<PAGE> 1
As filed with the Securities and Exchange Commission on June 30, 1999
Registration No. 33-38362
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
(Registration No. 33-38362)
------------------------------------
CLECO HOLDING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
LOUISIANA 72-1445282
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
2030 DONAHUE FERRY ROAD
PINEVILLE, LOUISIANA 71360-5226
(318) 484-7400
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
------------------------------------
CLECO CORPORATION
1990 LONG-TERM INCENTIVE COMPENSATION PLAN
(AS AMENDED AND RESTATED APRIL 24, 1998)
(Full Title of Plan)
DAVID M. EPPLER COPY TO:
PRESIDENT AND CHIEF OPERATING OFFICER ALAN C. WOLF
CLECO CORPORATION PHELPS DUNBAR, L.L.P.
2030 DONAHUE FERRY ROAD 400 POYDRAS STREET
PINEVILLE, LOUISIANA 71360 NEW ORLEANS, LOUISIANA 70130-3245
(318) 484-7400 (504) 566-1311
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
------------------------------------
This Post-Effective Amendment No. 1 to the Registration Statement on Form S-8
(Registration No. 33- 38362) is being filed pursuant to Rule 414(d) under the
Securities Act of 1933, as amended, by the Registrant, Cleco Holding
Corporation, as successor to Cleco Corporation. The Registrant hereby expressly
adopts the Registration Statement as its own registration statement for all
purposes of the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended, and hereby sets forth any additional information
necessary to reflect any material changes made in connection with or resulting
from the succession, or necessary to keep this Registration Statement from being
misleading in any material respect.
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ADOPTION OF PREDECESSOR ISSUER'S REGISTRATION STATEMENT
Effective July 1, 1999, Cleco Holding Corporation (the "Registrant")
will become the successor issuer of Cleco Corporation ("Cleco") pursuant to the
Plan of Reorganization and Share Exchange Agreement referenced as Exhibit 2
hereto and, pursuant to Rule 414(d) under the Securities Act of 1933, as
amended, the Registrant hereby expressly adopts Cleco's Registration Statement
on Form S-8 (Registration No. 33-38362) as Registrant's own registration
statement for all purposes of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended.
Subsequent to the reorganization, shares of the Registrant's common
stock will be substituted for Cleco's common stock issuable under the Cleco
Corporation 1990 Long-Term Incentive Compensation Plan to which this
Registration Statement relates. Cleco shall continue to be the sponsor of the
Plan, and the Plan shall continue to be known as the Cleco Corporation 1990
Long-Term Incentive Compensation Plan.
The applicable registration fees were paid at the time of the original
filing of this Registration Statement.
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
*ITEM 1. PLAN INFORMATION.
*ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
*The information required by Part I of Form S-8 to be contained in the Section
10(a) prospectus is omitted from this Post-Effective Amendment No. 1 to
Registration Statement in accordance with Rule 428 under the Securities Act of
1933 and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by Registrant or Cleco with the
Securities and Exchange Commission (the "Commission") and are hereby
incorporated by reference in this Post-Effective Amendment No. 1 to Registration
Statement:
(1) Cleco's Annual Report on Form 10-K for the year ended December 31,
1998;
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(2) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since December 31, 1998;
(3) The Annual Report on Form 11-K dated July 13, 1998 for the Cleco
Corporation 401(k) Savings and Investment Plan for the fiscal year ended
December 31, 1997; and
(4) The description of the Registrant's common stock, $2.00 par value,
contained in the Registration Statement on Form S-4 filed on February 2, 1999,
as amended (Commission File No. 333-71643) by Cleco.
In addition, all documents filed with the Commission by the Registrant
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 on or after the date of this Post-Effective Amendment No. 1 to Registration
Statement and prior to the post-effective amendment which indicates that all
securities offered hereby have been sold, or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Post-Effective Amendment No. 1 to Registration Statement and to be a part hereof
from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 83 of the Business Corporation Law of the State of Louisiana
(the "LBCL") provides that a corporation may indemnify any person against whom
an action, suit or proceeding is brought or threatened (by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
was serving at the request of the corporation as a director, officer, employee
or agent of another business, corporation, partnership or other enterprise)
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with any such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In the case of actions by
or in the right of the corporation, the indemnity is limited to expenses
(including attorneys' fees and amounts paid in settlement not exceeding, in the
judgment of the board of directors, the estimated expense of litigating the
action to conclusion) actually and reasonably incurred in connection with a
defense or settlement; provided that no indemnity may be made in respect of any
matter in which the person shall have been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable for
willful or intentional misconduct in performance of his duty to the corporation,
unless and only to the extent that the court determines
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upon application that such person is fairly and reasonably entitled to such
indemnity. To the extent a person has been successful on the merits or otherwise
in defense of any action, suit or proceeding or in defense of any claim, issue
or matter therein, the statute provides that he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith. Section 83 also provides for, among other things,
procedures for indemnification, advancement of expenses, non-exclusivity of the
provisions of Section 83 with respect to indemnification and advancement of
expenses, and insurance (including self-insurance) with respect to liabilities
incurred by directors, officers and others.
Article IV of the Bylaws of the Registrant (the "Bylaws") provides that
the Registrant shall indemnify any person who was or is, or is threatened to be
made, a party to or otherwise involved in any pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or other proceeding, whether civil, criminal,
administrative or investigative (any such threatened, pending or completed
proceeding being hereinafter called a "Proceeding"), by reason of the fact that
he is or was a director, officer, employee or agent of the Registrant or is or
was serving at the request of the Registrant as a director, officer, employee or
agent of another business, foreign or nonprofit corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, to the fullest extent
permitted by applicable law, from and against expenses, including attorneys'
fees, judgments, fines, ERISA excise taxes or amounts paid or to be paid in
settlement, liability and loss, actually and reasonably incurred by him or on
his behalf or suffered in connection with such Proceeding or any claim, issue or
matter therein; provided, however, that, subject to certain exceptions set forth
therein, the Registrant shall indemnify any such person in connection with a
Proceeding initiated by such person only if such Proceeding was authorized by
the Registrant's board of directors.
Article IV of the Bylaws further provides that (i) the Registrant shall
from time to time pay, in advance of final disposition, all expenses (as therein
defined) incurred by or on behalf of any person claiming indemnity thereunder in
respect of any Proceeding, (ii) the right to indemnification provided therein is
a contract right; (iii) any such indemnification may continue as to any person
who has ceased to be a director, officer, employee or agent and may inure to the
benefit of the heirs, executors and legal representatives of such person; and
(iv) the rights of indemnification and to receive advancement of expenses
contemplated by Article IV of the Bylaws are not exclusive of any other rights
to which any person may at any time be otherwise entitled, provided that such
other indemnification may not apply to a person's willful or intentional
misconduct. The Bylaws set forth certain procedural and evidentiary standards
applicable to the enforcement of a claim thereunder.
The Bylaws also provide that the Registrant may procure or maintain
insurance or other similar arrangements, at its expense, to protect itself and
any director, officer, employee or agent of the Registrant or other corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss asserted against or incurred by such person, whether or not
the Registrant would have the power to indemnify such person against such
expense or liability. The Registrant has two insurance policies covering
liabilities not in excess of an aggregate of $85 million incurred by officers
and directors of the Registrant in their capacity as such and not in excess of
$25 million
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incurred by officers, directors and certain other employees of the Registrant in
connection with the administration of the Registrant's employee benefit plans.
Section 24(C)(4) of the LBCL provides that a corporation may eliminate
or limit the liability of a director or officer to the corporation or its
shareholders for monetary damages for breach of fiduciary duty, except for
liability (i) for any breach of the director's or officer's duty of loyalty to
the corporation or its shareholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) under Section 92(D) of the LBCL (relating to unlawful dividends and
unlawful stock repurchases and redemptions); and (iv) for any transaction from
which the director or officer derived an improper personal benefit. Section 7 of
Article 7 of the Registrant's Articles of Incorporation (the "Articles") is
consistent with the provisions of Section 24(C)(4) of the LBCL. If the LBCL is
subsequently amended to authorize further elimination or limitation of a
director's or officer's liability, the Articles provide that such liability will
be eliminated or limited to the fullest extent permitted by law.
The foregoing discussion of the Registrant's Bylaws, Articles and the
LBCL is not intended to be exhaustive and is qualified in its entirety by each
of such documents and such statute.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers of shares 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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
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aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(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 with or furnished to the
Commission by Registrant 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.
(4) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 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 therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Post-Effective Amendment No. 1 to Registration
Statement on Form S-8, Commission File Number 33-38362, to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Eureka,
State of California, on June 19, 1999.
CLECO HOLDING CORPORATION
By: /s/ Gregory L. Nesbitt
--------------------------
Gregory L. Nesbitt
Chairman and Chief
Executive 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 June 19, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
/s/ Gregory L. Nesbitt Chairman, Chief Executive Officer and Sole
- -------------------------- Director
Gregory L. Nesbitt
/s/ David M. Eppler President and Chief Operating Officer
- --------------------------
David M. Eppler
/s/ Thomas J. Howlin Senior Vice President - Financial Services and
- -------------------------- Officer
Thomas J. Howlin
</TABLE>
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POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Gregory L. Nesbitt, David M. Eppler and Thomas J. Howlin, and each of them, with
full power to act without the others, such person's true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign one or more registration statements and any amendments
thereto and one or more amendments to existing registration statements of Cleco
Corporation (to be renamed Cleco Utility Group Inc. upon the implementation of
the holding company structure) and one or more further amendments thereto to be
filed with the Securities and Exchange Commission to register under the
Securities Act of 1933, as amended, shares of Cleco Holding Corporation's (to be
renamed Cleco Corporation upon the implementation of the holding company
structure) common stock ($2.00 par value) and preferred stock ($100 par value)
to be offered and sold under the Cleco Corporation 401(k) Savings and Investment
Plan, most recently amended and restated effective as of January 1, 1994, and
shares of Cleco Holding Corporation's common stock to be offered and sold under
the 1990 Long-Term Incentive Compensation Plan, amended and restated effective
as of April 24, 1998, each of which Cleco Holding Corporation may assume
pursuant to the Plan of Reorganization and Share Exchange Agreement to be
executed by Cleco Corporation and Cleco Holding Corporation, and to file the
same, with exhibits and schedules thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, 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 necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he 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 substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this instrument, this
19th day of June, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C>
/s/ Gregory L. Nesbitt Chairman, Chief Executive Officer and Sole
- ------------------------ Director
Gregory L. Nesbitt
/s/ David M. Eppler President and Chief Operating Officer
- ------------------------
David M. Eppler
/s/ Thomas J. Howlin Senior Vice President - Financial Services and
- ------------------------ Officer
Thomas J. Howlin
</TABLE>
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INDEX TO EXHIBITS
The exhibits designated by an asterisk are filed with this
Post-Effective Amendment No. 1 to the Registration Statement. The exhibits not
so designated have been previously filed with the Commission and are
incorporated herein by reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
2 Plan of Reorganization and Share Exchange Agreement (filed as
Exhibit C to the Proxy Statement and Prospectus included in
Cleco's Registration Statement on Form S-4 filed on February 2,
1999, as amended, and incorporated herein by reference,
Commission File No. 333-71643).
3.1 Articles of Incorporation of Registrant, effective July 1, 1999
(filed as Exhibit A to the Proxy Statement and Prospectus
included in Cleco's Registration Statement on Form S-4 filed on
February 2, 1999, as amended, and incorporated herein by
reference, Commission File No. 333-71643).
3.2 By-laws of Registrant, effective as of July 1, 1999 (filed as
Exhibit 3(d) to Cleco's Registration Statement on Form S-4
filed on February 2, 1999, as amended, and incorporated herein
by reference, Commission File No. 333-71643).
*4.3 Cleco Corporation 1990 Long-Term Incentive Compensation Plan,
as amended and restated effective as of April 24, 1998 (the
"Plan").
*5 Opinion of Phelps Dunbar, L.L.P. as to the legality of the
securities being registered.
23.1 Consent of PricewaterhouseCoopers LLP, filed as an exhibit to
Cleco's Form 10-K for the period ended December 31, 1998, and
incorporated herein by reference.
*23.2 Consent of Phelps Dunbar, L.L.P. (included in Exhibit 5).
*24 Powers of Attorney (included on the Signature Page attached
hereto).
</TABLE>
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CLECO CORPORATION
1990 LONG-TERM INCENTIVE COMPENSATION PLAN
(As Amended and Restated Effective April 24, 1998)
ARTICLE I
PURPOSE
1.1 Purpose of Plan. The purpose of this Cleco Corporation 1990
Long-Term Incentive Compensation Plan (the "Plan") is to create shareholder
value. To do so, the Plan provides incentives to selected key employees of Cleco
Corporation (the "Company") and its subsidiaries who contribute, and are
expected to contribute, materially to the success of the Company and its
subsidiaries; provides a means of rewarding outstanding performance; and
enhances the interest of such key employees in the Company's continued success
and progress by providing them a proprietary interest in the Company and/or cash
payments based on the value of the Company's equity. Further, this Plan is
designed to enhance the Company's ability to maintain a competitive position in
attracting and retaining qualified members of the Board of Directors and key
personnel necessary for the continued success and progress of the Company.
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ARTICLE II
DEFINITIONS
2.1 Definitions. For purposes of the Plan, the following terms shall
have the meanings below stated, subject to the provisions of Section 11.1.
ATTACHED STOCK APPRECIATION RIGHT: means a Stock Appreciation Right
granted with respect to shares of Common Stock covered by an Option, pursuant to
the provisions of Section 9.4.
BOARD or BOARD OF DIRECTORS: means the Board of Directors of the
Company.
CODE: means the Internal Revenue Code of 1986, as amended.
COMMITTEE: means the Compensation Committee of the Board of Directors
as constituted pursuant to Article XI.
COMMON STOCK: means, subject to the provisions of Section 13.3, the
presently authorized common stock, $2.00 par value, of the Company.
COMMON STOCK EQUIVALENT UNIT: means a unit which is valued by reference
to the value of one share of Common Stock and which is converted to cash
payments to the Key Employee pursuant to the provisions of Section 5.3.
COMMON STOCK EQUIVALENT UNITS LEDGER: means the ledger to be
established and maintained by the Company pursuant to the provisions of Section
5.3.
COMPANY: means Cleco Corporation, a Louisiana corporation.
DISABILITY: means a physical or mental impairment of sufficient
severity such that an Employee is (or the Eligible Director would be, if such
Director were a participant in such plans) both eligible for and in receipt of
benefits under the long-term disability provisions of the Company's benefit
plans.
DIVIDEND EQUIVALENT CREDIT: means an amount to be credited to a Key
Employee's account maintained in the Common Stock Equivalent Units Ledger upon
the payment of dividends on the Company's Common Stock, as provided in Section
5.3(a).
ELIGIBLE DIRECTOR: means a person serving as a member of the Board of
Directors of the Company who is not also an Employee of the Company or any
Subsidiary.
EMPLOYEE: means an officer or employee of the Company or a Subsidiary
of the Company.
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FAIR MARKET VALUE: means the average, rounded to the nearest 1/8th, of
the high and low sales price of a share of Common Stock on the New York Stock
Exchange Composite Transactions reporting system, as reported in The Wall Street
Journal, on the date as of which such value is being determined or, if no sales
occurred on such day, then on the next preceding day on which there were such
sales.
INCENTIVE STOCK OPTION: means an option to purchase Common Stock,
granted by the Company to a Key Employee pursuant to Section 9.1, which meets
the requirements of Section 422 of the Code.
KEY EMPLOYEE: means an Employee selected to participate in this Plan
pursuant to the terms hereof.
NONSTATUTORY STOCK OPTION: means an option to purchase Common Stock,
granted by the Company to a Key Employee pursuant to Section 9.1, which should
not and does not meet the requirements of Section 422 of the Code.
OPPORTUNITY SHARES: means additional shares of Common Stock which may
be granted to a Key Employee receiving a Restricted Stock Award, as provided in
Section 5.1(b).
OPPORTUNITY UNITS: means additional Common Stock Equivalent Units which
may be granted to a Key Employee receiving a Restricted Unit Award, as provided
in Section 5.1(b).
OPTION: means an Incentive Stock Option or a Nonstatutory Stock Option.
PERFORMANCE CYCLE: means the period of time used when measuring the
degree to which the Performance Objectives relating to Restricted Stock Awards
or Restricted Unit Awards have been met.
PERFORMANCE OBJECTIVES: means the criteria established by the Committee
for each Performance Cycle as the basis for determining (i) the number of shares
of Common Stock or Common Stock Equivalent Units, as the case may be, which
shall be released from the restrictions of a Restricted Stock Award or a
Restricted Unit Award and (ii) the number of additional Opportunity Shares of
Common Stock or Opportunity Units of Common Stock Equivalent Units, as the case
may be, related to such Restricted Stock Award or Restricted Unit Award which
the Committee may elect to award to a Key Employee.
PLAN: means the Cleco Corporation 1990 Long-Term Incentive Compensation
Plan, as set forth herein and as from time to time amended.
RESTRICTED STOCK AWARD: means an award of restricted shares of Common
Stock, granted by the Company to a Key Employee pursuant to Section 5.1 or to an
Eligible Director pursuant to Section 5.4.
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RESTRICTED UNIT AWARD: means an award of Common Stock Equivalent Units
granted by the Company to a Key Employee pursuant to Section 5.1.
STOCK APPRECIATION RIGHT: means a right, granted by the Company to a
Key Employee pursuant to Section 9.4 or 9.5, to earn additional compensation for
services rendered based upon the appreciation of the Fair Market Value of the
Common Stock.
STOCK INCENTIVES: means Options, Stock Appreciation Rights, Restricted
Stock Awards, and Restricted Unit Awards granted under this Plan.
SUBSIDIARY: means a subsidiary corporation as defined in Section 424(f)
of the Code.
UNATTACHED STOCK APPRECIATION RIGHT: means a Stock Appreciation Right
granted independent of any Option, pursuant to the provisions of Section 9.5.
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ARTICLE III
SHAREHOLDER APPROVAL; RESERVATION OF SHARES
3.1 Approvals. The Plan was originally adopted effective January, 1990
and was approved by shareholders at the 1990 annual meeting of the shareholders.
This Plan, as amended and restated effective April 24, 1998, shall become
effective only if approved on or before January 1, 1999 by the affirmative vote,
in person or by proxy, of the holders of a majority of the shares of Common
Stock present and entitled to vote at a meeting held to take action thereon at
which a quorum is present; and if such approval has not been obtained by such
date, all Restricted Stock Awards to Eligible Directors previously granted shall
be void and the Plan shall be reinstated in the form approved by shareholders at
the 1990 annual meeting. If any grant pursuant to this Plan or the issuance or
transfer pursuant to this Plan of any shares of the Common Stock shall require
any prior approval of any governmental body or agency, no grant, issuance, or
transfer thereof shall be made until such approval shall have been obtained.
3.2 Shares Reserved Under Plan. The aggregate number of shares of Common
Stock which may be granted under this Plan shall not exceed Eight Hundred
Thousand (800,000) shares. The shares of Common Stock which may be granted
pursuant to Options, Attached Stock Appreciation Rights, and Restricted Stock
Awards will consist of either (i) authorized but unissued shares of Common Stock
or (ii) shares of Common Stock which have been issued and which shall have been
heretofore or hereafter reacquired by or on behalf of or at the direction of the
Company (whether directly or indirectly through one or more agents, affiliates,
nominees, custodians, trustees, or other representatives or designees). The
total number of shares available for grant under this Plan shall be subject to
increase or decrease in order to give effect to the adjustment provision of
Section 13.3 and to give effect to any amendment adopted as provided in Section
12.1. The total number of shares available for grant under this Plan shall also
be decreased by one share for (a) each Common Stock Equivalent Unit (including
each such unit granted as an Opportunity Unit) awarded under a Restricted Unit
Award and (b) each Unattached Stock Appreciation Right granted pursuant to this
Plan; provided, however, that if any Restricted Unit Award or Unattached Stock
Appreciation Right granted to a Key Employee under this Plan shall expire,
terminate, or be canceled for any reason prior to the lapse of all restrictions
relating thereto, then the number of shares of Common Stock previously made
unavailable for grant by operation of this provision upon the grant of such
Restricted Unit Award or Unattached Stock Appreciation Right shall again be
available for purposes of this Plan. If any Option, Attached Stock Appreciation
Right, or Restricted Stock Award granted to a Key Employee or Eligible Director
under this Plan shall expire, terminate, or be canceled for any reason prior to
the lapse of all restrictions relating to all shares covered thereby, any shares
of Common Stock that such Key Employee or Eligible Director is not entitled to
receive under this Plan and such Stock Incentive upon such expiration,
termination, or cancellation shall again be available for purposes of this Plan;
provided, however, that the number of shares of Common Stock available for grant
under this Plan shall be reduced by the number of shares subject to an Option
for which a Key Employee has exercised a related Attached Stock Appreciation
Right in accordance with Section 9.4. If the number of shares of Common Stock
available for grant under this Plan shall ever decrease to zero, then no further
grants of any Stock Incentives shall be made under this Plan until
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<PAGE> 6
such time, if ever, before the termination of this Plan that shares of Common
Stock shall again be available for grant hereunder.
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ARTICLE IV
PARTICIPATION IN THE PLAN
4.1 Eligibility to Receive Stock Incentives. Stock Incentives under this
Plan may be granted only to persons who are determined by the Committee to be
Key Employees of the Company or a Subsidiary of the Company on the date the
Stock Incentive is granted and to Eligible Directors as provided in Section 5.4.
A member of the Board of Directors who is not also an Employee of the Company or
of a Subsidiary of the Company shall not be eligible to receive a Stock
Incentive other than pursuant to Section 5.4.
4.2 Participation Not Guarantee of Employment. Nothing in this Plan or
in the instrument evidencing the grant of a Stock Incentive shall in any manner
be construed to limit in any way the right of the Company or a Subsidiary to
terminate a Key Employee's employment at any time, without regard to the effect
of such termination on any rights such Key Employee would otherwise have under
this Plan, or give any right to such a Key Employee to remain employed by the
Company or a Subsidiary thereof in any particular position or at any particular
rate of compensation.
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ARTICLE V
STOCK AWARDS
5.1 Grant of Restricted Stock Awards and Restricted Unit Awards to Key
Employees.
(a) Selection of Key Employees. Subject to the terms of this
Plan, the Committee shall select from among the Employees of the
Company and its Subsidiaries those Key Employees to whom Restricted
Stock Awards or Restricted Unit Awards shall be awarded for each
Performance Cycle. Restricted Stock Awards and Restricted Unit Awards
and the allocation of Opportunity Shares or Opportunity Units, if any,
related to such awards shall generally be made at the beginning of a
Performance Cycle, but may, in the Committee's discretion, be made
from time to time during the term of a Performance Cycle.
(b) Award of Shares or Units. The Committee shall determine the
number of shares of Common Stock covered by each Restricted Stock
Award or the number of Common Stock Equivalent Units covered by each
Restricted Unit Award and the maximum number of Opportunity Shares or
Opportunity Units, if any, related to such award which may be granted
to a Key Employee. After the close of, and, if appropriate and in
accordance with Section 7.2(b) during the term of each Performance
Cycle, the Committee shall determine whether the restrictions provided
for in Article VI hereof shall lapse with respect to a portion or all
of the shares awarded under a Restricted Stock Award or with respect
to a portion or all of the shares awarded under a Restricted Stock
Award or with respect to a portion or all of the Common Stock
Equivalent Units awarded under a Restricted Unit Award and whether any
Opportunity Shares or Opportunity Units, as the case may be, related
to such award shall be granted.
(c) Form of Instrument. Each Restricted Stock Award and each
Restricted Unit Award shall be made to a Key Employee pursuant to an
instrument prescribed in form by the Committee. Such instrument shall
contain such terms and provisions as the Committee shall determine and
shall specify the number of shares of Common Stock or Common Stock
Equivalent Units covered thereby, the restrictions provided for in
Article VI, and the Performance Objectives, if any, which if not
achieved may cause all or part of the shares or units to be forfeited
after the close of the Performance Cycle with respect to which they
were awarded.
(d) Performance Objectives. Each Restricted Stock Award and each
Restricted Unit Award to a Key Employee may or may not be subject to
the achievement of Performance Objectives by the Company during the
Performance Cycle with respect to which the Restricted Stock Award or
Restricted Unit Award is made. The Committee shall establish
Performance Objectives prior to the beginning of each Performance
Cycle. Once established, Performance Objectives may be
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changed, adjusted, or amended during the term of a Performance Cycle
only upon authorization by the Committee. The degree to which the
Company achieves such Performance Objectives shall serve as the basis
for the Committee's determination of the portion of a Key Employee's
Restricted Stock Award or Restricted Unit Award which shall become
vested by reason of the lapse of the restrictions provided for in
Article VI and the number of Opportunity Shares or Opportunity Units,
if any, which shall be awarded. The Committee may waive the attainment
of Performance Objectives (in whole or in part) during or after the
close of a Performance Cycle if the Committee deems it appropriate in
light of a change of circumstances.
5.2 Rights with Respect to Shares. Each Key Employee to whom a
Restricted Stock Award consisting of shares of Common Stock represented by a
stock certificate has been made shall have absolute ownership of such shares
including the right to vote the same and receive dividends thereon, subject,
however, to the terms, conditions, and restrictions described in this Plan and
in the instrument evidencing the grant of the Restricted Stock Award.
Notwithstanding the foregoing, shares of Common Stock transferred pursuant to a
Restricted Stock Award shall be held in escrow pursuant to an agreement
satisfactory to the Committee until such time as the Committee shall have
determined whether the restrictions provided for in Article VI shall have
lapsed. No Key Employee to whom a Restricted Stock Award with related
Opportunity Shares is granted shall have any rights as a shareholder, including
without limitation the right to receive dividends or the right to vote, with
respect to such Opportunity Shares, until the issuance thereof pursuant to this
Plan.
5.3 Common Stock Equivalent Units. The Company shall establish a Common
Stock Equivalent Units Ledger which will reflect the name of each Key Employee,
the number of Common Stock Equivalent Units awarded to each Key Employee, and
the Fair Market Value of the number of shares of Common Stock equal to the
Common Stock Equivalent Units awarded to a Key Employee on the date of grant of
each Restricted Unit Award. Each Common Stock Equivalent Unit shall be subject
to the following adjustments and provisions:
(a) Dividend Equivalents. So long as a Key Employee holds Common
Stock Equivalent Units on a record date for the payment of dividends
on the Common Stock, the Company shall enter a Dividend Equivalent
Credit to the Key Employee's account in the Common Stock Equivalent
Units Ledger on the dividend payment date of the Common Stock
corresponding to such record date measured by the amount of the
dividend paid on a share of Common Stock multiplied by the number of
Common Stock Equivalent Units credited to the Key Employee's account
on such record date, so that the amount of each Dividend Equivalent
Credit shall equal the dividends which the Key Employee would have
received had such Key Employee then been the record owner of a number
of shares of Common Stock equal to the number of Common Stock
Equivalent Units credited to such Key Employee's account on such
record date. The Dividend Equivalent Credits shall be converted into
additional Common Stock Equivalent Units as of the dividend payment
date by reference to the Fair Market Value of the Common Stock on the
dividend payment date.
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(b) Payment. The Fair Market Value of the number of shares of
Common Stock equal to the number of Common Stock Equivalent Units held
by a Key Employee pursuant to a Restricted Unit Award shall be paid to
the Key Employee in cash at the time provided in the applicable
Restricted Unit Award instrument or upon the lapse of the restrictions
applicable to such Restricted Unit Award (including a lapse of
restrictions because of a change of control, as provided in Section
7.3).
(c) Nature of Units. The Common Stock Equivalent Units shall be
used solely as a device for the measurement and determination of the
amount to be paid to Key Employees pursuant to grant of Restricted
Unit Awards. The Common Stock Equivalent Units shall not constitute or
be treated as property or as a trust fund of any kind. Common Stock
Equivalent Units may not be sold, assigned, transferred, pledged,
hypothecated, or otherwise disposed of by a Key Employee. All amounts
at any time attributable to the Common Stock Equivalent Units shall be
and remain the sole property of the Company, and all Key Employees'
rights hereunder are limited to the rights to receive cash upon the
vesting of the Restricted Unit Awards.
5.4 Grant of Stock to Eligible Directors.
(a) Stock Awarded as Compensation. Each Eligible Director may
elect, except as provided below in Section 5.4(b)(i), to receive any
or all of such Director's annual compensation for his or her service
as a Director in Common Stock instead of in cash. The number of shares
provided the Eligible Director shall equal the quotient of x divided
by y where x equals that amount of compensation that the Eligible
Director elects to receive in Common Stock and y equals the Fair
Market Value of a share of Common Stock on the first business day
after the Board meeting to which such award of Common Stock relates.
Prior to the calendar year in which the shares are awarded as
compensation, the Eligible Director shall also elect whether to take
immediate receipt of the Common Stock or to defer receipt of the
Common Stock under the terms of the Deferred Compensation Plan for
Directors.
(b) Grant of Restricted Stock Awards to Eligible Directors. Each
Eligible Director who, on the first business day following the 1998
annual meeting or who, upon the Eligible Director's election to the
Board subsequent to such date, owns less than 1,000 shares of Common
Stock, shall receive a Restricted Stock Award equal to that number of
shares of Common Stock necessary to increase such Eligible Director's
ownership of Common Stock to 1,000 shares.
(i) Vesting of Shares. Until such time as all of the shares
awarded under the Restricted Stock Award have vested, the
Eligible Director shall apply $6,000 of such Eligible Director's
annual retainer toward acquiring a vested interest in such shares
of Common Stock. The shares of Common Stock will vest based on
the Fair Market
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Value of the shares on the date the Restricted Stock Award is
granted.
(ii) Deferral. Prior to receipt of the shares of Common
Stock granted under the Restricted Stock Award, the Eligible
Director shall elect whether to take receipt of the Common Stock
awarded or to defer receipt of the Common Stock under the terms
of the Deferred Compensation Plan for Directors.
(iii) Restrictions. Restricted Stock Awards to Eligible
Directors shall not be subject to the achievement of Performance
Objectives, but shall be subject to the provisions regarding
restrictions set forth in Sections 6.1, 7.2 and 7.3. Each
Restricted Stock Award made to an Eligible Director shall be
evidenced by an instrument prescribed in form by the Committee,
but consistent with the terms of this Plan. The Restricted Stock
Award to an Eligible Director shall consist of shares of Common
Stock represented by a stock certificate. The Eligible Director
shall have absolute ownership of such shares including the right
to vote the same and receive dividends thereon, subject, however,
to the terms, conditions and restrictions described in this Plan.
Notwithstanding the foregoing, shares of Common Stock transferred
to an Eligible Director pursuant to a Restricted Stock Award
shall be held in escrow pursuant to an agreement satisfactory to
the Committee until the restrictions provided for in Section 6.1
shall have lapsed.
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ARTICLE VI
RESTRICTIONS APPLICABLE TO RESTRICTED
STOCK AWARDS AND RESTRICTED UNIT AWARDS
6.1 Restrictions on Restricted Stock Awards. Each Restricted Stock Award
granted under this Plan shall contain the terms, conditions, and restrictions
set forth in this Section 6.1 and Restricted Stock Awards granted to Key
Employees shall contain such additional terms, conditions, and restrictions as
may be determined by the Committee. Until the restrictions set forth in this
Section 6.1 shall lapse pursuant to Article VII, shares of Common Stock awarded
to a Key Employee or an Eligible Director pursuant to each Restricted Stock
Award:
(a) shall not be sold, assigned, transferred, pledged, hypothecated,
or otherwise disposed of; and
(b) shall be returned to the Company, and all rights of the Key
Employee or Eligible Director to such shares shall terminate without any
payment of consideration by the Company, if (1) the Committee notifies the
Key Employee pursuant to Section 7.1 (as of the end of the Performance
Cycle or portion thereof) that it has determined that the Performance
Objectives established with respect to all or a portion of the shares of
Common Stock granted under such Restricted Stock Award have not been
achieved, (2) the Key Employee's continuous employment with the Company or
any of its Subsidiaries shall terminate for any reason, except as provided
in Section 7.2 or 7.3, or (3) the Eligible Director terminates membership
on the Board for any reason prior to full vesting of the shares of Common
Stock granted; provided, however, that this subparagraph (b)(3) shall not
apply to shares of Common Stock that have vested pursuant to the provisions
of Section 5.4.
6.2 Restrictions on Restricted Unit Awards. Each Restricted Unit Award
granted under this Plan shall contain such terms, conditions, and restrictions
as may be determined by the Committee. Until such restrictions shall lapse
pursuant to Article VII, Common Stock Equivalent Units awarded to a Key Employee
pursuant to each Restricted Unit Award shall be forfeited, and all rights of the
Key Employee relating to such Common Stock Equivalent Units shall terminate
without any payment of consideration by the Company, if (a) the Committee
notifies the Key Employee pursuant to Section 7.1 (as of the end of the
Performance Cycle or portion thereof) that it has determined that the
Performance Objectives established with respect to all or a portion of the
Common Stock Equivalent Units granted under such Restricted Unit Award have not
been achieved, or (b) the Key Employee's continuous employment with the Company
or any of its Subsidiaries shall terminate for any reason, except as provided in
Section 7.2 or 7.3.
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ARTICLE VII
LAPSE OF RESTRICTIONS
7.1 Lapse of Restrictions Due to Achievement of Performance Objectives.
As soon as practicable after the close of each Performance Cycle, the Committee
shall determine whether the Company has achieved the Performance Objectives
established for such Performance Cycle. The Committee shall notify each Key
Employee who has received a Restricted Stock Award or a Restricted Unit Award
whether the Performance Objectives established for the Performance Cycle have
been achieved, the number of shares, if any, of Common Stock or the number of
Common Stock Equivalent Units, if any, with respect to which the restrictions of
Article VI have lapsed, the number of shares of Common Stock or the number of
Common Stock Equivalent Units, if any, which have been forfeited, and the number
of Opportunity Shares or Opportunity Units, if any, related to such awards which
such Key Employee shall receive. Any lapse of restrictions or award of
Opportunity Shares or Opportunity Units pursuant to this Section 7.1 shall occur
on the date the Committee notifies the Key Employee thereof in writing.
7.2 Lapse of Restrictions Due to Certain Terminations of Employment. If
a Key Employee who has been in the continuous employment of the Company or of
any Subsidiary since the date on which a Restricted Stock Award or a Restricted
Unit Award was granted to such Key Employee shall, while in such employment and
prior to the close of the Performance Cycle with respect to which such award was
granted:
(a) terminate employment by reason of retirement on or after such Key
Employee's 65th birthday under a Company-sponsored retirement plan, the
restrictions set forth in Section 6.1 shall lapse, as to all shares
included in the Restricted Stock Award or as to all Common Stock Equivalent
Units included in the Restricted Unit Award granted to such Key Employee,
on the date of such retirement; or
(b) terminate employment by reason of death, Disability, or retirement
prior to such Key Employee's 65th birthday but on or after the earliest
date on which such Key Employee is eligible to retire under a
Company-sponsored retirement plan with an immediate retirement benefit, or
if such Key Employee's employment is terminated by the Company without
cause, the restrictions provided for in Section 6.1 (b)(2) or Section
6.2(b), as the case may be, shall lapse on the date of such event and all
other restrictions provided for in Section 6.1 or Section 6.2, as the case
may be, shall lapse on the date of such event as to the same proportion of
the shares included in the Restricted Stock Award or Common Stock
Equivalent Units included in the Restricted Unit Award granted to such Key
Employee (together with the maximum amount of Opportunity Shares or
Opportunity Units, if any, related to the Restricted Stock Award or
Restricted Unit Award which may be awarded to such Key Employee) as the
number of days elapsed in the Performance Cycle as of the date of such
event bears to the total number of days in the Performance Cycle.
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The restrictions set forth in Section 6.1(a) shall lapse as to all vested shares
covered by the Restricted Stock Awards made to each Eligible Director during his
or her term as a director immediately upon termination of that term.
7.3 Lapse of Restrictions Upon Change in Control. Notwithstanding any
provision of Section 6.1, Section 6.2, or any other provision of this Plan or
any provision in any grant or award hereunder to the contrary, (i) with respect
to Eligible Directors, the restrictions provided for in 6.1(a) on the shares of
Common Stock heretofore or hereafter granted pursuant to Restricted Stock Awards
and (ii) with respect to Key Employees, all of the restrictions provided for in
Article VI on the shares of Common Stock heretofore or hereafter granted
pursuant to Restricted Stock Awards and the Common Stock Equivalent Units
heretofore or hereafter granted pursuant to Restricted Unit Awards shall lapse
and all Opportunity Shares and Opportunity Units related to such awards shall be
granted upon and simultaneously with the occurrence of any "change in control"
of the Company. Such a "change in control" shall be deemed to have taken place
if:
(a) an event involving the Company occurs of a nature that the Company
would be required to report in response to item 5(f) of schedule 14A of
regulation 14A promulgated by the Securities and Exchange Commission (the
"SEC") under the Securities Exchange Act of 1934, as amended (the "1934
Act");
(b) any "person" (as such term is used in sections 13(d) and 14(d) of
the 1934 Act), other than the Company or any "person" who on the effective
date of this Plan is a director or officer of the Company, is or becomes
the "beneficial owner" (as determined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding
securities;
(c) during any period of 24 consecutive months after the effective
date of this Plan, individuals who at the beginning of such period
constitute the Board of Directors cease for any reason to constitute at
least a majority thereof, unless the election of each director who was not
a director at the beginning of such period shall have been approved in
advance by directors representing at least 80% of the directors then in
office who were directors at the beginning of such period;
(d) the Company shall be party to a merger or consolidation with
another corporation and as a result of such transaction less than 80% of
the then outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the former shareholders of
the Company other than "affiliates" (as such term is defined in Rule 405
promulgated by the SEC under the Securities Act of 1933, as amended (the
"1933 Act")) of any party to such transaction, as the same shall have
existed immediately before such transaction;
(e) the Company sells, leases, or otherwise disposes of, in one
transaction or in a series of related transactions, all or substantially
all of its assets; or
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(f) the shareholders of the Company approve a plan of dissolution or
liquidation.
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ARTICLE VIII
TAX PAYMENTS
8.1 Tax Payments. A Key Employee who has received shares of Common Stock
pursuant to a Restricted Stock Award with respect to which all of the
restrictions set forth in Article VI shall have lapsed or pursuant to an award
of Opportunity Shares related to such Restricted Stock Award may also receive
from the Company a cash payment in the year following the close of the
Performance Cycle in an amount determined by the Committee, if any, which amount
will be sufficient to pay such Key Employee's tax liability (assuming the
highest rates of tax applicable to any individual taxpayer in the year in which
such payment is made) with respect to (i) such shares and (ii) such cash
payment.
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ARTICLE IX
OPTIONS AND STOCK APPRECIATION RIGHTS
9.1 Grant of Options.
(a) Grant to Key Employees. The Committee may grant Incentive
Stock Options and/or Nonstatutory Stock Options to Key Employees. All
Options under this Plan shall be granted within ten years of the date
this Plan is originally adopted or the date this Plan is originally
approved by shareholders of the Company, whichever is earlier.
(b) Grant to Eligible Directors. Each Eligible Director, upon
such Eligible Director's election to the Board, shall be granted an
award of an immediately exercisable Nonstatutory Stock Option to
purchase 2,500 shares of Common Stock. Each Eligible Director who is,
on the date of the 1998 annual meeting, serving on the Board and whose
term on the Board expires in 1999 or 2000 shall receive an immediately
exercisable Nonstatutory Stock Option on the first business day
following the 1998 annual meeting to acquire a number of shares of
Common Stock equal to the product of 2,500 multiplied by a fraction,
which fraction has a numerator equal to the years remaining in the
Eligible Director's term of office and a denominator equal to three.
Except as provided in Section 10.2, such options granted under this
Section 9.1(b) shall expire and be of no further effect ten years
after the date on which such option is granted.
(c) Option Price. The purchase price per share of Common Stock
under each Option shall be not less than 100% of the Fair Market Value
per share of such Common Stock on the date the Option is granted and,
in any event, shall not be less than the par value per share of the
Common Stock. The Option price may be subject to adjustment in
accordance with the provisions of Section 13.3 hereof.
(d) Option Agreements. Options and any Stock Appreciation Rights
attached to such Options shall be evidenced by Option Agreements in
such form as the Committee shall approve and containing such terms and
conditions, including the period of their exercise and whether in
installments or otherwise, as shall be specified therein, which need
not be the same for all Options.
(e) Options Nontransferable. An Option granted under this Plan
shall by its terms be nontransferable by the Key Employee or the
Eligible Director (collectively, the Grantee) other than by will or
the laws of descent and distribution, and, during the lifetime of the
Grantee, shall be exercisable only by such Grantee. No transfer of an
Option by a Grantee by will or by the laws of descent and distribution
shall be effective to bind the Company unless the Company shall have
been furnished
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with written notice thereof and a copy of the will and/or such other
evidence as the Committee may determine necessary to establish the
validity of the transfer.
9.2 Exercise of Options.
(a) Term of Options. Except as provided in Section 9.1(b), no
Option granted under this Plan may be exercised until one year after
the date of grant thereof. Options may be exercised over such period,
ending not later than ten years from the date such Options shall have
been granted, as the Committee shall determine at the time each Option
is granted. The restrictions contained in the preceding sentences
shall cease to apply to the exercise of any Option heretofore or
hereafter granted under this Plan and any such Option and its attached
Stock Appreciation Rights, if any, shall become exercisable in full
upon and simultaneously with the occurrence of any "change in control"
(as defined in Section 7.3) of the Company.
(b) Payment on Exercise. No shares of Common Stock shall be
issued on the exercise of an Option unless paid for in full at the
time of purchase. Payment for shares of Common Stock purchased upon
the exercise of an Option shall be made in cash or, with the consent
of the Committee, in Common Stock valued at the then Fair Market Value
thereof, or by a combination of cash and Common Stock. No Grantee
shall have any rights as a shareholder with respect to any share of
Common Stock covered by an Option unless and until the Grantee shall
have become the holder of record of such share, and, except as
otherwise permitted by Section 13.3 hereof, no adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash,
securities, or other property or distributions or other rights) in
respect of such share for which the record date is prior to the date
on which such Grantee shall have become the holder of record thereof.
9.3 Incentive Stock Options.
(a) Annual Limitation. Any other provision of this Plan
notwithstanding, but subject to the limitation of Section 3.2 relating
to the aggregate number of shares subject to this Plan, Incentive
Stock Options may be granted with respect to any number of shares,
subject to the limitation that the aggregate Fair Market Value of such
shares (determined as of the time such Option is granted) with respect
to which such Options are exercisable for the first time by a Key
Employee during any one calendar year (under this Plan and any other
plans of the Company and its Subsidiaries) shall not exceed $100,000.
To the extent that the aggregate Fair Market Value of shares with
respect to which Incentive Stock Options (determined without regard to
this subsection) are exercisable for the first time by any Key
Employee during any calendar year (under this Plan and any other plan
of the Company and its Subsidiaries) exceeds $100,000, such Options
shall be treated as Nonstatutory Options.
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<PAGE> 19
(b) Incentive Stock Options Granted to Ten Percent Shareholders.
No Incentive Stock Options shall be granted to any Key Employee who
owns, directly or indirectly pursuant to Section 424(d) of the Code,
stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any Subsidiary, unless at the
time such Incentive Stock Option, by its terms, is not exercisable
after the expiration of five years from the date such Incentive Stock
Option is granted.
(c) Notice. Each Key Employee shall give prompt notice to the
Company of any disposition of shares acquired upon exercise of an
Incentive Stock Option if such disposition occurs within either two
years after the date of grant or one year after the date of transfer
of such shares to the Key Employee upon the exercise of such Incentive
Stock Option.
9.4 Stock Appreciation Rights Attached to Options.
(a) Award. The Committee may award an Attached Stock Appreciation
Right with respect to any shares of Common Stock covered by any Option
granted under this Plan, and such Attached Stock Appreciation Right
shall be granted only at the time of the grant of the related Option.
(b) Terms and Conditions. Each Attached Stock Appreciation Right
shall be subject to the same terms and conditions as the related
Option with respect to date of expiration, limitations on
transferability, and eligibility to exercise. No Attached Stock
Appreciation Right may be exercised after the related Option becomes
nonexercisable. Attached Stock Appreciation Rights shall be payable in
the form of cash or, at the election of the Committee, Common Stock or
a combination thereof.
(c) Amount of Compensation. The amount of compensation which
shall be payable to a Key Employee pursuant to the exercise of an
Attached Stock Appreciation Right shall be equal to the excess of the
Fair Market Value of one share of Common Stock on the date of exercise
of the Attached Stock Appreciation Right over Fair Market Value of
such share on the date the Attached Stock Appreciation Right was
granted multiplied by the number of Option shares with respect to
which the Attached Stock Appreciation Right is exercised.
(d) Termination of Option. Upon the exercise of an Attached Stock
Appreciation Right, the related Option shall cease to be exercisable
as to the number of shares of Common Stock with respect to which such
Attached Stock Appreciation Right was exercised, and the related
Option shall be considered to have been exercised to that extent.
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9.5 Stock Appreciation Rights Not Attached to Options.
(a) Award. The Committee may grant Unattached Stock Appreciation
Rights which are not attached to any Option granted under this Plan.
Unattached Stock Appreciation Rights shall expire five years after the
date of the grant thereof. Unattached Stock Appreciation Rights
granted to a Key Employee who is an officer or director of the Company
may not be exercised within six months after the Unattached Stock
Appreciation Rights are granted, except that this limitation shall not
be applicable in the event of death or disability of the Key Employee
occurring before the expiration of the six-month period.
(b) Exercise. Unattached Stock Appreciation Rights may be
exercised, to the extent exercisable by their terms, in whole or from
time to time in part, at any time before their expiration date. Any
exercise of Unattached Stock Appreciation Rights shall be accompanied
by a written notice to the Company specifying the number of Unattached
Stock Appreciation Rights being exercised. Upon the Key Employee's
exercise of Unattached Stock Appreciation Rights, such Key Employee
shall be entitled to receive a cash payment equal to the economic
value of those Unattached Stock Appreciation Rights. The economic
value of a single Unattached Stock Appreciation Right shall be equal
to the excess of (i) the Fair Market Value of one share of Common
Stock on the date the Unattached Stock Appreciation Right is exercised
over (ii) the Fair Market Value of one share of Common Stock on the
date the Unattached Stock Appreciation Right was granted to the Key
Employee. The economic value of all Unattached Stock Appreciation
Rights exercised by a Key Employee shall be the economic value of each
Unattached Stock Appreciation Right as provided in the preceding
sentence multiplied by the number of Unattached Stock Appreciation
Rights exercised.
(c) Nature of Unattached Stock Appreciation Rights. The
Unattached Stock Appreciation Rights shall be used solely as a device
for the measurement and determination of the amount to be paid to Key
Employees pursuant to grant of Unattached Stock Appreciation Rights.
The Unattached Stock Appreciation Rights shall not constitute or be
treated as property or as a trust fund of any kind. All amounts at any
time attributable to the Unattached Stock Appreciation Rights shall be
and remain the sole property of the Company, and all Key Employees'
rights hereunder are limited to the rights to receive cash upon the
exercise of the Unattached Stock Appreciation Rights.
(d) Unattached Stock Appreciation Rights Nontransferable. Any
rights arising under a grant of Unattached Stock Appreciation Rights
shall not be transferable otherwise than by will or the laws of
descent and distribution.
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ARTICLE X
TERMINATION OF EMPLOYMENT AND DEATH
10.1 Incentive Stock Options. Unless earlier terminated in accordance
with its terms, an Incentive Stock Option or Attached Stock Appreciation Right
related to such Incentive Stock Option shall terminate and no longer be
exercisable ninety days after the retirement or other termination of employment
of the Key Employee to whom the Option has been granted.
10.2 Nonstatutory Stock Options and Certain Stock Appreciation Rights.
Unless earlier terminated in accordance with its terms, a Nonstatutory Stock
Option and any Attached Stock Appreciation Right related to such Nonstatutory
Stock Option and an Unattached Stock Appreciation Right shall terminate and no
longer be exercisable after:
(a) the expiration of three years following the termination of
employment because of Disability or retirement under a retirement plan
maintained by the Company of the Key Employee to whom the Nonstatutory
Stock Option or Unattached Stock Appreciation Right has been granted,
or
(b) the expiration of three years following the termination of
service on the Board because of Disability by the Eligible Director to
whom the Nonstatutory Stock Option has been granted, or
(c) the expiration of thirty days following the termination of
employment by the Key Employee for any reason other than death,
Disability, or retirement as described in (a) above, or
(d) the expiration of thirty days following the termination of
service on the Board by the Eligible Director for any reason other
than death or Disability.
10.3 Death of Optionee. If a Key Employee or Eligible Director
("Optionee") shall die during the term of an Option or Stock Appreciation Right,
such Optionee's legal representatives shall be entitled to exercise the Option
or Stock Appreciation Right, in whole or in part, at any time within one year
following the death of such Optionee, to the extent such Option or Stock
Appreciation Right was exercisable by such Optionee on the date of such
Optionee's death.
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ARTICLE XI
ADMINISTRATION OF PLAN
11.1 The Committee. This Plan shall be administered solely by the
Compensation Committee of the Board of Directors; provided, however, that the
Compensation Committee shall administer the Plan only at such time as the
Committee shall consist of two or more nonemployee members of the Board of
Directors. The Committee shall have full and final authority to interpret this
Plan and the agreements evidencing Stock Incentives granted hereunder, to
prescribe, amend, and rescind rules and regulations, if any, relating to this
Plan, and to make all determinations necessary or advisable for the
administration of this Plan. The Committee's determination in all matters
referred to herein shall be conclusive and binding for all purposes and upon all
persons including, but without limitation, the Company, the shareholders of the
Company, the Committee, and each of the members thereof, Eligible Directors,
Employees of the Company, and their respective successors in interest.
11.2 Certain Powers. The Committee shall have authority to engage outside
consultants, auditors, or other professionals, and agents, trustees, custodians,
nominees, and other representatives and designees, to assist in the fulfillment
of the Committee's powers and duties under this Plan at the Company's expense.
In addition, the Committee shall have the authority, in its sole discretion, to
direct the establishment of a trust or other arrangement pursuant to which the
trustee or other contracting party would assume such obligations of the Company
as the Committee may prescribe which relate to the payment of cash benefits or
transfer of Common Stock to Key Employees in satisfaction of Key Employees'
rights under Stock Incentives. Any trust or other arrangement established
hereunder shall have such terms as the Committee shall deem necessary or
desirable, including such terms as the Committee shall prescribe with respect to
funding the trust or other arrangement and the revocability and termination
thereof.
11.3 Determinations of the Committee. In making its determinations
concerning the Key Employees who shall receive Stock Incentives, as well as the
number of shares to be covered thereby and/or cash awards payable thereunder and
the time or times at which they shall be granted, the Committee shall take into
account the nature of the services rendered by the respective Key Employees,
their past, present, and potential contribution to the Company's success, and
such other factors as the Committee may deem relevant. The Committee shall also
determine the form of Stock Incentives to be issued under this Plan and the
terms and conditions to be included therein, provided such terms and conditions
are not inconsistent with the terms of this Plan. The Committee may, in its sole
discretion, waive the vesting provisions and any other provisions of any Stock
Incentive granted to a Key Employee, provided such waiver is not inconsistent
with the terms of this Plan as then in effect.
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<PAGE> 23
ARTICLE XII
AMENDMENT AND TERMINATION OF PLAN
12.1 Amendment of Plan.
(a) General Provisions. The Plan may be amended at any time and
from time to time by the Board of Directors of the Company, but no
amendment which (1) increases the aggregate number of shares of Common
Stock and/or amounts of cash payments which may be granted pursuant to
this Plan (other than increases due to adjustments pursuant to Section
13.3), (2) extends the period during which Stock Incentives may be
granted under this Plan, (3) changes the class of Key Employees
eligible to receive Stock Incentives, or (4) would otherwise be
required to be approved by the holders of Common Stock pursuant to
Rule 16b-3 under the 1934 Act shall be effective unless and until the
same is approved by the affirmative vote, in person or by proxy, of
the holders of a majority of the shares of Common Stock present and
entitled to vote at a meeting held to take such action at which a
quorum is present.
(b) Amendments Relating to Incentive Stock Options. To the extent
applicable, this Plan is intended to permit the issuance of Incentive
Stock Options in accordance with the provisions of Section 422 of the
Code. The Plan may be modified or amended at any time, both
prospectively and retroactively, and in such manner as to affect
Incentive Stock Options previously granted, if such amendment or
modification is necessary for this Plan and the Incentive Stock
Options granted hereunder to qualify under said provisions of the
Code.
(c) Special Power to Amend. Notwithstanding any other provision
of the Plan, the Board of Directors may amend the Plan at any time and
from time to time so as to (i) remove any provision from the Plan that
is no longer required to enable the Plan to comply with Rule 16b-3
under the 1934 Act (or any similar substitute rule under Section 16 of
the 1934 Act) as in effect from time to time, (ii) add any provision
to the Plan that shall be required to enable the Plan to comply in
such respect, and (iii) modify the Plan to comply in such respect in
any instance in which the Plan as theretofore in effect shall impose
restrictions, limitations, or obligations more rigorous or burdensome
on the Company or Key Employees than those required by such rule (or
such substitute therefor) as from time to time in effect.
(d) Amendments Relating to Restricted Stock Awards to Eligible
Directors. Notwithstanding any other provision of the Plan, the
provisions of the Plan which constitute a formula award to Eligible
Directors for purposes of Rule 16b-3 under the 1934 Act may not be
amended more than once every six months, other than to comport with
changes in the Code or the rules thereunder.
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<PAGE> 24
12.2 Termination. The Board of Directors of the Company may at any time
terminate this Plan as of any date specified in a resolution adopted by the
Board. If not earlier terminated, this Plan shall terminate on January 1, 2000.
No Stock Incentives may be granted after this Plan has terminated. After this
Plan has terminated, the function of the Committee with respect to this Plan
will be limited to supervising the administration of Stock Incentives previously
granted.
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<PAGE> 25
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 Restrictions Upon Grant of Stock Incentives. The listing upon the
New York Stock Exchange and the Pacific Exchange Inc. or the registration or
qualification under any federal or state law of any shares of Common Stock to be
granted pursuant to this Plan (whether to permit the grant of Stock Incentives
or the resale or other disposition of any shares of Common Stock by or on behalf
of the Key Employees receiving such shares) may be necessary or desirable and,
in any such event, if the Committee in its sole discretion so determines,
delivery of the certificates for such shares of Common Stock shall not be made
until such listing, registration, or qualification shall have been completed. In
such connection, the Company agrees that it will use its best efforts to effect
any such listing, registration, or qualification, provided, however, that the
Company shall not be required to use its best efforts to effect such
registration under the 1933 Act other than on Form S-8, as presently in effect,
or other such forms as may be in effect from time to time calling for
information comparable to that presently required to be furnished under Form
S-8.
13.2 Registrations Upon Resale of Unregistered Stock. If the shares of
Common Stock that have been transferred to a Key Employee pursuant to the terms
of this Plan are not registered under the 1933 Act pursuant to an effective
registration statement, such Key Employee, if the Committee deems it advisable,
may be required to represent and agree in writing (i) that any shares of Common
Stock acquired by such Key Employee pursuant to this Plan will not be sold
except pursuant to an effective registration statement under the 1933 Act or
pursuant to an exemption from registration under said Act and (ii) that such Key
Employee is acquiring such shares of Common Stock for such Key Employee's own
account and not with a view to the distribution thereof.
13.3 Adjustments. The number of shares of Common Stock, Common Stock
Equivalent Units, or Stock Appreciation Rights authorized under this Plan, the
value of such shares, units, or rights, the number of shares of Common Stock
subject to Restricted Stock Awards to Eligible Directors, and the price to be
paid for any shares issuable pursuant to the exercise of Options shall be
subject to adjustment by the Committee, in its sole discretion, to reflect any
stock split, stock dividend, recapitalization, merger, consolidation,
reorganization, combination, or exchange of shares or other similar event.
13.4 Restrictive Legends.
(a) Any certificates for shares of Common Stock delivered
pursuant to Stock Incentives shall bear an appropriate legend
conforming to the requirements of applicable law referring to the
terms, conditions, and restrictions described in this Plan and in the
instruments evidencing the grant of the Restricted Stock Awards. Any
attempt to dispose of any shares of Common Stock in contravention of
the terms, conditions, and restrictions described in this Plan or in
the instruments evidencing the grant of the Restricted Stock Awards
shall be ineffective. The Company may also
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<PAGE> 26
place appropriate "stop transfer" instructions in the stock transfer
books of the Company with respect to any shares of Common Stock
covered by a Stock Incentive.
(b) Any shares of Common Stock received by a Key Employee as a
stock dividend on, or as a result of stock splits, combinations,
exchanges of shares, reorganizations, mergers, consolidations, or
otherwise with respect to shares of Common Stock received pursuant to
a Restricted Stock Award, shall have the same status and bear the same
legend as the shares received pursuant to the Restricted Stock Award.
13.5 Withholding of Taxes.
(a) Each Key Employee granted a Restricted Stock Award shall
agree that no later than the date of the lapse of all the restrictions
mentioned in Article VI hereof and in the instrument evidencing the
grant of the Restricted Stock Award and on the date of receipt of any
Opportunity Shares related to such Restricted Stock Award, such Key
Employee will pay to the Company, or make arrangements satisfactory to
the Committee regarding payments of, any taxes of any kind required by
law to be withheld with respect to such shares of Common Stock.
(b) Each Key Employee who exercises a Nonstatutory Stock Option
to purchase Common Stock shall agree that no later than the date of
such exercise or receipt the Key Employee will pay to the Company, or
make arrangements satisfactory to the Committee regarding payment of,
any taxes of any kind required by law to be withheld with respect to
the transfer to such Key Employee of such shares of Common Stock.
(c) Each Key Employee who receives payment in cash under this
Plan shall receive such payments net of an amount sufficient to
satisfy any taxes of any kind required to be withheld from such
payments.
13.6 Restrictions on Benefit. Notwithstanding the provisions of Sections
7.3 and 9.2(a) of this Plan, the aggregate present value of all parachute
payments payable to or for the benefit of a participant in the Plan, whether
payable pursuant to the Plan or otherwise, shall be limited to three times the
participant's base amount less one dollar and, to the extent necessary, the
acceleration of unmatured Option installments and Stock Appreciation Rights
installments and the termination of restrictions on Restricted Stock Awards and
Restricted Unit Awards shall be reduced by the Company in order that this
limitation not be exceeded. For purposes of this Section 13.6, the terms
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<PAGE> 27
"parachute payment," "base amount," and "present value" shall have the meanings
assigned thereto under Section 280G of the Code. It is the intention of this
Section 13.6 to avoid excise taxes on the participant under Section 4999 of the
Code or the disallowance of a deduction to the Company pursuant to Section 280G
of the Code.
CLECO CORPORATION
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<PAGE> 28
CLECO CORPORATION
1990 LONG-TERM INCENTIVE COMPENSATION PLAN
(As Amended and Restated, Effective April 24, 1998)
<PAGE> 1
June 28, 1999
Cleco Corporation
Cleco Holding Corporation
2030 Donahue Ferry Road
Pineville, Louisiana 71360-5226
Re: Cleco Corporation Post-Effective Amendment No. 1 to
Registration Statement on Form S-8, SEC File No. 33-38362
Ladies and Gentlemen:
We have acted as counsel to Cleco Corporation ("Cleco") and its
subsidiary, Cleco Holding Corporation (the "Company"), in connection with the
preparation of the above referenced Post-Effective Amendment No. 1 to
Registration Statement on Form S-8 filed by the Company with the Securities and
Exchange Commission (the "Commission") with respect to the issuance by the
Company of up to 800,000 shares of $2.00 par value common stock (the "Company
Shares") in connection with the assumption of such Registration Statement by the
Company, as a successor issuer, in accordance with Rule 414 promulgated under
the Securities Act of 1933, as amended. In so acting, we have examined and
relied upon the original, or a photostatic or certified copy, of such records of
the Company, certificates of officers of the Company and of public officials,
and such other documents as we have deemed relevant and necessary as the basis
for the opinion set forth below.
In such examination, we have assumed the genuineness of all signatures
appearing on all documents, the legal capacity of all persons signing such
documents, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified,
conformed or photostatic copies, the accuracy and completeness of all corporate
records made available to us by the Company, and the truth and accuracy of all
facts set forth in all certificates provided to or examined by us.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that the Company Shares have been duly authorized, and, when issued in
accordance with the terms described in the Post-Effective Amendment, will be
validly issued, fully paid and nonassessable.
<PAGE> 2
Cleco Corporation
Cleco Holding Corporation
June 28, 1999
Page 2
The foregoing opinions are limited to the laws of the State of
Louisiana and the federal laws of the United States of America. We express no
opinion as to matters governed by the laws of any other state. Furthermore, no
opinion is expressed herein as to the effect of any future acts of the parties
or changes in existing law. We undertake no responsibility to advise you of any
changes after the date hereof in the law or the facts presently in effect that
would alter the scope or substance of the opinions herein expressed.
This letter expresses our legal opinion as to the foregoing matters
based on our professional judgment at this time; it is not, however, to be
construed as a guaranty, nor is it a warranty that a court considering such
matters would not rule in a manner contrary to the opinion set forth above.
We consent to the filing of this opinion as an exhibit to the
Post-Effective Amendment and to the reference to us in the prospectus under the
caption "Legal Matters." In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, and the General Rules and Regulations of the
Commission thereunder.
Very truly yours,
PHELPS DUNBAR, L.L.P.
