The Registrant requests that this Registration Statement become effective
immediately upon filing pursuant to Securities Act Rule 462.
As filed with the Securities and Exchange Commission on July 2, 1996.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
ZIONS COOPERATIVE MERCANTILE INSTITUTION
(Exact name of registrant as specified in its charter)
Utah 87-0196220
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2200 South 900 West
Salt Lake City, Utah 84137
(801) 574-6404
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
KEITH C. SAUNDERS
Executive Vice President and Chief Financial Officer
ZCMI
2200 South 900 East
Salt Lake City, Utah 84137
(801) 574-6404
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copies To:
A. ROBERT THORUP
RAY, QUINNEY & NEBEKER
Suite 700
79 South Main Street
Salt Lake City, Utah 84111
(801) 323-3359
<TABLE>
CALCULATION OF REGISTRATION FEE
Title of securities Amount to Proposed maximum Proposed maximum Amount of
to be registered be Offering price aggregate registration
registered per share offering price fee
<S> <C> <C> <C> <C>
Common Stock, 250,000 (1) $12.00 (2) $3,000,000 (2) $1,034.45
(par value $0.001) shares
</TABLE>
(1) Plus, in accordance with Rule 416(a), such indeterminate number of shares
as may become subject to options under the ZCMI 1996 Equity-Based Incentive
Plan (the "Plan") as a result of the adjustment provisions therein. In
addition, pursuant to rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests
to be offered or sold pursuant to the ZCMI 1996 Equity-Based Incentive
Plan.
(2) The registration fee for shares of Common Stock issuable upon exercise of
awards issued under the Plan was calculated pursuant to Rule 457 (c), based
on the last sale price on the NASDAQ Bulletin Board on June 25, 1996.
This Registration Statement consists of 37 consecutively numbered pages.
The Exhibit Index is on consecutively numbered page 4.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information
********
Item 2. Registrant Information and Employee Plan Annual Information
********
******** Information required by Part I to be contained in the
Section 10(a) prospectus is omitted from the registration
statement in accordance with Rule 428 under the Securities
Act of 1933 and the Note to Part I of Form S-8.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Registrant with the Securities and
Exchange Commission are incorporated by reference in the Registration
Statement:
(1) Registrant's report on Form 10-K for its fiscal year ended
February 3, 1996;
(2) Registrant's Quarterly Report on Form 10-Q for the quarter
ended May 4, 1996; and
(3) Registrant's Proxy Statement dated April 20, 1996.
In addition, all documents subsequently filed by Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities
The shares to be issued as awards under the Plan are shares of the
Registrant's common stock, par value $0.001. The shares to be issued will be
from the treasury or from authorized but unissued shares.
Item 5. Interests of Named Experts and Counsel
Counsel for Registrant, Ray Quinney & Nebeker, has rendered an opinion
to the effect that the shares of common stock covered through this
Registration Statement will be duly and validly issued, fully paid and
non-assessable upon issuance. Attorneys at Ray Quinney & Nebeker PC
beneficially owned an aggregate total of approximately 700 shares of the
Registrant's common stock as of May 31, 1996.
<PAGE>
Item 6. Indemnification of Directors and Officers
Registrant's Articles of Incorporation require the Registrant to
indemnify and hold harmless its directors and officers to the extent that
indemnifiable expenses or losses were not caused by the willful, bad faith or
grossly negligent conduct of the officer or director. Registrant maintained a
policy of director's and officer's liability insurance to fund this
obligation.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The following Exhibits are filed as a part of this Registration Statement:
4. The ZCMI 1996 Equity-Based Incentive Plan.
5. Opinion of Ray Quinney & Nebeker, Professional Corporation.
23.1 Consent of Deloitte & Touche.
23.2 Consent of Ray Quinney & Nebeker (included in Exhibit 5).
Item 9. Undertakings
(A) Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of this
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in this registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in this registration statement or any
material change to such information in this
registration statement;
Provided however, that paragraphs (i) and (ii) do not apply
if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remains unsold at the termination of the offering.
(B) Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of
Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(C) (1) Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus to each employee to whom the
Prospectus is sent or given a copy of Registrant's annual
report to stockholders for its last fiscal year, unless such
employee otherwise has received a copy of such report, in
which case Registrant shall state in the Prospectus that it
will promptly furnish, without charge, a copy of such report
on written request of the employee. If the last fiscal year
of Registrant has ended within 120 days prior to the use of
the Prospectus, the annual report of Registrant for the
preceding fiscal year may be so delivered, but within such
120-day period the annual report for the last fiscal year
will be furnished to each such employee.
(2) Registrant hereby undertakes to transmit or cause to be
transmitted to all employees participating in the Plan who
do not otherwise receive such material as stockholders of
Registrant, at the time and in the manner such material is
sent to its stockholders, copies of all reports, proxy
statements and other communications distributed to its
stockholders generally.
[This space left blank intentionally.]
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all 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 Salt Lake City, Utah, on the 2nd day of July,
1996.
ZCMI
/s/ Keith C. Saunders
By: Keith C. Saunders,
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 2nd day of July, 1996.
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints A. Robert Thorup, Esq. his true and lawful attorney-in-fact and
agent, with full powers of substitution, for him and in his name, place and
stead, in any and all capacities, to sign this Registration Statement and any
and all amendments (including post-effective amendments) to this Registration
Statement, with the Securities and Exchange Commission, granting to said
attorney-in-fact full power and authority to perform any other act on behalf
of the undersigned required to be done in connection therewith.
Signature Title Date
Chairman, President and
Chief Executive Officer,
/s/ Richard H. Madsen Director July 2, 1996
Richard H. Madsen
Executive Vice President, Secretary,
Treasurer, and Chief Financial
Officer (Principal Financial and
/s/ Keith C. Saunders Accounting Officer), Director July 2, 1996
Keith C. Saunders
<PAGE>
Signature Title Date
Vice President and
/s/ R. Barry Arnold Director July 2, 1996
R. Barry Arnold
/s/ Spencer F. Eccles Director July 2, 1996
Spencer F. Eccles
Director July 2, 1996
Lela Ence
Director July 2, 1996
A. Blaine Huntsman
/s/ James S. Jardine Director July 2, 1996
James S. Jardine
Director July 2, 1996
Patricia Madsen
Director July 2, 1996
O. Don Ostler
/s/ Fred W. Ball Director July 2, 1996
Fred W. Ball
<PAGE>
Exhibit 4
Z C M I
1996
EQUITY-BASED INCENTIVE PLAN
<PAGE>
SECTION CONTENTS PAGE
1. Purpose; Definitions 1
2. Administration 4
3. Stock Subject to Plan 5
4. Eligibility; Limit on Awards to Certain Persons 7
5. Stock Options 7
6. Stock Appreciation Rights 14
7. Restricted Stock 16
8. Long-Term Performance Awards 18
9. Change-in-Control Provisions 20
10. Amendments and Termination 23
11. Unfunded Status of Plan 24
12. Tax Withholding 24
13. General Provisions 24
14. Effective Date of Plan 26
15. Term of Plan 26
<PAGE>
SECTION 1. Purpose; Relationship to Other Plans of the Company; Definitions.
The name of this plan is the ZCMI 1996 Equity-Based Incentive Plan (the
"Plan"). The purpose of the Plan is to enable key employees and Eligible
Independent Contractors (as hereinafter defined) of ZCMI ("the Company") to
(i) own shares of stock in the Company, (ii) participate in the shareholder
value which has been created, (iii) have a mutuality of interest with other
shareholders and (iv) enable the Company to attract, retain and motivate key
employees, non-employee directors, and independent contractors of particular
merit.
For the purposes of the Plan, the following terms shall be defined as set
forth below:
a. "Board" means the Board of Directors of the Company.
b. "Cause" means a felony conviction of a Participant or the failure of
a Participant to contest prosecution for a felony, or a
Participant's willful misconduct or dishonesty, any of which is
directly and materially harmful to the business or reputation of the
Company.
c. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
d. "Committee" means the Committee referred to in Section 2 of the
Plan. If at any time no Committee shall be duly elected and serving
as a result of Board action or resignations of the Committee or
otherwise, then the functions of the Committee specified in the Plan
shall be exercised by the Board.
e. "Company" means Zions Cooperative Mercantile Institution or "ZCMI",
a corporation organized under the laws of the State of Utah and its
subsidiaries or any successor organization.
f. "Disability" means permanent and total inability of a Participant to
perform the tasks required by his/her job description for a period
of in excess of ninety (90) days.
g. "Disinterested Person" shall mean a Director of the Company meeting
the requirements for a "disinterested person" set forth in Rule
16b-3 as promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
h. "Early Retirement" means retirement, with consent of the Committee
at the time of retirement, from active employment with the Company
prior to normal retirement age under provisions of the Company's
pension plan, if such a plan is in effect at the time; or pursuant
to the Company's profit-sharing plan if no pension plan is then in
effect; or retirement prior to age 65 if neither a pension plan nor
a profit sharing plan are then in place.
i. [RESERVED]
j. "Eligible Independent Contractor" means an independent contractor
hired by the Company to provide consulting or advisory services on a
regular basis for the Company at or after the time the Plan is
initially approved by the shareholders.
k. "Fair Market Value" means, as of any given date, the last sale price
of the Stock as furnished by the National Association of Securities
Dealers Inc.'s Automated Quotation System ("NASDAQ") or, if either
no such sale is reported by NASDAQ on such date or the Stock is not
publicly traded on or as of such date, the fair market value of the
Stock as determined by the Committee in good faith based on the best
available facts and circumstances at the time.
l. "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of
Section 422A of the Code.
m. "Insider" means a Participant who is subject to the requirements of
the Rules (as defined below).
n. "Long-Term Performance Award" or "Long-Term Award" means an award
made pursuant to Section 8 below that is payable in cash and/or
Stock (including Restricted Stock) in accordance with the terms of
the grant, based on Company, business unit and/or individual
performance over a period of at least two years.
o. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
p. "Normal Retirement" means retirement from active employment with the
Company and any Affiliate (as defined in Section 9) pursuant to the
normal retirement provisions of the Company's pension plan, if such
a plan is in effect at the time; or pursuant to the Company's
profit-sharing plan if no pension plan is then in effect; or
retirement at or after age 65 if neither a pension plan nor a profit
sharing plan are then in place.
q. "Participant" means an employee, or Eligible Independent Contractor
to whom an Award is granted pursuant to the Plan.
r. "Plan" means the ZCMI 1996 Equity-Based Incentive Plan, as
hereinafter amended from time to time.
s. "Restricted Stock" means an award of shares of Stock that is subject
to restrictions pursuant to Section 7 below.
t. "Retirement" means Normal or Early Retirement.
u. "Rules" means the regulations promulgated under Section 16 of the
Exchange Act.
v. "Securities Broker" means the registered securities broker
acceptable to the Company who agrees to effect the cashless exercise
of an Option pursuant to Section 5(m) hereof.
w. "Stock" means the Common Stock, $0.001 par value per share, of the
Company.
x. "Stock Appreciation Right" means the right, pursuant to an award
granted under Section 6 below, to surrender to the Company all (or a
portion) of a Stock Option in exchange for an amount equal to the
difference between (i) the Fair Market Value, as of the date such
Stock Option (or such porion thereof) is surrendered, of the shares
of Stock covered by such Stock Option (or such portion thereof), and
(ii) the aggregate exercise price of such Stock Option (or such
portion thereof).
y. "Stock Option" or "Option" means any option to purchase shares of
Stock (including Restricted Stock, if the Committee so determines)
granted pursuant to Section 5 below.
In addition, the terms "Change-in-Control," "Potential Change-in-Control"
and "Change-in-Control Price" shall have meanings set forth, respectively, in
Sections 9(b), (c) and (d) below.
SECTION 2. Administration.
The Plan shall be administered and managed by the Plan Committee, which
shall be appointed by the Board of Directors.
The Committee shall be comprised of two or more members of the Board of
Directors, all of whom shall be "disinterested persons" as defined in Rule
16b-3 and "outside directors" as that term is used in Section 162 of the Code
and the regulations promulgated thereunder.
The Committee shall have the authority to grant pursuant to the terms of
the Plan: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted
Stock and/or (iv) Long-Term Performance Awards to key employees and officers;
(i) Stock Options and/or (ii) Stock Appreciation Rights to Eligible
Independent Contractors.
In particular, the Committee shall have the authority:
(i) to select the officers and other key employees of the Company to
whom Stock Options, Stock Appreciation Rights, Restricted Stock and
Long-Term Performance Awards may from time to time be granted
hereunder and Eligible Independent Contractors to whom Stock Options
and Stock Appreciation Rights may from time to time be granted
hereunder;
(ii) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock and Long-Term Performance Awards, or
any combination thereof, are to be granted hereunder;
(iii) to determine the number of shares to be covered by each such
award granted hereunder,
(iv) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder:
including, but not limited to, the share price and any
restriction or limitation, or any vesting acceleration or
forfeiture waiver regarding any Stock Option or other award
and/or the shares of Stock relating thereto, based on such
factors as the Committee shall determine, in its sole
discretion;
(v) to determine whether and under what circumstances a Stock Option may
be settled in cash or stock, including Restricted Stock under
Section 5(1);
(vi) to determine whether and under what circumstances a Stock
Option may be exercised without a payment of cash under Section
5(m); and
(vii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to
an award under this Plan shall be deferred either automatically
or at the election of the Participant.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of
the Plan and any award issued under the Plan (and any agreements relating
thereto); and to otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be final and binding on all persons, including the Company and Plan
Participants.
SECTION 3. Stock Subject to the Plan.
(a) Stock Subject to Plan. Awards of stock under the Plan shall be made
from Stock which is either authorized and unissued or held in the
treasury of the Company. The maximum number of shares of Stock
authorized for issuance under the Plan with respect to the grant of
awards while the Plan is in effect, subject to adjustment in
accordance with paragraph 3(d) below, shall be up to 250,000 shares
in the aggregate, or such other number of shares as are provided by
operation of this Section 3 or as may be subsequently approved by
the Company's shareholders.
(b) Computation of Stock Available for the Plan. For the purpose of
computing the total number of shares of Stock available for
distribution at any time in each calendar year during which the Plan
is in effect in connection with the exercise of options awarded
under the Plan, there shall be debited against the total number of
shares determined to be available pursuant to paragraphs (a), and
(c) of this Section 3 the maximum number of shares of Stock subject
to issuance upon exercise of options or other stock based awards
made under the Plan.
(c) Unused, Forfeited and Reacquired Shares. Any unused portion of the
shares annually available for award shall be carried forward and
shall be made available for Plan awards in succeeding calendar
years. The shares related to the unexercised or undistributed
portion of any terminated, expired or forfeited award for which no
material benefit was received by a Participant (i.e. dividends) also
shall be made available for distribution in connection with future
awards under the Plan to the extent permitted to receive exemptive
relief pursuant to the Rules.
(d) Adjustments. The Committee may make such adjustments to Awards
granted under the Plan (including the terms, exercise price and
otherwise) as it deems appropriate in the event of changes that
impact the Company, the Company's share price, or share status,
provided that any such actions are consistently and equitably
applied to all affected Participants; provided, that,
notwithstanding any other provision hereof, insofar as any Award is
subject to performance goals established to qualify payments
thereunder as "performance-based compensation" as described in
Section 162(m) of the Code, the Committee shall have no power to
adjust such Awards other than (i) negative discretion and (ii) the
power to adjust Awards for corporate transactions, in either case to
the extent permissible under regulations interpreting Code Section
162(m).
In the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend,
extraordinary dividend, spin-off, split-up, rights offering, share
combination, or other change in the corporate structure of the
Company affecting the Common Stock, the number and kind of shares
that may be delivered under the Plan shall be subject to such
equitable adjustment as the Committee, in its sole discretion, may
deem appropriate in order to preserve the benefits or potential
benefits to be made available under the Plan, and the number and
kind and price of shares subject to outstanding Awards and any other
terms of outstanding Awards shall be subject to such equitable
adjustment as the Committee, in its sole discretion, may deem
appropriate in order to prevent dilution or enlargement of
outstanding Awards.
SECTION 4. Eligibility; Limit on Awards to Certain Persons.
Officers of the Company, other key employees of the Company, and Eligible
Independent Contractors, who are responsible for or contribute to the
management, growth and/or profitability of the business of the Company are
eligible to be granted awards under the Plan as determined in the sole
discretion of the Committee.
Section 162(m of the Internal Revenue Code places a limit of $1 million
on the tax-deductibility of compensation paid to individuals listed in the
proxy statements of publicly held corporations. Compensation for the
individual executives listed in company proxy statements which exceeds $1
million on an individual basis may not be tax-deductible unless it meets
certain requirements with respect to being performance-based.
To ensure that its executive compensation program is in full compliance
with the provisions regarding performance-based compensation, the number of
Awards (calculated as a number of Shares granted to an individual under the
Plan may not exceed, in total over the life of that individual, 25% of the
shares authorized and approved for grants under the Plan.
SECTION 5. Stock Options.
Stock Options may be granted alone, in addition to or in tandem with
other awards granted under the Plan, consistent with the requirement of
Section 12(f), below. Any Stock Option granted under the Plan shall be in
such form as the Committee may from time to time approve.
Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of Stock Options (in
each case with or without Stock Appreciation Rights). To the extent that any
Stock Option does not qualify as an Incentive Stock Option, it shall
constitute a separate Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify the Plan under Section 422A of the Code, or,
without the consent of the optionee(s) affected, to disqualify any Incentive
Stock Option under such Section 422A.
Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem
appropriate:
(a) Option Price. The option price per share of Stock purchasable under
a Stock Option shall be determined by the Committee at the time of
grant but shall be not less than 100% of the Fair Market Value of
the Stock at the time of grant for Incentive Stock Options and 85%
of the Fair Market Value of the Stock at the time of grant for
Non-Qualified Options; provided, however that Non-Qualified Options
issued in exchange for options held by employees of an acquired
company or a division or subsidiary thereof may, at the Committee's
discretion, be issued at not less than 50% of the Fair Market Value
of the Stock at the time of grant.
Any Incentive Stock Option granted to any optionee who, at the time
the option is granted, owns more than 10% of the voting power of all
classes of stock of the Company or of a Parent or Subsidiary
corporation, shall have an exercise price no less than 110% of Fair
Market Value per share on date of the grant.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more
than ten years after the date the Option is granted and no
Non-Qualified Stock Option shall be exercisable more than ten years
and one day after the date the Option is granted. However, any
option granted to any optionee who, at the time the option is
granted owns more than 10% of the voting power of all classes of
Stock of the Company or of a Parent or Subsidiary corporation may
not have a term of more than five years. No option may be exercised
by any person after expiration of the term of the option.
(c) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be
determined by the Committee at or after grant, provided, however,
that, except as provided in Section 5(g) and Section 9, unless
otherwise determined by the Committee at or after grant, no Stock
Option shall be exercisable during the six months following the date
of the granting of the Option. If the Committee provides, in its
discretion, that any Stock Option is exercisable only in
installments, the Committee may waive such installment exercise
provisions at any time at or after grant in whole or in part, based
on such factors as the Committee shall determine, in its sole
discretion.
(d) Method of Exercise. Subject to whatever Installment exercise
provisions apply under Section 5(c), Stock Options may be exercised
in whole or in part at any time and from time to time during the
option period, by giving written notice of exercise to the Company
specifying the number of shares to be purchased.
Such notice shall be accompanied by payment in full of the purchase
price, (i) as provided in subsections (e) and (f), below; (ii) by
certified or bank check, or such other instrument as the Committee
may accept; (iii) in the form of unrestricted Stock already owned by
the optionee or, in the case of the exercise of a Non-Qualified
Stock Option, Restricted Stock subject to an award hereunder (based,
in each case, on the Fair Market Value of the Stock on the date the
option is exercised, as determined by the Committee), provided,
however, that, in the case of an Incentive Stock Option, the right
to make a payment in the form of already owned shares may be
authorized only at the time the option is granted; or (iv) in any
other manner that the Committee shall approve, including without
limitation any arrangement that the Committee may establish to
enable Participants to simultaneously exercise Stock Options and
sell the shares of Common Stock acquired thereby and apply the
proceeds to the payment of the Option Price therefor.
If payment of the option exercise price of a Non-Qualified Stock
Option is made in whole or in part in the form of Restricted Stock,
such Restricted Stock (and any replacement shares relating thereto)
shall remain (or be) restricted in accordance with the original
terms of the Restricted Stock award in question, and any additional
Stock received upon the exercise shall be subject to the same
forfeiture restrictions, unless otherwise determined by the
Committee, in its sole discretion, at or after grant.
If payment of the Option exercise price of a Non-Qualified Option is
made in whole or in part in the form of unrestricted stock already
owned by the Participant, the Company may require that the stock has
been owned by the Participant for a period of time so that such
payment would not result in a charge to the Company's earnings as a
result of the exercise. Such provision may be used by the Company
to prevent a pyramid exercise.
No shares of Stock shall be issued until full payment therefor has
been made. An optionee shall generally have the rights to dividends
or other rights of a shareholder with respect to shares subject to
the Option when the optionee has given written notice of exercise,
has paid in full for such shares, and, if requested, has given the
representation described in Section 12(a).
(e) Cash-out of Option: Settlement Based on Spread Value in Stock. On
receipt of written notice to exercise, the Committee may, in it sole
discretion, elect to cash out all or part of the portion of the
option(s) to be exercised by paying the optionee an amount, in cash
or Stock, equal to the excess of the Fair Market Value of the Stock
over the option price (the "Spread Value") on the effective date of
such cash-out.
In addition, if the option agreement so provides at grant or is
amended after grant and prior to exercise to so provide (with the
optionee's consent), the Committee may require that all or part of
the shares to be issued with respect to the Spread Value of an
exercised option take the form of Restricted Stock, which shall be
valued on the date of exercise on the basis of the Fair Market Value
of such Restricted Stock determined without regard to the forfeiture
restrictions involved.
(f) Broker-Assisted Cashless Exercise. To the extent permitted under
the applicable laws and regulations, at the request of the
Participant, and with the consent of the Committee, the Company
agrees to cooperate in a "cashless exercise" of an Option. The
cashless exercise shall be effected by the Participant delivering to
the Securities Broker instructions to sell a sufficient number of
shares of Common Stock to cover the costs and expenses associated
therewith. The Company shall withhold the number of shares of
Common Stock obtainable on the exercise of an Option which when
valued at Fair Market Value (determined as of the day preceding the
date of exercise) is equivalent to the minimum required withholding
taxes due.
(g) Replacement Options. If an Option granted pursuant to the Plan may
be exercised by an optionee by means of a stock-for-stock swap
method of exercise as provided in 5(d) above, then the Committee
may, in its sole discretion and at the time of the original option
grant, authorize the Participant to automatically receive a
replacement Option pursuant to this part of the Plan. This
replacement option shall cover a number of shares determined by the
Committee, but in no event more than the number of shares equal to
the difference between the number of shares of the original option
exercised and the net shares received by the Participant from such
exercise. The exercise price of the replacement option shall equal
the then current Fair Market Value, and with a term extending to the
expiration date of the original Option.
The Committee shall have the right, in its sole discretion and at
any time, to discontinue the automatic grant of replacement options
if it determines the continuance of such grants to no longer be in
the best interest of the Company.
(h) Non-transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws
of descent and distribution, and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee.
(i) Termination by Reason of Death. Subject to Section 5(k), if an
optionee's employment by the Company terminates by reason of death,
any Stock Option held by such optionee may thereafter be exercised,
to the extent then exercisable or on such accelerated basis as the
Committee may determine at or after grant, by the legal
representative of the estate or by the legatee of the optionee under
the will of the optionee, for a period of one year (or such shorter
period as the Committee may specify at grant) from the date of such
death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter.
<PAGE>
(j) Termination by Reason of Disability. Subject to Section 5(k), if an
optionee's employment by the Company terminates by reason of
Disability, any Stock Option held by such optionee may thereafter be
exercised by the optionee, to the extent it was exercisable at the
time of termination, or on such accelerated basis as the Committee
may determine at or after grant, for a period of three years (or
such shorter period as the Committee may specify at grant) from the
date of such termination of employment or until the expiration of
the stated term of such Stock Option, whichever period is the
shorter; provided, however, that, if the optionee dies within such
three-year period (or such shorter period as the Committee shall
specify at grant), any unexercised Stock Option held by such
optionee shall thereafter be exercisable to the extent to which it
was exercisable at the time of death for a period of twelve months
from the date of such death or until the expiration of the stated
term of such Stock Option, whichever period is the shorter. In the
event of termination of employment by reason of Disability, if an
Incentive Stock Option is exercised after the expiration of the
exercise periods that apply for purposes of Section 422A of the
Code, such Stock Option will thereafter be treated as a Non--
Qualified Stock Option.
(k) Termination by Reason of Retirement. Subject to Section 5(k), if an
optionee's employment by the Company terminates by reason of Normal
or Early Retirement, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was
exercisable at the time of such Retirement or on such accelerated
basis as the Committee may determine at or after grant, for a period
of three years (or such shorter period as Committee may specify at
grant) from the date of such termination of employment or the
expiration of the stated term of such Stock Option, whichever period
is the shorter; provided, however, that, if the optionee dies within
such three-year period, any unexercised Stock Option held by such
optionee shall thereafter be exercisable, to the extent to which it
was exercisable at the time of death, for a period of twelve months
from the date of such death or until the expiration of the stated
term of such Stock Option, whichever period is the shorter. In the
event of termination of employment by reason of Retirement, if an
Incentive Stock Option is exercised after the expiration of the
exercise periods that apply for purposes of Section 422A of the
Code, option will thereafter be treated as a Non-Qualified Stock
Option.
(l) Other Termination. Unless otherwise determined by the Committee at
or after grant, if an optionee's employment by the Company
terminates for any reason other than death, Disability or Normal or
Early Retirement, the Stock Option shall thereupon terminate, except
that such Stock Option may be exercised for the lesser of three
months or the balance of such Stock Option's term if the optionee is
involuntarily terminated by the Company without Cause.
(m) Incentive Stock Option Limitations. To the extent required for
"incentive stock option" status under Section 422A of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of
the Stock with respect to which Incentive Stock Options granted
after 1986 are exercisable for the first time by the optionee during
any calendar year under the Plan and/or any other stock option plan
of the Company (within the meaning of Section 425 of the Code) after
1986 shall not exceed $100,000.
To the extent (if any) permitted under Section 422A of the Code, if
(i) a Participant's employment with the Company is terminated by
reason of death, Disability or Retirement and (ii) the portion of
any Incentive Stock Option that is otherwise exercisable during the
post-termination period specified under Section 5(g), (h) or (i),
applied without regard to this Section 5(k), is greater than the
portion of such option that is exercisable as an "incentive stock
option" during such post-termination period under Section 422A, such
post-termination period shall automatically be extended (but not
beyond the original option term) to the extent necessary to permit
the optionee to exercise such Incentive Stock Option. The Committee
is also authorized to provide at grant for a similar extension of
the post-termination exercise period in the event of a
Change-in-Control.
SECTION 6. Stock Appreciation Rights.
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the
Plan, complying at all times with the requirement of Section 12(f),
below. In the case of a Non-Qualified Stock Option, such rights may
be granted either at or after the time of the grant of such Stock
Option. In the case of an Incentive Stock Option, such rights may
be granted only at the time of the grant of such Stock Option.
A Stock Appreciation Right or applicable portion thereof granted
with respect to a given Stock Option shall terminate and no longer
be exercisable upon the termination or exercise of the related Stock
Option, except that, unless otherwise determined by the Committee,
in its sole discretion, at the time of grant, a Stock Appreciation
Right granted with respect to less than the full number of shares
covered by a related Stock Option shall not be reduced until the
number of shares covered by an exercise or termination of the
related Stock Option exceeds the number of shares not covered by the
Stock Appreciation Right.
A Stock Appreciation Right may be exercised by an optionee, in
accordance with Section 6(b), by surrendering the applicable portion
of the related Stock Option. Upon such exercise and surrender, the
optionee shall be entitled to receive an amount determined in the
manner prescribed in Section 6(b). Stock Options which have been so
surrendered, in whole or in part, shall no longer be exercisable to
the extent the related Stock Appreciation Rights have been
exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of
the Plan, as shall be determined from time to time by the Committee,
including the following:
(i) Stock Appreciation Rights shall be exercisable only at such
time or times and to the extent that the Stock Options to which
they relate, if any, shall be exercisable in accordance with
the provisions of Section 5 and this Section 6 of the Plan;
provided, however, that any Stock Appreciation Right granted
subsequent to the grant of the related Stock Option shall not
be exercisable during the first six months of its term, except
that this special limitation shall not apply in the event of
death or Disability of the optionee prior to the expiration of
the six-month period.
(ii) Upon the exercise of a Stock Appreciation Right, an
optionee shall be entitled to receive up to, but not more
than, an amount in cash and/or shares of Stock equal in
value to the excess of the Fair Market Value of one share
of Stock over the option price per share specified in the
related Stock Option, multiplied by the number of shares
in respect of which the Stock Appreciation Right shall
have been exercised, with the Committee having the right
to determine the form of payment.
(iii) Stock Appreciation Rights shall be transferable only when
and to the extent that the underlying Stock Option would
be transferable under Section S(f) of the Plan.
(iv) Upon the exercise of a Stock Appreciation Right, the
Stock Option or part thereof to which such Stock
Appreciation Right is related shall be deemed to have
been exercised for the purpose of the limitation set
forth in Section 3 of the Plan on the number of shares of
Stock to be issued under the Plan, but only to the extent
of the number of shares issued under the Stock
Appreciation Right at the time of exercise based on the
value of the Stock Appreciation Right at such time.
(v) A Stock Appreciation Right granted in connection with an
Incentive Stock Option may be exercised only if and when the
market price of the Stock subject to the Incentive Stock Option
exceeds the exercise price of such Stock Option.
(vi) In its sole discretion, the Committee may provide, at the
time of grant of a Stock Appreciation Right under this
Section 6, that such Stock Appreciation Right can be
exercised only in the event of a Change-in-Control and/or
a Potential Change-in-Control, subject to such terms and
conditions as the Committee may specify at grant.
(vii) The Committee, in its sole discretion, may also provide
that, in the event of a Change-in-Control and/or a
Potential Change-in-Control, the amount to be paid upon
the exercise of a Stock Appreciation Right shall be based
on the Change-in-Control Price, subject to such terms and
conditions as the Committee may specify at grant.
SECTION 7. Restricted Stock.
(a) Administration. Shares of Restricted Stock may be issued either
alone or in addition to other awards granted under the Plan,
complying at all times with the requirement of Section 12(f), below.
The Committee shall determine the officers and key employees of the
Company to whom, and the time or times at which, grants of
Restricted Stock will be made, the number of shares to be awarded,
the price (if any) to be paid by the recipient of Restricted Stock
(subject to Section 7(b)), the time or times within which such
awards may be subject to forfeiture, and all other conditions of the
awards.
The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors as
the Committee may determine, in its sole discretion.
The provisions of Restricted Stock awards need not be the same with
respect to each recipient.
(b) Awards and Certificates. The prospective recipient of a Restricted
Stock award shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing
the award and has delivered a fully executed copy thereof to the
Company, and has otherwise complied with the applicable terms and
conditions of such award.
(i) The purchase price for shares of Restricted Stock shall be
equal to or less than their par value and may be zero.
(ii) Awards of Restricted Stock must be accepted within a
period of 60 days (or such shorter period as the
Committee may specify at grant) after the award date, by
executing a Restricted Stock Award Agreement and paying
whatever price (if any) is required under Section
7(b)(i).
(iii) Each Participant receiving a Restricted Stock award shall
be issued a stock certificate in respect of such shares
of Restricted Stock. Such certificate shall be registered
in the name of such Participant, and shall bear an
appropriate legend referring to the terms, conditions,
and restrictions applicable to such award, substantially
in the following form:
"The transferability of this certificate and the
shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of
the ZCMI 1996 Equity-Based Incentive Plan and an
Agreement entered into between the registered owner
and ZCMI. Copies of such Plan and Agreement are on
file at the executive management offices of ZCMI,
2200 South 900 West, Salt Lake City, Utah 84137".
(iv) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company
until the restrictions thereon shall have lapsed, and
that, as a condition of any Restricted Stock award, the
Participant shall have delivered a stock power, endorsed
in blank, relating to the Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following
restrictions and conditions:
(i) Subject to the provisions of this Plan and the award agreement,
during a period set by the Committee commencing with the date
of such award (the "Restriction Period"), the Participant shall
not be permitted to sell, transfer, pledge, assign or otherwise
encumber shares of Restricted Stock awarded under the Plan.
Within these limits, the Committee, in its sole discretion, may
provide for the lapse of such restrictions in installments and
may accelerate or waive such restrictions in whole or in part,
based on service, performance and/or such other factors or
criteria as the Committee may determine, in its sole
discretion.
(ii) Except as provided in this paragraph (ii) and Section
7(c)(i), the Participant shall have, with respect to the
shares of Restricted Stock, all of the rights of a
shareholder of the Company, including the right to vote
the shares, and the right to receive any cash dividends.
The Committee, in its sole discretion, as determined at
the time of award, may permit or require the payment of
cash dividends to be deferred and, if the Committee so
determines, reinvested in additional Restricted Stock to
the extent shares are available under Section 3.
(iii) Subject to the applicable provisions of the award
agreement and this Section 7, upon termination of a
Participant's employment with the Company for any reason
during the Restriction Period, all shares still subject
to restriction shall be forfeited by the Participant.
(iv) In the event of hardship or other special circumstances
of a Participant whose employment with the Company is
involuntarily terminated (other than for Cause), the
Committee may, in it sole discretion, waive in whole or
in part any or all remaining restrictions with respect to
such Participant's shares of Restricted Stock, based on
such factors as the Committee may deem appropriate.
(v) If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction
Period, the certificates for such shares shall be delivered to
the Participant promptly.
SECTION 8. Long Term Performance Awards.
(a) Awards and Administration. Long Term Performance Awards may be
awarded to officers or key employees of the Company either alone or
in addition to other awards granted under the Plan, complying at all
times with the requirement of Section 12(f), below. The Committee
shall determine the nature, length and starting date of the
performance period (the "Performance Period") for each Long Term
Performance Award, which shall be at least two years (subject to
Section 9 below), and shall determine the performance objectives to
be used in valuing Long Term Performance Awards and determining the
extent to which such Long Term Performance Awards have been earned.
Performance objectives may vary from Participant to Participant and
between groups of Participants and shall be based upon such Company,
business unit and/or individual performance factors and criteria as
the Committee may deem appropriate, including, but not limited to,
earnings per share or return on equity. Performance Periods may
overlap and Participants may participate simultaneously with respect
to Long Term Performance Awards that are subject to different
Performance Periods and/or different performance factors and
criteria.
At the beginning of each Performance Period, the Committee shall
determine for each Long Term Performance Award subject to such
Performance period the range of dollar values or number of shares of
Stock to be awarded to the Participant at the end of the performance
Period if and to the extent that the relevant measure(s) of
performance for such Long Term Performance Award is (are) met. Such
dollar values or number of shares of Stock may be fixed or may vary
in accordance with such performance and/or other criteria as may be
specified by the Committee, in its sole discretion.
(b) Adjustment of Awards. In the event of special or unusual events or
circumstances affecting the application of one or more performance
objectives to a Long Term Performance Award, the Committee may
revise the performance objectives and/or underlying factors and
criteria applicable to the Long Term Performance Awards affected, to
the extent deemed appropriate by the Committee, in its sole
discretion, to avoid unintended windfalls or hardship.
(c) Termination of Employment. Subject to Section 9 below and unless
otherwise provided in the applicable award agreement(s), if a
Participant terminates employment with the Company during a
Performance Period because of death, Disability or Retirement, such
Participant shall be entitled to a payment with respect to each
outstanding Long Term Performance Award at the end of the applicable
Performance Period:
(i) based, to the extent relevant under the terms of the award,
upon the Participant's performance for the portion of such
Performance Period ending on the date of termination and the
performance of the applicable business unit(s) for the entire
Performance Period, and
(ii) prorated, where deemed appropriate by the Committee, for
the portion of the Performance Period during which the
Participant was employed by the Company, all as
determined by the Committee, in its sole discretion.
However, the Committee may provide for an earlier payment in
settlement of such award in such amount and under such terms and
conditions as the Committee deems appropriate.
Subject to Section 9 below, if a Participant terminates employment
with the Company during a Performance Period for any other reason,
then such Participant shall not be entitled to any payment with
respect to the Long Term Performance Awards subject to such
Performance Period, unless the Committee shall otherwise determine,
in its sole discretion.
(d) Form of Payment. The earned portion of a Long Term Performance
Award may be paid currently or on a deferred basis with such
interest or earnings equivalent as may be determined by the
Committee, in its sole discretion. Payment shall be made in the
form of cash or whole shares of Stock, including Restricted Stock,
either in a lump sum payment or in annual installments commencing as
soon as practicable after the end of the relevant Performance
Period, all as the Committee shall determine at or after grant. If
and to the extent a Long Term Performance Award is payable in Stock
and the full amount of such value is not paid in Stock, then the
shares of Stock representing the portion of the value of the Long
Term Performance Award not paid in Stock shall again become
available for award under the Plan.
SECTION 9. Change in Control Provisions.
(a) Impact of Event. In the event of:
(i) a "Change in Control" as defined in Section 9(b), unless
otherwise determined by the Committee or the Board at or after
grant, but prior to the occurrence of such Change in Control,
or
(ii) a "Potential Change in Control" as defined in Section
9(c), but only if and to the extent so determined by the
Committee or the Board at or after grant (subject to any
right of approval expressly reserved by the Committee or
the Board at the time of such determination),
the following acceleration and valuation provisions shall apply:
(iii) Any Stock Appreciation Rights outstanding for at least
six months and any Stock Options awarded under the Plan
not previously exercisable and vested shall become fully
vested and exercisable.
(iv) The restrictions applicable to any Restricted Stock
awards under the Plan shall lapse and such shares and
awards shall be deemed fully vested.
(iii) The value of all outstanding Stock Options, Stock
Appreciation Rights and Restricted Stock awards shall,
unless otherwise determined by the Committee at or after
grant, be cashed out on the basis of the "Change in
Control Price" as defined in Section 9(d) as of the date
such Change in Control or such Potential Change in
Control is determined to have occurred or such other date
as the Committee may determine prior to the Change in
Control.
(iv) Any outstanding Long Term Performance Awards shall be
vested and paid out based on the prorated target results
for the Performance Periods in question, unless the
Committee provides at or after grant and prior to the
Change in Control event, for a different payment.
(b) Definition of "Change in Control". For purposes of Section 9(a), a
"Change in Control" means the happening of any of the following:
(i) When any "person," as such term is used in Sections 13(d) and
14(d) of the Exchange Act, other than the Company or an
Affiliate of the Company (as defined in Rule 12b-2 under the
Securities Exchange Act) or any Company employee benefit plan
(including any trustee of such plan acting as trustee) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly of securities of the
Company representing 20 percent or more of the combined voting
power of the Company's then outstanding securities without the
consent of a majority of the Board;
(ii) The occurrence of any transactions or event relating to
the Company required to be described pursuant to the
requirements of Item 5(f) of Schedule 13A of the Exchange
Act;
(iii) When, during any period of two consecutive years during
the existence of the Plan, the individuals who, at the
beginning of such period, constitute the Board of
Directors of the Company cease for any reason other than
death to constitute at least a two-thirds majority
thereof, provided, however, that a director who was not a
director at the beginning of such period shall be deemed
to have satisfied the two-year requirement if such
director was elected by, or on the recommendation of, at
least two-thirds of the directors who were directors at
the beginning of such period (either actually or by prior
operation of this Section 9(b) (iii); or
(iv) The occurrence of a transaction requiring stockholder
approval for the acquisition of the Company by an entity
other than the Company through purchase of assets, or by
merger, or otherwise.
(c) Definition of Potential Change in Control. For purposes of Section
9(a), a "Potential Change in Control" means the happening of any one
of the following:
(i) The entering into an agreement by the Company, the consummation
of which would result in a Change in Control of the Company as
defined in Section 9(b); or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group other than the
Company or any Company employee benefit plan (including
any trustee of such plan acting as such trustee) of
securities of the Company representing five percent or
more of the combined voting power of the Company's
outstanding securities and the adoption by the Board of
Directors of a resolution to the effect that a Potential
Change in Control of the Company has occurred for the
purposes of this Plan.
(d) Change in Control Price. For purposes of this Section 9, "Change in
Control Price" means the highest bid price per share paid in any
transaction as furnished by NASDAQ or the highest price paid or
offered in any bona fide transaction related to a potential or
actual change in control of the Company at any time during the
preceding sixty day period as determined by the Committee except
that, in the case of Incentive Stock Options and Stock Appreciation
Rights relating to Incentive Stock Options, such price shall be
based only on transactions reported for the date on which the
Committee decides to cash out such options.
(e) Compliance with Section 280G. No payment shall be made under this
Section 9 which, when aggregated with other payments made to the
employee, would, as determined by such person(s) as the Committee
shall irrevocably designate at or prior to a Change in Control or
Potential Change in Control, result in an excess parachute payment
for which the Company, would not receive a Federal income tax
deduction by reason of Section 280G of the Code.
SECTION 10. Amendments and Termination.
The Committee may suspend, terminate, or amend the Plan as it deems
necessary or appropriate to better achieve the purposes of the Plan, except
that, without the approval of the Company's shareholders, no such amendment
shall be made for which shareholder approval is necessary to comply with any
applicable tax or regulatory requirement, including for these purposes any
approval requirement which is a prerequisite for exemptive relief under
Section 16b of the Exchange Act.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Stock Options for
previously granted Stock Options, including previously granted Stock Options
having higher option prices.
Subject to the above provisions, the Board shall have broad authority to
amend the Plan to take into account changes in applicable tax laws and
accounting rules, as well as other developments.
SECTION 11. Unfunded Status of Plan.
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 optionee by the Company, nothing contained herein shall give
any such Participant or optionee any rights that are greater than those of a
general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock or payments in lieu of or with respect
to awards hereunder, provided, however, that, unless the Committee otherwise
determines with the consent of the affected Participant, the existence of such
trusts or other arrangements is consistent with the "unfunded" status of the
Plan.
SECTION 12. Tax Withholding.
The Company shall have the right to (i) make deductions from any
settlement of an Award made under the Plan, including the delivery or vesting
of shares, or require shares or cash or both be withheld from any Award, in
each case in an amount sufficient to satisfy withholding of any federal, state
or local taxes required by law, or (ii) take such other action as may be
necessary or appropriate to satisfy any such withholding obligations. The
Committee may determine the manner in which such tax withholding may be
satisfied, and may permit shares of Common Stock (rounded up to the next whole
number) to be used to satisfy required tax withholding based on the Fair
Market Value of any such shares of Common Stock, as of the Settlement Date of
the applicable Award.
SECTION 13. General Provisions.
(a) The Committee may require each person purchasing shares pursuant to
a Stock Option under the Plan to represent to and agree with the
Company in writing that the optionee or Participant is acquiring the
shares without a view to distribution thereof. The certificates for
such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Exchange Act, any
stock exchange upon which the Stock is then listed, and any
applicable Federal or state securities law, and the Committee may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board of Directors
from adopting other or additional compensation arrangements, subject
to stockholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only
in specific cases.
(c) The adoption of the Plan shall not confer upon any Participant any
right to continued employment with the Company, as the case may be,
nor shall it interfere in any way with the right of the Company to
terminate the employment of any of its employees, directors, or
independent contractors at any time.
(d) No later than the date as of which an amount first becomes
includable in the gross income of the Participant for Federal income
tax purposes with respect to any award under the Plan, the
Participant who is an officer or key employee of the Company, shall
pay to the Company, or make arrangements satisfactory to the
Committee regarding the payment of, any Federal, state, or local
taxes of any kind required by law to be withheld with respect to
such amount. Unless otherwise determined by the Committee, the
minimum required withholding obligations may be settled with Stock,
including Stock that is part of the award that gives rise to the
withholding requirement. The obligations of the Company under the
Plan shall be conditional on such payment or arrangements and the
Company shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to
the Participant.
(e) At the time of grant, the Committee may provide in connection with
any grant made under this Plan that the shares of Stock received as
a result of such grant shall be subject to a right of first refusal,
pursuant to which the Participant shall be required to offer to the
Company any shares that the Participant wishes to sell, with the
price being the then Fair Market Value of the Stock, subject to such
other terms and conditions as the Committee specify at the time of
grant.
(f) Any grant made under this Plan shall be represented by a WRITTEN
AGREEMENT between the Company and the Participant receiving the
grant setting forth the material terms of the grant, and
incorporating the terms of this Plan (specifically as well as
generally by reference) into each such Agreement.
(g) The Committee shall establish such procedures as it deems
appropriate for a Participant to designate a beneficiary to whom any
amounts payable in the event of the Participant's death are to be
paid.
(h) The Plan and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State
of Utah.
SECTION 13. Effective Date of Plan.
The Plan shall be effective on June 1, 1996, subject to the approval of
the Plan by a vote of the holders of a majority of the total outstanding Stock
within 12 months of such date.
SECTION 14. Term of Plan.
No Stock Option, Stock Appreciation Right, Restricted Stock or Long Term
Performance Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the date of stockholder approval, but awards granted prior to
such tenth anniversary may extend beyond that date.
<PAGE>
This Plan was approved by the Board of Directors on April 17, 1996, and
by the shareholders on May 22, 1996. No awards were made pending shareholder
approval.
Dated: July 2, 1996 /s/ Richard H. Madsen
Richard H. Madsen
Chairman and Chief Executive Officer
<PAGE>
Exhibit 5<PAGE>
July 2, 1996
Keith C. Saunders,
Executive Vice President and Chief Financial Officer
ZCMI
2200 South 900 West
Salt Lake City, Utah 84137
Re: Registration and Issuance of 250,000 Shares of ZCMI Common
Stock to Participants in the 1996 Equity Incentive Plan.
Dear Mr. Saunders:
This Firm has acted as counsel to ZCMI, a Utah corporation ("the
Company), in connection with its registration of 250,000 shares of its common
stock, par value $0.001 ("the Shares") for use in the ZCMI 1996 Equity-Based
Incentive Plan, a copy of which is filed as an exhibit to the Company's
Registration Statement on Form S-8 as filed with the Securities and Exchange
Commission on July 2, 1996.
In connection with this representation, we have examined the
originals, or copies identified to our satisfaction, of such minutes,
agreements, corporate records and filings and other documents necessary to our
opinion contained in this letter. We have also relied as to certain matters
of fact upon representations made to us by officers and agents of the Company.
Based upon and in reliance on the foregoing, it is our opinion that:
1. The Company has been duly incorporated and is validly
existing and in good standing as a corporation under
the laws of the State of Utah; and has full corporate
power and authority to own its properties and conduct
its business as described in the Prospectus referred
to above.<PAGE>
Mr. Keith C. Saunders
July 2, 1996
Page 2
2. When issued and distributed under the terms of the
Plan, the Shares will be duly and validly issued and
will be fully paid and nonassessable.
3. The shareholders of the Company have no pre-emptive rights to
acquire additional shares of ZCMI Common Stock in respect of the
Shares.
We hereby consent to the use of our name in the Prospectus and
therein being disclosed as counsel to the Company in this matter.
Very truly yours,
RAY, QUINNEY & NEBEKER
A. Robert Thorup
<PAGE>
Exhibit 23
Consent of Deloitte & Touche
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Zions Cooperative Mercantile Institution on Form S-8 of our reports dated
April 12, 1996, appearing in the Annual Report on Form 10-K of Zions
Cooperative Mercantile Institution for the year ended February 3, 1996.
DELOITTE & TOUCHE LLP
Salt Lake City, Utah
July 2, 1996<PAGE>
