Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Registration of Securities Issued in a 120 663K
Business-Combination Transaction
2: EX-2.1 Agreement of Sale and Plan of Merger 90 281K
3: EX-2.2 1st Amendment to Agreement of Sale 5 27K
4: EX-3.1 Cert. of Incorp. - American Home Foods Products 8 41K
13: EX-3.10 Bylaws of Canadian Home Products 14 64K
14: EX-3.11 Ceri. of Incorp. - Heritage Brands Holdings 4 22K
15: EX-3.12 Bylaws of Heritage Brands Holdings 13 57K
16: EX-3.13 Certificate of Incorporation - Heritage Brands 2 17K
17: EX-3.14 Bylaws of Heritage Brands 13 57K
18: EX-3.15 Certificate of Incorporation of Campfire 2 17K
19: EX-3.16 Bylaws of Campfire, Inc. 13 57K
5: EX-3.2 Bylaws of American Home Foods Products, Inc. 9 42K
6: EX-3.3 Certificate of Incorporation - American Home Foods 9 41K
7: EX-3.4 Bylaws of American Home Foods 7 37K
8: EX-3.5 Certificate of Incorporation - Luck's, Inc. 7 33K
9: EX-3.6 Bylaws of Luck's, Inc. 7 36K
10: EX-3.7 Certificate of Incorporation - M. Polaner, Inc. 6 32K
11: EX-3.8 Bylaws of M. Polaner, Inc. 7 41K
12: EX-3.9 Certificate of Continuance 13 45K
20: EX-4.1 Registration Rights Agreement 17 82K
21: EX-4.2 Indenture Dated as of November 1, 1996 125 413K
22: EX-10.1 Transisitional Services Agreement 9 35K
27: EX-10.10 Monitoring and Oversight Agreement 7 30K
23: EX-10.2 Financial Advisory Agreement 5 26K
24: EX-10.3 International Home Foods, Inc. Stock Option Plan 16 74K
25: EX-10.8 Indemnification Agreement 11 45K
26: EX-10.9 Credit Agreement 242 879K
28: EX-12.1 Computation of Ratio of Earnings to Fixed Charges 1 13K
29: EX-12.2 Pro Forma Ratio of Earnings to Fixed Charges 1 13K
30: EX-16.1 Letter Re: Change to Certifying Acountants 1 12K
31: EX-21.1 List of Subsidiaries 1 12K
32: EX-23.1 Consent of Arthur Andersen LLP 1 12K
33: EX-25.1 Form T-1 5 25K
34: EX-27.1 Financial Data Schedule 1 15K
EX-10.3 — International Home Foods, Inc. Stock Option Plan
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EXHIBIT 10.3
INTERNATIONAL HOME FOODS, INC.
1996 STOCK OPTION PLAN
1. Purpose.
International Home Foods, Inc., a Delaware corporation (herein,
together with its successors, referred to as the "Company"), by means of this
1996 Stock Option Plan (the "Plan"), desires to afford certain individuals and
key employees of the Company and any parent corporation or subsidiary
corporation thereof now existing or hereafter formed or acquired (such parent
and subsidiary corporations sometimes referred to herein as "Related Entities")
who are responsible for the continued growth of the Company an opportunity to
acquire a proprietary interest in the Company, and thus to create in such
persons an increased interest in and a greater concern for the welfare of the
Company and any Related Entities. As used in the Plan, the terms "parent
corporation" and "subsidiary corporation" shall mean, respectively, a
corporation within the definition of such terms contained in Sections 424(e)
and 424(f), respectively, of the Internal Revenue Code of 1986, as amended (the
"Code").
The stock options described in Sections 6 and 7 (the "Options"), and
the shares of Common Stock (as hereinafter defined) acquired pursuant to the
exercise of such Options are a matter of separate inducement and are not in
lieu of any salary or other compensation for services.
2. Administration.
The Plan shall be administered by the Option Committee, or any
successor thereto, of the Board of Directors of the Company (the "Board of
Directors"), or by any other committee appointed by the Board of Directors to
administer this Plan (the "Committee"); provided, the entire Board of Directors
may act as the Committee if it chooses to do so. The number of individuals
that shall constitute the Committee shall be determined from time to time by a
majority of all the members of the Board of Directors, and, unless that
majority of the Board of Directors determines otherwise, shall be no less than
two individuals; provided, however, that unless the Plan and the Options
granted thereunder otherwise comply with Rule 16b-3 (or any successor rule)
under the Exchange Act (or any successor law) the Committee shall be composed
of either (a) the entire Board of Directors or (b) persons who are
"Non-Employee Directors under Rule 16b-3. A majority of the Committee shall
constitute a quorum (or if the Committee consists of only two members, then
both members shall constitute a quorum), and subject to the provisions of
Section 5, the acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by all members of the
Committee, shall be the acts of the Committee.
The members of the Committee shall serve at the pleasure of the Board
of Directors, which shall have the power, at any time and from time to time, to
remove members from or add members to the Committee. Removal from the
Committee may be with or without cause. Any individual serving as a member of
the Committee shall have the right to resign from membership in the Committee
by written notice to the Board of Directors. The Board of Directors, and not
the remaining members of the Committee, shall have the power and authority to
fill vacancies on the Committee, however caused. The Board of Directors shall
promptly fill any vacancy that causes the number of members of the Committee to
be below two or, if the Company has a class of equity securities registered
pursuant to Section 12 of the Exchange Act, any other number that Rule 16b-3
may require from time to time.
3. Shares Available.
Subject to the adjustments provided in Section 10, the maximum
aggregate number of shares of Common Stock, $.01 par value, of the Company
("Common Stock") in respect of which Options may be
granted for all purposes under the Plan shall be 45,000,000 shares. If, for
any reason, any shares as to which Options have been granted cease to be
subject to purchase thereunder, including the expiration of such Option, the
termination of such Option prior to exercise, or the forfeiture of such Option,
such shares shall thereafter be available for grants under the Plan. Options
granted under the Plan may be fulfilled in accordance with the terms of the
Plan with (i) authorized and unissued shares of the Common Stock, (ii) issued
shares of such Common Stock held in the Company's treasury, or (iii) issued
shares of Common Stock reacquired by the Company in each situation as the Board
of Directors or the Committee may determine from time to time.
4. Eligibility and Bases of Participation.
Grants of Incentive Options (as hereinafter defined) and Non-Qualified
Options (as hereinafter defined) may be made under the Plan, subject to and in
accordance with Section 6, to Key Employees. As used herein, the term "Kev
Employee" shall mean any employee of the Company or any Related Entity,
including officers and directors of the Company or any Related Entity who are
also employees of the Company or any Related Entity, who is regularly employed
on a salaried basis and who is so employed on the date of such grant, whom the
Committee identifies as having a direct and significant effect on the
performance of the Company or any Related Entity.
Grants of Non-Qualified Options may be made, subject to and in
accordance with Section 7, to any Eligible Non-Employee. As used herein, the
term "Eligible Non-Employee" shall mean any person or entity of any nature
whatsoever, specifically including an individual, a firm, a company, a
corporation, a partnership, a trust, or other entity (collectively, a
"Person"), that the Committee designates as eligible for a grant of Options
pursuant to this Plan because such Person performs bona fide consulting,
advisory, or other services for the Company or any Related Entity (other than
services in connection with the offer or sale of securities in a
capital-raising transaction) and the Board of Directors or the Committee
determines that the Person has a direct and significant effect on the financial
development of the Company or any Related Entity.
The adoption of this Plan shall not be deemed to give any Person a
right to be granted any Options.
Notwithstanding any other provision of this Plan to the contrary, with
respect to the grant of any Options to any Key Employee or Eligible
Non-Employee, the Committee shall first determine the number of shares in
respect of which Options are to be granted to such Key Employee or Eligible
Non-Employee and shall then cause to be granted to such Key Employee or
Eligible Non-Employee an Option exercisable for such shares. The exercise
price per share of Common Stock under each Option shall be fixed by the
Committee at the time of grant of the Option and shall equal at least 100% of
the Fair Market Value of a share of Common Stock on the date of grant.
5. Authority of Committee.
Subject to and not inconsistent with the express provisions of the
Plan, the Code and, if applicable, Rule 16b-3, the Committee shall have
plenary authority to:
a. determine the Key Employees and Eligible Non-Employees to whom
Options shall be granted, the time when such Options shall be
granted, the number of options, the purchase price or exercise
price of each Option, the period(s) during which such Options
shall be exercisable (whether in whole or in part, including
whether such Options shall become immediately exercisable upon
the consummation of a "Sale of the Company" or a "Qualifying
Public Offering"), the restrictions to be applicable to
Options and all other terms and provisions thereof (which need
not be identical);
b. require, as a condition to the granting of any Option, that
the Person receiving such Option agree not to sell or
otherwise dispose of such Option, any Common Stock acquired
pursuant to such Option, or any other "derivative security"
(as defined by Rule 16a-l(c) under the Exchange Act) for a
period of six months following the later of the date of the
grant of such Option or (ii) the date when the exercise price
of such Option is fixed if such exercise price is not fixed at
the date of grant of such Option, or for such other period as
the Committee may determine;
c. provide an arrangement through registered broker-dealers
whereby temporary financing may be made available to an
optionee by the broker-dealer, under the rules and regulations
of the Board of Governors of the Federal Reserve, for the
purpose of assisting the optionee in the exercise of an
Option, such authority to include the payment by the Company
of the commissions of the broker-dealer;
d. provide the establishment of procedures for an optionee (i) to
have withheld from the total number of shares of Common Stock
to be acquired upon the exercise of an Option (other than an
Incentive Option) that number of shares having a Fair Market
Value which, together with such cash as shall be paid in
respect of fractional shares, shall equal the aggregate
exercise price under such Option for the number of shares then
being acquired (including the shares to be so withheld), and
(ii) to exercise a portion of an Option by delivering that
number of shares of Common Stock already owned by such
optionee having an aggregate Fair Market Value which shall
equal the partial Option exercise price and to deliver the
shares thus acquired by such optionee in payment of shares to
be received pursuant to the exercise of additional portions of
such Option, the effect of which shall be that such optionee
can in sequence utilize such newly acquired shares in payment
of the exercise price of the entire Option, together with such
cash as shall be paid in respect of fractional shares;
provided, however, that in the case of an Incentive Option, no
shares shall be used to pay the exercise price unless such
shares were not acquired through the exercise of an Incentive
Option or, if so acquired, have been held for more than two
years since the grant of such Option and for more than one
year since the exercise of such Option;
e. provide (in accordance with Section 13 or otherwise) the
establishment of a procedure whereby a number of shares of
Common Stock or other securities may be withheld from the
total number of shares of Common Stock or other securities to
be issued upon exercise of an Option (other than an Incentive
Option) to meet the obligation of withholding for income,
social security and other taxes incurred by an optionee upon
such exercise or required to be withheld by the Company or a
Related Entity in connection with such exercise;
f. prescribe, amend, modify and rescind rules and regulations
relating to the Plan;
g. make all determinations permitted or deemed necessary,
appropriate or advisable for the administration of the Plan,
interpret any Plan or Option provision, perform all other
acts, exercise all other powers, and establish any other
procedures determined by the Committee to be necessary,
appropriate, or advisable in administering the Plan or for the
conduct of the Committee's business. Any act of the
Committee, including interpretations of the provisions of the
Plan or any Option and determinations under the Plan or any
Option shall be final, conclusive and binding on all parties.
The Committee may delegate to one or more of its members, or to one or
more agents, such administrative duties as it may deem advisable, and the
Committee or any Person to whom it has delegated
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duties as aforesaid may employ one or more Persons to render advice with
respect to any responsibility the Committee or such Person may have under the
Plan. The Committee may employ attorneys, consultants, accountants, or other
Persons and the Committee, the Company, and its officers and directors shall be
entitled to rely upon the advice, opinions, or valuations of any such Persons.
No member or agent of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan and
all members and agents of the Committee shall be fully protected by the Company
in respect of any such action, determination or interpretation.
6. Stock Options for Key Employees.
Subject to the express provisions of this Plan, the Committee shall
have the authority to grant incentive stock options pursuant to Section 422 of
the Code ("Incentive Options"), to grant non-qualified stock options (options
which do not qualify under Section 422 of the Code) ("Non-Qualified Options"),
and to grant both types of Options to Key Employees. No Incentive Option shall
be granted pursuant to this Plan after the earlier of ten years from the date
of adoption of the Plan or ten years from the date of approval of the Plan by
the stockholders of the Company. Notwithstanding anything in this Plan to the
contrary, Incentive Options may be granted only to Key Employees. The terms
and conditions of the Options granted under this Section 6 shall be determined
from time to time by the Committee; provided, however, that the Options granted
under this Section 6 shall be subject to all terms and provisions of the Plan
(other than Section 7), including the following:
a. Option Exercise Price. Subject to Section 4, the Committee
shall establish the Option exercise price at the time any
Option is granted at such amount as the Committee shall
determine; provided, that, in the case of an Incentive Option,
such price shall not be less than the Fair Market Value per
share of Common Stock at the date the Option is granted; and
provided, further, that in the case of an Incentive Option
granted to a person who, at the time such Incentive Option is
granted, owns shares of the Company or any Related Entity
which possess more than 10% of the total combined voting power
of all classes of shares of the Company or of any Related
Entity, the option exercise price shall not be less than 110%
of the Fair Market Value per share of Common Stock at the date
the Option is granted. The Option exercise price shall be
subject to adjustment in accordance with the provisions of
Section 10 of the Plan.
b. Payment. The price per share of Common Stock with respect to
each Option exercise shall be payable at the time of such
exercise. Such price shall be payable in cash or by any other
means acceptable to the Committee, including delivery to the
Company of shares of Common Stock owned by the optionee or by
the delivery or withholding of shares pursuant to a procedure
created pursuant to Section 5.d. of the Plan. Shares
delivered to or withheld by the Company in payment of the
Option exercise price shall be valued at the Fair Market Value
of the Common Stock on the day preceding the date of the
exercise of the Option.
c. Continuation of Employment. Each Incentive Option shall
require the optionee to remain in the continuous employ of the
Company or any Related Entity from the date of grant of the
Incentive Option until no more than three months prior to the
date of exercise of the Incentive Option.
d. Exercisability of Stock Option. Subject to Section 8, each
Option shall be exercisable in one or more installments as the
Committee may determine at the time of the grant. No Option
by its terms shall be exercisable after the expiration of ten
years from the date of grant of the Option, unless, as to any
Non-Qualified Option, otherwise expressly provided in such
Option;
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provided, however, that no Incentive Option granted to a
person who, at the time such Option is granted, owns stock of
the Company, or any Related Entity, possessing more than 10%
of the total combined voting power of all classes of stock of
the Company, or any Related Entity, shall be exercisable after
the expiration of five years from the date such Option is
granted.
e. Death. If any optionee's employment with the Company or a
Related Entity terminates due to the death of such optionee,
the estate of such optionee, or a Person who acquired the
right to exercise such Option by bequest or inheritance or by
reason of the death of the optionee, shall have the right to
exercise such Option in accordance with its terms at any time
and from time to time within 180 days after the date of death
unless a longer or shorter period is expressly provided in
such Option or established by the Committee pursuant to
Section 8 (but in no event after the expiration date of such
Option).
f. Disability. If the employment of any optionee terminates
because of his Disability (as defined in Section 18), such
optionee or his legal representative shall have the right to
exercise the Option in accordance with its terms at any time
and from time to time within 180 days after the date of such
termination unless a longer or shorter period is expressly
provided in such Option or established by the Committee
pursuant to Section 8 (but not after the expiration date of
the Option); provided, however, that in the case of an
Incentive Option, the optionee or his legal representative
shall in any event be required to exercise the Incentive
Option within one year after termination of the optionee's
employment due to his Disability.
g. Termination for Cause; Voluntary Termination. Unless an
optionee's Option expressly provides otherwise, such optionee
shall immediately forfeit all rights under his Option, except
as to the shares of stock already purchased thereunder, if the
employment of such optionee with the Company or a Related
Entity is terminated by the Company or any Related Entity for
Good Cause (as defined below) or if such optionee voluntarily
terminates employment without the consent of the Company or
any Related Entity. The determination that there exists Good
Cause for termination shall be made by the Option Committee
(unless otherwise agreed to in writing by the Company and the
optionee).
h. Other Termination of Employment. If the employment of an
optionee with the Company or a Related Entity terminates for
any reason other than those specified in subsections 6(e), (f)
or (g) above, such optionee shall have the right to exercise
his Option in accordance with its terms, within 30 days after
the date of such termination, unless a longer or shorter
period is expressly provided in such Option or established by
the Committee pursuant to Section 8 (but not after the
expiration date of the Option); provided, that no Incentive
Option shall be exercisable more than three months after such
termination.
i. Maximum Exercise. The aggregate Fair Market Value of stock
(determined at the time of the grant of the Option) with
respect to which Incentive Options are exercisable for the
first time by an optionee during any calendar year under all
plans of the Company and any Related Entity shall not exceed
$100,000.
7. Stock Option Grants to Eligible Non-Employees.
Subject to the express provisions of this Plan, the Committee shall
have the authority to grant Non-Qualified Options to Eligible Non-Employees.
The terms and conditions of the Options granted under this Section 7 shall be
determined from time to time by the Committee; provided, however, that the
Options granted
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under this Section 7 shall be subject to all terms and provisions of the Plan
(other than Section 6), including the following:
a. Option Exercise Price. Subject to Section 4, the Committee
shall establish the Option exercise price at the time any
Non-Qualified Option is granted at such amount as the
Committee shall determine. The Option exercise price shall be
subject to adjustment in accordance with the provisions of
Section 10 of the Plan.
b. Payment. The price per share of Common Stock with respect to
each Option exercise shall be payable at the time of such
exercise. Such price shall be payable in cash or by any other
means acceptable to the Committee, including delivery to the
Company of shares of Common Stock owned by the optionee or by
the delivery or withholding of shares pursuant to a procedure
created pursuant to Section 5.d. of the Plan. Shares
delivered to or withheld by the Company in payment of the
Option exercise price shall be valued at the Fair Market Value
of the Common Stock on the day preceding the date of the
exercise of the Option.
c. Exercisability of Stock Option. Subject to Section 8, each
Option shall be exercisable in one or more installments as the
Committee may determine at the time of the grant. No Option
shall be exercisable after the expiration of ten years from
the date of grant of the Option, unless otherwise expressly
provided in such Option.
d. Death. If the retention by the Company or any Related Entity
of the services of any Eligible Non-Employee terminates
because of his death, the estate of such optionee, or a Person
who acquired the right to exercise such Option by bequest or
inheritance or by reason of the death of the optionee, shall
have the right to exercise such Option in accordance with its
terms, at any time and from time to time within 180 days after
the date of death unless a longer or shorter period is
expressly provided in such Option or established by the
Committee pursuant to Section 8 (but in no event after the
expiration date of such Option).
e. Disability. If the retention by the Company or any Related
Entity of the services of any Eligible Non-Employee
terminates because of his Disability, such optionee or his
legal representative shall have the right to exercise the
Option in accordance with its terms at any time and from time
to time within 180 days after the date of the optionee's
termination unless a longer or shorter period is expressly
provided in such Option or established by the Committee
pursuant to Section 8 (but not after the expiration of the
Option).
f. Termination for Cause; Voluntary Termination. If the
retention by the Company or any Related Entity of the services
of any Eligible Non-Employee is terminated (i) for Good Cause,
(ii) as a result of removal of the optionee from office as a
director of the Company or of any Related Entity for cause by
action of the stockholders of the Company or such Related
Entity in accordance with the by-laws of the Company or such
Related Entity, as applicable, and the corporate law of the
Jurisdiction of incorporation of the Company or such Related
Entity, or (iii) as a result of the voluntarily termination by
optionee of optionee's service without the consent of the
Company or any Related Entity, then such optionee shall
immediately forfeit his rights under his Option except as to
the shares of stock already purchased. The determination that
there exists Good Cause for termination shall be made by the
Option Committee (unless otherwise agreed to in writing by the
Company and the optionee).
g. Other Termination of Relationship. If the retention by the
Company or any Related Entity of the services of any Eligible
Non-Employee terminates for any reason other than those
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specified in subsections 7(d), (e) or (f) above, such optionee
shall have the right to exercise his or its Option in
accordance with its terms within 30 days after the date of
such termination, unless a longer or shorter period is
expressly provided in such Option or established by the
Committee pursuant to Section 8 (but not after the expiration
date of the Option).
h. Ineligibility for Other Grants. Any Eligible Non-Employee who
receives an Option pursuant to this Section 7 shall be
ineligible to receive any Options under any other Section of
the Plan.
8. Change of Control; Sale of the Company.
If (i) a Change of Control or a Sale of the Company shall occur, (ii)
the Company shall enter into an agreement providing for a Change of Control or
a Sale of the Company, or (iii) any member of the HMC Group shall enter into an
agreement providing for a Sale of the Company, then the Committee may declare
any or all Options outstanding under the Plan to be exercisable in full at such
time or times as the Committee shall determine, notwithstanding the express
provisions of such Options. Each Option accelerated by the Committee pursuant
to the preceding sentence shall terminate, notwithstanding any express
provision thereof or any other provision of the Plan, on such date (not later
than the stated exercise date) as the Committee shall determine.
9. Purchase Option.
a. Except as otherwise expressly provided in any particular
Option, if (i) any optionee's employment (or, in the case of
any Option granted under Section 7, the optionee's
relationship) with the Company or a Related Entity terminates
for any reason at any time or (ii) a Change of Control occurs,
the Company (and/or its designees) shall have the option (the
"Purchase Option") to purchase, and if the option is
exercised, the optionee (or the optionee's executor or the
administrator of the optionee's estate, in the event of the
optionee's death, or the optionee's legal representative in
the event of the optionee's incapacity) (hereinafter,
collectively with such optionee, the "Grantor") shall sell to
the Company and/or its assignee(s), all or any portion (at the
Company's option) of the shares of Common Stock and/or Options
held by the Grantor (such shares of Common Stock and Options
collectively being referred to as the "Purchasable Shares").
b. The Company shall give notice in writing to the Grantor of the
exercise of the Purchase Option within one year from the date
of the termination of the optionee's employment or engagement
or such Change of Control. Such notice shall state the number
of Purchasable Shares to be purchased and the determination of
the Board of Directors of the Fair Market Value per share of
such Purchasable Shares. If no notice is given within the
time limit specified above, the Purchase Option shall
terminate.
c. The purchase price to be paid for the Purchasable Shares
purchased pursuant to the Purchase Option shall be, in the
case of any Common Stock, the Fair Market Value per share as
of the date of the notice of exercise of the Purchase Option
times the number of shares being purchased, and in the case of
any Option, the Fair Market Value per share times the number
of vested shares subject to such Option which are being
purchased, less the applicable per share Option exercise
price. The purchase price shall be paid in cash. The closing
of such purchase shall take place at the Company's principal
executive offices within ten days after the purchase price has
been determined. At such closing, the Grantor shall deliver
to the purchasers the certificates or instruments evidencing
the Purchasable Shares being purchased, duly endorsed (or
accompanied by duly executed stock powers) and otherwise in
good form
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for delivery, against payment of the purchase price by check
of the purchasers). In the event that, notwithstanding the
foregoing, the Grantor shall have failed to obtain the release
of any pledge or other encumbrance on any Purchasable Shares
by the scheduled closing date, at the option of the
purchasers) the closing shall nevertheless occur on such
scheduled closing date, with the cash purchase price being
reduced to the extent of all unpaid indebtedness for which
such Purchasable Shares are then pledged or encumbered.
d. To assure the enforceability of the Company's rights under
this Section 9, each certificate or instrument representing
Common Stock or an Option held by him or it shall bear a
conspicuous legend in substantially the following form:
THE SHARES (REPRESENTED BY THIS CERTIFICATE] [ISSUABLE
PURSUANT TO THIS AGREEMENT] ARE SUBJECT TO AN OPTION TO
REPURCHASE PROVIDED UNDER THE PROVISIONS OF THE COMPANY'S 1996
STOCK OPTION PLAN AND A STOCK OPTION AGREEMENT ENTERED INTO
PURSUANT THERETO. A COPY OF SUCH OPTION PLAN AND OPTION
AGREEMENT ARE AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY AT
ITS PRINCIPAL EXECUTIVE OFFICES.
The Company's rights under this Section 9 shall terminate upon the
consummation of a Qualifying Public Offering.
10. Adjustment of Shares.
Unless otherwise expressly provided in a particular Option, in the
event that, by reason of any merger, consolidation, combination, liquidation,
reorganization, recapitalization, stock dividend, stock split, split-up, split-
off, spin-off, combination of shares, exchange of shares or other like change
in capital structure of the Company (collectively, a "Reorganization"), the
Common Stock is substituted, combined, or changed into any cash, property, or
other securities, or the shares of Common Stock are changed into a greater or
lesser number of shares of Common Stock, the number and/or kind of shares
and/or interests subject to an Option and the per share price or value thereof
shall be appropriately adjusted by the Committee to give appropriate effect to
such Reorganization. Any fractional shares or interests resulting from such
adjustment shall be eliminated. Notwithstanding the foregoing, (i) each such
adjustment with respect to an Incentive Option shall comply with the rules of
Section 424(a) of the Code, and (ii) in no event shall any adjustment be made
which would render any Incentive Option granted hereunder other than an
"incentive stock option" for purposes of Section 422 of the Code.
In the event the Company is not the surviving entity of a
Reorganization and, following such Reorganization, any optionee will hold
Options issued pursuant to this Plan which have not been exercised, canceled,
or terminated in connection therewith, the Company shall cause such Options to
be assumed (or cancelled and replacement Options issued) by the surviving
entity or a Related Entity.
11. Assignment or Transfer.
a. Except as otherwise expressly provided in any Nonqualified
Option, no Option granted under the Plan or any rights or
interests therein shall be assignable or transferable by an
optionee except by will or the laws of descent and
distribution, and during the lifetime of an optionee, Options
granted to him or her hereunder shall be exercisable only by
the optionee or, in the event that a legal representative has
been appointed in connection with the Disability of an
optionee, such legal representative.
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b. At least ninety (90) days prior to selling, pledging,
hypothecating, transferring or otherwise disposing
("Transfer") of any interest in Common Stock issued upon
exercise of an Option, the optionee proposing such Transfer
shall deliver a written notice (the "Sale Notice") to the
Company. The Sale Notice will disclose in reasonable detail
the identity of the prospective transferee(s) and the terms
and conditions of the proposed transfer. Such optionee (and
such optionee's transferees) shall not consummate any such
Transfer until ninety (90) days after the Sale Notice has been
delivered to the Company, unless the Company has notified such
optionee in writing that it will not exercise its rights under
this Section 11.b. (The date of the first to occur of such
events is referred to herein as the "Authorization Date").
The Company or its designee may elect to purchase all (but not
less than all) of the shares of Common Stock to be Transferred
upon the same terms and conditions as those set forth in the
Sale Notice ("Right of First Refusal") by delivering a written
notice of such election to such optionee within thirty (30)
days after the receipt of the Sale Notice by the Company (the
"Election Notice"). If the Company has not elected to
purchase all of the shares of Common Stock specified in the
Sale Notice, such optionee may Transfer the shares of Common
Stock to the prospective transferee(s) as specified in the
Sale Notice, at a price and on terms no more favorable to the
transferee(s) thereof than specified in the Sale Notice,
during the 90-day period immediately following the
Authorization Date. Any Option Shares not so transferred
within such 90-day period must be reoffered to the Company in
accordance with the provisions of this Section 11.b. The
Right of First Refusal will not apply with respect to
Transfers of such shares of Common Stock (i) by will or
pursuant to applicable laws of descent and distribution or
among the optionee's family group; provided that the
restrictions contained in this Section 11.b. will continue to
be applicable to the shares of Common Stock after any such
Transfer and provided further that the transferees of such
shares of Common Stock have agreed in writing to be bound by
the terms and provisions of this Plan and the applicable
Option Agreement as each may be amended from time to time. In
addition, upon any transfer to a member of the optionee's
family group, the optionee shall be required to give notice to
the Company and as a condition to such Transfer to a member of
the optionee's family group, the optionee will maintain all
voting control over all of the shares of Common Stock. The
optionee's, "family group" means the optionee's spouse and
lineal descendants (whether natural or adopted) and any trust
solely for the benefit of the optionee and/or the optionee's
spouse and/or lineal descendants. In addition, with the prior
approval of the Committee, notwithstanding the provisions of
this Section 11.b., an optionee may pledge such shares of
Common Stock creating a security interest therein; provided,
that the pledgee agrees in writing to be bound, and that such
shares of Common Stock remain bound, by the terms and
provisions of this Plan and the applicable Option Agreement,
as each may be amended from time to time. The rights and
obligations pursuant to this Section 11.b. hereof will
terminate upon the consummation of a Qualified Public
Offering.
To assure the enforceability of the Company's rights
under this Section 11.b., each certificate or instrument
representing Common Stock or an Option held by him or it shall
bear a conspicuous legend in substantially the following form:
THE SHARES [REPRESENTED BY THIS CERTIFICATE] [ISSUABLE
PURSUANT TO THIS AGREEMENT] ARE SUBJECT TO A RIGHT OF FIRST
REFUSAL PROVIDED UNDER THE COMPANY'S ROLLOVER STOCK OPTION
PLAN AND A STOCK OPTION AGREEMENT ENTERED INTO PURSUANT
THERETO. A COPY OF SUCH OPTION PLAN AND OPTION AGREEMENT ARE
AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES.
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12. Compliance with Securities Laws.
The Company shall not in any event be obligated to file any
registration statement under the Securities Act or any applicable state
securities law to permit exercise of any option or to issue any Common Stock in
violation of the Securities Act or any applicable state securities law. Each
optionee (or, in the event of his death or, in the event a legal representative
has been appointed in connection with his Disability, the Person exercising the
Option) shall, as a condition to his right to exercise any Option, deliver to
the Company an agreement or certificate containing such representations,
warranties and covenants as the Company may deem necessary or appropriate to
ensure that the issuance of shares of Common Stock pursuant to such exercise is
not required to be registered under the Securities Act or any applicable state
securities law.
Certificates for shares of Common Stock, when issued, may have
substantially the following legend, or statements of other applicable
restrictions, endorsed thereon, and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED
FOR SALE, SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF
UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO THE
ISSUER (WHICH, IN THE DISCRETION OF THE ISSUER, MAY INCLUDE AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER) THAT SUCH
OFFER, SALE, PLEDGE, TRANSFER OR OTHER DISPOSITION WILL NOT
VIOLATE APPLICABLE FEDERAL OR STATE LAWS.
This legend shall not be required for shares of Common Stock issued
pursuant to an effective registration statement under the Securities Act and in
accordance with applicable state securities laws.
13. Withholding Taxes.
By acceptance of the Option, the optionee will be deemed to (i) agree
to reimburse the Company or Related Entity by which the optionee is employed
for any federal, state, or local taxes required by any government to be
withheld or otherwise deducted by such corporation in respect of the optionee's
exercise of all or a portion of the Option; (ii) authorize the Company or any
Related Entity by which the optionee is employed to withhold from any cash
compensation paid to the optionee or in the optionee's behalf, an amount
sufficient to discharge any federal, state, and local taxes imposed on the
Company, or the Related Entity by which the optionee is employed, and which
otherwise has not been reimbursed by the optionee, in respect of the optionee's
exercise of all or a portion of the Option; and (iii) agree that the Company
may, in its discretion, hold the stock certificate to which the optionee is
entitled upon exercise of the Option as security for the payment of the
aforementioned withholding tax liability, until cash sufficient to pay that
liability has been accumulated, and may, in its discretion, effect such
withholding by retaining shares issuable upon the exercise of the Option having
a Fair Market Value on the date of exercise which is equal to the amount to be
withheld.
14. Costs and Expenses.
The costs and expenses of administering the Plan shall be borne by the
Company and shall not be charged against any Option nor to any employee
receiving an Option.
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15. Funding of Plan.
The Plan shall be unfunded. The Company shall not be required to make
any segregation of assets to assure the payment of any Option under the Plan.
16. Other Incentive Plans.
The adoption of the Plan does not preclude the adoption by appropriate
means of any other incentive plan for employees.
17. Effect on Employment.
Nothing contained in the Plan or any agreement related hereto or
referred to herein shall affect, or be construed as affecting, the terms of
employment of any Key Employee except to the extent specifically provided
herein or therein. Nothing contained in the Plan or any agreement related
hereto or referred to herein shall impose, or be construed as imposing, an
obligation on (i) the Company or any Related Entity to continue the employment
of any Key Employee, and (ii) any Key Employee to remain in the employ of the
Company or any Related Entity.
18. Definitions.
In addition to the terms specifically defined elsewhere in the Plan,
as used in the Plan, the following terms shall have the respective meanings
indicated:
a. "Affiliate" shall mean, as to any Person, a Person that
directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control
with, such Person.
b. "Authorization Date" shall have the meaning set forth in
Section 11.b. hereof.
c. "Board of Directors" shall have the meaning set forth in
Section 2 hereof.
d. "Change of Control" shall mean the first to occur of the
following events: (i) any sale, lease, exchange, or other
transfer (in one transaction or series of related
transactions) of all or substantially all of the assets of the
Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act, other than one or more
members of the HMC Group, (ii) a majority of the Board of
Directors of the Company shall consist of Persons who are not
Continuing Directors; or (iii) the acquisition by any Person
or Group (other than one or more members of the HMC Group) of
the power, directly or indirectly, to vote or direct the
voting of securities having more than 50% of the ordinary
voting power for the election of directors of the Company.
e. "Code" shall have the meaning set forth in Section 1 hereof.
f. "Committee" shall have the meaning set forth in Section 2
hereof.
g. "Common Stock" shall have the meaning set forth in Section 3
hereof.
h. "Company" shall have the meaning set forth in Section 1
hereof.
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i. "Continuing Director" shall mean, as of the date of
determination, any Person who (i) was a member of the Board of
Directors of the Company on the date of adoption of this Plan,
(ii) was nominated for election or elected to the Board of
Directors of the Company with the affirmative vote of a
majority of the Continuing Directors who were members of such
Board of Directors at the time of such nomination or election,
or (iii) is a member of the HMC Group.
j. "Designated Date" means the first date on which each of the
following conditions shall have been met: (i) the Company
shall have consummated a Qualifying Public Offering and (ii)
the Company shall have ceased to be an Equity Fund Company.
k. "Disability" shall mean permanent disability as defined under
the appropriate provisions of the long- term disability plan
maintained for the benefit of employees of the Company or any
Related Entity who are regularly employed on a salaried basis
unless another meaning shall be agreed to in writing by the
Committee and the optionee; Provided, however, that in the
case of an Incentive Option "disability" shall have the
meaning specified in Section 22(e)(3) of the Code.
l. "Election Notice" shall have the meaning set forth in Section
11.b. hereof.
m. "Eligible Non-Employee" shall have the meaning set forth in
Section 4 hereof.
n. "Equity Fund Company" means any Person in which one or more
Equity Fund Investment Vehicles own(s), directly or
indirectly, more than 10% of the fully-diluted common stock or
has an unrecovered investment of $1,000,000 or more, and each
Subsidiary thereof.
o. "Equity Fund Investment Vehicle" means HMTF/CH Holdings, L.P.,
Hicks, Muse, Tate & Furst Equity Fund II, L.P., Hicks, Muse,
Tate & Furst Equity Fund III, L.P., or any other similar
investment entity formed by Hicks, Muse, Tate & Furst
Incorporated.
p. "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
q. "Fair Market Value", shall, as it relates to the Common Stock,
mean the average of the high and low prices of such Common
Stock as reported on the principal national securities
exchange on which the shares of Common Stock are then listed
on the date specified herein, or if there were no sales on
such date, on the next preceding day on which there were
sales, or if such Common Stock is not listed on a national
securities exchange, the last reported bid price in the
over-the-counter market, or if such shares are not traded in
the over-the-counter market, the per share cash price for
which all of the outstanding Common Stock could be sold to a
willing purchaser in an arms length transaction (without
regard to minority discount, absence of liquidity, or transfer
restrictions imposed by any applicable law or agreement) at
the date of the event giving rise to a need for a
determination. Except as may be otherwise expressly provided
in a particular Option, Fair Market Value shall be determined
in good faith by the Committee.
r. "Good Cause", with respect to any Key Employee, shall mean
(unless another definition is agreed to in writing by the
Company and the optionee) termination by action of the Board
of Directors because of: (A) the optionee's conviction of, or
plea of nolo contendere to, a felony or a crime involving
moral turpitude; (B) the optionee's personal dishonesty,
incompetence, willful misconduct, willful violation of any
law, rule, or regulation (other than minor traffic
-12-
violations or similar offenses) or breach of fiduciary duty
which involves personal profit; (C) the optionee's commission
of material mismanagement in the conduct of his duties as
assigned to him by the Board of Directors or the optionee's
supervising officer or officers of the Company or any Related
Entity; (D) the optionee's willful failure to execute or
comply with the policies of the Company or any Related Entity
or his stated duties as established by the Board of Directors
or the optionee's supervising officer or officers of the
Company or any Related Entity, or the optionee's intentional
failure to perform the optionee's stated duties; (E) substance
abuse or addiction on the part of the optionee. "Good Cause",
with respect to any Eligible Non-Employee, shall mean (unless
another definition is agreed to in writing by the Company and
the optionee) termination by action of the Board of Directors
because of: (A) the optionee's conviction of, or plea of nolo
contendere to, a felony or a crime involving moral turpitude;
(B) the optionee's personal dishonesty, incompetence, willful
misconduct, willful violation of any law, rule, or regulation
(other than minor traffic violations or similar offenses) or
breach of fiduciary duty which involves personal profit; (C)
the optionee's commission of material mismanagement in
providing services to the Company or any Related Entity; (D)
the optionee's willful failure to comply with the policies of
the Company in providing services to the Company or any
Related Entity, or the optionee's intentional failure to
perform the services for which the optionee has been engaged;
(E) substance abuse or addiction on the part of the optionee;
or (F) the optionee's willfully making any material
misrepresentation or willfully omitting to disclose any
material fact to the board of directors of the Company or any
Related Entity with respect to the business of the Company or
any Related Entity. Notwithstanding the foregoing, in the
case of each optionee listed on Schedule A hereto, who as of
the effective date of the Plan, has an employment agreement
with the Company or any Related Entity that contains a
definition of "Good Cause" (or any similar definition), then
during the term of such employment agreement the definition
contained in such employment agreement shall be the applicable
definition of "Good Cause" under the Plan as to such optionee.
s. "Grantor" has the meaning set forth in Section 9 hereof.
t. "Hicks Muse Company" shall mean any Person in which the HMC
Group beneficially owns more than 25% of the fully-diluted
common stock or has an unrecovered investment of $1,000,000 or
more, and each Subsidiary thereof.
u. "HMC Group" shall mean Hicks, Muse, Tate & Furst Incorporated,
its Affiliates and their respective employees, officers, and
directors (and members of their respective families and trusts
for the primary benefit of such family members).
v. "Incentive Options" shall have the meaning set forth in
Section 6 hereof.
w. The term "included" when used herein shall mean "including,
but not limited to".
x. "Key Employee" shall have the meaning set forth in Section 4
hereof.
y. "Marketable Securities" shall mean securities (i) of a class
or series listed or traded on the New York Stock Exchange,
American Stock Exchange, or NASDAQ National Market and (ii)
which, as a matter of law, shall at the time of acquisition be
(or which at the date of acquisition are legally committed to
become within six months after the date of acquisition) freely
saleable in unlimited quantities by the HMC Group to the
public, either pursuant to an
-13-
effective registration statement under the Securities Act as
amended (including a current prospectus which is available for
delivery) or without the necessity of such registration.
z. "Non-Qualified Options" shall have the meaning set forth in
Section 6 hereof.
aa. "Options" shall have the meaning set forth in Section 1
hereof.
ab. "Person" shall have the meaning set forth in Section 4 hereof,
ac. "Plan" shall have the meaning set forth in Section 1 hereof.
ad. "Purchasable Shares" shall have the meaning set forth in
Section 9 hereof.
ae. "Purchase Option" shall have the meaning set forth in Section
9 hereof.
af. "Qualifying Public Offering" shall mean a firm commitment
underwritten public offering of Common Stock for cash where
the proceeds to the Company (prior to deducting any
underwriters' discounts and commissions) exceed $10 million
and the shares of Common Stock registered under the Securities
Act are listed on a national securities exchange.
ag. "Related Entities" shall have the meaning set forth in Section
1 hereof.
ah. "Reorganization" shall have the meaning set forth in Section
10 hereof.
ai. "Right of First Refusal" shall have the meaning set forth in
Section 11.b. hereof.
aj. "Rule 16b-3" shall mean Rule 16b-3, as amended, or other
applicable rules under Section 16(b) of the Exchange Act.
ak. "Sale of the Company" shall mean the first to occur of (i) any
sale, lease, exchange, or other transfer (in one transaction
or series of related transactions) of all or substantially all
of the assets of the Company to any Person or group of related
Persons for purposes of Section 13(d) of the Exchange Act,
other than one or more members of the HMC Group (a "Clause 1
Event"), (ii) the Company's ceasing to be a Hicks Muse Company
in a transaction or series of related transactions initiated
or agreed to by the HMC Group (other than the distribution by
one or more Equity Fund Investment Vehicles, following a
Qualifying Public Offering, of equity securities of the
Company to the investors in such Equity Fund Investment
Vehicle(s)) (a "Clause 2 Event"), or (iii) the consummation of
a transaction or series of related transactions initiated or
agreed to by the HMC Group pursuant to which the HMC Group
receives, in respect of its shares of Common Stock, cash
and/or Marketable Securities which have an aggregate value
equal to at least 75%; of the total value of all Common Stock
owned by the HMC Group immediately prior to such transaction,
as determined by the Board of Directors in good faith (a
"Clause 3 Event"); provided, however, that the occurrence of a
Clause 1 Event, a Clause 2 Event or a Clause 3 Event on any
date after the Designated Date shall not constitute a "Sale of
the Company".
al. "Sale Notice" shall have the meaning set forth in Section 11.b
hereof.
am. "Securities Act" shall mean the Securities Act of 1933, as
amended.
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an. "Subsidiary" shall mean, with respect to any Person, any other
Person of which such first Person owns or has the power to
vote, directly or indirectly, securities representing a
majority of the votes ordinarily entitled to be cast for the
election of directors or other governing Persons.
ao. "Transfer" shall have the meaning set forth in Section 11.b.
hereof.
19. Amendment of Plan.
The Board of Directors shall have the right to amend, modify, suspend
or terminate the Plan at any time; provided, that no amendment shall be made
which shall increase the total number of shares of the Common Stock which may
be issued and sold pursuant to Options granted under the Plan or decrease the
minimum Option exercise price in the case of an Incentive Option, or modify the
provisions of the Plan relating to eligibility with respect to Incentive
Options unless such amendment is made by or with the approval of the
stockholders. The Board of Directors shall have the right to amend the Plan
and the Options outstanding thereunder, without the consent or joinder of any
optionee or other Person, in such manner as may be determined necessary or
appropriate by the Board of Directors in order to cause the Plan and the
Options outstanding thereunder (i) to qualify as "incentive stock options"
within the meaning of Section 422 of the Code, (ii) to comply with Rule 16b-3
(or any successor rule) under the Exchange Act (or any successor law) and the
regulations (including any temporary regulations) promulgated thereunder, or
(iii) to comply with Section 162(m) of the Code (or any successor section) and
the regulations (including any temporary regulations) promulgated thereunder.
Except as provided above, no amendment, modification, suspension or termination
of the Plan shall alter or impair any Options previously granted under the
Plan, without the consent of the holder thereof.
20. Effective Date.
The Plan shall become effective on the date on which it is approved by
the Board of Directors of the Company.
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SCHEDULE "A"
NONE
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