<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-----------------------------------
BROWN-FORMAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 61-0143150
(State of incorporation) (I.R.S. Employer Identification No.)
850 DIXIE HIGHWAY, LOUISVILLE, KENTUCKY 40210
(Address of Principal Executive Offices and Zip Code)
Stock Option Grants
Brown-Forman Corporation Non-Employee Director
Compensation Plan
(Full title of the plan)
---------------------------
MICHAEL B. CRUTCHER
Senior Vice President
General Counsel and Secretary
Brown-Forman Corporation
850 Dixie Highway
Louisville, Kentucky 40210
(502) 585-1100
OGDEN NEWELL & WELCH
Attention: James S. Welch
1700 Citizens Plaza
500 West Jefferson Street
Louisville, Kentucky 40202-2874
(502) 582-1601
(Names, addresses and telephone numbers of agents for service)
Exhibit Index appears on page 11
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to be Price Offering Registration
to be Registered Registered Per Share Price Fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options to 7,000/1/ $51.97/2/ $363,790.00 $110.24
purchase -------- --------- ----------- -------
common
stock
- --------------------------------------------------------------------------------
</TABLE>
/1/ This Registration Statement also covers such indeterminable number of
additional options which may be issued as a result of future adjustments
made in accordance with the Brown-Forman Corporation Non-Employee Director
Compensation Plan.
/2/ Estimated solely for purpose of calculating amount of registration fee
which, calculated pursuant to Rule 457(h)(1) and (2), is based on the
average of the high and low prices for shares of common stock of Brown-
Forman Corporation on the New York Stock Exchange consolidated tape on
October 22, 1997.
2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
- ------------------------
Item 2. Registrant Information and Employee Plan Annual
- -------------------------------------------------------
Information
- -----------
As allowed by Rule 428(b)(1), the information specified in Items 1 and 2 of
Form S-8 will be contained in a document sent or given to plan participants.
This information is not filed as part of this Registration Statement.
3
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
- -----------------------------------------------
The following documents are hereby incorporated by reference, except as
superseded or modified herein:
(a) Annual Report of Brown-Forman Corporation on Form 10-K for the year
ended April 30, 1997 filed on July 22, 1997; and
(b) Quarterly Report of Brown-Forman Corporation on Form 10-Q for the
quarter ended July 31, 1997 filed on September 5, 1997.
All documents filed by Brown-Forman Corporation ("Brown-Forman" or the
"Company") with the Securities and Exchange Commission pursuant to Sections
13(a), 13(d), 14 or 15(d) of the Securities Exchange Act of 1934 after the
effective date of this Registration Statement and 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 shall be deemed to
be a part hereof from the date of filing of such documents.
Item 4. Description of Securities
- ---------------------------------
The securities to be issued are stock options granted in accordance with
the Brown-Forman Non-Employee Director Omnibus Compensation Plan (the "Omnibus
Plan"). Upon vesting and in accordance with the provisions of the Omnibus Plan
and the terms of the grant made to each grantee, each option entitles the
grantee to purchase one share of the Company's Class A or Class B Common Stock,
as the case may be. The Company's Class A and Class B common stock is
registered pursuant to Section 12 of the Securities Exchange Act of 1934 and is
traded on the New York Stock Exchange. The options, except for transfers by the
laws of descent and distribution, are non-transferable.
4
<PAGE>
Item 5. Interests of Named Experts and Counsel
- ----------------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers
- -------------------------------------------------
The Company's Amended and Restated Certificate of Incorporation, in
accordance with the laws of the State of Delaware, limits the personal liability
of directors and officers of the Company.
Officers and directors of the Company are covered by insurance policies
purchased by the Company under which they are insured (subject to exceptions and
limitations specified in the policies) against expenses and liabilities arising
out of actions, suits or proceedings to which they are parties by reason of
being or having been such directors or officers.
Item 7. Exemption from Registration Claimed
- -------------------------------------------
Not applicable.
Item 8. Exhibits.
- -----------------
Exhibit
Number Description of Documents
- ------- ------------------------
5 Opinion of Counsel, Ogden Newell & Welch, counsel to Registrant
23(a) Consent of Coopers & Lybrand, LLP, independent accountants of
Registrant
23(b) Consent of Ogden Newell & Welch, counsel to Registrant (included in
Exhibit 5)
24(a) Power of attorney authorizing Steven B. Ratoff, Michael B. Crutcher,
and Garrison R. Cox to sign the Registration Statement in any and all
capacities on behalf of Owsley Brown II, Barry D. Bramley, Geo. Garvin
Brown III, Donald G. Calder, Owsley Brown Frazier, Richard P. Mayer,
Stephen E. O'Neil, William M. Street, and James S. Welch
24(b) Certified resolution of Registrant's Board of Directors authorizing
the execution of powers of attorney
99 Brown-Forman Non-Employee Director Compensation Plan
5
<PAGE>
The following items were filed previously:
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
3(a) Restated Certificate of Incorporation of the registrant, incorporated
by reference to its 10-K filed on July 19, 1994
3(b) Certificate of Amendment to Restated Certificate of Incorporation of
Registrant, incorporated by reference to its 10-K filed on July 19,
1994
3(c) Certificate of Ownership and Merger of Brown-Forman Corporation into
Brown-Forman, Inc., incorporated by reference to its 10-K filed on
July 19, 1994
3(d) Certificate of Amendment to Restated and Amended Certificate of
Incorporation of Brown-Forman Corporation, incorporated by reference
to Registrant's 10-K filed on July 19, 1994
3(e) Registrant's by-laws, as amended on May 25, 1988, incorporated by
reference to its 10-K filed on July 26, 1993
4(a) Credit Agreement dated as of November 30, 1994, among the Registrant
and a group of banks, incorporated by reference to Registrant's 10-K
filed on July 17, 1995
4(b) Form of Indenture dated as of March 1, 1994, between the Registrant
and The First National Bank of Chicago, as Trustee, incorporated by
reference to Registrant's Form S-3 (Registration No. 33-52551) filed
on March 8, 1994
4(c) Amendment No. 1 dated as of February 23, 1996, to the Credit Agreement
referenced above as 4(a), incorporated by reference to Registrant's
10-K filed July 3, 1996
4(d) Brown-Forman Omnibus Compensation Plan, incorporated by reference to
the Appendix of the Registrant's definitive proxy statement for the
Annual Meeting of Stockholders held on July 27, 1995, filed July 3,
1995
6
<PAGE>
Item 9. Undertakings
- --------------------
The undersigned 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 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 (i) and (ii) do not apply
if the Registration Statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by (i) or
(ii) is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the 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 remain unsold at the termination
of the offering; and
(4) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Company's annual reports pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 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
7
<PAGE>
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. If a director, officer or controlling
person of the Company asserts a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) in connection with the securities
being registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
8
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant, Brown-Forman Corporation, certifies that it
has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Louisville, Commonwealth of Kentucky.
Dated: October 23, 1997
BROWN-FORMAN CORPORATION
By: /s/ Owsley Brown II
------------------------------------
Owsley Brown II
Chairman and Chief Executive Officer
Director
By: /s/ Garrison R. Cox
------------------------------------
Garrison R. Cox
Attorney-in-fact for
Owsley Brown II
9
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title
--------- -----
/s/ Steven B. Ratoff
- --------------------------- Steven B. Ratoff
Executive Vice President (Principal
Financial Officer and Principal
Accounting Officer)
/s/ Barry D. Bramley *
- --------------------------- Barry D. Bramley
Director
/s/ Geo. Garvin Brown III *
- --------------------------- Geo. Garvin Brown III
Director
/s/ Donald G. Calder *
- --------------------------- Donald G. Calder
Director
/s/ Owsley Brown Frazier *
- --------------------------- Owsley Brown Frazier
Director
/s/ Richard P. Mayer *
- --------------------------- Richard P. Mayer
Director
/s/ Stephen E. O'Neil *
- --------------------------- Stephen E. O'Neil
Director
/s/ William M. Street *
- --------------------------- William M. Street
Director
/s/ James S. Welch *
- --------------------------- James S. Welch
Director
* By: /s/ Garrison R. Cox
-----------------------------
Garrison R. Cox, Attorney-in-fact for each
10
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
Number Description Page
- ------- ----------- ----
<S> <C> <C>
5 Opinion of Counsel, Ogden Newell & Welch 11
23(a) Consent of Coopers & Lybrand, L.L.P., independent
accountants of Registrant 13
23(b) Consent of Ogden Newell & Welch, counsel to
Registrant (included in Exhibit 5) 11
24(a) Power of attorney authorizing Steven B.
Ratoff, Michael B. Crutcher, and Garrison R.
Cox to sign the Registration Statement in any
and all capacities on behalf of Owsley Brown II,
Barry D. Bramley, Geo. Garvin Brown III,
Donald G. Calder, Owsley Brown Frazier,
Richard P. Mayer, Stephen E. O'Neil,
William M. Street, and James S. Welch 14
24(b) Certified resolution of Registrant's Board
of Directors authorizing the execution of
powers of attorney 16
99 Brown-Forman Non-Employee Director Compensation
Plan 18
</TABLE>
11
<PAGE>
Exhibit 5
[Letterhead of Ogden Newell & Welch]
October 23, 1997
Brown-Forman Corporation
850 Dixie Highway
Louisville, Kentucky 40210
Re: Brown-Forman Corporation Non-Employee Director Compensation Plan
Award of Stock Options
Registration Statement on Form S-8
Dear Sirs:
We are acting as counsel for Brown-Forman Corporation, a Delaware
corporation (the "Company") in connection with its registration under the
Securities Act of 1933, as amended, of stock options ("Options") which are
proposed to be granted pursuant to the Company's Non-Employee Director
Compensation Plan (the "Plan"), and pursuant to the Company's Registration
Statement on Form S-8 (the "Registration Statement") to be filed with the
Securities and Exchange Commission (the "Commission") with respect to the
Options.
In rendering this opinion, we have examined instruments, documents, and
records which we deemed relevant and necessary for the basis of our opinion
hereinafter expressed. In such examination, we have assumed the following: (a)
the authenticity of original documents and the genuineness of all signatures;
(b) the conformity to the originals of all documents submitted to us as copies;
and (c) the truth, accuracy and completeness of the information, representations
and warranties contained in the documents.
It is our opinion that:
<PAGE>
(a) the Options issued pursuant to the Plan will be legally and
validly issued, fully paid and non-assessible; and
(b) the shares to be received upon the proper exercise of the Options
("Option Shares") pursuant to the Plan will have been duly authorized and,
subject to the effectiveness of the Registration Statement and compliance
with applicable state securities laws, will be legally and validly issued,
fully paid and non-assessible.
Insofar as this opinion relates to securities to be issued in the future,
we have assumed that all applicable laws, rules and regulations in effect at the
time of such issuance shall be the same as such laws, rules and regulations are
in effect as of the date hereof.
It should be noted that nothing in this opinion is intended to apply to any
disposition of the Options or the Option Shares which any participant in the
Plan may propose to make.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and as an exhibit to any filing made by the Company under the
Securities or "Blue Sky" laws of any state or jurisdiction.
This opinion is furnished to you in connection with the filing of the
Registration Statement and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose, except as expressly provided in the preceding
paragraph, without our express written consent, and no party other than you is
entitled to rely upon it. This opinion is rendered to you as of the date hereof,
and we undertake no obligation to advise you of any change, whether legal or
factual.
Very truly yours,
/s/ Ogden Newell & Welch
OGDEN NEWELL & WELCH
2
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Brown-Forman Corporation on Form S-8 of our report dated May 27, 1997 on our
audits of the consolidated financial statements and financial statement schedule
of Brown-Forman Corporation as of April 30, 1997, 1996, and 1995, and for the
years ended April 30, 1997, 1996, and 1995, which report is included in the
Company's Annual Report on Form 10-K filed July 22, 1997.
/s/ COOPERS & LYBRAND L.L.P.
Louisville, Kentucky
October 23, 1997
<PAGE>
EXHIBIT 24(a)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, as of the 24th day of July, 1997, the
undersigned each constitutes and appoints Steven B. Ratoff, Michael B. Crutcher,
and Garrison R. Cox, and each of them, his true and lawful attorney-in-fact and
agent with full power of substitution and resubstitution, for him in his name,
place and stead, in any and all capacities:
(a) to sign and file with the Securities and Exchange Commission one or more
Registration Statements on Form S-8 relating to the Brown-Forman Non-
Employee Director Compensation Plan (the "Plan"), and any and all related
amendments, exhibits, or appendices (including post-effective amendments);
and
(b) to prepare, execute, and file with the appropriate securities commissions
in states or other jurisdictions any forms or filings (including any
amendments or exhibits) necessary or useful in complying with state or
foreign securities laws in the issuance of shares under the Plan,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his or her substitute(s), may lawfully do or cause to be done by virtue of
this power of attorney.
BROWN-FORMAN CORPORATION
By: /s/ Owsley Brown II
Owsley Brown II
Chairman & Chief Executive Officer
/s/ Barry D. Bramley /s/ Geo. Garvin Brown III
Barry D. Bramley Geo. Garvin Brown III
<PAGE>
Director Director
/s/ Owsley Brown II /s/ Donald G. Calder
Owsley Brown II Donald G. Calder
Director Director
/s/ Owsley Brown Frazier /s/ Richard P. Mayer
Owsley Brown Frazier Richard P. Mayer
Director Director
/s/ Stephen E. O'Neil /s/ William M. Street
Stephen E. O'Neil William M. Street
Director Director
/s/ James S. Welch
James S. Welch
Director
2
<PAGE>
EXHIBIT 24(b)
RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS OF
BROWN-FORMAN CORPORATION EFFECTIVE AS OF JULY 24, 1997
WHEREAS, the Securities Act of 1933 requires the filing of a registration
statement on Form S-8 (the "Registration Statement") by the Company relating
to the Brown-Forman Non-Employee Director Compensation Plan (the "Plan");
NOW, THEREFORE, BE IT RESOLVED, that the appropriate officers of the Company,
with the assistance of its accountants and counsel, are hereby authorized to
prepare, execute, and file with the Securities and Exchange Commission on
behalf of the Company the Registration Statement;
BE IT FURTHER RESOLVED, that Michael B. Crutcher, Senior Vice President,
General Counsel, and Secretary of the Company, be and hereby is appointed and
designated as a person duly authorized to receive communications and notices
from the Securities and Exchange Commission with respect to any documents
relating to the Registration Statement; and
BE IT FURTHER RESOLVED, that the Company and each director and officer who may
be required to execute any filings or documents relating to the Registration
Statement and any amendments thereof or appendices thereto be, and hereby is,
authorized to execute a power of attorney appointing Steven B. Ratoff, Michael
B. Crutcher, and Garrison R. Cox, and each of them, his true and lawful
attorneys and agents:
(a) to execute in his name, and on behalf of the Plan, any and all documents
relating to the Plan, and to file the same with the Securities and
Exchange Commission; and
<PAGE>
(b) to execute in his name, and on behalf of the Plan, any and all documents
relating to the Plan, and to file the same with any state or foreign
securities commission.
I, Garrison R. Cox, being duly elected and acting Assistant Vice President and
Assistant Secretary of Brown-Forman Corporation, do hereby certify that the
above is a true and correct copy of a resolution adopted by the Board of
Directors of said corporation, and that said resolution is still in full force
and effect.
In testimony whereof, witness my hand this 23rd day of October, 1997.
/s/ Garrison R. Cox
Garrison R. Cox
Assistant Vice President
and Assistant Secretary
Brown-Forman Corporation
2
<PAGE>
EXHIBIT 99
BROWN-FORMAN NON-EMPLOYEE DIRECTORS' COMPENSATION PLAN
Brown-Forman Corporation
July 24, 1997
Unless the context clearly requires otherwise, references to "Sections" and
"Articles" are to sections and articles of this plan, and capitalized terms have
the meaning assigned to them below. All references to statutes or regulations
mean those statutes or regulations as amended from time to time, and any
successors to those statutes or regulations.
ARTICLE 1 - ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1 ESTABLISHMENT: Brown-Forman Corporation, a Delaware corporation (the
"Company"), hereby establishes a compensation plan to be known as the
"Brown-Forman Non-Employee Directors' Compensation Plan" (the "Plan"), as
set out in this document. The Plan permits the Plan Administrator to
grant Awards (as defined below).
1.2 OBJECTIVES: The Plan's objectives are:
(a) to compensate the Company's Non-Employee Directors using the
Company's common stock to improve the linkage between the interests of
the Directors and those of the Company's shareholders;
(b) to provide, in conjunction with cash retainers and meeting fees,
appropriate compensation for Board service; and
(c) to allow Directors to share in the Company's success.
<PAGE>
1.3 DURATION: Subject to the Board's right to amend or terminate the
Plan at any time pursuant to Article 11, the Plan shall take effect as of
the Effective Date, and remain in effect indefinitely.
ARTICLE 2 - DEFINITIONS
Whenever used in the Plan, the following terms shall have the following
meanings:
2.1 "Award" means, individually or collectively, a grant under this Plan.
2.2 "Award Agreement" means an agreement entered into by the Company and a
Participant setting forth the terms of Awards granted under this Plan.
2.3 "Award Opportunity" means the total Award which a Participant may earn
under the Plan, as established by the Plan Administrator.
2.4 "Beneficial Owner" or "Beneficial Ownership" shall have the meaning
ascribed to such term in Rule 13d-3 under the Exchange Act.
2.5 "Board" means the Company's board of directors.
2.6 "Change in Control" of the Company means, and shall be deemed to have
occurred upon, any of the following events:
(a) a merger, consolidation, or other reorganization of the Company
in which one or both classes of outstanding Common Stock are converted
into or exchanged for a different class of securities of the Company,
a class of securities of any other issuer (other than a direct or
indirect wholly owned Company subsidiary), cash, or other property;
(b) a sale, lease, or exchange of all or substantially all of the
Company's assets to any
2
<PAGE>
other corporation or entity (other than a direct or indirect wholly
owned Company subsidiary);
(c) the adoption by the Company's shareholders of a plan of
liquidation and dissolution; or
(d) as a result of or in connection with a contested election of
directors, the persons who were Directors before such election cease
to comprise a Board majority.
2.7 "Code" means the Internal Revenue Code of 1986.
2.8 "Company" means Brown-Forman Corporation, a Delaware corporation, and the
Company's Subsidiaries, as well as any successor to any of such entities
as provided in Section 14.4.
2.9 "Director" means any individual who is a Board member.
2.10 "Disability" shall mean a disability that the Plan Administrator has
reason to believe will be of extended duration, and that results in the
Non-Employee Director relinquishing his/her position on the Board of
Directors.
2.11 "Effective Date" means July 24, 1997.
2.12 "Employee" means any non-union employee of the Company.
2.13 "Exchange Act" means the Securities Exchange Act of 1934.
2.14 "Fair Market Value" means the closing sale price on the principal
securities exchange on which the Shares are traded on the relevant date
(or, if no Shares traded on the relevant date, the last previous day on
which a sale was reported).
2.15 "Freestanding SAR" means an SAR granted independently of any Options, as
described in Section 6.4.
3
<PAGE>
2.16 "Incentive Stock Option" or "ISO" means an option to buy Shares granted
under Section 6.3 which is designated an Incentive Stock Option and which
is intended to meet the requirements of Code Section 422.
2.17 "Indexed Option" means an Option with an exercise price which either
increases by a fixed percentage over time or changes by reference to a
published index.
2.18 "Insider" means an individual who is, on the relevant date, an officer,
Director, or 10% beneficial owner of any class of the Company's equity
securities that is registered pursuant to Section 12 of the Exchange Act,
all as defined under Section 16 of the Exchange Act.
2.19 "Non-employee Director" means a Director who is not an Employee.
2.20 "Nonqualified Stock Option" or "NQSO" means an option to buy
Shares granted under Section 6.3 which is not intended to meet the
requirements of Code Section 422.
2.21 "Option" means an Incentive Stock Option, Indexed Option or a
Nonqualified Stock Option, as described in Section 6.3.
2.22 "Option Price" means the price at which a Participant may buy a
Share under an Option.
2.23 "Participant" means a Non-Employee Director who has outstanding an Award
granted under the Plan. The term "Participant" shall not include Employee
Directors.
2.24 "Performance Period" means such period of time as determined by the Plan
Administrator.
2.25 "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage
of time, the achievement of performance goals, or upon the
4
<PAGE>
occurrence of other events as determined by the Plan Administrator), and
during which the Shares are subject to a substantial risk of forfeiture,
as provided in Section 6.2.
2.26 "Person" shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.
2.27 "Plan Administrator" means such persons or committees appointed by the
Board or the Compensation Committee to administer the Plan with respect
to grants of Awards.
2.28 "Plan Year" means the Company's Fiscal Year.
2.29 "Restricted Stock" means an Award granted to a Participant pursuant to
Section 6.2.
2.30 "Retirement" shall mean the relinquishment of the Director's position on
the Board on or after age 60.
2.31 "Shares" means the shares of the Company's Class A or Class B Common
Stock, or any combination of Class A or Class B Common Stock, as the Plan
Administrator determines.
2.32 "Stock Appreciation Right" or "SAR" means an Award, granted alone or in
connection with a related Option, designated as an SAR, pursuant to
Section 6.4.
2.33 "Subsidiary" means any corporation, partnership, joint venture,
affiliate, or other entity in which the Company has a majority voting
interest, and which the Plan Administrator designates as a participating
entity in the Plan.
2.34 "Tandem SAR" means an SAR granted in connection with a related Option
pursuant to Section 6.4. A holder exercising a Tandem SAR must forfeit
the right to buy a Share under the related Option; conversely, a holder
of
5
<PAGE>
a Tandem SAR buying a Share under the Option will have the Tandem SAR
canceled proportionately.
ARTICLE 3 - ADMINISTRATION
3.1 THE PLAN ADMINISTRATOR:
(a) Disinterested Administration: For Non-Employee Directors, the Plan
Administrator shall be a committee comprising two or more Employee
Directors. If for any reason such committee does not qualify to
administer the Plan as contemplated under any Regulation or rule of
law, the Board may appoint a new committee so as to comply with such
regulation or rule.
(b) Code Compliance: Awards to Non-Employee Directors are intended to
qualify under appropriate section of the Code.
3.2 AUTHORITY: Except as limited by law or by the Company's Certificate of
Incorporation or By-laws, and subject to the Plan's terms, the Plan
Administrator shall have full power to:
(a) determine the sizes and types of Awards;
(b) determine the terms and conditions of Awards in a manner
consistent with the Plan;
(c) construe and interpret the Plan and any agreement or instrument
entered into under the Plan;
(d) establish, amend, or waive rules and regulations for the Plan's
administration;
(e) (subject to Article 11) amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within
the Plan Administrator's discretion;
6
<PAGE>
(f) determine the length of the Performance Period(s) and vesting
periods; and
(g) make all other determinations which may be necessary or advisable
to administer the Plan as it applies to Employees.
3.3 DECISIONS BINDING: All determinations and decisions made by the Plan
Administrator pursuant to the Plan and all related Board orders and
resolutions shall be final, conclusive, and binding on all persons,
including the Company, its shareholders, Employees, Participants, and their
estates and beneficiaries.
ARTICLE 4 - SHARES SUBJECT TO THE PLAN
No shares are reserved for Plan use. Shares issued under this plan will be
obtained by purchase on the open market.
ARTICLE 5 - ELIGIBILITY AND PARTICIPATION
5.1 EMPLOYEE ELIGIBILITY: No Employee, including Employees who are Directors,
is eligible for participation in this Plan.
5.2 NON-EMPLOYEE DIRECTOR ELIGIBILITY: Directors who are not Employees are
automatically eligible to participate in this Plan.
5.3 ACTUAL PARTICIPATION: The Plan Administrator may from time to time select,
from all eligible Non-Employee Directors, those to whom Awards shall be
granted and shall determine the nature and amount of each Award Opportunity
and Award.
5.4 RIGHTS NOT AFFECTED OR CREATED:
(a) Rights Not Affected: Nothing in the Plan shall interfere with or
limit in any way the Company's right to terminate any Director's
position on the Board at any time, nor confer upon any Participant
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any right to continue as a member or officer of the Board.
(b) No Right to Award: A Non-Employee Director's status confers no
right on that Participant to receive an Award under this Plan, or,
having received any Award, to receive a future Award.
5.5 PRO RATA PLAN YEAR OR PERFORMANCE PERIOD PARTICIPATION: The Plan
Administrator may allow Directors who join the Board after the Plan Year or
Performance Period begins to participate under this Article on a full year
or pro rata basis. Such situations include, but are not limited to:
(a) newly added positions to the Board during a Plan Year; or
(b) the replacement of a Director due to disability, retirement,
death, or other termination or removal from the Board during a Plan
Year.
5.6 AWARD OPPORTUNITIES:
(a) Timing: As soon as practicable in each Plan Year or Performance
Period, the Plan Administrator shall establish an Award Opportunity
for each Participant.
(b) Measures: An Award Opportunity may be a function of one or more
performance measures and goals selected by the Plan Administrator.
5.7 AWARD DETERMINATIONS:
(a) The Award shall be computed for each Participant as determined by
the Plan Administrator.
(b) Award amounts may vary as the Plan Administrator shall, from time
to time, determine, unless otherwise limited by the Plan.
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ARTICLE 6 - AWARDS OF COMMON STOCK
6.1 GENERALLY:
(a) Grant of Awards: Subject to Article 4, the Plan Administrator, at
any time and from time to time, may, in its discretion, grant or award
Options, Restricted Stock, Freestanding SAR's, Tandem SAR's, or any
combination thereof to Participants in such amounts as the Plan
Administrator shall determine. The Plan Administrator may apply
Performance Periods and performance measures, and may set threshold,
target, and maximum goals for each type of Award, as it chooses.
(b) Source of Shares: The source of Shares delivered to Participants
under this Plan shall be limited to Shares purchased by the Company
from time to time for the purpose of funding the operation of this
Plan. The Company shall maintain a separate accounting of Shares
purchased for this purpose.
(c) Termination of Employment: Each Participant's Award Agreement
shall set out the extent to which the Participant may (as the case may
be):
(1) receive unvested Restricted Shares;
(2) exercise Options; or
(3) exercise SAR's
following termination of employment with the Company and/or its
Subsidiaries. Under no circumstances will an Award vest prior to one
year from the date of grant.
Such provisions shall be determined in the Plan Administrator's
sole discretion, shall be included in the Award Agreement entered into
with each Participant, need not be uniform among all Awards
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granted or issued pursuant to this Article, and may reflect
distinctions based on the reasons for termination of employment.
(d) Other Restrictions: Subject to Article 7, the Plan Administrator
may impose such other conditions and/or restrictions on any Long-Term
Incentive Awards granted pursuant to the Plan as the Plan
Administrator deems advisable, including time-based restrictions on
vesting following the attainment of the performance goals, and/or
restrictions under applicable Federal or state securities laws.
6.2 RESTRICTED STOCK:
(a) Award Agreement: Each Restricted Stock grant shall be evidenced
by an Award Agreement that shall specify the Period(s) of Restriction,
the number of Shares of Restricted Stock granted, and such other terms
as the Plan Administrator shall determine.
(b) Non-Transferability: Except as provided in this Article, the
Shares of Restricted Stock granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated until the end
of the applicable Period of Restriction established by the Plan
Administrator and specified in the Award Agreement, or upon earlier
satisfaction of any other conditions, as specified by the Plan
Administrator and set out in the Award Agreement. During a
Participant's lifetime, only that Participant may exercise any rights
with respect to the Restricted Stock granted to that Participant.
(c) Other Restrictions on Restricted Stock:
(1) The Company shall keep custody of the certificates
representing Shares of Restricted Stock until all conditions
and/or restrictions applicable to such Shares have been
satisfied.
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(2) Except as otherwise provided in this Article, Shares of
Restricted Stock covered by each Restricted Stock grant made
under the Plan shall become freely transferable by the
Participant after the last day of the applicable Period of
Restriction.
(d) Voting Rights: During the Period of Restriction, Participants
holding Shares of Restricted Stock may exercise full voting rights
with respect to those Shares.
(e) Dividends and Other Distributions:
(1) During the Period of Restriction, Participants holding
Shares of Restricted Stock may be credited with regular cash
dividends paid with respect to the underlying Shares while they
are so held. The Plan Administrator may apply any restrictions to
the dividends that it deems appropriate.
(2) If any dividend constitutes a "derivative security" or
an "equity security" pursuant to Rule 16(a) under the Exchange
Act, such dividend shall be subject to a vesting period equal to
the remaining vesting period of the Shares of Restricted Stock
with respect to which the dividend is paid.
6.3 STOCK OPTIONS:
(a) Award Agreement: Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the Option's duration,
the number of Shares to which the Option pertains, and such other
terms as the Plan Administrator shall determine. The Award Agreement
shall also specify whether the Option is intended to be an ISO,
Indexed Option, or an NQSO, and what Performance Period (if any)
applies. Even if an option is designated as an ISO, it shall be
treated as an NQSO to the extent the Fair Market Value of the
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Shares with respect to which ISO's are exercisable for the first time
by any Participant exceeds $100,000.
(b) Option Price and Duration: The Option Price for each grant of an
Option under this Plan shall be at least 100% of the Fair Market Value
of a Share on the date the Option is granted. Options may be Indexed
Options. Each Option granted to an Employee shall expire as the Plan
Administrator shall determine at the time of grant -- but no Option
shall be exercisable later than the tenth anniversary of its grant.
(c) Exercise of Options: Options granted under this Section shall be
exercisable at such times and be subject to such restrictions and
conditions as the Plan Administrator shall in each instance approve,
which need not be the same for each grant or for each Participant.
(d) Payment:
(1) Options granted under this Section shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth
the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.
(2) The Option Price upon exercise of any Option shall be
payable to the Company in full either:
(A) in cash or its equivalent,
or
(B) by tendering previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the
total Option Price (but only if the Shares which are tendered
have been held by the Participant for at least six months
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before their tender to satisfy the Option Price); or
(C) by a combination of (A) and (B).
(3) The Plan Administrator also may allow cashless exercise
as permitted under Federal Reserve Board's Regulation T, subject
to applicable securities law restrictions, or by any other means
which the Plan Administrator determines to be consistent with the
Plan's purpose and applicable law.
(4) As soon as practicable after receipt of a written
notification of exercise and full payment, the Company shall
deliver to the Participant, in the Participant's name, Share
certificates in an appropriate amount based upon the number of
Shares bought under the Option(s).
(e) Restrictions on Share Transferability: The Plan Administrator may
impose such restrictions on any Shares acquired pursuant to the
exercise of an Option granted under this Section as it may deem
advisable, including, without limitation, restrictions under
applicable Federal securities laws, under the requirements of any
stock exchange or market upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to
such Shares.
(f) Non-transferability: During a Participant's lifetime, only the
Participant may exercise any Option granted to such Participant.
Participants may not sell, pledge, assign, or otherwise alienate their
Options. Participants may transfer Options only by will or by the laws
of descent and distribution.
6.4 STOCK APPRECIATION RIGHTS ("SAR'S"):
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(a) Award Agreement: Each SAR grant shall be evidenced by an Award
Agreement specifying the grant price, the SAR's duration, and such
other terms as the Plan Administrator shall determine.
(b) Grant Prices and Duration of SAR's: The grant price of a
Freestanding SAR shall equal the Fair Market Value of a Share on the
date of the SAR grant. The grant price of Tandem SAR's shall equal the
Option Price of the related Option. The term of an SAR granted under
the Plan shall be determined by the Plan Administrator -- but such
term shall not exceed ten years.
(c) Exercise of Tandem SAR's:
(1) Tandem SAR's may be exercised for all or part of the
Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option. A
Tandem SAR may be exercised only with respect to the Shares for
which its related Option is then exercisable.
(2) Notwithstanding any other contrary Plan provision, with
respect to a Tandem SAR granted in connection with an ISO:
(A) the Tandem SAR will expire no later than the
expiration of the underlying ISO;
(B) the payout value with respect to the Tandem SAR
may not exceed 100% of the difference between the Option
Price of the underlying ISO and the Fair Market Value of the
Shares subject to the underlying ISO at the time the Tandem
SAR is exercised; and
(C) the Tandem SAR may be exercised only when the Fair
Market Value
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of the Shares subject to the ISO exceeds the Option Price of
the ISO.
(d) Exercise of Freestanding SAR's: Freestanding SAR's may be
exercised upon whatever terms and conditions the Plan Administrator
imposes upon them.
(e) Payment of SAR Amount:
(1) Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount
determined by multiplying:
(A) the difference between the Fair Market Value of a
Share on the date of exercise and the grant price; by
(B) the number of Shares with respect to which the SAR
is exercised.
(2) The Plan Administrator may allow for payment upon SAR
exercise to be in cash, in Shares of equivalent value, or in some
combination of cash and Shares.
(f) Rule 16b-3 Requirements: Notwithstanding any other Plan term, the
Plan Administrator may impose such conditions on exercise of an SAR
(including limiting the exercise to specified periods) as may be
required to comply with Section 16 of the Exchange Act.
(g) Non-transferability: Except as otherwise provided in an Award
Agreement:
(1) During a Participant's lifetime, only the Participant
may exercise any SAR granted to such Participant.
(2) Participants may not sell, pledge, assign, or otherwise
alienate their SAR's.
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(3) Participants may transfer SAR's only by will or by the laws
of descent and distribution.
ARTICLE 7 - PERFORMANCE MEASURES
7.1 GENERALLY: The Plan Administrator may establish performance goals for
each Plan Year and Performance Period for each type of Award to be
awarded or granted under this Plan. The goals may be expressed as a
percentage of corporate, division, business unit, and/or individual goals
or financial measures, or such other measures as the Plan Administrator
shall, from time to time, determine, unless otherwise limited by the
Plan.
7.2 PERFORMANCE THRESHOLD: The Plan Administrator may establish minimum
levels of performance which must be achieved during a Plan Year or
Performance Period before any Awards shall be paid to Participants. Such
minimum levels of performance may be expressed as a percentage of
corporate, division, business unit, and/or individual goals or financial
measures, or such other measures as the Plan Administrator shall, from
time to time, determine, unless otherwise limited by the Plan.
7.3 MAXIMUM AWARDS: Subject to Section 4, the Plan Administrator may
establish guidelines governing the maximum Awards that Participants may
earn (either in the aggregate or among individual Participants) during
each Plan Year or Performance Period. Such guidelines may be expressed as
a percentage of corporate, division, business unit, and/or individual
goals or financial measures, or such other measures as the Plan
Administrator shall, from time to time, determine, unless otherwise
limited by the Plan.
ARTICLE 8 - BENEFICIARY DESIGNATION
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8.1 Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid if the
Participant dies before receiving any or all of such benefit.
8.2 Each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be
effective only when filed by the Participant in writing with the Company
during the Participant's lifetime.
8.3 Absent such designation, benefits remaining unpaid at the Participant's
death shall be paid to the Participant's estate.
ARTICLE 9 - DEFERRALS AND SPECIAL AWARDS/GRANTS
The Plan Administrator may permit a Participant to defer receipt of the payment
of cash or the delivery of Shares that would otherwise be due to such
Participant by virtue of the satisfaction of any requirements or goals with
respect to Awards, the exercise of an Option or SAR, or the lapse or waiver of
restrictions with respect to Restricted Stock. If any such deferral election is
required or permitted, the Plan Administrator shall establish rules and
procedures for such payment deferrals. Such rules and procedures shall be
consistent with the appropriate provisions of Code where applicable.
ARTICLE 10 - CHANGE IN CONTROL
10.1 TREATMENT OF OUTSTANDING AWARDS: Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or
by the rules and regulations of any governing governmental agencies or
national securities exchanges:
(a) Any and all Options and SAR's granted shall become immediately and
shall remain exercisable throughout their entire term.
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(b) Any restriction periods and restrictions imposed on Restricted
Shares shall lapse.
(c) The target payout opportunities attainable under all outstanding
Awards shall be deemed to have been earned through the effective date
of the Change in Control. The vesting of all Awards shall be
accelerated as of the effective date of the Change in Control.
provided, however, that no payouts will be accelerated based on Awards
granted less than six months before the effective date of the Change
in Control.
(d) Subject to Article 11, the Plan Administrator may modify the
Awards as determined by the Plan Administrator to be appropriate
before the effective date of the Change in Control.
10.2 ACCELERATION OF AWARD VESTING: Notwithstanding any provision of this
Plan or any Award Agreement provision to the contrary, the Plan
Administrator may at any time accelerate the vesting of any Award granted
under the Plan to a Participant, including without limitation
acceleration to such a date that would result in said Awards becoming
immediately vested.
10.3 OPTIONAL GROSS-UP FOR EXCISE TAXES: If, for any reason, any part or all
of the amounts payable to a Participant pursuant to this Plan (or
otherwise, if the Company or any of its Subsidiaries pays amounts after
there has been a Change in Control) are deemed to be "excess parachute
payments" within the meaning of Code Section 280G(b)(1), the Plan
Administrator may, in its sole discretion, provide in the Award Agreement
that the Company shall pay to such Participant, in addition to any other
amounts the Participant may be entitled to receive pursuant to this Plan,
an amount which after all Federal, state, and local taxes (of whatever
kind) imposed on the Participant with respect to such amount are
subtracted therefrom, equals the excise taxes imposed on such excess
parachute payments under Code Section 4999.
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10.4 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE IN CONTROL
PROVISIONS: Notwithstanding any other Plan term or any Award Agreement
term, this Article may not be terminated, amended, or modified on or
after the date of a Change in Control to affect adversely any Award
already granted under the Plan without the prior written consent of the
Participant with respect to said Participant's outstanding Awards -- but
the Board, upon recommendation of the Plan Administrator, may terminate,
amend, or modify this Article at any time and from time to time before
the date of a Change in Control.
ARTICLE 11 - AMENDMENT, MODIFICATION, AND TERMINATION
11.1 GENERALLY:
(a) The Board may at any time and from time to time, alter, amend,
suspend, or terminate the Plan in whole or in part -- but no amendment
needing shareholder approval in order for the Plan to continue to
comply with Rule 16b-3 under the Exchange Act shall be effective
unless such amendment shall be approved by the requisite vote of
Company shareholders entitled to vote on it.
(b) The Plan Administrator may not cancel outstanding Awards and issue
substitute Awards without the written consent of the Participant
holding such Award.
11.2 OUTSTANDING AWARDS: No termination, amendment, or modification of
the Plan shall adversely affect in any material way any outstanding Award
under the Plan without the written consent of the Participant holding
such Award.
ARTICLE 12 - WITHHOLDING
12.1 TAX WITHHOLDING: The Company may deduct or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy
Federal,
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state, and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a
result of this Plan.
12.2 SHARE WITHHOLDING: With respect to withholding required upon the
exercise of Options or SAR's, upon the lapse of restrictions on
Restricted Stock, or upon any other taxable event arising as a result of
Awards granted hereunder, Participants may elect, subject to the approval
of the Plan Administrator, to satisfy the withholding requirement, in
whole or in part, by having the Company withhold Shares having a Fair
Market Value on the date the tax is to be determined equal to the
statutory total tax which could be imposed on the transaction. All such
elections shall be irrevocable, shall be made in writing, shall be signed
by the Participant, and shall be subject to any restrictions or
limitations that the Plan Administrator deems appropriate.
ARTICLE 13 - INDEMNIFICATION
13.1 GENERALLY: The Company shall indemnify and hold harmless each
current and former Director against and from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by such
Director in connection with or resulting from any claim, action, suit, or
proceeding to which such Director may be a party or in which such
Director may be involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by such
Director in settlement thereof, with the Company's approval, or paid by
such Director in satisfaction of any judgment in any such action, suit,
or proceeding against such Director -- but only if such Director gives
the Company an opportunity, at its own expense, to handle and defend the
same before such Director undertakes to handle and defend it personally.
13.2 NON-EXCLUSIVITY: This right of indemnification shall not exclude
any other indemnification rights to which such persons may be entitled
under the Company's
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Certificate of Incorporation of Bylaws, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or hold them
harmless.
ARTICLE 14 - LEGAL CONSTRUCTION
14.1 SEVERABILITY: If any Plan section is held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.
14.2 REQUIREMENTS OF LAW: The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
14.3 SECURITIES LAW COMPLIANCE: With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions or
Rule 16b-3. To the extent any Plan provision or action by the Plan
Administrator fails to so comply, it shall be deemed void, to the extent
permitted by law and deemed advisable by the Plan Administrator.
14.4 SUCCESSORS: All Company obligations under the Plan with respect to
Awards granted shall be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially
all of the Company's business and/or assets.
14.5 GOVERNING LAW: To the extent not preempted by Federal law, the Plan,
and all agreements made under it, shall be construed in accordance with
and governed by the laws of the State of Delaware.
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