<PAGE> 1
As filed with the Securities and Exchange Commission on February 22, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POPE & TALBOT, INC.
(Exact name of issuer as specified in its charter)
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<S> <C>
DELAWARE 94-0777139
(State or other jurisdiction (I.R.S.
of incorporation or organization) Employer Identification No.)
</TABLE>
1500 S.W. FIRST AVENUE, PORTLAND, OR 97201
(Address of principal executive offices) (Zip Code)
POPE & TALBOT, INC.
STOCK OPTION AND APPRECIATION PLAN
SPECIAL NON-EMPLOYEE DIRECTOR STOCK RETAINER FEE PLAN
(Full title of the plan)
PETER T. POPE
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
POPE & TALBOT, INC.
1500 S.W. FIRST AVENUE, PORTLAND, OR 97201
(Name and address of agent for service)
(503) 228-9161
(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
=============================================================================================================
Proposed Proposed
Maximum Maximum
Title of Securities Amount to be Offering Price per Aggregate Offering Amount of
to be Registered Registered (1) Share (2) Price (2) Registration Fee
---------------- -------------- --------- --------- ----------------
<S> <C> <C> <C> <C>
Stock Option and
Appreciation Plan
Common Stock, $1.00 par
value 300,000 $7.28 $2,184,000 $607.15
Special Non-Employee
Director Stock Retainer
Fee Plan
Common Stock, $1.00 par
value 300,000 $7.28 $2,184,000 $607.15
Aggregate Registration Fee $1,214.30
=============================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of the
Registrant's Common Stock which become issuable under the Stock Option and
Appreciation Plan and Special Non-Employee Director Stock Retainer Fee Plan
by reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the Registrant's receipt of
consideration which results in an increase in the number of outstanding
shares of the Registrant's Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low selling prices per share of the Registrant's Common Stock on
February 17, 1999 as reported on the New York Stock Exchange.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
Pope & Talbot, Inc. (the "Registrant") hereby incorporates by reference
into this Registration Statement the following documents previously filed with
the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 filed with the Commission on March 31, 1998;
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1998, June 30, 1998 and September 30, 1998
filed with the Commission on May 14, 1998, August 10, 1998 and
November 8, 1998, respectively;
(c) The Registrant's Current Report on Form 8-K, filed with the Commission
on April 7, 1998 and an amendment thereto filed on April 17, 1998; and
(d) (1) The Registrant's Registration Statement on Form 8-A filed with
the Commission on December 3, 1985, together with Amendments 1
and 2, filed with the Commission on January 10, 1986, and
March 9, 1987, respectively, in which there is described the
terms, rights and provisions applicable to the Registrant's
outstanding Common Stock.
(2) The Registrant's Registration Statements on Form 8-A filed with
the Commission on April 7, 1998 and April 21, 1998, respectively,
together with Amendment No. 1 filed on April 21, 1998, in which
there is described the terms, rights and provisions applicable to
the Registrant's preferred stock purchase rights distributed as a
dividend on the outstanding shares of Registrant's Common Stock.
All reports and definitive proxy or information statements filed pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), after the date of this Registration Statement and
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Capital Stock
Inapplicable.
Item 5. Interests of Named Experts and Counsel
Inapplicable.
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Item 6. Indemnification of Directors and Officers
The Registrant's Restated Certificate of Incorporation provides that no
member of the Registrant's Board of Directors or Executive Committee of the
Board will be personally liable to the Registrant or any of its stockholders for
monetary damages arising from such member's breach of his fiduciary duties to
the Registrant. However, this does not apply with respect to any action in which
such person would be liable under Section 174 of Title 8 of the General
Corporation Law of Delaware, nor does it apply with respect to any liability in
which such person (i) breached his duty of loyalty to the Registrant; (ii) did
not act in good faith or, in failing to act, did not act in good faith; (iii)
acted in a manner involving intentional misconduct or a knowing violation of law
or, in failing to act, acted in a manner involving intentional misconduct or a
knowing violation of law; or (iv) derived an improper personal benefit.
Pursuant to the provisions of Section 145 of the General Corporation Law of
Delaware, every Delaware corporation has power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or in the right of
the corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the Registrant or of any corporation, partnership, joint
venture, trust or other enterprise for which he is or was serving in such
capacity at the request of the Registrant, against any and all expenses,
judgments, fines and settlement amounts reasonably incurred by him in connection
with such action, suit or proceeding. The power to indemnify applies only if
such person acted in good faith and in a manner he reasonably believed to be in
the best interests, 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.
The power to indemnify applies to actions brought by or in the right of the
corporation as well, but only to the extent of defense and settlement expenses
and not to any satisfaction of a judgment or settlement of the claim itself, and
with the further limitation that in such actions no indemnification shall be
made in the event of any adjudication of negligence or misconduct unless the
court, in its discretion, feels that in the light of all the circumstances
indemnification should apply.
To the extent any of the persons referred to in the two immediately
preceding paragraphs is successful in the defense of the actions referred to
therein, such person is entitled pursuant to Section 145 to indemnification as
described above. Section 145 also empowers the corporation to advance litigation
expenses to such person upon receipt of any undertaking to repay such advances
in the event no right to indemnification is subsequently shown. A corporation
may also obtain insurance at its expense to protect anyone who might be
indemnified, or has a right to insist on indemnification, under the statute.
The Registrant has entered into indemnification agreements with certain of
its officers and all of its current directors which provide for indemnification
to the fullest extent permitted by Delaware General Corporation Law, including
Section 145 thereof. Such agreements have been approved by the Registrant's
stockholders. The Registrant's stockholders also approved the use of similar
agreements which may be entered into from time to time with future directors
and/or future officers of the Registrant.
Item 7. Exemption from Registration Claimed
Inapplicable.
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<PAGE> 4
Item 8. Exhibits
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Exhibit Number Exhibit
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4.0 Instruments Defining Rights of Stockholders. Reference is made
to the Registrant's Registration Statements on Form 8-A,
together with the Amendments thereto, which are incorporated
herein by reference pursuant to Items 3(d)(1) and 3(d)(2) of
this Registration Statement.
5.0 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Public Accountants -- Arthur
Andersen LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24.0 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 Stock Option and Appreciation Plan.
99.2 Stock Option and Appreciation Plan Amendment
99.3* Form of Non-Statutory Stock Option Agreement generally used in
connection with the Stock Option and Appreciation Plan.
99.4* Form of Independent Stock Appreciation Right Grant.
99.5 Special Non-Employee Director Stock Retainer Fee Plan
99.6 Form of Notice of Grant under Special Non-Employee Director
Stock Retainer Fee Program
99.7 Form of Stock Option Agreement generally used in connection
with the Special Non-Employee Director Stock Retainer Fee
Plan.
- ----------
</TABLE>
* Exhibits 99.3 and 99.4 are incorporated herein by reference to Exhibits
28.2 and 28.3, respectively, to the Registrant's Post-Effective Amendment
No. 1 to Form S-8 Registration Statement No. 33-8966 which was filed with
the Commission on December 15, 1987.
Item 9. Undertakings.
A. The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in the periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) that, for the
purpose of determining any liability under the 1933 Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(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
Registrant's Stock Option and Appreciation Plan and Special Non-Employee
Director Stock Retainer Fee Plan.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into 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.
C. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers or controlling persons of the Registrant
pursuant to the indemnification provisions summarized in Item 6 above or
otherwise, the Registrant has been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in the
1933 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
II-3
<PAGE> 5
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 the Registrant is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the 1933 Act, 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
Portland, State of Oregon on this day of February , 1999.
POPE & TALBOT, INC.
By: /s/ PETER T. POPE
------------------------------------
Peter T. Pope
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of POPE & TALBOT, INC., a
Delaware corporation, do hereby constitute and appoint Peter T. Pope and Robert
J. Day, and each one of them, the lawful attorneys and agents, with full power
and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, determine may be
necessary or advisable or required to enable said corporation to comply with the
1933 Act, and any rules or regulations or requirements of the Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or any of them, shall do or cause to be done
by virtue hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the 1933 Act, this Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.
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Signatures Title Date
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<S> <C> <C>
/s/ PETER T. POPE Chairman of the Board, February 22, 1999
- ----------------------------- Chief Executive Officer and Director
Peter T. Pope (Principal Executive Officer)
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<TABLE>
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Signatures Title Date
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<S> <C> <C>
/s/ MICHAEL FLANNERY President and Director February 22, 1999
- ------------------------------
Michael Flannery
/s/ ROBERT J. DAY Senior Vice President and February 22, 1999
- ------------------------------ Chief Financial Officer
Robert J. Day (Principal Financial Officer)
/s/ MARIA M. POPE Treasurer and Secretary February 22, 1999
- ------------------------------
Maria M. Pope
/s/ GORDON P. ANDREWS Director February 22, 1999
- ------------------------------
Gordon P. Andrews
/s/ HAMILTON W. BUDGE Director February 22, 1999
- ------------------------------
Hamilton W. Budge
/s/ CHARLES CROCKER Director February 22, 1999
- ------------------------------
Charles Crocker
/s/ KENNETH G. HANNA Director February 22, 1999
- ------------------------------
Kenneth G. Hanna
/s/ ROBERT STEVENS MILLER, JR. Director February 22, 1999
- ------------------------------
Robert Stevens Miller, Jr.
/s/ HUGO G.L. POWELL Director February 22, 1999
- ------------------------------
Hugo G.L. Powell
/s/ BROOKS WALKER, JR. Director February 22, 1999
- ------------------------------
Brooks Walker, Jr.
/s/ GERALD L. BRICKEY Financial Controller February 22, 1999
- ------------------------------ (Principal Accounting Officer)
Gerald L. Brickey
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
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<S> <C>
4.0 Instruments Defining Rights of Stockholders. Reference is
made to the Registrant's Registration Statement on Form
8-A, together with the Amendments thereto, which are
incorporated herein by reference pursuant to Items 3(d)(1)
and 3(d)(2) of this Registration Statement.
5.0 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Public Accountants -- Arthur
Andersen LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24.0 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 Stock Option and Appreciation Plan.
99.2 Stock Option and Appreciation Plan Amendment.
99.3* Form of Non-Statutory Stock Option Agreement generally used
in connection with the Stock Option and Appreciation Plan.
99.4* Form of Independent Stock Appreciation Right Grant.
99.5 Special Non-Employee Director Stock Retainer Fee Plan.
99.6 Form of Notice of Grant under Special Non-Employee Director
Stock Retainer Fee Program.
99.7 Form of Stock Option Agreement generally used in connection with
the Special Non-Employee Director Stock Retainer Fee Plan.
</TABLE>
* Exhibits 99.3 and 99.4 are incorporated herein by reference to Exhibits
28.2 and 28.3, respectively, to the Registrant's Post-Effective Amendment
No. 1 to Form S-8 Registration Statement No. 33-8966 which was filed with
the Commission on December 15, 1987.
<PAGE> 1
EXHIBIT 5.0
OPINION OF BROBECK, PHLEGER & HARRISON LLP
February 22, 1999
Pope & Talbot, Inc.
1500 S.W. First Avenue
Portland, OR 97201
Re: Pope & Talbot, Inc. Registration Statement for Offering of an aggregate of
600,000 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Pope & Talbot, Inc., a Delaware corporation
(the "Company") in connection with the registration on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended, of (i)
an additional 300,000 shares of common stock and related stock options for
issuance under the Stock Option and Appreciation Plan (the "Option Plan") and
(ii) an initial reserve of 300,000 shares of common stock and related stock
options for issuance under the Special Non-Employee Director Stock Retainer Fee
Plan (the "Retainer Fee Plan").
This opinion is being furnished in accordance with the requirements of Item
8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the amendment of the Option
Plan and the establishment of the Retainer Fee Plan. Based on such review, we
are of the opinion that, if, as and when the shares of the Company's common
stock are issued and sold (and the consideration therefor received) pursuant to
the provisions of option agreements duly authorized under the Option Plan or the
Retainer Fee Plan and in accordance with the Registration Statement, such shares
will be duly authorized, legally issued, fully paid and nonassessable.
We consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement.
This opinion letter is rendered as of the date first written above and we
disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Option Plan or the Retainer Fee Plan or the shares of the Company's common stock
issuable under such plans or options.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
-----------------------------------
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 19, 1998
(except with respect to the matters discussed in Notes 2 and 9 of the notes to
the financial statements, as to which the dates are February 2, 1998 and March
6, 1998, respectively) incorporated by reference in Pope & Talbot, Inc.'s Form
10-K for the year ended December 31, 1997 and to all references to our Firm
included in this registration statement.
/s/ Arthur Andersen LLP
Portland, Oregon
February 17, 1999
<PAGE> 1
EXHIBIT 99.1
POPE & TALBOT, INC.
STOCK OPTION AND APPRECIATION PLAN
(As Amended and Restated Effective March 1, 1993)
I. PURPOSES OF THE PLAN
This Stock Option and Appreciation Plan (the "Plan") is intended to
promote the interests of Pope & Talbot, Inc. (the "Corporation") and its
subsidiaries by providing a method whereby employees of the Corporation and its
subsidiaries who are primarily responsible for the management, growth and
success of the business may be offered incentives and rewards which will
encourage them to continue in the employ of the Corporation or its subsidiaries.
II. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Human Resources Committee
("Committee") appointed from time to time by the Corporation's Board of
Directors (the "Board"). The Committee shall consist of two (2) or more Board
members who shall serve for such term as the Board may determine and shall be
subject to removal by the Board at any time. However, no Board member shall be
eligible to serve on the Committee if such individual has, within the twelve
(12)-month period immediately preceding the date he is to be appointed to the
Committee, received an option grant or share issuance under this Plan or any
other stock option, stock appreciation, stock bonus or other stock plan of the
Corporation or its subsidiaries.
(b) The Committee shall have full authority to administer the Plan,
including authority to interpret and construe any provision of the Plan and to
adopt such rules and regulations for administering the Plan as it may deem
necessary. Decisions of the Committee shall be final and binding on all persons
who have an interest in the Plan.
III. STOCK SUBJECT TO THE PLAN
(a) The stock which is to be made the subject of the options or stock
appreciation rights granted under the Plan shall be the Corporation's authorized
but unissued or reacquired common stock, par value $1.00 per share ("Common
Stock"). In connection with the issuance of shares under the Plan, the
Corporation may repurchase shares of Common Stock on the open market or
otherwise. The total number of shares issuable under the Plan upon the exercise
of options and stock appreciation rights granted under the Plan shall not exceed
<PAGE> 2
1,700,000 shares. However, from and after March 1, 1993 not more than 1,380,858
shares shall be issued under this Plan. In addition, the Committee may issue (i)
Independent Stock Appreciation Rights (as defined in Section VI) covering up to
a total of 1,500,000 shares(2) of Common Stock over the term of the Plan and
(ii) Tandem Stock Appreciation Rights (as defined in Section VI) covering up to
a total of 1,700,000 shares(2) of Common Stock over the term of the Plan.
(b) The number of shares of Common Stock available for issuance under
this Plan shall be subject to adjustment in accordance with the following
guidelines:
(1) If any outstanding option granted under the Plan expires or
is terminated or cancelled for any reason prior to exercise in full,
then the unissued shares of Common Stock subject to the unexercised
portion of such option may become the subject of subsequent stock
option or stock appreciation right grants under the Plan.
(2) If any outstanding option is in whole or in part surrendered
pursuant to a Tandem Stock Appreciation Right under Section VI, then
the shares subject to such surrendered option (or the surrendered
portion thereof) shall reduce on a share-for-share basis the number of
shares of Common Stock available for the subsequent grant of stock
options and stock appreciation rights under this Plan or for
subsequent issuance under the Corporation's Restricted Stock Bonus
Plan.
(3) Should the exercise price of an outstanding option under the
Plan be paid with shares of Common Stock or should shares of Common
Stock otherwise issuable under the Plan be withheld by the Corporation
in satisfaction of the withholding taxes incurred in connection with
the exercise of an outstanding option under the Plan, then the number
of shares of Common Stock available for issuance under the Plan or
issuable in the aggregate under this Plan and the Corporation's
Restricted Stock Bonus Plan shall be reduced by the gross number of
shares for which the option is exercised, and not by the net number of
shares of Common Stock actually issued to the option holder.
(4) To the extent that any outstanding Independent Stock
Appreciation Right expires or terminates prior to exercise in full,
the shares as to which such right is not exercised may become the
subject of new Independent Stock Appreciation Rights granted under the
Plan.
(5) However, the following limitations shall be in effect under
the Plan:
i) the maximum number of shares for which Tandem Stock
Appreciation Rights may be granted in any one calendar year shall
not exceed 200,000 shares;
- ----------
(2) Reflects the 400,000-share increase approved at the 1993 Annual
Shareholders Meeting.
2.
<PAGE> 3
ii) the maximum number of shares for which Independent Stock
Appreciation Rights may be granted in any one calendar year shall
not exceed 200,000 shares; and
iii) to the extent the distribution paid on any Independent
Stock Appreciation Right is made in shares of Common Stock, the
number of shares so distributed shall reduce, on a one-for-one
basis, the number of shares of Common Stock remaining available
for future issuance under this Plan or the Restricted Stock Bonus
Plan.
(c) In the event any change is made to the Common Stock issuable under
the Plan or subject to any outstanding stock option or stock appreciation right
granted under the Plan (whether by reason of (I) any merger, consolidation or
reorganization or (II) any recapitalization, stock dividend, stock split,
combination of shares, exchange of shares or other change in corporate structure
effected without the Corporation's receipt of consideration), then appropriate
adjustments shall be made to (i) the maximum number and/or class of securities
issuable under the Plan, (ii) the maximum number and/or class of securities for
which Tandem and Independent Stock Appreciation Rights may be issued under the
Plan, (iii) the maximum number and/or class of securities for which Tandem Stock
Appreciation Rights or Independent Stock Appreciation Rights may be granted in
any one calendar year, (iv) the maximum number and/or class of securities which
may in the aggregate be issued under this Plan and the Corporation's Restricted
Stock Bonus Plan, (v) the number and/or class of securities and price per share
in effect under outstanding options and (vii) the number and/or class of
securities and the base price per share in effect under outstanding Tandem and
Independent Stock Appreciation Rights.
IV. SELECTION OF OPTIONEES
The persons who shall be eligible to receive options under the Plan
shall be such key employees of the Corporation and its subsidiaries (including
officers, whether or not they are directors) as the Committee shall from time to
time select. Non-employee members of the Board shall not be eligible to
participate in this Plan or in any other stock option, stock appreciation, stock
bonus or other stock plan of the Corporation or its subsidiaries.
V. TERMS AND CONDITIONS OF STOCK OPTIONS
The Committee shall have the sole and exclusive authority to grant to
the selected key employees one or more stock options under the Plan. The
Committee shall have full authority to determine whether each such granted
option is to be an incentive stock option ("Incentive Option") satisfying the
requirements of Section 422 of the Internal Revenue Code or a non-qualified
option not intended to meet such requirements. Each option granted under the
Plan shall be evidenced by an instrument in such form as the Committee may from
time to time approve. Such instrument, however, shall conform to the terms and
conditions specified below. Each instrument evidencing an Incentive Option
shall, in addition, be subject to the applicable provisions of Section VII.
(a) Option Price. The option price per share shall be fixed by the
Committee, but in no event shall the option price be less than eighty-five
percent (85%) of the fair market
3.
<PAGE> 4
value per share of Common Stock on the date the option is granted. For purposes
of the preceding sentence (and for all other valuation purposes under the Plan),
the fair market value per share of Common Stock shall be its closing price, as
officially quoted on the New York Stock Exchange Composite-Tape (or any similar
successor quotation system), on the day immediately prior to the date in
question. If there is no quotation available for such day, then the closing
price on the next preceding day for which there does exist such a quotation
shall be determinative of fair market value.
(b) Number of Shares, Term and Exercise.
(1) Each option granted under the Plan shall be exercisable on
such date or dates, during such period or periods and for such number of shares
as shall be determined by the Committee and set forth in the instrument
evidencing such option. No option granted under the Plan, however, shall become
exercisable during the first six months of the option term, except to the extent
the instrument evidencing such option provides for exercisability upon the
optionee's death or disability; nor shall any option have an expiration date
which is more than 10 years after the grant date.
(2) Any option granted under the Plan may be exercised upon
written notice to the Corporation at any time prior to the expiration or sooner
termination of the option term. The option price for the number of shares of
Common Stock for which the option is exercised shall become immediately due and
payable, and no certificates for the shares shall be issued until payment has
been made in accordance with subparagraph (3) below.
(3) The option price shall be payable in one or more of the
following alternative forms specified in the instrument evidencing the option:
full payment in cash or cash equivalents; or
full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings
and valued at fair market value on the Exercise Date (as such
term is defined below); or
full payment through a combination of shares of Common Stock held
for the requisite period necessary to avoid a charge to the
Corporation's earnings and valued at fair market value on the
Exercise Date and cash or cash equivalents; or
full payment effected through a broker-dealer sale and remittance
procedure pursuant to which the optionee (A) shall provide
irrevocable written instructions to the designated brokerage firm
to effect the immediate sale of the purchased shares and to remit
to the Corporation, out of the sale proceeds available on the
settlement date, an amount equal to the aggregate option price
payable for the purchased shares plus all applicable Federal and
State income and employment taxes required to be withheld by the
Corporation in connection with such purchase and sale and (B)
shall provide written directives to the Corporation to deliver
the
4.
<PAGE> 5
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
For purposes of this subparagraph (3), the Exercise Date shall be the
date on which written notice of the option exercise is delivered to the
Corporation. Except to the extent the sale and remittance procedure is utilized
in connection with the option exercise, payment of the option price for the
purchased shares must accompany the exercise notice.
(c) Termination of Employment.
(1) Should an optionee cease to be an Employee of the
Corporation other than by reason of death or termination for gross and willful
misconduct, then each outstanding option held by such optionee under the Plan
shall not remain exercisable for more than a twelve (12) month period (or such
shorter period as may be specified in the instrument evidencing such option)
following the date of such cessation of Employee status, except to the extent
the Committee may specifically provide otherwise pursuant to its authority under
Section XI below. Under no circumstances, however, shall any such option be
exercisable after the specified expiration date of the option term. Each such
option shall, during such period of limited exercisability, be exercisable only
to the extent of the number of shares (if any) for which such option is
exercisable on the date of the optionee's cessation of Employee status. However,
to the extent the option is held by an individual described in Section VI(c)(3),
such option shall remain exercisable until the later of (i) the end of the
twelve-month period (or such shorter period as may be specified in the
instrument evidencing such option) following the date of such individual's
cessation of Employee status or (ii) the end of the window period immediately
following the window period within which or immediately prior to which occurs
such individual's cessation of Employee status, but in no event shall such
option remain exercisable at any time after its specified expiration date.
(2) If the optionee's status as an Employee is terminated
for gross and willful misconduct, including (without limitation) the wrongful
appropriation of employer funds or the commission of a felony, then any
outstanding options granted such optionee under the Plan may be terminated by
the Committee as of the date of such misconduct.
(3) For purposes of the Plan, an individual shall be
considered to be an Employee of the Corporation for so long as such individual
continues in employment with the Corporation or one or more subsidiaries of the
Corporation. A subsidiary of the Corporation shall be any company (other than
the Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each of the companies in such unbroken chain (other than
the last company) owns, at the time of determination, stock possessing 50% or
more of the total combined voting power of all classes of stock in one other
company in such chain.
(d) Death of Optionee. Any option under the Plan held by the
optionee on the date of his death may be exercised, to the extent of the number
of shares (if any) for which such option was exercisable on the date the
optionee ceased Employee status (less any option shares subsequently purchased
by the optionee prior to death), by the personal representative of the
optionee's estate or by the person or persons to whom the option is transferred
pursuant to the optionee's will or in accordance with the laws of descent and
distribution. Such option may be
5.
<PAGE> 6
exercised at any time prior to the earlier of (A) the specified expiration date
of the option term or (B) the first anniversary of the optionee's death. Upon
the occurrence of the earlier event, the option shall terminate and cease to be
exercisable.
(e) Acceleration Upon Cessation of Employee Status. The
Committee shall have complete discretion, exercisable either at the time of the
option grant or at any time while the option remains outstanding, to provide
with respect to one or more options granted under the Plan that during the
limited period of exercisability following the optionee's cessation of Employee
status (as provided in Section V(c)(1) or Section V(d) above), the option may be
exercised not only with respect to the number of shares for which it is
exercisable at the time of such cessation of Employee status but also with
respect to one or more installments of purchasable shares for which the option
otherwise would have become exercisable had such cessation of Employee status
not occurred.
(f) Assignability. No option or stock appreciation right granted
under the Plan shall be assignable or transferable by the optionee other than by
will or by the laws of descent and distribution following the optionee's death,
and during the optionee's lifetime, the option and all stock appreciation rights
pertaining to such option shall be exercisable only by the optionee.
(g) Immediate Exercise of Option. In the event that the
Corporation or its shareholders enter into an agreement to dispose of all or
substantially all of the assets or outstanding capital stock of the Corporation
by means of a sale, merger, reorganization or liquidation ("Corporate
Transaction"), then each option to acquire Common Stock at the time outstanding
under the Plan shall become exercisable, immediately prior to the consummation
of such Corporate Transaction, with respect to the full number of shares of
Common Stock at the time subject to such option; provided, however, that (i) the
exercise of any accelerated pre-1987 Incentive Option shall be subject to the
sequential exercise limitations of Section VII(b) and (ii) the exercisability as
an incentive stock option under the Federal tax laws of any accelerated
post-1986 option shall be subject to the applicable dollar limitation of Section
VIII(c). However, an outstanding option shall not be so accelerated if the terms
of the agreement require as a prerequisite for the consummation of the Corporate
Transaction that such option is either to be assumed by the successor
corporation or parent thereof or to be replaced with a comparable option to
purchase shares of capital stock of the successor corporation or parent thereof.
The determination of such comparability shall be made by the Board, and its
determination shall be conclusive and binding on all persons who have an
interest in the Plan. Immediately after the consummation of the Corporate
Transaction, all outstanding options (whether or not accelerated) shall expire
and be of no further force or effect whatsoever, unless assumed by the successor
corporation or parent thereof.
(h) Stockholder Rights. No person shall have any rights as a
stockholder with respect to the shares of Common Stock purchasable under any
option granted under the Plan until he shall have exercised such option and paid
the exercise price for the purchased shares.
VI. STOCK APPRECIATION RIGHTS
The Committee shall have full power and authority, exercisable in its
sole discretion, to grant to selected key employees of the Corporation and its
subsidiaries stock
6.
<PAGE> 7
appreciation rights pertaining to all or part of the shares
of Common Stock subject to one or more option grants made to such individuals
under the Plan. Two types of stock appreciation rights shall be authorized for
issuance under the Plan:
i) Tandem Stock Appreciation Rights which require the
holder to elect between the exercise of the underlying option for
shares of Common Stock or the surrender of such option for an
appreciation distribution from the Corporation equal to the
excess of the fair market value of the shares of Common Stock
subject to the surrendered option over the aggregate option price
payable for such shares.
ii) Independent Stock Appreciation Rights which are to be
exercisable concurrently with (or within a period not to exceed
twelve (12) months following) the exercise of the underlying
option and without the surrender of all or part of such option.
The appreciation distribution to which the holder of such
independent right shall be entitled upon exercise shall be in an
amount not to exceed the product of (I) the number of shares of
Common Stock covered by the exercised right and (II) the lower of
(A) the excess of the fair market value per share of Common Stock
on the exercise date over the base price per share in effect
under the exercised right or (B) the ordinary income per share
recognized by the holder in connection with the exercise of the
underlying option for the same number of shares.
The terms and conditions applicable to each Tandem Stock Appreciation
Right ("Tandem Right") or Independent Stock Appreciation Right ("Independent
Right") shall be as follows:
(a) Tandem Rights.
(1) Tandem Rights may be tied to either Incentive Options or
non-qualified options, and such rights shall, except as specifically set forth
in this Section VI(a), be subject to the same terms and conditions applicable to
stock option grants made under Section V of the Plan.
(2) The Tandem Right shall be exercised by surrendering the
underlying option to the Corporation, in whole or in part to the extent such
option is at the time exercisable for shares of Common Stock. If the entire
option is surrendered or if a portion of the option is surrendered without a
concurrent exercise of all or part of the remainder, then the Appreciation
Distribution to which the option-holder becomes entitled shall be made in the
form of Common Stock and cash in accordance with the percentages of each
designated by the option-holder on the surrender-notification form; provided,
however, that at least 70% of the distribution must be made in whole shares of
Common Stock. For purposes of computing the number of shares to be distributed,
the Common Stock shall be valued at fair market value on the date the option is
surrendered.
(3) Should an option-holder surrender the option in part for an
Appreciation Distribution and concurrently exercise the option in part for
Common Stock, then
7.
<PAGE> 8
the Appreciation Distribution on the surrendered portion of the option shall
first be applied as a cash credit against the option price payable for the
Common Stock for which the option is exercised. Should the Appreciation
Distribution exceed the option price payable for the purchased Common Stock,
then the excess shall be distributed in accordance with terms and conditions of
subparagraph (a)(2) above.
(4) The Appreciation Distribution to which the holder of the
exercised Tandem Right shall be entitled shall be in an amount equal to the
excess of the fair market value (on the date of the option surrender) of the
number of shares of Common Stock for which the surrendered option (or
surrendered portion) is at the time exercisable over the aggregate option price
payable for such shares.
(5) The following special provisions shall be applicable to any
Incentive Option which is to be surrendered pursuant to a Tandem Right under
this Section VI(a):
i) The right to surrender the Incentive Option may only be
transferred or assigned in connection with a transfer or
assignment of the Incentive Option in compliance with the
limitations of Section V(f).
ii) The Incentive Option may only be surrendered when there
is a positive spread between the fair market value of the Common
Stock subject to the surrendered option and the aggregate option
price payable for such Common Stock.
iii) The Incentive Option may not be surrendered any time
after the expiration or sooner termination of the option term.
(b) Independent Stock Appreciation Right.
(1) Independent Rights may only be granted in conjunction with
non-qualified options, and such rights shall, except as specifically set forth
in this Section VI(b), be subject to the same terms and conditions applicable to
stock option grants made under Section V of the Plan. Independent Rights may be
granted at the same time the underlying option is granted or at any time
thereafter while such option remains outstanding; provided, however, that in no
event shall the number of shares of Common Stock to which the Independent Right
pertains exceed the number of shares at the time subject to the underlying
option.
(2) The base price in effect for measuring the Appreciation
Distribution payable with respect to each Independent Right granted under the
Plan shall be fixed by the Committee at the time of grant, but in no event shall
such base price be less than eighty-five percent (85%) of the fair market value
per share of Common Stock on the grant date.
(3) The Independent Right may be exercised either (i)
concurrently with the exercise of the underlying option or (ii) at any time
thereafter within a period not to exceed twelve (12) months, but in no event
after the specified expiration date of such right. The Committee shall establish
the exercise schedule to be in effect for each Independent Right at the time of
grant. The number of shares as to which the Independent Right may in any
instance be exercised shall not exceed on an aggregate basis the corresponding
number of shares for which
8.
<PAGE> 9
the underlying option has been exercised. If the Independent Right is not
exercised within the applicable exercise period, it shall terminate and cease to
be exercisable with respect to the particular shares as to which the Independent
Right could have been (but was not) exercised during such period.
(4) The Appreciation Distribution to which the holder of the
Independent Right shall become entitled upon exercise shall not exceed in amount
the product of (I) the number of shares for which such right is exercised and
(II) the lower of (A) the excess of the fair market value of one share of Common
Stock on the date of exercise over the base price per share in effect for the
exercised right or (B) the ordinary income per share recognized in connection
with the exercise of the underlying option for the same number of shares. The
Committee shall, at the time of grant, determine the specific percentage (not to
exceed 100%) of such product to be paid upon the subsequent exercise of the
Independent Right.
(5) Unless the instrument evidencing the Independent Right
specifies the particular method of payment, the Appreciation Distribution shall
be paid in cash, in shares of Common Stock (valued as of the date of exercise)
or in a combination of cash and Common Stock, as the Committee shall in its sole
discretion deem appropriate.
(c) Terms Applicable to Both Tandem Rights and Independent Rights.
(1) Neither a Tandem Right nor an Independent Right may be
exercised for any shares of Common Stock to which it pertains, unless (and only
to the extent) the underlying option has become exercisable for the same number
of shares.
(2) To exercise any outstanding Tandem or Independent Right, the
holder must provide written notice of exercise to the Corporation in compliance
with the provisions of the instrument evidencing such right.
(3) If a Tandem Right or an Independent Right is granted to an
individual who (i) is at the time an officer or director of the Corporation
subject to Section 16(b) of the Securities Exchange Act of 1934 or (ii) was such
an officer or director at any time during the six-month period immediately
preceding the date of grant and made any non-exempt Section 16(b) purchase or
sale of Common Stock during such six-month period, then such Tandem Right or
Independent Right shall not become exercisable in whole or in part at any time
during the initial six-month period following the grant date, except to the
extent the instrument evidencing such right provides for exercisability upon the
holder's death or disability.
(4) If the holder of the Tandem or Independent Right (i) is at
the time of exercise considered an officer or director of the Corporation
subject to Section 16(b) of the Securities Exchange Act of 1934 or (ii) was such
an officer or director at any time during the six-month period immediately
preceding the date of exercise and made any non-exempt Section 16(b) purchase of
Common Stock during such six-month period, then the following additional terms
and condition shall apply to the exercise of such Tandem or Independent Right:
i) The right can only be exercised during the so-called
"window period" commencing on the third and ending on the twelfth
business day following the
9.
<PAGE> 10
day on which the Corporation's quarterly or annual summaries of
income and earnings are released to the public.
ii) The exercise of such right shall be effective only if
it is approved by the Committee, which shall have sole discretion
in the matter.
iii) If the exercise of a Tandem Right is disapproved, then
the holder shall retain whatever rights he had under the
surrendered option (or the surrendered portion thereof) on the
option surrender date and may exercise such rights at any time
prior to the later of (a) the expiration of the 5 business-day
period following the date on which he received notification of
the disapproval or (b) the last day on which the option is
otherwise exercisable, but in no event may such rights be
exercised at any time after ten (10) years after the date of the
option grant.
iv) If the exercise of an Independent Right is disapproved,
then such right shall terminate and cease to be exercisable with
respect to the particular shares of Common Stock for which such
exercise is disapproved.
(5) No limitation shall exist on the aggregate amount of cash
payments the Corporation may make under the Plan in connection with the exercise
of Tandem Rights or Independent Rights pursuant to this Section VI. However, to
the extent the Appreciation Distribution payable with respect to any exercised
Independent Right is made in shares of Common Stock, then the number of shares
of Common Stock remaining available for future issuance under this Plan or the
Restricted Stock Bonus Plan shall be reduced on a one-for-one basis. To the
extent any outstanding option under the Plan is surrendered in connection with
the exercise of a Tandem Right, the number of shares subject to the surrendered
option shall not be available for future issuance under this Plan or the
Restricted Stock Bonus Plan.
VII. INCENTIVE OPTIONS
Incentive Options may be granted under the Plan shall be subject to
the additional terms and conditions specified below. Options which are
specifically designated as "non-qualified options" or "non-statutory options" at
the time of grant shall not be subject to any of the terms and conditions
specified below and accordingly shall not be Incentive Options.
(a) Option Price. The option price per share of the Common Stock
subject to an Incentive Option shall in no event be less than one hundred
percent (100%) of the fair market value of a share of Common Stock on the date
of grant.
(b) Sequential Exercise Rule. Except to the extent now or hereafter
permitted by Section 422 of the Internal Revenue Code, no Incentive Option
granted prior to January 1, 1987 may be exercised while there remains
outstanding (within the meaning of subsection (c) (7) of Section 422 of the
Internal Revenue Code) any other pre-1987 Incentive Option which was granted at
an earlier date to the optionee to purchase stock in the Company or in any other
corporation which is on the date of grant of the later option either a parent or
subsidiary corporation of the Company or a predecessor corporation of any of
such corporations.
10.
<PAGE> 11
(c) Dollar Limitation. The aggregate fair market value (determined as
of the respective date or dates of grant) of the Common Stock for which one or
more options granted after December 31, 1986 to any Employee under this Plan (or
any other option plan of the Corporation or its parent or subsidiary
corporations) may for the first time become exercisable as incentive stock
options under the Federal tax laws during any one post-1986 calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000) or such greater
amount as may be permitted under subsequent amendments to Section 422 of the
Internal Revenue Code. To the extent the Employee holds two or more post-1986
options which become exercisable for the first time in the same calendar year,
the foregoing limitations or the exercisability thereof as incentive stock
options under the Federal tax laws shall be applied on the basis of the order in
which such options are granted. Should the number of shares of Common Stock for
which any Incentive Option first becomes exercisable in any calendar year exceed
the applicable One Hundred Thousand Dollar ($100,000) limitation, then the
option may nevertheless be exercised in that calendar year for the excess number
of shares as a non-qualified option under the Federal tax laws.
(d) 10% Shareholder. If any individual to whom an Incentive Option is
to be granted pursuant to the provisions of the Plan is on the date of grant the
owner of stock (as determined under Section 424(d) of the Internal Revenue Code)
possessing more than 10% of the total combined voting power of all classes of
stock of the Corporation or any one of its subsidiaries, then the following
special provisions shall be applicable to the option granted to such individual:
i) The option price per share of the Common Stock subject to
such Incentive Option shall not be less than one hundred and ten
percent (110%) of the fair market value of one share of Common Stock
on the date of grant; and
ii) The option shall not have a term in excess of five (5) years
from the date of grant.
Except as modified by the preceding provisions of this paragraph VII, all the
provisions of the Plan shall be applicable to the Incentive Options granted
hereunder.
VIII. EFFECTIVE DATE AND TERM OF PLAN
(a) The Plan initially became effective on the date it was adopted by
the Board, but before any options granted under the Plan could become
exercisable, the Plan had to be approved by the holders of at least a majority
of the Corporation's outstanding voting stock represented and voting at a
duly-held meeting at which a quorum was present, provided the shares voting for
approval also constituted at least a majority of the required quorum. If such
stockholder approval had not been obtained, then any options previously granted
under the Plan would have terminated and no further options would have been
granted. Subject to such limitation, the Committee was authorized to grant
options under the Plan at any time after the adoption of the Plan by the Board.
(b) The provisions of the Plan as amended effective March 1, 1993
shall apply only to options granted under the Plan from and after such date. All
stock options and stock
11.
<PAGE> 12
appreciation rights issued and outstanding under the Plan immediately prior to
such effective date shall continue to be governed by the terms and conditions of
the Plan (and the respective instruments evidencing each such option or right)
as in effect on the date each such option or right was previously granted, and
none of the March 1, 1993 amendments to the Plan shall be deemed to affect or
otherwise modify the rights or obligations of the holders of such options or
stock appreciation rights with respect to the acquisition of shares of Common
Stock thereunder or the exercise of their outstanding stock appreciation rights.
However, the Committee may, in its discretion, modify one or more options issued
and outstanding under the Plan prior to the March 1, 1993 effective date of such
amendments to incorporate one or more features added to the Plan by those
amendments.
(c) No option granted on the basis of the 400,000-share increase
included as part of the March 1, 1993 amendments to the Plan is to become
exercisable in whole or in part at any time prior to shareholder approval of the
amendments at the 1993 Annual Meeting. Should such stockholder approval not be
obtained, then any and all options granted on the basis of such 400,000-share
increase shall immediately terminate and shall not become exercisable for any of
the shares of Common Stock subject thereto. Subject to such limitation, the
Committee is authorized to grant options on the basis of such 400,000-share
increase at any time after the March 1, 1993 effective date of such share
increase.
(d) The sale and remittance procedure authorized for the exercise of
outstanding options shall be available for all options granted under the Plan to
officers and directors of the Corporation from and after May 1, 1991 and for all
outstanding non-qualified options under the Plan held on that date by such
officers and directors. The sale and remittance procedure authorized for the
exercise of outstanding options shall be available for all options granted under
the Plan from and after March 1, 1990 to individuals who are not officers and
directors of the Corporation at the time of such grant and for all outstanding
non-qualified options under the Plan held by such individuals on that date. The
Committee may also allow such procedure to be utilized in connection with one or
more disqualifying dispositions of incentive stock option shares effected on or
after the applicable effective date specified above, whether or not the option
was granted on or before such date.
(e) Unless sooner terminated in accordance with Section IX, the Plan
shall terminate upon the earlier of (i) December 31, 2002(3) or (ii) the date
upon which all the shares of Common Stock available for issuance under the Plan
shall have been issued pursuant to the exercise of options or stock appreciation
rights granted hereunder. If the date of termination is determined under clause
(i) above, then any options or stock appreciation rights outstanding on such
date shall not be affected by the termination of the Plan and shall continue to
have force and effect in accordance with the provisions of the instruments
evidencing such options or stock appreciation rights.
- ----------
(3) Approved at the 1993 Annual Shareholders Meeting.
12.
<PAGE> 13
IX. AMENDMENT OR DISCONTINUANCE BY BOARD ACTION
(a) The Board may amend, suspend or discontinue the Plan in whole or
in part at any time; provided, however, that such action shall not adversely
affect rights and obligations with respect to options or stock appreciation
rights at the time outstanding under the Plan. In addition, no modification of
the Plan by the Board shall without the approval of the Corporation's
stockholders (i) materially increase the number of shares of Common Stock or the
number of Tandem or Independent Stock Appreciation Rights which may be issued
under the Plan, the number of shares of Common Stock for which stock
appreciation rights may be granted in any one calendar year or the aggregate
number of shares of Common Stock which may be issued under this Plan and the
Corporation's Restricted Stock Bonus Plan (unless necessary to effect the
adjustments required under Section III(c)), (ii) materially increase the
benefits accruing to participants under the Plan or (iii) materially modify the
eligibility requirements for the grant of options or stock appreciation rights
under the Plan.
(b) Notwithstanding the provisions of Section IX(a), the Board hereby
reserves the right to amend or modify the terms and provisions of the Plan and
of any outstanding options or stock appreciation rights under the Plan to the
extent necessary to qualify any or all options under the Plan for such favorable
Federal income tax treatment as may be afforded employee stock options under
Section 422 of the Internal Revenue Code and regulations subsequently
promulgated thereunder.
X. CANCELLATION AND REGRANT
The Committee shall have the exclusive authority to effect, at any
time and from time to time, with the consent of the affected holders, the
cancellation of any or all outstanding options or stock appreciation rights
under the Plan and to grant in substitution therefor new options or stock
appreciation rights under the Plan covering the same or different numbers of
shares of Common Stock but having an option price per share not less than
eighty-five percent (85%) of fair market value on the new grant date or a base
price per share not less than eighty-five percent (85%) of fair market value on
the new grant date. If one or more cancelled options are pre-1987 Incentive
Options, then such options shall, for purposes of the "sequential exercise" rule
of Section VII(b), be considered to be outstanding options until the expiration
date initially specified for the option term.
XI. SPECIAL POWERS
In addition to the power and authority provided the Committee pursuant
to the foregoing provisions of the Plan, the Committee shall have the full power
and authority, exercisable from time to time in its sole discretion, to extend,
either at the time the option or stock appreciation right is granted or at any
time during which the option or stock appreciation right remains outstanding,
the period for which the option or stock appreciation right is to remain
exercisable following the holder's termination of Employee status from the
twelve (12) month or shorter period set forth in the agreement evidencing such
option or stock appreciation right to such greater period of time as the
Committee shall deem appropriate; provided, however, that in no event shall such
option or stock appreciation right be exercisable after the specified expiration
date of the term thereof.
13.
<PAGE> 14
XII. SPECIAL TAX WITHHOLDING ELECTION
The Committee may, in its discretion and in accordance with the
provisions of this Section XII and such supplemental rules as the Committee may
from time to time adopt, provide any or all holders of non-qualified options
under the Plan with the right to use shares of the Corporation's Common Stock in
satisfaction of the Federal and State income and employment tax liability
incurred in connection with the exercise of such options (the "Taxes"). Such
right may be provided to any such option holder in either or both of the
following formats:
1. Stock Withholding: The holder of the non-qualified option may be
provided with the election to have the Corporation withhold, from the shares of
Common Stock otherwise issuable upon the exercise of such non-qualified option,
a portion of such shares with an aggregate fair market value equal to the
designated percentage (any multiple of 5% up to 100% as specified by the option
holder) of the applicable Taxes.
Any such stock withholding election shall be subject to the following
terms and conditions:
i) The election must be made on or before the date the amount of
the Taxes incurred in connection with the exercise of the option is
determined (the "Tax Determination Date").
ii) The election shall be irrevocable.
iii) The exercise of such election shall be subject to the
approval of the Committee, and none of the shares of Common Stock for
which the option is exercised shall be withheld in satisfaction of the
Taxes incurred in connection with such exercise except to the extent
the election is approved by the Committee.
iv) The shares of Common Stock withheld pursuant to the election
shall be valued at fair market value on the Tax Determination Date in
accordance with the valuation procedures of Paragraph V(a).
v) In no event may the requested withholding exceed the dollar
amount of Taxes incurred in connection with the exercise of the
non-qualified option.
Stock withholding elections made by individuals who (A) are at the
time officers or directors of the Corporation subject to the short-swing profit
restrictions of Section 16(b) of the Securities Exchange Act of 1934 or (B) were
such officers or directors at any time during the six (6)-month period
immediately preceding the exercise of such election and made any non-exempt
Section 16(b) purchases or sales of Common Stock during such six (6)-month
periods shall be subject to the following limitations in addition to the
preceding provisions of this Section XII:
vi) The election shall not become effective at any time prior to
the expiration of the six (6)-month period measured from the later of
the grant date of the non-qualified option to which such election
pertains or the actual grant date of the
14.
<PAGE> 15
stock withholding election, and no shares shall accordingly be
withheld in connection with any Tax Determination Date which occurs
before the expiration of such six (6)-month period.
vii) Either the election must be made six (6) months or more
prior to the Tax Determination Date or the exercise of such election
and the underlying stock option must occur concurrently within the
same quarterly "window" period. Quarterly window periods shall begin
on the third (3rd) business day following the date of public release
of each quarterly or annual summary statement of the Corporation's
sales and earnings and end on the earlier of the twelfth (12th)
business day following such release date or the Tax Determination
Date.
viii) The six (6)-month period specified in clauses (i) and (ii)
shall not be applicable in the event of the option holder's death or
disability.
2. Stock Delivery: The Committee may, in its discretion, provide the
holder of the non-qualified option with the election to deliver, at the time the
non-qualified option is exercised, one or more shares of Common Stock already
held by such individual with an aggregate fair market value equal to the
designated percentage (any multiple of 5% up to 100% as specified by the option
holder) of the Taxes incurred in connection with such option exercise.
Any such stock delivery election shall be subject to the following
terms and conditions:
i) The election must be made on or before the date the amount of
the Taxes incurred in connection with the exercise of the option is
determined (the "Tax Determination Date").
ii) The election shall be irrevocable.
iii) The exercise of the election shall be subject to the
approval of the Committee, and none of the delivered shares of Common
Stock shall be accepted in satisfaction of the Taxes incurred in
connection with the option exercise except to the extent the election
is approved by the Committee.
iv) The shares of Common Stock delivered in satisfaction of such
Taxes shall be valued at fair market value on the Tax Determination
Date in accordance with the valuation procedures of Paragraph V(a).
v) In no event may the value of the delivered shares exceed the
dollar amount of Taxes incurred in connection with the exercise of the
non-qualified option.
Stock delivery elections made by individuals who (A) are at the time
officers or directors of the Corporation subject to the short-swing profit
restrictions of Section 16(b) of the Securities Exchange Act of 1934 or (B) were
such officers or directors at any time during the six
15.
<PAGE> 16
(6)-month period immediately preceding the exercise of such election and made
any non-exempt Section 16(b) purchases or sales of Common Stock during such six
(6)-month period shall NOT be subject to any of the special limitations
otherwise applicable in connection with the exercise of the stock withholding
election specified above.
16.
<PAGE> 1
EXHIBIT 99.2
POPE & TALBOT, INC.
STOCK OPTION AND APPRECIATION PLAN
PLAN AMENDMENT
THE POPE & TALBOT STOCK OPTION AND APPRECIATION PLAN, as amended and
restated effective March 1, 1993 (the "Plan"), is hereby further amended and
modified, effective as of February 4, 1998.
1. Section III(a) of the Plan is hereby amended in its entirety to read
as follows:
(a) The stock which is to be made the subject of the options or stock
appreciation rights granted under the Plan shall be the Corporation's authorized
but unissued or reacquired common stock ("Common Stock"). In connection with the
issuance of shares under the Plan, the Corporation may repurchase shares of
Common Stock on the open market or otherwise. The total number of shares
issuable in the aggregate under the Plan and the Corporation's Restricted Stock
Bonus Plan (the "Restricted Plan") shall not exceed 2,000,000 shares. However,
from and after February 28, 1998, not more than 1,360,182 shares may be issued
under the Plan, and none of the shares attributable to the 400,000-share
increase approved by the stockholders at the 1993 Annual Meeting or the
300,000-share increase effected by this Plan Amendment shall be issuable under
the Restricted Plan. In addition, the Committee may issue (i) Independent Stock
Appreciation Rights (as defined in Section VI) covering up to a total of
1,500,000 shares of Common Stock over the term of the Plan and (ii) Tandem Stock
Appreciation Rights (as defined in Section VI) covering up to a total of
1,700,000 shares of Common Stock over the term of the Plan.
2. Section III(c) of the Plan is hereby redesignated as Section
III(d), and new Section III(c) is hereby added to the Plan to read as follows:
(c) In no event shall any one participant in the Plan receive
stock options and separately exercisable stock appreciation rights for more than
200,000 shares of Common Stock in the aggregate per calendar year, beginning
with the 1998 calendar year.
3. Redesignated Section III(d) is hereby amended to read as follows:
(d) In the event that any change is made to the Common Stock
issuable under the Plan or subject to any outstanding stock option or stock
appreciation right granted under the Plan (whether by reason of (I) any merger,
consolidation or other reorganization or (II) any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change in
corporate structure effected without the Corporation's receipt of
consideration), appropriate adjustments shall be made to (i) the maximum number
and/or class of securities issuable under the Plan, (ii) the maximum number
and/or class of securities for which Independent and Tandem Stock Appreciation
Rights may each be granted over the term of the Stock Option Plan, (iii) the
maximum number and/or class of securities for
<PAGE> 2
which Independent Stock Appreciation Rights and Tandem Stock Appreciation Rights
may each be granted in any one calendar year, (iv) the maximum number and/or
class of securities which may in the aggregate be issued under the Plan and the
Restricted Plan, (v) the maximum number and/or class of securities for which
stock options and separately exercisable stock appreciation rights may be
granted under the Plan to any one participant per calendar year, beginning with
the 1998 calendar year, and (vi) the number and/or class of securities and price
per share in effect under each outstanding stock option and stock appreciation
right.
4. There is hereby added to Article VIII of the Plan new section (f)
to read as follows:
(f) No option or stock appreciation right shall be granted on
the basis of the 300,000-share increase which forms part of this Plan Amendment,
unless and until this Plan Amendment is approved by the stockholders at the 1998
Annual Meeting. Should such stockholder approval not be obtained, then the
300,000-share increase shall not be implemented; however, the Plan shall
continue in effect until the share reserve as last approved by the stockholders
has been issued pursuant to the exercise of stock options and stock appreciation
rights granted under this Plan.
5. Except as modified by this Plan Amendment, all the terms and
provisions of the Plan (as amended and restated effective March 1, 1993) shall
continue in full force and effect.
IN WITNESS WHEREOF, POPE & TALBOT, INC. has caused this Plan Amendment
to be executed on its behalf by its duly authorized officer as of the effective
date indicated above.
POPE & TALBOT, INC.
BY: /s/ ROBERT J. DAY
------------------------------------
TITLE: SENIOR VICE PRESIDENT AND CFO
<PAGE> 1
EXHIBIT 99.5
POPE & TALBOT, INC.
SPECIAL NON-EMPLOYEE DIRECTOR STOCK RETAINER FEE PLAN
I. PURPOSE OF THE PLAN
This Special Non-Employee Director Stock Retainer Fee Plan (the
"Plan") is intended to promote the interests of Pope & Talbot, Inc., a Delaware
corporation (the "Corporation"), by providing the non-employee members of the
Corporation's Board of Directors with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Corporation
as an incentive for them to remain in the service of the Corporation.
II. ADMINISTRATION OF THE PLAN
The terms and conditions of each option grant (including the timing
and pricing of the option grant) shall be determined solely pursuant to the
express terms and conditions of the Plan, and neither the Board nor any
committee of the Board shall exercise any discretionary functions with respect
to option grants made pursuant to the Plan.
III. STOCK SUBJECT TO THE PLAN
A. Shares of the Corporation's Common Stock shall be available for
issuance under the Plan and shall be drawn from either the Corporation's
authorized but unissued shares of Common Stock or from reacquired shares of
Common Stock, including shares repurchased by the Corporation on the open
market. The maximum number of shares of Common Stock issuable under this Plan
shall not exceed 300,000 shares, subject to adjustment from time to time in
accordance with the provisions of this Article III.
B. Should one or more outstanding options under the Plan expire or
terminate for any reason prior to exercise in full, then the shares subject to
the portion of each option not so exercised shall be available for subsequent
option grant under the Plan. In addition, should the exercise price of an
outstanding option under the Plan be paid with shares of Common Stock, then the
number of shares of Common Stock available for issuance under this Plan shall be
reduced only by the net number of shares of Common Stock actually issued to the
holder of such option, and not by the gross number of shares for which such
option is exercised.
C. Should any change be made to the Common Stock issuable under the
Plan by reason of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, then the
Board shall make appropriate adjustments to (i) the maximum number and/or class
of securities issuable under the Plan and (ii) the number and/or class of
securities and price per share in effect for each option outstanding under the
Plan. Such adjustments to the outstanding options are to be effected in a manner
which shall preclude the enlargement or dilution of rights and benefits under
such options. The adjustments determined by the Board shall be final, binding
and conclusive.
<PAGE> 2
IV. OPTION GRANTS
Each non-employee Board member may elect to apply all or a portion, in
twenty-five percent (25%) increments, of the annual retainer fee and any
Chairman of the Board fees for the year to the acquisition of stock options
under the Plan in lieu of payment of those fees in cash. Such election must be
filed with the Corporation's Chief Financial Officer prior to the start of the
calendar year for which the fees which are the subject of that election would
otherwise be payable in cash. Each non-employee Board member who files such a
timely election shall automatically be granted four (4) separate stock options
under this Plan during the calendar year for which such election is in effect.
The grants shall be made on the first business day in January, April, July and
October of that year. However, no option grants shall be made to any
non-employee Board member following his or her cessation of Board service.
V. OPTION GRANTS
Each quarterly stock option grant shall be a Non-Statutory Option
governed by the terms and conditions specified below.
A. Exercise Price. The exercise price per share shall be equal to the
Fair Market Value per share of Common Stock on the grant date.
B. Number of Option Shares. The number of shares of Common Stock
subject to the option shall be determined by dividing (i) one-fourth of the fees
for the year applied to the program by (ii) the Black-Scholes formula value of
the option, as determined by the Corporation's independent financial advisors.
C. Option Term. Each option shall have a maximum term of ten (10)
years measured from the grant date.
D. Exercisability. Each option grant shall be immediately exercisable
for any or all of the option shares as fully vested shares. However, any options
granted prior to the 1999 Annual Stockholders Meeting shall be subject to
stockholder approval of this Plan at such Annual Meeting and shall not become
exercisable unless and until such stockholder approval is obtained.
E. Limited Transferability of Options. During the lifetime of the
Optionee the option may, in connection with the Optionee's estate plan, be
assigned in whole or in part to one or more members of the Optionee's immediate
family or to a trust established exclusively for one or more such family
members. The assigned portion may only be exercised by the person or persons who
acquire a proprietary interest in the option pursuant to the assignment. The
terms applicable to the assigned portion shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Corporation may deem appropriate.
Should the Optionee die while holding the option, then that option shall be
transferred in accordance with the Optionee's will or the laws of descent and
distribution.
2
<PAGE> 3
F. Effect of Termination of Board Service.
1. Should the Optionee cease for any reason to serve as a Board
member while holding one or more option grants under the Plan, then such
individual shall have a three (3)-year period following the date of such
cessation of Board service in which to exercise each such option for any or all
of the option shares at the time subject to that option. In no event shall any
option grant remain exercisable after the expiration date of the ten (10)-year
option term.
2. Should the Optionee die while holding one or more option
grants under the Plan, then each such grant may subsequently be exercised, for
any or all of the option shares at the time subject to that option, by the
personal representative of the Optionee's estate or by the person or persons to
whom the option is transferred pursuant to the Optionee's will or in accordance
with the laws of descent and distribution. The right to exercise each such
option shall lapse upon the earlier of (i) the expiration of the three (3)-year
period measured from the date of the Optionee's cessation of Board service or
(ii) the expiration of the ten (10) year option term.
G. Corporate Transaction. Each outstanding option shall terminate at
the time of a Corporate Transaction, except to the extent that option is assumed
by the successor entity or its parent company. Each option which is so assumed
shall, immediately after the Corporate Transaction, be appropriately adjusted to
apply and pertain to the number and class of securities which would have been
issued to the option holder in the consummation of such Corporate Transaction
had the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the option exercise price payable
per share, provided the aggregate option exercise price shall remain the same.
H. Stockholder Rights. The holder of an option grant shall have no
stockholder rights with respect to any shares subject to such option until such
individual shall have exercised the option, paid the exercise price for the
purchased shares and become a holder of record of the shares.
I. Remaining Terms. The remaining terms and conditions of each
option grant shall be as set forth in the form of Stock Option Agreement
attached as Exhibit A.
VI. AMENDMENT OF THE PLAN AND AWARDS
The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options at the time outstanding under the Plan unless the affected
Optionees consent to such amendment or modification. In addition, certain
amendments may require stockholder approval pursuant to applicable laws or
regulations.
3
<PAGE> 4
VII. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan shall be implemented effective January 4, 1999, subject
to stockholder approval of the Plan at the 1999 Annual Stockholders Meeting. If
such stockholder approval is not obtained, then the Plan shall terminate, all
options previously granted hereunder shall terminate and cease to be
outstanding, and no further option grants shall be made under the Plan.
B. If the Plan is approved by the stockholders at the 1999 Annual
Meeting, then the Plan shall remain in effect until the earlier of (i) December
31, 2008 or (ii) the date on which all shares available for issuance under this
Plan shall have been issued pursuant to the exercise of outstanding options. If
the date of plan termination is determined under clause (i) above, then all
option grants outstanding on such date shall thereafter continue to have force
and effect in accordance with the provisions of the instruments evidencing those
grants.
VIII. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants or share issuances under the Plan shall be used for
general corporate purposes
IX. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option under
the Plan and the issuance of Common Stock upon the exercise of the option grants
made hereunder shall be subject to the Corporation's procurement of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options granted under it, and the Common Stock issued
pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under this Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any securities exchange on which the Common Stock is then listed for trading.
X. NO IMPAIRMENT OF RIGHTS
Neither the action of the Corporation in establishing the Plan nor any
provision of the Plan shall be construed or interpreted so as to affect
adversely or otherwise impair the right of the Corporation or the stockholders
to remove any individual from the Board at any time in accordance with the
provisions of applicable law.
XI. MISCELLANEOUS PROVISIONS
A. The right to acquire Common Stock or other assets under the Plan
may not be assigned, encumbered or otherwise transferred by any Optionee.
4
<PAGE> 5
B. The provisions of the Plan relating to the exercise of the
outstanding options shall be governed by the laws of the State of Oregon, as
such laws are applied to contracts entered into and performed in such State.
C. The provisions of the Plan shall inure to the benefit of, and be
binding upon, the Corporation and its successors or assigns, and the Optionees,
the legal representatives of their respective estates, their respective heirs or
legatees and their permitted assignees.
5
<PAGE> 6
APPENDIX
For purposes of the Plan, the following definitions shall be in
effect:
A. BOARD: the Corporation's Board of Directors.
B. CODE: the Internal Revenue Code of 1986, as amended.
C. COMMON STOCK: shares of the Corporation's common stock.
D. CORPORATE TRANSACTION: any of the following stockholder-approved
transactions to which the Corporation is a party:
(i) a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of which is
to change the State in which the Corporation is incorporated,
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation, or
(iii) any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities are transferred to a person or persons different from the persons
holding those securities immediately prior to such merger.
E. EFFECTIVE DATE: the January 4, 1999 date on which the first stock
option grants shall be made under the Plan, subject to stockholder approval at
the 1999 Annual Meeting.
F. FAIR MARKET VALUE: the Fair Market Value per share of Common
Stock determined in accordance with the following provisions:
(i) If the Common Stock is at the time listed or admitted to
trading on the New York Stock Exchange or on any other national securities
exchange, then the Fair Market Value shall be the closing selling price per
share on the date in question, as officially quoted on the composite tape of
transactions on the exchange serving as the primary market for the Common Stock.
If there is no reported sale of Common Stock on such exchange on the date in
question, then the Fair Market Value shall be the closing selling price on the
exchange on the last preceding date for which such quotation exists.
(ii) If the Common Stock is not at the time listed or admitted to
trading on any national securities exchange but is traded on the Nasdaq National
Market, the Fair Market Value shall be the closing selling price per share on
the date in question, as such price is reported by the National Association of
Securities Dealers on the Nasdaq National Market. If there is no reported
closing selling price for the Common Stock on the grant date, then the closing
selling price on the last preceding date for which such quotation exists shall
be determinative of Fair Market Value.
G. 1934 ACT: the Securities Exchange Act of 1934, as amended.
A-1
<PAGE> 7
H. OPTIONEE: any person to whom an option is granted under the Plan.
A-2
<PAGE> 8
EXHIBIT A
STOCK OPTION AGREEMENT
<PAGE> 1
EXHIBIT 99.6
POPE & TALBOT, INC.
NOTICE OF GRANT OF STOCK OPTION
UNDER
SPECIAL NON-EMPLOYEE DIRECTOR STOCK RETAINER FEE PROGRAM
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Pope & Talbot, Inc. (the "Corporation"):
Optionee:__________________________________________________________________
Grant Date: _________________________________________________________, 1999
Exercise Price: $________________________________________________ per share
Number of Option Shares: ___________________________ shares of Common Stock
Expiration Date: ____________________________________________________, 2009
Type of Option: Non-Statutory Stock Option
Exercise Date: Immediately Exercisable
Vesting Schedule: The Option Shares shall be fully vested upon issuance.
Optionee understands and agrees that the Option is granted subject to and
in accordance with the terms of the Special Non-Employee Director Stock Retainer
Fee Plan (the "Plan"). Optionee further agrees to be bound by the terms of the
Plan and the terms of the Option as set forth in the Stock Option Agreement
attached hereto as Exhibit A. A copy of the Plan is available upon request made
to the Corporate Secretary at the Corporation's principal offices.
No Impairment of Rights. Nothing in this Notice or in the attached Stock
Option Agreement or in the Plan shall adversely affect or otherwise impair the
right of the Corporation or the stockholders to remove the Optionee from the
Board at any time in accordance with the provisions of applicable law.
<PAGE> 2
Definitions. All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the attached Stock Option Agreement.
DATED: ________________________, 1999
POPE & TALBOT, INC.
By:_____________________________________
Title:__________________________________
________________________________________
OPTIONEE
Address: _______________________________
________________________________________
ATTACHMENT
EXHIBIT A -- STOCK OPTION AGREEMENT
2
<PAGE> 3
EXHIBIT A
STOCK OPTION AGREEMENT
<PAGE> 1
EXHIBIT 99.7
POPE & TALBOT, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has implemented the Special Non-Employee Director
Stock Retainer Fee Plan (the "Plan") pursuant to which eligible non-employee
members of the Corporation's Board of Directors (the "Board") may elect to apply
all or a portion of the annual retainer fee and any Chairman of the Board fees
for the year to the acquisition of stock options in lieu of payment of those
fees in cash.
B. Optionee is an eligible non-employee Board member, and this Agreement
is executed pursuant to, and is intended to carry out the purposes of, the Plan
in connection with the grant of a stock option to purchase shares of the
Corporation's common stock ("Common Stock") under the Plan.
C. The granted option is intended to be a non-statutory option which does
not meet the requirements of Section 422 of the Internal Revenue Code.
D. All capitalized terms in this Agreement, to the extent not otherwise
defined in the Agreement, shall have the meaning assigned to them in the
attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of the
Grant Date, a Non-Statutory Option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a maximum term of ten (10) years
measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or Paragraph 6.
3. LIMITED TRANSFERABILITY. During the lifetime of the Optionee the
option may, in connection with the Optionee's estate plan, be assigned in whole
or in part to one or more members of the Optionee's immediate family or to a
trust established exclusively for one or more such family members. The assigned
portion may only be exercised by the person or persons who acquire a proprietary
interest in the option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the option immediately
prior to such assignment and shall be set forth in such documents issued to the
assignee as the Plan Administrator may deem appropriate. Should Optionee die
while holding this option, then the option shall be transferred in accordance
with Optionee's will or the laws of descent and distribution.
<PAGE> 2
4. EXERCISABILITY/VESTING. This option shall be immediately exercisable
for any or all of the Option Shares as fully-vested shares and shall remain so
exercisable until the Expiration Date or the sooner termination of the option
term under Paragraph 5 or Paragraph 6. In no event, however, shall this option
become exercisable for any of the Option Shares prior to stockholder approval of
the Plan at the 1999 Annual Stockholders Meeting. Should such stockholder
approval not be obtained, then this option shall immediately terminate.
5. CESSATION OF BOARD SERVICE. Should Optionee cease service as a Board
member while this option remains outstanding, then the option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:
- Should Optionee cease for any reason to serve as a Board member
while this option is outstanding, then the period during which
this option may be exercised, for any or all of the Option Shares
at the time subject to this option, shall be limited to the three
(3)-year period measured from the date of such cessation of Board
service. In no event, however, shall this option be exercisable
at any time after the Expiration Date.
- Should Optionee die while holding this option, then the personal
representative of Optionee's estate or the person or persons to
whom the option is transferred pursuant to Optionee's will or in
accordance with the laws of descent and distribution shall have
the right to exercise this option for any or all of the Option
Shares at the time subject to this option. Such right shall
terminate, and this option shall accordingly cease to be
exercisable for such Option Shares, upon the earlier of (A) the
expiration of the three (3)-year period measured from the date of
Optionee's cessation of Board service or (B) the specified
Expiration Date of the option term.
6. CORPORATE TRANSACTION. This option shall terminate at the time of
a Corporate Transaction, except to the extent assumed by the successor entity or
its parent company. To the extent this option is so assumed, the option shall be
appropriately adjusted, immediately after the Corporate Transaction, to apply
and pertain to the number and class of securities which would have been issued
to the holder of this option in the consummation of such Corporate Transaction
had the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the Exercise Price payable per
share, provided the aggregate Exercise Price shall remain the same.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
2
<PAGE> 3
8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. MANNER OF EXERCISING OPTION.
A. In order to exercise this option for all or any part of the
Option Shares for which the option is at the time exercisable, Optionee (or in
the case of exercise after Optionee's death, Optionee's executor, administrator,
heir or legatee, as the case may be) must take the following actions:
(i) The Secretary of the Corporation shall be provided with
written notice of the option exercise (the "Exercise Notice"), in
substantially the form of Exhibit I attached hereto, in which there is
specified the number of Option Shares to be purchased under the exercised
option.
(ii) The aggregate Exercise Price for the purchased shares shall
be paid in one or more of the following alternative forms:
- payment in cash or check made payable to the
Corporation; or
- payment in shares of Common Stock held by Optionee (or
any other person or persons exercising the option) for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or
- payment effected through a broker-dealer sale and
remittance procedure pursuant to which Optionee shall provide
irrevocable instructions (A) to a Corporation-designated
brokerage firm to effect the immediate sale of the shares
purchased under the option and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Exercise Price payable for those
shares plus the applicable Federal, State and local income taxes
required to be withheld by the Corporation by reason of such
exercise and (B) to the Corporation to deliver the certificates
for the purchased shares directly to such brokerage firm in order
to complete the sale.
(iii) Appropriate documentation evidencing the right to exercise
this option shall be furnished the Corporation if the person or persons
exercising the option is other than the Optionee.
(iv) Appropriate arrangement must be made with the Corporation
for the satisfaction of all Federal, State and local income tax withholding
requirements applicable to the option exercise.
3
<PAGE> 4
B. Except to the extent the sale and remittance procedure specified
above is utilized in connection with the exercise of the option, payment of the
Exercise Price for the purchased shares must accompany the Exercise Notice
delivered to the Corporation in connection with the option exercise.
C. As soon as practical after the Exercise Date, the Corporation
shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate or certificates representing the purchased
Option Shares.
D. In no event may this option be exercised for any fractional
shares.
10. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in any way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets. In addition, this Agreement shall not in any way be
construed or interpreted so as to affect adversely or otherwise impair the right
of the Corporation or the stockholders to remove Optionee from the Board at any
time in accordance with the provisions of applicable law.
11. COMPLIANCE WITH LAWS AND REGULATIONS.
A. The exercise of this option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of the New York Stock Exchange.
B. The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
However, the Corporation shall use its best efforts to obtain all such
applicable approvals.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraph 3 or Paragraph 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
13. CONSTRUCTION/GOVERNING LAW. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions of the Plan.
The interpretation, performance, and enforcement of this Agreement shall be
governed by the laws of the State of Oregon without resort to that State's
conflict-of-laws rules.
4
<PAGE> 5
14. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
5
<PAGE> 6
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify Pope & Talbot, Inc. (the "Corporation") that I elect to
purchase ______________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $_____ per share (the "Exercise Price")
pursuant to that certain option (the "Option") granted to me under the
Corporation's Special Non-Employee Director Stock Retainer Fee Plan on ________,
1999.
Concurrently with the delivery of this Exercise Notice to the Secretary of
the Corporation, I shall hereby pay to the Corporation the Exercise Price for
the Purchased Shares in accordance with the provisions of my agreement with the
Corporation evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker/dealer sale and remittance
procedure specified in my agreement to effect payment of the Exercise Price for
any Purchased Shares.
___________________________________ ________________________________________
Date Optionee
Address: _______________________________
________________________________________
Print name in exact manner
it is to appear on the
stock certificate: ________________________________________
Address to which certificate
is to be sent, if different
from address above: ________________________________________
________________________________________
Social Security Number: ________________________________________
<PAGE> 7
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean any of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State in which the Corporation is incorporated,
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution of the
Corporation, or
(iii) any reverse merger in which the Corporation is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such merger.
F. CORPORATION shall mean Pope & Talbot, Inc., a Delaware corporation.
H. EXERCISE DATE shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price payable per share as
specified in the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option term expires
as specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
be determined as follows:
(i) If the Common Stock is at the time listed or admitted to trading
on the New York Stock Exchange or on any other national securities
exchange, then the Fair Market Value shall be the closing selling price per
share on the date in question, as officially quoted on the composite tape
of transactions on the exchange serving as the primary market for the
Common Stock. If there is no reported sale of Common Stock on such exchange
on the date in question, then the Fair Market Value shall be the closing
selling price on the exchange on the last preceding date for which such
quotation exists.
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<PAGE> 8
(ii) If the Common Stock is not at the time listed or admitted to
trading on any national securities exchange but is traded on the Nasdaq
National Market, the Fair Market Value shall be the closing selling price
per share on the date in question, as such price is reported by the
National Association of Securities Dealers on the Nasdaq National Market.
If there is no reported closing selling price for the Common Stock on the
grant date, then the closing selling price on the last preceding date for
which such quotation exists shall be determinative of Fair Market Value.
L. GRANT DATE shall mean the date of grant of the option as specified in
the Grant Notice.
M. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
N. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
O. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.
P. OPTION SHARES shall mean the number of shares of Common Stock subject
to the option.
Q. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
S. PLAN shall mean the Corporation's Special Non-Employee Director Stock
Retainer Fee Plan.
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