TROPICAL SPORTSWEAR INT'L CORPORATION
4902 W. WATERS AVENUE
TAMPA, FLORIDA 33634-1302
January 7, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of Tropical Sportswear Int'l Corporation (the "Company") which will
be held at the offices of the Company, 4902 Waters Avenue, Tampa, Florida, on
Wednesday, February 2, 2000 at 10:00 a.m. local time.
We look forward to your attendance at the Annual Meeting so that
you can learn more about your Company and become better acquainted with members
of the Board of Directors and management team. The items of business which are
being presented for a vote by the holders of Common Stock at the Annual Meeting
are (i) the election of two directors of the Company, (ii) approval of the
Company's proposed 2000 Long Term Incentive Plan; and (iii) ratification of the
selection of the Company's auditor for the fiscal year ending September 30,
2000, all as explained in the accompanying Proxy Statement. Even if you are
planning to attend, please complete the enclosed proxy card and return it in the
enclosed envelope to cast your vote. You will still be able to revoke your proxy
and vote your shares in person at the Annual Meeting if you so desire.
If you have any questions about the Proxy Statement or the
accompanying 1999 Annual Report, please contact Mr. Michael Kagan at (813) 249-
4900.
Sincerely,
/s/ William W. Compton
William W. Compton
Chairman of the Board of Directors
<PAGE>
TROPICAL SPORTSWEAR INT'L CORPORATION
4902 W. WATERS AVENUE
TAMPA, FLORIDA 33634-1302
NOTICE TO THE HOLDERS OF COMMON STOCK
OF THE ANNUAL MEETING OF SHAREHOLDERS
to be held on February 2, 2000
Notice is hereby given to the holders of the common stock, $.01 par
value per share (the "Common Stock"), of Tropical Sportswear Int'l Corporation
(the "Company") that the 2000 Annual Meeting of Shareholders of the Company (the
"Annual Meeting") will be held at the offices of the Company, 4902 W. Waters
Avenue, Tampa, Florida 33634-1302, on Wednesday, February 2, 2000, at 10:00
a.m., local time, for the following purposes:
(i) To elect two directors to serve until the 2003 Annual Meeting of
Shareholders;
(ii) To approve the Company's proposed 2000 Long Term Incentive Plan;
(iii) To ratify the selection of Ernst & Young LLP as the Company's
independent certified public accountants for the fiscal year
ending September 30, 2000; and
(iv) To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Information relating to the Annual Meeting and the election of
directors is set forth in the attached Proxy Statement.
Only those shareholders of record at the close of business on December
15, 1999, are entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. A complete list of shareholders entitled to vote at the
Annual Meeting will be available for examination by any shareholder at the
Annual Meeting and for a period of ten days prior thereto at the executive
offices of the Company in Tampa, Florida.
By Order of the Board of Directors,
/s/ Michael Kagan
Michael Kagan
January 7, 2000 Secretary
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE VOTE,
SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED BUSINESS
REPLY ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING YOU MAY, IF YOU WISH, WITHDRAW
YOUR PROXY APPOINTMENT AND VOTE IN PERSON.
<PAGE>
TROPICAL SPORTSWEAR INT'L CORPORATION
4902 W. WATERS AVENUE
TAMPA, FLORIDA 33634-1302
January 7, 2000
Proxy Statement
For Holders of Common Stock
For Annual Meeting of Shareholders
to be Held on February 2, 2000
INTRODUCTION
This Proxy Statement is furnished to holders of the common stock, $.01
par value per share ("Common Stock"), of Topical Sportswear Int'l Corporation, a
Florida corporation (the "Company"), in connection with the solicitation of
proxies by the Company's Board of Directors from holders of the outstanding
shares of Common Stock for use at the 2000 Annual Meeting of Shareholders to be
held at 10:00 a.m. local time at the office of the Company, 4902 W. Waters
Avenue, Tampa, Florida 33634-1302, on Wednesday, February 2, 2000, and at any
adjournments thereof (the "Annual Meeting").
With respect to the holders of Common Stock, the Annual Meeting will be
held for the following purposes:
(i) To elect two directors to serve until the 2003 Annual Meeting of
Shareholders;
(ii) To approve the Company's proposed 2000 Long Term Incentive Plan;
(iii) To ratify the selection of Ernst & Young LLP as the Company's
independent certified public accountants for the fiscal year
ending September 30, 2000; and
(iv) To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
This Proxy Statement and the accompanying Proxy are first being mailed
to shareholders of the Company on or about January 7, 2000.
Shareholders Entitled to Vote
Only shareholders of record of the Company at the close of business on
December 15, 1999 (the "Record Date") will be entitled to notice of, and to vote
at, the Annual Meeting. Each share of Common Stock is entitled to one vote. On
the Record Date, there were 7,622,255 shares of the Common Stock issued and
outstanding held by approximately 98 shareholders of record. Notwithstanding the
Record Date specified above, the Company's stock transfer books will not be
closed and shares may be transferred subsequent to the Record Date. However, all
votes must be cast in the names of shareholders of record on the Record Date.
Quorum and Voting Requirements
The holders of record of a majority of the issued and outstanding shares
of Common Stock entitled to vote at the Annual Meeting, present in person or by
proxy, are required to establish a quorum for the Annual Meeting and for voting
on each matter. For the purpose of determining the presence of a quorum,
abstentions and votes withheld from any nominee will be considered to be "votes
entitled to be cast" and therefore will be counted as present for purposes of
determining the presence or absence of a quorum. Broker non-votes will not be
considered to be "votes entitled to be cast" and will not be counted as present
for quorum purposes. Broker non-votes are votes that brokers holding shares of
record for their customers are not permitted to cast under applicable stock
exchange rules because the brokers have not received specific instructions from
their customers as to certain proposals and as to which the brokers advised the
Company that they lack voting authority. Although there are no controlling
precedents under Florida law regarding the treatment of broker non-votes, the
Company intends to apply the principles set for herein.
<PAGE>
Proposal I: Election of Directors. The election of two directors by the
holders of Common Stock will require a plurality of the votes cast by the shares
of Common Stock represented and entitled to vote in the election at the Annual
Meeting. With respect to the election of directors, shareholders may (1) vote
"for" each of the nominees, (2) withhold authority for each of such nominees, or
(3) withhold authority for specific nominees but vote for the other nominees.
Because the directors are elected by a plurality of the votes cast by the shares
represented and entitled to vote, an abstention from voting or a broker non-vote
will have no effect on the outcome of the election of directors.
Proposals II and III: Approval of the 2000 Long Term Incentive Plan and
Ratification of Auditors. The approval of the Company's proposed 2000 Long Term
Incentive Plan and the ratification of Ernst & Young LLP as the Company's
independent certified public accountants will require that the votes cast by the
shares of Common Stock represented and entitled to vote at the Annual Meeting in
favor of the proposal exceed the votes against the proposal. With respect to
these proposals, shareholders may (1) vote "for" each proposal, (2) vote
"against" each proposal, or (3) abstain from voting. An abstention or a broker
non-vote will have no effect on the outcome of these proposals.
Proxies
If the enclosed Proxy is executed, returned in time and not revoked, the
shares represented thereby will be voted in accordance with the instructions
indicated in such Proxy. IF NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE VOTED
FOR (I) THE ELECTION OF ALL DIRECTOR NOMINEES, (II) THE APPROVAL OF THE
COMPANY'S PROPOSED 2000 LONG TERM INCENTIVE PLAN, and (III) THE RATIFICATION OF
ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR
THE FISCAL YEAR ENDING SEPTEMBER 30, 2000.
The Board of Directors is not aware of any other business to be
presented to a vote of the shareholders at the Annual Meeting. As permitted by
Rule 14a-4(c) of the Securities and Exchange Commission (the "Commission"), the
persons named as proxies on the proxy cards will have discretionary authority to
vote in their judgment on any proposals presented by shareholders for
consideration at the Annual Meeting that were submitted to the Company after
November 20, 1999. Such proxies also will have discretionary authority to vote
in their judgment upon the election of any person as a director if a director
nominee named in Proposal I is unable to serve for good cause and will not
serve, and on matters incident to the conduct of the Annual Meeting.
A shareholder who has given a Proxy may revoke it at any time prior to
its exercise at the Annual Meeting by either (i) giving written notice of
revocation to the Secretary of the Company, (ii) properly submitting to the
Company a duly executed Proxy bearing a later date, or (iii) appearing at the
Annual Meeting and voting in person. All written notices of revocation of
Proxies should be addressed as follows: Tropical Sportswear Int'l Corporation,
4902 W. Waters Avenue, Tampa, Florida 33634-1302, Attention: Mr. Michael Kagan,
Secretary.
<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes each
consisting of three members, with each class serving three-year terms expiring
at the third annual meeting of shareholders after their elections. Due to the
recent resignation of one of the Company's directors, the Board of Directors has
only nominated two members to serve as Class III directors of the Company for a
three-year term ending 2003, and until each of their respective successors is
duly elected and qualified. As a result, The Board of Directors decided to
reduce the size of Class III from three to two members effective as of the
Annual Meeting. The Board of Directors has initiated the process of securing the
nomination of a third suitable candidate to serve as Class III director. It is
the intention of the Board of Directors to continue to search for a suitable
candidate, and, if such a person is identified, the Board of Directors intends
to act to increase the size of Class III to three members and elect such person
to fill the then created vacancy until the next annual meeting of shareholders
in 2001. In the event any of the nominees to Class III is unable to serve, the
person designated as proxy will cast votes for such other person in their
discretion as a substitute nominee. The Board of Directors has no reason to
believe that the nominees named below will be unavailable, or if elected, will
decline to serve.
Pursuant to the Company's Amended and Restated Articles of
Incorporation (the "Articles"), Accel, S.A. de C.V. ("Accel") currently has the
right to nominate two persons to stand for election to the Company's Board of
Directors. In addition, separate family partnerships controlled by William W.
Compton, Chairman of the Board and Chief Executive Officer of the Company, and
Michael Kagan, Vice Chairman of the Board, Executive Vice President, Chief
Financial Officer and Secretary of the Company, each currently have the right to
nominate one person to stand for election to the Company's Board of Directors.
Moreover, pursuant to a shareholders' agreement among Accel and Messrs. Compton
and Kagan and their respective family limited partnerships, all shares of Common
Stock owned or controlled by such persons or entities will be voted in favor of
the election of the persons nominated by such persons and entities pursuant to
their rights under the Articles. Only one of the nominees, Mr. William W.
Compton, has been nominated pursuant to these provisions. He will receive the
favorable votes of Accel and Messrs. Vallina-Laguera and Kagan and their
respective family limited partnerships.
The Board of Directors recommends that the shareholders vote FOR each
Director nominee. If a choice is specified on the Proxy by the shareholder, the
shares will be voted as specified. If no specification is made, the shares will
be voted FOR the Director nominees. Election of each Director nominee will
require the affirmative vote of a plurality of the votes cast by shares of
Common Stock represented and entitled to vote at the Annual Meeting.
The following paragraphs set forth the names of the Directors of the
Company, their ages, their positions with the Company, and their principal
occupations and employers for at least the last five years. For information
concerning directors' ownership of Common Stock, see "Stock Ownership."
Nominees for Director
The Board of Directors has nominated the following individuals for
election by the holders of Common Stock as directors of the Company:
Term to Expire in 2003
Jesus Alvarez-Morodo. Mr. Alvarez-Morodo, age 53, has served as a
Director of the Company and its predecessors since November 1989. He has been
Vice Chairman of the Board of Elamex S.A. de C.V. ("Elamex"), a manufacturing
company controlled by Accel since 1995 and a Director since 1990. Accel is a
publicly traded Mexican holding company having subsidiaries engaged in
warehousing, distribution and manufacturing. He has been President and Chief
Executive Officer of Accel since 1992 and has held various positions with Accel
and its predecessor, Grupo Chihuahua, S.A. de C.V. ("Grupo Chihuahua"), and
its subsidiaries since 1982, including Vice President from 1989 to 1992 and Vice
Chairman since 1999. Mr. Alvarez-Morodo was a Director of El Paso State Bank
from 1989 to 1992.
William W. Compton. Mr. Compton, age 56, has served as Chairman of the
Board, Chief Executive Officer and a Director of the Company and its
predecessors since November 1989. He also served as President of the Company and
its predecessors from November 1989 to November 1994. Mr. Compton has over 30
years of experience in the apparel industry. Mr. Compton serves as First Vice
Chairman and Treasurer of the American Apparel Manufacturers Association and is
a member of the Board of Directors for the Center for Entreprenuership for
Brigham Young University.
<PAGE>
Directors Continuing in Office
The following members of the Board of Directors of the Company will
continue in office after the Annual Meeting:
Term to Expire in 2002
Leslie J. Gillock. Ms. Gillock, age 43, has served as a Director of
the Company since August 1997. Ms. Gillock has served as Vice President Brand
Management of Spring Industries, Inc. since October 1999. Previously, she
served in various capacities with Fruit of the Loom, Inc. from 1978 until June
1998, including Vice President of Marketing between March 1995 and June 1998,
Director of Marketing from January 1993 through February 1995, and Marketing
Manager for Intimate Apparel from January 1989 through December 1992. She has
over 20 years experience in the apparel industry.
Donald H. Livingstone. Mr. Livingstone, age 57, has served as a
Director of the Company since August 1997. He also has served as a Director of
the Eureka Family of Mutual Funds since August 1997, and as a director of
California Independent Bankcorp since October 1998. He has been a Teaching
Professor at the Brigham Young University Marriott School of Management and the
Director of its Center for Entrepreneurship since September 1994. From 1976
through March 1995, he was a partner with Arthur Andersen LLP. He joined Arthur
Andersen LLP in 1966.
Eloy S. Vallina-Laguera. Mr. Vallina-Laguera, age 62, has served as
a Director of the Company and its predecessors since November 1989. He has been
Chairman of the Board of Accel and Grupo Chihuahua, since its inception in 1979.
Mr. Vallina-Laguera has been Chairman of the Board of Elamex since 1990. Mr.
Vallina-Laguera was Chairman of Banco Commercial Mexicano, later Multibanco
Comermex, one of Mexico's largest commercial banks at that time, from 1971 until
its expropriation in 1982.
Term to Expire in 2001
Michael Kagan. Mr. Kagan, age 60, has served as Executive Vice
President, Chief Financial Officer, Secretary and a Director of the Company
since November 1989. He was also Treasurer of the Company from November 1989 to
January 1998. Mr. Kagan has more than 30 years experience in the apparel
industry. Prior to joining the Company, Mr. Kagan served as Senior Vice
President of Finance for Munsingwear, Inc. and as Executive Vice President and
Chief Operating Officer of Flexnit Company, Inc., a manufacturer of women's
intimate apparel.
Leon H. Reinhart. Mr. Reinhart, age 56, has served as a Director of
the Company since August 1997. Mr. Reinhart has been President, Chief Executive
Officer and a director of First National Bank based in San Diego, California
since May 1996. Prior to such time, he served as Chief Credit Officer and Deputy
General Manager of Citibank, Mexico from 1988 through April 1996. Mr. Reinhart's
experience includes more than twenty years as a financial executive with
Citibank, N.A. and its affiliates in a variety of domestic and international
positions.
Charles J. Smith. Mr. Smith, age 72, was a director of Farah from March
1994 until the Farah Acquisition. For more than five years prior to his
retirement in 1994, Mr. Smith served in various capacities with Crystal Brands,
Inc., an apparel manufacturer and marketer, most recently as an Executive Vice
President. Since then, Mr. Smith has served as a consultant to various apparel
companies. In May 1995, Mr. Smith became a partner and director of Phoenix
Apparel Group, Inc., a privately-held apparel sourcing and consulting company.
In connection with the Farah Acquisition, Mr. Smith became a Director of the
Company in June 1998.
<PAGE>
Meetings of the Board of Directors and Committees
Board of Directors. The property, affairs and business of the Company
are under the general management of its Board of Directors as provided by the
laws of Florida and the Bylaws of the Company. The Board of Directors conducts
its business through meetings of the full Board and through committees of the
Board, and the Board of Directors has appointed standing Audit, Compensation,
Stock Option and Executive Committees of the Board of Directors.
The Board of Directors as a whole functions as the nominating committee
to select nominees for election as directors of the Company. The Board of
Directors will consider nominees submitted by holders of Common Stock if
submitted to the Company on or before September 5, 2000. See "Shareholder
Proposals for 2000 Annual Meeting of Shareholders."
The Board of Directors held four meetings during the fiscal year ending
October 2, 1999 ("Fiscal 1999"). Each director attended all of the meetings of
the Board of Directors.
Audit Committee. The Audit Committee is comprised of Messrs.
Alvarez-Morodo, Smith and Livingstone, and Ms. Gillock and met four times in
Fiscal 1999. The Audit Committee is responsible for reviewing the independence,
qualifications and activities of the Company's independent certified public
accountants and the Company's financial policies, control procedures and
accounting staff. The Audit Committee recommends to the Board the appointment of
the independent certified public accountants and reviews and approves the
Company's financial statements. The Audit Committee is also responsible for the
review of transactions between the Company and any Company officer, director or
entity in which a Company officer or director has a material interest.
Compensation Committee. The Compensation Committee is comprised of
Messrs. Compton, Reinhart and Vallina-Laguera and Ms. Gillock and met once in
Fiscal 1999. The Compensation Committee is responsible for establishing the
compensation of the Company's directors and officers, including salaries,
bonuses, termination arrangements, and other executive officer benefits.
Stock Option Committee. The Stock Option Committee is comprised of Ms.
Gillock and Messrs. Reinhart and Vallina-Laguera and met twice in Fiscal 1999.
The Stock Option Committee is responsible for the administration of both the
Company's Employee Stock Option Plan (the "Employee Plan"), including the
recipients, amounts and terms of stock option grants thereunder, and the
Company's 1996 Stock Option Plan (the "1996 Plan").
Executive Committee The Executive Committee is responsible for
performing all tasks of the Board of Directors on behalf of the Board between
meetings of the Board to the extent permitted by the Company's Bylaws and
Florida law. The Executive Committee is comprised of Messrs. Alvarez-Morodo,
Compton, Kagan, Vallina-Laguera and Livingstone.
Compensation of Directors
Directors who are executive officers of the Company receive no
compensation as such for service as members of either the Board of Directors or
committees thereof. Directors who are not executive officers of the Company
received $1,500 per Board and/or committee meeting attended thereafter, plus
reimbursement of reasonable expenses. The outside directors are also eligible to
receive options to purchase Common Stock under the Company's Non-Employee
Director Stock Option Plan.
<PAGE>
Executive Officers of the Company
The following table sets forth the names of the executive officers of
the Company, other than Messrs. Compton and Kagan, who are discussed above,
their ages, their positions with the Company and their principal occupations and
employers for at least the last five years. For information concerning executive
officers' ownership of Common Stock, see "Stock Ownership."
Richard J. Domino. Richard J. Domino, age 51 joined the Company in 1988
and has served as President of the Company since 1994. Mr. Domino served as
Senior Vice President of Sales and Marketing from January 1994 to October 1994
and Vice President of Sales from December 1989 to December 1993. He has over 24
years experience in apparel-related sales and marketing. Before joining the
Company, Mr. Domino was employed by Thomson Sportswear, Inc., a men's apparel
manufacturer and marketer, as its Sales Manager for the Northwest Territory, and
by Haggar Corp., a men's apparel manufacturer and marketer, as its New Jersey
Salesman.
Michael R. Mitchell. Michael R. Mitchell, age 46, serves as President
of Savane International Corp. He served as President of Farah Incorporated from
March 1994 until the Farah Acquisition. Mr. Mitchell was employed by Farah
since 1981 in various sales and marketing capacities. He also served on the
Farah Board of Directors from March 1994 until the merger with the Company in
1998.
<PAGE>
Executive Compensation
Summary Compensation Information. The following table presents certain
summary information concerning compensation paid or accrued by the Company for
services rendered in all capacities during the fiscal years ended October 3,
1999, October 3, 1998 and September 27, 1997, for (i) the Chief Executive
Officer of the Company; and (ii) each of the three other most highly compensated
executive officers of the Company whose total salary and bonus for the fiscal
year ended October 2, 1999, exceeded $100,000 (collectively, the "Named
Executive Officers").
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Compensation
--------------------
Awards
Annual Compensation Securities
Name and Underlying All Other
Principal Position Year Salary Bonus Options/SARs Compensation
<S> <C> <C> <C> <C> <C> <C>
William W. Compton 1999 $550,000 $250,000 72,100 $17,679 (2)
Chairman of the Board and 1998 434,096 493,350 104,400 9,822 (1)(2)
Chief Executive Officer 1997 390,000 429,000 23,500 22,640 (1)(2)
Richard J. Domino 1999 $325,000 $ -- 40,000 $7,695 (3)
President 1998 254,848 258,750 35,300 --
1997 225,000 225,000 8,000 --
Michael R Mitchell 1999 $320,000 $200,000 45,000 $4,391 (4)
President 1998 300,000 100,000 10,000 563,243 (4)
Savane International Corp. 1997 280,000 - - 3,159 (4)
Michael Kagan 1999 $300,000 $100,000 50,000 $29,158 (5)
Vice Chairman of the Board, 1998 239,178 197,800 61,100 5,260 (2)(5)
Executive Vice President 1997 215,000 172,000 13,800 19,343 (2)(5)
and Chief Financial Officer
</TABLE>
- ---------------------------------
(1) Includes $4,167 and $15,000 in director's fees for fiscal 1998 and
1997, respectively and $17,679, $5,655 and $7,640 in grossed up
premiums for term life insurance for fiscal 1999, 1998 and 1997,
respectively, for the benefit of Mr. Compton and his family.
(2) Following the Company's initial public offering in October 1997,
directors who are executive officers of the Company were no longer
eligible to receive compensation for services as members of either the
Board of Directors or committees thereof.
(3) Includes $7,695 in grossed up premiums for term life insurance policies
for fiscal 1999.
(4) Includes $2,843, $2,132 and $1,611 in grossed up premiums for term life
insurance policies for fiscal 1999, 1998 and 1997, respectively;
$1,548, $1,548 and $1,548 for split dollar life insurance policies for
fiscal 1999, 1998 and 1997, respectively; and $559,563 in a cash payout
for Farah Incorporated common stock in 1998 related to the merger.
(5) Includes $2,500 and $15,000 in director's fees for fiscal 1998 and
1997, respectively and $29,158, $2,760 and $4,343 in grossed up
premiums for term life insurance for fiscal 1999, 1998 and 1997,
respectively, for the benefit of Mr. Kagan and his family.
<PAGE>
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grant
----------------------------------------------------------------
Number of Percent of Potential Realizable Value at
Securities Total Options Assumed Annual Rates of
Underlying Granted to Exercise Stock Price Appreciation
Options Employees in Or Expiration for Option Term
Name Granted Fiscal Year Base Price Date 5% 10%
- ---- ------- ----------- ---------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
William W. Compton 9,227 2.4% $21.7250 11/13/2003 $32,124 $ 93,032
20,773 5.4% $21.7250 11/13/2008 216,988 612,833
42,100 11.0% $18.5625 7/22/2009 375,747 1,061,210
Richard J Domino 20,000 5.2% $19.7500 11/13/2008 248,413 629,528
20,000 5.2% $16.8750 7/22/2009 212,252 537,888
Michael R. Mitchell 45,000 11.8% $16.8750 7/22/2009 477,567 1,210,248
Michael Kagan 25,000 6.5% $19.7500 11/13/2008 310,517 786,910
25,000 6.5% $16.8750 7/22/2009 265,315 672,360
</TABLE>
<TABLE>
<CAPTION>
Fiscal Year-End Option Values
Value of Unexercised
Number of Securities Underlying In-the-Money
Unexercised Options Options
Name At Fiscal Year-End At Fiscal Year-End (1)
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
William W. Compton 92,567 107,433 $313,836 $442,678
Richard J. Domino 17,101 66,199 123,433 218,342
Michael R. Mitchell 3,334 51,666 0 84,375
Michael Kagan 54,567 70,333 260,252 312,898
</TABLE>
- ---------------------------------
(1) Represents the fair market value of a share of Common Stock as of October
1, 1999 of $18.75, less the option exercise price, multiplied by the total
number of exercisable or unexercisable options.
<PAGE>
Employment Arrangements.
The Company has employment agreements with each of Messrs. Compton,
Kagan and Domino, which became effective as of the completion of the initial
public offering in October 1997.
William W. Compton. The employment agreement with Mr. Compton provides
for an initial term ending in 2002, with automatic renewals beginning at the end
of the third year such that there shall remain at all times thereafter a rolling
two-year term of employment. Notwithstanding the foregoing, in the event the
agreement has not otherwise been terminated, it will terminate automatically at
the end of the Company's fiscal year in which Mr. Compton reaches age 65. The
agreement provides for an annual base salary (currently $600,000) subject to a
minimum annual increase equal to the increase in the Consumer Price Index for
all Urban Consumers - All Items Index for Tampa, Florida ("CPI") for the
immediately preceding twelve months. Mr. Compton is also entitled to an annual
performance bonus of up to 110% of his base salary based on a comparison of the
Company's average return on total capital employed over a four-year period as
compared to an average target return on total capital as calculated for a select
group of publicly traded apparel companies over the same period. To the extent
authorized by the Company's Board of Directors, Mr. Compton also shall be
entitled to participate in such bonus programs and other benefit plans as are
generally made available to other executive officers of the Company.
If the agreement is terminated by the Company on or after January 1,
1999, for any reason other than cause of Mr. Compton's death or disability, the
Company shall pay Mr. Compton a one-time, lump sum severance payment equal to
the product of (i) the greater of two and the number of years (rounded to the
nearest 1/12 of a year) remaining in the initial five-year term and (ii) the sum
of Mr. Compton's average annual base salary and average annual bonus for the
preceding three years. During the two-year period following termination of
employment other than as a result of disability, Mr. Compton shall not engage in
or have any impermissible financial interest in any business that is engaged in
the merchandising, manufacturing, distribution or marketing of men's casual
pants, shorts or jeans.
Mr. Compton's agreement also provides for a one-time, lump sum
severance payment, in lieu of any other severance payment, if Mr. Compton elects
to terminate his employment with the Company either for "good reason" (as
defined therein) or upon a "change of control" of the Company. Upon termination
for "good reason," the severance payment will equal the product of (i) the
greater of two and the number of years (rounded to the nearest 1/12th of a year)
remaining in the initial five-year term and (ii) the sum of Mr. Compton's
average annual base salary and average annual bonus for the preceding three
years. Upon termination upon a "change of control," the severance payment will
equal, depending on the extent of the change of control, either (a) two times
Mr. Compton's average annual base salary for the preceding three years or (b)
two times the sum of Mr. Compton's average annual base salary and average annual
bonus for the preceding three years. Under the agreement, a "change of control"
shall be deemed to have occurred if (i) any person (other than certain exempt
persons, including Messrs. Compton and Kagan, Accel, the Company and their
respective affiliates and associates) beneficially owns 25% (or, in certain
cases, 33%) or more of the outstanding shares of voting capital stock or (ii)
immediately following the sale or transfer of substantially all of the Company's
assets, or the merger or consolidation of the Company with or into another
person, any person (other than certain except persons) shall beneficially own
25% (or, in certain cases, 33%) or more of the surviving or acquiring person.
Michael Kagan. The Company's employment agreement with Mr. Kagan is
substantially the same as Mr. Compton's except that Mr. Kagan's current annual
base salary is $330,000 and his maximum annual performance bonus equals 80% of
his base salary.
Richard J. Domino. The Company's employment agreement with Mr. Domino
provides for an initial term ending in 2000, with automatic renewals beginning
at the end of the second year such that there shall remain at all times
thereunder a rolling one-year term of employment. Notwithstanding the foregoing,
in the event the agreement has not been otherwise terminated, it will terminate
automatically at the end of the Company's fiscal year in which Mr. Domino
reaches age 65. The agreement provides for an annual base salary (currently
$360,000) subject to a minimum annual increase equal to the increase in the CPI
for the immediately preceding twelve months. Mr. Domino is also entitled to an
annual performance bonus of up to 100% of his base salary.
<PAGE>
The agreement provides that, if Mr. Domino's employment is terminated
without cause (as defined therein) by the Company, he shall be entitled to
severance payments, payable biweekly, at his annual base salary rate at the time
of termination until the end of the remaining term under the employment
agreement. The agreement further provides that, if Mr. Domino is terminated by
the Company for cause, Mr. Domino will not be entitled to any separation
benefits and Mr. Domino's salary, bonus, benefits and business expense
reimbursements shall cease as of the date of termination, except that payments
due to Mr. Domino and not paid up to the date of such termination will be paid
to Mr. Domino within forty-five (45) days of such termination.
Michael R. Mitchell. The Company's employment agreement with Mr.
Mitchell provides for an initial term ending in 2000, with automatic renewals
beginning at the end of the second year such that there shall remain at all
times thereunder a rolling one-year term of employment. Notwithstanding the
foregoing, in the event the agreement has not been otherwise terminated, it will
terminate automatically when Mr. Mitchell reaches age 65. The agreement provides
for an annual base salary (currently $358,400).
The agreement provides that, if Mr. Mitchell's employment is terminated
without cause (as defined therein) by the Company, he shall be entitled to
severance payments consisting of his base salary rate at the time of termination
until the end of the remaining term under the employment agreement, any bonus
accrued and certain benefits. The agreement further provides that, if Mr.
Mitchell is terminated by the Company for cause, Mr. Mitchell will not be
entitled to any separation benefits and Mr. Mitchell's salary, bonus, benefits
and business expense reimbursements shall cease as of the date of termination.
Compensation Committee Report on Executive Compensation.
Introduction. Under the rules of the Commission, the Company is
required to provide certain information concerning compensation of the Company's
chief executive officer in particular, and the Named Executive Officers (Messrs.
Compton, Domino, Kagan and Mitchell) for Fiscal 1999 as a group. The disclosure
requirements include a report of the committee responsible for compensation
decisions for the Named Executive Officers, explaining the rationale and
considerations that led to those compensation decisions.
Compensation Committee Role. The Compensation Committee and the Stock
Option Committee currently are responsible for separate aspects of the Company's
compensation program for its executive officers, including the Named Executive
Officers. The Compensation Committee is responsible for establishing the
compensation of the Company's directors and officers, including salaries,
bonuses, termination arrangements and other executive officer benefits. The
Stock Option Committee is responsible for the administration of both the
Employee Plan, including the recipients, amounts and terms of stock option
grants thereunder, and the 1996 Plan.
Compensation Philosophy. The compensation philosophy for executive
officers conforms generally to the compensation philosophy followed for all of
the Company's employees. The Company's compensation is designed to maintain
executive compensation programs and policies that enable the Company to attract
and retain the services of highly qualified executives. In addition to base
salaries, executive compensation programs and policies consisting of
performance-based and discretionary cash bonuses and periodic grants of stock
options are designed to reward and provide incentives for individual
contributions as well as overall Company performance.
The Compensation Committee monitors the operation of the Company's
executive compensation policies. Key elements of the Company's compensation
program consists of base salary, annual cash bonuses and periodic grants of
stock options. The Company's policies with respect to these elements, including
the basis for the compensation awarded the Company's chief executive officer,
are discussed below. While the elements of compensation described below are
considered separately, the Board of Directors and Compensation Committee take
into account the full compensation package offered by the Company to the
individual, including healthcare and other insurance benefits.
<PAGE>
Base Salaries. The Company has established competitive annual base
salaries for all officers, including the Named Executive Officers. Effective as
of the initial public offering, the Company entered into new employment
agreements with each of its executive officers. The employment agreement for
each of Messrs. Compton and Kagan provides for an initial term of five years,
with automatic renewals. The employment agreement for Mr. Domino provides for an
initial term of three years, with automatic renewals. The employment agreement
with Mr. Mitchell provides for an initial term of two years, with automatic
renewals. See "Executive Compensation-Employment Agreements." The annual base
salaries for each of the Company's executive officers, including the Company's
chief executive officer, reflect the subjective judgment of the Compensation
Committee based on the consideration of the executive officer's position and
tenure with the Company, the Company's needs, and the executive officer's
individual performance, achievements and contributions to the growth of the
Company. The minimum annual percentage increase in base salary under each of the
foregoing employment agreements is the percentage increase in the CPI.
Mr. Compton's annual base salary as the Company's chief executive
officer was $550,000 for Fiscal 1999. The Board of Directors and Compensation
Committee believe that this annual base salary is consistent with the salary
range established for this position based on the factors noted above and Mr.
Compton's prior experience and managerial expertise, his knowledge of the
Company's operations and the industry in which it operates.
Annual Bonus. Pursuant to their respective employment agreements, each
of the Company's executive officers is eligible for an annual cash bonus. Mr.
Compton is entitled to an annual performance bonus of up to 110% of his base
salary based on a comparison of the Company's average return on total capital
employed over a four-year period as compared to an average target return on
total capital as calculated for a select group of publicly traded apparel
companies over the same period. Messrs. Kagan and Domino are entitled to
similarly computed annual performance bonuses, except that Mr. Kagan's maximum
annual bonus equals 80% of his base salary and Mr. Domino's maximum bonus equals
100% of his base salary.
The amount of the cash bonus paid to Mr. Compton as the Company's chief
executive officer was $250,000 for Fiscal 1999, the majority of which was
determined in accordance with the provisions of his current employment
agreement.
Stock Options. Under the Employee Plan, stock options may be granted
to key employees, including executive officers of the Company. The Employee
Plan is administered by the Stock Option Committee. The Stock Option Committee
also administers the 1996 Plan.
During Fiscal 1999, options to purchase 72,100 shares of Common Stock
were granted to Mr. Compton under the Employee Plan. The principal factors
considered in determining the granting of stock options to executive officers of
the Company, including the Company's chief executive officer, were the executive
officer's tenure with the Company, his total cash compensation for the prior
year, the executive officer's acceptance of additional responsibilities and his
contributions toward the Company's attainment of strategic goals.
Section 162(m) Limitations. Under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), a tax deduction by corporate
taxpayers, such as the Company, is limited with respect to the compensation of
certain executive officers unless such compensation is based upon performance
objectives meeting certain regulatory criteria or is otherwise excluded from the
limitation. Based upon the Board of Directors' and Compensation Committee's
commitment to link compensation with performance as described in this report,
the Board of Directors and Compensation Committee currently intend to qualify
compensation paid to the Company's executive officers for deductibility by the
Company under Section 162(m) of the Code.
Compensation Committee:
William W. Compton
Eloy J. Vallina-Laguera
Leslie J. Gillock
Leon H. Reinhart
January 7, 2000
The report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933, as
amended or under the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such Acts.
<PAGE>
Compensation Committee Interlocks and Insider Participation.
The members of the Compensation Committee are Messrs. Compton,
Reinhart and Vallina-Laguera and Ms. Gillock. Except for Messrs. Compton, no
officer or employee of the Company participated in deliberations of the
Compensation Committee concerning executive officer compensation during the
fiscal year ended October 2, 1999.
CERTAIN TRANSACTIONS
The Audit Committee of the Board of Directors is responsible for
reviewing all transactions between the Company and any officer or director of
the Company or any entity in which an officer of director has a material
interest. Any such transactions must be on terms no less favorable than those
that could be obtained on an arms-length basis from independent third parties.
<PAGE>
Stock Ownership
Based solely upon information furnished to the Company, the following
table sets forth certain information with respect to the beneficial ownership of
Common Stock as of December 31, 1999 by (i) each person who is known by the
Company to beneficially own more than five percent of Common Stock, (ii) each
nominee for director of the Company, (iii) each of the Named Executive Officers
(as defined under "Election of Directors -- Executive Compensation" above), and
(iv) all officers and directors as a group.
<TABLE>
<CAPTION>
Shares Beneficially
Owned
------------------------------------
Name and Address of Beneficial Owner (1) Percent
- ---------------------------------------- Shares of Class
------ --------
<S> <C> <C>
William W. Compton (2)........................................... 1,082,700 14.2%
Richard J. Domino (3)............................................ 39,251 *
Michael Kagan (4)................................................ 650,368 8.5
Jesus Alvarez-Morodo (5)(6)...................................... 1,613,217 21.1
Eloy S. Vallina-Laguera (5)(6)................................... 1,607,117 21.1
Leslie J. Gillock (5)............................................ 7,017 *
Donald H. Livingstone (5)........................................ 8,667 *
Leon H. Reinhart (5)............................................. 8,667 *
Charles J. Smith (7)............................................ 3,334 *
Michael R. Mitchell (8) 3,334 *
Accel, S.A. de C.V. (6).......................................... 1,600,450 21.0
Virginia Fabregas No. 80,
Col. San Rafael, 06470 Mexico, D.F.
Lord Abbett & Co. (9) 769,400 10.1
767 Fifth Avenue
New York, NY 10153
Advantus Capital Management, Inc. (10) 453,900 6.0
Minnesota Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
BlackRock Advisors, Inc. (11) 442,050 5.8
Black Rock Financial Management, Inc.
1600 Market Street
Philadelphia, PA 19103
PNC Bank Corp.
PNC Bank, N.A.
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222
PNC Bancorp, Inc.
222 Delaware Avenue
Wilmington, DE 19899
Morgens, Waterfall, Vintiadis & Co., Inc. (12) 417,750 5.5
10 E. 50th Street
New York, NY 10022
All directors and officers as a group (10 persons)............... 3,454,890 ______
</TABLE>
<PAGE>
- ------------------
*Less than 1%.
(1) Except as indicated in the footnotes set forth below, the persons named in
the table have sole voting and investment power with respect to all shares
shown as beneficially owned by them. The numbers of shares shown include
shares that are not currently outstanding but which certain shareholders
are entitled to acquire or will be entitled to acquire within 60 days, upon
the exercise of stock options. Such shares are deemed to be outstanding for
the purpose of computing the percentage of Common Stock owned by the
particular shareholder and by the group but are not deemed to be
outstanding for the purpose of computing the percentage ownership of any
other person. Except as indicated in the table, the business address of all
persons named in the table is 4902 West Waters Avenue, Tampa, Florida
33634-1302.
(2) Includes 216,000 shares of Common Stock held by the Compton Family Limited
Partnership. Includes 145,200 shares of Common Stock issuable upon the
exercise of vested stock options. Does not include 54,800 shares of Common
Stock issuable upon the exercise of nonvested stock options.
(3) Includes 38,201 shares of Common Stock issuable upon the exercise of vested
stock options. Does not include 45,099 shares of Common Stock issuable upon
the exercise of nonvested stock options. Includes 1,050 shares held as
custodian for the benefit of his minor children.
(4) Includes 562,500 shares of Common Stock held by the Kagan Family Limited
Partnership. Includes 87,868 shares of Common Stock issuable upon the
exercise of vested stock options. Does not include 37,032 shares of Common
Stock issuable upon the exercise of nonvested stock options.
(5) Includes 6,667 shares of Common Stock issuable upon the exercise of vested
stock options. Does not include 3,333 shares of Common Stock issuable upon
the exercise of nonvested stock options.
(6) Based on a Schedule 13G filed with the Commission on February 17, 1998.
Consists of 1,600,450 shares held by Accel. Mr. Vallina-Laguera owns
directly 130,862,957 shares, or 37.6%, of the outstanding common stock of
Accel. In addition, he controls companies that hold 46,414,851 shares, or
13.3%, of the outstanding common stock of Accel. Mr. Alvarez-Morodo is the
President and Chief Executive Officer of Accel. The business address of Mr.
Vallina-Laguera is Av. Zarco No. 2401., Col. Zarco, Chihuahua, Chih.,
Mexico, and the business address of Mr. Alvarez-Morodo and Accel is
Virginia Fabregas No. 80, Col. San Rafael, 06470 Mexico, D.F.
(7) Includes 3,334 shares of Common Stock issuable upon the exercise of vested
stock options. Does not include 6,666 shares of Common Stock issuable upon
the exercise of nonvested stock options.
(8) Includes 3,334 shares of Common Stock issuable upon the exercise of vested
stock options. Does not include 51,666 shares of Common Stock issuable upon
the exercise of nonvested options.
(9) Based on a Schedule 13G filed with the Commission on August 11, 1999. Lord
Abbett & Co reports sole voting power of 769,400 shares of Common Stock and
sole dispositive power of 769,400 shares of Common Stock.
(10) Based on a Schedule 13G filed with the Commission on February 2, 1999.
Advantus Capital Management, Inc., a wholly-owned subsidiary of Minnesota
Life Insurance Company, is the beneficial owner of 453,900 shares of Common
Stock as a result of acting as investment adviser to several persons.
Minnesota Life Insurance Company, through its control of Advantus Capital
Management, Inc., has sole power to vote and to dispose of the 453,900
shares of Common Stock owned by persons advised by Advantus Capital
Management, Inc.
(11) Based on a Schedule 13G filed with the Commission on February 12, 1999.
BlackRock Financial Management, Inc., a wholly owned subsidiary of
BlackRock Advisors, Inc., is the beneficial owner of 442,050 shares of
common stock as a result of acting as an investment adviser to several
persons. BlackRock Advisors, Inc. is a wholly owned subsidiary of PNC Bank,
N.A., PNC Bancorp, Inc. and PNC Bank Corp. PNC Bank Corp., PNC Bancorp,
Inc., PNC Bank, N.A., and BlackRock Advisors, Inc., through their control
of BlackRock Financial Management, Inc., each have sole power to dispose of
the 437,550 shares of Common Stock owned by BlackRock Financial Management
and shared power to dispose of 5,000 additional shares owned by BlackRock
Financial Management.
(12) Based on a Schedule 13G filed with the Commission on February 12, 1999.
Morgens, Waterfall, Vintiadis & Co., Inc. is the beneficial owner of
417,750 shares of Common Stock as a result of acting as an investment
adviser to several persons.
<PAGE>
Shareholder Return Comparison
The Company's Common Stock began trading on the Nasdaq National Market
on October 29, 1997 in connection with the Company's initial public offering.
The price information reflected for the Common Stock in the following
performance graph represents the closing sale price of the Common Stock for the
period from October 29, 1997 through October 2, 1999. The performance graph
compares the cumulative shareholder returns on the Common Stock with the Nasdaq
Stock Market Index (U.S. Companies) and a Peer Index (as described below) over
the same period (assuming the investment of $100 in the Company's Common Stock,
the Nasdaq Stock Market (U.S. Companies) and the Peer Index on October 29, 1997,
and reinvestment of all dividends).
Comparison of Cumulative Total Returns
Tropical Sportswear Int'l Corporation
[PERFORMANCE GRAPH]
Year-End Cumulative Returns
<TABLE>
<CAPTION>
October 29, 1997 FY 1998 FY 1999
---------------- ------- -------
<S> <C> <C> <C>
Tropical Sportswear Int'l Corporation 100.0 148.2 151.3
The Nasdaq Stock Market 100.0 102.1 173.3
Peer Index 100.0 85.3 72.2
</TABLE>
Total return calculations for the Nasdaq Stock Market Index (U.S.
Companies) and the Peer Index were prepared by the Center for Research in
Security Prices, The University of Chicago. The Peer Index is composed of the
stocks of Haggar Clothing Co. (HGGR), Hartmarx Corporation (HMX), Kellwood
Company (KWD), Oxford Industries, Inc. (OXM), Philips-Van Huesen Corporation
(PVH), Perry Ellis Int'l, Inc. (PERY), Tarrant Apparel Group (TAGS), and V.F.
Corporation (VFC). Specific information regarding the companies comprising the
Peer Index will be provided to any shareholder upon request to Michael Kagan,
the Secretary of the Company.
<PAGE>
PROPOSAL II
APPROVAL OF THE COMPANY'S PROPOSED 2000 LONG TERM INCENTIVE STOCK PLAN
2000 Long-Term Incentive Plan
The Company currently maintains the Employee Plan and the 1996 Plan,
which provide for the grant of options to purchase shares of the Company's
Common Stock to employees of the Company and its subsidiaries. As of December
15, 1999, there were 16,928 shares of Common Stock remaining available for the
grant of options under the Employee Plan. The Company does not grant new options
under the 1996 Plan.
The Company also maintains the Non-Employee Director Stock Option Plan,
which provides for the automatic grant of options to non-employee directors of
the Company upon their initial appointment or election and each subsequent
re-election. As of December 15, 1999, there were 140,000 shares of Common Stock
remaining available for grant of options under the Non-Employee Director Stock
Option Plan.
On January 5, 2000, the Board of Directors adopted the Tropical
Sportswear Int'l Corporation 2000 Long-Term Incentive Plan (the "2000 Plan"),
subject to approval of the 2000 Plan by the shareholders at the Annual Meeting.
The 2000 Plan will be effective as of its approval by the shareholders at the
Annual Meeting, and no awards will be made under the 2000 Plan prior to such
approval. Whether or not the shareholders approve the 2000 Plan, the Company may
continue to grant options under the Employee Plan and the Non-Employee Director
Plan until the shares authorized thereunder are depleted or until such plans
expire in 2007.
The Company has reserved 500,000 shares of the authorized but unissued
shares of Common Stock for issuance upon the grant or exercise of awards
pursuant to the 2000 Plan.
A summary of the 2000 Plan is set forth below. The summary is qualified
in its entirety by reference to the full text of the 2000 Plan, which is filed
as an exhibit to this Proxy Statement.
General
The purpose of the 2000 Plan is to promote the success, and enhance the
value, of the Company by linking the personal interests of employees, officers,
directors, and consultants to those of the stockholders, and by providing such
employees, officers, directors, and consultants with an incentive for
outstanding performance. As of December 15, 1999, there were approximately 1,470
employees (including all current executive officers) and directors eligible to
participate in the 2000 Plan.
Pursuant to Section 162(m) of the Code, the Company may not deduct
compensation in excess of $1 million paid to the Named Executive Officers. The
2000 Plan is designed to comply with Code Section 162(m) so that the grant of
options and stock appreciation rights under the 2000 Plan, and other awards,
such as performance shares, that are conditioned on the performance goals
described in Section 13.13 of the 2000 Plan, will be excluded from the
calculation of annual compensation for purposes of Code Section 162(m) and will
be fully deductible by the Company. The Board has approved the 2000 Plan for
submission to the stockholders at the annual meeting in order to permit the
grant of awards thereunder that will constitute deductible performance-based
compensation for purposes of Code Section 162(m).
Shares Available for Awards under the 2000 Plan
Subject to adjustment as provided in the 2000 Plan, the aggregate
number of shares of Common Stock reserved and available for awards or which may
be used to provide a basis of measurement for or to determine the value of an
award, such as with a stock appreciation right or performance share award, is
500,000 shares. Not more than 10% of the total authorized shares may be granted
as awards of restricted stock or unrestricted stock awards.
Administration
The 2000 Plan will be administered by the Compensation Committee of the
Board of Directors of the Company (the "Committee"), or at the discretion of the
Board from time to time, by the Board. The Committee has the power, authority
and discretion to designate participants; determine the type or types of awards
to be granted to each participant and the number, terms and conditions thereof;
establish, adopt or revise any rules and regulations as it may deem necessary or
advisable to administer the 2000 Plan; and make all other decisions and
determinations that may be required under, or as the Committee deems necessary
or advisable to administer, the 2000 Plan. During any time that the Board is
acting as administrator of the 2000 Plan, it shall have all the powers of the
Committee thereunder. In addition, the Board or the Committee may expressly
delegate to a special committee consisting of one or more directors who are also
officers of the Company some or all of the Committee's authority with respect to
those eligible participants who, at the time of grant are not, and are not
anticipated to be become, either (i) Named Executive Officers or (ii) persons
subject to the insider trading restrictions of Section 16 of the 1934 Act.
<PAGE>
Awards
The 2000 Plan authorizes the granting of awards to employees, officers,
directors, and consultants of the Company or its subsidiaries in the following
forms: (i) options to purchase shares of Common Stock, which may be incentive
stock options or nonqualified stock options, (ii) stock appreciation rights, or
SARs; (iii) performance shares; (iv) restricted stock; (v) dividend equivalents;
(vi) other stock-based awards; or (vii) any other right or interest relating to
Common Stock or cash. Not more than 10% of the total authorized shares may be
granted as awards of restricted stock or unrestricted stock awards. The maximum
number of shares of Common Stock with respect to one or more options and/or SARs
that may be granted during any one calendar year under the 2000 Plan to any one
participant is 200,000. The maximum fair market value of any awards (other than
options and SARs) that may be received by a participant (less any consideration
paid by the participant for such award) during any one calendar year under the
2000 Plan is $4,000,000.
Stock Options. The Committee is authorized to grant options, which may
be incentive stock options or nonqualified stock options, to participants. All
options will be evidenced by a written award agreement between the Company and
the participant, which will include such provisions as may be specified by the
Committee; provided, however, that the exercise price of an option shall not be
less than the fair market value of the underlying Common Stock as of the date of
the grant. The terms of any incentive stock option must meet the requirements of
Section 422 of the Code, including stockholder approval requirements.
Stock Appreciation Rights. The Committee may grant SARs to
participants. Upon the exercise of a SAR, the participant has the right to
receive the excess, if any, of the fair market value of one share of Common
Stock on the date of exercise, over the grant price of the SAR as determined by
the Committee, which will not be less than the fair market value of one share of
Common Stock on the date of grant. All awards of SARs will be evidenced by an
award agreement, reflecting the terms, methods of exercise, methods of
settlement, form of consideration payable in settlement, and any other terms and
conditions of the SAR, as determined by the Committee at the time of grant.
Performance Shares. The Committee may grant performance shares to
participants on such terms and conditions as may be selected by the Committee.
The Committee will have the complete discretion to determine the number of
performance shares granted to each participant and to set performance goals and
other terms or conditions to payment of the performance shares in its discretion
which, depending on the extent to which they are met, will determine the number
and value of performance shares that will be paid to the participant.
Restricted Stock Awards. The Committee may make awards of restricted
stock to participants, which will be subject to such restrictions on
transferability and other restrictions as the Committee may impose (including,
without limitation, limitations on the right to vote restricted stock or the
right to receive dividends, if any, on the restricted stock).
Dividend Equivalents. The Committee is authorized to grant dividend
equivalents to participants subject to such terms and conditions as may be
selected by the Committee. Dividend equivalents entitle the participant to
receive payments equal to dividends with respect to all or a portion of the
number of shares of Common Stock subject to an award, as determined by the
Committee. The Committee may provide that dividend equivalents be paid or
distributed when accrued or be deemed to have been reinvested in additional
shares of Common Stock or otherwise reinvested.
Other Stock-Based Awards. The Committee may, subject to limitations
under applicable law, grant to participants such other awards that are payable
in, valued in whole or in part by reference to, or otherwise based on or related
to shares of Common Stock as deemed by the Committee to be consistent with the
purposes of the 2000 Plan, including without limitation shares Common Stock
awarded purely as a bonus and not subject to any restrictions or conditions,
convertible or exchangeable debt securities, other rights convertible or
exchangeable into shares of Common Stock and awards valued by reference to book
value of shares of Common Stock or the value of securities of or the performance
of specified parents or subsidiaries of the Company. The Committee will
determine the terms and conditions of any such awards.
Performance Goals. The Committee may determine that any award will be
determined solely on the basis of (a) the achievement by the Company or a Parent
or Subsidiary of a specified target return, or target growth in return, on
equity or assets, (b) the Company's stock price, (c) the Company's total
stockholder return (stock price appreciation plus reinvested dividends) relative
to a defined comparison group or target over a specific performance period, (d)
the achievement by a business unit of the Company, Parent or Subsidiary of a
specified target, or target growth in, revenue, profit contribution, net income,
EBIT, EBITDA, or earnings per share, or (e) any combination of the goals set
forth in (a) through (d) above. If an award is made on such basis, the Committee
shall establish goals prior to the beginning of the period for which such
performance goal relates (or such later date as may be permitted under Code
Section 162(m) or the regulations thereunder), and the Committee may reduce (but
not increase) the award, notwithstanding the achievement of a specified goal.
Any payment of an award granted with performance goals will be conditioned on
the written certification of the Committee in each case that the performance
goals and any other material conditions were satisfied.
<PAGE>
Limitations on Transfer; Beneficiaries. No award will be assignable or
transferable by a participant other than by will or the laws of descent and
distribution or, except in the case of an incentive stock option, pursuant to a
qualified domestic relations order; provided, however, that the Committee may
(but need not) permit other transfers where the Committee concludes that such
transferability (i) does not result in accelerated taxation, (ii) does not cause
any option intended to be an incentive stock option to fail to be described in
Code Section 422(b), and (iii) is otherwise appropriate and desirable, taking
into account any factors deemed relevant, including without limitation, state or
federal tax or securities laws applicable to transferable awards. A participant
may, in the manner determined by the Committee, designate a beneficiary to
exercise the rights of the participant and to receive any distribution with
respect to any award upon the participant's death.
Acceleration of Awards. Upon a participant's death or disability, all
of his or her outstanding options and other awards in the nature of rights that
may be exercised will become fully exercisable and all restrictions on
outstanding awards will lapse. Any such awards will thereafter continue or lapse
in accordance with the other provisions of the 2000 Plan and the award
agreement.
In the event of a Change in Control of the Company (as defined in the
1999 Plan), all outstanding options and other awards in the nature of rights
that may be exercised will become fully vested and all restrictions on all
outstanding awards will lapse; provided, however that such acceleration will not
occur if, in the opinion of the Company's accountants, such acceleration would
preclude the use of "pooling of interest" accounting treatment for a Change in
Control transaction that would otherwise qualify for such accounting treatment
and is contingent upon qualifying for such accounting treatment. Regardless of
whether an event described above shall have occurred, the Committee may in its
sole discretion declare all outstanding options and other awards in the nature
of rights that may be exercised to become fully vested, and/or all restrictions
on all outstanding awards to lapse, in each case as of such date as the
Committee may, in its sole discretion, declare. The Committee may discriminate
among participants or among awards in exercising such discretion.
Termination and Amendment
The Board of Directors or the Committee may, at any time and from time
to time, terminate, amend or modify the 2000 Plan without stockholder approval;
provided, however, that the Committee may condition any amendment on the
approval of stockholders of the Company if such approval is necessary or deemed
advisable with respect to tax, securities or other applicable laws, policies or
regulations. No termination, amendment, or modification of the 2000 Plan may
adversely affect any award previously granted under the 2000 Plan, without the
written consent of the participant. In addition, the original term of any option
granted under the 2000 Plan may not be extended, and, except as otherwise
provided in the anti-dilution provision of the 2000 Plan, the exercise price of
any option may not be reduced.
Certain Federal Income Tax Effects
The following is a brief general description of the consequences under
the Code and current federal income tax regulations of the receipt or exercise
of awards under the Plan.
Nonqualified Stock Options. There will be no federal income tax
consequences to either the Company or the participant upon the grant of a
non-discounted nonqualified stock option. However, the participant will realize
ordinary income on the exercise of the nonqualified stock option in an amount
equal to the excess of the fair market value of the Common Stock acquired upon
the exercise of such option over the exercise price, and the Company will
receive a corresponding deduction (subject to Code Section 162(m) limitations).
The gain, if any, realized upon the subsequent disposition by the participant of
the Common Stock will constitute short-term or long-term capital gain, depending
on the participant's holding period.
Incentive Stock Options. There will be no federal income tax
consequences to either the Company or the participant upon the grant of an
incentive stock option or the exercise thereof by the participant, except that
upon exercise of an incentive stock option, the participant may be subject to
alternative minimum tax on certain items of tax preference. If the participant
holds the shares of Common Stock for the greater of two years after the date the
option was granted or one year after the acquisition of such shares of Common
Stock (the "required holding period"), the difference between the aggregate
option price and the amount realized upon disposition of the shares of Common
Stock will constitute long-term capital gain or loss, and the Company will not
be entitled to a federal income tax deduction. If the shares of Common Stock are
disposed of in a sale, exchange or other disqualifying disposition during the
required holding period, the participant will realize taxable ordinary income in
an amount equal to the excess of the fair market value of the Common Stock
purchased at the time of exercise over the aggregate option price, and the
Company will be entitled to a federal income tax deduction equal to such amount
(subject to Code Section 162(m) limitations).
<PAGE>
SARs. A participant receiving a SAR will not recognize income, and the
Company will not be allowed a tax deduction, at the time the award is granted.
When a participant exercises the SAR, the amount of cash and the fair market
value of any shares of Common Stock received will be ordinary income to the
participant and will be allowed as a deduction for federal income tax purposes
to the Company (subject to Code Section 162(m) limitations).
Performance Shares. A participant receiving performance shares will not
recognize income and the Company will not be allowed a tax deduction at the time
the award is granted. When a participant receives payment of performance shares,
the amount of cash and the fair market value of any shares of Common Stock
received will be ordinary income to the participant and will be allowed as a
deduction for federal income tax purposes to the Company (subject to Code
Section 162(m) limitations)
Restricted Stock. Unless the participant makes an election to
accelerate recognition of the income to the date of grant, a participant
receiving a restricted stock award will not recognize income, and the Company
will not be allowed a tax deduction, at the time the award is granted. When the
restrictions lapse, the participant will recognize ordinary income equal to the
fair market value of the Common Stock and the Company will be entitled to a
corresponding tax deduction at that time (subject to Code Section 162(m)
limitations).
Benefits to Named Executive Officers and Others
As of the date of this proxy statement, no awards had been granted or
approved for grant under the 2000 Plan. Any awards under the 2000 Plan will be
made at the discretion of the Committee or the Board, as the case may be.
Consequently, it is not presently possible to determine either the benefits or
amounts that will be received by any particular person or group pursuant to the
2000 Plan.
The Board of Directors recommends that shareholders vote FOR the
Company's proposed 2000 Long Term Incentive Plan . If a choice is specified on
the Proxy by the shareholder, the shares will be voted as specified. If no
specification is made, the shares will be voted FOR the amendment. Adoption of
Proposal II will require that of the votes cast by the shares of Common Stock
represented and entitled to vote at the Annual Meeting, the votes in favor of
the Proposal exceed the votes against the Proposal.
PROPOSAL III
RATIFICATION OF THE COMPANY'S INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The Company's Board of Directors has selected Ernst & Young LLP to
conduct the annual audit of the financial statements of the Company for the
fiscal year ending September 30, 2000. Ernst & Young LLP has no financial
interest, direct or indirect, in the Company and does not have any connection
with the Company except in its professional capacity as independent certified
public accountants. The holders of Common Stock will have the opportunity to
ratify the Board of Directors' selection of Ernst & Young LLP as independent
certified public accountants to the Company for the fiscal year ending September
30, 2000. The ratification by the holders of Common Stock of the selection of
Ernst & Young LLP as independent certified public accountants to the Company is
not required by law or by the Bylaws of the Company. The Board of Directors,
consistent with the practice of many publicly held corporations, is nevertheless
submitting this selection to the holders of Common Stock. Representatives of
Ernst & Young LLP will be present at the Annual Meeting and will have an
opportunity to make a statement if they so desire and respond to appropriate
questions. If this selection is not ratified at the Annual Meeting, the Board of
Directors intends to reconsider its selection of independent certified public
accountants for the fiscal year ending September 30, 2000. Even if the selection
is ratified, the Board of Directors in its sole discretion may direct the
appointment of a different independent accounting firm at any time during the
fiscal year if the Board determines that such a change would be in the best
interest of the Company and its shareholders.
The Board of Directors recommends that shareholders vote FOR
ratification of the selection of Ernst & Young LLP as independent certified
public accountants for the fiscal year September 30, 2000. If a choice is
specified on the Proxy by the shareholder, the shares will be voted as
specified. If no specification is made, the shares will be voted FOR
ratification. Adoption of Proposal III will require that of the votes cast by
the shares of Common Stock represented and entitled to vote at the Annual
Meeting, the votes in favor of the Proposal exceed the votes against the
Proposal.
<PAGE>
SHAREHOLDER PROPOSALS
FOR 2001 ANNUAL MEETING OF SHAREHOLDERS
Proposals of shareholders, including nominations for the Board of
Directors, intended to be presented at the annual meeting of shareholders to be
held in 2001 should be submitted by certified mail, return receipt requested,
and must be received by the Company at its executive offices in Tampa, Florida
on or before September 9, 2000 to be eligible for inclusion in the Company's
Proxy Statement and Proxy relating to that meeting. Any shareholder proposal
must be in writing and must set forth (i) a description of the business desired
to be brought before the meeting and the reasons for conducting the business at
the meeting, (ii) the name and address, as they appear on the Company's books,
of the shareholder submitting the proposal, (iii) the class and number of shares
that are beneficially owned by such shareholder, (iv) the dates on which the
shareholder acquired the shares, (v) documentary support for any claim of
beneficial ownership, (vi) any material interest of the shareholder in the
proposal, (vii) a statement in support of the proposal, and (viii) any other
information required by the rules and regulations of the Commission.
OTHER MATTERS
Section 16(a) Beneficial Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors and any persons who beneficially own more than
ten percent of the Company's Common Stock to file reports of ownership and
changes in ownership of such securities with the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. Officers,
directors and beneficial owners of more than ten percent of the Common Stock are
required by applicable regulations to furnish the Company with copies of all
Section 16(a) forms they file. Based solely upon a review of the copies of the
Forms 3, 4 and 5 furnished to the Company, or written representations from
certain reporting persons that no Forms 5 were required, the Company believes
that during Fiscal 1999, all persons subject to the reporting requirements with
regard to the Common Stock complied with all applicable filing requirements.
Expenses of Solicitation
The cost of soliciting proxies in the accompanying form will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
directors, officers or other employees of the Company, personally, by telephone
or by telegraph. The Company does not expect to pay any compensation for the
solicitation of proxies, but may reimburse brokers, custodians or other persons
holding stock in their names or in the names of nominees for their expenses in
sending proxy materials to principals and obtaining their instructions.
Miscellaneous
Management does not know of any matters to be brought before the Annual
Meeting other than as described in this Proxy Statement. Should any other
matters properly come before the Annual Meeting, the persons designated as
proxies will vote in accordance with their best judgment on such matters.
Availability of Annual Report
Accompanying this Proxy Statement is a copy of the Company's Annual
Report for Fiscal 1999. Shareholders who would like additional copies of the
Annual Report should direct their requests in writing to: Tropical Sportswear
Int'l Corporation, 420 W. Waters Avenue, Tampa, Florida 33634-1302, Attention:
Michael Kagan, Secretary.
<PAGE>
APPENDIX A
TROPICAL SPORTSWEAR INT'L CORPORATION
2000 LONG-TERM INCENTIVE PLAN
ARTICLE 1
PURPOSE
1.1 GENERAL. The purpose of the Tropical Sportswear Int'l Corporation 2000
Long-Term Incentive Plan (the "Plan") is to promote the success, and enhance the
value, of Tropical Sportswear Int'l Corporation (the "Corporation"), by linking
the personal interests of its employees, officers, directors and consultants to
those of Corporation shareholders and by providing such persons with an
incentive for outstanding performance. The Plan is further intended to provide
flexibility to the Corporation in its ability to motivate, attract, and retain
the services of employees, officers, directors and consultants upon whose
judgment, interest, and special effort the successful conduct of the
Corporation's operation is largely dependent. Accordingly, the Plan permits the
grant of incentive awards from time to time to selected employees, officers,
directors and consultants.
ARTICLE 2
EFFECTIVE DATE
2.1 EFFECTIVE DATE. The Plan shall be effective as of the date upon which
it shall be approved by the shareholders of the Corporation (the "Effective
Date").
ARTICLE 3
DEFINITIONS
3.1 DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Section 1.1 unless a clearly different meaning is required by the
context. The following words and phrases shall have the following meanings:
(a) "Award" means any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Share Award, Dividend Equivalent
Award, or Other Stock-Based Award, or any other right or interest
relating to Stock or cash, granted to a Participant under the Plan.
(b) "Award Agreement" means any written agreement, contract,
or other instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Change of Control" means and includes the occurrence of
any one of the following events:
(i) individuals who, at the Effective Date,
constitute the Board (the "Incumbent Directors") cease for any
reason to constitute at least a majority of the Board,
provided that any person becoming a director after the
Effective Date and whose election or nomination for election
was approved by a vote of at least a majority of the Incumbent
Directors then on the Board (either by a specific vote or by
approval of the proxy statement of the Corporation in which
such person is named as a nominee for director, without
written objection to such nomination) shall be an Incumbent
Director; provided, however, that no individual initially
elected or nominated as a director of the Corporation as a
result of an actual or threatened election contest (as
described in Rule 14a-11 under the 1934 Act ("Election
Contest") or other actual or threatened solicitation of
proxies or consents by or on behalf of any "person" (as such
term is defined in Section 3(a)(9) of the 1934 Act and as used
in Section 13(d)(3) and 14(d)(2) of the 1934 Act) other than
the Board ("Proxy Contest"), including by reason of any
agreement intended to avoid or settle any Election Contest or
Proxy Contest, shall be deemed an Incumbent Director;
(ii) any person becomes a "beneficial owner" (as
defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of securities of the Corporation representing more
than 50% or more of the combined voting power of the
Corporation's then outstanding securities eligible to vote for
the election of the Board (the "Company Voting Securities");
provided, however, that the event described in this paragraph
(ii) shall not be deemed to be a Change in Control of the
Corporation by virtue of any of the following acquisitions:
(A) any acquisition by a person who is on the Effective Date
the beneficial owner of more than 50% or more of the
outstanding Company Voting Securities, (B) an acquisition by
the Corporation which reduces the number of Company Voting
Securities outstanding and thereby results in any person
acquiring beneficial ownership of more than 50% of the
outstanding Company Voting Securities; provided, that if after
such acquisition by the Corporation such person becomes the
beneficial owner of additional Company Voting Securities that
increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in
Control of the Corporation shall then occur, (C) an
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any Parent or
Subsidiary, (D) an acquisition by an underwriter temporarily
holding securities pursuant to an offering of such securities,
or (E) an acquisition pursuant to a Non-Qualifying Transaction
(as defined in paragraph (iii)); or
(iii) the consummation of a reorganization, merger,
consolidation, statutory share exchange or similar form of
corporate transaction involving the Corporation that requires
the approval of the Corporation's stockholders, whether for
such transaction or the issuance of securities in the
transaction (a "Reorganization"), or the sale or other
disposition of all or substantially all of the Corporation's
assets to an entity that is not an affiliate of the
Corporation (a "Sale"), unless immediately following such
Reorganization or Sale: (A) more than 50% of the total voting
power of (x) the corporation resulting from such
Reorganization or the corporation which has acquired all or
substantially all of the assets of the Corporation (in either
case, the "Surviving Corporation"), or (y) if applicable, the
ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible
to elect directors of the Surviving Corporation (the "Parent
Corporation"), is represented by the Corporation Voting
Securities that were outstanding immediately prior to such
Reorganization or Sale (or, if applicable, is represented by
shares into which such Company Voting Securities were
converted pursuant to such Reorganization or Sale), and such
voting power among the holders thereof is in substantially the
same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the
Reorganization or Sale, (B) no person (other than (x) the
Corporation, (y) any employee benefit plan (or related trust)
sponsored or maintained by the Surviving Corporation or the
Parent Corporation, or (z) a person who immediately prior to
the Reorganization or Sale was the beneficial owner of more
than 50% of the outstanding Company Voting Securities) is the
beneficial owner, directly or indirectly, of more than 50% of
the total voting power of the outstanding voting securities
eligible to elect directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation),
and (C) at least a majority of the members of the board of
directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) following the
consummation of the Reorganization or Sale were Incumbent
Directors at the time of the Board's approval of the execution
of the initial agreement providing for such Reorganization or
Sale (any Reorganization or Sale which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed
to be a "Non-Qualifying Transaction").
(e) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(f) "Committee" means the committee of the Board described in
Article 4.
(g) "Corporation" means Tropical Sportswear Int'l, Inc., a
Florida corporation.
(h) "Covered Employee" means a covered employee as defined in
Code Section 162(m)(3), provided that no employee shall be a Covered
Employee until the deduction limitation of Code Section 162(m) are
applicable to the Corporation and any reliance period under Code
Section 162(m) has expired, as described in Section 16.15 hereof.
(i) "Disability" shall mean any illness or other physical or
mental condition of a Participant that renders the Participant
incapable of performing his customary and usual duties for the
Corporation, or any medically determinable illness or other physical or
mental condition resulting from a bodily injury, disease or mental
disorder which, in the judgment of the Committee, is permanent and
continuous in nature. The Committee may require such medical or other
evidence as it deems necessary to judge the nature and permanency of
the Participant's condition. Notwithstanding the above, with respect to
an Incentive Stock Option, Disability shall mean Permanent and Total
Disability as defined in Section 22(e)(3) of the Code.
(j) "Dividend Equivalent" means a right granted to a
Participant under Article 11.
(k) "Effective Date" has the meaning assigned such term in
Section 2.1.
(l) "Fair Market Value", on any date, means (i) if the Stock
is listed on a securities exchange or is traded over the Nasdaq
National Market, the closing sales price on such exchange or over such
system on such date or, in the absence of reported sales on such date,
the closing sales price on the immediately preceding date on which
sales were reported, or (ii) if the Stock is not listed on a securities
exchange or traded over the Nasdaq National Market, the mean between
the bid and offered prices as quoted by Nasdaq for such date, provided
that if it is determined that the fair market value is not properly
reflected by such Nasdaq quotations, Fair Market Value will be
determined by such other method as the Committee determines in good
faith to be reasonable.
(m) "Incentive Stock Option" means an Option that is
intended to meet the requirements of Section 422 of the Code or any
successor provision thereto.
(n) "Non-Qualified Stock Option" means an Option that is not
an Incentive Stock Option.
(o) "Option" means a right granted to a Participant under
Article 7 of the Plan to purchase Stock at a specified price during
specified time periods. An Option may be either an Incentive Stock
Option or a Non-Qualified Stock Option.
(p) "Other Stock-Based Award" means a right, granted to a
Participant under Article 12, that relates to or is valued by reference
to Stock or other Awards relating to Stock.
(q) "Parent" means a corporation which owns or beneficially
owns a majority of the outstanding voting stock or voting power of the
Corporation. Notwithstanding the above, with respect to an Incentive
Stock Option, Parent shall have the meaning set forth in Section 424(f)
of the Code.
(r) "Participant" means a person who, as an employee, officer,
director or consultant of the Corporation or any Parent or Subsidiary,
has been granted an Award under the Plan.
(s) "Performance Share" means a right granted to a Participant
under Article 9, to receive cash, Stock, or other Awards, the payment
of which is contingent upon achieving certain performance goals
established by the Committee.
(t) "Plan" means the Tropical Sportswear Int'l, Inc. 2000
Long-Term Incentive Plan, as amended from time to time.
(u) "Restricted Stock Award" means Stock granted to a
Participant under Article 10 that is subject to certain restrictions
and to risk of forfeiture.
(v) "Stock" means the $.01 par value common stock of the
Corporation and such other securities of the Corporation as may be
substituted for Stock pursuant to Article 14.
(w) "Stock Appreciation Right" or "SAR" means a right granted
to a Participant under Article 8 to receive a payment equal to the
difference between the Fair Market Value of a share of Stock as of the
date of exercise of the SAR over the grant price of the SAR, all as
determined pursuant to Article 8.
(x) "Subsidiary" means any corporation, limited liability
company, partnership or other entity of which a majority of the
outstanding voting stock or voting power is beneficially owned directly
or indirectly by the Corporation. Notwithstanding the above, with
respect to an Incentive Stock Option, Subsidiary shall have the meaning
set forth in Section 424(f) of the Code.
(y) "1933 Act" means the Securities Act of 1933, as amended
from time to time.
(z) "1934 Act" means the Securities Exchange Act of 1934, as
amended from time to time.
ARTICLE 4
ADMINISTRATION
4.1 COMMITTEE. The Plan shall be administered by a committee (the
"Committee") appointed by the Board (which Committee shall consist of two or
more directors) or, at the discretion of the Board from time to time, the Plan
may be administered by the Board. It is intended that the directors appointed to
serve on the Committee shall be "non-employee directors" (within the meaning of
Rule 16b-3 promulgated under the 1934 Act) and "outside directors" (within the
meaning of Code Section 162(m) and the regulations thereunder) to the extent
that Rule 16b-3 and, if necessary for relief from the limitation under Code
Section 162(m) and such relief is sought by the Corporation, Code Section
162(m), respectively, are applicable. However, the mere fact that a Committee
member shall fail to qualify under either of the foregoing requirements shall
not invalidate any Award made by the Committee which Award is otherwise validly
made under the Plan. The members of the Committee shall be appointed by, and may
be changed at any time and from time to time in the discretion of, the Board.
During any time that the Board is acting as administrator of the Plan, it shall
have all the powers of the Committee hereunder, and any reference herein to the
Committee (other than in this Section 4.1) shall include the Board.
4.2 ACTION BY THE COMMITTEE. For purposes of administering the Plan, the
following rules of procedure shall govern the Committee. A majority of the
Committee shall constitute a quorum. The acts of a majority of the members
present at any meeting at which a quorum is present, and acts approved
unanimously in writing by the members of the Committee in lieu of a meeting,
shall be deemed the acts of the Committee. Each member of the Committee is
entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the Corporation or
any Parent or Subsidiary, the Corporation's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Corporation to assist in the administration of the Plan.
4.3 AUTHORITY OF COMMITTEE. Except as provided below, the Committee has
the exclusive power, authority and discretion to:
(a) Designate Participants;
(b) Determine the type or types of Awards to be granted
to each Participant;
(c) Determine the number of Awards to be granted and the
number of shares of Stock to which an Award will relate;
(d) Determine the terms and conditions of any Award granted
under the Plan, including but not limited to, the exercise price, grant
price, or purchase price, any restrictions or limitations on the Award,
any schedule for lapse of forfeiture restrictions or restrictions on
the exercisability of an Award, and accelerations or waivers thereof,
based in each case on such considerations as the Committee in its sole
discretion determines;
(e) Accelerate the vesting or lapse of restrictions of any
outstanding Award, based in each case on such considerations as the
Committee in its sole discretion determines;
(f) Determine whether, to what extent, and under what
circumstances an Award may be settled in, or the exercise price of an
Award may be paid in, cash, Stock, other Awards, or other property, or
an Award may be canceled, forfeited, or surrendered;
(g) Prescribe the form of each Award Agreement, which need not
be identical for each Participant;
(h) Decide all other matters that must be determined in
connection with an Award;
(i) Establish, adopt or revise any rules and regulations
as it may deem necessary or advisable to administer
the Plan;
(j) Make all other decisions and determinations that may be
required under the Plan or as the Committee deems necessary or
advisable to administer the Plan; and
(k) Amend the Plan or any Award Agreement as provided herein.
Not withstanding the above, the Board or the Committee may expressly
delegate to a special committee consisting of one or more directors who are also
officers of the Corporation some or all of the Committee's authority under
subsections (a) through (g) above with respect to those eligible Participants
who, at the time of grant are not, and are not anticipated to be become, either
(i) Covered Employees or (ii) persons subject to the insider trading
restrictions of Section 16 of the 1934 Act.
4.4.DECISIONS BINDING. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.
ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 14.1,
the aggregate number of shares of Stock reserved and available for Awards or
which may be used to provide a basis of measurement for or to determine the
value of an Award (such as with a Stock Appreciation Right or Performance Share
Award) shall be 500,000, of which not more than 10% may be granted as Awards of
Restricted Stock or unrestricted Stock Awards.
5.2 LAPSED AWARDS. To the extent that an Award is canceled, terminates,
expires or lapses for any reason, any shares of Stock subject to the Award will
again be available for the grant of an Award under the Plan and shares subject
to SARs or other Awards settled in cash will be available for the grant of an
Award under the Plan.
5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
5.4 LIMITATION ON AWARDS. Notwithstanding any provision in the Plan to the
contrary (but subject to adjustment as provided in Section 14.1), the maximum
number of shares of Stock with respect to one or more Options and/or SARs that
may be granted during any one calendar year under the Plan to any one
Participant shall be 200,000. The maximum fair market value (measured as of the
date of grant) of any Awards other than Options and SARs that may be received by
any one Participant (less any consideration paid by the Participant for such
Award) during any one calendar year under the Plan shall be $4,000,000.
ARTICLE 6
ELIGIBILITY
6.1 GENERAL. Awards may be granted only to individuals who are employees,
officers, directors or consultants of the Corporation or a Parent or Subsidiary.
ARTICLE 7
STOCK OPTIONS
7.1 GENERAL. The Committee is authorized to grant Options to Participants
on the following terms and conditions:
(a) EXERCISE PRICE. The exercise price per share of Stock
under an Option shall be determined by the Committee, provided that the
exercise price for any Option shall not be less than the Fair Market
Value as of the date of the grant.
(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part. The Committee also shall determine the performance or
other conditions, if any, that must be satisfied before all or part of
an Option may be exercised. The Committee may waive any exercise
provisions at any time in whole or in part based upon factors as the
Committee may determine in its sole discretion so that the Option
becomes exercisable at an earlier date.
(c) PAYMENT. The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, shares of Stock, or other property
(including "cashless exercise" arrangements), and the methods by which
shares of Stock shall be delivered or deemed to be delivered to
Participants; provided, however, that if shares of Stock are used to
pay the exercise price of an Option, such shares must have been held by
the Participant for at least six months.
(d) EVIDENCE OF GRANT. All Options shall be evidenced by a
written Award Agreement between the Corporation and the Participant.
The Award Agreement shall include such provisions, not inconsistent
with the Plan, as may be specified by the Committee.
(e) EXERCISE TERM. In no event may any Option be
exercisable for more than ten years from the date of its grant.
7.2 INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options
granted under the Plan must comply with the following additional rules:
(a) EXERCISE PRICE. The exercise price per share of Stock
shall be set by the Committee, provided that the exercise price for any
Incentive Stock Option shall not be less than the Fair Market Value as
of the date of the grant.
(b) EXERCISE. In no event may any Incentive Stock Option be
exercisable for more than ten years from the date of its grant.
(c) LAPSE OF OPTION. An Incentive Stock Option shall lapse
under the earliest of the following circumstances:
(1) The Incentive Stock Option shall lapse as of the
option expiration date set forth in the Award Agreement.
(2) The Incentive Stock Option shall lapse ten years
after it is granted, unless an earlier time is set in the
Award Agreement.
(3) If the Participant terminates employment for any
reason other than as provided in paragraph (4) or (5) below,
the Incentive Stock Option shall lapse, unless it is
previously exercised, three months after the Participant's
termination of employment; provided, however, that if the
Participant's employment is terminated by the Corporation for
cause (as determined by the Corporation), the Incentive Stock
Option shall (to the extent not previously exercised) lapse
immediately.
(4) If the Participant terminates employment by
reason of his Disability, the Incentive Stock Option shall
lapse, unless it is previously exercised, one year after the
Participant's termination of employment.
(5) If the Participant dies while employed, or during
the three-month period described in paragraph (3) or during
the one-year period described in paragraph (4) and before the
Option otherwise lapses, the Option shall lapse one year after
the Participant's death. Upon the Participant's death, any
exercisable Incentive Stock Options may be exercised by the
Participant's beneficiary, determined in accordance with
Section 13.6.
Unless the exercisability of the Incentive Stock Option is
accelerated as provided in Article 13, if a Participant exercises an
Option after termination of employment, the Option may be exercised
only with respect to the shares that were otherwise vested on the
Participant's termination of employment.
(d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market
Value (determined as of the time an Award is made) of all shares of
Stock with respect to which Incentive Stock Options are first
exercisable by a Participant in any calendar year may not exceed
$100,000.00.
(e) TEN PERCENT OWNERS. No Incentive Stock Option shall be
granted to any individual who, at the date of grant, owns stock
possessing more than ten percent of the total combined voting power of
all classes of stock of the Corporation or any Parent or Subsidiary
unless the exercise price per share of such Option is at least 110% of
the Fair Market Value per share of Stock at the date of grant and the
Option expires no later than five years after the date of grant.
(f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an
Incentive Stock Option may be made pursuant to the Plan after the day
immediately prior to the tenth anniversary of the Effective Date.
(g) RIGHT TO EXERCISE. During a Participant's lifetime, an
Incentive Stock Option may be exercised only by the Participant or, in
the case of the Participant's Disability, by the Participant's guardian
or legal representative.
(h) DIRECTORS. The Committee may not grant an Incentive Stock
Option to a non-employee director. The Committee may grant an Incentive
Stock Option to a director who is also an employee of the Corporation
or Parent or Subsidiary but only in that individual's position as an
employee and not as a director.
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1 GRANT OF SARs. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
(a) RIGHT TO PAYMENT. Upon the exercise of a Stock
Appreciation Right, the Participant to whom it is granted has the right
to receive the excess, if any, of:
(1) The Fair Market Value of one share of Stock on
the date of exercise; over
(2) The grant price of the Stock Appreciation Right as
determined by the Committee, which shall not be less than the
Fair Market Value of one share of Stock on the date of grant in
the case of any SAR related to an Incentive Stock Option.
(b) OTHER TERMS. All awards of Stock Appreciation Rights shall
be evidenced by an Award Agreement. The terms, methods of exercise,
methods of settlement, form of consideration payable in settlement, and
any other terms and conditions of any Stock Appreciation Right shall be
determined by the Committee at the time of the grant of the Award and
shall be reflected in the Award Agreement.
ARTICLE 9
PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE SHARES. The Committee is authorized to grant
Performance Shares to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion to
determine the number of Performance Shares granted to each Participant. All
Awards of Performance Shares shall be evidenced by an Award Agreement.
9.2 RIGHT TO PAYMENT. A grant of Performance Shares gives the Participant
rights, valued as determined by the Committee, and payable to, or exercisable
by, the Participant to whom the Performance Shares are granted, in whole or in
part, as the Committee shall establish at grant or thereafter. The Committee
shall set performance goals and other terms or conditions to payment of the
Performance Shares in its discretion which, depending on the extent to which
they are met, will determine the number and value of Performance Shares that
will be paid to the Participant.
9.3 OTHER TERMS. Performance Shares may be payable in cash, Stock, or other
property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.
ARTICLE 10
RESTRICTED STOCK AWARDS
10.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make Awards
of Restricted Stock to Participants in such amounts and subject to such terms
and conditions as may be selected by the Committee. All Awards of Restricted
Stock shall be evidenced by a Restricted Stock Award Agreement.
10.2 ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, upon the satisfaction of performance
goals or otherwise, as the Committee determines at the time of the grant of the
Award or thereafter.
10.3 FORFEITURE. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment
during the applicable restriction period or upon failure to satisfy a
performance goal during the applicable restriction period, Restricted Stock that
is at that time subject to restrictions shall be forfeited and reacquired by the
Corporation; provided, however, that the Committee may provide in any Award
Agreement that restrictions or forfeiture conditions relating to Restricted
Stock will be waived in whole or in part in the event of terminations resulting
from specified causes, and the Committee may in other cases waive in whole or in
part restrictions or forfeiture conditions relating to Restricted Stock.
10.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock.
ARTICLE 11
DIVIDEND EQUIVALENTS
11.1 GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to Participants subject to such terms and conditions as may
be selected by the Committee. Dividend Equivalents shall entitle the Participant
to receive payments equal to dividends with respect to all or a portion of the
number of shares of Stock subject to an Award, as determined by the Committee.
The Committee may provide that Dividend Equivalents be paid or distributed when
accrued or be deemed to have been reinvested in additional shares of Stock, or
otherwise reinvested.
ARTICLE 12
OTHER STOCK-BASED AWARDS
12.1. GRANT OF OTHER STOCK-BASED AWARDS. The Committee is authorized,
subject to limitations under applicable law, to grant to Participants such other
Awards that are payable in, valued in whole or in part by reference to, or
otherwise based on or related to shares of Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including without limitation shares
of Stock awarded purely as a "bonus" and not subject to any restrictions or
conditions, convertible or exchangeable debt securities, other rights
convertible or exchangeable into shares of Stock, and Awards valued by reference
to book value of shares of Stock or the value of securities of or the
performance of specified Parents or Subsidiaries. The Committee shall determine
the terms and conditions of such Awards.
ARTICLE 13
PROVISIONS APPLICABLE TO AWARDS
13.1 STAND-ALONE, TANDEM, AND SUBSTITUTE AWARDS. Awards granted under the
Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for, any other Award granted
under the Plan. If an Award is granted in substitution for another Award, the
Committee may require the surrender of such other Award in consideration of the
grant of the new Award. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other Awards.
13.2 EXCHANGE PROVISIONS. The Committee may at any time offer to exchange
or buy out any previously granted Award for a payment in cash, Stock, or another
Award (subject to Section 14.1 and Section 15.2), based on the terms and
conditions the Committee determines and communicates to the Participant at the
time the offer is made, and after taking into account the tax, securities and
accounting effects of such an exchange.
13.3 TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant
(or, if Section 7.2(e) applies, five years from the date of its grant).
13.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any
applicable law or Award Agreement, payments or transfers to be made by the
Corporation or a Parent or Subsidiary on the grant or exercise of an Award may
be made in such form as the Committee determines at or after the time of grant,
including without limitation, cash, Stock, other Awards, or other property, or
any combination, and may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case determined in accordance with
rules adopted by, and at the discretion of, the Committee.
13.5 LIMITS ON TRANSFER. No right or interest of a Participant in any
unexercised or restricted Award may be pledged, encumbered, or hypothecated to
or in favor of any party other than the Corporation or a Parent or Subsidiary,
or shall be subject to any lien, obligation, or liability of such Participant to
any other party other than the Corporation or a Parent or Subsidiary. No
unexercised or restricted Award shall be assignable or transferable by a
Participant other than by will or the laws of descent and distribution or,
except in the case of an Incentive Stock Option, pursuant to a domestic
relations order that would satisfy Section 414(p)(1)(A) of the Code if such
Section applied to an Award under the Plan; provided, however, that the
Committee may (but need not) permit other transfers where the Committee
concludes that such transferability (i) does not result in accelerated taxation,
(ii) does not cause any Option intended to be an incentive stock option to fail
to be described in Code Section 422(b), and (iii) is otherwise appropriate and
desirable, taking into account any factors deemed relevant, including without
limitation, state or federal tax or securities laws applicable to transferable
Awards.
13.6 BENEFICIARIES. Notwithstanding Section 13.5, a Participant may, in the
manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If no beneficiary has been designated or survives the
Participant, payment shall be made to the Participant's estate. Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.
13.7 STOCK CERTIFICATES. All Stock certificates delivered under the Plan
are subject to any stop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with federal or state securities laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on which the Stock is listed, quoted, or traded. The
Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock.
13.8 ACCELERATION UPON DEATH OR DISABILITY. Notwithstanding any other
provision in the Plan or any Participant's Award Agreement to the contrary, upon
the Participant's death or Disability during his employment or service as a
director or consultant, all outstanding Options, Stock Appreciation Rights, and
other Awards in the nature of rights that may be exercised shall become fully
exercisable and all restrictions on outstanding Awards shall lapse. Any Option
or Stock Appreciation Rights Awards shall thereafter continue or lapse in
accordance with the other provisions of the Plan and the Award Agreement. To the
extent that this provision causes Incentive Stock Options to exceed the dollar
limitation set forth in Section 7.2(d), the excess Options shall be deemed to be
Non-Qualified Stock Options.
13.9 ACCELERATION UPON A CHANGE IN CONTROL. Except as otherwise
provided in the Award Agreement, upon the occurrence of a Change in Control, all
outstanding Options, Stock Appreciation Rights, and other Awards in the nature
of rights that may be exercised shall become fully exercisable and all
restrictions on outstanding Awards shall lapse; provided, however that such
acceleration will not occur if, in the opinion of the Corporation's accountants,
such acceleration would preclude the use of "pooling of interest" accounting
treatment for a Change in Control transaction that (a) would otherwise qualify
for such accounting treatment, and (b) is contingent upon qualifying for such
accounting treatment. To the extent that this provision causes Incentive Stock
Options to exceed the dollar limitation set forth in Section 7.2(d), the excess
Options shall be deemed to be Non-Qualified Stock Options.
13.10 ACCELERATION UPON CERTAIN EVENTS NOT CONSTITUTING A CHANGE IN
CONTROL. In the event of the occurrence of any circumstance, transaction or
event not constituting a Change in Control (as defined in Section 3.1) but which
the Board of Directors deems to be, or to be reasonably likely to lead to, an
effective change in control of the Corporation of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of the 1934
Act, the Committee may in its sole discretion declare all outstanding Options,
Stock Appreciation Rights, and other Awards in the nature of rights that may be
exercised to be fully exercisable, and/or all restrictions on all outstanding
Awards to have lapsed, in each case, as of such date as the Committee may, in
its sole discretion, declare, which may be on or before the consummation of such
transaction or event. To the extent that this provision causes Incentive Stock
Options to exceed the dollar limitation set forth in Section 7.2(d), the excess
Options shall be deemed to be Non-Qualified Stock Options.
13.11 ACCELERATION FOR ANY OTHER REASON. Regardless of whether an event
has occurred as described in Section 13.9 or 13.10 above, the Committee may in
its sole discretion at any time determine that all or a portion of a
Participant's Options, Stock Appreciation Rights, and other Awards in the nature
of rights that may be exercised shall become fully or partially exercisable,
and/or that all or a part of the restrictions on all or a portion of the
outstanding Awards shall lapse, in each case, as of such date as the Committee
may, in its sole discretion, declare. The Committee may discriminate among
Participants and among Awards granted to a Participant in exercising its
discretion pursuant to this Section 13.11.
13.12 EFFECT OF ACCELERATION. If an Award is accelerated under Section 13.9
or 13.10, the Committee may, in its sole discretion, provide (i) that the Award
will expire after a designated period of time after such acceleration to the
extent not then exercised, (ii) that the Award will be settled in cash rather
than Stock, (iii) that the Award will be assumed by another party to the
transaction giving rise to the acceleration or otherwise be equitably converted
in connection with such transaction, or (iv) any combination of the foregoing.
The Committee's determination need not be uniform and may be different for
different Participants whether or not such Participants are similarly situated.
13.13 PERFORMANCE GOALS. The Committee may determine that any Award
granted pursuant to this Plan to a Participant (including, but not limited to,
Participants who are Covered Employees) shall be determined solely on the basis
of (a) the achievement by the Corporation or a Parent or Subsidiary of a
specified target return, or target growth in return, on equity or assets, (b)
the Corporation's stock price, (c) the Corporation's total shareholder return
(stock price appreciation plus reinvested dividends) relative to a defined
comparison group or target over a specific performance period, (d) the
achievement by a business unit of the Corporation, Parent or Subsidiary of a
specified target, or target growth in, revenue, profit contribution, net income,
EBIT, EBITDA, or earnings per share, or (e) any combination of the goals set
forth in (a) through (d) above. If an Award is made on such basis, the Committee
shall establish goals prior to the beginning of the period for which such
performance goal relates (or such later date as may be permitted under Code
Section 162(m) or the regulations thereunder), and the Committee has the right
for any reason to reduce (but not increase) the Award, notwithstanding the
achievement of a specified goal. Any payment of an Award granted with
performance goals shall be conditioned on the written certification of the
Committee in each case that the performance goals and any other material
conditions were satisfied.
13.14 TERMINATION OF EMPLOYMENT. Whether military, government or other
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A termination of
employment shall not occur (i) in a circumstance in which a Participant
transfers from the Corporation to one of its Parents or Subsidiaries, transfers
from a Parent or Subsidiary to the Corporation, or transfers from one Parent or
Subsidiary to another Parent or Subsidiary, or (ii) in the discretion of the
Committee as specified at or prior to such occurrence, in the case of a spin-off
of the Participant's employer from the Corporation or any Parent or Subsidiary.
To the extent that this provision causes Incentive Stock Options to extend
beyond three months from the date a Participant is deemed to be an employee of
the Corporation, a Parent or Subsidiary for purposes of Section 424(f) of the
Code, the Options held by such Participant shall be deemed to be Non-Qualified
Stock Options.
13.15 LOAN PROVISIONS. With the consent of the Committee, the Corporation
may make, guarantee or arrange for a loan or loans to a Participant with respect
to the exercise of any Option granted under this Plan and/or with respect to the
payment of the purchase price, if any, of any Award granted hereunder and/or
with respect to the payment by the Participant of any or all federal and/or
state income taxes due on account of the granting or exercise of any Award
hereunder. The Committee shall have full authority to decide whether to make a
loan or loans hereunder and to determine the amount, terms and provisions of any
such loan or loans, including the interest rate to be charged in respect of any
such loan or loans, whether the loan or loans are to be made with or without
recourse against the borrower, the terms on which the loan is to be repaid and
the conditions, if any, under which the loan or loans may be forgiven.
ARTICLE 14
CHANGES IN CAPITAL STRUCTURE
14.1 GENERAL. In the event of a corporate transaction involving the
Corporation (including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
authorization limits under Section 5.1 and 5.4 shall be adjusted
proportionately, and the Committee may adjust Awards to preserve the benefits or
potential benefits of the Awards. Action by the Committee may include: (i)
adjustment of the number and kind of shares which may be delivered under the
Plan; (ii) adjustment of the number and kind of shares subject to outstanding
Awards; (iii) adjustment of the exercise price of outstanding Awards; and (iv)
any other adjustments that the Committee determines to be equitable. Without
limiting the foregoing, in the event a stock dividend or stock split is declared
upon the Stock, the authorization limits under Section 5.1 and 5.4 shall be
increased proportionately, and the shares of Stock then subject to each Award
shall be increased proportionately without any change in the aggregate purchase
price therefor.
ARTICLE 15
AMENDMENT, MODIFICATION AND TERMINATION
15.1 AMENDMENT, MODIFICATION AND TERMINATION. The Board or the Committee
may, at any time and from time to time, amend, modify or terminate the Plan
without shareholder approval; provided, however, that the Board or Committee may
condition any amendment or modification on the approval of shareholders of the
Corporation if such approval is necessary or deemed advisable with respect to
tax, securities or other applicable laws, policies or regulations.
15.2 AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Award without approval
of the Participant; provided, however, that, subject to the terms of the
applicable Award Agreement, such amendment, modification or termination shall
not, without the Participant's consent, reduce or diminish the value of such
Award determined as if the Award had been exercised, vested, cashed in or
otherwise settled on the date of such amendment or termination, and provided
further that the original term of any Option may not be extended and, except as
otherwise provided in the anti-dilution provision of the Plan, the exercise
price of any Option may not be reduced. No termination, amendment, or
modification of the Plan shall adversely affect any Award previously granted
under the Plan, without the written consent of the Participant.
ARTICLE 16
GENERAL PROVISIONS
16.1 NO RIGHTS TO AWARDS. No Participant or any eligible Participant shall
have any claim to be granted any Award under the Plan, and neither the
Corporation nor the Committee is obligated to treat Participants or eligible
Participants uniformly.
16.2 NO STOCKHOLDER RIGHTS. No Award gives the Participant any of the
rights of a shareholder of the Corporation unless and until shares of Stock are
in fact issued to such person in connection with such Award.
16.3 WITHHOLDING. The Corporation or any Parent or Subsidiary shall have
the authority and the right to deduct or withhold, or require a Participant to
remit to the Corporation, an amount sufficient to satisfy federal, state, and
local taxes (including the Participant's FICA obligation) required by law to be
withheld with respect to any taxable event arising as a result of the Plan. With
respect to withholding required upon any taxable event under the Plan, the
Committee may, at the time the Award is granted or thereafter, require or permit
that any such withholding requirement be satisfied, in whole or in part, by
withholding from the Award shares of Stock having a Fair Market Value on the
date of withholding equal to the minimum amount (and not any greater amount)
required to be withheld for tax purposes, all in accordance with such procedures
as the Committee establishes.
16.4 NO RIGHT TO CONTINUED SERVICE. Nothing in the Plan or any Award
Agreement shall interfere with or limit in any way the right of the Corporation
or any Parent or Subsidiary to terminate any Participant's employment or status
as an officer, director, or consultant at any time, nor confer upon any
Participant any right to continue as an employee, officer, director, or
consultant of the Corporation or any Parent or Subsidiary.
l6.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an "unfunded"
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan or
any Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Corporation or any Parent or Subsidiary.
16.6 INDEMNIFICATION. To the extent allowable under applicable law, each
member of the Committee shall be indemnified and held harmless by the
Corporation from any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by such member in connection with or resulting from any
claim, action, suit, or proceeding to which such member may be a party or in
which he may be involved by reason of any action or failure to act under the
Plan and against and from any and all amounts paid by such member in
satisfaction of judgment in such action, suit, or proceeding against him
provided he gives the Corporation an opportunity, at its own expense, to handle
and defend the same before he undertakes to handle and defend it on his own
behalf. The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the
Corporation's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Corporation may have to indemnify them or hold
them harmless.
16.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the
Corporation or any Parent or Subsidiary unless provided otherwise in such other
plan.
16.8 EXPENSES. The expenses of administering the Plan shall be borne
by the Corporation and its Parents or Subsidiaries.
16.9 TITLES AND HEADINGS. The titles and headings of the Sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
16.10 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
16.11 FRACTIONAL SHARES. No fractional shares of Stock shall be issued and
the Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up.
16.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Corporation
to make payment of awards in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Corporation shall be under no obligation to
register under the 1933 Act, or any state securities act, any of the shares of
Stock issued in connection with the Plan. The shares issued in connection with
the Plan may in certain circumstances be exempt from registration under the 1933
Act, and the Corporation may restrict the transfer of such shares in such manner
as it deems advisable to ensure the availability of any such exemption.
16.13 GOVERNING LAW. To the extent not governed by federal law, the Plan
and all Award Agreements shall be construed in accordance with and governed by
the laws of the State of Florida.
16.14 ADDITIONAL PROVISIONS. Each Award Agreement may contain such other
terms and conditions as the Committee may determine; provided that such other
terms and conditions are not inconsistent with the provisions of this Plan.
16.15 Code Section 162(m). The deduction limits of Code Section 162(m) and
the regulation thereunder do not apply to the Corporation until such time, if
any, as any class of the Corporation's common equity securities is registered
under Section 12 of the 1934 Act or the Corporation otherwise meets the
definition of a "publicly held corporation" under Treasury Regulation
1.162-27(c) or any successor provision. Upon becoming a publicly held
corporation, the deduction limits of Code Section 162(m) and the regulations
thereunder shall not apply to compensation payable under this Plan until the
expiration of the reliance period described in Treasury Regulation 1.162-27(f)
or any successor regulation.
The foregoing is hereby acknowledged as being the Tropical Sportswear
Int'l, Inc. 2000 Long-Term Incentive Plan as adopted by the Board of Directors
of the Corporation on January 5, 2000.
TROPICAL SPORTSWEAR INT'L CORPORATION
By: /s/ Michael Kagan
Michael Kagan
Its: Executive Vice President
Chief Financial Officer and
Corporate Secretary
<PAGE>
PROXY
TROPICAL SPORTSWEAR INT'L CORPORATION
Tampa, Florida
2000 Annual Meeting of Shareholders
The undersigned shareholder of Tropical Sportswear Int'l Corporation
(the "Company"), Tampa, Florida, hereby constitutes and appoints William W.
Compton and Michael Kagan, or either one of them, each with full power of
substitution, to vote the number of shares of Common Stock which the undersigned
would be entitled to vote if personally present at the 2000 Annual Meeting of
Shareholders to be held at the offices of the Company at 4902 West Waters
Avenue, Tampa, Florida 33634-1302 on Wednesday, February 2, 2000, at 10:00 A.M.,
local time, or at any adjournments thereof (the "Annual Meeting"), upon the
proposals described in the Notice to the Holders of Common Stock of the Annual
Meeting of Shareholders and Proxy Statement, both dated January 7, 2000, the
receipt of which is acknowledged, in the manner specified below. The proxies, in
their discretion, are further authorized to vote on any shareholder proposals
submitted to the Company for a vote of the shareholders at the Annual Meeting
after November 20, 1999, as well as on the election of any person as a director
if a director nominee named in Proposal I is unable to serve or for good cause
will not serve, and on matters incident to the conduct of the Annual Meeting. At
the present time, the Board of Directors knows of no other business to be
presented to a vote of the shareholders at the Annual Meeting. The Board of
Directors recommends a vote FOR the proposals.
Proposal I: Election of Directors. On the proposal to elect the
following directors to serve until the indicated Annual Meeting of Shareholders
of the Company and until their successors are elected and qualified:
Terms to Expire in 2003
William W. Compton
Jesus Alvarez-Morodo
For |_| Withhold Authority |_|
To withhold authority for any individual nominee(s), write the name of the
nominee(s) in the space provided:
Proposal II: Approval of the Company's Proposed 2000 Long Term Incentive Plan:
For |_| Against |_| Abstain |_|
Proposal III: Ratification of the Company's Independent Auditors. On
the Proposal to ratify the selection of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending September 30, 2000:
For |_| Against |_| Abstain |_|
This Proxy, when properly executed, will be voted in the manner directed
by the undersigned shareholder. If no direction is made, this Proxy will be
voted FOR the proposals.
Please sign exactly as your name appears on your stock certificate and
date. Where shares are held jointly, each shareholder should sign. When signing
as executor, administrator, trustee, or guardian, please give full title as
such. If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in full partnership name by
authorized person.
Shares Held: ____________________
Signature of Shareholder
Signature of Shareholder (If held Jointly)
Dated: _________________________, _____
Month Day
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TROPCICAL
SPORTSWEAR INT'L CORPORATION AND MAY BE REVOKED BY THE SHAREHOLDER PRIOR TO ITS
EXERCISE.
