<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 29, 1997
REGISTRATION NO. 333-33111
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
THE PETERSEN COMPANIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 2721 36-4099296
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
----------------
6420 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90048
TELEPHONE: (213) 782-2000
(Address, including zip code, and telephone number, including
area code, of registrants' principal executive offices)
----------------
NEAL VITALE
PRESIDENT AND CHIEF OPERATING OFFICER
THE PETERSEN COMPANIES, INC.
6420 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90048
TELEPHONE: (213) 782-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
DENNIS M. MYERS STEVEN L. GROSSMAN
KIRKLAND & ELLIS O'MELVENY & MYERS LLP
200 EAST RANDOLPH DRIVE 400 SOUTH HOPE STREET
CHICAGO, ILLINOIS 60601 LOS ANGELES, CALIFORNIA 90071
(312) 861-2000 (213) 669-6000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a statement of estimated expenses, to be paid solely by the
Company, of the issuance and distribution of the securities being registered:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 52,273
NASD filing fee................................................. 17,750
NYSE original listing fee....................................... 189,600
Blue Sky fees and expenses (including attorneys' fees and ex-
penses)........................................................ 20,000
Printing expenses............................................... 300,000
Accounting fees and expenses.................................... 300,000
Transfer agent's fees and expenses.............................. 10,000
Legal fees and expenses......................................... 400,000
Miscellaneous expenses (including certain anticipated roadshow
expenses)...................................................... 210,377
----------
Total......................................................... $1,500,000
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is incorporated under the laws of the State of Delaware. Section
145 of the General Corporation Law of the State of Delaware, inter alia,
("Section 145") provides that a Delaware corporation may indemnify any persons
who were, are or are threatened to be made, parties to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
such corporation), by reason of the fact that such person is or was an
officer, director, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer employee or agent of
another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
action, suit or proceeding, provided such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's
best interests and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was illegal. A Delaware
corporation may indemnify any persons who are, were or are threatened to be
made, a party to any threatened, pending or completed action or suit by or in
the right of the corporation by reasons of the fact that such person was a
director, officer, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent
of another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit, provided
such person acted in good faith and in a manner he reasonably believed to be
in or not opposed to the corporation's best interests, provided that no
indemnification is permitted without judicial approval if the officer,
director, employee or agent is adjudged to be liable to the corporation. Where
an officer, director, employee or agent is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses which such officer or director has actually
and reasonably incurred.
The Company's Certificate of Incorporation provides that, to the fullest
extent permitted by the General Corporation Law of the State of Delaware as
the same exists or may hereafter be amended, a director of the Company shall
not be liable to the Company or its stockholders for monetary damages for a
breach of fiduciary duty as a director.
Article V of the By-laws of the Company ("Article V") provides, among other
things, that each person who was or is made a party or is threatened to be
made a party to or is involved in any action, suit or proceeding,
II-1
<PAGE>
whether civil, criminal, administrative or investigative, by reason of the fact
that he or a person of whom he is the legal representative, is or was a
director or officer, of the corporation or is or was serving at the request of
the Company as a director, officer, employee, fiduciary, or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
shall be indemnified and held harmless by the Company to the fullest extent
which it is empowered to do so by the General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment permits the Company
to provide broader indemnification rights than said law' permitted the Company
to provide prior to such amendment) against all expense, liability and loss
(including attorneys' fees actually and reasonably incurred by such person in
connection with such proceeding, and such indemnification shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that, the Company shall indemnify any such person seeking indemnification in
connection with a proceeding initiated by such person only if such proceeding
was authorized by the board of directors of the Company.
Article V also provides that persons who are not covered by the foregoing
provisions of Article V and who are or were employees or agents of the Company,
or who are or were serving at the request of the Company as employees or agents
of another corporation, partnership, joint venture, trust or other enterprise,
may be indemnified to the extent authorized at any time or from time to time by
the board of directors.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
enterprise, against any liability asserted against him and incurred by him in
any such capacity, arising out of his status as such, whether or not the
corporation would otherwise have the power to indemnify him under Section 145.
Article V further provides that the Company may purchase and maintain
insurance on its own behalf and on behalf of any person who is or was a
director, officer, employee, fiduciary, or agent of the Company or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him or her and incurred by him or her in
any such capacity, whether or not the Company would have the power to indemnify
such person against such liability under Article V.
Under the Securityholders Agreement, the Company agrees to indemnify certain
of its directors and officers against certain liabilities, including
liabilities under the Securities Act.
II-2
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
On September 30, 1996, the Company sold an aggregate of 2,106 shares of Class
A Common Stock and 1,200 shares of Class B Common Stock for $500 per share
pursuant to the terms of a Securities Purchase Agreement dated as of the date
thereof. The following persons purchased such shares in the amounts set forth
opposite their names:
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
-------------------- ----------------------
NAME SHARES NAME SHARES
---- ------ ---- ------
<S> <C> <C> <C>
Willis Stein & Partners
L.P. .................. 1,000 Chase Equity Associates, L.P. ........... 300
Petersen Properties Com-
pany................... 500 BankAmerica Investment Corporation ...... 360
Allstate Insurance Com-
pany................... 300 CIVC Partners II......................... 40
Norwest Equity Capital,
L.L.C. ................ 100 CIBC WG Argosy Merchant Fund 2, L.L.C. .. 250
Nassau Capital Partners
II, L.P. .............. 99.5 FUI, Inc. ............................... 250
NAS Partners I,
L.L.C. ................ .5
James D. Dunning, Jr. .. 42
The Laurence and Cindy
Bloch Trust............ 20
Stuart Karu............. 20
Thomas J. Strauss....... 1
Irwin Bard.............. 10
Bernard Shavitz......... 3
D. Claeys Bahrenburg.... 10
----- -----
Total................. 2,106 Total.................................... 1,200
===== =====
</TABLE>
In connection with the execution of their respective Employment Agreements on
September 30, 1996, the Company sold an aggregate of 41 shares of Class A
Common Stock at a price of $500 per share to the following executive officers:
<TABLE>
<CAPTION>
NAME SHARES
---- ------
<S> <C>
D. Claeys Bahrenburg....................................... 20
Neal Vitale................................................ 15
Richard S Willis........................................... 6
On February 10, 1997, the Company sold an aggregate of 11.2 shares of Class A
Common Stock at a price of $500 per share to the following employees of the
Company:
<CAPTION>
NAME SHARES
---- ------
<S> <C>
Richard P. Lague........................................... 2
John Dianna................................................ 2
Lee Kelley................................................. 0.2
Paul J. Tzimoulis.......................................... 2
David Myers................................................ 1
Ken Elliott................................................ 1
Jay Cole................................................... 1
James D. Dunning III Trust................................. 1
David F. Dunning Trust..................................... 1
On June 13, 1997, the Company sold an aggregate of 6 shares of Class A Common
Stock at a price of $550 per share to the following employees of the Company:
<CAPTION>
NAME SHARES
---- ------
<S> <C>
James Guthrie.............................................. 2
Charlotte A. Perkins....................................... 1
Amy P. Wilkins............................................. 1
Justin McCormack........................................... 2
</TABLE>
II-3
<PAGE>
Immediately prior to and contingent upon the consummation of the Offering,
the Company will effect the Reorganization whereby, among other things, all of
the existing securityholders of the Company and Petersen will enter into a
Contribution and Recapitalization Agreement (the "Recapitalization Agreement")
pursuant to which, among other things, each existing securityholder will
contribute all of its Preferred Units and Common Units of Petersen and common
stock of the Company to the Company in exchange for newly-issued shares of
Common Stock. Pursuant to the Recapitalization Agreement, the existing
securityholders of Petersen Holdings L.L.C. will receive an aggregate of
27,840,994 shares of Common Stock of the Company (assuming an initial public
offering price of $16 per share).
Except as set forth above, the Company has not sold any securities. All of
the transactions described above were effected in reliance upon the exemption
from the registration requirement of the Securities Act contained in Section
4(2) of the Securities Act and Regulation D and Rule 701 promulgated
thereunder on the basis such transactions did not involve any public offering.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS.
<TABLE>
<C> <S>
**1.1 Form of Underwriting Agreement.
**2.1 Form of Contribution and Recapitalization Agreement by and among the
Company, Petersen, Publishing and all of the Company's existing
stockholders.
**3.1 Form of Restated Certificate of Incorporation of the Company.
**3.2 Form of Amended and Restated By-Laws of the Company.
**4.1 Indenture, dated as of November 15, 1996, by and among Petersen,
Publishing, Capital and United States Trust Company of New York, as
trustee.
**4.2 Forms of 11 1/8% Senior Subordinated Notes and Series B 11 1/8%
Senior Subordinated Notes.
**4.3 Securities Purchase Agreement, dated November 20, 1996, by and among
Petersen, Capital, Publishing and the Initial Purchasers.
**4.4 Credit Agreement, dated as of September 30, 1996, by and among
Publishing, the Lenders named therein, First Union National Bank of
North Carolina ("First Union"), as Administrative Agent and
Syndication Agent and CIBC, Inc., as Documentation Agent.
**4.5 Pledge and Security Agreement, dated as of September 30, 1996, by and
between Publishing and First Union, as Administrative Agent.
**4.6 Pledge and Security Agreement, dated as of September 30, 1996, by and
among the Company, Petersen and First Union, as Administrative Agent.
**4.7 Guaranty, dated as of September 30, 1996, by and among the Company,
Petersen and First Union, as Administrative Agent.
**4.8 Senior Subordinated Credit Agreement, dated as of September 30, 1996,
among Publishing, the guarantors named therein, the Lenders named
therein and First Union, as Agent.
**4.9 Registration Rights Agreement, dated November 20, 1996, by and among
Publishing, Capital and the Initial Purchasers named therein.
**4.10 Specimen of Class A Common Stock.
**4.11 Term sheet relating to the New Credit Facility.
**5.1 Opinion and consent of Kirkland & Ellis.
**8.1 Opinion of Kirkland & Ellis regarding certain tax matters.
**10.1 License Agreement, dated as of August 15, 1996, by and between Robert
E. Petersen, the Company and the Seller.+
**10.2 Employment Agreement, dated as of August 15, 1996, by and between the
Company and Robert E. Petersen.+
**10.3 Executive Securities Purchase and Employment Agreement, dated as of
September 30, 1996, by and among the Company, Petersen, Publishing
and D. Claeys Bahrenburg.+
**10.4 Executive Securities Purchase and Employment Agreement, dated as of
September 30, 1996, by and among the Company, Petersen, Publishing
and Neal Vitale.+
**10.5 Securities Purchase Agreement, dated as of September 30, 1996, made
by and among Petersen, Petersen Investment Corp., the Company, the
Seller, Willis Stein & Partners, L.P., and the other Persons set
forth on Schedule A thereto.+
10.6 Reserved.
**10.7 Securityholders Agreement, dated as of September 30, 1996, among
Petersen Investment Corp., Petersen, the Company and the other
parties thereto.+
</TABLE>
II-4
<PAGE>
<TABLE>
<C> <S>
**10.8 Promissory Note, dated as of September 30, 1996, from D. Claeys
Bahrenburg in favor of the Company in the amount of $8,000.+
**10.9 Promissory Note, dated as of September 30, 1996, from D. Claeys
Bahrenburg in favor of the Company in the amount of $2,000.+
**10.10 Promissory Note, dated as of September 30, 1996, from D. Claeys
Bahrenburg in favor of Petersen in the amount of $891,000.+
**10.11 Promissory Note, dated as of September 30, 1996, from D. Claeys
Bahrenburg in favor of Petersen in the amount of $99,000.+
**10.12 Promissory Note, dated as of September 30, 1996, from Neal Vitale in
favor of the Company in the amount of $7,500.+
**10.13 Promissory Note, dated as of September 30, 1996, from Neal Vitale in
favor of Petersen in the amount of $742,500.+
**10.14 Asset Purchase Agreement, dated as of August 15, 1996, by and
between the Company (formerly known as BrightView Communications
Group, Inc.) and Petersen Publishing Company (the "Seller"), as
amended by the Letter Agreement, dated as of September 30, 1996, by
and among the Seller, the Company, Petersen and Publishing,
incorporated by reference to Exhibit 2.1 of the Registration
Statement on Form S-4 (333-18017) of Petersen, Publishing and
Petersen Capital Corp.
10.15 The Petersen Companies, Inc. 1997 Long-Term Equity Incentive Plan.
10.16 The Petersen Companies, Inc. Employee Stock Discount Purchase Plan.
**10.17 Agreement, dated as of July 31, 1997, between and among Petersen,
the Company, Publishing and Messrs. Dunning, Bloch, Karu, Vitale and
R. Willis.
10.18 Petersen Holdings, L.L.C. 1997 Long-Term Equity Incentive Plan.
**10.19 Form of Amendment No. 1 to Securityholders Agreement, among Petersen
Investment Corp., Petersen, the Company and the other parties
thereto.
**11.1 Calculation of Earnings Per Share.
**21.1 Subsidiaries of the Company.
**23.1 Consent of Ernst & Young LLP.
**23.2 Consent of Kirkland & Ellis (included in Exhibit 5.1).
**24.1 Powers of Attorney.
**27.1 Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
**Previously filed.
+ Incorporated by reference to the same numbered exhibit to the Registration
Statement on S-4 (Registration No. 333-18017) of Petersen, Publishing and
Petersen Capital Corp.
(B) FINANCIAL STATEMENT SCHEDULES.
Schedule II--Petersen Holdings, L.L.C.--Valuation and Qualifying Accounts.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes to provide to the underwriter
at closing specified in the underwriting agreement certificates in such
denominations and registered in such names as requested by the Underwriter to
permit prompt delivery to each purchaser.
The undersigned registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating
II-5
<PAGE>
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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange 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 registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant 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
registrant 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.
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE PETERSEN
COMPANIES, INC., HAS DULY CAUSED THIS AMENDMENT NO. 3 TO REGISTRATION
STATEMENT ON FORM S-1 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA, ON SEPTEMBER
26, 1997.
THE PETERSEN COMPANIES, INC.
/s/ Neal Vitale
By: _________________________________
NEAL VITALEPRESIDENT
* * * *
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 3 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE CAPACITY DATE
* Chairman of the Board
- ------------------------------------- and Chief Executive September 26,
JAMES D. DUNNING, JR. Officer (Principal 1997
Executive Officer)
/s/ Richard S Willis Executive Vice
- ------------------------------------- President--Chief September 26,
RICHARD S WILLIS Financial Officer and 1997
Director (Principal
Financial and
Accounting Officer)
* Director
- ------------------------------------- September 26,
D. CLAEYS BAHRENBERG 1997
/s/ Neal Vitale Director
- ------------------------------------- September 26,
NEAL VITALE 1997
* Director
- ------------------------------------- September 26,
LAURENCE H. BLOCH 1997
* Director
- ------------------------------------- September 26,
AVY H. STEIN 1997
* Director
- ------------------------------------- September 26,
DANIEL H. BLUMENTHAL 1997
* Director
- ------------------------------------- September 26,
STUART KARU 1997
* Director
- ------------------------------------- September 26,
1997
JOHN A. WILLIS
* The undersigned, by signing his name hereto, does sign and execute this
Amendment No. 3 to Registration Statement pursuant to the Power of Attorney
executed by the above-named officers and Directors and filed with the
Securities and Exchange Commission on behalf of such officers and Directors.
/s/ Neal Vitale
- -------------------------------------
NEAL VITALE, ATTORNEY-IN-FACT
II-7
<PAGE>
Exhibit 10.15
THE PETERSEN COMPANIES, INC.
1997 LONG-TERM EQUITY INCENTIVE PLAN
------------------------------------
1. Purpose.
-------
This plan shall be known as The Petersen Companies, Inc. 1997 Long-
Term Equity Incentive Plan (the "Plan"). The purpose of the Plan shall be to
promote the long-term growth and profitability of The Petersen Companies, Inc.
(the "Company") and its Subsidiaries by (i) providing certain directors,
officers and key employees of, and certain other key individuals who perform
services for, the Company and its Subsidiaries with incentives to maximize
stockholder value and otherwise contribute to the success of the Company and
(ii) enabling the Company to attract, retain and reward the best available
persons for positions of substantial responsibility. Grants of incentive or
nonqualified stock options, stock appreciation rights ("SARs") in tandem with
options, restricted stock, performance awards, or any combination of the
foregoing may be made under the Plan.
2. Definitions.
-----------
(a) "Board of Directors" and "Board" mean the board of directors of
The Petersen Companies, Inc.
(b) "Cause" means the occurrence of one of the following events:
(i) Conviction of a felony or any crime or offense lesser than
a felony involving the property of the Company or a Subsidiary; or
(ii) Conduct that has caused demonstrable and serious injury to
the Company or a Subsidiary, monetary or otherwise; or
(iii) Willful refusal to perform or substantial disregard of
duties properly assigned, as determined by the Company.
(c) "Change in Control" means the occurrence of one of the following
events:
(i) if any "person" or "group" as those terms are used in
Sections 13(d) and 14(d) of the Exchange Act, other than an Exempt Person, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of the combined voting power of the Company's then outstanding securities;
or
<PAGE>
(ii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board and any new directors whose
election by the Board or nomination for election by the Company's stockholders
was approved by at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election was
previously so approved, cease for any reason to constitute a majority thereof;
or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in all or a portion of the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets,
other than a sale to an Exempt Person.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation Committee of the Board. The
membership of the Committee shall be constituted so as to comply at all times
with the applicable requirements of Rule 16b-3 under the Exchange Act and
Section 162(m) of the Code.
(f) "Common Stock" means the Class A Common Stock, par value $.01 per
share, of the Company, and any other shares into which such stock may be changed
by reason of a recapitalization, reorganization, merger, consolidation or any
other change in the corporate structure or capital stock of the Company.
(g) "Competition" is deemed to occur if a person whose employment
with the Company or its Subsidiaries has terminated obtains a position as a
full-time or part-time employee of, as a member of the board of directors of, or
as a consultant or advisor with or to, or acquires an ownership interest in
excess of 5% of, a corporation, partnership, firm or other entity that engages
in any of the businesses of the Company or any Subsidiary with which the person
was involved in a management role at any time during his or her last five years
of employment with or other service for the Company or any Subsidiaries.
(h) "Disability" means a disability that would entitle an eligible
participant to payment of monthly disability payments under any Company
disability plan or as otherwise approved by the Committee.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Exempt Person" means (i) any of Willis, Stein & Partners, L.P.,
James D. Dunning, Jr., Laurence H. Bloch, D. Claeys Bahrenburg, Neal Vitale and
Richard Willis, or any combination of all or any of the foregoing, (ii) any
person, entity or group under the control of any party included in clause (i),
or (iii) a trustee or other administrator or fiduciary holding securities under
an employee benefit plan of the Company.
-2-
<PAGE>
(k) "Fair Market Value" of a share of Common Stock of the Company
means, as of the date in question, the officially-quoted closing selling price
of the stock (or if no selling price is quoted, the bid price) on the principal
securities exchange on which the Common Stock is then listed for trading
(including for this purpose the Nasdaq National Market) (the "Market") for the
immediately preceding trading day or, if the Common Stock is not then listed or
quoted in the Market, the Fair Market Value shall be the fair value of the
Common Stock determined in good faith by the Board; provided, however, that when
shares received upon exercise of an option are immediately sold in the open
market, the net sale price received may be used to determine the Fair Market
Value of any shares used to pay the exercise price or withholding taxes and to
compute the withholding taxes.
(l) "Incentive Stock Option" means an option conforming to the
requirements of Section 422 of the Code and any successor thereto.
(m) "Non-Employee Director" has the meaning given to such term in
Rule 16b-3 under the Exchange Act.
(n) "Nonqualified Stock Option" means any stock option other than an
Incentive Stock Option.
(o) "Other Company Securities" mean securities of the Company other
than Common Stock, which may include, without limitation, unbundled stock units
or components thereof, debentures, preferred stock, warrants and securities
convertible into or exchangeable for Common Stock or other property.
(p) "Retirement" means retirement as defined under any Company
pension plan or retirement program or termination of one's employment on
retirement with the approval of the Committee.
(q) "Subsidiary" means a corporation or other entity of which
outstanding shares or ownership interests representing 50% or more of the
combined voting power of such corporation or other entity, or such lesser
percentage as may be approved by the Committee, are owned directly or indirectly
by the Company.
3. Administration.
--------------
The Plan shall be administered by the Committee; provided that the
Board may, in its discretion, at any time and from time to time, resolve to
administer the Plan, in which case the term "Committee" shall be deemed to mean
the Board for all purposes herein. The Committee shall consist of at least two
directors. Subject to the provisions of the Plan, the Committee shall be
authorized to (i) select persons to participate in the Plan, (ii) determine the
form and substance of grants made under the Plan to each participant, and the
conditions and restrictions, if any, subject to which such grants will be made,
(iii) modify the terms of grants made under the Plan, (iv) interpret the Plan
and grants made thereunder, (v) make any adjustments necessary or desirable in
connection with grants made under the Plan to eligible participants located
outside the United States and (vi) adopt, amend, or rescind such rules and
regulations, and make such other determinations,
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for carrying out the Plan as it may deem appropriate. Decisions of the Committee
on all matters relating to the Plan shall be in the Committee's sole discretion
and shall be conclusive and binding on all parties. The validity, construction,
and effect of the Plan and any rules and regulations relating to the Plan shall
be determined in accordance with applicable federal and state laws and rules and
regulations promulgated pursuant thereto. No member of the Committee and no
officer of the Company shall be liable for any action taken or omitted to be
taken by such member, by any other member of the Committee or by any officer of
the Company in connection with the performance of duties under the Plan, except
for such member's own willful misconduct or as expressly provided by statute.
The expenses of the Plan shall be borne by the Company. The Plan shall
not be required to establish any special or separate fund or make any other
segregation of assets to assume the payment of any award under the Plan, and
rights to the payment of such awards shall be no greater than the rights of the
Company's general creditors.
4. Shares Available for the Plan.
-----------------------------
Subject to adjustments as provided in Section 15, an aggregate of
2,041,269 shares of Common Stock (the "Shares") may be issued pursuant to the
Plan. Such Shares may be in whole or in part authorized and unissued, or shares
which have been reacquired by the Company and held as treasury shares. If any
grant under the Plan expires or terminates unexercised, becomes unexercisable or
is forfeited as to any Shares, such unpurchased or forfeited Shares shall
thereafter be available for further grants under the Plan unless, in the case of
options granted under the Plan, related SARs are exercised.
Without limiting the generality of the foregoing provisions of this
Section 4 or the generality of the provisions of Sections 3, 6 or 17 or any
other section of this Plan, the Committee may, at any time or from time to time,
and on such terms and conditions (that are consistent with and not in
contravention of the other provisions of this Plan) as the Committee may, in its
sole discretion, determine, enter into agreements (or take other actions with
respect to the options) for new options containing terms (including exercise
prices) more (or less) favorable than the outstanding options.
5. Participation.
-------------
Participation in the Plan shall be limited to those directors
(including Non-Employee Directors), officers (including non-employee officers)
and key employees of, and other key individuals performing services for, the
Company and its Subsidiaries selected by the Committee (including participants
located outside the United States). Nothing in the Plan or in any grant
thereunder shall confer any right on a participant to continue in the employ of
or the performance of services for the Company or shall interfere in any way
with the right of the Company to terminate the employment or performance of
services of a participant at any time. By accepting any award under the Plan,
each participant and each person claiming under or through him or her shall be
conclusively deemed to have indicated his or her acceptance and ratification of,
and consent to, any action taken under the Plan by the Company, the Board or the
Committee.
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Incentive Stock Options or Nonqualified Stock Options, SARs in tandem
with options, restricted stock awards, performance awards, or any combination
thereof, may be granted to such persons and for such number of Shares as the
Committee shall determine (such individuals to whom grants are made being
sometimes herein called "optionees" or "grantees," as the case may be).
Determinations made by the Committee under the Plan need not be uniform and may
be made selectively among eligible individuals under the Plan, whether or not
such individuals are similarly situated. A grant of any type made hereunder in
any one year to an eligible participant shall neither guarantee nor preclude a
further grant of that or any other type to such participant in that year or
subsequent years.
6. Incentive and Nonqualified Options.
----------------------------------
The Committee may from time to time grant to eligible participants
Incentive Stock Options, Nonqualified Stock Options, or any combination thereof;
provided that the Committee may grant Incentive Stock Options only to eligible
employees of the Company or its subsidiaries (as defined for this purpose in
Section 424(f) of the Code). In any one calendar year, the Committee shall not
grant to any one participant, options or SARs to purchase a number of shares of
Common Stock in excess of 100,000. The options granted shall take such form as
the Committee shall determine, subject to the following terms and conditions.
It is the Company's intent that Nonqualified Stock Options granted
under the Plan not be classified as Incentive Stock Options, that Incentive
Stock Options be consistent with and contain or be deemed to contain all
provisions required under Section 422 of the Code and any successor thereto, and
that any ambiguities in construction be interpreted in order to effectuate such
intent. If an Incentive Stock Option granted under the Plan does not qualify as
such for any reason, then to the extent of such nonqualification, the stock
option represented thereby shall be regarded as a Nonqualified Stock Option duly
granted under the Plan, provided that such stock option otherwise meets the
Plan's requirements for Nonqualified Stock Options.
(a) Price. The price per Share deliverable upon the exercise of each
option ("exercise price") shall be established by the Committee, except that in
the case of the grant of any Incentive Stock Option, the exercise price may not
be less than 100% of the Fair Market Value of a share of Common Stock as of the
date of grant of the option, and in the case of the grant of any Incentive Stock
Option to an employee who, at the time of the grant, owns more than 10% of the
total combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the exercise price may not be less that 110% of the Fair Market
Value of a share of Common Stock as of the date of grant of the option, in each
case unless otherwise permitted by Section 422 of the Code.
(b) Payment. Options may be exercised, in whole or in part, upon
payment of the exercise price of the Shares to be acquired. Unless otherwise
determined by the Committee, payment shall be made (i) in cash (including check,
bank draft or money order), (ii) by delivery of outstanding shares of Common
Stock with a Fair Market Value on the date of exercise equal to the aggregate
exercise price payable with respect to the options' exercise, (iii) by
simultaneous sale through a broker reasonably acceptable to the Committee of
Shares acquired on exercise, as permitted under Regulation T of the Federal
Reserve Board, (iv) by authorizing the Company to
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withhold from issuance a number of Shares issuable upon exercise of the options
which, when multiplied by the Fair Market Value of a share of Common Stock on
the date of exercise is equal to the aggregate exercise price payable with
respect to the options so exercised or (v) by any combination of the foregoing.
Options may also be exercised upon payment of the exercise price of the Shares
to be acquired by delivery of the optionee's promissory note, but only to the
extent specifically approved by and in accordance with the policies of the
Committee.
In the event a grantee elects to pay the exercise price payable with
respect to an option pursuant to clause (ii) above, (A) only a whole number of
share(s) of Common Stock (and not fractional shares of Common Stock) may be
tendered in payment, (B) such grantee must present evidence acceptable to the
Company that he or she has owned any such shares of Common Stock tendered in
payment of the exercise price (and that such tendered shares of Common Stock
have not been subject to any substantial risk of forfeiture) for at least six
months prior to the date of exercise, and (C) Common Stock must be delivered to
the Company. Delivery for this purpose may, at the election of the grantee, be
made either by (A) physical delivery of the certificate(s) for all such shares
of Common Stock tendered in payment of the price, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, or (B) direction to
the grantee's broker to transfer, by book entry, such shares of Common Stock
from a brokerage account of the grantee to a brokerage account specified by the
Company. When payment of the exercise price is made by delivery of Common
Stock, the difference, if any, between the aggregate exercise price payable with
respect to the option being exercised and the Fair Market Value of the share(s)
of Common Stock tendered in payment (plus any applicable taxes) shall be paid in
cash. No grantee may tender shares of Common Stock having a Fair Market Value
exceeding the aggregate exercise price payable with respect to the option being
exercised.
In the event a grantee elects to pay the exercise price payable with
respect to an option pursuant to clause (iv) above, (A) only a whole number of
Share(s) (and not fractional Shares) may be withheld in payment and (B) such
grantee must present evidence acceptable to the Company that he or she has owned
a number of shares of Common Stock at least equal to the number of Shares to be
withheld in payment of the exercise price (and that such owned shares of Common
Stock have not been subject to any substantial risk of forfeiture) for at least
six months prior to the date of exercise. When payment of the exercise price is
made by withholding of Shares, the difference, if any, between the aggregate
exercise price payable with respect to the option being exercised and the Fair
Market Value of the Share(s) withheld in payment (plus any applicable taxes)
shall be paid in cash. No grantee may authorize the withholding of Shares
having a Fair Market Value exceeding the aggregate exercise price payable with
respect to the option being exercised. Any withheld Shares shall no longer be
issuable under such option.
(c) Terms of Options. The term during which each option may be
exercised shall be determined by the Committee, but, except as otherwise
provided herein, in no event shall an option be exercisable in whole or in part,
in the case of a Nonqualified Stock Option or an Incentive Stock Option (other
than as described below), more than ten years from the date it is granted or, in
the case of an Incentive Stock Option granted to an employee who at the time of
the grant owns more than 10% of the total combined voting power of all classes
of stock of the Company or any of its Subsidiaries, if required by the Code,
more than five years from the date it is granted. All rights to purchase Shares
pursuant to an option shall, unless sooner terminated, expire at the date
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designated by the Committee. The Committee shall determine the date on which
each option shall become exercisable and may provide that an option shall become
exercisable in installments. The Shares constituting each installment may be
purchased in whole or in part at any time after such installment becomes
exercisable, subject to such minimum exercise requirements as may be designated
by the Committee. Unless otherwise provided herein or in the terms of the
related grant, an optionee may exercise an option only if he or she is, and has
been continuously since the date the option was granted, a director, officer or
employee of the Company or a Subsidiary. Prior to the exercise of an option and
delivery of the Shares represented thereby, the optionee shall have no rights as
a stockholder with respect to any Shares covered by such outstanding option
(including any dividend or voting rights).
(d) Limitations on Grants. If required by the Code, the aggregate
Fair Market Value (determined as of the grant date) of Shares for which an
Incentive Stock Option is exercisable for the first time during any calendar
year under all equity incentive plans of the Company and its Subsidiaries may
not exceed $100,000.
(e) Termination; Change in Control.
------------------------------
(i) If a participant ceases to be a director, officer or
employee of, or to perform other services for, the Company and any Subsidiary
due to death or Disability, all of the participant's options and SARs shall
become fully vested and exercisable and shall remain so for a period of 180 days
from the date of such death or Disability, but in no event after the expiration
date of the option. Notwithstanding the foregoing, if the Disability giving rise
to the termination of employment is not within the meaning of Section 422(e)(3)
of the Code, Incentive Stock Options not exercised by such participant within 90
days after the date of termination of employment will cease to qualify as
Incentive Stock Options and will be treated as Nonqualified Stock Options under
the Plan if required to be so treated under the Code.
(ii) If a participant ceases to be a director, officer or
employee of, or to perform other services for, the Company and any Subsidiary
upon the occurrence of his or her Retirement, (A) each of his or her options and
SARs that was exercisable on the date of Retirement shall remain exercisable
for, and shall otherwise terminate at the end of, a period of up to one year
after the date of Retirement, but in no event after the expiration date of the
options; provided that the participant does not engage in Competition during
such one year period unless he or she receives written consent to do so from the
Board or the Committee, and (B) all of the participant's options and SARs that
were not exercisable on the date of Retirement shall be forfeited immediately
upon such Retirement. Notwithstanding the foregoing, Incentive Stock Options not
exercised by such participant within 90 days after Retirement will cease to
qualify as Incentive Stock Options and will be treated as Nonqualified Stock
Options under the Plan if required to be so treated under the Code.
(iii) If a participant ceases to be a director, officer or
employee of, or to perform other services for, the Company or a Subsidiary due
to Cause, all of his or her options and SARs shall be forfeited immediately upon
such cessation, whether or not then exercisable.
(iv) Unless otherwise determined by the Committee, if a
participant ceases to be a director, officer or employee of, or to otherwise
perform services for, the Company or a
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Subsidiary for any reason other than death, Disability, Retirement or Cause, (A)
each of his or her options and SARs that was exercisable on the date of such
cessation shall remain exercisable for, and shall otherwise terminate at the end
of, a period of 30 days after the date of such cessation, but in no event after
the expiration date of the options; provided that the participant does not
engage in Competition during such 30-day period unless he or she receives
written consent to do so from the Board or the Committee, and (B) all of the
participant's options and SARs that were not exercisable on the date of such
cessation shall be forfeited immediately upon such cessation.
(v) Unless otherwise determined by the Committee if there is a
Change in Control of the Company, all of the participant's options and SARs
shall become fully vested and exercisable immediately prior to such Change in
Control and shall remain so until the expiration date of the options and SARs.
(f) Grant of Reload Options. The Committee may provide, in its
discretion, for the grant (either at the time of grant or exercise of an
option), to a grantee who exercises all or any portion of an option for Shares
which have a Fair Market Value equal to not less than 100% of the price for such
options ("Exercised Options") and who pays all or part of such exercise price
with shares of Common Stock, of an additional option (a "Reload Option") for a
number of shares of Common Stock equal to the sum (the "Reload Number") of the
number of shares of Common Stock tendered or withheld in payment of such
exercise price for the Exercised Options plus, if so provided by the Committee,
the number of shares of Common Stock, if any, tendered or withheld by the
grantee or withheld by the Company in connection with the exercise of the
Exercised Options to satisfy any federal, state or local tax withholding
requirements. The terms of each Reload Option, including the date of its
expiration and the terms and conditions of its exercisability and
transferability, shall be the same as the terms of the Exercised Option to which
it relates, except that (i) the grant date for each Reload Option shall be the
date of exercise of the Exercised Option to which it relates, (ii) the exercise
price for each Reload Option shall be the Fair Market Value of the Common Stock
on the grant date of the Reload Option and (iii) no Reload Option may be
exercised within one year from the grant date thereof.
7. Stock Appreciation Rights.
-------------------------
The Committee shall have the authority to grant SARs under this Plan
to any optionee in tandem with options, either at the time of grant of the
related option or thereafter by amendment to an outstanding option. The
exercise of an option shall result in an immediate forfeiture of any related SAR
to the extent the option is exercised, and the exercise of an SAR shall cause an
immediate forfeiture of any related option to the extent the SAR is exercised.
SARs shall be subject to such other terms and conditions as the Committee may
specify. An SAR shall expire at the same time as the related option expires and
shall be transferable only when, and under the same conditions as, the related
option is transferable.
SARs shall be exercisable only when, to the extent and on the
conditions that the related option is exercisable. No SAR may be exercised
unless the Fair Market Value of a share of Common Stock of the Company on the
date of exercise exceeds the exercise price of the option to which the SAR
corresponds. Prior to the exercise of the SAR and delivery of the cash and/or
Shares
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<PAGE>
represented thereby, the optionee shall have no rights as a stockholder with
respect to Shares covered by such outstanding SAR (including any dividend or
voting rights).
Upon the exercise of an SAR, the optionee shall be entitled to a
distribution in an amount equal to the difference between the Fair Market Value
of a share of Common Stock on the date of exercise and the exercise price of the
option to which the SAR is related, multiplied by the number of Shares as to
which the SAR is exercised. The Committee shall decide whether such
distribution shall be in cash, in Shares, in Other Company Securities or in a
combination thereof.
All SARs will be exercised automatically on the last day prior to the
expiration date of the related option, so long as the Fair Market Value of a
share of Common Stock on that date exceeds the exercise price of the related
option.
8. Restricted Stock.
----------------
The Committee may at any time and from time to time grant Shares of
restricted stock under the Plan to such participants and in such amounts as it
determines. Each grant of restricted stock shall specify the applicable
restrictions on such Shares, the duration of such restrictions (which shall be
at least six months except as otherwise provided in the third paragraph of this
Section 8), and the time or times at which such restrictions shall lapse with
respect to all or a specified number of Shares that are part of the grant.
The participant will be required to pay the Company the aggregate par
value of any Shares of restricted stock (or such larger amount as the Board may
determine to constitute capital under Section 154 of the Delaware General
Corporation Law, as amended) within ten days of the date of grant, unless such
Shares of restricted stock are treasury shares. The Shares will be held in
escrow by the Company on the participant's behalf during any period of
restriction thereon and will bear an appropriate legend specifying the
applicable restrictions thereon, and the participant will be required to execute
a blank stock power therefor. Except as otherwise provided by the Committee,
during such period of restriction the participant shall have all of the rights
of a holder of Common Stock, including but not limited to the rights to receive
dividends (or amounts equivalent to dividends) and to vote, and any stock
received as a distribution with respect to such participant's restricted stock
shall be subject to the same restrictions as then in effect for the restricted
stock.
Except as otherwise provided by the Committee, immediately prior to a
Change in Control or at such time as a grantee ceases to be a director, officer
or employee of, or to otherwise perform services for, the Company and its
Subsidiaries due to death, Disability or Retirement during any period of
restriction, all restrictions on Shares granted to such grantee shall lapse. At
such time as a grantee ceases to be a director, officer or employee of, or to
otherwise perform services for, the Company or its Subsidiaries for any other
reason, all restricted stock granted to such grantee on which the restrictions
have not lapsed shall be forfeited to the Company.
9. Performance Awards.
------------------
Performance awards may be granted to participants at any time and from
time to time as determined by the Committee. The Committee shall have complete
discretion in determining the
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size and composition of performance awards so granted to a participant and the
appropriate period over which performance is to be measured (a "performance
cycle"). Performance awards may include (i) specific dollar-value target awards,
(ii) performance units, the value of each such unit being determined by the
Committee at the time of issuance, and/or (iii) performance Shares, the value of
each such Share being equal to the Fair Market Value of a share of Common Stock.
The value of each performance award may be fixed or it may be
permitted to fluctuate based on a performance factor (e.g., return on equity)
selected by the Committee.
The Committee shall establish performance goals and objectives for
each performance cycle on the basis of such criteria and objectives as the
Committee may select from time to time, including, without limitation, the
performance of the participant, the Company, one or more of its Subsidiaries or
divisions or any combination of the foregoing. During any performance cycle,
the Committee shall have the authority to adjust the performance goals and
objectives for such cycle for such reasons as it deems equitable.
The Committee shall determine the portion of each performance award
that is earned by a participant on the basis of the Company's performance over
the performance cycle in relation to the performance goals for such cycle. The
earned portion of a performance award may be paid out in Shares, cash, other
Company Securities, or any combination thereof, as the Committee may determine.
A participant must be a director, officer or employee of, or otherwise
perform services for, the Company or its Subsidiaries at the end of the
performance cycle in order to be entitled to payment of a performance award
issued in respect of such cycle; provided, however, that, except as otherwise
determined by the Committee, if a participant ceases to be a director, officer
or employee of, or to otherwise perform services for, the Company and its
Subsidiaries upon his or her death, Retirement, or Disability prior to the end
of the performance cycle, the participant shall earn a proportionate portion of
the performance award based upon the elapsed portion of the performance cycle
and the Company's performance over that portion of such cycle.
10. Withholding Taxes.
-----------------
(a) Participant Election. Unless otherwise determined by the Committee,
a participant may elect to deliver shares of Common Stock (or have the Company
withhold shares acquired upon exercise of an option or SAR or deliverable upon
grant or vesting of restricted stock, as the case may be) to satisfy, in whole
or in part, the amount the Company is required to withhold for taxes in
connection with the exercise of an option or SAR or the delivery of restricted
stock upon grant or vesting, as the case may be. Such election must be made on
or before the date the amount of tax to be withheld is determined. Once made,
the election shall be irrevocable. The fair market value of the shares to be
withheld or delivered will be the Fair Market Value as of the date the amount of
tax to be withheld is determined. In the event a participant elects to deliver
shares of Common Stock pursuant to this Section 10(a), such delivery must be
made subject to the conditions and pursuant to the procedures set forth in
Section 6(b) with respect to the delivery of Common Stock in payment of the
exercise price of options.
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(b) Company Requirement. The Company may require, as a condition to any
grant or exercise under the Plan or to the delivery of certificates for Shares
issued hereunder, that the grantee make provision for the payment to the
Company, either pursuant to Section 10(a) or this Section 10(b), of any federal,
state or local taxes of any kind required by law to be withheld with respect to
any grant or any delivery of Shares. The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee, an amount equal to any
federal, state or local taxes of any kind required by law to be withheld with
respect to any grant or to the delivery of Shares under the Plan, or to retain
or sell without notice a sufficient number of the Shares to be issued to such
grantee to cover any such taxes, the payment of which has not otherwise been
provided for in accordance with the terms of the Plan, provided that the Company
shall not sell any such Shares if such sale would be considered a sale by such
grantee for purposes of Section 16 of the Exchange Act that is not exempt from
matching thereunder.
11. Written Agreement; Vesting.
--------------------------
Each employee to whom a grant is made under the Plan shall enter into
a written agreement with the Company that shall contain such provisions,
including without limitation vesting requirements, consistent with the
provisions of the Plan, as may be approved by the Committee. Unless the
Committee determines otherwise and except as otherwise provided in Sections 6,
7, 8 and 9 in connection with a Change of Control or certain occurrences of
termination, no grant under this Plan may be exercised within six months of the
date such grant is made.
12. Transferability.
---------------
Unless the Committee determines otherwise, no option, tandem SAR,
performance award, or restricted stock granted under the Plan shall be
transferable by a participant otherwise than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code. Unless the Committee determines otherwise, an option, SAR, or
performance award may be exercised only by the optionee or grantee thereof or
his guardian or legal representative; provided that Incentive Stock Options may
be exercised by such guardian or legal representative only if permitted by the
Code and any regulations promulgated thereunder.
13. Listing, Registration and Qualification.
---------------------------------------
If the Committee determines that the listing, registration or
qualification upon any securities exchange or under any law of Shares subject to
any option, SAR, performance award or restricted stock grant is necessary or
desirable as a condition of, or in connection with, the granting of same or the
issue or purchase of Shares thereunder, no such option or SAR may be exercised
in whole or in part, no such performance award may be paid out and no Shares may
be issued unless such listing, registration or qualification is effected free of
any conditions not acceptable to the Committee.
It is the intent of the Company that the Plan comply in all respects
with Section 162(m) of the Code, that awards made hereunder comply in all
respects with Rule 16b-3 under the Exchange Act, that any ambiguities or
inconsistencies in construction of the Plan be interpreted to
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give effect to such intention and that if any provision of the Plan is found not
to be in compliance with Rule 16b-3 or Section 162(m), such provision shall be
deemed null and void to the extent required to permit the Plan to comply with
Rule 16b-3 or Section 162(m), as the case may be.
14. Transfer of Employee.
--------------------
Transfer of an employee from the Company to a Subsidiary, from a
Subsidiary to the Company, and from one Subsidiary to another shall not be
considered a termination of employment; nor shall it be considered a termination
of employment if an employee is placed on military or sick leave or such other
leave of absence which is considered by the Committee as continuing intact the
employment relationship.
15. Adjustments.
-----------
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of assets,
or any other change in the corporate structure or shares of the Company, the
Committee shall make such adjustment as it deems appropriate in the number and
kind of Shares or other property reserved for issuance under the Plan, in the
number and kind of Shares or other property covered by grants previously made
under the Plan, and in the exercise price of outstanding options and SARs. Any
such adjustment shall be final, conclusive and binding for all purposes of the
Plan. In the event of any merger, consolidation or other reorganization in
which the Company is not the surviving or continuing corporation or in which a
Change in Control is to occur, all of the Company's obligations regarding
options, SARs performance awards, and restricted stock that were granted
hereunder and that are outstanding on the date of such event shall, on such
terms as may be approved by the Committee prior to such event, be assumed by the
surviving or continuing corporation or canceled in exchange for property
(including cash).
Without limitation of the foregoing, in connection with any
transaction of the type specified by clause (iii) of the definition of a Change
in Control in Section 2(c), the Committee may, in its discretion, (i) cancel any
or all outstanding options under the Plan in consideration for payment to the
holders thereof of an amount equal to the portion of the consideration that
would have been payable to such holders pursuant to such transaction if their
options had been fully exercised immediately prior to such transaction, less the
aggregate exercise price that would have been payable therefor, or (ii) if the
amount that would have been payable to the option holders pursuant to such
transaction if their options had been fully exercised immediately prior thereto
would be less than the aggregate exercise price that would have been payable
therefor, cancel any or all such options for no consideration or payment of any
kind. Payment of any amount payable pursuant to the preceding sentence may be
made in cash or, in the event that the consideration to be received in such
transaction includes securities or other property, in cash and/or securities or
other property in the Committee's discretion.
16. Termination and Modification of the Plan.
----------------------------------------
The Board of Directors, without further approval of the stockholders,
may modify or terminate the Plan, except that no modification shall become
effective without prior approval of
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the stockholders of the Company if stockholder approval would be required for
continued compliance with the performance-based compensation exception of
Section 162(m) of the Code or any listing requirement of the principal stock
exchange on which the Common Stock is then listed.
17. Amendment or Substitution of Awards under the Plan.
--------------------------------------------------
The terms of any outstanding award under the Plan may be amended from
time to time by the Committee in its discretion in any manner that it deems
appropriate (including, but not limited to, acceleration of the date of exercise
of any award and/or payments thereunder or of the date of removal of
restrictions on Shares); provided that, except as otherwise provided in Section
15, no such amendment shall adversely affect in a material manner any right of a
participant under the award without his or her written consent. The Committee
may, in its discretion, permit holders of awards under the Plan to surrender
outstanding awards in order to exercise or realize rights under other awards, or
in exchange for the grant of new awards, or require holders of awards to
surrender outstanding awards as a condition precedent to the grant of new awards
under the Plan.
18. Commencement Date; Termination Date.
-----------------------------------
The date of commencement of the Plan shall be September 29, 1997,
subject to approval by the shareholders of the Company. Unless previously
terminated upon the adoption of a resolution of the Board terminating the Plan,
the Plan shall terminate at the close of business on September 29, 2007;
provided that the Board may, prior to such termination, extend the term of the
Plan for up to five years for the grant of awards other than Incentive Stock
Options. No termination of the Plan shall materially and adversely affect any
of the rights or obligations of any person, without his consent, under any grant
of options or other incentives theretofore granted under the Plan.
19. Governing Law. The Plan shall be governed by the corporate laws of the
State of Delaware, without giving effect to any choice of law provisions.
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Exhibit 10.16
THE PETERSEN COMPANIES, INC.
EMPLOYEE STOCK DISCOUNT PURCHASE PLAN
-------------------------------------
ARTICLE I - PURPOSE
1.01. Purpose.
The Petersen Companies, Inc. Employee Stock Discount Purchase Plan
(the "Plan") is intended to provide employees of The Petersen
Companies, Inc. and its Subsidiary Corporations (hereinafter
collectively referred to, unless the context otherwise requires, as
the "Company") an opportunity to acquire a proprietary interest in the
Company through the purchase of shares of the Class A Common Stock of
the Company. It is the intention of the Company to have the Plan
qualify as an "employee stock purchase plan" under (S)423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The provisions
of the Plan shall be construed so as to extend and limit participation
in a manner consistent with the requirements of that section of the
Code.
ARTICLE II - DEFINITIONS
2.01. Base Pay.
"Base Pay" shall mean regular straight-time earnings excluding
payments for overtime, shift premium, bonuses and other special
payments.
2.02. Committee.
"Committee" shall mean the individuals described in Article XI.
2.03. Employee.
"Employee" means any person who is employed on a full-time or part-
time basis by the Company and is regularly scheduled to work more than
20 hours per week and more than five months in any calendar year.
2.04. Subsidiary Corporation.
"Subsidiary Corporation" shall mean any present or future corporation
which (i) would be a "subsidiary corporation" of The Petersen
Companies, Inc. as that term is defined in (S)424 of the Code and (ii)
is designated as a participant in the Plan by the Committee.
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ARTICLE III - ELIGIBILITY AND PARTICIPATION
3.01. Initial Eligibility.
Any employee, who shall have completed one hundred eighty (180) days
employment and shall be employed by the Company on the date the
employee's participation in the Plan is to become effective, shall be
eligible to participate in offerings under the Plan which commence on
or after such one hundred eighty (180) day period has concluded.
3.02. Leave of absence.
For purposes of determining initial eligibility for participation in
the Plan, an employee on leave of absence shall be deemed to continue
to be an employee under the Plan for the first (lst) ninety (90) days
of such leave of absence. Such person's initial eligibility to
participate in the Plan shall terminate at the close of business on
the ninetieth (90th) day of such leave of absence unless such person
shall have returned to regular full-time or part-time employment (as
the case may be) prior to the close of business on such ninetieth
(90th) day. Termination by the Company of any employee's leave of
absence, other than termination of such leave of absence on return to
full-time or part-time employment, shall terminate an employee's
eligibility to participate in the plan for all purposes of the Plan
and shall terminate such employee's participation in the Plan, and/or
night to exercise any option under the Plan. Any such employee may
reestablish eligibility only by meeting the requirements of (S)3.01
and/or (S)3.02.
3.03. Restrictions on Participation.
Notwithstanding any provisions of the Plan to the contrary, no
employee shall be granted an option to participate in the Plan or any
Offering under the Plan
(a) if, immediately after the grant, such employee would own stock,
and/or hold outstanding options to purchase stock, possessing
five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Company (for purposes of
this paragraph, the rules of (S)424(d) of the Code shall apply in
determining stock ownership of any employee.); or
(b) which permits such employee's rights to purchase stock under all
employee stock purchase plans of the Company to accrue at a rate
which exceeds $25,000 in fair market value of the stock
(determined at the time such option is granted) for each calendar
year in which such option is outstanding.
3.04. Commencement of Participation.
An eligible employee may become a participant by completing an
authorization of a payroll deduction on the form provided by the
Company and filing it with the Human Resources office of the Company
on or before the date set therefor by the Committee, which date shall
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be prior to the Offering Commencement Date for the Offering (as such
terms are defined below). Payroll deductions for a participant shall
commence on the applicable Offering Commencement Date when his
authorization for a payroll deduction becomes effective and shall end
on the Offering Termination Date of the Offering to witch such
authorization is applicable unless sooner terminated by the
participant as provided in Article VIII.
ARTICLE IV - OFFERINGS
4.01. Annual Offerings.
The Plan will be implemented by four (4) annual offerings of the
Company's Class A Common Stock (the "Offerings"). The Offerings shall
begin on the first (1st) day of January in each of the years 1998,
1999, 2000 and 2001, and shall terminate on December 31 of such year.
In the discretion of the Committee, exercised prior to the
commencement thereof, each annual Offering may be divided into four
(4) three-month Offerings commencing on January 1, April 1, July 1 and
October 1 of such year and terminating on March 31, June 30, September
30 and December 31 of such year. The maximum number of shares issued
in the respective years shall be:
. From January 1, 1998 to December 31, 1998: 22,640 shares.
. From January 1, 1999 to December 31, 1999: 22,639 shares plus
unissued shares from the prior Offerings, whether offered or not.
. From January 1, 2000 to December 31, 2000: 22,639 shares plus
unissued shares from the prior Offerings, whether offered or not.
. From January 1, 2001 to December 31, 2001: 22,639 shares plus
unissued shares from the prior Offerings, whether offered or not.
If a three-month Offering is made, the maximum number of shares which may be
issued shall be one-quarter (1/4) of the number of shares set forth for the
annual period in which the three-month offering falls, plus, if the Offering is
an April 1 to June 30, July 1 to September 30 or October 1 to December 31
offering, the number of unissued shares, whether offered or not, from the
immediately preceding three-month Offering. As used in the Plan, "Offering
Commencement Date" means January 1, April 1, July 1 or October 1, as the case
may be, on which the particular Offering begins, and "Offering Termination Date"
means the March 31, June 30, September 30 or December 31, as the case may be, on
which the particular Offering terminates.
ARTICLE V - PAYROLL DEDUCTIONS
5.01. Amount of Deduction.
At the time a participant files an authorization for payroll
deduction, he shall elect to have deductions made from his pay on each
payday during the time he is a participant in an Offering at a
percentage of his base pay in effect at the Offering Commencement Date
of
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such Offering specified in such authorization. In the case of a part-
time hourly employee, such employee's base pay during an Offering
shall be determined by multiplying such employee's hourly rate of pay
in effect on the Offering Commencement Date by the number of regularly
scheduled hours of work for such employee during such Offering.
5.02. Participant's Account.
All payroll deductions made for a participant shall be credited to the
participant's account under the Plan. A participant may not make any
separate cash payment into such account except when on leave of
absence and then only as provided in (S)5.04.
5.03. Changes in Payroll Deductions.
A participant may discontinue his participation in the Plan as
provided in Article VIII, but no other change may be made during an
Offering, and, specifically, a participant may not, after the Offering
Commencement Date for an Offering, alter the amount of the
participant's payroll deductions for that Offering.
5.04. Leave of Absence.
If a participant goes on a leave of absence, such participant shall
elect:
(a) to withdraw, pursuant to (S)7.02., the balance in the
participant's account under the Plan;
(b) to delay commencement of or, if applicable, to discontinue,
contributions to the Plan but remain a participant in the Plan;
or
(c) if payments will be made to the participant by the Company during
such leave of absence, remain a participant in the Plan during
such leave of absence, authorizing deductions to be made from
such payments by the Company and undertaking to make cash payment
to the Plan at the end of each payroll period to the extent that
amounts payable by the Company to such participant are
insufficient to meet participant's authorized Plan deductions.
ARTICLE VI - GRANTING OF OPTION
6.01. Number of Option Shares.
On the Commencement Date of each Offering, a participating employee
shall be deemed to have been granted an option to purchase a maximum
number of shares of the Class A Common Stock of the Company equal to
an amount determined as follows:
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(i) that percentage of the employee's base pay which the
employee has elected to have withheld (but not in any case
in excess of ten percent (10%) ), multiplied by
(ii) the employee's base pay during the period of the Offering,
divided by
(iii) eighty-five percent (85%) of the market value of the stock
of the Company on the applicable Offering Commencement Date.
The market value of the Company's Class A Common Stock shall be
determined as provided in paragraphs (a) and (b) of (S)6.02. below. If an
employee is paid hourly, such employee's base pay during the period of an
Offering shall be determined by multiplying such employee's hourly rate
(as in effect on the last day prior to the Commencement Date of the
particular Offering) by two thousand eighty (2,080) or, in the case of a
three-month Offering, by five hundred twenty (520), as the case may be,
plus any commission paid by the Company to such employee during the
period of the Offering, provided that any commission paid may be applied
to only one Offering, and provided further that, in the case of a part-
time, hourly employee, the employee's base pay during the period of an
offering shall be determined by multiplying such employee's hourly rate
by the number of regularly scheduled hours of work for such employee
during such Offering. If an employee is a salaried employee, such
employee's base pay during the period of an Offering shall be such
employee's annual salary (as in effect on the last day prior to the
Commencement Date of the particular Offering) or, in the case of a three-
month Offering, such employee's annual salary divided by four (4), in
each case plus any commission paid by the Company to such employee during
the period of the Offering, provided that any commission paid may be
applied to only one Offering.
6.02. Option Price.
The option price of stock purchased with payroll deductions made during
such annual offering for a participant therein shall be the lower of:
(a) eighty-five percent (85%) of the opening price per share of the
Company's Class A Common Stock on the Offering Commencement Date or
the nearest prior business day on which trading occurred on the New
York Stock Exchange or any other national trading market for such
stock of the Company; or
(b) eighty-five percent (85%) of the closing price per share of the
Company's Class A Common Stock on the Offering Termination Date or
the nearest prior business day on which trading occurred on the New
York Stock Exchange or any other national trading market. If the
Class A Common Stock of the Company is not admitted to trading on
any of the aforesaid dates for which closing prices of the stock are
to be determined, then reference shall be made to the fair market
value of the stock on that date, as determined on such basis as
shall be established or specified for the purpose by the Committee.
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ARTICLE VII - EXERCISE OF OPTION
7.01. Automatic Exercise.
Unless a participant gives written notice to the Company as hereinafter
provided, the participant's option for the purchase of stock with payroll
deductions made during any Offering will be deemed to have been exercised
automatically on the Offering Termination Date applicable to such
Offering, for the purchase of the number of full shares of the Company's
Class A Common Stock which the accumulated payroll deductions in the
participant's account at that time will purchase at the applicable option
price (but not in excess of the number of shares for which options have
been granted to the employee pursuant to (S)6.01.), and any excess in the
participant's account at that time will be returned to the participant.
7.02. Withdrawal of Account.
By written notice to the Treasurer of the Company, at any time prior to
the Offering Termination Date applicable to any Offering, a participant
may elect to withdraw all of the accumulated payroll deductions in his or
her account under the Plan at such time. In such event, the employee will
not be entitled to participate in such Offering.
7.03. Fractional Shares.
Fractional shares will not be issued under the Plan, and any accumulated
payroll deductions which would have been used to purchase fractional
shares will be returned to any participant promptly following the
termination of an Offering, without interest.
7.04. Transferability of Option.
During a participant's lifetime, options held by such participant shall
be exercisable only by that participant.
7.05. Delivery of Stock.
As promptly as practical, after the Offering Termination Date of each
Offering, the Company will deliver to each participant, as appropriate,
the stock purchased upon exercise of the participant's option.
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ARTICLE VIII - WITHDRAWAL
8.01. In General.
As indicated in (S)7.02., a participant may withdraw payroll deductions
credited to the participant's account under the Plan at any time prior to
the Offering Termination Date by giving written notice to the Treasurer
of the Company. All of the participant's payroll deductions credited to
his/her account will be paid to the participant promptly after receipt of
participant's notice of withdrawal, and no further payroll deductions
will be made from the participant's pay during such Offering.
8.02. Effect on Subsequent Participation.
A participant's withdrawal from any Offering will not have any effect
upon the participant's eligibility to participate in any succeeding
Offering or in any similar plan which may hereafter be adopted by the
Company.
8.03. Termination of Employment
Upon termination of the participant's employment for any reason,
including retirement (but excluding death while in the employ of the
Company or continuation of a leave of absence for a period beyond ninety
(90) days), the participant's option to purchase stock pursuant to the
Plan will automatically terminate and the payroll deductions credited to
the participant's account under the Plan will be returned to the
participant or, in the case of the participant's death subsequent to the
termination of the participant's employment, to the person or persons
entitled thereto under (S)12.01.
8.04. Termination of Employment Due to Death.
Upon termination of the participant's employment because of the
participant's death, the participant's beneficiary (as defined in
(S)12.01.) shall have the right to elect, by written notice given to the
Treasurer of the Company prior to the earlier of the Offering Termination
Date or the expiration of a period of sixty (60) days commencing with the
date of the death of the participant, either:
(a) to withdraw all of the payroll deductions credited to the
participant's account under the Plan, or
(b) to exercise the participant's option for the purchase of stock on the
Offering Termination Date next following the date of the
participant's death for the purchase of the number of full shares of
stock which the accumulated payroll deductions in the participant's
account at the date of the participant's death will purchase at the
applicable option price, and any excess in such account will be
returned to said beneficiary, without interest.
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In the event that no such written notice of election shall be duly received by
the office of the Treasurer of the Company, the beneficiary shall automatically
be deemed to have elected, pursuant to paragraph 8.04.(b), [not] to exercise the
participant's option.
8.05. Leave of absence.
A participant on leave of absence shall, subject to the election made
by such participant pursuant to (S)5.04., continue to be a participant
in the Plan so long as such participant is on continuous leave of
absence; provided, however, that a participant who has been on leave
of absence for more than ninety (90) days shall not be entitled to
participate in any Offering commencing after the ninetieth (90th) day
of such leave of absence. Notwithstanding the above or any other
provisions of the Plan, unless a participant on leave of absence
returns to regular full-time or part-time employment with the Company
at the earlier of (a) the termination of such leave of absence or (b)
three (3) months from the ninetieth (90) day of such leave of absence,
such participant's participation in the Plan shall terminate on
whichever of such dates first occurs.
ARTICLE IX - STOCK
9.01. Maximum Shares.
The maximum number of shares which shall be issued under the Plan,
subject to adjustment upon changes in capitalization of the Company as
provided in (S)12.04, shall be 22,640 shares in the first annual
Offering and 22,639 shares in each subsequent annual Offering, (5660
shares in each three-month Offering), plus, in each Offering all
unissued shares from prior Offerings whether offered or not to exceed
90,557 shares for all Offerings. If the total number of shares for
which options are exercised on any Offering Termination Date in
accordance with Article VI exceeds the maximum number of shares for
the applicable offering, the Company shall make a pro rata allocation
of the shares available for delivery and distribution in as nearly a
uniform manner as shall be practicable and as it shall determine to be
equitable, and the balance of payroll deductions credited to the
account of each participant under the Plan shall be returned to such
participant as promptly as possible.
9.02. Participant's Interest in Option Stock.
No participant will have any interest in stock covered by such
participant's option until such option has been exercised.
9.03. Registration of Stock.
Stock to be delivered to a participant under the Plan will be
registered in the name of the participant or, if the participant so
directs by written notice to the Treasurer of the Company prior to the
Offering Termination Date applicable thereto, in the names of the
participant and
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one (1) such other person as may be designated by the participant, as
joint tenants with rights of survivorship or as tenants by the
entireties, to the extent permitted by applicable law.
9.04. Restrictions on Exercise.
The Board of Directors or the Committee may, in its discretion,
require as conditions to the exercise of any option that the shares of
Class A Common Stock reserved for issuance upon the exercise of such
option shall have been duly listed, upon official notice of issuance,
upon a stock exchange, and that a Registration Statement under the
Securities Act of 1933, as amended, with respect to said shares shall
be effective.
ARTICLE X - ADMINISTRATION
10.01. Appointment of Committee.
The Board of Directors may appoint a committee (the "Committee") to
administer the Plan, which shall consist of no fewer than two (2)
members of the Board of Directors. No member of the Committee shall be
eligible to purchase stock under the Plan.
10.02. Authority of Committee.
Subject to the express provisions of the Plan, the Committee shall
have plenary authority in its discretion to interpret and construe any
and all provisions of the Plan, to adopt rules and regulations for
administering the Plan, to solicit and retain third party services to
assist in administration of the Plan, and to make all other
determinations deemed necessary or advisable for administering the
Plan. The Committee's determination on the foregoing matters shall be
conclusive.
10.03. Rules Governing the Administration of the Committee.
Board of Directors may from time to time appoint members of the
Committee in substitution for or in addition to members previously
appointed and may fill vacancies, however caused, in the Committee.
The Committee may select one (1) of its members as its Chairman and
shall hold its meetings at such times and places as it shall deem
advisable and may hold telephonic meetings. A majority of its members
shall constitute a quorum. All determinations of the Committee shall
be made by a majority of its members. The Committee may correct any
defect or omission or reconcile any inconsistency in the Plan, in the
manner and to the extent it shall deem desirable. Any decision or
determination reduced to writing and signed by a majority of the
members of the Committee shall be as fully effective as if it had been
made by a majority vote at a meeting dully called and held. The
Committee may appoint a Secretary and shall make such rules and
regulations for the conduct of its business as it shall deem
advisable.
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ARTICLE XI - MISCELLANEOUS
11.01. Designation of Beneficiary.
A participant may file a written designation of a beneficiary who is
to receive any stock and/or cash pursuant to the Plan. Such
designation of beneficiary may be changed by the participant at any
time by written notice to the Treasurer of the Company. Upon the death
of a participant and upon receipt by the Company of proof of identity
and existence at such participant's death of a beneficiary validly
designated by such participant under the Plan, the Company shall
deliver such stock and/or cash to such beneficiary. In the event of
the death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such stock and/or cash
to the executor or administrator of the estate of such participant, or
if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in it discretion, may deliver
such stock and/or cash to the spouse or to any one or more dependents
of such participant as the Company may designate. No beneficiary
shall, prior to the death of the participant by whom such beneficiary
has been designated, acquire any interest in the stock or cash
credited to such participant under the Plan.
11.02. Transferability.
Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an option or to receive stock
under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way by the participant other than by will or the
laws of descent and distribution. Any such attempted assignment
transfer pledge or other disposition shall be without effect, except
that the Company may treat such act as an election to withdraw funds
in accordance with (S)7.02.
11.03. Use of Funds.
All payroll deductions received or held by the Company under this Plan
may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such payroll deductions.
11.04. Adjustment Upon Changes in Capitalization
(a) If, while any options are outstanding, the outstanding shares of
Class A Common Stock of the Company have increased, decreased,
changed into or been exchanged for a different number or kind of
shares or securities of the Company through reorganization,
merger, recapitalization, reclassification, stock split, reverse
stock split or similar transaction, appropriate and proportionate
adjustments may be made by the Committee in the number and/or
kind of shares which are subject to purchase under outstanding
options and in the option exercise price or prices applicable to
such outstanding options. In addition, in any such event, the
number and/or kind or shares which may be offered in the
Offerings described in Article IV hereof shall
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also be proportionately adjusted. No adjustments shall be made
for stock dividends. For the purposes of this Paragraph, any
distribution of shares to shareholders in an amount aggregating
twenty percent (20%) or more of the outstanding shares shall be
deemed a stock split, and any distributions of shares aggregating
less than twenty percent (20%) of the outstanding shares shall be
deemed a stock dividend.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one
(1) or more corporations as a result of which the Company is not
the surviving corporation, or upon a sale of substantially all of
the property or stock of the Company to another corporation, the
Company shall return all of the accumulated payroll deductions to
all holders of options then outstanding under the Plan.
11.05. Amendment and Termination.
The Board of Directors shall have complete power and authority to
terminate or amend the Plan; provided, however, that the Board of
Directors shall not, without the approval of the stockholders of the
Company
(i) increase the maximum number of shares which may be issued
under any Offering (except pursuant to (S)12.04.); or
(ii) amend the requirements as to the class of employees eligible
to purchase stock under the Plan or permit the members of
the Committee to purchase stock under the Plan.
11.06. No Employment Rights.
The Plan does not, directly or indirectly, create any right for the
benefit of any employee or class of employees to purchase any shares
under the Plan, or create in any employee or class of employees any
right with respect to continuation of employment by the Company, and
it shall not be deemed to interfere in any way with the Company's
right to terminate, or otherwise modify, an employee's employment at
any time.
11.07. Effect of Plan
The provisions of the Plan shall, in accordance with its terms, be
binding upon, and inure to the benefit of, all successors of each
employee participating in the Plan, including, without limitation,
such employee's estate and the executors, administrators or trustees
thereof, heirs and legatees, and any receiver, trustee in bankruptcy
or representative of creditors of the employee.
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11.08. Governing Law.
The law of the State of Delaware will govern all matters relating to
this Plan except to the extent it is superseded by the laws of the
United States.
11.09. Effective Date
The Plan shall take effect upon approval by the holders of a majority
of the stock of the Company entitled to vote either present or
represented at a special or annual meeting of the shareholders, or by
written consent or consents in writing signed by such holders setting
forth the action so taken. If the Plan is not so approved, the Plan
shall not become effective.
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Exhibit 10.18
PETERSEN HOLDINGS, L.L.C.
1997 LONG-TERM EQUITY INCENTIVE PLAN
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1. Purpose.
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This plan shall be known as Petersen Holdings, L.L.C. 1997 Long-Term
Equity Incentive Plan (the "Plan"). The purpose of the Plan shall be to promote
the long-term growth and profitability of Petersen Holdings, L.L.C. (the
"Company") and its Subsidiaries by (i) providing certain officers and key
employees of, and certain other key individuals who perform services for, the
Company and its Subsidiaries with incentives to maximize unitholder value and
otherwise contribute to the success of the Company and (ii) enabling the Company
to attract, retain and reward the best available persons for positions of
substantial responsibility.
2. Definitions.
-----------
(a) "Board of Directors" and "Board" mean the board of directors of
the Managing Member.
(b) "Cause" means the occurrence of any of the following events:
(i) commission of a felony or any crime or offense lesser than
a felony involving, or any other act or omission including dishonesty or fraud
with respect to, the Company or any of its Subsidiaries or any property,
customer or supplier thereof;
(ii) conduct that has brought the Company or any of its
Subsidiaries into public disgrace or disrepute or otherwise has caused injury to
the Company or any of its Subsidiaries, monetary or otherwise;
(iii) willful refusal to perform or substantial disregard or
neglect of duties properly assigned, as determined by the Company; or
(iv) gross negligence or wilful misconduct in the performance of
duties for the Company or any Subsidiary which, if subject to cure, continues
after written notice thereof from the Company.
(c) "Change in Control" means the occurrence of any of the following
events:
(i) if any "person" or "group" as those terms are used in
Sections 13(d) and 14(d) of the Exchange Act, other than an Exempt Person, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the
<PAGE>
Managing Member representing 50% or more of the combined voting power of the
Managing Member's then outstanding securities;
(ii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board and any new directors whose
election by the Board or nomination for election by the Managing Member's
stockholders was approved by at least two-thirds of the directors then still in
office who either were directors at the beginning of the period or whose
election was previously so approved, cease for any reason to constitute a
majority thereof; or
(iii) the stockholders of the Managing Member approve a merger or
consolidation of the Managing Member or the Company with any other corporation
or entity, other than a merger or consolidation of the Company and the Managing
Member or a merger or consolidation which would result in all or a portion of
the voting securities of the Managing Member or the Company, as the case may be,
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) 50% or more of the combined voting power of the voting
securities of the Managing Member or the Company, as the case may be, or such
surviving entity outstanding immediately after such merger or consolidation; or
the stockholders of the Managing Member approve a plan of complete liquidation
of both the Managing Member and the Company or an agreement for the sale or
disposition by the Managing Member or the Company of all or substantially all
the Managing Member's or the Company's assets, other than a sale or other
disposition of Company's assets to the Managing Member or a sale or other
disposition of the Managing Member's or the Company's assets to an Exempt
Person.
(d) "Class A Common Units" means the Class A Common Units of the
Company, and any other shares or ownership interests issued by the Company or
any successor thereto in a Reorganization, including but not limited to Common
Stock, par value $.01 per share of the Managing Member, into which such units
may be converted or for which such units may be exchanged by reason of a
Reorganization.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" means the Compensation Committee of the Board. The
membership of the Committee shall be constituted so as to comply at all times
with the applicable requirements of Rule 16b-3 under the Exchange Act and
Section 162(m) of the Code.
(g) "Competition" is deemed to occur in respect of a person whose
employment with the Company or its Subsidiaries has terminated if such person
obtains a position as a full-time or part-time employee of, as a member of the
board of directors of, or as a consultant or advisor with or to, or acquires an
ownership interest in excess of 5% of, a corporation, partnership, firm or other
entity that engages in any of the businesses of the Company or any Subsidiary
with which such person was involved in a management role at any time during his
or her last five years of employment with or other service for the Company or
any Subsidiaries.
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(h) "Disability" means a disability that would entitle an eligible
participant to payment of monthly disability payments under any Company
disability plan or as otherwise approved by the Committee.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Exempt Person" means (i) any of Willis Stein & Partners, L.P.,
James D. Dunning, Jr., Laurence H. Bloch, D. Claeys Bahrenburg, Neal Vitale and
Richard S. Willis, or any combination of all or any of the foregoing, (ii) any
person, entity or group under the control of any one or more of the parties
included in clause (i), or (iii) a trustee or other administrator or fiduciary
holding securities under an employee benefit plan of the Company.
(k) "Fair Market Value" of a Class A Common Unit means, as of the
date in question, the officially-quoted closing selling price of such Class A
Common Unit (or if no selling price is quoted, the bid price) on the principal
securities exchange on which the Class A Common Units are then listed for
trading (including for this purpose the Nasdaq National Market) (the "Market")
for the immediately preceding trading day or, if the Class A Common Units are
not then listed or quoted in the Market, the Fair Market Value shall be the fair
value of the Class A Common Units determined in good faith by the Board;
provided, however, that when Class A Common Units received upon exercise of an
option are immediately sold in the open market, the net sale price received may
be used to determine the Fair Market Value of any such Class A Common Units used
to pay the exercise price or withholding taxes and to compute withholding taxes.
(l) "IPO Roll-up" means a transaction approved by the Board pursuant
to which holders of all or a substantially portion of the equity interests in
the Company would contribute such interests to the Managing Member in exchange
for capital stock of the Managing Member, or another transaction pursuant to
which all or a substantial part of the Company's equity interests would be
converted in to capital stock of the Managing Member, in connection with an
offering and sale to the public of shares of capital stock of the Managing
Member pursuant to a registration statement filed with the U.S. Securities and
Exchange Commission under the Securities Act.
(m) "Managing Member" means BrightView Communications Group, Inc. or
any successor thereto as the managing member of the Company.
(n) "Non-Employee Director" has the meaning given to such term in
Rule 16b-3 under the Exchange Act.
(o) "Other Company Securities" mean securities of the Company or any
successor entity to the Company in connection with a Reorganization or other
change in the structure of the Company, other than Class A Common Units, which
may include, without limitation, unbundled stock, units or components thereof,
debentures, preferred units or stock, warrants and securities convertible into
or exchangeable for Class A Common Units or other property.
(p) "Reorganization" means any recapitalization, reorganization,
merger, consolidation or any other change in the structure or ownership
interests of the Company, including
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but not limited to an IPO Roll-up or any other exchange or contribution of
substantially all of the equity securities of the Company for securities of any
other entity.
(q) "Retirement" means retirement as defined under any Company
pension plan or retirement program or termination of one's employment on
retirement with the approval of the Committee.
(r) "Securities Act" means the Securities Act of 1933, as amended.
(s) "Subsidiary" means a corporation or other entity of which
outstanding shares or ownership interests representing 50% or more of the
combined voting power of such corporation or other entity, or such lesser
percentage as may be approved by the Committee, are owned by the Company through
one or more Subsidiaries, directly or indirectly.
3. Administration.
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(a) The Plan shall be administered by the Committee; provided that
the Board may, in its discretion, at any time and from time to time, resolve to
administer the Plan, in which case the term "Committee" shall be deemed to mean
the Board for all purposes herein. The Committee shall consist of at least two
directors. Subject to the provisions of the Plan, the Committee shall be
authorized to (i) select persons to participate in the Plan, (ii) determine the
form and substance of grants made under the Plan to each participant, and the
conditions and restrictions, if any, subject to which such grants will be made,
(iii) modify the terms of grants made under the Plan, (iv) interpret the Plan
and grants made thereunder, (v) make any adjustments necessary or desirable in
connection with grants made under the Plan to eligible participants located
outside the United States and (vi) adopt, amend, or rescind such rules and
regulations, and make such other determinations, for carrying out the Plan as it
may deem appropriate. Decisions of the Committee on all matters relating to the
Plan shall be in the Committee's sole discretion and shall be conclusive and
binding on all parties. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with applicable federal and state laws and rules and regulations promulgated
pursuant thereto. No member of the Committee and no officer of the Managing
Member or the Company shall be liable for any action taken or omitted to be
taken by such member, by any other member of the Committee or by any officer of
the Managing Member or the Company in connection with the performance of duties
under the Plan, except for such member's own willful misconduct or as expressly
provided by statute.
(b) The expenses of the Plan shall be borne by the Company. The Plan
shall not be required to establish any special or separate fund or make any
other segregation of assets to assume the payment of any award under the Plan,
and rights to the payment of such awards shall be no greater than the rights of
the Company's general creditors.
4. Units Available for the Plan.
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(a) Subject to adjustments as provided in Section 12, an aggregate of
10,000 Class A Common Units (the "Units") may be issued pursuant to the Plan.
Such Units may be in whole or in part authorized and unissued, or units which
have been reacquired by the Company. If
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any grant under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited as to any Units, such unpurchased or forfeited
Units shall thereafter be available for further grants.
(b) Without limiting the generality of the foregoing provisions of
this Section 4 or the generality of the provisions of Sections 3, 6 or 14 or any
other section of this Plan, the Committee may, at any time or from time to time,
and on such terms and conditions (that are consistent with and not in
contravention of the other provisions of this Plan) as the Committee may, in its
sole discretion, determine, enter into agreements (or take other actions with
respect to the options) for new options containing terms (including exercise
prices) more (or less) favorable than the outstanding options.
5. Participation.
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(a) Participation in the Plan shall be limited to those officers
(including non-employee officers), key employees of, and other key individuals
performing services for, the Company and its Subsidiaries selected by the
Committee (including participants located outside the United States). Nothing
in the Plan or in any grant thereunder shall confer any right on a participant
to continue in the employ of or the performance of services for the Company or
any Subsidiary or shall interfere in any way with the right of the Company or
any Subsidiary to terminate the employment or performance of services of a
participant at any time. By accepting any award under the Plan, each
participant and each person claiming under or through him or her shall be
conclusively deemed to have indicated his or her acceptance and ratification of,
and consent to, any action taken under the Plan by the Company, the Managing
Member, the Board or the Committee.
(b) Options may be granted to such persons and for such number of
Units as the Committee shall determine (such individuals to whom grants are made
being sometimes herein called "optionees" or "grantees," as the case may be).
Determinations made by the Committee under the Plan need not be uniform and may
be made selectively among eligible individuals under the Plan, whether or not
such individuals are similarly situated. A grant of any type made hereunder in
any one year to an eligible participant shall neither guarantee nor preclude a
further grant of that or any other type to such participant in that year or
subsequent years.
6. Options. Options granted shall take such form as the Committee shall
determine, subject to the following terms and conditions.
(a) Price. The price per Unit deliverable upon the exercise of each
option ("exercise price") shall be established by the Committee.
(b) Payment.
(i) Options may be exercised, in whole or in part, upon payment
of the exercise price of the Units to be acquired. Unless otherwise determined
by the Committee, payment shall be made (A) in cash (including check, bank draft
or money order), (B) by delivery of outstanding Class A Common Units with a Fair
Market Value on the date of exercise equal to the aggregate exercise price
payable with respect to the options' exercise, (C) by simultaneous sale through
a broker reasonably acceptable to the Committee of Units acquired on exercise,
as permitted
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under Regulation T of the Federal Reserve Board, (D) by authorizing the Company
to withhold from issuance a number of Units issuable upon exercise of the
options which, when multiplied by the Fair Market Value of a Class A Common Unit
on the date of exercise is equal to the aggregate exercise price payable with
respect to the options so exercised (or terminate a portion of such option with
the same effect) or (E) by any combination of the foregoing. Options may also be
exercised upon payment of the exercise price of the Units to be acquired by
delivery of the optionee's promissory note, but only to the extent specifically
approved by and in accordance with the policies of the Committee.
(ii) In the event a grantee elects to pay the exercise price
payable with respect to an option pursuant to clause (B) of subparagraph (i)
above, (x) only a whole number of Class A Common Unit(s) (and not fractional
Class A Common Units) may be tendered in payment, (y) such grantee must present
evidence acceptable to the Company that he or she has owned any such Class A
Common Units tendered in payment of the exercise price (and that such tendered
Class A Common Units have not been subject to any substantial risk of
forfeiture) for at least six months prior to the date of exercise, and (z) Class
A Common Units must be delivered to the Company. Delivery for this purpose may,
at the election of the grantee, be made either by (1) physical delivery of the
certificate(s) for all such Class A Common Units tendered in payment of the
price, accompanied by duly executed instruments of transfer in a form acceptable
to the Company, (2) direction to the grantee's broker to transfer, by book
entry, such Class A Common Units from a brokerage account of the grantee to a
brokerage account specified by the Company or (3) otherwise in accordance with
Article X of the Company's Amended and Restated Limited Liability Company
Agreement dated as of September 30, 1996, as amended from time to time. When
payment of the exercise price is made by delivery of Class A Common Units, the
difference, if any, between the aggregate exercise price payable with respect to
the option being exercised and the Fair Market Value of the Class A Common
Unit(s) tendered in payment (plus any applicable taxes) shall be paid in cash.
No grantee may tender Class A Common Units having a Fair Market Value exceeding
the aggregate exercise price payable with respect to the option being exercised.
(iii) In the event a grantee elects to pay the exercise price
payable with respect to an option pursuant to clause (D) above, (x) only a whole
number of Unit(s) (and not fractional Units) may be withheld in payment, and (y)
the difference, if any, between the aggregate exercise price payable with
respect to the option being exercised and the Fair Market Value of the Unit(s)
withheld in payment (plus any applicable taxes) shall be paid in cash. No
grantee may authorize the withholding of Units having a Fair Market Value
exceeding the aggregate exercise price payable with respect to the option being
exercised. Any withheld Units shall no longer be issuable under such option.
(c) Terms of Options. The term during which each option may be
exercised shall be determined by the Committee, but, except as otherwise
provided herein, in no event shall an option be exercisable in whole or in part
more than ten years from the date it is granted. All rights to purchase Units
pursuant to an option shall, unless sooner terminated, expire at the date
designated by the Committee. The Committee shall determine the date on which
each option shall become exercisable and may provide that an option shall become
exercisable in installments. The Units constituting each installment may be
purchased in whole or in part at any time after such installment becomes
exercisable, subject to such minimum exercise requirements as may be designated
by the
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Committee. Unless otherwise provided herein or in the terms of the related
grant, an optionee may exercise an option only if he or she is, and has been
continuously since the date the option was granted, a director, officer or
employee of the Company or a Subsidiary. Prior to the exercise of an option and
delivery of the Units represented thereby, the optionee shall have no rights as
a stockholder with respect to any Units covered by such outstanding option
(including any dividend or voting rights).
(d) Termination; Change in Control.
(i) If a participant ceases to be an officer or employee of the
Company and any Subsidiary due to death or Disability, (A) each of such
participant's Options that was exercisable on the date of death or Disability
shall remain exercisable for, and shall otherwise terminate at the end of, a
period of up to 180 days after the date of death or disability, but in no event
after the expiration date of the option; provided that, in the case of a
Disability, the participant does not engage in Competition during such period
unless he or she receives written consent to do so from the Board or the
Committee, and (B) all of the participant's Options that were not exercisable on
the date of death or Disability shall become fully vested and exercisable and
shall remain so for a period of 180 days from the date of such death or
Disability, but in no event after the expiration date of the option.
(ii) If a participant ceases to be an officer or employee of the
Company and any Subsidiary upon the occurrence of his or her Retirement, (A)
each of his or her Options that was exercisable on the date of Retirement shall
remain exercisable for, and shall otherwise terminate at the end of, a period of
up to one year after the date of Retirement, but in no event after the
expiration date of the options; provided that the participant does not engage in
Competition during such one-year period unless he or she receives written
consent to do so from the Board or the Committee, and (B) all of the
participant's Options that were not exercisable on the date of Retirement shall
be forfeited immediately upon such Retirement.
(iii) If a participant ceases to be an officer or employee of the
Company or a Subsidiary due to or after Cause, all of his or her options shall
be forfeited immediately upon such cessation, whether or not then exercisable.
(iv) Unless otherwise determined by the Committee, if a
participant ceases to be an officer or employee of the Company or a Subsidiary
for any reason other than death, Disability, Retirement or Cause, (A) each of
his or her Options that was exercisable on the date of such cessation shall
remain exercisable for, and shall otherwise terminate at the end of, a period of
30 days after the date of such cessation, but in no event after the expiration
date of the options; provided that the participant does not engage in
Competition during such 30-day period unless he or she receives written consent
to do so from the Board or the Committee, and (B) all of the participant's
options that were not exercisable on the date of such cessation shall be
forfeited immediately upon such cessation.
(v) Unless otherwise determined by the Committee, upon a Change
in Control, each participant's Options shall become fully vested and
exercisable.
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<PAGE>
7. Withholding Taxes.
(a) Company Requirement. The Company may require, as a condition to any
grant or exercise under the Plan or to the delivery of certificates for Units
issued hereunder, that the grantee make provision for the payment to the
Company, either pursuant to this Section 7(a) or Section 7(b), of any federal,
state or local taxes of any kind required by law to be withheld with respect to
any grant or any delivery of Units. The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee, an amount equal to any
federal, state or local taxes of any kind required by law to be withheld with
respect to any grant or to the delivery of Units under the Plan, or to retain or
sell without notice a sufficient number of the Units to be issued to such
grantee to cover any such taxes, the payment of which has not otherwise been
provided for in accordance with the terms of the Plan, provided that the Company
shall not sell any such Units if such sale would be considered a sale by such
grantee for purposes of Section 16 of the Exchange Act that is not exempt from
matching thereunder.
(b) Participant Election. Unless otherwise determined by the Committee, a
participant may elect to deliver Class A Common Units (or have the Company
withhold units acquired upon exercise of an option or deliverable upon grant or
vesting of restricted units, as the case may be) to satisfy, in whole or in
part, the amount the Company is required to withhold for taxes in connection
with the exercise of an option or the delivery of restricted units upon grant or
vesting, as the case may be. Such election must be made on or before the date
the amount of tax to be withheld is determined. Once made, the election shall be
irrevocable. The fair market value of the units to be withheld or delivered will
be the Fair Market Value as of the date the amount of tax to be withheld is
determined. In the event a participant elects to deliver Class A Common Units
pursuant to this Section 7(b), such delivery must be made subject to the
conditions and pursuant to the procedures set forth in Section 6(b) with respect
to the delivery of Class A Common Units in payment of the exercise price of
options.
8. Written Agreement; Vesting. Each employee to whom a grant is made under the
Plan shall enter into a written agreement with the Company that shall contain
such provisions, including without limitation vesting requirements, consistent
with the provisions of the Plan, as may be approved by the Committee. Unless the
Committee determines otherwise and except as otherwise provided in Sections 6
and 7 in connection with a Change of Control or certain occurrences of
termination, no grant under this Plan may be exercised within six months of the
date such grant is made.
9. Transferability. Unless the Committee determines otherwise, no option
granted under the Plan shall be transferable by a participant otherwise than by
will or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code. Unless the Committee determines
otherwise, an option may be exercised only by the optionee or grantee thereof or
his guardian or legal representative.
10. Listing, Registration and Qualification.
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<PAGE>
(a) If the Committee determines that the listing, registration or
qualification upon any securities exchange or under any law of Units subject to
any option is necessary or desirable as a condition of, or in connection with,
the granting of same or the issue or purchase of Units thereunder, no such
option may be exercised in whole or in part unless such listing, registration or
qualification is effected free of any conditions not acceptable to the
Committee.
(b) It is the intent of the Company that the Plan comply in all respects
with Section 162(m) of the Code, that awards made hereunder comply in all
respects with Rule 16b-3 under the Exchange Act, that any ambiguities or
inconsistencies in construction of the Plan be interpreted to give effect to
such intention and that if any provision of the Plan is found not to be in
compliance with Rule 16b-3 or Section 162(m), such provision shall be deemed
null and void to the extent required to permit the Plan to comply with Rule 16b-
3 or Section 162(m), as the case may be.
11. Transfer of Employee. Transfer of an employee from the Company to a
Subsidiary, from a Subsidiary to the Company, and from one Subsidiary to another
shall not be considered a termination of employment; nor shall it be considered
a termination of employment if an employee is placed on military or sick leave
or such other leave of absence which is considered by the Committee as
continuing intact the employment relationship.
12. Adjustments.
(a) In the event of a unit split, unit dividend, combination of units,
distribution of assets, Reorganization or any other change in the corporate
structure or membership interests of the Company, the Committee shall make such
adjustment as it deems appropriate in the number and kind of Units or other
property reserved for issuance under the Plan, in the number and kind of Units
or other property covered by grants previously made under the Plan, and in the
exercise price of outstanding options. Any such adjustment shall be final,
conclusive and binding for all purposes of the Plan. In the event of any
Reorganization in which the Company is not the surviving or continuing
corporation, all of the Company's obligations regarding options that were
granted hereunder and that are outstanding on the date of such event shall, on
such terms as may be approved by the Committee prior to such event, be assumed
by the surviving or continuing corporation or other entity or canceled in
exchange for property (including cash).
(b) Without limitation of the foregoing, in connection with any
transaction of the type specified by clause (iii) of the definition of a Change
in Control in Section 2(c), the Committee may, in its discretion, (i) cancel any
or all outstanding options under the Plan in consideration for payment to the
holders thereof of an amount equal to the portion of the consideration that
would have been payable to such holders pursuant to such transaction if their
options had been fully exercised immediately prior to such transaction, less the
aggregate exercise price that would have been payable therefor, or (ii) if the
amount that would have been payable to the option holders pursuant to such
transaction if their options had been fully exercised immediately prior thereto
would be less than the aggregate exercise price that would have been payable
therefor, cancel any or all such options for no consideration or payment of any
kind. Payment of any amount payable pursuant to the preceding sentence may be
made in cash or, in the event that the consideration to be received in such
transaction includes securities or other property, in cash and/or securities or
other property in the Committee's discretion.
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13. Securities Law Compliance. Each Option awarded under this Plan shall be
subject to the condition that such Option may not be exercised if and to the
extent the Committee determines that the sale of securities upon exercise of the
Option may violate the Securities Act or any other law or requirement of any
governmental authority. The Company shall not be deemed by any reason of the
granting of any Option to have any obligation to register the Units subject to
such Option under the Securities Act or to maintain in effect any registration
of such Units which may be made at any time under the Securities Act. An Option
shall not be exercisable if the Committee or the Board determines there is non-
public information material to the decision of the holder of such Option to
exercise such Option which the Company cannot for any reason communicate to such
holder. Without limiting the foregoing, the Committee or the Board, in its sole
discretion, may require any person exercising an Option to make such
representations, including a representation that it is the optionee's intention
to acquire units for investment and not with a view to distribution thereof, and
furnish such information as it may consider appropriate in connection with the
issuance or delivery of the units in compliance with applicable laws, rules and
regulations. In such event no shares shall be issued to such holder unless and
until the Committee or the Board is satisfied with the accuracy of any such
representations.
14. Termination and Modification of the Plan. The Board of Directors, without
further approval of the stockholders of the Managing Member or the members of
the Company, may modify or terminate the Plan, except that no modification shall
become effective without prior approval of the stockholders of the Managing
Member or the members of the Company if stockholder or member approval would be
required for continued compliance with the performance-based compensation
exception of Section 162(m) of the Code or any listing requirement of the
principal stock exchange on which the Class A Common Units are then listed.
15. Amendment or Substitution of Awards under the Plan. The terms of any
outstanding award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate (including,
but not limited to, acceleration of the date of exercise of any award and/or
payments thereunder or of the date of removal of restrictions on Units);
provided that, except as otherwise provided in Section 12, no such amendment
shall adversely affect in a material manner any right of a participant under the
award without his or her written consent. The Committee may, in its discretion,
permit holders of options under the Plan to surrender outstanding options in
order to exercise or realize rights under other options, or in exchange for the
grant of new options, or require holders of options to surrender outstanding
options as a condition precedent to the grant of new options under the Plan.
16. Commencement Date; Termination Date. The date of commencement of the Plan
shall be July 31, 1997, subject to approval by the Managing Member on behalf of
the Company. Unless previously terminated upon the adoption of a resolution of
the Board terminating the Plan, the Plan shall terminate at the close of
business on July 31, 2007; provided that the Board may, prior to such
termination, extend the term of the Plan for up to five years for the grant of
awards other than Incentive Options. No termination of the Plan shall materially
and adversely affect any of the rights or obligations of any person, without his
consent, under any grant of options or other incentives theretofore granted
under the Plan.
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17. Governing Law. The Plan shall be governed by the corporate laws of the
State of Delaware, without giving effect to any choice of law provisions.
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