<PAGE>
SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO
SECTION 14(c) OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
/ / Preliminary information statement / / Confidential, for use of the
Commission only (as
permitted by Rule
14c-5(d)(2))
/X/ Definitive information statement
Premier Parks Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
Not Applicable
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
Not Applicable
- --------------------------------------------------------------------------------
<PAGE>
(4) Proposed maximum aggregate value of transaction:
Not Applicable
- --------------------------------------------------------------------------------
(5) Total fee paid:
Not Applicable
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
Not Applicable
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
Not Applicable
- --------------------------------------------------------------------------------
(3) Filing party:
Not Applicable
- --------------------------------------------------------------------------------
(4) Date filed:
Not Applicable
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NOTE: WHERE ANY ITEM, OTHER THAN ITEM 4, CALLS FOR INFORMATION WITH RESPECT TO
ANY MATTER TO BE ACTED UPON AT THE MEETING OR, IF NO MEETING IS BEING HELD, BY
WRITTEN AUTHORIZATION OR CONSENT, SUCH ITEM NEED BE ANSWERED ONLY WITH RESPECT
TO PROPOSALS TO BE MADE BY THE REGISTRANT. REGISTRANTS AND ACQUIREES THAT MEET
THE DEFINITION OF "SMALL BUSINESS ISSUER" UNDER RULE 12b-2 OF THE EXCHANGE ACT
SHALL REFER TO THE DISCLOSURE ITEMS IN REGULATION S-B AND NOT REGULATION S-K.
IF THERE IS NO COMPARABLE DISCLOSURE ITEM IN REGULATION S-B, SMALL BUSINESS
ISSUERS NEED NOT PROVIDE THE INFORMATION REQUESTED. SMALL BUSINESS ISSUERS
SHALL PROVIDE THE FINANCIAL INFORMATION IN ITEM 310 OF REGULATION S-B IN LIEU OF
ANY FINANCIAL STATEMENTS REQUIRED BY ITEM 1 OF RULE 14c-101.
<PAGE>
INFORMATION STATEMENT
PREMIER PARKS INC.
11501 NORTHEAST EXPRESSWAY
OKLAHOMA CITY, OKLAHOMA 73131
_______________________________________
December 30, 1996
Dear Stockholder:
This is to inform you that Premier Parks Inc. (the "Company") is
adopting a 1996 Stock Option and Incentive Plan (the "Plan") as more fully
described in this Information Statement.
By resolutions dated December 12, 1996, the Plan was adopted by written
consent of the holders of a majority of the outstanding shares of the
Company's Common Stock.
The Plan will become effective on January 20, 1997 (the "Effective Date").
In August 1996, the Board of Directors of the Company adopted the Plan.
Pursuant to the provisions of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the listing requirements of NASDAQ National Market and
the provisions of Delaware law and the Company's Certificate of
Incorporation, the holders of at least a majority of the outstanding shares
of Common Stock are permitted to approve the Plan and the grant of options
thereunder by written consent in lieu of a meeting, PROVIDED that prompt
notice of such action is given to the other stockholders. Pursuant to the
rules and regulations promulgated by the Securities and Exchange Commission
(the "Commission") under the Exchange Act, an information statement must be
sent to holders of Common Stock ("Holders") at least 20 days prior to the
Effective Date. This notice, which is being sent to all Holders of record on
December 27, 1996, is intended to serve as such notice under Delaware law and
as the Information Statement required by the Exchange Act.
Please note that you are not being asked to send a proxy and you are
requested not to send one.
This notice is not a notice of a meeting of stockholders.
Sincerely,
Kieran E. Burke
Chairman of the Board
<PAGE>
INFORMATION STATEMENT
NOTICE PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14(c) THEREUNDER
AND
SECTION 228(d) OF THE DELAWARE GENERAL CORPORATION LAW
PREMIER PARKS INC.
11501 NORTHEAST EXPRESSWAY
OKLAHOMA CITY, OKLAHOMA 73131
__________________________
INFORMATION STATEMENT
FOR
STOCKHOLDERS
__________________________
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
__________________________
CONSENT REQUIRED FOR APPROVAL
The Board of Directors of the Company has adopted resolutions
authorizing the Company's 1996 Stock Option and Incentive Plan (the "Plan"),
a copy of which is annexed hereto. The written consent of holders of
shares representing at least a majority of the outstanding shares of the
Company's Common Stock is required to approve the Plan.
The Plan was approved by the written consent, dated December 12, 1996,
of the holders of approximately 55% of the outstanding shares of Common Stock.
The Board of Directors has fixed the close of business on December 27,
1996 as the record date for the determination of stockholders entitled to
notice of the adoption of the Plan. As of that date, the Company had issued
and outstanding 11,366,323 shares of Common Stock, the Company's only class
of voting securities outstanding.
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL HOLDERS
The following table sets forth certain information as of September 30,
1996 (except as noted below) as to Common Stock owned by (a) each of the
Company's current directors, (b) all current directors and officers of the
Company as a group, and (c) each person who, to the best of the Company's
knowledge, beneficially owned on that date more than 5% of the outstanding
Common Stock.
SHARES OF
NAME AND ADDRESS OF COMMON STOCK PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------- ------------------ --------
Kieran E. Burke(1). . . . . . . . . . . . . 224,301 1.9
Paul A. Biddelman(2). . . . . . . . . . . . 3,020,063 26.6
James F. Dannhauser(3). . . . . . . . . . . 48,000 *
Michael E. Gellert(4)(5). . . . . . . . . . 1,396,560 12.3
Gary Story(6) . . . . . . . . . . . . . . . 80,000 *
Jack Tyrrell(7) . . . . . . . . . . . . . . 1,001,336 8.8
Robert J. Gellert(5)(8) . . . . . . . . . . 1,261,945 11.1
Windcrest Partners(5)(9). . . . . . . . . . 1,136,025 10.0
122 East 42nd Street
New York, New York 10168
Lawrence, Tyrrell, Ortale & Smith II,
L.P.(10). . . . . . . . . . . . . . . . . 661,940 5.8
Lawrence, Tyrrell, Ortale & Smith
3100 West End Avenue, Suite 500
Nashville, TN 37203
Hanseatic Corporation(11) . . . . . . . . . 3,020,063 26.6
Wolfgang Traber
450 Park Avenue
New York, New York 10152
Janus Capital Corporation(12) . . . . . . . 1,257,900 11.1
Thomas H. Bailey
Janus Venture Fund
100 Fillmore Street, Suite 300
Denver, Colorado 80206-4923
All directors and officers as a group(13)
(10 persons). . . . . . . . . . . . . . . . 5,785,460 49.6
-2-
<PAGE>
________________
(*) Less than 1%.
(1) Includes 47,302 shares of Common Stock and warrants and options to
purchase 176,999 shares of Common Stock for his own account as to
which Mr. Burke has sole voting and investment power.
(2) Represents shares beneficially owned by Hanseatic Corporation
("Hanseatic"), a private investment company, of which Mr. Biddelman is
treasurer. See Footnote 11 below.
(3) Includes 11,000 shares of Common Stock for his own account and options
to purchase 26,000 shares of Common Stock for his own account and
11,000 shares of Common Stock beneficially owned by Lepercq, de
Neuflize & Co. Incorporated ("Lepercq"), an investment banking firm,
of which Mr. Dannhauser is a director. Mr. Dannhauser disclaims
beneficial ownership of the shares held by Lepercq.
(4) Includes 231,818 shares of Common Stock for his own account, as to
which Mr. Gellert has sole voting and investment power. Includes
1,136,025 shares of Common Stock beneficially owned by Windcrest
Partners, a New York limited partnership ("Windcrest") which shares
voting and investment power with its general partners, Michael E.
Gellert and Robert J. Gellert. Also includes 28,717 shares of Common
Stock beneficially owned by Michael E. Gellert's daughter who resides
in his household, Mr. Gellert disclaims beneficial ownership of all
shares beneficially owned by his daughter.
(5) Members of the Gellert family and entities controlled by them
beneficially own in the aggregate 1,597,881 shares of Common Stock.
Such shares represent 14.1% of the Company's outstanding Common Stock.
See footnotes (4), (8) and (9).
(6) Includes 80,000 shares of Common Stock issuable upon exercise of stock
options held by Mr. Story, as to which he has sole voting and
investment power.
(7) Includes 200,000 shares of Common Stock beneficially owned by
Lawrence, Tyrrell, Ortale & Smith ("LTOS"); 461,940 shares of Common
Stock beneficially owned by Lawrence, Tyrrell, Ortale & Smith II, L.P.
("LTOS II"); and 339,240 shares of Common Stock beneficially owned by
Richland Ventures, L.P. ("Richland"). Mr. Tyrrell, who is a general
partner of the respective general partners of LTOS and LTOS II and a
general partner of Richland, disclaims beneficial ownership of all
such shares.
(8) Includes 2,514 shares of Common Stock for his own account, as to which
he has sole voting and investment power; 49,597 shares of Common Stock
as agent for 30 other persons and entities with whom he shares voting
and investment power; 2,168 shares of Common Stock as trustee for
Michael E. Gellert's sister with respect to which he shares voting and
investment power with Peter J. Gellert (who holds these shares as
agent); 5,558 shares of Common Stock as trustee of irrevocable trusts
for the benefit of Michael E. Gellert's children as to which he has
sole voting and investment power; 1,083 shares of Common Stock as
trustee of an irrevocable trust for the benefit of his brother as to
which he has sole voting and investment power; 1,136,023 shares of
Common Stock owned by Windcrest which shares voting and investment
power with its general partners, Michael E. Gellert and Robert J.
Gellert; and 65,000 shares of Common Stock beneficially owned by
Lexfor Corporation of which he is President and a director, as to
which he shares voting and investment power with the other officers
and directors. Michael E. Gellert disclaims beneficial ownership of
the shares owned by the trusts for the benefit of his children.
-3-
<PAGE>
(9) Windcrest shares voting and investment power with its general
partners, Michael E. Gellert and Robert J. Gellert.
(10) Includes 200,000 shares of Common Stock beneficially owned by LTOS and
461,940 shares beneficially owned by LTOS II. LTOS and LTOS II may be
deemed to constitute a "group" within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Information has been derived from Amendment No. 2 to Schedule 13D, dated
November 2, 1994.
(11) Represents shares of Common Stock beneficially owned by Hanseatic. Mr.
Traber holds a majority of the shares of capital stock of Hanseatic
and thus may be deemed to beneficially own such Common Stock. Of such
shares, 2,588,695 shares of Common Stock are held by Hanseatic
Americas LDC, a Bahamian limited duration company in which the sole
managing member is Hansabel Partners LLC, a Delaware limited liability
company in which the sole managing member is Hanseatic. The remaining
shares of Common Stock are held by Hanseatic for discretionary
customer accounts. Information has been derived from Amendment No. 6
to Schedule 13D, dated June 4, 1996.
(12) Janus Capital Corporation ("Janus Capital") is a registered investment
adviser that furnishes investment advice to certain registered
investment companies, including Janus Venture Fund (the "Fund") and
individual and institutional clients (collectively the "Managed
Portfolios"). As a result, Janus Capital may be deemed to be the
beneficial owner of the Common Stock held by such Managed Portfolios.
Of the amount shown, 719,400 shares are held by the Fund and the
balance are held in other Managed Portfolios. Mr. Bailey owns 12.2% of
Janus Capital and serves as President and Chairman thereof. As a
result, Mr. Bailey may be deemed beneficial owner of the shares held
by the Managed Portfolios. Information has been obtained from
Schedule 13G, dated November 8. 1996.
(13) The share amounts listed include shares of Common Stock that the
following persons have the right to acquire within 60 days from
September 30, 1996: Kieran E. Burke, 176,999 shares (see footnote
(1)); James F. Dannhauser, 26,000 shares (see footnote (3)); Gary Story,
80,000 shares (see footnote (6)); and all directors and officers as a
group, 298,199 shares.
EXECUTIVE COMPENSATION
The following table discloses compensation received by the
Company's Chief Executive Officer and Chief Operating Officer for the three
years ended December 31, 1995. Messrs. Burke and Story are the only executive
officers of the Company whose annual salary and bonus exceeded $100,000 in
1995.
-4-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION(1) YEAR SALARY($) BONUS($) COMPENSATION AWARD(S)($) OPTIONS(#) COMPENSATION
- --------------------- ---- --------- -------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kieran E. Burke . . . 1995 $307,500 $150,000 -- -- 100,000 (2)
Chairman of the 1994 290,000 -- -- -- 10,000 (2)
Board, Chief 1993 265,000 40,000 -- -- 76,200 (2)
Executive Officer
and Director
Gary Story. . . . . . 1995 $214,583 $100,000 50,000 (2)
President, Chief 1994 200,000 -- -- -- 20,000 (2)
Operating Officer 1993 140,000 70,000 -- -- 40,000 (2)
and Director
</TABLE>
_______________
(1) James F. Dannhauser became Chief Financial Officer of the Company on
October 1, 1995. Mr. Dannhauser's annual salary was $125,000. During 1995,
he was granted options to acquire 40,000 shares of Common Stock.
(2) The Company has concluded that, as to each named executive officer for each
year shown, all personal benefits paid or provided did not exceed the
lesser of $50,000 or 10% of the salary and bonus reported for such officer.
During 1995, the Company did not have any defined contribution plans or
pension or other defined benefit or retirement plans, other than a
qualified, contributory 401(k) plan. All regular employees are eligible
to participate in the 401(k) plan if they have completed one full year of
service and are at least 21 years old. Except with respect to the former
employees of Funtime Parks, which the Company acquired in August 1995,
the Company did not match contributions made by employees in 1995. The
accounts of all participating employees are fully vested.
OPTIONS GRANTS IN LAST FISCAL YEAR
The following table shows the grants of options under the Company's 1995
Stock Option and Incentive Plan (the "1995 Stock Incentive Plan") that were
made to the named executive officers during the year ended December 31, 1995.
These options are the only options that were granted to the named executive
officers during that year. The amount shown as the potential realizable value
of the options is based on an arbitrarily assumed annualized rate of
stock price appreciation of either five percent or ten percent over the
seven-year term of such options. Prior to the public offering (the "Public
Offering") of the Company's Common Stock in June 1996, during 1994, a limited
trading market developed for the Common Stock. The Compensation Committee of
the Board of Directors determined that $8.25 was the fair market value of the
Common Stock on the date such options were granted. Accordingly, $8.25 per
share was used below as the starting point to calculate potential
appreciation in the value of the Common Stock. Because the exercise price of
such options is equal to the value of the options on the date the options
were granted, optionees will not realize any benefit from the options unless
there is an increase in stock price of the Common Stock. Such an increase
would benefit all Common Stockholders proportionately. The potential
realizable value of the options is based solely on arbitrarily assumed rates
of appreciation as required by applicable regulations of the Commission.
Actual gains, if any, on option exercises and Common Stock holdings are
dependent on the future performance of the Common Stock and on overall market
conditions.
-5-
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
--------------------------------------------------------------- -----------------------
SHARES % OF TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
NAME OPTIONS (#) EMPLOYEES IN 1995 PRICE ($/SH) EXPIRATION DATE 5% 10%
---- ----------- ------------------ ------------ --------------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Kieran E. Burke. . . . 100,000 40.32% $8.25 August 31, 2002 $340,000 $785,000
Gary Story . . . . . . 50,000 20.16% $8.25 August 31, 2002 $170,000 $392,500
</TABLE>
AGGREGATE OPTION EXERCISES AND OPTION VALUES
The following table provides information on option exercises in 1995 by
each of the named executive officers and the value of such officers'
unexercised options at December 31, 1995.
<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1995 (#) DECEMBER 31, 1995 ($)(1)
---------------------------- -----------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kieran E. Burke. . . . - - 114,759 116,480 $1,037,572 $671,402
Gary Story . . . . . . - - 42,000 68,000 $288,750 $392,500
</TABLE>
____________________
(1) Prior to the Public Offering, during 1994, a limited trading market
developed for the Common Stock. Amount shown is based on $13.125 per share,
the average of the closing bid and asked prices of the Common Stock (as
reported on The Pink Sheets and the OTC Bulletin Board) on December 29,
1995, adjusted for the subsequent reverse stock split. The Company does not
believe that this highly illiquid market constitutes an established
trading market for the Common Stock.
APPROVAL OF THE 1996 STOCK INCENTIVE PLAN AND
PERFORMANCE-BASED COMPENSATION UNDER THE 1996 STOCK INCENTIVE PLAN
GENERAL
The Board of Directors and the holders of a majority of the outstanding
shares of Common Stock of the Company have adopted the Plan. The Plan is
intended to help the Company to attract, retain and motivate key employees
(including officers) of the Company. The Company has approximately 430
full-time employees.
The Plan provides for the grant of options ("Options") to purchase
Common Stock that are intended to qualify as incentive stock options
("Incentive Options") under Section 422 of the Code as well as options that
do not so qualify ("Non-Qualified Options"). The Plan also provides for the
grant of stock appreciation rights ("SARs") in tandem with Options. An SAR
granted in tandem with an Option (a
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<PAGE>
"tandem SAR") permits an optionee to surrender his Option to the Company for
cancellation and receive an amount (in cash or shares of common stock) equal
to the excess, if any, of (i) the fair market value at the time of surrender
of the shares of Common Stock subject to the Option over (ii) the exercise
price of the Option.
GRANTS PURSUANT TO THE PLAN
Pursuant to the Plan, in August 1996, the Company granted Options to
purchase an aggregate of 246,700 shares of Common Stock, all of which were
Incentive Options. Of such Options, 86,200 were granted to Kieran E. Burke,
Chairman of the Board and Chief Executive Officer of the Company, 58,000 were
granted to Gary Story, President and Chief Operating Officer of the Company,
164,200 were granted to executive officers of the Company as a group and
82,500 were granted to employees and officers of the Company (who are not
executive officers) as a group. All of the Options granted to date have a
term of seven years and an exercise price of $22.00 per share, which is the
amount determined by the Compensation Committee to have been the fair market
value of the Common Stock on the date of grant of the Options. On December
26, 1996, the last sales price of the Common Stock as reported on the Nasdaq
National Market was $31 3/4 per share. The Options become exercisable 20%
upon grant and 20% per year after each of the next four years. If individual
Option agreements so provide, Options become fully exercisable following a
"change of control" of the Company.
BACKGROUND OF SHAREHOLDER APPROVAL REQUIREMENT
Stockholder approval of the Plan is required for options granted under
the Plan to qualify as Incentive Options under Section 422 of the Code. For
this purpose, stockholders must approve a plan that designates the aggregate
number of shares which may be issued under the plan and the class of
employees eligible to receive options under the plan. Stockholder approval
must be obtained within 12 months after adoption of the plan by the Board of
Directors. In addition, stockholder approval of the Plan is required in order
for transactions by optionees with respect to the Options and underlying
shares to be exempt from certain requirements under Section 16(b) of the
Exchange Act.
Section 162(m) of the Code disallows a tax deduction for compensation in
excess of $1 million that is paid to certain employees of a corporation whose
common stock is subject to the registration requirement of Section 12 of the
Exchange Act. However, this limitation does not apply to "qualified
performance-based compensation." Pursuant to Treasury Regulation Section
1.162-27 promulgated under Section 162(m) of the Code, in order for grants
under the Plan to satisfy the requirements to be "qualified performance-based
compensation," it is necessary to obtain stockholder approval of the class of
employees eligible to receive grants under the Plan, the business criteria to
be used in making such grants (except in the case of options or SARs for
which the exercise price is equal to the fair market value of the underlying
stock on the grant date), the maximum number of shares with respect to which
grants can be made to any one employee under the Plan and the exercise price
of any Options or SARs or stock purchase price of any incentive stock awards.
Another requirement for "qualified performance-based compensation" is that
grants under the plan be made by a compensation committee consisting solely
of two or more "outside directors," within the meaning of Treasury Regulation
Section 1.162-27(e)(3).
The following "Description of the Plan" summarizes the principal
features of the Plan. This summary is qualified in its entirety by reference
to the specific provisions of the Plan, the full text of which is set forth
in Exhibit A to this Information Statement.
-7-
<PAGE>
The Company does not presently intend either to grant options or SARs
with an exercise price that is less than the fair market value of the Common
Stock on the date of grant or to make incentive stock awards to purchase
Common Stock at below market prices. Any such options or SARs that are
granted or incentive stock awards that are made will not satisfy the
"qualified performance-based compensation" exception to Section 162(m)
absent stockholder approval of the business criteria on which are based the
performance goals that are the basis for such grants or awards.
DESCRIPTION OF THE PLAN
The following is a summary of the principal features of the Plan. This
summary is qualified in its entirety by reference to the specific provisions
of the Plan, the full text of which is set forth in Exhibit A to this
Information Statement.
ADMINISTRATION OF THE PLAN
The Plan will be administered by a compensation committee (the
"Compensation Committee") which is appointed by the Board of Directors. The
Compensation Committee consists of two members of the Board, neither of whom
is or has been eligible at any time for the grant of Options or SARs under
the Plan and each of whom is an "outside director" within the meaning of
Treasury Regulation Section 1.162-27(e)(3). The Compensation Committee is
authorized to interpret the Plan, adopt and amend rules and regulations
relating to the Plan, and determine the recipients, form, and terms of
Options and SARs granted under the Plan. All Options and SARs must be
evidenced by a written agreement.
SHARES AVAILABLE
Under the Plan, the maximum number of shares of Common Stock that may be
subject to Options or SARs may not exceed an aggregate of 750,000 shares. The
maximum number of shares will be adjusted in certain events, such as a stock
split, reorganization or recapitalization. If a tandem SAR is exercised, the
Option that is surrendered in connection with exercise of the SAR will
terminate and the shares subject to that Option will not be available for
further issuance under the Plan. If any option or SAR granted under the Plan
terminates for any reason or expires before it is exercised in full, or if
any shares sold under the Plan are reacquired by the Company under a right
established when the shares were sold, the shares that had been reserved for
such option or SAR or the shares so reacquired count toward the maximum
number of shares issuable and cannot again be issued under the Plan. A
reduction of the exercise price of an option is treated as the expiration of
the option and issuance of a new option.
No participant may be granted options or other rights, including SARs
and incentive stock awards, to purchase more than 66 2/3% in the aggregate of
the number of shares of Common Stock authorized to be issued under the Plan,
as adjusted on account of certain events, such as a stock split,
reorganization or recapitalization. If stockholders approve an increase in
the number of shares authorized under the Plan, the 66 2/3% limitation will
apply to the increased number of shares so authorized.
ELIGIBILITY
Key employees (including officers and directors who are employees) of
the Company or its subsidiaries are eligible for the grant of Options and
SARs under the Plan. Directors who are not
-8-
<PAGE>
employees are not eligible to participate. In the event of Incentive
Options, the aggregate fair market value (determined at the time the Option
is granted) of the stock with respect to which Incentive Options become
exercisable for the first time by the Option holder (i.e., vest) during any
calendar year cannot exceed $100,000. This limit does not apply to
Non-Qualified Options and SARs. To the extent an Option that otherwise would
be an Incentive Option exceeds this $100,000 threshold, it will be treated as
a Non-Qualified Option.
EXERCISE PRICE OF OPTIONS
The Company will receive no monetary consideration for the grant of
Options under the Plan. In case of an Incentive Option, the exercise price
cannot be less than the fair market value of the shares on the date the
Option is granted (if an optionee is a beneficial holder of 10% or more of
the Company's outstanding Common Stock (a "10% Holder"), the exercise price
of Incentive Option cannot be less than 110% of such fair market value). The
exercise price of Non-Qualified Options shall be determined by the
Compensation Committee, but shall not be less than 50% of the fair market
value of the Common Stock on the date of grant. The exercise price of Options
will be adjusted in certain events, such as a stock split, reorganization or
recapitalization. The Company does not presently intend to issue any Options
which have an exercise price that is less than the fair market value of the
underlying Common Stock on the date of grant.
PAYMENT UPON EXERCISE OF OPTIONS
Payment for shares purchased by exercising an Option is to be made in
cash or, if the individual Option agreement so provides, by the delivery of
promissory notes or the surrender of all or part of the Option to the Company
in exchange for a number of shares of Common Stock having a total fair market
value on the date of surrender equal to (i) the number of shares that could
be acquired by exercising the portion of the Option that is surrendered over
(ii) the aggregate exercise price that would otherwise be paid to the Company
on a cash exercise of the Option as to the number of shares surrendered. If
individual Option agreements so provide, payment of the exercise price also
may be made by delivery of shares of Common Stock valued at their fair market
value on the date of delivery.
TERM OF OPTIONS
The term of an Option cannot exceed ten years, and in the case of an
optionee who is a 10% Holder, cannot exceed five years.
TERMINATION OF EMPLOYMENT
Individual option agreements generally will provide that the Options
will expire upon termination of employment except that (i) in the case of
involuntary termination that is not for cause, the Option will be exercisable
for three months after termination to the same extent that it was exercisable
prior to termination, (ii) in the case of termination due to disability, the
Option will be exercisable for one year after termination to the same extent
that it was exercisable prior to termination and (iii) in the case of death
during either the three month period referred to in (i) or the one year
period referred to in (ii), the Option will be exercisable for one year after
death to the same extent exercisable on the date of death.
-9-
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After the death of an optionee, the Option is exercisable by the legal
representative of the optionee or by the person that acquired the Option by
reason of the death of the Optionee.
NON-TRANSFERABILITY OF OPTIONS
Options are not transferable by the optionee except by will or by the
laws of descent and distribution. The disposition of shares acquired pursuant
to the exercise of an Option will be subject to any applicable restrictions
on transferability imposed by the SEC regulations.
STOCK APPRECIATION RIGHTS
A tandem SAR cannot be exercised before the related Option is first
exercisable or after the related Option expires or is terminated. In
addition, an SAR can be exercised for cash only during the period beginning
on the third business day following the date of release for publication by
the Company of quarterly or annual summary statements of earnings and ending
on the twelfth business day following such day. Upon exercise of an SAR,
payment to the holder may be made in cash or shares of Common Stock, as the
Compensation Committee designates. SARs are not transferable except by will
or the laws of descent and distribution. The exercise of an SAR is subject to
such further conditions and limitations as the Compensation Committee may
determine, including such conditions on exercise as may be required to
comply with Rule 16b-3 under the Exchange Act.
EFFECTIVE DATE
The Plan will become effective on January 20, 1997.
DURATION OF THE PLAN
The Plan will terminate automatically and no Options or SARs may be
granted after ten years have elapsed from the earlier of the date the Plan
was approved by the Company's Board of Directors or the effective date of the
Plan. The Plan may be terminated at any prior time by the Board of Directors.
Termination of the Plan will not affect Options or SARs that were granted
prior to the termination date.
AMENDMENTS
The Plan may be amended from time to time by the Board of Directors.
However, no action of the Board may, without the approval of the Company's
stockholders, (i) materially increase the benefits accruing to participants
under the Plan, (ii) increase the number of shares that may be issued under
the Plan (except for certain adjustments that would not further dilute the
interest of any stockholder), or (iii) change the eligibility requirements
for participation in the Plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary outlines certain federal income tax consequences
of the Plan to the Company and participants under present law.
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INCENTIVE OPTIONS
A participant will not recognize income for federal income tax purposes
upon the grant of an Incentive Option. A participant also will not be taxed
on the exercise of an Incentive Option, provided that the Common Stock
acquired upon exercise of the Incentive Option is not sold by the participant
within two years after the Option was granted and one year after the Option
is exercised (the "required holding period").
However, for alternative minimum tax ("AMT") purposes, the difference
between the exercise price of the Incentive Option and the fair market value
of the Common Stock acquired upon exercise is an item of tax preference in
the year the Incentive Option is exercised. The participant is required to
include such amount in AMT income in such year and to compute the tax basis
of the shares so acquired in the same manner as if a Non-Qualified Stock
Option had been exercised, including the availability of a Section 83
election (discussed below). Whether a participant will be liable for AMT in
the year the Incentive Option is exercised will depend on the participant's
particular tax circumstances. AMT paid in such year will be allowed as a
credit to the extent regular tax exceeds AMT in subsequent years.
On a sale, after the required holding period, of Common Stock that was
acquired by exercising an Incentive Option, the difference between the
participant's tax basis in the Common Stock and the amount received in the
sale is taxed as long-term capital gain or loss.
If Common Stock acquired upon the exercise of an Incentive Option is
disposed of by the participant during the required holding period (a
"disqualifying disposition"), the excess, if any, of (i) the amount realized
on such disposition (up to the fair market value of the Common Stock on the
exercise date) over (ii) the exercise price, will be taxed to the participant
as ordinary income. If a participant pays the exercise price of an Incentive
Option by delivering Common Stock that was previously acquired by exercising
an Incentive Option and such delivery occurs before the end of the required
holding period of such Common Stock, the participant is treated as making a
disqualified disposition of the Common Stock so delivered.
The Code puts a $100,000 limit on the value of stock subject to
Incentive Options that first become exercisable in any one year, based on the
fair market value of the underlying Common Stock on the date of grant. To the
extent Options exceed this limit, they are taxed as Non-Qualified Stock
Options.
NON-QUALIFIED STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
A participant who receives a Non-Qualified Stock Option or SAR does not
recognize taxable income on the grant of the Option or SAR. Upon exercise of
a Non-Qualified Stock Option, a participant generally has ordinary income in
an amount equal to the excess of the fair market value of the shares at the
time of exercise over the exercise price paid for the shares. Upon receipt of
cash or shares when an SAR is exercised, a participant generally has ordinary
income in an amount equal to the sum of the amount of cash and the fair
market value of the shares received.
However, if the participant (i) is an officer or director of the Company
or the beneficial owner of more than 10% of the Company's equity securities
(in each case, within the meaning of Section 16 of the Exchange Act -- as so
defined, an "Insider"), (ii) does not make a Section 83 election and (iii)
receives shares upon the exercise of a Non-Qualified Stock Option or SAR, the
recognition of income (and the determination of the amount of income) is
deferred until the earlier of (a) six months after the
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shares are acquired or (b) the earliest date on which the Insider could sell
the shares at a profit without being subject to liability under Section 16(b)
of the Exchange Act (six months after the Non-Qualified Stock Option or SAR
is granted, in the case of an "in-the-money" Option or SAR). If the
participant makes a Section 83 election, income is not deferred. Rather,
income is recognized on the date of exercise of the Non-Qualified Stock
Option or SAR in an amount equal to the excess of the fair market value of
the shares acquired upon exercise over the exercise price. A Section 83
election must be filed with the Internal Revenue Service within thirty (30)
days after an Option is exercised.
A participant's tax basis in shares received upon exercise of a
Non-Qualified Stock Option or SAR is equal to the amount of ordinary income
recognized on the receipt of the shares plus the amount of cash, if any, paid
upon exercise. The holding period for the shares begins on the day after the
shares are received or, in the case of an Insider that has not made a Section
83 election, on the day after the date on which income is recognized by the
Insider on account of the receipt of the shares.
If a participant exercises a Non-Qualified Stock Option by delivering
previously held shares in payment of the exercise price, the participant does
not recognize gain or loss on the delivered shares, even if their fair market
value is different from the participant's tax basis in the shares. The
exercise of the Non-Qualified Stock Option is taxed however, and the Company
generally is entitled to a deduction, in the same amount and at the same time
as if the participant had paid the exercise price in cash. Provided the
participant receives a separate identifiable stock certificate therefor, his
tax basis in the number of shares received that is equal to the number of
shares surrendered on exercise will be the same as his tax basis in the
shares surrendered. His holding period for such number of shares will include
his holding period for the shares surrendered. The participant's tax basis
and holding period for the additional shares received upon exercise will be
the same as it would if the participant had paid the exercise price in cash.
If a participant receives shares upon the exercise of a Non-Qualified
Stock Option or SAR and thereafter disposes of the shares in a taxable
transaction, the difference between the amount realized on the disposition
and the participant's tax basis in the shares is taxed as capital gain or
loss (provided the shares are held as a capital asset on the date of
disposition), which is long-term or short-term depending on the participant's
holding period for the shares.
DEDUCTION BY THE COMPANY
The Company is not allowed a federal income tax deduction on the grant
or exercise of an Incentive Option or the disposition, after the required
holding period, of shares acquired by exercising an Incentive Option. On
a disqualifying disposition of such shares, the Company is allowed a federal
income tax deduction in an amount equal to the ordinary income recognized by
the participant as a result of the disqualifying disposition, provided that
such amount constitutes an ordinary and necessary business expense of the
Company, is reasonable in amount and is not disallowed by Section 162(m) of
the Code (discussed above).
The ordinary income recognized by an employee of the Company on account
of the exercise of a Non-Qualified Stock Option or SAR is subject to both
wage withholding and employment taxes. A deduction for federal income tax
purposes is allowed to the Company in an amount equal to the amount of
ordinary income taxable to the participant, provided that such amount
constitutes an ordinary and necessary business expense of the Company, that
such amount is reasonable, and that the Company satisfies any tax reporting
obligation that it has with respect to such income.
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OTHER MATTERS
The Company will pay the cost of distributing this Information
Statement, including the cost of assembling and mailing it. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending this Information
Statement to the beneficial owners of the Company's Common Stock.
BY ORDER OF THE BOARD OF DIRECTORS
RICHARD A. KIPF
Secretary
Oklahoma City, Oklahoma
December 30, 1996
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EXHIBIT A
PREMIER PARKS INC.
1996 STOCK OPTION AND INCENTIVE PLAN
I. THE PLAN
There is hereby established the 1996 Stock Option and Incentive Plan
(the "Plan") for Premier Parks Inc. (the "Company"), under which options may
be granted to purchase shares of the common stock, $.05 par value, of the
Company, under which shares of such common stock may be sold at incentive
prices below the market price at the time of sale, and under which stock
appreciation rights may be granted.
II. AMOUNT OF STOCK
An aggregate of Seven Hundred and Fifty Thousand (750,000) shares of the
Company's common stock may be issued upon exercises of options or stock
appreciation rights or upon purchases at incentive prices. Such shares may
be authorized but unissued shares, shares held in the treasury or outstanding
shares purchased from their owners on the market or otherwise. If any option
or stock appreciation right granted under the Plan terminates for any reason
or expires before the option or stock appreciation right is exercised in full
or if any shares sold under the Plan are reacquired by the Company by reason
of any right to reacquire such shares established at the time the shares were
initially sold, the shares previously reserved for issuance upon exercise of
such option or stock appreciation right or the shares so reacquired shall
count toward the maximum number of shares that may be issued under the plan,
as adjusted pursuant to next paragraph, and such shares shall not again be
available to be issued under the Plan. A reduction of the exercise price of
an option shall be treated for purposes of the preceding sentence as the
expiration of the option and the issuance of a new option.
If the outstanding shares of the Company's common stock are from time to
time increased, decreased, changed into or exchanged for a different number
or kind of shares of the Company through merger, consolidation,
reorganization, split-up, split-off, spin-off, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment shall be made in the number and kind
of shares which may be issued upon purchases made under the Plan and an
appropriate and proportionate adjustment shall be made in the number and kind
of shares and/or other property which may be issued upon exercise of options
or stock appreciation rights granted under the Plan such that each such
option or stock appreciation right shall thereafter be exercisable for such
securities, cash and/or other property as would have been received in respect
of the shares subject to the option or stock appreciation right had such
option or right been exercised in full immediately prior to such increase,
decrease or change. Such adjustment shall be made successively each time that
any such increase, decrease or change is made. In addition, in the event of
any such increase, decrease or change, the Board of Directors or the
Committee shall make such further adjustments as are appropriate to the
maximum number of shares subject to the Plan or to the other provisions of
the Plan or of incentive stock issued or options or stock appreciation
rights granted thereunder. Notwithstanding the foregoing, each such
increase, decrease, change or other adjustment with respect to an incentive
stock option, within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code") (hereafter, an "Incentive Stock Option") (i)
shall comply with the requirements to be an issuance or assumption of a stock
option in a transaction to
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which Section 424(a) of the Code applies and (ii) shall not be made if, as a
result, an Incentive Stock Option granted hereunder would not be an Incentive
Stock Option.
To the extent that the aggregate fair market value of stock subject to
one or more Incentive Stock Options first exercisable by any individual in
any calendar year under this Plan (or under all such plans of the Company and
its subsidiary corporations) exceeds $100,000, determined as of the time the
option is granted, such options shall be treated as options that are not
Incentive Stock Options. This limitation will be applied by taking into
account options in the order in which they were granted and without taking
into account Incentive Stock Options granted before 1987.
III. ADMINISTRATION
(a) The Plan shall be administered by the Board of Directors of the
Company or by a Committee appointed by the Board of Directors which shall
include not less than two Directors of the Company, each of whom shall be a
disinterested person' within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, and an 'outside director' within
the meaning of Treasury Regulation Section 1.162-27(e)(3) promulgated under
Section 162(m) of the Code. The Board of Directors may from time to time
remove members from or add members to the Committee. Vacancies on the
Committee, however caused, shall be filled by the Board of Directors. Acts of
the Committee may be authorized by a vote of the members if (i) at a meeting,
held at a time and place and in accordance with rules adopted by the
Committee, at which a majority of the members of the Committee are present
and acting, or (ii) reduced to and approved in writing by a majority of the
members of the Committee.
(b) Subject to the express terms and conditions of the Plan, the Board
of Directors and the Committee, if it exists, shall have full power to
construe the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan and to make all other determinations necessary or
advisable for the administration of the Plan. The exercise of these powers
by the Board of Directors or the Committee, as the case may be, shall be
conclusive and binding upon all present, past and future participants in the
Plan.
(c) The Board of Directors or the Committee may from time to time
determine to which officers or other employees eligible for selection as
participants in the Plan, if any, options shall be granted or shares shall be
sold under the Plan, the number of shares which may be issued upon exercise
of any such option or which may be sold to any such participant, the period
during which any option or stock appreciation right may be exercised, the
exercise price of any option or the purchase price of any shares, and the
means of payment upon exercise of any option or for any shares, determined in
each case in accordance with the provisions of the Plan.
(d) The Board of Directors or the Committee may from time to time, with
the consent of the participant, adjust or reduce the option prices of options
held by such participant by cancelling such options and granting options to
purchase the same or a lesser number of shares at lower option prices or by
modifying, extending or renewing such options, as those terms are defined in
Section 424(h) of the Code, and the applicable regulations thereunder. The
Board of Directors or the Committee may, from time to time, conditionally or
unconditionally accelerate, in whole or in part, rights to exercise any
option granted under the Plan.
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(e) The Board of Directors or the Committee shall report in writing to
the Secretary of the Company the names of the officers or other employees
selected as participants in the Plan, and the terms and conditions of the
options to be granted or the shares to be sold to each of them.
IV. ELIGIBILITY FOR PARTICIPATION
All officers and key employees of the Company and its subsidiary
corporations (including officers or employees who are members of the
Company's Board of Directors, but excluding directors who are not officers or
employees) shall be eligible for selection as participants in the Plan. For
this purpose a "subsidiary corporation" is a corporation so defined under
Section 424(f) of the Code.
V. TERMS AND CONDITIONS OF OPTIONS
The terms and conditions of each option granted under the Plan shall be
evidenced by a Stock Option Agreement executed by the Company and the
participant, which shall contain the following provisions, if applicable:
(a) The number of shares which may be issued upon exercise of the
option, the period during which the option may be exercised, the purchase
price or prices per share to exercise the option, and the means of payment
for the shares; PROVIDED, HOWEVER, that notwithstanding any other provision
of the Plan to the contrary, an Incentive Stock Option shall not be
exercisable after the expiration of ten (10) years from the date it is
granted, and, PROVIDED, further, that in the case of an Incentive Stock
Option granted to a person who, at the time such Incentive Stock Option is
granted, owns shares of the Company or any of its subsidiary corporations
which possess more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any of such subsidiary
corporations, such Incentive Stock Option shall not be exercisable after the
expiration of five (5) years from the date such option is granted, and,
PROVIDED, further, that the purchase price or prices of each share of the
Company's common stock subject to any option under the Plan shall be
determined as follows:
(i) The price of each share subject to an Incentive Stock Option
under the Plan shall be not less than one hundred percent (100%) of the fair
market value of such share on the date the option is granted; PROVIDED,
HOWEVER, that in the case of an Incentive Stock Option granted to a person
who, at the time such Incentive Stock Option is granted, owns shares of the
Company or any of its subsidiary corporations which possess more then ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or of any of such subsidiary corporations, the price of each
share subject to such Incentive Stock Option shall be not less than one
hundred and ten percent (110%) of the fair market value of such share on the
date the option is granted. In determining stock ownership of an employee for
any purposes under the Plan, the rules of Section 424(d) of the Code shall
apply, and the Board of Directors or the Committee may rely on the
representations of fact made to it by the employee and believed by it to be
true.
(ii) The purchase price of each share subject to a nonqualified
stock option under the Plan shall be determined by the Board of Directors or
the Committee prior to granting the option. The Board of Directors or the
Committee shall set the purchase price for each share subject to a
nonqualified stock option at either the fair market value of such share on
the date the option is granted, or at such other price as the Board of
Directors or the Committee in its sole discretion shall determine; PROVIDED,
HOWEVER, that in no event shall the purchase price of a share subject to a
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nonqualified stock option under the Plan be less than 50% of the fair market
value of such share on the date the option is granted.
(iii) The fair market value of a share on a particular date shall
be deemed to be the average (mean) of the reported "high" and "low" sales
prices on the largest national securities exchange (based on the aggregate
dollar value of securities listed) on which such shares are then listed or
traded. If such shares are not listed or traded on any national securities
exchange, then, in each case, to the extent the Board of Directors or the
Committee determines in good faith that the following prices arise out of a
bona fide, established trading market for the shares, (i) the average of the
reported "high" and "low" sales prices for such shares in the
over-the-counter market, as reported on the National Association of
Securities Dealers Automated Quotations System, or, if such prices shall not
be reported thereon, the average between the closing bid and asked prices
reported, or (ii) if such prices shall not be reported, then the average
closing bid and asked prices reported by the National Quotation Bureau
Incorporated. In all other cases, the fair market value of a share shall be
established by the Board of Directors or the Committee in good faith.
(b) Such terms and conditions of exercise as may be set by the Board of
Directors or the Committee and specified in the Stock Option Agreement.
(c) That the option is not transferable other than by will or the laws
of descent and distribution and that the option is exercisable during the
grantee's lifetime only by the grantee or, if the grantee is disabled, by
his guardian or legal representative.
(d) In addition to the restrictions set forth in (c) above, such
restrictions on transfer of the option, and such restrictions on transfer
of the shares acquired upon exercise of the option, as may be set by the
Board of Directors or the Committee.
(e) Such other terms and conditions not inconsistent with the Plan as
may be set by the Board of Directors or the Committee, including provisions
allowing acceleration of options upon a change of control of the Company or
otherwise.
(f) In the discretion of the Board of Directors or the Committee, any
option granted hereunder may provide that such option may be exercised by the
holder's surrender of all or part of such option to the Company in exchange
for a number of shares of the Company's common stock having a total market
value, as of the date of surrender, equal to the excess of (i) the market
value, as of the date of surrender, of the number of shares that could be
acquired by the exercise of that portion of the option which is surrendered,
over (ii) the aggregate exercise price which would otherwise be paid to the
Company upon a normal exercise of the option as to the number of shares
surrendered. In the event the foregoing calculation would require the
issuance of a fractional share, the Company shall, in lieu thereof, pay cash
in an amount equal to the fair market value of such fraction as of the date
of surrender.
(g) The Board of Directors or the Committee may, in its discretion,
grant stock appreciation rights to participants who are concurrently being
granted, or previously have been granted, options under the Plan. A stock
appreciation right shall be related to a particular option (either an option
previously granted to a participant or an option granted concurrently with
the stock appreciation right) and shall entitle the participant, at such time
or times as the related option is exercisable, and upon surrender of the then
exercisable option, or part thereof, and exercise of the stock appreciation
right, to receive payment of an amount determined pursuant to paragraph (ii)
below.
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Stock appreciation rights shall be subject to the following terms and
conditions, to the terms of subsection (c) above regarding transferability,
and to such other terms and conditions not inconsistent with this Plan as the
Board of Directors or Committee may approve and direct:
(i) A stock appreciation right shall be exercisable by a participant
at such time or times, and to such extent, as the option to which it
relates shall be then exercisable; PROVIDED, HOWEVER, that a stock
appreciation right may be exercised for cash only during the period
beginning on the third business day following the date of release for
publication by the Company of quarterly or annual summary statements of
earnings and ending on the twelfth business day following such date and
that the Board of Directors or Committee may impose such other conditions
on exercise as may be required to satisfy the requirements of Rule 16b-3
under the Exchange Act (or and successor provision in effect at that time).
(ii) Upon exercise of the stock appreciation right and surrender of
an exercisable portion of the related option, a participant shall be
entitled to receive payment of an amount determined by multiplying:
A. the difference obtained by subtracting the option exercise
price per share of common stock subject to the related option from
the fair market value of a share of common stock of the Company on
the date of exercise of the stock appreciation right, by
B. the number of shares subject to the related option with
respect to which the stock appreciation right shall have been
exercised.
(iii) Unless otherwise provided, payment of the amount determined
under paragraph (ii) above shall be made one-half in cash and one-half in
shares of common stock of the Company valued at their fair market value on
the date of exercise of the stock appreciation right, PROVIDED, HOWEVER,
that the Board of Directors or the Committee, in its sole discretion, may
either require or allow the holder of the stock appreciation right to
elect for such stock appreciation right to be settled solely in such
shares, solely in cash, or in some other proportion of shares and cash,
and PROVIDED, further, that cash shall, in any event, be paid in lieu
of fractional shares.
(iv) A stock appreciation right shall in no event be exercisable
unless and until six months have elapsed from the date of grant of such
stock appreciation right.
(v) The shares and/or cash delivered or paid to a participant upon
exercise of the stock appreciation right shall be issued or paid in
consideration of services performed for the Company or for its benefit by
the participant.
(h) Notwithstanding anything herein to the contrary, no participant may
be granted options or other rights to purchase, including stock appreciation
rights with respect to, more than 66 2/3% in the aggregate of the number of
shares of common stock authorized to be issued under the Plan, counted as
provided in and as adjusted pursuant to, Section 2 above. In the event of an
increase in the number of shares authorized under the Plan, the 66 2/3%
limitation will apply to the increased number of shares so authorized.
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VI. LIMITATION ON PRICE FOR SHARES
No option shall be granted under the Plan, and no stock shall be sold
under the Plan, at an exercise price in the case of options or a purchase
price in the case of direct sales of stock that is less than the par value of
the shares optioned or sold.
VII. PROCEEDS FROM SALES OF SHARES
The proceeds from the sale of shares under the Plan, upon the exercise
of options or directly, shall be added to the general funds of the Company
and may thereafter be used from time to time for such corporate purposes as
the Board of Directors may determine and direct.
VIII.AMENDMENT SUSPENSION OR TERMINATION OF PLAN
The Board of Directors may at any time amend, suspend or terminate the
Plan. However, no such action by the Board of Directors may be taken without
the approval of the stockholders of the Company if such action would increase
the aggregate number of shares subject to the Plan (other than pursuant to
Section II of the Plan), change the provisions regarding eligibility for
participation in the Plan, reduce the exercise price of an Incentive Stock
Option to below the price required by Section V(a)(i) of the Plan or
materially increase the benefit accruing to participants under the Plan. No
amendment, suspension or termination of the Plan shall alter or impair any
rights or obligations under any outstanding Stock Option Agreement without
the consent of the holder.
IX. PROVISIONS FOR EMPLOYEES OF SUBSIDIARIES
In connection with the granting of an option or the sale of any shares
to a participant who is an employee of a subsidiary corporation, as defined
in Section IV of the Plan, the Company may sell the shares to be optioned or
sold to such employee to the subsidiary corporation which is his employer, at
a price which shall be not less than the option exercise price or the
purchase price of the shares to such participant, but which may be more, in
order that the shares sold to the participant, or issued to the participant
upon exercise of an option may be issued or sold to him directly by his
employer corporation.
X. EFFECTIVE DATE AND TERMINATION OF THE PLAN
(a) The Plan shall be submitted for a vote at a meeting of the
stockholders of the Company or shall be approved by written consent of the
stockholders, in either case in accordance with and only to the extent
permitted by the requirements of Rule 16b-3 of the Exchange Act, by the
Company's charter and by-laws and by applicable state laws prescribing the
method and degree of stockholder approval required for the issuance of
corporate stock or options; PROVIDED, that if applicable state law does not
provide a method and degree of required approval, the Plan must be approved
by a majority of the votes cast at a duly held stockholders' meeting at which
a quorum representing a majority of all outstanding voting stock is, either
in person or by proxy, present and voting on the Plan.
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(b) If approved by the stockholders of the Company within 12 months
before or after adoption of the Plan by the Board, the Plan shall become
effective on the date of such stockholder approval (the "Effective Date").
Unless sooner terminated by the Board, the Plan shall terminate on the date
ten (10) years after the earlier of (i) the date the Plan is adopted by the
Board or (ii) the Effective Date. After termination of the Plan, no further
options may be granted or shares sold under the Plan (other than upon the
exercise of options previously granted under the Plan); PROVIDED, HOWEVER1,
that such termination will not affect any options granted or shares sold
prior to termination of the Plan.
XI. MISCELLANEOUS
(a) The invalidity or illegality of any provision of the Plan shall not
affect the validity or legality of any other provision of the Plan.
(b) The Plan, any options or stock appreciation rights granted or
shares sold thereunder and all related matters shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
from time to time obtaining.
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