Document/Exhibit Description Pages Size
1: 10-K/A Amendment to Annual Report 56± 243K
2: EX-3.1 Articles of Incorporation/Organization or By-Laws 8± 33K
3: EX-3.2 Articles of Incorporation/Organization or By-Laws 8± 34K
4: EX-4.8 Instrument Defining the Rights of Security Holders 53± 222K
5: EX-4.9 Instrument Defining the Rights of Security Holders 20± 88K
6: EX-10.18 Material Contract 8± 41K
7: EX-10.20 Material Contract 6± 29K
8: EX-10.35 Material Contract 16± 65K
9: EX-10.36 Material Contract 62± 291K
10: EX-11.1 Statement re: Computation of Earnings Per Share 2± 14K
11: EX-21.1 Subsidiaries of the Registrant 1 7K
12: EX-23.1 Consent of Experts or Counsel 1 7K
EX-4.9 — Instrument Defining the Rights of Security Holders
Exhibit Table of Contents
Exhibit 4.9
DOSKOCIL COMPANIES INCORPORATED
1992 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
ARTICLE I -- PURPOSE . . . . . . . . . . . . . . . . . . . . . . 1
Section I.1 Purpose . . . . . . . . . . . . . . . . . . . 1
Section I.2 Establishment . . . . . . . . . . . . . . . . 1
ARTICLE II -- DEFINITIONS . . . . . . . . . . . . . . . . . . . 1
ARTICLE III -- ADMINISTRATION . . . . . . . . . . . . . . . . . 4
Section III.1 Administration by Committee . . . . . . . . 4
Section III.2 Committee to Make Rules and Interpret
Plan . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section III.3 Committee Members Ineligible . . . . . . . . 5
ARTICLE IV -- GRANT OF AWARDS; SHARES SUBJECT
TO THE PLAN . . . . . . . . . . . . . . . . . . . 5
Section IV.1 Committee to Grant Awards . . . . . . . . . . 5
Section IV.2 Six-Month Holding Period . . . . . . . . . . 6
ARTICLE V -- ELIGIBILITY . . . . . . . . . . . . . . . . . . . . 6
Section V.1 Eligible Employees . . . . . . . . . . . . . . 6
ARTICLE VI -- STOCK OPTIONS . . . . . . . . . . . . . . . . . . 7
Section VI.1 Grant of Options . . . . . . . . . . . . . . 7
Section VI.2 Conditions of Options . . . . . . . . . . . . 7
Section VI.3 Options to Non-Employee Directors . . . . . . 8
ARTICLE VII -- PERFORMANCE SHARE AWARD . . . . . . . . . . . . . 10
Section VII.1 Grant of Performance Share Awards . . . . . 10
Section VII.2 Conditions of Performance Share Awards . . . 10
ARTICLE VIII -- RESTRICTED STOCK AWARDS . . . . . . . . . . . . 12
Section VIII.1 Grant of Restricted Stock Awards . . . . . 12
Section VIII.2 Conditions of Restricted Stock Awards . . . 12
ARTICLE IX -- OTHER INCENTIVE AWARDS . . . . . . . . . . . . . . 13
Section IX.1 Grant of Other Incentive Awards . . . . . . . 13
Section IX.2 Conditions of Other Incentive Awards . . . . 13
ARTICLE X -- STOCK ADJUSTMENTS . . . . . . . . . . . . . . . . . 13
Section X.1 Adjustment of Shares Available;
Recapitalization . . . . . . . . . . . . . . . 13
ARTICLE XI -- GENERAL . . . . . . . . . . . . . . . . . . . . . 14
Section XI.1 Amendment or Termination of Plan . . . . . . 14
Section XI.2 Dividends and Dividend Equivalents . . . . . 15
Section XI.3 Termination of Employment . . . . . . . . . 15
Section XI.4 Nonassignability . . . . . . . . . . . . . . 15
Section XI.5 Withholding Taxes . . . . . . . . . . . . . 16
Section XI.6 Forfeiture . . . . . . . . . . . . . . . . . 16
Section XI.7 Change of Control . . . . . . . . . . . . . 16
Section XI.8 Amendments to Awards . . . . . . . . . . . . 16
Section XI.9 Regulatory Approval and Listings . . . . . . 16
Section XI.10 Right to Continued Employment . . . . . . . 17
Section XI.11 Beneficiaries . . . . . . . . . . . . . . . 17
Section XI.12 Indemnification . . . . . . . . . . . . . . 17
Section XI.13 Reliance on Reports . . . . . . . . . . . . 18
Section XI.14 Relationship to Other Benefits . . . . . . . 18
Section XI.15 Expenses . . . . . . . . . . . . . . . . . . 18
Section XI.16 Construction . . . . . . . . . . . . . . . . 18
Section XI.17 Governing Law . . . . . . . . . . . . . . . 18
ARTICLE I
PURPOSE
Section I.1 Purpose. This Stock Incentive Plan is
established by Doskocil Companies Incorporated (the "Corporation")
to create incentives which are designed to motivate participants to
put forth maximum effort toward the success and growth of the
Corporation and to enable the Corporation to attract and retain
experienced individuals who by their position, ability and
diligence are able to make important contributions to the
Corporation's success. Toward these objectives, the Plan provides
for the granting of Options, Restricted Stock Awards, Performance
Share Awards and/or Other Incentive Awards to Participants on the
terms and subject to the conditions set forth in the Plan.
Section I.2 Establishment. The Plan is effective as of
January 1, 1992 (the "Effective Date"), and subject to the
provisions of Section XI.1, Awards (as defined in Section II.1) may
be made as provided herein for a period of 10 years after such
date.
The Plan shall be approved by the holders of a majority
of the outstanding shares of Common Stock, which approval must
occur within the period ending twelve months after the date the
Plan is adopted by the Board. Pending such approval by the
shareholders, Awards under the Plan may be granted to Eligible
Employees (as defined in Section II.10), including persons who are,
or within the preceding six months have been, Insider Participants
(as defined in Section IV.2), but no such Awards may be exercised
or transferred prior to receipt of shareholder approval. In the
event shareholder approval is not obtained within such twelve-month
period, all such Awards shall be void.
The Plan shall continue in effect until all matters
relating to the payment of Awards and administration of the Plan
have been settled.
ARTICLE II
DEFINITIONS
Section II.1 "Award" means, individually, collectively
or in tandem, any Option, Restricted Stock Award, Performance Share
Award, or Other Incentive Award granted under the Plan to a
Participant by the Committee pursuant to such terms, conditions,
restrictions, and/or limitations, if any, as the Committee may
establish by the Award Notice or otherwise.
Section II.2 "Award Notice" means any written instrument
that establishes the terms, conditions, restrictions, and/or
limitations applicable to an Award in addition to those established
by this Plan and by the Committee's exercise of its administrative
powers.
Section II.3 "Board" means the Board of Directors of the
Corporation.
Section II.4 "Change of Control Event" means each of the
following:
(a) A change in shareholder ownership of the
Corporation, whereby a person or company, or a group of
affiliated persons or companies, acquires a sufficiently large
block of Common Stock, which, when voted together with the
shares of Common Stock of all other shareholders of the
Corporation whose proxies or written consents are solicited by
such person, company or group without the benefit of a
management-supported proxy statement at any meeting of the
shareholders of the Corporation, would enable such person or
company or group of affiliated persons or companies to elect
a majority of the members of the Board;
(b) A merger or consolidation of the Corporation
with and into another company, other than with or into a
wholly-owned Subsidiary of the Corporation, where the
Corporation is not the surviving company; or the Corporation
is the surviving company and the members of the Board
immediately prior to the merger or consolidation do not
constitute a majority of the Board of the surviving company
after the merger or consolidation;
(c) The sale of all or substantially all of the
assets of the Corporation; or
(d) Any other kind of a corporate reorganization or
takeover where: (i) the Corporation is not the surviving
company; or the Corporation is the surviving company and the
members of the Board immediately prior to the reorganization
do not constitute a majority of the Board of Directors of the
surviving company.
With respect to the events described in subparagraphs
(b), (c) and (d) above, the Change of Control Event shall be deemed
to occur on the later of the transaction described in such
subparagraph or a shareholder vote approving such a transaction.
Section II.5 "Code" means the Internal Revenue Code of
1986. Reference in the Plan to any section of the Code shall be
deemed to include any amendments or successor provisions to such
section and any regulations under such section.
Section II.6 "Committee" means the Compensation
Committee of the Board, or such other committee designated by the
Board, authorized to administer the Plan under Article III hereof.
The Committee shall consist of not less than two members, each of
whom is, and within the twelve (12) months preceding his or her
appointment to the Committee has been, a "disinterested person"
within the meaning of Rule 16b-3 promulgated under Section 16 of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
Section II.7 "Common Stock" means the common stock, par
value $.01 per share, of the Corporation, and after substitution,
such other stock as shall be substituted therefor as provided in
Article X.
Section II.8 "Date of Grant" means the date on which the
granting of an Award is authorized by the Committee or such later
date as may be specified by the Committee in such authorization.
Section II.9 "Director Options" means non-qualified
Options awarded under Section VI.3.
Section II.10 "Eligible Employee" means any employee of
the Corporation or a Subsidiary, or an individual who satisfies the
requirements of Section VI.3.
Section II.11 "Fair Market Value" means (A) during any
such time as the Common Stock is not listed upon an established
stock exchange or the NASDAQ/National Market System, the mean
between dealer "bid" and "ask" prices of the Common Stock in the
over-the-counter market on the day for which such value is to be
determined, as reported by the National Association of Securities
Dealers, Inc. or (B) during such time as the Common Stock is listed
upon an established stock exchange or exchanges or the
NASDAQ/National Market System, the highest closing price of the
Common Stock on such stock exchange or exchanges or the
NASDAQ/National Market System on the day for which such value is to
be determined, or if no sale of the Common Stock shall have been
made on any stock exchange or the NASDAQ/National Market System
that day, on the next preceding day on which there was a sale of
such Common Stock.
Section II.12 "Incentive Stock Option" means an Option
within the meaning of Section 422 of the Code.
Section II.13 "Other Incentive Award" means an Award
granted under Article IX of the Plan.
Section II.14 "Option" means an Award granted under
Article VI of the Plan and includes both non-qualified Options and
Incentive Stock Options to purchase shares of Common Stock.
Section II.15 "Participant" means an Eligible Employee
of the Corporation or a Subsidiary to whom an Award has been
granted by the Committee under the Plan.
Section II.16 "Performance Share Award" means an Award
granted under Article VII of the Plan.
Section II.17 "Plan" means the Doskocil Companies
Incorporated 1992 Stock Incentive Plan.
Section II.18 "Restricted Stock Award" means an Award
granted under Article VIII of the Plan.
Section II.19 "Subsidiary" means any corporation of
which a majority of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Corporation.
ARTICLE III
ADMINISTRATION
Section III.1 Administration by Committee. The
Committee shall administer the Plan. Unless otherwise provided in
the by-laws of the Corporation or the resolutions adopted from time
to time by the Board establishing the Committee, the Board may from
time to time remove members from, or add members to, the Committee;
vacancies on the Committee, howsoever caused, shall be filled by
the Board; the Committee shall hold meetings at such times and
places as it may determine; a majority of the Committee shall
constitute a quorum; and the acts of a majority of the members
present at any meeting at which a quorum is present or acts reduced
to or approved in writing by a majority of the members of the
Committee shall be the valid acts of the Committee.
Subject to the provisions of the Plan, the Committee
shall have exclusive power to:
(a) Select the Eligible Employees to participate in
the Plan.
(b) Determine the time or times when Awards will be
made.
(c) Determine the form of an Award, whether an
Option, a Restricted Stock Award, a Performance Share Award,
or Other Incentive Award established by the Committee in
accordance with Article IX below, the number of shares of
Common Stock subject to the Award or with reference to which
the Award is determined, all the terms, conditions (including
performance requirements), restrictions and/or limitations, if
any, of an Award, including the time and conditions of
exercise or vesting, and the terms of any Award Notice, which
may include the waiver or amendment of prior terms and
conditions or acceleration or early vesting or payment of an
Award under certain circumstances determined by the Committee.
(d) Determine whether Awards will be granted
singly, in combination or in tandem.
(e) Grant waivers of Plan terms, conditions,
restrictions, and limitations.
(f) Accelerate the vesting, exercise, or payment of
an Award or the performance period of an Award when such
action or actions would be in the best interest of the Corporation.
(g) Take any and all other action it deems
necessary or advisable for the proper operation or
administration of the Plan.
In exercising the foregoing powers, the Committee shall
seek the recommendation of the Chief Executive Officer of the
Corporation or his delegate.
Section III.2 Committee to Make Rules and Interpret
Plan. The Committee shall have the authority, subject to the
provisions of the Plan, to establish, adopt, or revise such rules
and regulations and to make all such determinations relating to the
Plan as it may deem necessary or advisable for the administration
of the Plan. The Committee's interpretation of the Plan or any
Awards granted pursuant thereto and all decisions and
determinations by the Committee with respect to the Plan shall be
final, binding, and conclusive on all parties unless otherwise
determined by the Board.
Section III.3 Committee Members Ineligible. No
Committee member shall be eligible to participate in the Plan
except to the extent set forth in Section VI.3.
ARTICLE IV
GRANT OF AWARDS; SHARES
SUBJECT TO THE PLAN
Section IV.1 Committee to Grant Awards. The Committee
may, from time to time, grant Awards to one or more Eligible
Employees, provided, however, that:
(a) Subject to Article X, the aggregate number of
shares of Common Stock made subject to Awards may not exceed
810,000.
(b) Any shares of Common Stock related to Awards
which terminate by expiration, forfeiture, cancellation or
otherwise without the issuance of shares of Common Stock, are
settled in cash in lieu of Common Stock, or are exchanged in
the Committee's discretion for Awards not involving Common
Stock, shall be available again for grant under the Plan, so
long as the holder of any such Award received no benefits of
Common Stock ownership (including but not limited to
dividends) from the shares of Common Stock related to such
Award.
(c) Any shares of Common Stock issued by the
Corporation through the assumption or substitution of
outstanding grants from an acquired company shall reduce the
shares available for grants under the Plan.
(d) Common Stock delivered by the Corporation in
payment of any Award under the Plan may be authorized and
unissued Common Stock or Common Stock held in the treasury of
the Corporation or may be purchased on the open market or by
private purchase.
(e) The Committee shall, in its sole discretion,
determine the manner in which fractional shares arising under
this Plan shall be treated.
Section IV.2 Six-Month Holding Period. With respect to
Awards granted hereunder to any Participant who is, or within the
preceding six months was, subject to the provisions of Section 16
of the Exchange Act (an "Insider Participant"), each such Award
which is an equity security must be held and not transferred by
such Insider Participant for a period of six months from the Date
of Grant. Nothing in this Section IV.2 shall be deemed to prohibit
the exercise of Options within the six (6) month period following
the Date of Grant, but the shares of Common Stock received by an
Insider Participant pursuant to the exercise of an Option must be
held and not transferred for a period of six months from the Date
of Grant of the Option so exercised.
ARTICLE V
ELIGIBILITY
Section V.1 Eligible Employees. Those persons who shall
be eligible to receive Awards under the Plan shall be such
employees (including officers, whether or not they are directors)
of the Corporation or its Subsidiaries as the Committee shall
select from time to time. Directors who are not employees of the
Corporation or its Subsidiaries ("Non-Employee Directors") may also
participate in the Plan, but only to the extent set forth in
Section VI.3 hereof.
Subject to the provisions of the Plan, the Committee
shall, from time to time, select from the Eligible Employees those
to whom Awards shall be granted and shall determine the type or
types of Awards to be made and shall establish in the related Award
Notices the terms, conditions, restrictions and/or limitations, if
any, applicable to the Awards in addition to those set forth in the
Plan and the administrative rules and regulations issued by the
Committee.
ARTICLE VI
STOCK OPTIONS
Section VI.1 Grant of Options. The Committee may, from
time to time, subject to the provisions of the Plan and such other
terms and conditions as it may determine, grant Options to Eligible
Employees. These Options may be Incentive Stock Options or non-
qualified Options, or a combination of both. Each grant of an
Option shall be evidenced by an Award Notice executed by the
Corporation and the Participant, and shall contain such terms and
conditions and be in such form as the Committee may from time to
time approve, subject to the requirements of Section VI.2.
Section VI.2 Conditions of Options. Each Option so
granted shall be subject to the following conditions:
(a) Exercise price. As limited by Section VI.2(e)
below, each Option shall state the exercise price which shall
be set by the Committee at the Date of Grant.
(b) Form of payment. The exercise price of an
Option may be paid (i) in cash or by check, bank draft or
money order payable to the order of the Corporation; (ii) in
shares of Common Stock or shares of Restricted Stock as to
which restrictions have lapsed; (iii) a combination of the
foregoing; or (iv) such other consideration as the Committee
may deem appropriate. In addition to the foregoing, subject
to the discretion of the Committee, any Option granted under
the Plan may be exercised by a broker-dealer acting on behalf
of a Participant if (A) the broker-dealer has received from
the Participant or the Corporation a fully- and duly-endorsed
agreement evidencing such Option and instructions signed by
the Participant requesting the Corporation to deliver the
shares of Common Stock subject to such Option to the broker-
dealer on behalf of the Participant and specifying the account
into which such shares should be deposited, (B) adequate
provision has been made with respect to the payment of any
withholding taxes due upon such exercise or, in the case of an
Incentive Stock Option, upon the disposition of such shares
and (C) the broker-dealer and the Participant have otherwise
complied with Section 220.3(e)(4) of Regulation T, 12 CFR,
Part 220 and any successor rules and regulations applicable to
such exercise ("Cashless Exercise"); provided, however, that
an Insider Participant may not elect to utilize a Cashless
Exercise within six (6) months of the date the Option is
granted (unless death or disability occurs prior to the
expiration of such six-month period), and any such election
must be made during any period beginning on the third business
day following the date of release of a summary statement of
the Corporation's quarterly or annual sales and earnings and
ending on the twelfth business day following such date (the
"Window Period"). The Committee shall establish appropriate
methods for accepting Common Stock, whether restricted or
unrestricted, and may impose such conditions as it deems
appropriate on the use of such Common Stock in payment of the
exercise price. Common Stock used to exercise an Option shall
be valued at its then Fair Market Value.
(c) Exercise of Options. Options granted under the
Plan shall be exercisable, in whole or in such installments
and at such times, and shall expire at such time, as shall be
provided by the Committee in the Award Notice. Exercise of an
Option shall be by written notice stating the election to
exercise in the form and manner determined by the Committee.
Every share of Common Stock acquired through the exercise of
an Option shall be deemed to be fully paid at the time of
exercise and payment of the exercise price.
(d) Other terms and conditions. Among other
conditions that may be imposed by the Committee, if deemed
appropriate, are those relating to (i) the period or periods
and the conditions of exercisability of any Option; (ii) the
minimum periods during which Participants must be employed by
the Corporation or its Subsidiaries, or must hold Options
before they may be exercised; (iii) the minimum periods during
which shares acquired upon exercise must be held before sale
or transfer shall be permitted; (iv) conditions under which
such Options or shares may be subject to forfeiture; and (v)
the frequency of exercise or the minimum or maximum number of
shares that may be acquired at any one time.
(e) Special Restrictions Relating to Incentive
Stock Options. Options issued in the form of Incentive Stock
Options shall, in addition to being subject to all applicable
terms, conditions, restrictions and/or limitations established
by the Committee, comply with the requirements of Section 422
of the Code (or any successor section thereto), including,
without limitation, the requirement that the exercise price of
an Incentive Stock Option not be less than 100% of the Fair
Market Value of the Common Stock on the Date of Grant, the
requirement that each Incentive Stock Option, unless sooner
exercised, terminated or cancelled, expire no later than ten
(10) years from its Date of Grant, and the requirement that
the aggregate Fair Market Value (determined on the Date of
Grant) of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by a
Participant during any calendar year (under this Plan or any
other plan of the Corporation or any Subsidiary) not exceed
$100,000.
(f) Application of funds. The proceeds received by
the Corporation from the sale of Common Stock pursuant to
Options will be used for general corporate purposes.
Section VI.3 Options to Non-Employee Directors.
Notwithstanding any other provision herein, no Awards shall be
granted hereunder to Non-Employee Directors other than the Director
Options granted pursuant to this Section VI.3.
An Option to purchase 5,000 shares of Common Stock shall
be automatically granted under the Plan to each person who is a
Non-Employee Director on the date the Plan is approved and adopted
by the Board, and any individual who becomes a Non-Employee
Director subsequent to such date shall be granted an Option to
purchase 5,000 shares of the Common Stock on the date he or she
becomes a Non-Employee Director.
Each Director Option shall be evidenced by an Award
Notice executed by the Corporation and the Non-Employee Director,
and shall include the following terms and provisions:
(a) Each Director Option shall become exercisable
with respect to one-third of the shares of Common Stock to
which it relates on each of the first three anniversaries of
the Date of Grant so long as the Non-Employee Director remains
a director at such time. The Option exercise price per share
shall be equal to the Fair Market Value of one such share on
the date the Director Option is granted. The period within
which each Option may be exercised shall expire six (6) years
from the date the option is granted (the "Option Period"),
unless ended sooner due to termination of service or death of
the optionee, or if fully exercised prior to the end of such
six (6) year period. No Director Options shall be granted
hereunder after the ten-year anniversary of the Effective
Date.
(b) If the directorship of an optionee is
terminated within the Option Period for any reason other than
(i) death of the optionee or (ii) on account of any act of
fraud, intentional misrepresentation, embezzlement,
misappropriation, or conversion of assets or opportunities of
the Corporation or any of its Subsidiaries, the Director
Option may be exercised, to the extent the optionee was able
to do so at the date of termination of the directorship,
within three months after such termination (if otherwise
within the Option Period).
(c) If an optionee dies during the Option Period
while a director of the Corporation, or if an optionee dies
within three months of serving as a Non-Employee Director, the
Option may be exercised, to the extent the optionee was
entitled to exercise such Option at the date of his or her
death, within one year after such death (if otherwise within
the Option Period), by the executor or the administrator of
the estate of the optionee, or by the person or persons who
shall have acquired the Option directly from the optionee by
a bequest or an inheritance.
(d) If the directorship of the optionee is
terminated within the Option Period for any of the reasons
enumerated in Section VI.3(b)(ii), the Director Option shall
automatically terminate as of the date of termination of such
directorship.
(e) Payment of the exercise price shall be made in
full, at the election of the Non-Employee Director, in cash,
by check, bank draft or money order payable to the order of
the Corporation concurrently with the exercise of the Director
Option, or by Cashless Exercise; provided, however, that such
election to utilize Cashless Exercise may not be made within
six (6) months of the Date of Grant of such Director Option,
and must be made during the Window Period.
(f) Such Director Options shall be nontransferable
by the optionee other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employees
Retirement Income Security Act, and shall be exercisable
during the optionee's lifetime only by the optionee or the
optionee's guardian or legal representative.
(g) Upon the termination of the directorship of an
optionee for any reason other than specified in Section
VI.3(b)(ii) within the two (2) year period following the
occurrence of a Change of Control Event, all Director Options
held by such optionee shall be deemed to be immediately
exercisable and the Corporation shall, within the three (3)
month period immediately following such termination, permit
the exercise of Director Options granted hereunder.
ARTICLE VII
PERFORMANCE SHARE AWARD
Section VII.1 Grant of Performance Share Awards. Grants
of Performance Share Awards may be made by the Committee to any
Eligible Employee during the term of the Plan. Each Performance
Share Award shall represent one share of Common Stock. Each
Performance Share Award shall be evidenced by an Award Notice.
There may be more than one award in existence at any one time for
any Participant and performance periods for separate Performance
Share Awards need not be identical.
The Performance Shares will be paid out in full or in
part on the basis of the performance of the Corporation following
the beginning of the Corporation's fiscal year in which the
Performance Share Award is made as hereinafter set forth. In
determining the size of Performance Share Awards, the Committee
shall take into account a Participant's responsibility level,
performance, potential, and cash compensation level, as well as
such other considerations as it deems appropriate. If any
Performance Share Award granted under the Plan shall be forfeited,
cancelled, or not paid out in full, such Performance Share Award
may again be granted under the Plan in accordance with Article VII.
Section VII.2 Conditions of Performance Share Awards.
A Performance Share Award shall be subject to the following terms
and conditions:
(a) Performance Share Account. Performance Share
Awards shall be credited to a Performance Share account to be
maintained for each holder. Each Performance Share Award
shall be deemed to be the equivalent of one share of Common
Stock of the Corporation. A Performance Share Award under the
Plan shall not entitle the holder to any interest in or to any
dividend, voting, or other rights of a shareholder. The value
of the Performance Shares in a holder's Performance Share
account at the time of Award or the time of payment shall be
the Fair Market Value at any such time of an equivalent number
of shares of the Common Stock.
(b) Performance Period and Criteria. Performance
Shares shall be contingent upon the attainment during a
performance period of certain performance objectives. The
length of the performance period for each Performance Share
Award, the performance objectives to be achieved during the
Performance Share Award period, and the measure of whether and
to what degree such objectives have been attained shall be
conclusively determined by the Committee in the exercise of
its discretion. The Committee may revise performance
objectives at such times as it deems appropriate during the
Performance Share Award period in order to take into account
or into consideration any unforeseen events or changes in
circumstances; provided,however, that any such revision which
is adverse to the holder of a Performance Share Award shall
require the holder's consent.
(c) Payment of Award. Following the end of the
Performance Share Award period, the holder of a Performance
Share Award shall be entitled to receive payment of an amount
based on the achievement of the performance measures for such
Performance Share Award period. In the event that a recipient
of a Performance Share Award is, or within the preceding six
(6) months has been, an Insider Participant, no Performance
Share Award shall be payable within the first six (6) months
from the Date of Grant of such Performance Share Award. The
payment to which a holder of a Performance Share Award shall
be entitled at the end of a Performance Share Award period
shall be a dollar amount equal to the Fair Market Value of the
number of shares of Common Stock equal to the number of
Performance Shares earned and payable to such holder.
The Committee may authorize payment of a Performance
Share Award in any combination of cash and shares of Common
Stock or all in cash or all in Common Stock, as it deems
appropriate, provided, however, that in the event a payee is,
or within the preceding six (6) months has been, an Insider
Participant, no cash payment may be made to such person except
during any period beginning on the third business day
following the date of release of a summary statement of the
Corporation's quarterly or annual sales and earnings and
ending on the twelfth business day following such date. Such
shares may include any restrictions on transfer and forfeiture
provisions as the Committee, from time to time, deems
appropriate.
(d) Additional Terms and Conditions. The Committee
may, by way of the Award Notice or otherwise, determine such
other terms, conditions, restrictions and/or limitations, if
any, of any Performance Share Award, provided they are not
inconsistent with the Plan.
ARTICLE VIII
RESTRICTED STOCK AWARDS
Section VIII.1 Grant of Restricted Stock Awards. The
Committee may grant a Restricted Stock Award to any Eligible
Employee. Restricted Stock Awards shall be awarded in such number
and at such times during the term of the Plan as the Committee
shall determine. Each Restricted Stock Award may be evidenced in
such manner as the Committee deems appropriate, including, without
limitation, book-entry registration or issuance of a stock
certificate or certificates, and by an Award Notice setting forth
the terms of such Restricted Stock Award.
Section VIII.2 Conditions of Restricted Stock Awards.
The grant of a Restricted Stock Award shall be subject to the
following:
(a) Restriction period. Vesting of each Restricted
Stock Award shall require the holder to remain in the
employment of the Corporation or a Subsidiary for a prescribed
period (a "Restriction Period"). The Committee shall
determine the Restriction Period or Periods which shall apply
to the shares of Common Stock covered by each Restricted Stock
Award or portion thereof. At the end of the Restriction
Period the restrictions imposed hereunder shall lapse with
respect to the shares of Common Stock covered by the
Restricted Stock Award or portion thereof. The Committee may,
in its sole discretion, modify or accelerate the vesting of a
Restricted Stock Award under such circumstances as it deems
appropriate.
(b) Restrictions. The holder of a Restricted Stock
Award may not sell, transfer, pledge, exchange, hypothecate,
or otherwise dispose of the shares of Common Stock represented
by the Restricted Stock Award during the applicable
Restriction Period. The Committee shall impose such other
restrictions on any shares of Common Stock covered by a
Restricted Stock Award as it may deem advisable including,
without limitation, restrictions under applicable Federal or
state securities laws, and may legend the certificates
representing Restricted Stock to give appropriate notice of
such restrictions.
(c) Rights as shareholders. During any Restriction
Period, the Committee may, in its discretion, grant to the
holder of a Restricted Stock Award all or any of the rights of
a shareholder with respect to said shares, including, but not
by way of limitation, the right to vote such shares and to
receive dividends. If any dividends or other distributions
are paid in shares of Common Stock, all such shares shall be
subject to the same restrictions on transferability as the
shares of Restricted Stock with respect to which they were
paid.
ARTICLE IX
OTHER INCENTIVE AWARDS
Section IX.1 Grant of Other Incentive Awards. The
Committee may, in its discretion, grant other types of awards of,
or based on, Common Stock. Other Incentive Awards are limited to
awards under which Common Stock is or may in the future be
acquired. Such awards may include grants of debt securities
convertible into or exchangeable for shares of Common Stock upon
such conditions, including attainment of performance goals, as the
Committee shall determine.
Section IX.2 Conditions of Other Incentive Awards. Each
grant of an Other Incentive Award shall be evidenced by an Award
Notice executed by the Corporation and the Participant, and shall
contain such terms and conditions and be in such form as the
Committee may from time to time approve. Other Incentive Awards
may not be sold, assigned, transferred, pledged, or encumbered
except as may be provided in the Award Notice, and in no event may
be transferred other than by will or by the laws of descent and
distribution or be exercised, during the life of the participant,
other than by the participant or the participant's guardian or
legal representative. The recipient of an Other Incentive Award
will have the rights of a shareholder only to the extent, if any,
specified in the Award Notice governing such Other Incentive Award.
ARTICLE X
STOCK ADJUSTMENTS
Section X.1 Adjustment of Shares Available;
Recapitalization. In the event that the shares of Common Stock, as
presently constituted, shall be changed into or exchanged for a
different number or kind of shares of stock or other securities of
the Corporation or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, stock
split, combination of shares or otherwise), or if the number of
such shares of Common Stock shall be increased through the payment
of a stock dividend, or a dividend on the shares of Common Stock or
rights or warrants to purchase securities of the Corporation shall
be made, then there shall be substituted for or added to each share
available under and subject to the Plan as provided in Article IV
hereof, and each share theretofore appropriated or thereafter
subject or which may become subject to Performance Share Awards,
Options, Restricted Stock Awards or Other Incentive Awards under
the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock shall
be so changed or for which each such share shall be exchanged or to
which each such share shall be entitled, as the case may be. In
the event there shall be any other change in the number or kind of
the outstanding shares of Common Stock, or any stock or other
securities into which the Common Stock shall have been changed or
for which it shall have been exchanged, then if the Committee
shall, in its sole discretion, determine that such change equitably
requires an adjustment in the shares available under and subject to
the Plan, or in any Award theretofore granted or which may be
granted under the Plan, such adjustments shall be made in
accordance with such determination, except that no adjustment of
the number of shares of Common Stock available under the Plan or to
which any Award relates that would otherwise be required shall be
made unless and until such adjustment either by itself or with
other adjustments not previously made would require an increase or
decrease of at least 1% in the number of shares of Common Stock
available under the Plan or to which any Award relates immediately
prior to the making of such adjustment (the "Minimum Adjustment").
Any adjustment representing a change of less than such minimum
amount shall be carried forward and made as soon as such adjustment
together with other adjustments required by this Section X.1 and
not previously made would result in a Minimum Adjustment.
Notwithstanding the foregoing, any adjustment required by this
Section X.1 which otherwise would not result in a Minimum
Adjustment shall be made with respect to shares of Common Stock
relating to any Award immediately prior to exercise, payment or
settlement of such Award.
No fractional shares of Common Stock or units of other
securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in
each case by rounding downward to the nearest whole share.
ARTICLE XI
GENERAL
Section XI.1 Amendment or Termination of Plan. The
Board may suspend or terminate the Plan at any time. In addition,
the Board may, from time to time, amend the Plan in any manner, but
may not without shareholder approval adopt any amendment which
would:
(a) increase the aggregate number of shares of
Common Stock available under the Plan (except by operation of
Article X);
(b) materially increase the benefits accruing to
Insider Participants under the Plan; or
(c) materially modify the requirements as to
eligibility for participation in the Plan;
provided, that any amendment to the Plan shall require approval of
the shareholders if, in the opinion of counsel to the Corporation,
such approval is required by Section 16(b) or any other section of
the Exchange Act, or any other Federal or state law or any
regulations or rules promulgated thereunder. Notwithstanding the
above, Section VI.3, the number of Director Options to be awarded
to Non-Employee Directors pursuant to Section VI.3, the number of
shares of Common Stock to be covered by each Director Option, the
exercise price per share under each Director Option, when and under
what circumstances each Director Option will be granted and the
period within which each such option may be exercised, shall not be
amended more than once every six months (even with shareholder
approval), other than to conform with changes in the Code, ERISA,
or the rules and regulations thereunder.
Section XI.2 Dividends and Dividend Equivalents. If an
Award is granted in the form of a Performance Share Award,
Restricted Stock, or an Option, the Committee may choose, at the
time of the grant of such Award or any time thereafter up to the
time of payment of such Award, to include as part of such Award an
entitlement to receive dividends or dividend equivalents subject to
such terms, conditions, restrictions, and/or limitations, if any,
as the Committee may establish. Dividends and dividend equivalents
granted hereunder shall be paid in such form and manner (i.e., lump
sum or installments), and at such time as the Committee shall
determine. All dividends or dividend equivalents which are not
paid currently may, at the Committee's discretion, accrue interest,
be reinvested into additional shares of Common Stock or, in the
case of dividends or dividend equivalents credited in connection
with a Performance Share Award, be credited as additional
Performance Shares and paid to the Participant if and when, and to
the extent that, payment is made pursuant to such Performance Share
Award.
Section XI.3 Termination of Employment. If a
Participant's employment with the Corporation or a Subsidiary
terminates for a reason other than death, disability, retirement,
or any approved reason, all unexercised, unearned, and/or unpaid
Awards, including, but not by way of limitation, Awards earned, but
not yet paid, all unpaid dividends and dividend equivalents, and
all interest accrued on the foregoing shall be cancelled or
forfeited, as the case may be, unless the Participant's Award
Notice provides otherwise. The Committee shall have the authority
to promulgate rules and regulations to (i) determine what events
constitute disability, retirement, or termination for an approved
reason for purposes of the Plan, and (ii) determine the treatment
of a Participant under the Plan in the event of his or her death,
disability, retirement, or termination for an approved reason.
Such rules and regulations may include, without limitation, the
method, if any, for prorating a Performance Share Award,
accelerating the vesting or exercisability of any Options or
Restricted Stock Award, or providing for the exercise of any
unexercised Options in the event of a Participant's death,
disability, retirement, or termination for an approved reason.
Section XI.4 Nonassignability. No Options, Performance
Share Awards or other derivative securities (as defined in the
rules and regulations promulgated under Section 16 of the Exchange
Act) awarded under the Plan to any person who is or within the
preceding six months has been, an Insider Participant, shall be
subject in any manner to alienation, anticipation, sale, transfer,
assignment, pledge, or encumbrance, except for transfer by will or
the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended
(ERISA), or the rules and regulations thereunder. Any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of, or
to subject to execution, attachment or similar process, any Option,
Performance Share Award or other derivative security, contrary to
the provisions hereof, shall be void and ineffective, shall give no
right to any purported transferee, and may, at the sole discretion
of the Committee, result in forfeiture of the Award involved in
such attempt.
Section XI.5 Withholding Taxes. The Corporation shall
be entitled to deduct from any payment under the Plan, regardless
of the form of such payment, the amount of all applicable income
and employment taxes required by law to be withheld with respect to
such payment or may require the Participant to pay to it such tax
prior to and as a condition of the making of such payment. In
accordance with any applicable administrative guidelines it
establishes, the Committee may allow a Participant to pay the
amount of taxes required by law to be withheld from an Award by
withholding from any payment of Common Stock due as a result of
such Award, or by permitting the Participant to deliver to the
Corporation, shares of Common Stock, having a Fair Market Value, on
the date of payment, equal to the amount of such required
withholding taxes; provided, however, that in the event the
Participant is, or within the preceding six (6) months has been an
Insider Participant, such an election may not be made within six
(6) months of the date the Award is granted (unless death or
disability of the Participant occurs prior to the expiration of
such six-month period), and must be made either six (6) months
prior to the date of payment or during the Window Period.
Section XI.6 Forfeiture. If the employment of a
Participant is terminated on account of any act of fraud,
intentional misrepresentation, embezzlement, misappropriation, or
conversion of assets or opportunities of the Corporation or any of
its Subsidiaries, any Award granted hereunder, whether and
regardless of the extent to which such Award is vested, earned or
exercisable, shall automatically terminate as of the date of
termination of such employment.
Section XI.7 Change of Control. Awards granted under
the Plan to any Participant may, in the discretion of the
Committee, provide that (a) such Awards shall be immediately
vested, fully earned and exercisable, as appropriate, upon the
termination of such Participant's employment with the Corporation
or any Subsidiary within the two (2) year period following a Change
of Control Event, except as provided in Section XI.6 or as
otherwise provided in any employment contract or similar agreement
between such Participant and the Corporation, and (b) the
Corporation shall, within the three (3) month period immediately
following such termination of employment, make full payment to each
such Participant with respect to any Performance Share Award or
Other Incentive Award, deliver certificates to such Participant
with respect to each Restricted Stock Award, and permit the
exercise of Options, respectively, granted hereunder to such
Participant.
Section XI.8 Amendments to Awards. The Committee may at
any time dunilaterally amend the terms of any Award Notice for any
Award, whether or not presently exercisable, earned, paid or
vested, to the extent it deems appropriate; provided, however, that
any such amendment which is adverse to the Participant shall
require the Participant's consent.
Section XI.9 Regulatory Approval and Listings. The
Corporation shall use its best efforts to file with the Securities
and Exchange Commission as soon as practicable following the
Effective Date, and keep continuously effectively and usable, a
Registration Statement on Form S-8 with respect to shares of Common
Stock subject to Awards hereunder. Notwithstanding anything
contained in this Plan to the contrary, the Corporation shall have
no obligation to issue or deliver certificates representing shares
of Common Stock evidencing Restricted Stock Awards or any other
Award relating to shares of Common Stock prior to:
(a) the obtaining of any approval from, or
satisfaction of any waiting period or other condition imposed
by, any governmental agency which the Committee shall, in its
sole discretion, determine to be necessary or advisable,
(b) the admission of such shares to listing on the
stock exchange on which the Common Stock may be listed, and
(c) the completion of any registration or other
qualification of said shares under any state or Federal law or
ruling of any governmental body which the Committee shall, in
its sole discretion, determine to be necessary or advisable.
Section XI.10 Right to Continued Employment.
Participation in the Plan shall not give any Eligible Employee any
right to remain in the employ of the Corporation or any Subsidiary.
The Corporation or, in the case of employment with a Subsidiary,
the Subsidiary, reserves the right to terminate any Eligible
Employee at any time. Further, the adoption of this plan shall not
be deemed to give any Eligible Employee or any other individual any
right to be selected as a Participant or to be granted an Award.
Section XI.11 Beneficiaries. Each Participant shall
file with the Committee a written designation of one or more
persons as the beneficiary (the "Beneficiary") who shall be
entitled to receive the amount, if any, payable under the Plan upon
his death. A Participant may, from time to time, revoke or change
his Beneficiary designation without the consent of any prior
Beneficiary by filing a new designation with the Committee. The
last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received by the
Committee prior to the Participant's death, and in no event shall
be effective as of a date prior to such receipt.
If such Beneficiary designation is in effect at the time
of a Participant's death, or if no designated Beneficiary survives
the Participant, or such designation conflicts with law, the
payment of the amount, if any, payable under the Plan upon his
death shall be made to the Participant's estate. If the Committee
is in doubt as to the right of any person to receive such amount,
the Committee may retain such amount, without liability or any
interest thereon, until the rights thereon are determined, or the
Committee may pay such amount into any court of appropriate
jurisdiction and such payment shall be a complete discharge of the
liability of the Plan, the Corporation and the Committee therefor.
Section XI.12 Indemnification. Each person who is or
shall have been a member of the Committee or of the Board shall be
indemnified and held harmless by the Corporation against and from
any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by such person in connection with or resulting
from any claim, action, suit, or proceeding to which he or she may
be a party or in which he may be involved by reason of any action
or failure to act under the Plan and against and from any and all
amounts paid by such person in satisfaction of judgment in any such
action, suit, or proceeding against such person. He or she shall
give the Corporation an opportunity, at its own expense, to handle
and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the
Corporation's Articles or Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Corporation may have to
indemnify or hold harmless any such person.
Section XI.13 Reliance on Reports. Each member of the
Committee and each member of the Board shall be fully justified in
relying or acting in good faith upon any report made by the
independent public accountants of the Corporation and its
Subsidiaries and upon any other information furnished in connection
with the Plan by any person or persons other than himself. In no
event shall any person who is or shall have been a member of the
Committee or of the Board be liable for any determination made or
other action taken or any omission to act in reliance upon any such
report or information or for any action taken, including the
furnishing of information, or failure to act, if in good faith.
Section XI.14 Relationship to Other Benefits. No
payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit sharing, group
insurance or other benefit plan of the Corporation or any
Subsidiary.
Section XI.15 Expenses. The expenses of administering
the Plan shall be borne by the Corporation subject to such
allocation to its Subsidiaries as it deems appropriate.
Section XI.16 Construction. Masculine pronouns and
other words of masculine gender shall refer to both men and women.
The titles and headings of the sections in the Plan are for the
convenience of reference only, and in the event of any conflict,
the text of the plan, rather than such titles or headings, shall
control.
Section XI.17 Governing Law. The Plan shall be governed
by and construed in accordance with the laws of the State of
Delaware except as superseded by applicable Federal law.
Dates Referenced Herein and Documents Incorporated by Reference
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