<PAGE>
As filed with the Securities and Exchange Commission on May 22, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM S-8
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933
____________
FIRST COMMONWEALTH, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2154228
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
444 North Wells Street, Suite 600
Chicago, Illinois 60610
(Address of Principal Executive Offices) (Zip Code)
First Commonwealth, Inc. 1995 Long-Term Incentive Plan
(Full title of the plan)
Christopher C. Multhauf
Chairman
First Commonwealth, Inc.
444 North Wells Street, Suite 600
Chicago, Illinois 60610
(Name and address of agent for service)
(312) 644-1800
(Telephone number, including
area code, of agent for service)
_______________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================================
Proposed Proposed
Maximum Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share(1) Price Registration Fee
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value(2) 200,000 shares $14.75 $2,950,000 $870.25 (3)
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated for the Common Stock solely for the purpose of calculating the
registration fee on the basis of the average of the high and low prices of
the Common Stock of the Company on the Nasdaq National Market on May 18,
1998, pursuant to Rule 457(h) under the Securities Act of 1933.
(2) Includes 200,000 associated rights ("Rights") to purchase 1/100 of a share
of Series A Junior Participating Preferred Stock, par value $.001 per
share. Rights initially are attached to and trade with the Common Stock of
the Registrant. The value attributable to such Rights, if any, is
reflected in the market price of the Common Stock.
(3) Calculated as the product of .000295 and the Proposed Maximum Aggregate
Offering Price.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
* Information required by Part I to be contained in the Section 10(a)
prospectus (the "Prospectus") is omitted from the Registration Statement in
accordance with Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act") and the Note to Part I of Form S-8.
The registrant has previously filed a Registration Statement on Form S-8
(No. 333-00474), relating to 150,000 shares of its Common Stock, which first
became effective on January 19, 1996. Pursuant to Rule 429 under the Securities
Act of 1933, as amended, the Prospectus relates to the 150,000 shares of Common
Stock covered by Registration Statement No. 333-00474, of which 145,024 remain
unissued, as well as the securities registered by this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have heretofore been filed by First
Commonwealth, Inc. (the "Company" or the "Registrant"), with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), are incorporated by reference herein
and shall be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
3. The description of the Common Stock, par value $.001 per share,
including ("Common Stock"), of the Company contained in the
Company's Report on Form 8-A, dated October 24, 1995; and
4. All other reports filed by the Company pursuant to Section 13(a)
and 15(d) of the Exchange Act since December 31, 1997.
All documents, subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment to this Registration Statement which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and made a part hereof from their
respective dates of filing (such documents, and the documents enumerated above,
being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
-2-
<PAGE>
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
In accordance with Section 102(b)(7) of the General Corporation Law of
Delaware, Article Eighth of the Company's Second Restated Certificate of
Incorporation contains a provision providing that no director or officer of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director or officer except
for breach of the director's or officer's duty of loyalty to the Company or its
stockholders, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, unlawful payment of dividends,
unlawful stock redemptions or repurchases and transactions from which the
director or officer derived an improper personal benefit.
Section 145 of the General Corporation Law of Delaware permits or requires
indemnification of directors, officers and employees of a corporation under
certain conditions and subject to certain limitations. Article Ninth of the
Company's Second Restated Certificate of Incorporation and Article VI of the
Company's Restated Bylaws contain provisions for the indemnification of
directors, officers and employees of the Company generally within the
limitations of Section 145.
The Company has a directors' and officers' liability insurance policy which
provides for indemnification of its directors and officers against certain
liabilities incurred in their capacities as such, which may include liabilities
under the Securities Act.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The exhibits accompanying this Registration Statement are listed on the
accompanying Exhibit Index. The Plan is not intended to be qualified under
Section 401(a) of the Internal Revenue Code.
Item 9. Undertakings.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no
-3-
<PAGE>
more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Company pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the shares of Common Stock being registered
hereby which remain unsold at the termination of the offering.
(b) The Company hereby undertakes that, for the purposes of determining
any liability under the Securities Act, each filing of the Company's
Annual Report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering hereof.
(C) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on the 22nd day of May,
1998.
FIRST COMMONWEALTH, INC.
By: /s/ Christopher C. Multhauf
-----------------------------------
Christopher C. Multhauf
Chairman of the Board of Directors
and Chief Executive Officer
POWER OF ATTORNEY AND SIGNATURES
Each of the undersigned officers and directors of First Commonwealth,
Inc. hereby severally constitutes and appoints Christopher C. Multhauf, David W.
Mulligan and Scott B. Sanders, and each of the singly, our true and lawful
attorneys, with full power to them and each of them singly, to sign for us in
our names in the capacities indicated below, all pre-effective and post-
effective amendments to this registration statement, and generally to do all
things in our names and on our behalf in such capacities to enable First
Commonwealth, Inc. to comply with the provisions of the Securities Act of 1933,
as amended, and all requirements of the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on the 22nd day of May, 1998.
/s/ Christopher C. Multhauf Chairman of the Board of Directors and
- --------------------------------- Chief Executive Officer (principal
Christopher C. Multhauf executive officer)
/s/ David W. Mulligan Director, President, Secretary and Chief
- --------------------------------- Operating Officer
David W. Mulligan
/s/ Scott B. Sanders Chief Financial Officer and Treasurer
- --------------------------------- (principal financial and accounting
Scott B. Sanders officer)
/s/ Richard M. Burdge, Sr. Director
- ---------------------------------
Richard M. Burdge, Sr.
/s/ Jackson W. Smart, Jr. Director
- ---------------------------------
Jackson W. Smart, Jr.
/s/ William J. McBride Director
- ---------------------------------
William J. McBride
-5-
<PAGE>
EXHIBIT INDEX
The following documents are filed herewith or incorporated herein by
reference.
Exhibit
No. Description
- ------- -----------
4.1 Second Restated Certificate of Incorporation, as amended, of the
Company (Incorporated herein by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-1, as amended,
Registration No. 33-97426).
4.2 Restated Bylaws of the Company (Incorporated herein by reference to
Exhibit 3.2 to the Company's Form 10-Q for the quarter ended June 30,
1996).
4.3 Stockholders Rights Agreement dated November 1, 1995 between the
Company and First Chicago Trust Company of New York (Incorporated
herein by reference to Exhibit 4.1 to the Company's Registration
Statement on Forms S-1, as amended, Registration No. 33-97426).
5 Opinion of Sidley & Austin
23.1 Consent of Independent Public Accountants
23.2 Consent of Sidley & Austin (contained in Exhibit 5 hereto).
24.1 Powers of Attorney (included on signature page)
99.1 First Commonwealth, Inc. 1995 Long-Term Incentive Plan, as amended.
-6-
<PAGE>
EXHIBIT 5
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
May 22, 1998
First Commonwealth, Inc.
Suite 600
444 North Wells Street
Chicago, Illinois 60610
Re: First Commonwealth, Inc.
Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
We are counsel to First Commonwealth, Inc., a Delaware corporation (the
"Company"), and have represented the Company in connection with the Registration
Statement on Form S-8 (the "Registration Statement") being filed by the Company
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the issuance and delivery of up
to 200,000 shares of common stock, par value $.001 per share, of the Company,
including associated preferred stock purchase rights (the "1995 Plan Shares"),
to be issued and delivered pursuant to the First Commonwealth, Inc. 1995 Long-
Term Incentive Plan (the "1995 Plan").
In rendering this opinion, we have examined and relied upon a copy of the
1995 Plan and the Registration Statement, including the related Prospectus. We
have also examined and relied upon originals, or copies of originals certified
to our satisfaction, of such agreements, documents, certificates and other
statements of governmental officials and other instruments, and have examined
such questions of law and have satisfied ourselves as to such matters of fact,
as we have considered relevant and necessary as a basis for this opinion. We
have assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the legal capacity of all natural persons and the
conformity with the original documents of any copies thereof submitted to us for
our examination.
Based on the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing under the
laws of the State of Delaware.
2. The 1995 Plan Shares will be legally issued, fully paid and
nonassessable when (i) the Registration Statement shall have become effective
under the Securities Act; (ii) the 1995 Plan Shares shall have been duly issued
and delivered in the manner contemplated by the 1995 Plan; and (iii)
certificates representing the 1995 Plan Shares shall have been duly executed,
countersigned and registered and duly delivered to the persons entitled thereto
against receipt of the agreed consideration therefor (not less than the par
value thereof) in accordance with the 1995 Plan.
We do not find it necessary for the purposes of this opinion to cover,
and accordingly we express no opinion as to, the application of the securities
or "Blue Sky" laws of the various states to the issuance and delivery of the
1995 Plan Shares.
<PAGE>
First Commonwealth, Inc.
May 22, 1998
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our Firm in or made a part of
the Registration Statement.
Very truly yours,
SIDLEY & AUSTIN
<PAGE>
EXHIBIT 23.1
CONSENT OF ARTHUR ANDERSEN LLP
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 Registration Statement of our reports dated February
11, 1998, on the consolidated financial statements and schedule of First
Commonwealth, Inc. and Subsidiaries (the "Company") included and incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
May 22, 1998
<PAGE>
EXHIBIT 99.1
FIRST COMMONWEALTH, INC.
1995 LONG-TERM INCENTIVE PLAN
(As Amended as of February 18, 1998)
I. INTRODUCTION
1.1 Purposes. The purposes of the 1995 Long-Term Incentive Plan (the
"Plan") of First Commonwealth, Inc. (the "Company"), and its subsidiaries from
time to time (individually a "Subsidiary" and collectively the Subsidiaries"),
are (a) to align the interests of the Company's stockholders and the recipients
of awards under this Plan by increasing the proprietary interest of such
recipients in the Company's growth and success, (b) to advance the interests of
the Company by attracting and retaining officers and other key employees,
consultants, advisors, agents and other independent contractors of the Company,
and well-qualified persons who are not officers or employees of the Company
("non-employee directors") for service as directors of the Company and (C) to
motivate such employees, independent contractors and non-employee directors to
act in the long-term best interests of the Company's stockholders. For purposes
of this Plan, references to employment by the Company shall also mean employment
by a Subsidiary.
1.2 Certain Definitions.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2, as in effect on the effective date of this
Plan, under the Exchange Act; provided, however, that no director or officer of
the Company shall be deemed an Affiliate or Associate of any other director or
officer of the Company solely as a result of his or her being a director or
officer of the Company.
"Agreement" shall mean the written agreement evidencing an award
hereunder between the Company and the recipient of such award.
"Beneficial Owner" (including the terms "Beneficially Own" and
"Beneficial Ownership"), when used with respect to any Person, shall be deemed
to include any securities which:
(a) such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly (determined as provided in Rule 13d-3,
as in effect on the effective date of this Plan, under the Exchange Act);
(b) such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has:
(i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the satisfaction of
any conditions, or both) pursuant to any written or oral agreement,
arrangement or understanding (other than customary agreements with and
among underwriters and selling group members with respect to a bona fide
public offering of securities), upon the exercise of any options, warrants,
rights or conversion or exchange privileges or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or
(ii) the right to vote pursuant to any written or oral agreement,
arrangement or understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to Beneficially Own, any security
otherwise subject to this item (ii) if such agreement, arrangement or
understanding to vote (1) arises solely from a revocable proxy or consent
given to such Person or any of such Person's Affiliates or Associates in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with,
<PAGE>
the applicable rules and regulations under the Exchange Act and (2) is not
also then reportable by such Person on Schedule 13D (or any comparable or
successor report then in effect) under the Exchange Act; or
(iii) the right to dispose of pursuant to any written or oral
agreement, arrangement or understanding (other than customary agreements
with and among underwriters and selling group members with respect to a
bona fide public offering of securities); or
(c) are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or Associates
has any written or oral agreement, arrangement or understanding (other than
customary agreements with and among underwriters and selling group members with
respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso to
item (ii) of subparagraph (b) of the first paragraph of this definition) or
disposing of any securities of the Company.
Notwithstanding the first paragraph of this definition, no director or
officer of the Company shall be deemed to be the "Beneficial Owner" of, or to
"Beneficially Own," shares of Common Stock or other securities of the Company
beneficially owned by any other director or officer of the Company solely as a
result of his or her being a director or officer of the Company.
"Board" shall mean the Board of Directors of the Company.
"Bonus Stock" shall mean shares of Common Stock which are not subject
to a Restriction Period or Performance Measures.
"Bonus Stock Award" shall mean an award of Bonus Stock under this
Plan.
"Cause" shall mean any act of dishonesty, commission of a felony,
significant activities harmful to the reputation of the Company, refusal to
perform or substantial disregard of duties properly assigned or significant
violation of any statutory or common law duty of loyalty to the Company.
"Change in Control" shall have the meaning set forth in Section
6.8(b).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Committee designated by the Board,
consisting of two or more members of the Board, each of whom shall be (a) a
"Non-Employee Director" within the meaning of Rule 16b-3 under the Exchange Act
and (b) an "outside director" within the meaning of Section 162(m) of the Code,
subject to any transition rules applicable to the definition of outside
director.
"Common Stock" shall mean the common stock, $.001 par value, of the
Company.
"Company" has the meaning specified in Section 1.1.
"Directors Options" shall have the meaning set forth in Section 5.1.
"Directors Restricted Stock" shall have the meaning set forth in
Section 5.1.
"Disability" shall mean the inability of the holder of an award to
perform substantially such holder's duties and responsibilities for a continuous
period of at least six months, as determined solely by the Committee.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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<PAGE>
"Exempt Person" shall mean each of Christopher C. Multhauf and David
W. Mulligan and each Affiliate thereof.
"Fair Market Value" shall mean the average of the high and low
transaction prices of a share of Common Stock as reported in the National
Association of Securities Dealers Automated Quotation National Market System on
the date as of which such value is being determined, or, if the Common Stock is
listed on a national securities exchange, the average of the high and low
transaction prices of a share of Common Stock on the principal national stock
exchange on which the Common Stock is traded on the date as of which such value
is being determined, or, if there shall be no reported transactions for such
date, on the next preceding date for which transactions were reported; provided,
however, that if Fair Market Value for any date cannot be so determined, Fair
Market Value shall be determined by the Committee by whatever means or method as
the Committee, in the good faith exercise of its discretion, shall at such time
deem appropriate.
"Free-Standing SAR" shall mean an SAR which is not issued in tandem
with, or by reference to, an option, which entitles the holder thereof to
receive, upon exercise, shares of Common Stock (which may be Restricted Stock),
cash or a combination thereof with an aggregate value equal to the excess of the
Fair Market Value of one share of Common Stock on the date of exercise over the
base price of such SAR, multiplied by the number of such SARs which are
exercised.
"Incentive Stock Option" shall mean an option to purchase shares of
Common Stock that meets the requirements of Section 422 of the Code, or any
successor provision, which is intended by the Committee to constitute an
Incentive Stock Option.
"Incumbent Board" shall have the meaning set forth in Section
6.8(b)(2) hereof.
"Independent Contractor" shall mean a consultant, advisor, agent or
other independent contractor which performs services for the Company or its
Subsidiaries, including, but not limited to, dentist consultants, dentist
advisors, dentist providers and insurance agents.
"Mature Shares" shall mean shares of Common Stock for which the holder
thereof has good title, free and clear of all liens and encumbrances and which
such holder either (a) has held for at least six months or (b) has purchased on
the open market.
"Non-Employee Director" shall mean any director of the Company who is
not an officer or employee of the Company or any Subsidiary (except in the
definition of Committee, in which case "Non-Employee Director" shall have the
meaning set forth in Rule 16b-3 under the Exchange Act).
"Non-Statutory Stock Option" shall mean a stock option which is not an
Incentive Stock Option.
"Performance Measures" shall mean the criteria and objectives,
established by the Committee, which shall be satisfied or met (a) as a condition
to the exercisability of all or a portion of an option or SAR or (b) during the
applicable Restriction Period or Performance Period as a condition to the
holder's receipt, in the case of a Restricted Stock Award, of the shares of
Common Stock subject to such award, or, in the case of a Performance Share
Award, of payment with respect to such award. Such criteria and objectives may
include, but are not limited to, the attainment by a share of Common Stock of a
specified Fair Market Value for a specified period of time, earnings per share,
return on equity, earnings of the Company, revenues, market share, cash flows or
cost reduction goals, or any combination of the foregoing and any other criteria
and objectives established by the Committee.
"Performance Period" shall mean any period designated by the Committee
during which the Performance Measures applicable to a Performance Share Award
shall be measured.
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<PAGE>
"Performance Share" shall mean a right, contingent upon the attainment
of specified Performance Measures within a specified Performance Period, to
receive one share of Common Stock, which may be Restricted Stock, or in lieu
thereof, the Fair Market Value of such Performance Share in cash.
"Performance Share Award" shall mean an award of Performance Shares
under this Plan.
"Permanent and Total Disability" shall have the meaning set forth in
Section 22(e)(3) of the Code or any successor thereto.
"Person" shall mean any individual, firm, corporation, partnership or
other entity, and shall include any successor (by merger or otherwise) of any of
the forgoing.
"Restricted Stock" shall mean shares of Common Stock which are subject
to a Restriction Period.
"Restricted Stock Award" shall mean an award of Restricted Stock under
this Plan.
"Restriction Period" shall mean any period designated by the Committee
during which the Common Stock subject to a Restricted Stock Award may not be
sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or
disposed of, except as provided in this Plan or the Agreement relating to such
award.
"SAR" shall mean a stock appreciation right which may be a Free-
Standing SAR or a Tandem SAR.
"Stock Award" shall mean a Restricted Stock Award or a Bonus Stock
Award.
"Tandem SAR" shall mean an SAR which is granted in tandem with, or by
reference to, an option (including a Non-Statutory Stock Option granted prior to
the date of grant of the SAR), which entitles the holder thereof to receive,
upon exercise of such SAR and surrender for cancellation of all or a portion of
such option, shares of Common Stock (which may be Restricted Stock), cash or a
combination thereof with an aggregate value equal to the excess of the Fair
Market Value of one share of Common Stock on the date of exercise over the base
price of such SAR, multiplied by the number of shares of Common Stock subject to
such option, or portion thereof, which is surrendered.
"Tax Date" shall have the meaning set forth in Section 6.5.
"Ten Percent Holder" shall have the meaning set forth in Section
2.1(a).
1.3 Administration. This Plan shall be administered by the
Committee. Any one or a combination of the following awards may be made under
this Plan to eligible persons: (a) options to purchase shares of Common Stock
in the form of Incentive Stock Options or Non-Statutory Stock Options, (b) SARs
in the form of Tandem SARs or Free-Standing SARs, (c) Stock Awards in the form
of Restricted Stock or Bonus Stock and (d) Perfor mance Shares. The Committee
shall, subject to the terms of this Plan, select eligible persons for
participation in this Plan and determine the form, amount and timing of each
award to such persons and, if applicable, the number of shares of Common Stock,
the number of SARs and the number of Performance Shares subject to such an
award, the exercise price or base price associated with the award, the time and
conditions of exercise or settlement of the award and all other terms and
conditions of the award, including, without limitation, the form of the
Agreement evidencing the award. The Committee shall, subject to the terms of
this Plan, interpret this Plan and the application thereof, establish rules and
regulations it deems necessary or desirable for the administration of this Plan
and may impose, incidental to the grant of an award, conditions with respect to
the award, such as limiting competitive employment or other activities. All
such interpretations, rules, regulations and conditions shall be conclusive and
binding on all parties.
The Committee may delegate some or all of its power and authority
hereunder to the Chairman of the Board and Chief Executive Officer or other
executive officer of the Company as the Committee deems
-4-
<PAGE>
appropriate; provided, however, that the Committee may not delegate its power
and authority with regard to (a) the grant of an award under this Plan to any
person who is a "covered employee" within the meaning of Section 162(m) of the
Code or who, in the Committee's judgment, is likely to be a covered employee at
any time during the period an award hereunder to such employee would be
outstanding or (b) the selection for participation in this Plan of an officer or
other person subject to Section 16 of the Exchange Act or decisions concerning
the timing, pricing or amount of an award to such an officer or other person.
No member of the Board of Directors or Committee, and neither the
Chairman of the Board and Chief Executive Officer nor any other executive
officer to whom the Committee delegates any of its power and authority
hereunder, shall be liable for any act, omission, interpretation, construction
or determination made in connection with this Plan in good faith, and the
members of the Board of Directors and the Committee and the President and Chief
Executive Officer or other executive officer shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including attorneys' fees) arising therefrom to the full
extent permitted by law, except as otherwise may be provided in the Company's
Certificate of Incorporation and/or By-laws, as the same may be amended or
restated from time to time, and under any directors' and officers' liability
insurance that may be in effect from time to time.
A majority of the Committee shall constitute a quorum. The acts of
the Committee shall be either (a) acts of a majority of the members of the
Committee present at any meeting at which a quorum is present or (b) acts
approved in writing by a majority of the members of the Committee without a
meeting.
Notwithstanding anything to the contrary herein, any grants of awards
to a Non-Employee Director (not including awards under Article V) shall be null
and void unless such awards and all terms thereof are approved in advance by the
Board.
1.4 Eligibility. Participants in this Plan shall consist of such
directors, officers or other key employees of the Company and its Subsidiaries,
and such Independent Contractors, as the Committee, in its sole discretion, may
select from time to time. The Committee's selection of a person to participate
in this Plan at any time shall not require the Committee to select such person
to participate in this Plan at any other time. Non-Employee Directors shall
also be eligible to participate in this Plan in accordance with Article V.
1.5 Shares Available. Subject to adjustment as provided in Sections
6.7 and 6.8, 350,000 shares of Common Stock shall be available under this Plan,
reduced by the sum of the aggregate number of shares of Common Stock (a) that
are issued upon the grant of a Stock Award and (b) which become subject to
outstanding options, including Directors' Options, outstanding Free-Standing
SARs and outstanding Performance Shares. To the extent that shares of Common
Stock subject to an outstanding option (other than in connection with the
exercise of a Tandem SAR), Free-Standing SAR or Performance Share are not issued
or delivered by reason of the expiration, termination, cancellation or
forfeiture of such award or by reason of the delivery or withholding of shares
of Common Stock to pay all or a portion of the exercise price of an award, if
any, or to satisfy all or a portion of the tax withholding obligations relating
to an award, then such shares of Common Stock shall again be available under
this Plan.
Shares of Common Stock to be delivered under this Plan shall be made
available from authorized and unissued shares of Common Stock, or authorized and
issued shares of Common Stock reacquired and held as treasury shares or
otherwise or a combination thereof.
II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
2.1 Stock Options. The Committee may, in its discretion, grant
options to purchase shares of Common Stock to such eligible persons as may be
selected by the Committee. Each option, or portion thereof, that is not an
Incentive Stock Option, shall be a Non-Statutory Stock Option. Each Incentive
Stock Option shall be granted within ten years of the effective date of this
Plan. To the extent that the aggregate Fair Market Value
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(determined as of the date of grant) of shares of Common Stock with respect to
which options designated as Incentive Stock Options are exercisable for the
first time by a participant during any calendar year (under this Plan or any
other plan of the Company, or any parent or Subsidiary) exceeds the amount
(currently $100,000) established by the Code, such options shall constitute Non-
Statutory Stock Options. The Committee may not grant an Incentive Stock Option
to an Independent Contractor or a Non-Employee Director.
Options shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the
terms of this Plan, as the Committee shall deem advisable:
(a) Number of Shares and Purchase Price. The number of shares of
Common Stock subject to an option shall be determined by the Committee, except
that the Committee shall not grant an option or SAR (or any combination of
options and SARs) in any calendar year to any eligible person which, in the
aggregate, gives such person an option or SAR (or any combination of options and
SARs) to purchase more than 62,500 shares of Common Stock (as may be adjusted
pursuant to Section 6.7). The purchase price per share of Common Stock
purchasable upon exercise of the option shall be determined by the Committee;
provided, however, that the purchase price per share of Common Stock purchasable
upon exercise of an Option shall not be less than 100% of the Fair Market Value
of a share of Common Stock on the date of grant of such option; provided
further, that if an Incentive Stock Option shall be granted to any person who,
at the time such option is granted, owns capital stock possessing more than ten
percent of the total combined voting power of all classes of capital stock of
the Company (or of any parent or Subsidiary) (a "Ten Percent Holder"), the
purchase price per share of Common Stock shall be the price (currently 110% of
Fair Market Value) required by the Code in order to constitute an Incentive
Stock Option.
(b) Option Period and Exercisability. The period during which an
option may be exercised shall be determined by the Committee; provided, however,
that no Incentive Stock Option shall be exercised later than ten years after its
date of grant; provided further, that if an Incentive Stock Option shall be
granted to a Ten Percent Holder, such option shall not be exercised later than
five years after its date of grant. The Committee may, in its discretion,
establish Performance Measures which shall be satisfied or met as a condition to
the grant of an option or to the exercisability of all or a portion of an
option. The Committee shall determine whether an option shall become
exercisable in cumulative or non-cumulative installments and in part or in full
at any time. An exercisable option, or portion thereof, may be exercised only
with respect to whole shares of Common Stock.
(c) Method of Exercise. An option may be exercised (i) by giving
written notice to the Company specifying the number of whole shares of Common
Stock to be purchased and accompanied by payment therefor in full (or
arrangement made for such payment to the Company's satisfaction) either (1) in
cash, (2) by delivery of Mature Shares having a Fair Market Value, determined as
of the date of exercise, equal to the aggregate purchase price payable by reason
of such exercise, (3) by authorizing the Company to withhold whole shares of
Common Stock which would otherwise be delivered upon exercise of the option
having a Fair Market Value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of such exercise, (4) in cash by a
broker-dealer acceptable to the Company to whom the optionee has submitted an
irrevocable notice of exercise or (5) a combination of (1), (2) and (3), in each
case to the extent set forth in the Agreement relating to the option, (ii) if
applicable, by surrendering to the Company any Tandem SARs which are canceled by
reason of the exercise of the option and (iii) by executing such documents as
the Company may reasonably request. The Committee shall have sole discretion to
disapprove of an election pursuant to any of clauses (2)-(5) and in the case of
an optionee who is subject to Section 16 of the Exchange Act, the Company may
require that the method of making such payment be in compliance with Section 16
and the rules and regulations thereunder. Any fraction of a share of Common
Stock which would be required to pay such purchase price shall be disregarded
and the remaining amount due shall be paid in cash by the optionee. No
certificate representing Common Stock shall be delivered until the full purchase
price therefor has been paid.
(d) Additional Options. The Committee shall have the authority to
include in any Agreement relating to an option a provision entitling the
optionee to an additional option in the event such optionee exercises the option
represented by such option agreement, in whole or in part, by delivering
previously owned whole shares of Common Stock in payment of the purchase price
in accordance with this Plan and such Agreement. Any such
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additional option shall be for a number of shares of Common Stock equal to the
number of delivered shares, shall have a purchase price determined by the
Committee in accordance with this Plan, shall be exercisable on the terms and
subject to the conditions set forth in the Agreement relating to such additional
option.
2.2 Stock Appreciation Rights. The Committee may, in its discretion,
grant SARs to such eligible persons as may be selected by the Committee. The
Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a
Free-Standing SAR.
SARs shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
this Plan, as the Committee shall deem advisable:
(a) Number of SARs and Base Price. The number of SARs subject to an
award shall be determined by the Committee, except that the Committee shall not
grant an option or SAR (or any combination of options and SARs) in any calendar
year to any eligible person which, in the aggregate, gives such person an option
or SAR (or any combination of options and SARs) to purchase more than 62,500
shares of Common Stock (as may be adjusted pursuant to Section 6.7). Any Tandem
SAR related to an Incentive Stock Option shall be granted at the same time that
such Incentive Stock Option is granted. The base price of a Tandem SAR shall be
the purchase price per share of Common Stock of the related option. The base
price of a Free-Standing SAR shall be determined by the Committee; provided,
however, that such base price shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date of grant of such SAR.
(b) Exercise Period and Exercisability. The Agreement relating to an
award of SARs shall specify whether such award may be settled in shares of
Common Stock (including shares of Restricted Stock) or cash or a combination
thereof. The period for the exercise of an SAR shall be determined by the
Committee; provided, however, that no Tandem SAR shall be exercised later than
the expiration, cancellation, forfeiture or other termination of the related
option. The Committee may, in its discretion, establish Performance Measures
which shall be satisfied or met as a condition to the exercisability of an SAR.
The Committee shall determine whether an SAR may be exercised in cumulative or
non-cumulative installments and in part or in full at any time. An exercisable
SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only
with respect to whole shares of Common Stock and, in the case of a Free-Standing
SAR, only with respect to a whole number of SARs. If an SAR is exercised for
shares of Restricted Stock, a certificate or certificates representing such
Restricted Stock shall be issued in accordance with Section 3.2(c) and the
holder of such Restricted Stock shall have such rights of a stockholder of the
Company as determined pursuant to Section 3.2(d). Prior to the exercise of an
SAR for shares of Common Stock, including Restricted Stock, the holder of such
SAR shall have no rights as a stockholder of the Company with respect to the
shares of Common Stock subject to such SAR and shall have rights as a
stockholder of the Company in accordance with Section 6.10.
(c) Method of Exercise. A Tandem SAR may be exercised (i) by giving
written notice to the Company specifying the number of whole SARs which are
being exercised, (ii) by surrendering to the Company any options which are
canceled by reason of the exercise of the Tandem SAR and (iii) by executing such
documents as the Company may reasonably request. A Free-Standing SAR may be
exercised (I) by giving written notice to the Company specifying the whole
number of SARs which are being exercised and (ii) by executing such documents as
the Company may reasonably request.
2.3 Termination of Employment or Service with the Company.
(a) Disability. Subject to paragraph (f) below and Section 6.8, and
unless otherwise specified in the Agreement relating to an option or SAR, as the
case may be, if the employment or service with the Company of the holder of an
option or SAR terminates by reason of Disability, each option and SAR held by
such holder shall be exercisable only to the extent that such option or SAR, as
the case may be, is exercisable on the effective date of such holder's
termination of employment or service and may thereafter be exercised by such
holder (or such holder's legal representative or similar person) until and
including the earliest to occur of (i) the date which is three months
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(or such other period as set forth in the Agreement relating to such option or
SAR) after the effective date of such holder's termination of employment or
service and (ii) the expiration date of the term of such option or SAR.
(b) Retirement. Subject to paragraph (f) below and Section 6.8, and
unless otherwise specified in the Agreement relating to an option or SAR, as the
case may be, if the employment or service with the Company of the holder of an
option or SAR terminates by reason of retirement on or after age 65 with the
consent of the Company, each option and SAR held by such holder shall be
exercisable only to the extent that such option or SAR, as the case may be, is
exercisable on the effective date of such holder's termination of employment or
service and may thereafter be exercised by such holder (or such holder's legal
representative or similar person) until and including the earliest to occur of
(I) the date which is three months (or such other period as set forth in the
Agreement relating to such option or SAR) after the effective date of such
holder's termination of employment or service and (ii) the expiration date of
the term of such option or SAR.
(c) Death. Subject to paragraph (f) below and Section 6.8, and
unless otherwise specified in the Agreement relating to an option or SAR, as the
case may be, if the employment or service with the Company of the holder of an
option or SAR terminates by reason of death, each option and SAR held by such
holder shall be exercisable only to the extent that such option or SAR, as the
case may be, is exercisable on the date of such holder's death, and may
thereafter be exercised by such holder's executor, administrator, legal
representative, beneficiary or similar person, as the case may be, until and
including the earliest to occur of (i) the date which is one year (or such other
period as set forth in the Agreement relating to such option or SAR) after the
date of death and (ii) the expiration date of the term of such option or SAR.
(d) Other Termination. If the employment or service with the Company
of the holder of an option or SAR is terminated by the Company for Cause, each
option and SAR held by such holder shall terminate automatically on the
effective date of such holder's termination of employment or service.
Subject to paragraph (f) below and Section 6.8, and unless specified
in the Agreement relating to an option or SAR, as the case may be, if the
employment or service with the Company of the holder of an option or SAR
terminates for any reason other than Disability, retirement on or after age 65
with the consent of the Company, death or Cause, each option and SAR held by
such holder shall be exercisable only to the extent that such option or SAR is
exercisable on the effective date of such holder's termination of employment or
service and may thereafter be exercised by such holder (or such holder's legal
representative or similar person) until and including the earliest to occur of
(i) the date which is three months (or such other period as set forth in the
Agreement relating to such option or SAR) after the effective date of such
holder's termination of employment or service and (ii) the expiration date of
the term of such option or SAR.
(e) Death Following Termination of Employment or Service. Subject to
paragraph (f) below and Section 6.8, and unless otherwise specified in the
Agreement relating to an option or SAR, as the case may be, if the holder of an
option or SAR dies during the three-month period following termination of
employment or service by reason of Disability, or if the holder of an option or
SAR dies during the three-month period following termination of employment or
service by reason of retirement on or after age 65 with the consent of the
Company, or if the holder of an option or SAR dies during the three-month period
following termination of employment or service for any reason other than
Disability or retirement on or after age 65 with the consent of the Company (or,
in each case, such other period as set forth in the Agreement relating to such
option or SAR), each option and SAR held by such holder shall be fully
exercisable and may thereafter be exercised by the holder's executor,
administrator, legal representative, beneficiary or similar person, as the case
may be, until and including the earliest to occur of (i) the date which is one
year (or such other period as set forth in the Agreement relating to such option
or SAR) after the date of death and (ii) the expiration date of the term of such
option or SAR.
(f) Termination of Employment or Service - Incentive Stock Options.
Subject to Section 6.8 and unless otherwise specified in the Agreement relating
to the option, if the employment or service with the Company of a holder of an
incentive stock option terminates by reason of Permanent and Total Disability
(as defined in Section 22(e)(3) of the Code), each incentive stock option held
by such optionee shall be exercisable only to the extent that
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such option is exercisable on the effective date of such optionee's termination
of employment or service by reason of Permanent and Total Disability, and may
thereafter be exercised by such optionee (or such optionee's legal
representative or similar person) until and including the earliest to occur of
(i) the date which is three months (or such other period no longer than one
year as set forth in the Agreement relating to such option) after the effective
date of such optionee's termination of employment or service by reason of
Permanent and Total Disability and (ii) the expiration date of the term of such
option.
Subject to Section 6.8 and unless otherwise specified in the Agreement
relating to the option, if the employment or service with the Company of a
holder of an incentive stock option terminates by reason of death, each
incentive stock option held by such optionee shall be exercisable only to the
extent that such option is exercisable on the date of such optionee's death and
may thereafter be exercised by such optionee's executor, administrator, legal
representative, beneficiary or similar person until and including the earliest
to occur of (I) the date which is one year (or such shorter period as set forth
in the Agreement relating to such option)after the date of death and (ii) the
expiration date of the term of such option.
If the employment or service with the Company of the optionee of an
Incentive Stock Option is terminated by the Company for Cause, each Incentive
Stock Option held by such optionee shall terminate automatically on the
effective date of such optionee's termination of employment or service.
If the employment or service with the Company of a holder of an
incentive stock option terminates for any reason other than Permanent and Total
Disability, death or Cause, each incentive stock option held by such optionee
shall be exercisable only to the extent such option is exercisable on the
effective date of such optionee's termination of employment or service, and may
thereafter be exercised by such holder (or such holder's legal representative or
similar person) until and including the earliest to occur of (i) the date which
is three months after the effective date of such optionee's termination of
employment or service and (ii) the expiration date of the term of such option.
If the holder of an incentive stock option dies during the three-month
period following termination of employment or service by reason of Permanent and
Total Disability (or such shorter period as set forth in the Agreement relating
to such option), or if the holder of an incentive stock option dies during the
three-month period following termination of employment or service for any reason
other than Permanent and Total Disability, death or Cause, each incentive stock
option held by such optionee shall be exercisable only to the extent such option
is exercisable on the date of the optionee's death and may thereafter be
exercised by the optionee's executor, administrator, legal representative,
beneficiary or similar person until and including the earliest to occur of (i)
the date which is one year (or such shorter period as set forth in the Agreement
relating to such option) after the date of death and (ii) the expiration date of
the term of such option.
2.4 Termination of Independent Contractor. Not-withstanding anything
to the contrary herein, all of the terms relating to the exercise, cancellation
or other disposition of an option or SAR upon a termination of an Independent
Contractor, whether by reason of Disability, retirement, death, Cause or other
termination, shall be determined by the Committee. Such determination shall be
made at the time of the grant of such option or SAR, as the case may be, and
shall be specified in the Agreement relating to such option or SAR.
III. STOCK AWARDS
3.1 Stock Awards. The Committee may, in its discretion, grant Stock
Awards to such eligible persons as may be selected by the Committee. Subject to
adjustment as provided in Sections 6.7 and 6.8 of this Plan, the aggregate
number of shares of Common Stock available under this Plan pursuant to all Stock
Awards shall not exceed 50,000 of the aggregate number of shares of Common Stock
available under this Plan. The Agreement relating to a Stock Award shall
specify whether the Stock Award is a Restricted Stock Award or Bonus Stock
Award.
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3.2 Terms of Stock Awards. Stock Awards shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem advisable.
(a) Number of Shares and Other Terms. The number of shares of Common
Stock subject to a Restricted Stock Award or Bonus Stock Award and the
Performance Measures (if any) and Restriction Period applicable to a Restricted
Stock Award shall be determined by the Committee.
(b) Vesting and Forfeiture. The Agreement relating to a Restricted
Stock Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of the
shares of Common Stock subject to such award (i) if specified Performance
Measures are satisfied or met during the specified Restriction Period or (ii) if
the holder of such award remains continuously in the employment or service of
the Company during the specified Restricted Period and for the forfeiture of the
shares of Common Stock subject to such award (x) if specified Performance
Measures are not satisfied or met during the specified Restriction Period or (y)
if the holder of such award does not remain continuously in the employment or
service of the Company during the specified Restriction Period.
Bonus Stock Awards shall not be subject to any Performance Measures or
Restriction Periods.
(c) Share Certificates. During the Restriction Period, a certificate
or certificates representing a Restricted Stock Award shall be registered in the
holder's name and may bear a legend, in addition to any legend which may be
required pursuant to Section 6.6, indicating that the ownership of the shares of
Common Stock represented by such certificate is subject to the restrictions,
terms and conditions of this Plan and the Agreement relating to the Restricted
Stock Award. All such certificates shall be deposited with the Company,
together with stock powers or other instruments of assignment (including a power
of attorney), each endorsed in blank with a guarantee of signature if deemed
necessary or appropriate, which would permit transfer to the Company of all or a
portion of the shares of Common Stock subject to the Restricted Stock Award in
the event such award is forfeited in whole or in part. Upon termination of any
applicable Restriction Period (and the satisfaction or attainment of applicable
Performance Measures), or upon the grant of a Bonus Stock Award, in each case
subject to the Company's right to require payment of any taxes in accordance
with Section 6.5, a certificate or certificates evidencing ownership of the
requisite number of shares of Common Stock shall be delivered to the holder of
such award.
(d) Rights with Respect to Restricted Stock Awards. Unless otherwise
set forth in the Agreement relating to a Restricted Stock Award, and subject to
the terms and conditions of a Restricted Stock Award, the holder of such award
shall have all rights as a stockholder of the Company, including, but not
limited to, voting rights, the right to receive dividends and the right to
participate in any capital adjustment applicable to all holders of Common Stock;
provided, however, that a distribution with respect to shares of Common Stock,
other than a distribution in cash, shall be deposited with the Company and shall
be subject to the same restrictions as the shares of Common Stock with respect
to which such distribution was made.
3.3 Termination of Employment or Service.
(a) Disability, Retirement and Death. Subject to Section 6.8 and
unless otherwise set forth in the Agreement relating to a Restricted Stock
Award, if the employment or service with the Company of the holder of such award
terminates by reason of Disability, retirement on or after age 65 with the
consent of the Company or death, the portion of such award which is subject to a
Restriction Period shall terminate as of the effective date of such holder's
termination of employment or service shall be forfeited and such portion shall
be canceled by the Company.
(b) Other Termination. Subject to Section 6.8 and unless otherwise
set forth in the Agreement relating to a Restricted Stock Award, if the
employment or service with the Company of the holder of a Restricted Stock Award
terminates for any reason other than Disability, retirement on or after age 65
with the consent of the Company or death, the portion of such award which is
subject to a Restriction Period on the effective date of such holder's
termination of employment or service shall be forfeited and such portion shall
be canceled by the Company.
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3.4 Termination of Independent Contractor. Not-withstanding anything
to the contrary herein, all of the terms relating to the exercise, cancellation
or other disposition of a Restricted Stock Award upon a termination of an
Independent Contractor, whether by reason of Disability, retirement, death,
Cause or other termination, shall be determined by the Committee. Such
determination shall be made at the time of the grant of such Restricted Stock
Award, and shall be specified in the Agreement relating to such Restricted Stock
Award.
IV. PERFORMANCE SHARE AWARDS
4.1 Performance Share Awards. The Committee may, in its discretion,
grant Performance Share Awards to such eligible persons as may be selected by
the Committee.
4.2 Terms of Performance Share Awards. Performance Share Awards
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem advisable.
(a) Number of Performance Shares and Performance Measures. The number
of Performance Shares subject to any award and the Performance Measures and
Performance Period applicable to such award shall be determined by the
Committee.
(b) Vesting and Forfeiture. The Agreement relating to a Performance
Share Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of such
award, if specified Performance Measures are satisfied or met during the
specified Performance Period, and for the forfeiture of such award, if specified
Performance Measures are not satisfied or met during the specified Performance
Period.
(c) Settlement of Vested Performance Share Awards. The Agreement
relating to a Performance Share Award (i) shall specify whether such award may
be settled in shares of Common Stock (including shares of Restricted Stock) or
cash or a combination thereof and (ii) may specify whether the holder thereof
shall be entitled to receive, on a current or deferred basis, dividend
equivalents, and, if determined by the Committee, interest on any deferred
dividend equivalents, with respect to the number of shares of Common Stock
subject to such award. If a Performance Share Award is settled in shares of
Restricted Stock, a certificate or certificates representing such Restricted
Stock shall be issued in accordance with Section 3.2(c) and the holder of such
Restricted Stock shall have such rights of a stockholder of the Company as
determined pursuant to Section 3.2(d). Prior to the settlement of a Performance
Share Award in shares of Common Stock, including Restricted Stock, the holder of
such award shall have no rights as a stockholder of the Company with respect to
the shares of Common Stock subject to such award.
4.3 Termination of Employment or Service.
(a) Disability, Retirement and Death. Subject to Section 6.8 and
unless otherwise set forth in the Agreement relating to a Performance Share
Award, if the employment or service with the Company of the holder of such award
terminates by reason of Disability, retirement on or after age 65 with the
consent of the Company or death, the portion of such award which is subject to a
Performance Period on the effective date of such holder's termination of
employment or service shall be forfeited and such portion shall be canceled by
the Company.
(b) Other Termination. Subject to Section 6.8 and unless otherwise
set forth in the Agreement relating to a Performance Share Award, if the
employment or service with the Company of the holder of a Performance Share
Award terminates for any reason other than Disability, retirement on or after
age 65 with the consent of the Company or death, the portion of such award which
is subject to a Performance Period on the effective date of such holder's
termination of employment or service shall be forfeited and such portion shall
be canceled by the Company.
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4.4 Termination of Independent Contractor. Not-withstanding anything
to the contrary herein, all of the terms relating to the exercise, cancellation
or other disposition of a Performance Share Award upon a termination of an
Independent Contractor, whether by reason of Disability, retirement, death,
Cause or other termination, shall be determined by the Committee. Such
determination shall be made at the time of the grant of such Performance Share
Award, and shall be specified in the Agreement relating to such Performance
Share Award.
V. PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS
5.1 Eligibility. Each Non-Employee Director shall be granted options
to purchase shares of Common Stock in accordance with this Article V ("Director
Options"). All options granted under this Article V shall constitute Non-
Statutory Stock Options.
5.2 Grants of Stock Options. Each Non-Employee Director shall be
granted Non-Statutory Stock Options as follows:
(a) Initial Public Offering. On the date of the initial public
offering by the Company, each person who is a Non-Employee Director immediately
after such initial public offering or meeting of stockholders (other than any
Non-Employee Director who is expected to resign in connection with the Company's
initial public offering) shall be granted an option to purchase 1,000 shares of
Common Stock at a purchase price per share equal to the Fair Market Value of a
share of Common Stock on the date of grant of such option.
(b) Annual Meeting. On the date of each annual meeting of
stockholders of the Company, each person who is a Non-Employee Director
immediately after such annual meeting of stockholders shall be granted an option
to purchase 1,000 shares of Common Stock at a purchase price per share equal to
the Fair Market Value of a share of Common Stock on the date of grant of such
option.
(c) New Non-Employee Directors. In addition, following the initial
public offering of the Company, on the date on which a person is first elected
or begins to serve as a Non-Employee Director (other than by reason of
termination of employment or service) shall be granted an option to purchase
10,000 shares of Common Stock at a purchase price per share equal to the Fair
Market Value of a share of Common Stock on the date of grant of such option.
(d) Option Period and Exercisability. Except as otherwise provided
herein, each option granted under this Article V shall become exercisable in
full on the first to occur of (i) the day before the Company's annual meeting of
stockholders next following the date of grant or (ii) the first anniversary of
its date of grant. Each option granted under this Article V shall expire ten
years after its date of grant. An exercisable option, or portion thereof, may
be exercised in whole or in part only with respect to whole shares of Common
Stock. Options granted under this Article V shall be exercisable in accordance
with Section 2.1(c).
5.3 Termination of Directorship.
(a) Disability. Subject to Section 6.8, if the holder of an option
granted under this Article V ceases to be a director of the Company by reason of
Disability, each such option held by such holder shall be exercisable only to
the extent that such option is exercisable on the effective date of such
holder's ceasing to be a director and may thereafter be exercised by such holder
(or such holder's guardian, legal representative or similar person) until the
earliest to occur of the (i) date which is three months after the effective date
of such holder's ceasing to be a director and (ii) the expiration date of the
term of such option.
(b) Retirement. Subject to Section 6.8, if the holder of an option
granted under this Article V ceases to be a director of the Company on or after
age 65, each such option held by such holder shall be exercisable only to the
extent that such option is exercisable on the effective date of such holder's
ceasing to be a director and may thereafter be exercised by such holder (or such
holder's legal representative or similar person) until the earliest to
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occur of the (i) date which is three months after the effective date of such
holder's ceasing to be a director and (ii) the expiration date of the term of
such option.
(c) Death. Subject to Section 6.8, if the holder of an option granted
under this Article V ceases to be a director of the Company by reason of death,
each such option held by such holder shall be fully exercisable and may
thereafter be exercised by such holder's executor, administrator, legal
representative, beneficiary or similar person, as the case may be, until the
earliest to occur of the (i) date which is one year after the date of death and
(ii) the expiration date of the term of such option.
(d) Other Termination. Subject to Section 6.8, if the holder of an
option granted under this Article V ceases to be a director of the Company for
any reason other than Disability, retirement on or after age 65 or death, each
such option held by such holder shall be exercisable only to the extent such
option is exercisable on the effective date of such holder's ceasing to be a
director and may thereafter be exercised by such holder (or such holder's legal
representative or similar person) until the earliest to occur of the (i) date
which is three months after the effective date of such holder's ceasing to be a
director and (ii) the expiration date of the term of such option.
(e) Death Following Termination of Directorship. Subject to Section
6.8, if the holder of an option granted under this Article V dies during the
three-month period following such holder's ceasing to be a director of the
Company by reason of Disability, or if such a holder dies during the three-month
period following such holder's ceasing to be a director of the Company on or
after age 65, or if such a holder dies during the three-month period following
such holder's ceasing to be a director for any reason other than by reason of
Disability or retirement on or after age 65, each such option held by such
holder shall be exercisable only to the extent that such option is exercisable
on the date of the holder's death and may thereafter be exercised by the
holder's executor, administrator, legal representative, beneficiary or similar
person, as the case may be, until the earliest to occur of the (i) date one year
after the date of death and (ii) the expiration date of the term of such option.
VI. GENERAL
6.1 Effective Date and Term of Plan. This Plan shall be submitted to
the stockholders of the Company for approval and, if approved by the affirmative
vote of a majority of the voting power of the shares of capital stock of the
Company entitled to vote thereon, shall become effective as of the commencement
of the initial public offering of the Company. This Plan shall terminate ten
years after its effective date unless terminated earlier by the Board.
Termination of this Plan shall not affect the terms or conditions of any award
granted prior to termination.
Awards hereunder may be made at any time prior to the termination of
this Plan, provided that no award may be made later than ten years after the
effective date of this Plan. In the event that this Plan is not approved by the
stockholders of the Company, this Plan and any awards hereunder shall be void
and of no force or effect.
6.2 Amendments. The Board may amend this Plan as it shall deem
advisable, subject to any requirement of stockholder approval required by
applicable law, rule or regulation including Rule 16b-3 under the Exchange Act
and Section 162(m) of the Code; provided, however, that no amendment shall be
made without stockholder approval if such amendment would (a) increase the
maximum number of shares of Common Stock available for issuance under this Plan
(subject to Section 6.7), (b) reduce the minimum purchase price in the case of
an option or the base price in the case of an SAR, (c) effect any change
inconsistent with Section 422 of the Code or (d) extend the term of this Plan.
No amendment may impair the rights of a holder of an outstanding award without
the consent of such holder.
6.3 Agreement. Each award under this Plan shall be evidenced by an
Agreement setting forth the terms and conditions applicable to such award. No
award shall be valid until an Agreement is executed by the Company and the
recipient of such award and, upon execution by each party and delivery of the
Agreement to the Company, such award shall be effective as of the effective date
set forth in the Agreement.
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6.4 Non-Transferability of Stock Options, SARs and Performance
Shares. No option, SAR or Performance Share shall be transferable other than (i)
by will, the laws of descent and distribution or pursuant to beneficiary
designation procedures approved by the Company or (ii) as otherwise permitted
under Rule 16b-3 under the Exchange Act as set forth in the Agreement relating
to such award. Each option, SAR or Performance Share may be exercised or settled
during the participant's lifetime only by the holder or the holder's legal
representative or similar person. Except as permitted by the second preceding
sentence, no option, SAR or Performance Share may be sold, transferred,
assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by
operation of law or otherwise) or be subject to execution, attachment or similar
process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate,
encumber or otherwise dispose of any option, SAR or Performance Share, such
award and all rights thereunder shall immediately become null and void.
6.5 Tax Withholding. The Company shall have the right to require,
prior to the issuance or delivery of any shares of Common Stock or the payment
of any cash pursuant to an award made hereunder, payment by the holder of such
award of any Federal, state, local or other taxes which may be required to be
withheld or paid in connection with such award. An Agreement may provide that
(i) the Company shall withhold whole shares of Common Stock which would
otherwise be delivered to a holder, having an aggregate Fair Market Value
determined as of the date the obligation to withhold or pay taxes arises in
connection with an award (the "Tax Date"), or withhold an amount of cash which
would otherwise be payable to a holder, in the amount necessary to satisfy any
such obligation or (ii) the holder may satisfy any such obligation by any of the
following means: (1) a cash payment to the Company, (2) delivery to the Company
of Mature Shares having an aggregate Fair Market Value, determined as of the Tax
Date, equal to the amount necessary to satisfy any such obligation, (3)
authorizing the Company to withhold whole shares of Common Stock which would
otherwise be delivered having an aggregate Fair Market Value, determined as of
the Tax Date, or withhold an amount of cash which would otherwise be payable to
a holder, equal to the amount necessary to satisfy any such obligation, (4) in
the case of the exercise of an option, a cash payment by a broker-dealer
acceptable to the Company to whom the optionee has submitted an irrevocable
notice of exercise or (5) any combination of (1), (2) and (3), in each case to
the extent set forth in the Agreement relating to the award; provided, however,
that the Committee shall have sole discretion to disapprove of an election
pursuant to any of clauses (2)-(5) and that in the case of a holder who is
subject to Section 16 of the Exchange Act, the Company may require that the
method of satisfying such an obligation be in compliance with Section 16 and the
rules and regulations thereunder. An Agreement may provide for shares of Common
Stock to be delivered or withheld having an aggregate Fair Market Value in
excess of the minimum amount required to be withheld. Any fraction of a share of
Common Stock which would be required to satisfy such an obligation shall be
disregarded and the remaining amount due shall be paid in cash by the holder.
6.6 Restrictions on Shares. Each award made hereunder shall be
subject to the requirement that if at any time the Company determines that the
listing, registration or qualification of the shares of Common Stock subject to
such award upon any securities exchange or under any law, or the consent or
approval of any governmental body, or the taking of any other action is
necessary or desirable as a condition of, or in connection with, the delivery of
shares thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any award made hereunder bear a legend indicating that the
sale, transfer or other disposition thereof by the holder is prohibited except
in compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
6.7 Adjustment. Except as provided in Section 6.8, in the event of
any stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off or other
similar change in capitalization or event, or any distribution to holders of
Common Stock other than a regular cash dividend, the number and class of
securities available under this Plan, the number and class of securities subject
to each outstanding option and the purchase price per security, the number of
securities subject to each option to be granted to Non-Employee Directors
pursuant to Article V, the terms of each outstanding SAR, the number and class
of securities subject to each outstanding Stock Award, and the terms of each
outstanding Performance Share shall be appropriately adjusted by the Committee,
such adjustments to be made in the case of outstanding options and SARs without
an increase in the aggregate purchase price or base price. The decision of the
Committee regarding any such
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adjustment shall be final, binding and conclusive. If any such adjustment would
result in a fractional security being (a) available under this Plan, such
fractional security shall be disregarded, or (b) subject to an award under this
Plan, the Company shall pay the holder of such award, in connection with the
first vesting, exercise or settlement of such award, in whole or in part,
occurring after such adjustment, an amount in cash determined by multiplying (i)
the fraction of such security (rounded to the nearest hundredth) by (ii) the
excess, if any, of (1) the Fair Market Value on the vesting, exercise or
settlement date over (2) the exercise or base price, if any, of such award.
6.8 Change in Control.
(a) (i) Notwithstanding any provision in this Plan or any Agreement
(other than an Agreement with an Independent Contractor), in the event of a
Change in Control pursuant to Section (b)(iii) or (iv) below, (1) all
outstanding options and SARS shall immediately become exercisable in full,
(2) the Restriction Period applicable to any outstanding Restricted Stock
Award shall lapse, (3) the Performance Period applicable to any outstanding
Performance Share shall lapse and (4) the Performance Measures applicable
to any outstanding Restricted Stock Award (if any) and to any outstanding
Performance Share shall be deemed to be satisfied at the maximum level. If,
in connection with such Change in Control, holders of Common Stock receive
solely shares of common stock that are registered under Section 12 of the
Exchange Act, there shall be substituted for each share of Common Stock
available under this Plan, whether or not then subject to an outstanding
award, the number and class of shares into which each outstanding share of
Common Stock shall be converted pursuant to such Change in Control. If, in
connection with such Change in Control, holders of Common Stock receive
solely cash and shares of common stock that are registered under Section 12
of the Exchange Act, each outstanding award shall be surrendered to and
canceled by the Company, and the holder shall receive, within ten days of
the occurrence of such Change in Control, a proportionate amount of cash in
the manner provided in Section (a)(ii) below, and there shall be
substituted for the award surrendered a similar award reflecting a
proportionate number of the class of shares into which each outstanding
share of Common Stock shall be converted to such Change in Control. In the
event of any such substitution, the proportion of cash and common stock,
the purchase price per share in the case of an option and the base price in
the case of an SAR, and any other terms of outstanding awards shall be
appropriately adjusted by the Committee, such adjustments to be made in the
case of outstanding options and SARs without an increase in the aggregate
purchase price or base price; provided, that the proportion of cash and
common stock substituted for outstanding awards shall reflect the
approximate proportion of cash and common stock received by holders of
Common Stock in such Change in Control. If, in connection with a Change in
Control, holders of Common Stock receive any portion of the consideration
in a form other than cash or shares of common stock that are registered
under Section 12 of the Exchange Act, each share of Common Stock available
under this Plan, whether or not then subject to an outstanding award, shall
be substituted or surrendered for such proportion of common stock, cash or
other consideration as shall be determined by the Committee pursuant to
Section 6.7.
(ii) Notwithstanding any provision in this Plan or any Agreement
(other than an Agreement with an Independent Contractor), in the event of a
Change in Control pursuant to Section (b)(i) or (ii) below, or in the event
of a Change in Control pursuant to Section (b)(iii) or (iv) below in
connection with which the holders of Common Stock receive cash, each
outstanding award shall be surrendered to the Company by the holder
thereof, and each such award shall immediately be canceled by the Company,
and the holder shall receive, within ten days of the occurrence of a Change
in Control pursuant to Section (b)(i) or (ii) below or within ten days of
the approval of the stockholders of the Company contemplated by Section
(b)(iii) or (iv) below, a cash payment from the Company in an amount equal
to (1) in the case of an option, the number of shares of Common Stock then
subject to such option, multiplied by the excess, if any, of the greater of
(A) the highest per share price offered to stockholders of the Company in
any transaction whereby the Change in Control takes place or (B) the Fair
Market Value of a share of Common Stock on the date of occurrence of the
Change in Control, over the purchase price per share of Common Stock
subject to the option; (2) in the case of a Free-Standing SAR, the number
of shares of Common Stock then subject to such SAR, multiplied by the
excess, if any, of the greater of (A) the highest per share price offered
to stockholders of the Company in any transaction whereby the Change in
Control takes place or (B) the Fair Market Value of
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a share of Common Stock on the date of occurrence of the Change in Control,
over the base price of the SAR; and (3) in the case of a Restricted Stock
Award or Performance Share Award, the number of shares of Common Stock or
the number of Performance Shares, as the case may be, then subject to such
award, multiplied by the greater of (A) the highest per share price offered
to stockholders of the Company in any transaction whereby the Change in
Control takes place or (B) the Fair Market Value of a share of Common Stock
on the date of occurrence of the Change in Control. In the event of a
Change in Control, each Tandem SAR shall be surrendered by the holder
thereof and shall be canceled simultaneously with the cancellation of the
related option. The Company may, but is not required to, cooperate with any
person who is subject to Section 16 of the Exchange Act to assure that any
cash payment in accordance with the foregoing to such person is made in
compliance with Section 16 and the rules and regulations thereunder.
(b) "Change in Control" shall mean:
(i) the acquisition by any individual, entity or group (a "Person"),
including any "person" within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act, of Beneficial Ownership of 50% or more of either (1)
the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (2) the combined voting power of the
then outstanding securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
excluding, however, the following: (A) any acquisition directly from the
Company (excluding any acquisition resulting from the exercise of an
exercise, conversion or exchange privilege unless the security being so
exercised, converted or exchanged was acquired directly from the Company),
(B) any acquisition by the Company, (C) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the Company or
any corporation controlled by the Company, (D) any acquisition by an Exempt
Person or (E) any acquisition by any corporation pursuant to a transaction
which complies with clauses (1), (2) and (3) of subsection (iii) of this
Section 6.8(b); provided further, that for purposes of clause (2), if any
Person (other than an Exempt Person, the Company or any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company) shall become the Beneficial Owner of
50% or more of the Outstanding Company Common Stock or 50% or more of the
Outstanding Company Voting Securities by reason of an acquisition by the
Company, and such Person shall, after such acquisition by the Company,
become the Beneficial Owner of any additional shares of the Outstanding
Company Common Stock or any additional Outstanding Company Voting
Securities and such Beneficial Ownership is publicly announced, such
additional Beneficial Ownership shall constitute a Change in Control;
(ii) individuals who, as of the effective date hereof, constitute the
Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; provided that any individual
who becomes a director of the Company subsequent to the effective date
hereof whose election, or nomination for election by the Company's
stockholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed a member of
the Incumbent Board; and provided further, that any individual who was
initially elected as a director of the Company as a result of an actual or
threatened election contest, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any
Person other than the Board shall not be deemed a member of the Incumbent
Board;
(iii) approval by the stockholders of the Company of a reorganization,
merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Corporate Transaction");
excluding, however, a Corporate Transaction pursuant to which (1) all or
substantially all of the individuals or entities who are the Beneficial
Owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will Beneficially Own, directly or indirectly, more than 50%
of, respectively, the outstanding shares of common stock, and the combined
voting power of the outstanding securities of such corporation entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction owns the
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Company or all or substantially all of the Company's assets either directly
or indirectly) in substantially the same proportions relative to each other
as their Beneficial Ownership, immediately prior to such Corporate
Transaction, of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (2) no Person (other than an
Exempt Person; the Company; any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company; the corporation resulting from such Corporate Transaction; and any
Person which Beneficially Owned, immediately prior to such Corporate
Transaction, directly or indirectly, 50% or more of the Outstanding Company
Common Stock or the Outstanding Company Voting Securities, as the case may
be) will Beneficially Own, directly or indirectly, 50% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of
the outstanding securities of such corporation entitled to vote generally
in the election of directors and (3) individuals who were members of the
Incumbent Board will constitute at least a majority of the members of the
board of directors of the corporation resulting from such Corporate
Transaction; or
(iv) approval by the stockholders of the Company of a plan of complete
liquidation or dissolution of the Company.
Notwithstanding anything to the contrary herein, no Change of Control
shall be deemed to have taken place as a result of the issuance of shares of
Common Stock by the Company or the sale of shares of Common Stock by its
stockholders in connection with the Company's initial public offering.
6.9 No Right of Participation or Employment. No person shall have any
right to participate in this Plan. Neither this Plan nor any award made
hereunder shall confer upon any person any right to continued employment by the
Company, any Subsidiary or any affiliate of the Company or affect in any manner
the right of the Company, any Subsidiary or any affiliate of the Company to
terminate the employment of any person at any time without liability hereunder.
6.10 Rights as Stockholder. No person shall have any right as a
stockholder of the Company with respect to any shares of Common Stock or other
equity security of the Company which is subject to an award hereunder unless and
until such person becomes a stockholder of record with respect to such shares of
Common Stock or equity security.
6.11 Governing Law. This Plan, each award hereunder and the related
Agreement, and all determinations made and actions taken pursuant thereto, to
the extent not otherwise governed by the Code or the laws of the United States,
shall be governed by the laws of the State of Delaware and construed in
accordance therewith without giving effect to principles of conflicts of laws.
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