Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment No. 3 to Form S-1/A 3 18K
2: EX-1.1 Form of Underwriting Agreement 35 110K
3: EX-4.1 Specimen of Common Stock Certificate 2 11K
4: EX-5 Opinion of Hunton & Williams Re. Legality 2 9K
5: EX-10.1 Form of Bank Credit Facility 98 323K
6: EX-10.2 Stock Compensation Plan 25 95K
7: EX-10.3 Stock Purchase & Indemnification Agreement 24 64K
8: EX-10.4 Services Agreement 10 27K
9: EX-10.5 Tax Allocation Agreement 49 111K
10: EX-10.6 Computer & Information Tech. Agreements 69 121K
11: EX-10.7 Pension Plan Agreement 4 12K
EXHIBIT 10.2
OVERNITE CORPORATION
STOCK COMPENSATION PLAN
Table of Contents
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ARTICLE I DEFINITIONS...............................................................1
1.01. Accounting Firm......................................................1
1.03. Affiliate............................................................1
1.04. Agreement............................................................1
1.05. Beneficial Owner.....................................................1
1.06. Board................................................................1
1.07. Change in Control....................................................1
1.08. Code.................................................................3
1.09. Committee............................................................3
1.10. Common Stock.........................................................3
1.11. Company..............................................................4
1.12. Control Change Date..................................................4
1.13. Corresponding SAR....................................................4
1.15. Exchange Act.........................................................4
1.16. Fair Market Value....................................................4
1.17. Initial Value........................................................4
1.18. Option...............................................................4
1.19. Participant..........................................................5
1.20. Performance Shares...................................................5
1.21. Person...............................................................5
1.22. Plan.................................................................5
1.23. Related Entity.......................................................5
1.24. Restoration Feature..................................................5
1.26. SAR..................................................................6
1.27. Stock Award..........................................................6
ARTICLE II PURPOSES.................................................................6
ARTICLE III ADMINISTRATION..........................................................6
ARTICLE IV ELIGIBILITY..............................................................7
ARTICLE V STOCK SUBJECT TO PLAN.....................................................7
5.01. Shares Issued........................................................8
5.02. Aggregate Limit......................................................8
5.03. Reallocation of Shares...............................................8
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ARTICLE VI OPTIONS..................................................................8
6.01. Award................................................................9
6.02. Option Price.........................................................9
6.03. Maximum Option Period................................................9
6.04. Nontransferability...................................................9
6.05. Transferable Options.................................................9
6.06. Employee Status.....................................................10
6.07. Exercise............................................................10
6.08. Payment.............................................................10
6.09. Change in Control...................................................11
6.10. Shareholder Rights..................................................11
6.11. Disposition of Stock................................................11
ARTICLE VII SARS...................................................................11
7.01. Award...............................................................11
7.02. Maximum SAR Period..................................................11
7.03. Nontransferability..................................................12
7.04. Transferable SARs...................................................12
7.05. Exercise............................................................12
7.06. Change in Control...................................................13
7.07. Employee Status.....................................................13
7.08. Settlement..........................................................13
7.09. Shareholder Rights..................................................13
ARTICLE VIII STOCK AWARDS..........................................................13
8.01. Award...............................................................13
8.02. Vesting.............................................................13
8.03. Employee Status.....................................................14
8.04. Change in Control...................................................14
8.05. Shareholder Rights..................................................14
ARTICLE IX PERFORMANCE SHARE AWARDS................................................15
9.01. Award...............................................................15
9.02. Earning the Award...................................................15
9.03. Payment.............................................................15
9.04. Shareholder Rights..................................................15
9.05. Nontransferability..................................................16
9.06. Transferable Performance Shares.....................................16
9.07. Employee Status.....................................................16
9.08. Change in Control...................................................16
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ARTICLE X ADJUSTMENT UPON CHANGE IN COMMON STOCK...................................16
ARTICLE XI COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES...................17
ARTICLE XII GENERAL PROVISIONS.....................................................18
12.01. Effect on Employment and Service...................................18
12.02. Unfunded Plan......................................................18
12.03. Rules of Construction..............................................18
12.04. Tax Withholding....................................................19
12.05. Limitation on Benefits.............................................19
ARTICLE XIII AMENDMENT.............................................................20
ARTICLE XIV DURATION OF PLAN.......................................................20
ARTICLE XV EFFECTIVE DATE OF PLAN..................................................20
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OVERNITE CORPORATION
STOCK COMPENSATION PLAN
-----------------------
ARTICLE I
DEFINITIONS
-----------
1.01. ACCOUNTING FIRM
---------------
Accounting Firm means the independent accounting firm engaged to audit
the Company's financial statements.
1.02. ADMINISTRATOR
-------------
Administrator means the Committee and any delegate of the Committee that
is appointed in accordance with Article III.
1.03. AFFILIATE
---------
Affiliate has the meaning set forth in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act, as amended from time to time.
1.04. AGREEMENT
---------
Agreement means a written agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying the terms
and conditions of an award of Performance Shares or a Stock Award, Option or SAR
granted to such Participant.
1.05. BENEFICIAL OWNER
----------------
Beneficial Owner has the meaning set forth in Rule 13d-3 under the
Exchange Act, except that a Person shall not be deemed to be the Beneficial
Owner of any securities the holding of which is properly disclosed on a Form
13-G.
1.06. BOARD
-----
Board means the Board of Directors of the Company.
1.07. CHANGE IN CONTROL
-----------------
Change in Control means the occurrence of any of the events set forth in
any one of the following paragraphs:
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(1) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company or its affiliates) representing 30% or more
of the combined voting power of the Company's then outstanding
securities, excluding any Person who becomes such a Beneficial Owner
in connection with a transaction described in clause (i) of paragraph
(3) below; or
(2) the following individuals cease for any reason to constitute
a majority of the number of directors then serving: individuals who,
on the date the Plan is adopted by the Board, constitute the Board
and any new director (other than a director whose initial assumption
of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by
the Company's stockholders was approved or recommended by a vote of
at least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or
recommended, or
(3) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or any parent thereof) at
least 50% of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person
2
is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities
Beneficially Owned by such Person any securities acquired directly
from the Company or its Affiliates) representing 50% or more of the
combined voting power of the Company's then outstanding securities;
or
(4) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity at least 50% of the combined voting
power of the voting securities of which is owned by stockholders of
the Company in substantially the same proportions as their ownership
of the Company immediately prior to such sale.
Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to have occurred by virtue of the consummation of any transaction or
series of integrated transactions immediately following which the recordholders
of the common stock of the Company immediately prior to such transaction or
series of transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the assets of the
Company immediately following such transaction or series of transactions.
1.08. CODE
----
Code means the Internal Revenue Code of 1986, and any amendments
thereto.
1.09. COMMITTEE
---------
Committee means the Compensation Committee of the Board; provided,
however, that the Board shall serve as the Committee prior to the appointment of
the Compensation Committee.
1.10. COMMON STOCK
------------
Common Stock means the common stock of the Company.
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1.11. COMPANY
-------
Company means Overnite Corporation.
1.12. CONTROL CHANGE DATE
-------------------
Control Change Date means the date on which a Change in Control
occurs. If a Change in Control occurs on account of a series of transactions,
the Control Change Date is the date of the last of such transactions.
1.13. CORRESPONDING SAR
-----------------
Corresponding SAR means an SAR that is granted in relation to a
particular Option and that can be exercised only upon the surrender to the
Company, unexercised, of that portion of the Option to which the SAR relates.
1.14. EXCHANGE ACT
------------
Exchange Act means the Securities Exchange Act of 1934, as amended
from time to time.
1.15. FAIR MARKET VALUE
-----------------
Fair Market Value means, on any given date, the reported "closing"
price of a share of Common Stock in the over-the-counter market on such date as
reported by the National Association of Securities Dealers, Inc., or if the
Common Stock was not so traded on such day, then on the next preceding day that
the Common Stock was so traded.
1.16. INITIAL VALUE
-------------
Initial Value means, with respect to a Corresponding SAR, the option
price per share of the related Option and, with respect to an SAR granted
independently of an Option, the price per share of Common Stock as determined by
the Administrator on the date of the grant; provided, however, that the price
per share of Common Stock encompassed by the grant of an SAR shall not be less
than the Fair Market Value on the date of grant.
1.17. OPTION
------
Option means a stock option that entitles the holder to purchase from
the Company a stated number of shares of Common Stock at the price set forth in
an Agreement.
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1.18. PARTICIPANT
-----------
Participant means an employee of the Company or a Related Entity,
including an employee who is a member of the Board, who satisfies the
requirements of Article IV and is selected by the Administrator to receive an
award of Performance Shares, a Stock Award, an Option, an SAR, or a combination
thereof.
1.19. PERFORMANCE SHARES
------------------
Performance Shares means an award, in the amount determined by the
Administrator and specified in an Agreement, stated with reference to a
specified number of shares of Common Stock, that entitles the holder to receive
a payment for each specified share equal to the Fair Market Value of Common
Stock on the date of payment. In the discretion of the Administrator, a
Performance Share award may include the right to receive an additional payment
for the accumulated dividends that would have been paid on each specified share
as if such dividends had been invested in Common Stock on the dividend payment
date, from the date of grant to the date of payment.
1.20. PERSON
------
Person has the meaning set forth in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) of the Exchange Act except
that such term does not include (i) the Company, its Affiliates or any Related
Entity, (ii) a trustee or other fiduciary holding securities under an employee
benefit plan maintained by the Company or any Related Entity, (iii) any
underwriter temporarily holding securities pursuant to any offering of such
securities or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock in the Company.
1.21. PLAN
----
Plan means the Overnite Corporation Stock Compensation Plan.
1.22. RELATED ENTITY
--------------
Related Entity means any entity that directly or indirectly, through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Company.
1.23. RESTORATION FEATURE
-------------------
Restoration Feature means the right to receive a new option covering
the number of shares of Common Stock surrendered to the Company pursuant to the
exercise of an Option. The new Option shall have an exercise price equal to the
Fair Market Value on the date such shares of Common Stock were surrendered,
shall be
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exercisable six months after the date of grant and shall otherwise be subject to
the same terms and conditions as the related Option.
1.24. SAR
---
SAR means a stock appreciation right that entitles the holder to
receive, with respect to each share of Common Stock encompassed by the exercise
of such SAR, the lesser of (a) the excess, if any, of the Fair Market Value at
the time of exercise over the Initial Value, or (b) the Initial Value.
References to "SARs" include both Corresponding SARs and SARs granted
independently of Options, unless the context requires otherwise.
1.25. STOCK AWARD
-----------
Stock Award means Common Stock awarded to a Participant under Article
VIII.
ARTICLE II
PURPOSES
--------
The Plan is intended to assist the Company and Related Entities in
recruiting and retaining individuals with ability and initiative by enabling
such persons to participate in the future success of the Company and the Related
Entities and to associate their interests with those of the Company and its
shareholders. The Plan is intended to permit the grant of both Options
qualifying under Section 422 of the Code ("incentive stock options") and Options
not so qualifying, and the grant of SARs, Stock Awards and Performance Shares.
No Option that is intended to be an incentive stock option shall be invalid for
failure to qualify as an incentive stock option. The proceeds received by the
Company from the sale of Common Stock pursuant to this Plan shall be used for
general corporate purposes.
ARTICLE III
ADMINISTRATION
--------------
The Plan shall be administered by the Administrator. The Administrator
shall have authority to grant Stock Awards, Performance Shares, Options and SARs
upon such terms (not inconsistent with the provisions of this Plan), as the
Administrator may consider appropriate. Such terms may include conditions (in
addition to those contained in this Plan) on the exercisability of all or any
part of an Option or SAR or on the transferability or forfeitability of a Stock
Award or an award of Performance Shares, including by way of example and not of
limitation, conditions on which
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Participants may defer receipt of benefits under the Plan, requirements that the
Participant complete a specified period of employment with the Company or a
Related Entity, requirements that the Company achieve a specified level of
financial performance or that the Company achieve a specified level of financial
return. Notwithstanding any such conditions, the Administrator may, in its
discretion, accelerate the time at which any Option or SAR may be exercised, or
the time at which a Stock Award may become transferable or nonforfeitable or
both, or the time at which an award of Performance Shares may be settled or may
waive any of the conditions referred to above. In addition, the Administrator
shall have complete authority to interpret all provisions of this Plan; to
prescribe the form of Agreements; to adopt, amend, and rescind rules and
regulations pertaining to the administration of the Plan; and to make all other
determinations necessary or advisable for the administration of this Plan. The
express grant in the Plan of any specific power to the Administrator shall not
be construed as limiting any power or authority of the Administrator. Any
decision made, or action taken, by the Administrator in connection with the
administration of this Plan shall be final and conclusive. Neither the
Administrator nor any member of the Committee shall be liable for any act done
in good faith with respect to this Plan or any Agreement, Option, SAR, Stock
Award or award of Performance Shares. All expenses of administering this Plan
shall be borne by the Company, a Related Entity or a combination thereof.
The Committee, in its discretion, may delegate to one or more officers of
the Company all or part of the Committee's authority and duties with respect to
grants and awards to individuals who are not subject to the reporting and other
provisions of Section 16 of the Exchange Act. The Committee may revoke or amend
the terms of a delegation at any time but such action shall not invalidate any
prior actions of the Committee's delegate or delegates that were consistent with
the terms of the Plan.
ARTICLE IV
ELIGIBILITY
-----------
Any employee of the Company or a Related Entity (including a corporation
that becomes a Related Entity after the adoption of this Plan), is eligible to
participate in this Plan if the Administrator, in its sole discretion,
determines that such person has contributed or can be expected to contribute to
the profits or growth of the Company or a Related Entity. Directors of the
Company who are employees of the Company or a Related Entity may be selected to
participate in this Plan.
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ARTICLE V
STOCK SUBJECT TO PLAN
---------------------
5.01. SHARES ISSUED
-------------
Upon the award of shares of Common Stock pursuant to a Stock Award or
in settlement of an award of Performance Shares, the Company may issue shares of
Common Stock from its authorized but unissued Common Stock. Upon the exercise of
any Option or SAR the Company may deliver to the Participant (or the
Participant's broker if the Participant so directs), shares of Common Stock from
its authorized but unissued Common Stock.
5.02. AGGREGATE LIMIT
---------------
The maximum aggregate number of shares of Common Stock that may be
issued under this Plan, pursuant to the exercise of SARs and Options and the
grant of Stock Awards and the settlement of Performance Shares is 3,750,000
shares. The maximum aggregate number of shares that may be issued under this
Plan as Stock Awards and in settlement of Performance Shares, is 1,250,000
shares. The maximum aggregate number of shares that may be issued under this
Plan and the maximum number of shares that may be issued as Stock Awards and in
settlement of Performance Shares shall be subject to adjustment as provided in
Article X.
5.03. REALLOCATION OF SHARES
----------------------
If an Option is terminated, in whole or in part, for any reason other
than its exercise or the exercise of a Corresponding SAR, the number of shares
of Common Stock allocated to the Option or portion thereof may be reallocated to
other Options, SARs, Performance Shares and Stock Awards to be granted under
this Plan. If an SAR is terminated, in whole or in part, for any reason other
than its exercise or the exercise of a related Option, the number of shares of
Common Stock allocated to the SAR or portion thereof may be reallocated to other
Options, SARs, Performance Shares and Stock Awards to be granted under this
Plan. If an award of Performance Shares is terminated, in whole or in part, the
number of shares of Common Stock allocated to the Performance Shares or portion
thereof may be reallocated to other options, SARs, Performance Shares and Stock
Awards to be granted under this Plan. If a Stock Award is forfeited, in whole or
in part, for any reason, the number of shares of Common Stock allocated to the
Stock Award or portion thereof may be reallocated to other Options, SARs,
Performance Shares and Stock Awards to be granted under this Plan.
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ARTICLE VI
OPTIONS
-------
6.01. AWARD
-----
In accordance with the provisions of Article IV, the Administrator
will designate each individual to whom an Option is to be granted and will
specify the number of shares of Common Stock covered by each such award. An
Option may be granted with or without a Restoration Feature.
6.02. OPTION PRICE
------------
The price per share for Common Stock purchased on the exercise of an
Option shall be determined by the Administrator on the date of grant, but shall
not be less than the Fair Market Value on the date the Option is granted.
6.03. MAXIMUM OPTION PERIOD
---------------------
The maximum period in which an Option may be exercised shall be ten
years from the date such Option was granted. The terms of any Option may provide
that it has a term that is less than such maximum period.
6.04. NONTRANSFERABILITY
------------------
Except as provided in Section 6.05, each Option granted under this
Plan shall be nontransferable except by will or by the laws of descent and
distribution. In the event of any transfer of an Option (by the Participant or
his transferee), the Option and any Corresponding SAR that relates to such
Option must be transferred to the same person or persons or entity or entities.
Except as provided in Section 6.05, during the lifetime of the Participant to
whom the Option is granted, the Option may be exercised only by the Participant.
No right or interest of a Participant in any Option shall be liable for, or
subject to, any lien, obligation, or liability of such Participant.
6.05. TRANSFERABLE OPTIONS
--------------------
Section 6.04 to the contrary notwithstanding, if the Agreement
provides, an Option that is not an incentive stock option may be transferred by
a Participant to the Participant's children, grandchildren, spouse, one or more
trusts for the benefit of such family members or a partnership in which such
family members are the only partners, on such terms and conditions as may be
permitted under Securities Exchange Commission Rule 16b-3 as in effect from time
to time. The holder of an Option transferred pursuant to this section shall be
bound by the same terms and conditions that governed the Option during the
period that it was held by the Participant; provided, however, that such
transferee may not transfer the Option
9
except by will or the laws of descent and distribution. In the event of any
transfer of an Option (by the Participant or his transferee), the Option and any
Corresponding SAR that relates to such Option must be transferred to the same
person or persons or entity or entities.
6.06. EMPLOYEE STATUS
---------------
For purposes of determining the applicability of Section 422 of the
Code (relating to incentive stock options), or in the event that the terms of
any Option provide that it may be exercised only during employment or within a
specified period of time after termination of employment, the Administrator may
decide to what extent leaves of absence for governmental or military service,
illness, temporary disability, or other reasons shall not be deemed
interruptions of continuous employment.
6.07. EXERCISE
--------
Subject to the provisions of this Plan and the applicable Agreement,
an Option may be exercised in whole at any time or in part from time to time at
such times and in compliance with such requirements as the Administrator shall
determine; provided, however, that incentive stock options (granted under the
Plan and all plans of the Company and its Related Entities) may not be first
exercisable in a calendar year for stock having a Fair Market Value (determined
as of the date an Option is granted) exceeding the limit prescribed by Code
section 422(d). An Option granted under this Plan may be exercised with respect
to any number of whole shares less than the full number for which the Option
could be exercised. A partial exercise of an Option shall not affect the right
to exercise the Option from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining shares subject to the Option.
The exercise of an Option shall result in the termination of any Corresponding
SAR to the extent of the number of shares with respect to which the Option is
exercised.
6.08. PAYMENT
-------
Unless otherwise provided by the Agreement, payment of the Option
price shall be made in cash or a cash equivalent acceptable to the
Administrator. Subject to rules established by the Administrator, payment of all
or part of the Option price may be made with shares of Common Stock which have
been owned by the Participant for at least six months and which have not been
used for another exercise during the prior six months. If Common Stock is used
to pay all or part of the Option price, the sum of the cash and cash equivalent
and the Fair Market Value (determined as of the day preceding the date of
exercise) of such shares must not be less than the Option price of the shares
for which the Option is being exercised.
10
6.09. CHANGE IN CONTROL
-----------------
Section 6.07 to the contrary notwithstanding, each outstanding Option
shall be fully exercisable (in whole or in part at the discretion of the holder)
on and after a Control Change Date and during the period (i) beginning on the
first day after the commencement of a tender offer or exchange offer for shares
of Common Stock (other than an offer made by the Company); provided that shares
are acquired pursuant to such offer and (ii) ending on the thirtieth day
following the expiration of such offer.
6.10. SHAREHOLDER RIGHTS
------------------
No Participant shall have any rights as a shareholder with respect to
shares subject to his Option until the date of exercise of such Option.
6.11. DISPOSITION OF STOCK
--------------------
A Participant shall notify the Company of any sale or other
disposition of Common Stock acquired pursuant to an Option that was an incentive
stock option if such sale or disposition occurs (i) within two years of the
grant of an Option or (ii) within one year of the issuance of the Common Stock
to the Participant. Such notice shall be in writing and directed to the
Secretary of the Company.
ARTICLE VII
SARS
----
7.01. AWARD
-----
In accordance with the provisions of Article IV, the Administrator
will designate each individual to whom SARs are to be granted and will specify
the number of shares covered by each such award. In addition, no Participant may
be granted Corresponding SARs (under all incentive stock option plans of the
Company and its Affiliates) that are related to incentive stock options which
are first exercisable in any calendar year for stock having an aggregate Fair
Market Value (determined as of the date the related Option is granted) that
exceeds the limit prescribed by Code section 422(d).
7.02. MAXIMUM SAR PERIOD
------------------
The maximum period in which an SAR may be exercised shall be ten
years from the date such SAR was granted. The terms of any SAR may provide that
it has a term that is less than such maximum period.
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7.03. NONTRANSFERABILITY
------------------
Except as provided in Section 7.04, each SAR granted under this Plan
shall be nontransferable except by will or by the laws of descent and
distribution. In the event of any such transfer, a Corresponding SAR and the
related Option must be transferred to the same person or persons or entity or
entities. Except as provided in Section 7.04, during the lifetime of the
Participant to whom the SAR is granted, the SAR may be exercised only by the
Participant. No right or interest of a Participant in any SAR shall be liable
for, or subject to, any lien, obligation, or liability of such Participant.
7.04. TRANSFERABLE SARS
-----------------
Section 7.03 to the contrary notwithstanding, if the Agreement
provides, an SAR, other than a Corresponding SAR that is related to an incentive
stock option, may be transferred by a Participant to the Participant's children,
grandchildren, spouse, one or more trusts for the benefit of such family members
or a partnership in which such family members are the only partners, on such
terms and conditions as may be permitted under Securities Exchange Commission
Rule 16b-3 as in effect from time to time. The holder of an SAR transferred
pursuant to this section shall be bound by the same terms and conditions that
governed the SAR during the period that it was held by the Participant;
provided, however, that such transferee may not transfer the SAR except by will
or the laws of descent and distribution. In the event of any transfer of a
Corresponding SAR (by the Participant or his transferee), the Corresponding SAR
and the related Option must be transferred to the same person or person or
entity or entities.
7.05. EXERCISE
--------
Subject to the provisions of this Plan and the applicable Agreement,
an SAR may be exercised in whole at any time or in part from time to time at
such times and in compliance with such requirements as the Administrator shall
determine; provided, however, that a Corresponding SAR that is related to an
incentive stock option may be exercised only to the extent that the related
Option is exercisable and only when the Fair Market Value exceeds the option
price of the related Option. An SAR granted under this Plan may be exercised
with respect to any number of whole shares less than the full number for which
the SAR could be exercised. A partial exercise of an SAR shall not affect the
right to exercise the SAR from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining shares subject to the SAR.
The exercise of a Corresponding SAR shall result in the termination of the
related Option to the extent of the number of shares with respect to which the
SAR is exercised.
12
7.06. CHANGE IN CONTROL
-----------------
Section 7.05 to the contrary notwithstanding, each outstanding SAR
shall be fully exercisable (in whole or in part at the discretion of the holder)
on and after a Control Change Date and during the period (i) beginning on the
first day after the commencement of a tender offer or exchange offer for shares
of Common Stock (other than one made by the Company); provided that shares are
acquired pursuant to such offer and (ii) ending on the thirtieth day following
the expiration of such offer.
7.07. EMPLOYEE STATUS
---------------
If the terms of any SAR provide that it may be exercised only during
employment or within a specified period of time after termination of employment,
the Administrator may decide to what extent leaves of absence for governmental
or military service, illness, temporary disability or other reasons shall not be
deemed interruptions of continuous employment.
7.08. SETTLEMENT
----------
At the Administrator's discretion, the amount payable as a result of
the exercise of an SAR may be settled in cash, Common Stock, or a combination of
cash and Common Stock. No fractional share will be deliverable upon the exercise
of an SAR but a cash payment will be made in lieu thereof.
7.09. SHAREHOLDER RIGHTS
------------------
No Participant shall, as a result of receiving an SAR, have any
rights as a shareholder of the Company until the date that the SAR is exercised
and then only to the extent that the SAR is settled by the issuance of Common
Stock.
ARTICLE VIII
STOCK AWARDS
------------
8.01. AWARD
-----
In accordance with the provisions of Article IV, the Administrator
will designate each individual to whom a Stock Award is to be made and will
specify the number of shares of Common Stock covered by each such award.
8.02. VESTING
-------
The Administrator, on the date of the award, may prescribe that a
Participant's rights in a Stock Award shall be forfeitable or otherwise
restricted for a period of
13
time or subject to such conditions as may be set forth in the Agreement. By way
of example and not of limitation, the restrictions may postpone transferability
of the shares or may provide that the shares will be forfeited if the
Participant separates from the service of the Company and its Related Entities
before the expiration of a stated period or if the Company, a Related Entity,
the Company and its Related Entities or the Participant fails to achieve stated
performance objectives. The period that the shares are restricted shall be at
least three years; provided, however, that the period that the shares are
restricted shall be at least one year if the transferability, vesting or both is
subject to the satisfaction of performance objectives other than continued
employment.
8.03. EMPLOYEE STATUS
---------------
In the event that the terms of any Stock Award provide that shares
may become transferable and nonforfeitable thereunder only after completion of a
specified period of employment, the Administrator may decide in each case to
what extent leaves of absence for governmental or military service, illness,
temporary disability, or other reasons shall not be deemed interruptions of
continuous employment.
8.04. CHANGE IN CONTROL
-----------------
Sections 8.02 and 8.03 to the contrary notwithstanding, on and after
a Control Change Date or the first day following the commencement of a tender
offer or exchange offer for shares of Common Stock (other than one made by the
Company), provided that shares are acquired pursuant to such offer, each
outstanding Stock Award shall be transferable and nonforfeitable as of the
Control Change Date or the first day following such offer.
8.05. SHAREHOLDER RIGHTS
------------------
Prior to their forfeiture (in accordance with the applicable
Agreement and while the shares of Common Stock granted pursuant to the Stock
Award may be forfeited or are nontransferable), a Participant will have all
rights of a shareholder with respect to a Stock Award, including the right to
receive dividends and vote the shares; provided, however, that during such
period (i) a Participant may not sell, transfer, pledge, exchange, hypothecate,
or otherwise dispose of shares of Common Stock granted pursuant to a Stock
Award, (ii) the Company shall retain custody of the certificates evidencing
shares of Common Stock granted pursuant to a Stock Award, and (iii) the
Participant will deliver to the Company a stock power, endorsed in blank, with
respect to each Stock Award. The limitations set forth in the preceding sentence
shall not apply after the shares of Common Stock granted under the Stock Award
are transferable and are no longer forfeitable.
14
ARTICLE IX
PERFORMANCE SHARE AWARDS
------------------------
9.01. AWARD
-----
In accordance with the provisions of Article IV, the Administrator
will designate each individual to whom an award of Performance Shares is to be
made and will specify the number of shares of Common Stock covered by each such
award.
9.02. EARNING THE AWARD
-----------------
The Administrator, on the date of the grant of an award, shall
prescribe that the Performance Shares, or a portion thereof, will be earned, and
the Participant will be entitled to receive payment pursuant to the award of
Performance Shares, only upon the satisfaction of performance objectives or such
other criteria as may be prescribed by the Administrator and set forth in the
Agreement. By way of example and not of limitation, the performance objectives
or other criteria may provide that the Performance Shares will be earned only if
the Participant remains in the employ of the Company or a Related Entity for a
stated period or that the Company, a Related Entity, the Company and its Related
Entities or the Participant achieve stated objectives. The performance period
shall be at least three years; provided, however, that the performance period
shall be at least one year if the Agreement provides that the Performance Shares
will be earned upon the satisfaction of stated performance objectives other than
continued employment. No payments will be made with respect to Performance
Shares unless, and then only to the extent that, the Administrator certifies
that such objectives have been achieved.
9.03. PAYMENT
-------
In the discretion of the Administrator, the amount payable when an award of
Performance Shares is earned may be settled in cash, by the issuance of Common
Stock or a combination of cash and Common Stock. A fractional share shall not
be deliverable when an award of Performance Shares is earned, but a cash payment
will be made in lieu thereof.
9.04. SHAREHOLDER RIGHTS
------------------
No Participant shall, as a result of receiving an award of Performance
Shares, have any rights as a shareholder until and to the extent that the award
of Performance Shares is earned and settled by the issuance of Common Stock.
After an award of Performance Shares is earned, if settled completely or
partially in Common Stock, a Participant will have all the rights of a
shareholder with respect to such Common Stock.
15
9.05. NONTRANSFERABILITY
------------------
Except as provided in Section 9.06, Performance Shares granted under
this Plan shall be nontransferable except by will or by the laws of descent and
distribution. No right or interest of a Participant in any Performance Shares
shall be liable for, or subject to, any lien, obligation, or liability of such
Participant.
9.06. TRANSFERABLE PERFORMANCE SHARES
-------------------------------
Section 9.05 to the contrary notwithstanding, if the Agreement
provides, an award of Performance Shares may be transferred by a Participant to
the Participant's children, grandchildren, spouse, one or more trusts for the
benefit of such family members or a partnership in which such family members are
the only partners, on such terms and conditions as may be permitted under
Securities Exchange Commission Rule 16b-3 as in effect from time to time. The
holder of Performance Shares transferred pursuant to this section shall be bound
by the same terms and conditions that governed the Performance Shares during the
period that they were held by the Participant; provided, however that such
transferee may not transfer Performance Shares except by will or the laws of
descent and distribution.
9.07. EMPLOYEE STATUS
---------------
In the event that the terms of any Performance Share award provide
that no payment will be made unless the Participant completes a stated period of
employment, the Administrator may decide to what extent leaves of absence for
government or military service, illness, temporary disability, or other reasons
shall not be deemed interruptions of continuous employment.
9.08. CHANGE IN CONTROL
-----------------
Section 9.02 to the contrary notwithstanding, each outstanding
Performance Share award shall be earned as of a Control Change Date or the first
day following the commencement of a tender offer or exchange offer (other than
one made by the Company), provided that shares are acquired pursuant to such
offer. The amount payable for such Performance Shares shall be settled in cash
or Common Stock or a combination of cash and Common Stock as determined by the
Administrator in its discretion as soon as practicable after the Control Change
Date or the first day following such tender offer or exchange offer.
16
ARTICLE X
ADJUSTMENT UPON CHANGE IN COMMON STOCK
--------------------------------------
The maximum number of shares as to which Options, SARs, Performance Shares
and Stock Awards may be granted under this Plan and the terms of outstanding
Stock Awards, Options, Performance Shares and SARs, shall be adjusted as the
Committee shall determine to be equitably required in the event that (a) the
Company (i) effects one or more stock dividends, stock split-ups, subdivisions
or consolidations of shares or (ii) engages in a transaction to which Section
424 of the Code applies or (b) there occurs any other event which, in the
judgment of the Committee necessitates such action. Any determination made
under this Article X by the Committee shall be final and conclusive.
The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the maximum
number of shares as to which Options, SARs, Performance Shares and Stock Awards
may be granted or the terms of outstanding Stock Awards, Options, Performance
Shares or SARs.
The Committee may make Stock Awards and may grant Options, SARs and
Performance Shares in substitution for performance shares, phantom shares, stock
awards, stock options, stock appreciation rights, or similar awards held by an
individual who becomes an employee of the Company or a Related Entity in
connection with a transaction or event described in the first paragraph of this
Article X. Notwithstanding any provision of the Plan (other than the limitation
of Section 5.02), the terms of such substituted Stock Awards or Option, SAR or
Performance Shares grants shall be as the Committee, in its discretion,
determines is appropriate.
ARTICLE XI
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
-----------------------------------------------------
No Option or SAR shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements), any listing agreement to which the Company is a party, and the
rules of all domestic stock exchanges on which the Company's shares may be
listed. The Company shall
17
have the right to rely on an opinion of its counsel as to such compliance. Any
share certificate issued to evidence Common Stock when a Stock Award is granted,
a Performance Share is settled or for which an Option or SAR is exercised may
bear such legends and statements as the Administrator may deem advisable to
assure compliance with federal and state laws and regulations. No Option or SAR
shall be exercisable, no Stock Award or Performance Share shall be granted, no
Common Stock shall be issued, no certificate for shares shall be delivered, and
no payment shall be made under this Plan until the Company has obtained such
consent or approval as the Administrator may deem advisable from regulatory
bodies having jurisdiction over such matters.
ARTICLE XII
GENERAL PROVISIONS
------------------
12.01. EFFECT ON EMPLOYMENT AND SERVICE
--------------------------------
Neither the adoption of this Plan, its operation, nor any documents
describing or referring to this Plan (or any part thereof), shall confer upon
any individual any right to continue in the employ or service of the Company or
a Related Entity or in any way affect any right or power of the Company or a
Related Entity to terminate the employment or service of any individual at any
time with or without assigning a reason therefor.
12.02. UNFUNDED PLAN
-------------
The Plan, insofar as it provides for grants, shall be unfunded, and
the Company shall not be required to segregate any assets that may at any time
be represented by grants under this Plan. Any liability of the Company to any
person with respect to any grant under this Plan shall be based solely upon any
contractual obligations that may be created pursuant to this Plan. No such
obligation of the Company shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of the Company.
12.03. RULES OF CONSTRUCTION
---------------------
Headings are given to the articles and sections of this Plan solely
as a convenience to facilitate reference. The reference to any statute,
regulation, or other provision of law shall be construed to refer to any
amendment to or successor of such provision of law.
18
12.04. TAX WITHHOLDING
---------------
Each Participant shall be responsible for satisfying any income and
employment tax withholding obligation attributable to participation in this
Plan. In accordance with procedures established by the Administrator, a
Participant may surrender shares of Common Stock, or receive fewer shares of
Common Stock than otherwise would be issuable, in satisfaction of all or part of
that obligation.
12.05. LIMITATION ON BENEFITS
----------------------
(a) Despite any other provision of this Plan, if the Accounting
Firm determines that receipt of benefits or payments under this Plan would
subject a Participant to tax under Code section 4999, it must determine whether
some amount of the benefits or payments would meet the definition of a "Reduced
Amount." If the Accounting Firm determines that there is a Reduced Amount, the
total benefits and payments must be reduced to such Reduced Amount, but not
below zero.
(b) If the Accounting Firm determines that the benefits and
payments should be reduced to the Reduced Amount, the Company must promptly
notify the Participant of that determination, including a copy of the detailed
calculations by the Accounting Firm. All determinations made by the Accounting
Firm under this section are binding upon the Company and the Participant.
(c) It is the intention of the Company and the Participant to
reduce the benefits and payments under this Plan only if the aggregate Net After
Tax Receipts to the Participant would thereby be increased. As a result of the
uncertainty in the application of Code section 4999 at the time of the initial
determination by the Accounting Firm under this section, however, it is possible
that amounts will have been paid or distributed under the Plan to or for the
benefit of a Participant which should not have been so paid or distributed
("Overpayment") or that additional amounts which will not have been paid or
distributed under the Plan to or for the benefit of a Participant could have
been so paid or distributed ("Underpayment"), in each case, consistent with the
calculation of the Reduced Amount. If the Accounting Firm, based either upon the
assertion of a deficiency by the Internal Revenue Service against the Company or
the Participant which the Accounting Firm believes has a high probability of
success or controlling precedent or other substantial authority, determines that
an Overpayment has been made, any such Overpayment must be treated for all
purposes as a loan ab initio for which the Participant must repay the Company
together with interest at the applicable federal rate under Code section
7872(f)(2); provided, however, that no such loan may be deemed to have been made
and no amount shall be payable by Participant to the Company if and to the
extent such deemed loan and payment would not either reduce the amount on which
Participant is subject to tax under Code section 1 or 4999 or generate a refund
of such taxes. If the Accounting Firm, based upon controlling precedent or other
substantial authority, determines that an Underpayment has occurred, the
Accounting Firm must promptly notify the Administrator of the amount
19
of the Underpayment and such amount, together with interest at the applicable
federal rate under Code section 7872(f)(2), must be paid to the Participant.
(d) For purposes of this section, (i) "Net After Tax Receipt" means the
Present Value of a payment or benefit under this Plan net of all taxes imposed
on Participant with respect thereto under Code sections 1 and 4999, determined
by applying the highest marginal rate under Code section 1 which applied to the
Participant's taxable income for the immediately preceding taxable year; (ii)
"Present Value" means the value determined in accordance with Code section
280G(d)(4); and (iii) "Reduced Amount" means the smallest aggregate amount of
all payments or benefit under this Plan which (a) is less than the sum of all
payments or benefit under this Plan and (b) results in aggregate Net After Tax
Receipts which are equal to or greater than the Net After Tax Receipts which
would result if the aggregate payments or benefit under this Plan were any other
amount less than the sum of all payments or benefit under this Plan.
ARTICLE XIII
AMENDMENT
---------
The Board may amend or terminate this Plan from time to time; provided,
however, that no amendment may become effective until shareholder approval is
obtained if (i) the amendment increases the aggregate number of shares of Common
Stock that may be issued under the Plan (other than an adjustment pursuant to
Article XI) or (ii) the amendment changes the class of individuals eligible to
become Participants. No amendment shall, without a Participant's consent,
adversely affect any rights of such Participant under any Stock Award,
Performance Share award, Option or SAR outstanding at the time such amendment is
made.
ARTICLE XIV
DURATION OF PLAN
----------------
No Stock Award, Performance Share award, Option or SAR may be granted under
this Plan more than ten years after the earlier of the date the Plan is adopted
by the Board or the date that the Plan is approved in accordance with Article
XV. Stock Awards, Performance Share awards, Options and SARs granted before
that date shall remain valid in accordance with their terms.
20
ARTICLE XV
EFFECTIVE DATE OF PLAN
----------------------
Options, SARs and Performance Shares may be granted under this Plan upon
its adoption by the Board, provided that no Option, SAR or Performance Shares
shall be effective or exercisable unless this Plan is approved by a majority of
the votes cast by the Company's shareholders, voting either in person or by
proxy, at a duly held shareholders' meeting at which a quorum is present or by
unanimous consent. Stock Awards may be granted under this Plan, upon the later
of its adoption by the Board or its approval by shareholders in accordance with
the preceding sentence.
21
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