<PAGE> 1
As filed with the Securities and Exchange Commission on March 8, 1999
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FRUIT OF THE LOOM, LTD.
(Exact Name of Registrant as specified in its Charter)
CAYMAN ISLANDS NONE
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O Box 31311 SMB
Safehaven Corporate Center
Grand Cayman, Cayman Islands, BWI
(345) 949-6690
(Address of principal executive offices including zip code)
FRUIT OF THE LOOM, INC. 1996 INCENTIVE COMPENSATION PLAN
AS AMENDED AND RESTATED
(Full title of the plan)
G. William Newton
Senior Vice President Finance and
Acting Chief Financial Officer
Fruit of the Loom, Ltd.
5000 SEARS TOWER
233 South Wacker Drive
Chicago, Illinois 60606
(312) 876-1724
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a Copy to:
John J. Ray III
Vice President and Secretary
Fruit of the Loom, Ltd.,
5000 SEARS TOWER
Chicago, Illinois 60606
(312) 876-1724
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED (1) PER SHARE OFFERING PRICE FEE
- --------------------- ------------------ ---------------- -------------- ------------
<S> <C> <C> <C> <C>
Class A Common Stock 1,000,000 shares 12.157 12,157,000 $3,586
($.01 par value)
</TABLE>
(1) Includes an indeterminate number of shares of Common Stock that may be
issuable by reason of stock splits, stock dividends or similar
transactions in accordance with Rule 416 under the Securities Act of
1933.
(2) The amounts are based upon the high and low sales prices of Fruit of
the Loom, Inc. as reported on the New York Stock Exchange on March 4,
1999 and are used solely for the purpose of calculating the
registration fee pursuant to Rule 457(c) under the Securities Act of
1933.
This Registration Statement on Form S-8 registers additional securities of
the same class as other securities for which a registration statement filed on
Form S-8 relating to the Fruit of the Loom, Inc. 1996 Incentive Compensation
Plan As Amended and Restated is effective. Accordingly, pursuant to General
Instruction E of Form S-8, the Registration Statement on Form S-8 (File No.
333-09203) filed with the Securities and Exchange Commission on July 30, 1996 is
hereby incorporated by reference.
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PART I
INFORMATION REQUIRED IN PROSPECTUS
The documents containing the information specified in Part I of this
Registration Statement on Form S-8 will be sent or given to employees as
specified by Rule 428(b)(1). Such documents are not required to be and are not
filed with the Securities and Exchange Commission (the "Commission") either as
part of this Registration Statement or as prospectuses or prospectus supplements
pursuant to Rule 424. These documents and the documents incorporated by
reference in this Registration Statement pursuant to Item 3 of Part II of this
Form S-8, taken together, constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, which have been filed with the Commission, are
incorporated herein by reference and made a part hereof:
(i) The Annual Report on Form 10-K for the year ended December 31, 1997
of FTL-Delaware Delaware as amended on Form 10K/A dated August 10, 1998.
(ii) The Quarterly Report on Form 10-Q for the quarter ended September
26, 1998 of FTL-Delaware; and
(iii) The Quarterly Report on Form 10-Q for the quarter ended June 27,
1998 of FTL-Delaware; and
(iv) The Quarterly Report on Form 10-Q for the quarter ended March 28,
1998 of FTL-Delaware; and
(v) The Current Reports on Form 8-K dated February 11, 1998, February
12, 1998, July 24, 1998, February 17, 1999 and March 4, 1999 and on Form 8-K/A
dated February 23, 1998 of FTL-Delaware; and
(vi) The description of the Company's Class A Ordinary Shares, par
value $.01 per share ("Class A Shares") contained in the Company's Registration
Statement on Form S-4 (Registration No. 333-46007) filed on February 10, 1998
and all amendments thereto the "S-4 Registration Statement"); and
(vii) The S-4 Registration Statement.
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated in this Registration Statement by reference and to be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained therein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
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The Company hereby undertakes to provide without charge to each person
who has received a copy of the prospectus to which this Registration Statement
relates, upon the written or oral request of any such person, a copy of any or
all the documents that have been or may be incorporated by reference into this
Registration Statement, other than exhibits to such documents (unless such
exhibits are incorporated therein by reference).
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Cayman Islands company. Article 119 of the Company's
Amended and Restated Articles of Association, filed as Exhibit 3.3 to the S-4
Registration Statement, contains provisions with respect to indemnification of
the Company's officers and directors. Such provisions provide that the Company
shall indemnify, in accordance with and to the full extent now or hereafter
permitted by law, any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (including, without
limitation, an action by or in the right of the Company), by reason of his
acting as a director, officer, employee or agent of, or his acting in any other
capacity for or on behalf of, the Company, against any liability or expense
actually and reasonably incurred by such person in respect thereof. The Company
shall also advance the expenses of defending any such act, suit or proceeding in
accordance with and to the full extent now or hereafter permitted by law. Such
indemnification and advancement of expenses are not exclusive of any other right
to indemnification or advancement of expenses provided by law or otherwise. The
Articles of Association also provide that except under certain circumstances,
directors of the Company shall not be personally liable to the Company or its
shareholders for monetary damages for breach of fiduciary duties as a director.
The Companies Law (1995 Revision) of the Cayman Islands does not set
out any specific restrictions on the ability of a company to indemnify officers
or directors. However, the application of basic principles and certain
Commonwealth case law which is likely to be persuasive in the Cayman Islands
would indicate that indemnification is generally permissible except in the event
that there had been fraud or wilful default on the part of the officer or
director or reckless disregard of his duties and obligations to the Company.
The Company has purchased directors' and officers' liability insurance
covering certain liabilities incurred by its officers and directors and those of
its subsidiaries and affiliates in connection with the performance of their
duties.
5
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ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The following is a list of all exhibits filed as part of this Registration
Statement on Form S- 8, including those incorporated by reference.
EXHIBIT
NUMBER DESCRIPTION
4.1 Amended and Restated Articles of Association of FTL-Cayman.(1)
4.2 Amended and Restated Memorandum of Association of FTL-Cayman.(1)
4.3 Form of Certificate for the Class A Shares.(1)
4.4 Fruit of the Loom, Inc. 1996 Incentive Compensation Plan as
Amended and Restated through May 19, 1998.(3)
5 Opinion of Truman Bodden & Company.(3)
23.1 Consent of Independent Auditors, Ernst & Young LLP.(3)
23.2 Consent of Counsel (included in the Opinion of Truman Bodden &
Company in Exhibit 5 hereto).
24 Power of Attorney
- --------------------
(1) Previously filed as an exhibit to the S-4 Registration Statement and
incorporated herein by reference.
(2) Filed as Exhibit 4 to FTL-Delaware's Registration Statement on Form S-8
filed on July 30, 1996.
(3) Filed herewith.
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ITEM 9. UNDERTAKINGS.
1. The Company hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually,
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in a periodic report filed by the Company pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. The Company hereby undertakes that, for the purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company and subsidiary companies pursuant to the foregoing provisions, or
otherwise, the Company has been informed that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable. In the event that a claim for
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indemnification against such liabilities (other than the payment of by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by the Company is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, and State of Illinois on this 2nd day of
March, 1999.
FRUIT OF THE LOOM, LTD.
By: /s/ G. Wiliam Newton
----------------------------------
G. William Newton, Senior Vice
President Finance and Acting Chief
Financial Officer
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Chairman of the Board and Chief Executive Officer
* (Principal Executive Officer) and Director
- -------------------------------------------------------
William Farley
Senior Vice President Finance and Acting Chief
Financial Officer (Principal Financial and Accounting
/s/ G. William Newton Officer)
- -------------------------------------------------------
G. William Newton
* Director
- -------------------------------------------------------
Omar Z. Al Askari
* Director
- -------------------------------------------------------
Dennis S. Bookshester
* Director
- -------------------------------------------------------
Henry A. Johnson
* Director
- -------------------------------------------------------
A. Lorne Weil
* Director
- -------------------------------------------------------
Sir Brian G. Wolfson
Director
- -------------------------------------------------------
Mark A. McCormack
By: /s/ Howard S. Lanznar
----------------------------------------------------
Howard S. Lanznar
Attorney-in-fact
</TABLE>
9
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EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Amended and Restated Articles of Association of FTL-Cayman.(1)
4.2 Amended and Restated Memorandum of Association of FTL-Cayman.(1)
4.3 Form of Certificate for the Class A Shares.(1)
4.4 Fruit of the Loom, Inc. 1996 Incentive Compensation Plan as
Amended and Restated through May 19, 1998.(3)
5 Opinion of Truman Bodden & Company.(3)
23.1 Consent of Independent Auditors, Ernst & Young LLP.(3)
23.2 Consent of Counsel (included in the Opinion of Truman Bodden &
Company in Exhibit 5 hereto).
24 Power of Attorney
- --------------------
(1) Previously filed as an exhibit to the S-4 Registration Statement and
incorporated herein by reference.
(2) Filed as Exhibit 4 to FTL-Delaware's Registration Statement on Form S-8
filed on July 30, 1996.
(3) Filed herewith.
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EXHIBIT 4.5
FRUIT OF THE LOOM, INC.
1996 INCENTIVE COMPENSATION PLAN
As Amended and Restated Through May 19, 1998
<PAGE> 2
FRUIT OF THE LOOM, INC.
1996 INCENTIVE COMPENSATION PLAN
As Amended and Restated Through May 19, 1998
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
1. Purpose.........................................................................................1
2. Definitions.....................................................................................1
3. Administration..................................................................................3
(a) Authority of the Committee.............................................................3
(b) Manner of Exercise of Committee Authority..............................................3
(c) Limitation of Liability................................................................4
4. Stock Subject to Plan...........................................................................4
(a) Overall Number of Shares Available for Delivery........................................4
(b) Application of Limitation to Grants of Awards..........................................4
(c) Source of Shares Delivered Under the Plan..............................................4
5. Eligibility.....................................................................................5
6. Specific Terms of Awards........................................................................5
(a) General................................................................................5
(b) Options................................................................................5
(c) Stock Appreciation Rights..............................................................6
(d) Restricted Stock.......................................................................6
(e) Deferred Stock.........................................................................7
(f) Bonus Stock and Awards in Lieu of Obligations..........................................8
(g) Dividend Equivalents...................................................................8
(h) Other Stock-Based Awards...............................................................8
7. Certain Provisions Applicable to Awards.........................................................8
(a) Stand-Alone, Additional, Tandem, and Substitute Awards.................................8
(b) Term of Awards.........................................................................9
(c) Form and Timing of Payment Under Awards; Deferrals.....................................9
8. Performance Awards..............................................................................9
(a) Performance Conditions.................................................................9
(b) Annual Incentive Awards................................................................9
</TABLE>
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<TABLE>
<S> <C> <C>
9. Change in Control..............................................................................10
(a) Effect of "Change in Control."........................................................10
(b) Definition of "Change in Control......................................................11
(c) Definition of "Change in Control Price."..............................................12
10. General Provisions.............................................................................12
(a) Compliance With Legal and Other Requirements..........................................12
(b) Limits on Transferability; Beneficiaries..............................................12
(c) Adjustments...........................................................................13
(d) Taxes.................................................................................13
(e) Changes to the Plan and Awards........................................................14
(f) Limitation on Rights Conferred Under Plan.............................................14
(g) Unfunded Status of Awards; Creation of Trusts.........................................14
(h) Nonexclusivity of the Plan............................................................14
(i) Payments in the Event of Forfeitures; Fractional Shares...............................15
(j) Governing Law.........................................................................15
(k) Plan Effective Date and Termination...................................................15
</TABLE>
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FRUIT OF THE LOOM, INC.
1996 INCENTIVE COMPENSATION PLAN
AS AMENDED AND RESTATED MAY 19, 1998
1. PURPOSE. The purpose of this 1996 Incentive Compensation Plan (the
"Plan") is to assist Fruit of the Loom, Inc., a Delaware corporation (the
"Company"), and its subsidiaries in attracting, retaining, and rewarding high
quality employees, other than executive officers, and certain other persons who
provide services to the Company, enabling such persons to acquire or increase a
proprietary interest in the Company in order to strengthen the mutuality of
interests between such persons and the Company's stockholders, and providing
such persons with performance incentives to expend their maximum efforts in the
creation of long-term stockholder value.
2. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below, in addition to such terms defined in Section 1
hereof:
(a) "Annual Incentive Award" means a conditional right granted to a
Participant under Section 8(b) hereof to receive a cash payment, unless
otherwise determined by the Committee, after the end of a specified fiscal year.
(b) "Award" means any Option, SAR (including Limited SAR), Restricted
Stock, Deferred Stock, Stock granted as a bonus or in lieu of another award,
Dividend Equivalent, Other Stock-Based Award, Performance Award or Annual
Incentive Award, together with any other right or interest granted to a
Participant under the Plan.
(c) "Beneficiary" means the person, persons, trust or trusts which have
been designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under the
Plan upon such Participant's death or to which Awards or other rights are
transferred if and to the extent permitted under Section 10(b) hereof If, upon a
Participant's death, there is no designated Beneficiary or surviving designated
Beneficiary, then the term Beneficiary means the person, persons, trust or trust
entitled by will or the laws of descent and distribution to receive such
benefits.
(d) "Beneficial Owner", "Beneficially Owning" and "Beneficial
Ownership" shall have the meanings ascribed to such terms in Rule 13d-3 under
the Exchange Act and any successor to such Rule.
(e) "Board" means the Company's Board of Directors.
(f) "Change in Control" means a Change in Control as defined with
related terms in Section 9 of the Plan.
(g) "Change in Control Price" means the amount calculated in accordance
with Section 9(c) of the Plan.
<PAGE> 5
(h) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, including regulations thereunder and successor provisions and
regulations thereto.
(i) "Committee" means the Compensation Committee of the Board, or such
other Board committee as may be designated by the Board to administer the Plan.
(j) "Corporate Transaction" means a transaction as defined in Section
9(b) of the Plan.
(k) "Deferred Stock" means a right, granted to a Participant under
Section 6(e) hereof, to receive Stock, cash or a combination thereof at the end
of a specified deferral period.
(1) "Dividend Equivalent" means a right, granted to a Participant under
Section 6(g), to receive cash, Stock, other Awards or other property equal in
value to dividends paid with respect to a specified number of shares of Stock,
or other periodic payments.
(m) "Effective Date" means February 21, 1996, the effective date of the
Plan. This Plan has been amended and restated as of May 19, 1998.
(n) "Eligible Person" means any employee of the Company or any
subsidiary or consultant or other person who provides substantial services to
the Company or any subsidiary, provided that no person who is an Executive
Officer of the Company or a member of the Compensation Committee or other
committee that administers the 1995 Plan or any successor plan shall be shall be
an Eligible Person.
(o) "Executive Officer" means an executive officer of the Company as
defined under the Exchange Act.
(p) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor provisions
and rules thereto.
(q) "Fair Market Value" means the fair market value of Stock Awards, or
other property as determined by the Committee or under procedures established by
the Committee. Unless otherwise determined by the Committee, the Fair Market
Value of Stock as of any given date shall be the closing sale price per share
reported on a consolidated basis for stock listed on the principal stock
exchange or market on which Stock is traded on the date as of which such value
is being determined or, if there is no sale on that date, then on the last
previous day on which a sale was reported.
(r) "Incumbent Board" means the Board as defined in Section 9(b) of the
Plan.
(s) "Limited SAR" means a right granted to a Participant under Section
6(c) thereof.
(t) "1995 Plan" means the Company's 1995 Executive Incentive
Compensation Plan.
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(u) "Option" means a right, granted to a Participant under Section 6(b)
hereof, to purchase Stock or other Awards at a specified price during specified
time periods.
(v) "Other Stock Based Awards" means Awards granted to a Participant
under Section 6(h) hereof.
(w) "Participant" means a person who has been granted an Award under
the Plan, including a person who is no longer an Eligible Person.
(x) "Performance Award" means a right, granted to a Participant under
Section 8 hereof, to receive Awards based upon performance criteria specified by
the Committee.
(y) "Person" will have the meaning assigned in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, and includes a
"group" as defined in Section 13(d) thereof.
(z) "Restricted Stock" means Stock granted to a Participant under
Section 6(d) hereof, that is subject to certain restrictions and to a risk of
forfeiture.
(aa) "Stock" means the Company's Class A Common Stock and such other
securities as may be substituted (or resubstituted) for Stock pursuant to
Section 10(c) hereof.
(bb) "Stock Appreciation Rights" or "SAR" means a right granted to a
Participant under Section 6(c) hereof.
3. ADMINISTRATION.
(a) Authority of the Committee. The Plan shall be administered by the
Committee. The Committee shall have full and final authority, in each case
subject to and consistent with the provisions of the Plan, to select Eligible
Persons to become Participants, grant Awards, determine the type, number, and
other terms and conditions of, and all other matters relating to, Awards,
prescribe Award agreements (which need not be identical for each Participant)
and rules and regulations for the administration of the Plan, construe and
interpret the Plan and Award agreements and correct defects, supply omissions,
or reconcile inconsistencies therein, and to make all other decisions and
determinations as the Committee may deem necessary or advisable for the
administration of the Plan.
(b) Manner of Exercise of Committee Authority. The Committee may
delegate to officers or managers of the Company or any subsidiary, or committees
thereof, the authority, subject to such terms as the Committee shall determine,
to perform such functions as the Committee may determine, to the extent
permitted under applicable law. The Committee also may appoint agents to assist
it in administering the Plan. Any action of the Committee or its delegate shall
be final, conclusive and binding on all persons, including the Company, its
subsidiaries, Participants, Beneficiaries, transferees under Section 10(b)
hereof or other persons claiming rights from or through a Participant, and
stockholders, except that action by any delegate shall be subject
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to oversight by the Committee. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee.
(c) Limitation of Liability. The Committee, each member thereof, and
each delegate or member of a committee which acts as a delegate shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any executive officer, other officer or employee of
the Company or a subsidiary, the Company's independent auditors, consultants or
any other agents assisting in the administration of the Plan, and the Committee,
each member thereof, each delegate or member of a committee which acts as a
delegate, and any officer or employee of the Company or a subsidiary acting at
the direction or on behalf of the Committee or delegate shall not be personally
liable for any action or determination taken or made in good faith with respect
to the Plan, and shall, to the extent permitted by law, be fully indemnified and
protected by the Company with respect to any such action or determination.
4. STOCK SUBJECT TO PLAN.
(a) Overall Number of Shares Available for Delivery. Subject to
adjustment as provided in Section 10(c) hereof, the total number of shares of
Stock reserved and available for delivery in connection with Awards under the
Plan shall be 3,000,000.
(b) Application of Limitation to Grants of Awards. For purposes of the
Plan, the counting of shares of Stock delivered shall be consistent with the
manner in which shares are so counted under the 1995 Plan. No Award may be
granted if the number of shares of Stock to be delivered in connection with such
Award or, in the case of an Award relating to shares of Stock but settleable
only in cash (such as cash-only SARs), the number of shares to which such Award
relates, exceeds the number of shares of Stock remaining available under the
Plan minus the number of shares of Stock relating to then-outstanding cash-only
Awards. The Committee may adopt reasonable counting procedures to ensure
appropriate counting, avoid double counting (as, for example, in the case of
tandem or substitute awards) and make adjustments if the number of shares of
Stock actually delivered differs from the number of shares previously counted in
connection with an Award.
(c) Source of Shares Delivered Under the Plan. Any shares of Stock
delivered under the Plan may consist, in whole or in part, of authorized and
unissued shares or treasury shares, except as otherwise provided in this Section
4(c). If, at the time shares of Stock are to be delivered under the Plan to a
Participant (including upon exercise of an Option), the shares are listed on the
New York Stock Exchange and such Participant is a "director" or "officer" of the
Company within the meaning of Sections 312.03 and 703.09 of the Listed Company
Manual of the New York Stock Exchange, such that the Participant's acquisition
of shares originally issued by the Company would be subject to the requirement
of stockholder approval under then-applicable Exchange rules, the shares to be
distributed to such Participant shall consist only of either shares issued under
the 1995 Plan, if so specified by the committee then administering the 1995
Plan, or treasury shares then held by the Company. The Company shall use its
best efforts to obtain and have available, at any time that such treasury shares
are required to be distributed in connection with an Award, a sufficient number
of treasury shares, not reserved for other uses, to be able to make prompt
delivery in connection with any such Award.
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5. ELIGIBILITY. Awards may be granted under the Plan only to
Eligible Persons.
6. SPECIFIC TERMS OF AWARDS.
(a) General. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to Section
10(e)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment by the
Participant and terms permitting a Participant to make elections relating to his
or her Award. The Committee shall retain full power and discretion to
accelerate, waive or modify, at any time, any term or condition of an Award that
is not mandatory under the Plan. Except in cases in which the Committee is
authorized to require other forms of consideration under the Plan, or to the
extent other forms of consideration must by paid to satisfy the requirements of
the Delaware General Corporation Law, no consideration other than services may
be required for the grant (but not the exercise) of any Award.
(b) Options. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be determined by the Committee,
provided that such exercise price shall be not less than the Fair
Market Value of a share of Stock on the date of grant of such Option
except as provided under Section 7(a) hereof.
(ii) Time and Method of Exercise. The Committee shall
determine the time or times at which or the circumstances under which
an Option may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements),
the methods by which such exercise price may be paid or deemed to be
paid, the form of such payment, including, without limitation, cash,
Stock, other Awards or, awards granted under other plans of the Company
or any subsidiary, or other property (including notes or other
contractual obligations of Participants to make payment on a deferred
basis), and the methods by or forms in which Stock will be delivered or
deemed to be delivered to Participants.
(iii) Non-Qualified Stock Options. All options granted under
the plan shall be non-qualified stock options, and shall not be
incentive stock options as defined under Section 422 of the Code.
(c) Stock Appreciation Rights. The Committee is authorized to grant
SAR's to Participants on the following terms and conditions:
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<PAGE> 9
(i) Right to Payment. A SAR shall confer on the Participant to
whom it is granted a right to receive, upon exercise thereof, the
excess of (A) the Fair Market Value of one share of Stock on the date
of exercise (or, in the case of a "Limited SAR, " the Fair Market Value
determined by reference to the Change in Control Price, as defined
under Section 9(c) hereof), over (B) the grant price of the SAR as
determined by the Committee, provided that such grant price shall be
not less than the Fair Market Value of a share of Stock on the date of
grant of such SAR except as provided under Section 7(a) hereof.
(ii) Other Terms. The Committee shall determine at the date of
grant or thereafter, the time or times at which and the circumstances
under which a SAR may be exercised in whole or in part (including based
on achievement of performance goals and/or future service
requirements), the method of exercise, method of settlement, form of
consideration payable in settlement, method by or forms in which Stock
will be delivered or deemed to be delivered to Participants, whether or
not a SAR shall be in tandem or in combination with any other Award,
and any other terms and conditions of any SAR. Limited SARs that may
only be exercised in connection with a Change in Control or other event
as specified by the Committee may be granted on such terms, not
inconsistent with this Section 6(c), as the Committee may determine.
SARs and Limited SARs may be either freestanding or in tandem with
other Awards.
(d) Restricted Stock. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:
(i) Grant and Restrictions. Restricted Stock shall be subject
to such restrictions on transferability, risk of forfeiture and other
restrictions, if any, as the Committee may impose, which restrictions
may lapse separately or in combination at such times, under such
circumstances (including based on achievement of performance goals
and/or future service requirements), in such installments or otherwise,
as the Committee may determine at the date of grant or thereafter.
Except to the extent restricted under the terms of the Plan and any
Award agreement relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a stockholder,
including the right to vote the Restricted Stock and the right to
receive dividends thereon (subject to any mandatory reinvestment or
other requirement imposed by the Committee). During the restricted
period applicable to the Restricted Stock, subject to Section 10(b)
below, the Restricted Stock may not be sold, transferred, pledged,
hypothecated, margined or otherwise encumbered by the Participant.
(ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment during the applicable
restriction period, Restricted Stock that is at that time subject to
restrictions shall be forfeited and reacquired by the Company; provided
that the Committee may provide, by rule or regulation or in any Award
agreement, or may determine in any individual case, 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
the forfeiture of Restricted Stock.
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<PAGE> 10
(iii) Certificates for Stock. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Stock are registered
in the name of the Participant, the Committee may require such
certificates to bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Restricted Stock, that
the Company retain physical possession of the certificates, or that the
Participant deliver a stock power to the Company, endorsed in blank,
relating to the Restricted Stock.
(iv) Dividends and Splits. As a condition to the grant of an
Award of Restricted Stock, the Committee may require that any cash
dividends paid on a share of Restricted Stock be automatically
reinvested in additional shares of Restricted Stock or applied to the
purchase of additional Awards under the Plan. Unless otherwise
determined by the Committee, Stock distributed in connection with a
Stock split or Stock dividend, and other property distributed as a
dividend, shall be subject to restrictions and a risk of forfeiture to
the same extent as the Restricted Stock with respect to which such
Stock or other property has been distributed.
(e) Deferred Stock. The Committee is authorized to grant Deferred Stock
to Participants, which are rights to receive Stock, cash, or a combination
thereof at the end of a specified deferral period, subject to the following
terms and conditions:
(i) Award and Restrictions. Satisfaction of an Award of
Deferred Stock will occur upon expiration of the deferral period
specified for such Deferred Stock by the Committee (or, if permitted by
the Committee, as elected by the Participant). In addition, Deferred
Stock shall be subject to such restrictions (which may include a risk
of forfeiture) as the Committee may impose, if any, which restrictions
may lapse at the expiration of the deferral period or at earlier
specified times (including based on achievement of performance goals
and/or future service requirements), separately or in combination, in
installments or otherwise, as the Committee may determine. Deferred
Stock may be satisfied by delivery of Stock, cash equal to the Fair
Market Value of the specified number of shares of Stock covered by the
Deferred Stock, or a combination thereof, as determined by the
Committee at the date of grant or thereafter.
(ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment during the applicable
deferral period or portion thereof to which forfeiture conditions apply
(as provided in the Award agreement evidencing the Deferred Stock), all
Deferred Stock that is at that time subject to deferral (other than a
deferral at the election of the Participant) shall be forfeited;
provided that the Committee may provide, by rule or regulation or in
any Award agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Deferred 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 the forfeiture of Deferred Stock.
(iii) Dividend Equivalents. Unless otherwise determined by the
Committee at date of grant, Dividend Equivalents on the specified
number of shares of Stock covered by
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<PAGE> 11
an Award of Deferred Stock will be either (A) paid with respect to such
Deferred Stock at the dividend payment date in cash or in shares of
unrestricted Stock having a Fair Market Value equal to the amount of
such dividends, or (B) deferred with respect to such Deferred Stock and
the amount or value thereof automatically deemed reinvested in
additional Deferred Stock, other Awards, or other investment vehicles,
as the Committee shall determine or permit the Participant to elect.
(f) Bonus Stock and Awards in Lieu of Obligations. The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu.
of Company obligations to pay cash or deliver other property under other plans
or compensatory arrangements. Stock or Awards granted hereunder shall be subject
to such other terms as shall be determined by the Committee.
(g) Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to a Participant, entitling the Participant to receive cash, Stock,
other Awards, or other property equal in value to dividends paid with respect to
a specified number of shares of Stock, or other periodic payments. Dividend
Equivalents may be awarded on a free-standing basis or in connection with
another Award. The Committee may provide that Dividend Equivalents will be paid
or distributed when, accrued or will be deemed to have been reinvested in
additional Stock, Awards, or other investment vehicles, and subject to such
restrictions on transferability and risks of forfeiture, as the Committee may
specify.
(h) Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including, without limitation,
convertible or exchangeable debt securities, other rights convertible or
exchangeable into Stock, purchase rights for Stock, Awards with value and
payment contingent upon performance of the Company or any other factors
designated by the Committee, and Awards valued by reference to the book value of
Stock or the value of securities of or the performance of specified
subsidiaries. The Committee shall determine the terms and conditions of such
Awards. Stock delivered pursuant to an Award in the nature of a purchase right
granted under this Section 6(h) shall be purchased for such consideration, paid
for at such times, by such methods, and in such forms, including, without
limitation, cash, Stock, other Awards, or other property, as the Committee shall
determine. Cash awards, as an element of or supplement to any other Award under
the Plan, may also be granted pursuant to this Section 6(h).
7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
(a) Stand-Alone, Additional, 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 or exchange
for, any other Award or any award granted under another plan of the Company, any
subsidiary, or any business entity to be acquired by the Company or a
subsidiary, or any other right of a Participant to receive payment from the
Company or any subsidiary. Such additional, tandem, and substitute or exchange
Awards may be granted at any time. If an Award is granted in substitution or
exchange for another Award or award, the
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<PAGE> 12
Committee shall require the surrender of such other Award or award in
consideration for the grant of the new Award. In addition, Awards may be granted
in lieu of cash compensation, including in lieu of cash amounts payable under
other plans of the Company or any subsidiary, in which the value of Stock
subject to the Award is equivalent in value to the cash compensation (for
example, Deferred Stock or Restricted Stock), or in which the exercise price,
grant price or purchase price of the Award in the nature of a right that may be
exercised is equal to the Fair Market Value of the underlying Stock minus the
value of the cash compensation surrendered (for example, Options granted with an
exercise price "discounted" by the amount of the cash compensation surrendered).
(b) Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee.
(c) Form and Timing of Payment Under Awards; Deferrals. Subject to the
terms of the Plan and any applicable Award agreement, payments to be made by the
Company or a subsidiary upon the exercise of an Option or other Award or
settlement of an Award may be made in such forms as the Committee shall
determine, including, without limitation, cash, Stock, other Awards or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The settlement of any Award may be accelerated, and cash
paid in lieu of Stock in connection with such settlement, in the discretion of
the Committee or upon occurrence of one or more specified events (in addition to
a Change in Control). Installment or deferred payments may be required by the
Committee (subject to Section 10(e) of the Plan) or permitted at the election of
the Participant. Payments may include, without limitation, provisions for the
payment or crediting of reasonable interest on installment or deferred payments
or the grant or crediting of Dividend Equivalents or other amounts in respect of
installment or deferred payments denominated in Stock.
8. PERFORMANCE AWARDS.
(a) Performance Conditions. The right of a Participant to exercise or
receive a grant or settlement of any Award, and the timing thereof, may be
subject to such performance conditions as may be specified by the Committee. The
Committee may use such business criteria and other measures of performance as it
may deem appropriate in establishing any performance conditions, and may
exercise its discretion to reduce or increase the amounts payable under any
Award subject to performance conditions.
(b) Annual Incentive Awards. The Committee may grant Annual Incentive
Awards to Eligible Persons, which Awards shall represent a conditional right to
receive a payment in cash, unless otherwise determined by the Committee, after
the end of a specified fiscal year, in accordance with this Section 8(b).
(i) Annual Incentive Award Pool. The Committee may establish
an Annual Incentive Award pool, which shall be an unfunded pool, for
purposes of measuring Company performance in connection with Annual
Incentive Awards. The amount of such Annual Incentive Award pool shall
be based upon the achievement of a performance goal or goals specified
by the Committee. The Committee may specify the amount of the Annual
Incentive Award pool as a percentage of any of such business criteria,
a percentage
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<PAGE> 13
thereof in excess of a threshold amount, or as another amount which
need not bear a strictly mathematical relationship to such business
criteria.
(ii) Potential Annual Incentive Awards. The Committee shall
determine the Eligible Persons who will potentially receive Annual
Incentive Awards for a given fiscal year, either out of an Annual
Incentive Award pool established for that fiscal year or as individual
Annual Incentive Awards. The amount potentially payable shall be based
upon the achievement of a performance goal or goals based on such
criteria as shall be established by the Committee.
(iii) Payout of Annual Incentive Awards. After the end of each
fiscal year, the Committee shall determine the amount, if any, of (A)
the Annual Incentive Award pool, and the maximum amount of potential
Annual Incentive Award payable to each Participant in the Annual
Incentive Award pool, or (B) the amount of potential Annual Incentive
Award otherwise payable to each Participant. The Committee may, in its
discretion, determine that the amount payable to any Participant as a
final Annual Incentive Award shall be increased or reduced from the
amount of his or her potential Annual Incentive Award, including a
determination to make no final Award whatsoever. The Committee shall
specify the circumstances in which an Annual Incentive Award shall be
forfeited in the event of termination of employment by the Participant
prior to the end of a fiscal year or the payout of such Annual
Incentive Award, and other terms relating to such Annual Incentive
Award in accordance with the Plan.
9. CHANGE IN CONTROL.
(a) Effect of "Change in Control." In the event of a "Change in
Control," as defined in Section 9(b), the following provisions shall apply:
(i) Any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable and
vested as of the time of the Change in Control and shall remain
exercisable and vested for the balance of the stated term of such Award
without regard to any termination of employment by the Participant,
subject only to the restrictions set forth in Section 10(a) hereof;
(ii) The restrictions, deferral of settlement, and forfeiture
conditions applicable to any other Award granted under the Plan shall
lapse and such Awards shall be deemed fully vested as of the time of
the Change in Control, except to the extent of any waiver by the
Participant and subject to the restrictions set forth in Section 10(a)
hereof; and
(iii) With respect to any outstanding Award subject to
achievement of performance goals and conditions under the Plan, such
performance goals and other conditions will be deemed to be met if and
to the extent so provided by the Committee in the Award agreement
relating to such Award.
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<PAGE> 14
(b) Definition of "Change in Control." A "Change in Control" shall be
deemed to have occurred if:
(i) An acquisition by any Person of Beneficial Ownership of
the shares of Common Stock of the Company then outstanding (the
"Company Common Stock Outstanding") or the voting securities of the
Company then outstanding entitled to vote generally in the election of
directors (the "Company Voting Securities Outstanding"); provided,
however, that such acquisition of Beneficial Ownership would result in
the Person's Beneficially Owning 25% or more of the Company Common
Stock Outstanding or 25% or more of the combined voting power of the
Company Voting Securities Outstanding; and provided further, that
immediately prior to such acquisition such Person was not a direct or
indirect Beneficial Owner of 25% or more of the Company Common Stock
Outstanding or 25% or more of the combined voting power of Company
Voting Securities Outstanding, as the case may be; or
(ii) The approval by the stockholders of the Company of a
reorganization, merger, consolidation, complete liquidation or
dissolution of the Company, sale or disposition of all or substantially
all of the assets of the Company, or similar corporate transaction (in
each case referred to in this Section 9(b) as a "Corporate
Transaction") or, if consummation of such Corporate Transaction is
subject, at the time of such approval by stockholders, to the consent
of any government or governmental agency, the obtaining of such consent
(either explicitly or implicitly); provided, however, that any merger,
consolidation, sale, disposition or other similar transaction to or
with William Farley or entities controlled by him shall not constitute
a Corporate Transaction; or
(iii) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board (such
Board shall be hereinafter referred to as the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, for purposes of this Section 9(b), that any
individual who becomes a member of the Board subsequent to the
Effective Date whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a majority
of those individuals who are members of the Board and who were also
members of the Incumbent Board (or deemed to be such pursuant to this
proviso) shall be considered as though such individual were a member of
the Incumbent Board; but, provided, further, that any such individual
whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule
14a-11 of Regulation 14A under the Exchange Act, including any
successor to such Rule) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board
shall not be so considered as a member of the Incumbent Board.
Notwithstanding the provisions set forth in subparagraphs (i) and (ii)
of this Section 9(b), the following shall not constitute a Change in Control for
purposes of the Plan: (1) any acquisition by or consummation of a Corporate
Transaction with any subsidiary of the Company or an employee benefit plan (or
related trust) sponsored or maintained by the Company or an affiliate; or (2)
any acquisition or consummation of a Corporate Transaction following which more
than
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<PAGE> 15
50% of, respectively, the shares then outstanding of common stock of the
corporation resulting from such acquisition or Corporate Transaction and the
combined voting power of the voting securities then outstanding of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were Beneficial Owners, respectively, of the
Company Common Stock Outstanding and Company Voting Securities Outstanding
immediately prior to such acquisition or Corporate Transaction in substantially
the same proportions as their ownership, immediately prior to such acquisition
or Corporate Transaction, of the Company Common Stock Outstanding and Company
Voting Securities Outstanding, as the case may be.
(c) Definition of "Change in Control Price." The "Change in Control
Price" means an amount in cash equal to the higher of (i) the amount of cash and
fair market value of property that is the highest price per share paid
(including extraordinary dividends) in any transaction triggering the Change in
Control under Section 9(b)(ii) hereof or any liquidation of shares following a
sale of substantially all assets of the Company, or (ii) the highest Fair Market
Value per share at any time during the 60-day period preceding and 60-day period
following the Change in Control.
10. GENERAL PROVISIONS.
(a) Compliance With Legal and Other Requirements. The Company may, to
the extent deemed necessary or advisable by the Committee, postpone the issuance
or delivery of Stock or payment of other benefits under any Award until
completion of such registration or qualification of such Stock or other required
action under any federal or state law, rule, or regulation, listing or other
required action with respect to any stock exchange or automated quotation system
upon which the Stock or other Company securities are listed or quoted, or
compliance with any other obligation of the Company, as the Committee may
consider appropriate, and may require any Participant to make such
representations, furnish such information and comply with or be subject to such
other conditions as it may consider appropriate in connection with the issuance
or delivery of Stock or payment of other benefits in compliance with applicable
laws, rules, and regulations, listing requirements, or other obligations. In
addition, the Committee is authorized to modify Awards that are then held by a
Participant who has become or is expected to become subject to Section 16 of the
Exchange Act with respect to the Company to limit the risk to such Participant
of incurring liability under Section 16(b) while substantially maintaining the
value of the Award to such Participant.
(b) Limits on Transferability; Beneficiaries. No Award or other right
or interest of a Participant under the Plan shall be pledged, hypothecated or
otherwise encumbered or subject to any lien, obligation or liability of such
Participant to any party (other than the Company or a subsidiary), or assigned
or transferred by such Participant otherwise than by will or the laws of
descent and distribution or to a Beneficiary upon the death of a Participant,
and such Awards or rights that may be exercisable shall be exercised during the
lifetime of the Participant only by the Participant or his or her guardian or
legal representative, except that Awards and other rights may be transferred to
one or more Beneficiaries or other transferees during the lifetime of the
Participant in connection with the Participant's estate planning, and may be
exercised by such transferees in accordance with the terms of such Award, but
only if and to the extent such transfers are then
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<PAGE> 16
consistent with the registration of the offer and sale of Stock on Form S-8 or a
successor registration form of the Securities and Exchange Commission or such
other form of registration statement as has in fact been filed in connection
with the Plan, and permitted by the Committee (subject to any terms and
conditions which the Committee may impose thereon). A Beneficiary, transferee,
or other person claiming any rights under the Plan from or through any
Participant shall be subject to all terms and conditions of the Plan and any
Award agreement applicable to such Participant, except as otherwise determined
by the Committee, and to any additional terms and conditions deemed necessary or
appropriate by the Committee.
(c) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Stock, or other property), recapitalization,
forward or reverse split, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other
similar corporate transaction or event affects the Stock such that an adjustment
is determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the rights of Participants under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of (i) the
number and kind of shares of Stock which may be delivered in connection with
Awards granted thereafter, (ii) the number and kind of shares of Stock subject
to or deliverable in respect of outstanding Awards, and (iii) the exercise
price, grant price, or purchase price relating to any Award and/or make
provision for payment of cash or other property in respect of any outstanding
Award. In addition, the Committee is authorized to make adjustments in the terms
and conditions of, and the criteria included in, Awards (including Performance
Awards and performance goals, and Annual Incentive Awards and any Annual
Incentive Award pool or performance goals relating thereto) in recognition of
unusual or nonrecurring events (including, without limitation, events described
in the preceding sentence, as well as acquisitions and dispositions of
businesses and assets) affecting the Company, any subsidiary, or any business
unit, or the financial statements of the Company or any subsidiary, or in
response to changes in applicable laws, regulations, accounting principles, tax
rates and regulations, or business conditions or in view of the Committee's
assessment of the business strategy of the Company, any subsidiary or business
unit thereof, performance of comparable organizations, economic and business
conditions, personal performance of a Participant, and any other circumstances
deemed relevant.
(d) Taxes. The Company and any subsidiary is authorized to withhold
from any Award granted, any payment relating to an Award under the Plan,
including from a distribution of Stock, or any payroll or other payment to a
Participant, amounts of withholding and other taxes due or potentially payable
in connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Company and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participant's tax obligations,
either on a mandatory or elective basis in the discretion of the Committee.
(e) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue or terminate the Plan or the Committee's authority to grant
Awards under the Plan without the consent of stockholders or Participants;
provided that, without the consent of an affected Participant, no such Board
action may materially and adversely affect the rights of such
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<PAGE> 17
Participant under any previously granted and outstanding Award. The Committee
may waive any conditions or rights under, or amend, alter, suspend, discontinue
or terminate any Award theretofore granted and any Award agreement relating
thereto, except as otherwise provided in the Plan; provided that, without the
consent of an affected Participant, no such Committee action may materially and
adversely affect the rights of such Participant under such Award.
Notwithstanding anything in the Plan to the contrary, if any right under this
Plan would cause a transaction to be ineligible for pooling of interest
accounting that would, but for the right hereunder, be eligible for such
accounting treatment, the Committee may modify or adjust the right so that
pooling of interest accounting shall be available, including the substitution of
Stock having a Fair Market Value equal to the cash otherwise payable hereunder
for the right which caused the transaction to be ineligible for pooling of
interest accounting.
(f) Limitation on Rights Conferred Under Plan. Neither the Plan nor any
action taken hereunder shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant or in the
employ of the Company or a subsidiary, (ii) interfering in any way with the
right of the Company or a subsidiary to terminate any Eligible Person's or
Participant's employment at any time, (iii) giving an Eligible Person or
Participant any claim to be granted any Award under the Plan or to be treated
uniformly with other Participants and employees, or (iv) conferring on a
Participant any of the rights of a stockholder of the Company unless and until
the Participant has validly exercised an Option or is otherwise duly issued or
transferred shares of Stock in accordance with the terms of the Award.
(g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended
to constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or obligation to deliver
Stock pursuant to an Award, nothing contained in the Plan or any Award shall
give any such Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize the creation
of trusts and deposit therein cash, Stock, other Awards or other property, or
make other arrangements to meet the Company's obligations under the Plan. Such
trusts or other arrangements shall be consistent with the "unfunded" status of
the Plan unless the Committee otherwise determines with the consent of each
affected Participant. The trustee of such trusts may be authorized to dispose of
trust assets and reinvest the proceeds in alternative investments, subject to
such terms and conditions as the Committee may specify and in accordance with
applicable law.
(h) Nonexclusivity of the Plan. The adoption of the Plan by the Board
shall not be construed as creating any limitations on the power of the Board or
a committee thereof to adopt such other incentive arrangements as it may deem
desirable.
(i) Payments in the Event of Forfeitures; Fractional Shares. Unless
otherwise determined by the Committee, in the event of a forfeiture of an Award
with respect to which a Participant paid cash or other consideration, the
Participant shall be repaid the amount of such cash or other consideration. No
fractional shares of Stock shall be issued or delivered pursuant to the Plan or
any Award. The Committee shall determine whether cash, other Awards, or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
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<PAGE> 18
(j) Governing Law. The validity, construction and effect of the Plan,
any rules and regulations under the Plan, and any Award agreement shall be
determined in accordance with the Delaware General Corporation Law, to the
extent applicable, other laws (including those governing contracts) of the State
of Illinois, without giving effect to principles of conflicts of laws, and
applicable federal law.
(k) Plan Effective Date and Termination. The Plan shall become
effective on the Effective Date. Subject to earlier termination by action of the
Board in accordance with Section 10(e) hereof, no Award may be newly granted
under the Plan more than ten years after the Effective Date, and the Plan will
terminate thereafter at such time that the Company has no further obligations or
rights in respect of Awards granted under the Plan.
15
<PAGE> 1
EXHIBIT 5
March 4, 1999
Fruit of the Loom, Ltd.
P.O. Box 31311 SMB
Safehaven Corporate Centre
Grand Cayman
Cayman Islands
Dear Sirs:
This opinion is delivered in connection with the Registration Statement
on Form S-8 (the "REGISTRATION STATEMENT") (No. 333-00039) filed with the
Securities and Exchange Commission by Fruit of the Loom, Ltd., a Cayman Islands'
company ("FTL-CAYMAN") under the Securities Act of 1933, as amended (the "ACT"),
relating to the Class A ordinary shares, par value $.01 per share, in the
capital of FTL-Cayman (the "CLASS A SHARES") issuable pursuant to FTL-Cayman's
Fruit of the Loom, Inc., 1995 Executive Compensation Plan and Fruit of the Loom,
Inc. 1995 Non-Employee Directors' Stock Plan (the "PLAN").
For the purposes of giving this opinion, we have examined the documents
listed in Schedule 1 hereto.
In giving this opinion we have relied upon the assumption set out in
Schedule 2 hereto.
We are Attorneys-at-Law in the Cayman Islands and express no opinion as
to any laws other than the laws of the Cayman Islands in force and as
interpreted at the date hereof. Except as explicitly stated herein, we express
no opinion in relation to any representation or warranty contained in the
documents nor upon the commercial terms of the transactions contemplated by the
documents.
Based upon the foregoing examinations and assumptions and upon such
searches as we have conducted and having regard to legal considerations which we
deem relevant, we are of the opinion that under the law of the Cayman Islands
the Class A Shares have been duly authorized and that the Class A Shares when
issued under the Plan, and in the manner and on the terms described in the
Registration Statement and the Plan will be in accordance with the provisions of
the Memorandum and Articles of Association of FTL-Cayman and the same will be
validly issued and fully paid and non-assessable.
This opinion is limited to the matters referred to herein and shall not
be construed as extending to any other matter or document not referred to
herein. This opinion is governed by and shall be construed in accordance with
the laws of the Cayman Islands.
<PAGE> 2
Fruit of the Loom, Ltd.
March 4, 1999
Page 2
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and all references to our name in the Registration
Statement including, without limitation, under the caption "Legal Matters" in
the prospectus forming a part of the Registration Statement.
Yours faithfully,
Truman Bodden & Company
<PAGE> 3
SCHEDULE 1
----------
1. The Certificate of Incorporation of FTL-Cayman.
2. The Articles of Association of FTL-Cayman.
3. The Memorandum of Association of FTL-Cayman.
4. The Registration Statement.
5. The Agreement and Plan of Merger, dated as of 10th February, 1998 among
FTL-Delaware, FTL-Cayman and Sub.
6. Minutes of a meeting of the board of directors of FTL-Cayman held on 10th
February, 1998.
7. FTL-Cayman's Registration Statement S-4 (Registration No. 333-46007) filed
on 10th February, 1998 (and all amendments thereto) (the "S-4 REGISTRATION
STATEMENT").
<PAGE> 4
SCHEDULE 2
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1. The Amended and Restated Memorandum of Association and the Amended and
Restated Articles of Association in the form attached to the S-4
Registration Statement as Exhibit 3.4 and 3.3 respectively will be adopted
by Special Resolution of the shareholder(s) of FTL-Cayman prior to the
issue of the Class A Shares.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Fruit of the Loom, Ltd.
Registration Statement (Form S-8) pertaining to the Fruit of the Loom, Inc.
1996 Incentive Compensation Plan As Amended and Restated and in the related
Prospectus of our report dated February 12, 1998, with respect to the
consolidated financial statements and schedule of Fruit of the Loom, Inc.
included in its Annual Report (Form 10-K/A) for the year ended December 31,
1997, and our report dated February 9, 1998 with respect to the balance sheet
of Fruit of the Loom, Ltd., included in Amendment No.2 to the Registration
Statement (Form S-4 No. 333-46007) of Fruit of the Loom, ltd., both filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Chicago, Illinois
March 4, 1999
