PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CSX CORPORATION
(Exact name of registrant as specified in its charter)
COMMONWEALTH OF VIRGINIA 62-1051971
(State or other jurisdiction of (I.R.S. Emloyer
incorporation of organization) Identification No.)
One James Center
901 East Cary Street
Richmond, Virginia 23219
(Address, including zip code, of Principal Executive Offices)
CSX CORPORATION
STOCK PURCHASE AND LOAN PLAN
(Full title of the plan)
Ellen M. Fitzsimmons
Assistant General Counsel
CSX Corporation
One James Center
901 East Cary Street
Richmond, Virginia 23219
(804) 782-1400
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of the Registration Statement.
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CALCULATION OF REGISTRATION FEE
-------------------------------
- --------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price Per Offering Registration
be Registered Registered Share Price Fee
- --------------------------------------------------------------------------
Common Stock 4,600,000(1) $46.63(3) $214,498,000 $73,964.83
$1.00 par value
Rights to Purchase
Preferred Stock 4,600,000(2) $ 100.00
- ---------------------------------------------------------------------------
(1) Represents the maximum number of shares of Common Stock of CSX
Corporation that may be offered and sold hereunder.
(2) The Rights to Purchase Preferred Stock will be attached to and
trade with shares of the Common Stock of the Company. Value attributable
to such rights, if any, will be reflected in the market price of the shares
of Common Stock. The fee paid represents the minimum statutory fee
pursuant to Section 6(b) of the Securities Act of 1933, as amended.
(3) Estimated pursuant to Rule 457(c) solely for purposes of
calculating registration fee. Based on the average of the high and low
prices for the Common Stock reported in the consolidated reporting system
of the New York Stock Exchange on July 25, 1996.
All securities covered by this Registration Statement will be issued
to certain present and future officers and employees of the Company (or of
any subsidiary of the Company) from time to time under the CSX Corporation
Stock Purchase and Loan Plan.
Exhibit Index begins on page II-1.
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PART II. INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
-----------------------------------------------
The Company hereby incorporates by reference into this Registration
Statement the documents listed below which have been filed with the Securities
and Exchange Commission.
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 29, 1995.
(b) All reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") since the end
of the fiscal year covered by the annual report referred to in (a) above,
including the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 29, 1996 and June 28, 1996.
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-B filed on September 25, 1980 under Section
12 of the Exchange Act, as amended in Amendment Number 1 filed with the
Commission on June 17, 1988.
(d) The description of the Rights associated with the Common Stock
appearing in Amendment Number 1 to its Form 8-A dated September 7, 1990, filed
with the Commission in connection with the listing of such Rights on the New
York Stock Exchange.
Each document or report subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange
Act after the date of this Registration Statement, but prior to the filing of
a post-effective amendment to this Registration Statement which indicates that
all securities offered by this Registration Statement have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement. Each document or
report incorporated into this Registration Statement by reference shall be
deemed to be a part of this Registration Statement from the date of the filing
of such document with the Commission until the information contained therein
is superseded or updated by any subsequently filed document which is
incorporated by reference into this Registration Statement or by any
subsequently furnished appendix to this Registration Statement.
Item 4. Description of Securities
-------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
The legality of the Common Stock to which this Registration Statement
relates has been passed upon for the Company by Ellen M. Fitzsimmons,
Assistant General Counsel of the Company. Ms. Fitzsimmons is paid a salary by
the Company, is a participant in various employee benefit plans offered to
employees of the Company generally, and owns and has options to purchase
shares of Common Stock.
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Item 6. Indemnification of Directors and Officers
-----------------------------------------
Article 10 of the Virginia Stock Corporation Act provides, in
general, for indemnification by a corporation of any person threatened with or
made a party to any action, suit or proceeding by reason of the fact that he
or she is, or was, a director, officer, employee or agent of such corporation.
Indemnification is also authorized with respect to a criminal action or
proceeding where the person had no reasonable cause to believe that his
conduct was unlawful.
Article VII of the Company's Amended and Restated Articles of
Incorporation provides for mandatory indemnification of directors and officers
against liability incurred by them in proceedings instituted or threatened
against them by third parties, or by or on behalf of the Company itself,
relating to the manner in which they performed their duties unless they have
been guilty of willful misconduct or of a knowing violation of the criminal
law.
The Company's Amended and Restated Articles of Incorporation also
provide that in every instance permitted under Virginia corporate law in
effect from time to time, the liability of a director or officer of the
Company to the Company or its shareholders arising out of a single transac-
tion, occurrence or course of conduct shall be limited to one dollar.
The Company maintains standard policies of officers' and directors'
liability insurance.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not Applicable.
Item 8. Exhibits
--------
See Exhibit Index.
Item 9. Undertakings
------------
The undersigned registrant hereby undertakes or acknowledges:
(a) (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. Notwithstanding the foregoing, any increase or
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PAGE 5
decrease in the 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 and of the estimated maximum offering range may
be reflected in the form of a 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 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(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 by the 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.
(b) That, for the 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 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 time shall be deemed to be the
initial bona fide offering thereof.
(c) 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 Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by 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 Act
and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant 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 Richmond, Commonwealth of Virginia,
on July 30, 1996.
CSX CORPORATION
Registrant
By: /s/JAMES L. ROSS
--------------------------
James L. Ross
Vice President and Controller
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
John W. Snow Chairman of the Board and
Director, President and Chief
Executive Officer (Principal
Executive Officer)*
Paul R. Goodwin Executive Vice President-Finance
(Principal Financial Officer)*
/s/ JAMES L. ROSS
James L. Ross Vice President and Controller
(Principal Accounting Officer)
Elizabeth E. Bailey Director*
Robert L. Burrus, Jr. Director*
Bruce C. Gottwald Director*
John R. Hall Director*
Robert D. Kunisch Director*
Hugh L. McColl, Jr. Director*
James W. McGlothlin Director*
Southwood J. Morcott Director*
Charles E. Rice Director*
William C. Richardson Director*
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SIGNATURES (Continued)
Frank S. Royal, M.D. Director*
*By: /s/ALAN A. RUDNICK
---------------------
Alan A. Rudnick
Attorney-in-Fact
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Exhibit Index
-------------
The following exhibits are filed herewith as part of this Registration
Statement:
Electronic
Exhibit Page Submission
No. No. Document
- ------- ---- ----------
5 Opinion and Consent of Ellen M. Fitzsimmons,
Assistant General Counsel of the Company, as
to the validity of the Common Stock and the
Rights offered hereunder II-2 2
23.1 Consent of Independent Auditors II-3 3
23.2 Consent of Ellen M. Fitzsimmons (included
in Exhibit 5) II-2 2
24 Power of Attorney II-4 4
99 Stock Purchase and Loan Plan II-6 5
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EXHIBIT 5
July 30, 1996
CSX Corporation
One James Center
901 E. Cary Street
Richmond, Virginia 23219
Ladies and Gentlemen:
I am Assistant General Counsel of CSX Corporation and am providing
this opinion in connection with the filing with the Securities and Exchange
Commission of a registration statement on Form S-8 (the "Registration
Statement") relating to the CSX Corporation Stock Purchase and Loan Plan (the
"Plan"). The Registration Statement covers 4,600,000 shares of Common Stock
of the Company (the "Common Stock") which have been reserved for issuance
under the Plan and Rights to purchase Preferred Stock associated with the
Common Stock (the "Rights").
I am of the opinion that the 4,600,000 shares of Common Stock and the
related Rights when issued or sold in accordance with the terms and provisions
of the Plan, will be duly authorized, legally issued, fully paid and
nonassessable.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ELLEN M. FITZSIMMONS
------------------------
Ellen M. Fitzsimmons
Assistant General Counsel
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EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the CSX Corporation Stock Purchase and Loan
Plan, as amended and restated February 14, 1996, as amended through July 10,
1996, of our report dated January 31, 1996, with respect to the consolidated
financial statements of CSX Corporation and subsidiaries included in its
Annual Report (Form 10-K) for the year ended December 29, 1995, filed with the
Securities and Exchange Commission.
/s/ERNST & YOUNG LLP
--------------------
Richmond, Virginia Ernst & Young LLP
July 25, 1996
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EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each of the undersigned officers
and directors of CSX CORPORATION, a Virginia corporation (the "Corporation"),
hereby constitutes and appoints each of James L. Ross, Alan A. Rudnick and
Peter J. Shudtz his or her true and lawful attorneys-in-fact and agents, for
him or her and in his or her name, place and stead to sign and file a
registration statement under the Securities Act of 1933, as amended,
registering securities of the Corporation which may be issued pursuant to the
Corporation's Stock Purchase and Loan Plan, with power to sign and file any
amendment or amendments, including post-effective amendments thereto, with all
exhibits thereto and any and all other documents in connection therewith, with
the Securities and Exchange Commission, hereby granting unto such attorneys-
in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and 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 may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
25th day of April, 1996.
/s/JOHN W. SNOW
- ---------------
John W. Snow
/s/PAUL R. GOODWIN
- ------------------
Paul R. Goodwin
/s/ELIZABETH E. BAILEY
- ----------------------
Elizabeth E. Bailey
/s/ROBERT L. BURRUS, JR.
- ------------------------
Robert L. Burrus, Jr.
/s/BRUCE C. GOTTWALD
- --------------------
Bruce C. Gottwald
/s/JOHN R. HALL
- ---------------
John R. Hall
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/s/ROBERT D. KUNISCH
- --------------------
Robert D. Kunisch
/s/HUGH L. MCCOLL, JR.
- ----------------------
Hugh L. McColl, Jr.
/s/JAMES W. McGLOTHLIN
- ----------------------
James W. McGlothlin
/s/SOUTHWOOD J. MORCOTT
- -----------------------
Southwood J. Morcott
/s/CHARLES E. RICE
- ------------------
Charles E. Rice
/s/WILLIAM C. RICHARDSON
- ------------------------
William C. Richardson
/s/FRANK S. ROYAL
- -----------------
Frank S. Royal
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EXHIBIT 99
CSX CORPORATION
Stock Purchase and Loan Plan
As Amended and Restated February 14, 1996,
as Amended through July 10, 1996
1. PURPOSE
The CSX Corporation 1991 Stock Purchase and Loan Plan (the "1991
Plan") was established to encourage and increase the ownership of the common
stock of CSX Corporation (the "Company") by those employees of the Company or
a Subsidiary who, by virtue of their responsibilities or positions, were most
likely to have the opportunity to enhance long-term performance of the Company
and shareholder value. The Company continues to believe that ownership of the
Company's common stock stimulates the efforts of those employees upon whose
judgment and interest the Company is and will be largely dependent for the
successful conduct of its business and will further the identification of
those employees' interests with those of the Company's shareholders.
Unless the 1991 Plan is extended or replaced, these benefits will
generally end July 31, 1996. Management believes it is in the best interests
of the Company's shareholders to extend the 1991 Plan in order to continue the
original objective of assuring that significant amounts of the Company's
common stock are held by employees whose interests are identified with those
of the Company's non-employee shareholders. Accordingly, the 1991 Plan is
amended and restated as of February 14, 1996 (the "Plan"), to maintain and
expand this objective.
Notwithstanding anything contained in this amended and restated
Plan, the provisions of the 1991 Plan in effect prior to the amendment and
restatement reflected herein shall continue to apply with respect to Company
Stock acquired pursuant to a Purchase Award under the 1991 Plan as to which a
Participant is not granted or does not exercise an Exchange Award.
2. DEFINITIONS AND CONSTRUCTION
Unless the content clearly indicates to the contrary, in reading
this Plan, the singular shall include plural and the masculine shall include the
feminine.
As used in the Plan, the following terms have the indicated
meanings:
(a) Applied Dividends
-----------------
"Applied Dividends" means, as provided in Section 6(e), dividends
paid on pledged Company Stock used to reduce Interest.
(b) Board
-----
"Board" means the Company's Board of Directors.
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2. DEFINITIONS AND CONSTRUCTION, Continued
(c) Business Day
------------
"Business Day" means, if relevant to a determination of the value
of Company Stock, a day on which shares of Company Stock are or could be traded
on the New York Stock Exchange.
(d) Cause
-----
"Cause" means a Participant's: (i) act or acts of personal
dishonesty intended to result in substantial personal enrichment at the
expense of the Company or a Subsidiary; (ii) repeated violations of the
Participant's responsibilities which are demonstrably willful and deliberate
and which are not remedied in a reasonable period of time after receipt of
written notice from the Company or a Subsidiary; or (iii) conviction of a
felony involving moral turpitude.
(e) Change of Control
-----------------
"Change of Control" means any of the following:
(i) Stock Acquisition. The acquisition, by any individual, entity or
group [within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")] (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock"), or (B)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for purposes
of this subsection (i), the following acquisitions shall not constitute a
Change of Control: (A) any acquisition directly from the Company; (B) any
acquisition by the Company; (C) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; or (D) any acquisition by any corporation pursuant
to a transaction which complies with clauses (A), (B) and (C) of subsection
(iii) of this Section 2(e); or
(ii) Board Composition. Individuals who, as of the date hereof,
constitute the Board of Directors (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board of Directors; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors; or
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2. DEFINITIONS AND CONSTRUCTION, Continued
(e) Change of Control, Continued
-----------------
(iii) Business Combination. Approval by the shareholders of the Company
of a reorganization, merger, consolidation or sale or other disposition of all
or substantially all of the assets of the Company or its principal Subsidiary
that is not subject, as a matter of law or contract, to approval by the
Surface Transportation Board or any successor agency or regulatory body having
jurisdiction over such transactions (the "Agency") (a "Business Combination"),
in each case, unless, following such Business Combination:
(A) all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or its
principal Subsidiary or all or substantially all of the assets of the Company
or its principal Subsidiary either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be;
(B) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination; and
(C) at least a majority of the members of the Board of Directors
resulting from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the action of the
Board of Directors, providing for such Business Combination; or
(iv) Regulated Business Combination. Approval by the shareholders of the
Company of a Business Combination that is subject, as a matter of law or
contract, to approval by the Agency (a "Regulated Business Combination")
unless such Business Combination complies with clauses (A), (B) and (C) of
subsection (iii) of this Section 2(e); or
(v) Liquidation or Dissolution. Approval by the shareholders of the
Company of a complete liquidation or dissolution of the Company or its
principal Subsidiary.
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2. DEFINITIONS AND CONTRUCTION, Continued
(f) Commitment Date
---------------
"Commitment Date" means a date fixed by the Committee which shall
be the first day of the Commitment Period.
(g) Commitment Period
-----------------
"Commitment Period" means a period of twenty (20) Business Days
beginning with the Commitment Date during which a Participant who has been
granted a Purchase Award must purchase all or part of the underlying Company
Stock.
(h) Committee
---------
"Committee" means the Committee of the Board appointed to
administer the Plan as provided in Section 10.
(i) Company
-------
"Company" means CSX Corporation.
(j) Company Stock
-------------
"Company Stock" means the common stock of the Company and rights,
options or warrants for the purchase of securities of the Company which may be
issued with shares of common stock pursuant, and subject to, plans or
agreements adopted or entered into from time to time by the Company.
(k) Disability
----------
"Disability" means the inability to perform the services for
which a Participant was employed as a result of a physical or mental
impediment entitling the Participant to begin receiving benefits under the
CSX Salary Continuation and Long-Term Disability Plan.
(l) Equity
------
"Equity" means, as of any date, the Exchange Award Purchase
Price of a share of Company Stock less the applicable portion of the unpaid
balance and accrued interest of a Purchase Loan to which such share of
Company Stock is subject.
(m) Exchange Act
------------
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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2. DEFINITIONS AND CONSTRUCTION, Continued
(n) Exchange Award
--------------
"Exchange Award" means a Purchase Award granted pursuant to
Section 4 to a Participant who received a Purchase Award under the 1991 Plan.
(o) Exchange Award Down Payment
---------------------------
"Exchange Award Down Payment" means a dollar amount computed by
taking a percentage, to be determined by the Committee, of the Exchange Award
Purchase Price of the Company's common stock on the Commitment Date multiplied
by the number of shares in the Exchange Award; provided, however, such
percentage shall not be less than 10% nor more than 25%.
(p) Insider
-------
"Insider" means any person subject to Section 16(b) of the
Exchange Act.
(q) Interest
--------
"Interest" means an amount calculated using the Applicable Federal
Rate, as determined for purposes of Section 1274(d) of the IRC.
(r) Interest Spread
---------------
"Interest Spread" means, at the time of determination, Interest
accrued on a Purchase Loan reduced by Applied Dividends.
(s) IRC
---
"IRC" means the Internal Revenue Code of 1986, as amended.
(t) Market Price
------------
"Market Price" means the average of the high and the low price
of a share of Company Stock on the New York Stock Exchange (or the average of
the bid and asked prices if there were no sales), on any Business Day as
reported in The Wall Street Journal.
(u) Participant
-----------
"Participant" means an employee of the Company or a Subsidiary
who is designated by the Committee, in its sole discretion, as eligible for
and who receives a Purchase Award.
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2. DEFINITIONS AND CONSTRUCTION, Continued
(v) Purchase Award
--------------
"Purchase Award" means a right to purchase a specified number of
shares of Company Stock with Purchase Loan rights.
(w) Purchase Loan
-------------
"Purchase Loan" means an extension of credit to a Participant by
the Company evidenced by a non-recourse promissory note for (i) in the case of a
new Purchase Loan, 90% or 95% of the Purchase Price of the Company Stock
awarded to the Participant under the Plan, or (ii) in the case of a Purchase
Loan made pursuant to an exchange of Company Stock pursuant to Section 4, the
Purchase Price of the Company Stock awarded to the Participant under an
Exchange Award, less his Exchange Award Down Payment, and in either case,
bearing Interest, and secured by a pledge of all of the shares of Company
Stock purchased by the Participant.
(x) Purchase Note
-------------
"Purchase Note" means a promissory note evidencing the Purchase
Loan for the balance of the Purchase Price without recourse rights against the
maker and with other terms and conditions established by the Committee
consistent with the Plan.
(y) Purchase Note Repayment Amount
------------------------------
"Purchase Note Repayment Amount" means the then unpaid balance
of the Purchase Note, accrued and unpaid interest, applicable federal and
state payroll and withholding taxes on income recognized on the transaction,
and any brokerage fees, collection fees and costs associated with the
Purchase Loan.
(z) Purchase Price or Exchange Award Purchase Price
-----------------------------------------------
"Purchase Price" or "Exchange Award Purchase Price" means, with
respect to a share of Company Stock, the average of the Market Price for the
five (5) consecutive Business Days immediately preceding the Commitment Date.
(aa) Retirement
----------
"Retirement" means the termination of employment (for reasons
other than Cause) (i) at or after age 65, or (ii) after age 55 with at least
10 years of service with the Company and/or a Subsidiary.
(ab) Subsidiary
----------
"Subsidiary" means a corporation more than 50% of the voting
shares of which are owned directly or indirectly by the Company.
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3. COMPANY STOCK
There shall be an aggregate of 9,000,000 shares of Company
Stock reserved for issuance under the Plan, subject to Section 9 of the Plan
(concerning changes in the capital structure of the Company). Shares that
have been awarded under the Plan but not issued, or shares that have been
issued but are returned to the Company in conformity with the Plan (including
shares of Company Stock retained, canceled or repurchased by the Company in
conjunction with the payment of a Purchase Loan or withholding taxes), may
again be awarded under the Plan.
4. EXCHANGE OF SHARES
To encourage, extend and expand the continued ownership of
Company Stock, Participants in the 1991 Plan whose Purchase Loans mature
July 31, 1996, without regard to the one-year extension provided for under
Section 6(b), may be given a one-time irrevocable election to exchange all,
or a portion to be determined by the Committee, of any shares purchased under
the 1991 Plan for an enhanced Purchase Award under the Plan (an "Exchange
Award"). To the extent such shares are exchanged they shall constitute the
"Exchanged Shares." Exchange Awards shall be issued for not more than the
number of shares of common stock determined by dividing the excess of the
Exchange Award Purchase Price, as of the Commitment Date of the Exchange Award,
of the number of shares relating to a Purchase Loan issued pursuant to the 1991
Plan over the outstanding amount due on the Purchase Loan on such date by
25% of theExchange Award Purchase Price of the Company's common stock on such
date. In the case of a Participant who exercises an Exchange Award, his 1991
Purchase Notes shall be canceled.
5. STOCK PURCHASE AWARDS
On or as soon as practicable after a Commitment Date, the
Committee shall give notice to each Participant (or to the class of
Participants) eligible for an award stating (i) the number of shares of
Company Stock covered by each such Purchase Award or a formula for determining
the number of shares of Company Stock covered by each such Purchase Award,
and (ii) the price, other terms and conditions, if any, pertaining to each such
Purchase Award and Purchase Loan that must be satisfied by a Participant in
order to exercise the Purchase Award.
A Participant shall exercise a Purchase Award and Purchase Loan
rights by delivering to the Company during the Commitment Period (i) a notice
stating the amount of his down payment (which shall be 5% or 10% of the
Purchase Price or his Exchange Award Down Payment in the case of an Exchange
Award) and his intention to deliver a Purchase Note for the balance of the
Purchase Price, and (ii) where applicable, the down payment (which shall be
deemed paid in the case of an Exchange Award) and a Purchase Note.
The grant of a Purchase Award and Purchase Loan to a Participant
shall not obligate the Company or a Subsidiary of the Company to pay the
Participant any particular amount of remuneration, to continue the employment
of a Participant after the grant or to make further grants to a Participant at
any time thereafter.
- II-12 -
PAGE 8
6. PURCHASE LOANS
The Company shall, subject to paragraph (a) below, upon the
Committee's recommendation, extend a Purchase Loan to a Participant upon
exercise of a Purchase Award subject to the following terms and conditions:
(a) The original principal amount of a new Purchase Loan shall be
the difference between the Participant's down payment (which shall be 5% or
10% of the Purchase Price) and the Purchase Price. In the case of an Exchange
Award, the Purchase Loan shall be the difference between the Participant's
Exchange Award Down Payment and the Exchange Award Purchase Price. The down
payment for a new Purchase Loan shall be in cash, or, if authorized by the
Committee (i) by delivery of shares of Company Stock having a Market Price
equal to the required down payment on date of transfer to the Company, or (ii)
by delivery to the Company of a promissory note with terms and conditions
fixed by the Committee and with full recourse rights against the maker. The
Exchange Award Down Payment shall be deemed to have been paid by the Equity in
a Participant's Exchanged Shares subject to a Purchase Loan under the 1991
Plan.
(b) The Purchase Loan shall be due and payable as provided in the
provisions of the Purchase Note executed by the Participant. The term of the
Purchase Note shall not exceed a period of five (5) years; provided, however,
the Participant, in his discretion, may extend the Purchase Note for one (1)
year; provided, further, that the Committee, may, in its discretion, extend a
Purchase Note for up to two (2) years. In no event may the Purchase Note
term, including extensions, exceed seven (7) years.
(c) Purchase Notes shall be in the form approved by the Committee
and shall contain such terms and conditions, not inconsistent with the Plan,
as the Committee shall determine in its sole discretion; provided, that each
Purchase Note shall be subject to the terms of the Plan.
(d) A Participant shall effect a pledge of all shares of Company
Stock acquired by the Participant upon the exercise of the Purchase Award by
delivering to the Company (i) the certificate or certificates for the acquired
shares of Company Stock, accompanied by a duly executed stock power in blank,
and (ii) a properly executed stock pledge agreement in the form approved by
the Committee.
(e) Dividends paid on shares of Company Stock pledged as security
for a Purchase Loan shall be first treated as Applied Dividends and then
applied to repay the Purchase Note. At the discretion of the Committee, the
Company shall also pay (i) dividend equivalents on the number of shares
purchased pursuant to a Purchase Note equal to the number of shares
representing the Participant's Equity in the Exchanged Shares, and (ii) only
after all interest and Purchase Price reductions are realized under Section
6(g), dividend equivalents on the number of shares purchased pursuant to a
Purchase Note in excess of the number of shares in (i), above, if any.
(f) Within ten (10) Business Days after the maturity date of a
Purchase Loan, or on the date or dates, if installments are elected pursuant
to Section 7(c), as of which a Participant elects to prepay a Purchase Loan
- II-13 -
PAGE 9
6. PURCHASE LOANS, Continued
and Purchase Note in accordance with Section 7, the Participant shall repay in
full the Purchase Note Repayment Amount or the portion related to an
installment under Section 7(c). If not fully paid when due, the Participant
agrees to sell his pledged Company Stock to the Company at the Market Price on
the maturity date if a Business Day (or at the Market Price on the Business
Day immediately preceding the maturity date if the maturity date is not a
Business Day). The Company may sell on the Participant's behalf on the open
market (except as hereinafter provided) the number of shares of Company Stock
pledged as collateral necessary to repay the Purchase Note Repayment Amount.
If, pursuant to procedures established by the Company for compliance with
applicable securities laws, the Company believes that the purchase of pledged
shares by the Company in repayment of a Purchase Note, or the sale by the
Company of pledged shares of Company Stock on the open market to repay a
Purchase Note, would violate any provision of applicable securities laws or
cause a Participant to incur a liability under Section 16(b) of the Exchange
Act, the maturity date may be extended by the Committee until the first day
the purchase by the Company of the pledged shares or a sale of the pledged
shares on the open market can be made without violating such securities laws
or the Participant incurring liability under Section 16(b). If, pursuant to
procedures established by the Company for compliance with applicable tax laws,
the Company believes that the repayment of a Purchase Note, the purchase of
the pledged shares in repayment of a Purchase Note, or the sale by the Company
of pledged shares of Company Stock on the open market to repay a Purchase Note
would cause any portion of a Participant's compensation under the Plan to be
nondeductible under Section 162(m) of the IRC, the maturity date may be
extended by the Committee until the first day the repayment of a Purchase
Note, the purchase of the pledged shares in repayment of a Purchase Note, or
the sale by the Company of pledged shares of Company Stock on the open market
to repay a Purchase Note can be made without such compensation being
non-deductible under Section 162(m) of the IRC, but in no event shall such
extension of the maturity date be for a period greater than one (1) year.
(g) The Purchase Price and the principal amount of a
Participant's Purchase Loan and Purchase Note, plus accrued and unpaid Interest,
as well as any accrued and unpaid interest on a down payment loan referenced in
Section 6(a), shall be adjusted as follows if at any time after the first
anniversary date of a Purchase Note the Market Price of Company Stock equals or
exceeds the Purchase Price of the Participant's Company Stock by the amount
specified below for a period of ten (10) consecutive Business Days:
- II-14 -
PAGE 10
6. PURCHASE LOANS, Continued
Stock Price Interest & Purchase Price Reductions
----------- ------------------------------------
Purchase Price + 10% Interest Spread + Interest on down payment
loan
Purchase Price + 20% Interest Spread + 5% + Interest on down
payment loan
Purchase Price + 30% Interest Spread + 10% + Interest on down
payment loan
Purchase Price + 40% Interest Spread + 15% + Interest on down
payment loan
Purchase Price + 50% Interest Spread + 20% + Interest on down
payment loan
Purchase Price + 60% Interest Spread + 25% + Interest on down
payment loan
Purchase Price + 70% Interest Spread + 30% + Interest on down
payment loan
Purchase Price + 80% Interest Spread + 35% + Interest on down
payment loan
Purchase Price + 90% Interest Spread + 40% + Interest on down
payment loan
Purchase Price + 100% Interest Spread + 50% + Interest on down
payment loan
The provisions of this section and any applicable adjustments to Interest and
a Purchase Note shall be applied at the time of repayment of a Purchase Note.
Decreases in the Market Price of Company Stock subsequent to the completion of
a measuring period shall be disregarded for purposes of the adjustments
authorized by this section.
(h) In the event of a change in capital structure involving any
of the pledged shares of Company Stock, as provided in Section 9, such newly
acquired shares shall be pledged to the Company as substitute or additional
security.
- II-15 -
PAGE 11
6. PURCHASE LOANS, Continued
(i) Notwithstanding anything in this Section 6 to the contrary,
the Company shall not be required to make a Purchase Loan to a Participant if
making such Purchase Loan will (i) cause the Company to violate any covenant
or other similar provision in any indenture, loan agreement, or other
agreement, or (ii) violate any applicable federal, state or local law.
(j) Upon issuance by the Company of Company Stock purchased
pursuant to a Purchase Award, the affected Participant shall be deemed a
shareholder of the Company and (subject to the terms of the Plan, the Purchase
Loan, the Purchase Note and related documents) shall be entitled to dividend and
voting rights with respect to the Company Stock purchased.
7. TERMINATION OF EMPLOYMENT; CHANGE OF CONTROL; PREPAYMENT OF PURCHASE LOAN
If before a Purchase Note is repaid a Participant's employment
terminates for any reason, or he is no longer employed by a continuing
Subsidiary, or a Change of Control occurs, the following provisions shall
apply notwithstanding any terms in the Purchase Note to the contrary:
(a) Death or Disability
-------------------
If a Participant's termination of employment results from death or
Disability, the affected Participant (or the Participant's estate or personal
representative) may either (i) continue to hold the Purchase Note and
participate in the Plan for three years (or, if earlier, until the maturity
date of the Purchase Loan, as extended by either the Participant or the
Committee, pursuant to Section 6(b)), or (ii) within ninety (90) days of said
termination of employment (A) elect to prepay the Purchase Note, or (B) elect
to rescind the Exchange Award or the Purchase Award, as the case may be. If
the Participant elects to prepay the Purchase Note under (ii)(A), the Purchase
Note shall become due and payable on the prepayment date elected by the
Participant. If an election to prepay the Purchase Note is effective prior to
the first anniversary of the execution of the Purchase Note, Section 6(g)
shall not apply; if it is effective on or after the first anniversary of its
execution, Section 6(g) shall apply. If the Participant elects to rescind the
Exchange Award or the Purchase Award under (ii)(B), the shares of Company
Stock acquired by the Participant upon the exercise of the Exchange Award or
Purchase Award shall be transferred to the Company, the Purchase Note shall be
canceled, the Participant shall have no further rights under the Plan, and the
Company shall have no further obligations to the Participant, except that the
Company shall pay to or with respect to the Participant, in consideration for
the cancellation of the Participant's rights under the Exchange Award or
Purchase Award, an amount equal to his Exchange Award Down Payment, as
adjusted under Section 7(h), or, if applicable, the Purchase Award down
payment paid to the Company pursuant to Section 6(a).
- II-16 -
PAGE 12
7. TERMINATION OF EMPLOYMENT; CHANGE OF CONTROL; PREPAYMENT OF PURCHASE LOAN,
Continued
(b) Involuntary Termination With Consent of Company
-----------------------------------------------
If a Participant's employer terminates his employment for reasons
other than Cause, the affected Participant may, within ninety (90) days of
said termination of employment (i) elect to prepay the Purchase Note, or (ii)
elect to rescind the Exchange Award or the Purchase Award, as the case may be.
If the Participant elects to prepay the Purchase Note under (i), the Purchase
Note shall become due and payable on the prepayment date elected by the
Participant. If the Participant elects to rescind the Exchange Award or the
Purchase Award under (ii), the shares of Company Stock acquired by the
Participant upon the exercise of the Exchange Award or Purchase Award shall be
transferred to the Company, the Purchase Note shall be canceled, the
Participant shall have no further rights under the Plan, and the Company shall
have no further obligations to the Participant, except that the Company shall
pay to or with respect to the Participant, in consideration for the
cancellation of the Participant's rights under the Exchange Award or Purchase
Award, an amount equal to his Exchange Award Down Payment, as adjusted under
Section 7(h), or, if applicable, the Purchase Award down payment paid to the
Company pursuant to Section 6(a). If the Participant's termination of
employment is prior to the first anniversary of the execution of the Purchase
Note, Section 6(g) shall not apply; if it is on or after the first anniversary
of the execution of the Purchase Note, Section 6(g) shall apply.
(c) Retirement
----------
If a Participant's termination of employment results from his
Retirement, the affected Participant may either (i) continue to hold the
Purchase Note and participate in the Plan for three (3) years (or, if earlier,
until the maturity date of the Purchase Loan, as extended by either the
Participant, or the Committee, pursuant to Section 6(b)), (ii) prepay the
Purchase Note within ninety (90) days of said termination of employment, or
(iii) prepay the Purchase Note in no more than three (3) installments, due
over the remaining term of the Purchase Note, including extensions. If a
Participant elects to prepay a Purchase Note, the Participant agrees to sell
the pledged Company Stock to the Company for the Market Price on the date of
prepayment. If an election to prepay the Purchase Note under (ii) or (iii)
above is effective prior to the first anniversary of the execution of the
Purchase Note, Section 6(g) shall not apply; if it is effective on or after
the first anniversary of its execution, Section 6(g) shall apply.
(d) Voluntary Termination with Consent of Company or Involuntary Termination
------------------------------------------------------------------------
If the Participant's termination of employment is voluntary and
with the consent of the Company, or, if his employer terminates his employment
for reasons other than Cause and the Company does not consent to the
Participant's termination being treated under Section 7(b), the maturity date of
the Purchase Note shall be accelerated without further action of the Committee
or the Company and shall be required to be prepaid within ninety (90) days of
- II-17 -
PAGE 13
7. TERMINATION OF EMPLOYMENT; CHANGE OF CONTROL; PREPAYMENT OF PURCHASE LOAN,
Continued
(d) Voluntary Termination with Consent of Company or Involuntary Termination,
-------------------------------------------------------------------------
Continued
said termination of employment, and the Participant agrees to sell the pledged
Company Stock to the Company for the Market Price on the date of prepayment.
If a Participant's termination of employment is prior to the first anniversary
of the execution of the Purchase Note, Section 6(g) shall not apply; if it is
on or after the first anniversary of the execution of the Purchase Note,
Section 6(g) shall apply.
(e) Termination for Cause or Voluntary Termination Without Consent of
----------------------------------------------------------------
Company
-------
If the Participant's termination of employment is involuntary for
Cause or a voluntary termination without the consent of the Company, the
maturity date of the Purchase Note shall be accelerated without further action
of the Committee or the Company to the date of his termination of employment.
In such case, Section 6(g) shall not apply and the Participant agrees to sell
the pledged Company Stock to the Company for the lesser of (i) the Market
Price on the date of termination of employment, or (ii) an amount equal to his
Exchange Award Down Payment, as adjusted by Section 7(h), or, if applicable,
the Purchase Award down payment paid to the Company pursuant to Section 6(a)
(in any event, less all related taxes and expenses), and the Company shall
have the right to retain any excess over such amount and the shares' Market
Price.
(f) Divisive Transaction
--------------------
If the Participant's employer ceases to be a Subsidiary or if
there is a sale of substantially all of the assets of the Subsidiary, the
affected Participant may, within ninety (90) days of the closing of such
divisive transaction (i) elect to prepay the Purchase Note, or (ii) elect to
rescind the Exchange Award or the Purchase Award, as the case may be. If the
Participant elects to prepay the Purchase Note under (i), the Purchase Note
shall become due and payable on the prepayment date elected by the
Participant. If the Participant elects to rescind the Exchange Award or the
Purchase Award under (ii), the shares of Company Stock acquired by the
Participant upon the exercise of the Exchange Award or Purchase Award shall be
transferred to the Company, the Purchase Note shall be canceled, the
Participant shall have no further rights under the Plan, and the Company shall
have no further obligations to the Participant, except that the Company shall
pay to or with respect to the Participant, in consideration for the
cancellation of the Participant's rights under the Exchange Award or Purchase
Award, an amount equal to his Exchange Award Down Payment, as adjusted under
Section 7(h), or, if applicable, the Purchase Award down payment paid to the
Company pursuant to Section 6(a). Section 6(g) shall apply to all
- II-18 -
PAGE 14
7. TERMINATION OF EMPLOYMENT; CHANGE OF CONTROL; PREPAYMENT OF PURCHASE LOAN,
Continued
(f) Divisive Transaction, Continued
--------------------
Participants affected by a divisive transaction. The foregoing shall apply
whether or not the Participant continues in the employ of the Subsidiary but
shall not apply should the Participant continue in the employ of the Company
or another Subsidiary not part of the divisive transaction.
(g) Change of Control
-----------------
If a Change of Control occurs, Sections 7(a) through (f) shall no
longer be applicable, the Interest and Purchase Price Reductions under Section
6(g) shall be applied as if the Stock Price had increased by 100% and the
Participant may either (i) continue to hold the Purchase Note and participate
in the Plan until the maturity date of the Purchase Note, including any
extensions, or (ii) within ninety (90) days of said Change of Control and, if
applicable, within ninety (90) days of a final Agency action in a Regulated
Business Combination under Section 2(e)(iv), (A) elect to prepay the Purchase
Note, or (B) elect to rescind the Exchange Award or the Purchase Award, as the
case may be. If the Participant elects to prepay the Purchase Note under
(ii)(A), the Purchase Note shall become due and payable on the prepayment date
elected by the Participant, and the provisions of Section 6(g) shall apply.
If the Participant elects to rescind the Exchange Award or the Purchase Award
under (ii)(B), the shares of Company Stock acquired by the Participant upon
the exercise of the Exchange Award or Purchase Award shall be transferred to
the Company, the Purchase Note shall be canceled, the Participant shall have
no further rights under the Plan, and the Company shall have no further
obligations to the Participant, except that the Company shall pay to or with
respect to the Participant, in consideration for the cancellation of the
Participant's rights under the Exchange Award or Purchase Award, an amount
equal to his Exchange Award Down Payment, as adjusted under Section 7(h), or,
if applicable, the Purchase Award down payment paid to the Company pursuant to
Section 6(a).
(h) Adjustment of Exchange Award Down Payment
-----------------------------------------
Solely for purposes of determining the amount available to a
Participant under this Section 7, a Participant's Exchange Award Down Payment
shall be adjusted as follows: the dollar amount of the Exchange Award Down
Payment computed as of the date of the Exchange of Shares pursuant to
Section 4 shall be divided by the Market Price on the date of such Exchange of
Shares, to arrive at a number of equivalent shares. On the Purchase Loan
maturity date or prepayment date applicable under this Section 7, the number
of equivalent shares determined in the preceding sentence will be multiplied
by the Market Price on such date to arrive at the Participant's Exchange Award
Down Payment as adjusted.
- II-19 -
PAGE 15
7. TERMINATION OF EMPLOYMENT; CHANGE OF CONTROL; PREPAYMENT OF PURCHASE LOAN,
Continued
(i) Certain Terms of Purchase Awards or Exchange Awards
---------------------------------------------------
Notwithstanding any provision of this Plan to the contrary, in the
discretion of the Committee, a Purchase Award and/or Exchange Award may
provide, to the extent deemed appropriate by the Committee to eliminate or
reduce the applicability or impact of Sections 280G and/or 4999 of the IRC,
for: (i) the cancellation of shares and/or a reduction or increase in the
amount of a Purchase Note, (ii) a limitation of the reduction of the Purchase
Price pursuant to Section 7(g) above, (iii) the elimination of any
acceleration of a Purchase Note or right to prepay such Note, or (iv) a
reduction or limitation of any other benefit under this Plan or otherwise to a
Participant.
8. NON-TRANSFERABILITY OF PURCHASE AWARDS
Except as provided in Section 7(a), neither right of Participation
nor Purchase Awards are assignable or transferable.
9. CHANGE IN CAPITAL STRUCTURE
If the number of outstanding shares of Company Stock is
increased or decreased as a result of a subdivision or consolidation of shares,
the payment of a stock dividend, stock split, or any other change in
capitalization effected without receipt of consideration by the Company
(including, but not limited to, the creation or issuance to the shareholders
generally of rights, options or warrants for the purchase of common or preferred
stock of the Company), or if a spin-off transaction occurs, then the number and
kind of shares of stock or securities of the Company to be subject to the Plan,
the maximum number of shares or securities which may be delivered under the
Plan, and other relevant provisions shall be appropriately adjusted by the
Committee, whose determination shall be binding and conclusive on all persons.
If there is a Change of Control, the Committee may take such
actions, not inconsistent with the Plan, with respect to outstanding unexercised
Purchase Awards as the Committee deems appropriate.
Notwithstanding anything in the Plan to the contrary, the
Committee may take the foregoing actions without the consent of any Participant,
and the Committee's determination shall be conclusive and binding on all persons
for all purposes.
10. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee, consisting of not
less than three Directors of the Company appointed by the Board. Subject to
paragraph (d) below, the Committee shall be the Compensation Committee of the
Board or such subcommittee appointed by the Compensation Committee consisting
of not fewer than two non-employee directors. The Committee shall at all
times consist of outside directors within the meaning of Section 162(m) of the
IRC. The Committee shall have general authority to impose any limitation or
- II-20 -
PAGE 16
10. ADMINISTRATION OF THE PLAN, Continued
condition upon a Purchase Award the Committee deems appropriate to achieve the
objectives of the Purchase Award and the Plan, and in addition, and without
limitation and in addition to powers set forth elsewhere in the Plan, shall
have the following specific authority:
(a) The Committee shall have the power and complete discretion to
determine (i) which employees of the Company or a Subsidiary shall be
Participants, (ii) which Participants shall receive a Purchase Award with
Purchase Loan rights, (iii) the number of shares of Company Stock to be
covered by each Purchase Award, (iv) the Market Price of Company Stock, (v)
the time or times when a Purchase Award shall be granted, (vi) whether a
Disability exists, (vii) the manner in which payment will be made upon the
exercise of a Purchase Award, and (viii) any additional requirements relating
to Purchase Awards that the Committee deems appropriate.
(b) The Committee may adopt rules and regulations for carrying
out the Plan and for the sale or other disposition of Company Stock acquired
pursuant to the Plan. The interpretation and construction of any provision of
the Plan by the Committee shall be final and conclusive. The Committee may
consult with counsel, who may be counsel to the Company, and shall not incur
any liability for any action taken in good faith in reliance upon the advice
of counsel.
(c) A majority of the members of the Committee shall constitute a
quorum, and all actions of the Committee shall be taken by a majority of the
members present. Any action may be taken by a written instrument signed by
all of the members, and any action so taken shall be fully effective as if it
had been taken at a meeting.
(d) The Board may from time to time appoint or remove members and
fill vacancies, however caused, in the Committee. Insofar as it is necessary
to satisfy the requirements of Section 16(b) of the Exchange Act and Rule
16b-3 thereunder, no member of the Committee shall be eligible to participate
in the Plan or in any other plan of the Company or a Subsidiary that entitles
participants to acquire stock, stock options or stock appreciation rights of
the Company or a Subsidiary, and no person shall become a member of the
Committee if, within the preceding one-year period, the person shall have been
eligible to participate in such a plan.
(e) Down payment loans under the 1991 Plan shall be extended on a
full recourse basis for up to seven (7) years in the case of any Participant
who receives and exercises an Exchange Award. To the extent that a Purchase
Note is extended, accelerated or prepaid under the terms of the Plan, said
extension, acceleration or prepayment shall also apply to the down payment
loan.
11. EFFECTIVE DATE OF THE PLAN
The 1991 Plan became effective as of December 12, 1990. This
amendment and restatement of the 1991 Plan shall be effective as of February
14, 1996, and shall be submitted to the shareholders of the Company for
approval. Until (i) the Plan has been approved by the Company's shareholders,
- II-21 -
PAGE 17
11. EFFECTIVE DATE OF THE PLAN, Continued
(ii) the Company Stock issuable under the Plan has been registered with the
Securities and Exchange Commission, (iii) the Company Stock is accepted for
listing on the New York Stock Exchange, and (iv) the requirements of any
applicable state securities laws have been met, no Purchase Award shall be
granted or Purchase Loan authorized by the Committee.
12. TERMINATION, MODIFICATION
If not sooner amended or terminated by the Board, this Plan shall
terminate at the close of business on February 13, 2006. No Purchase Awards
shall be made under this Plan after termination. The Board may terminate the
Plan or may amend the Plan in such respects as it shall deem advisable;
provided, however, that, if necessary to satisfy the requirements of Section
16(b) of the Exchange Act, the New York Stock Exchange or applicable state
law, the shareholders of the Company must approve any amendment that would (i)
materially increase the benefits accruing to Participants under the Plan, (ii)
materially increase the number of shares of Company Stock that may be issued
under the Plan, or (iii) materially modify the Plan's eligibility
requirements. A termination or amendment of the Plan shall not, without the
consent of the affected Participant, adversely impact a Participant's rights
under a Purchase Award previously granted to him.
13. NOTICE
All notices and other communications required or permitted to be
given under this Plan shall be in writing and shall be deemed to have been
duly given if delivered personally or mailed first class, postage prepaid, as
follows: (i) if to the Company at its principal business address to the
attention of the Secretary; (ii) if to any Participant at the last address of
the Participant known to the sender at the time the notice or other
communication is sent.
14. GOVERNING LAW
The terms of this Plan shall be governed by the laws of the
Commonwealth of Virginia.
- II-22 -
