As Filed With the Securities and Exchange Commission on December 20, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MORGAN KEEGAN, INC.
(Exact name of registrant as specified in its charter)
TENNESSEE
(State or other jurisdiction of
incorporation or organization)
62-1153850
(I.R.S. Employer
Identification No.)
Morgan Keegan, Inc.
50 North Front Street
Memphis, Tennessee
(Address of Principal Executive Offices)
38103
(Zip Code)
Morgan Keegan, Inc. 2000 Equity Compensation Plan
Morgan Keegan, Inc. 2000 Employee Stock Purchase Plan
Morgan Keegan, Inc. 2000 Non-Employee Director Stock Option Plan
(Full title of the plans)
Joseph C. Weller
Secretary
Morgan Keegan, Inc.
50 North Front Street
Memphis, Tennessee 38103
(Name and address of agent for service)
(901) 524-4100
(Telephone number, including area code, of agent for service)
Copy to:
John A. Good, Esq.
Bass, Berry & Sims PLC
100 Peabody Place, Suite 950
Memphis, TN 38103
CALCULATION OF REGISTRATION FEE
Title of securities to be registered
------------------------------------
Common Stock, par value
$.625 per share
Amount to be registered
-----------------------------------
6,500,000 shares
Proposed maximum offering price per share*
-----------------------------------
$18.0625
Proposed maximum aggregate offering price*
-----------------------------------
$117,406,250
Amount of registration fee
-----------------------------------
$30,995.25
The offering price is estimated solely for the purpose of
determining the amount of the registration fee. Such estimate
has been calculated in accordance with Rule 457(c) and Rule
457(h) and is based upon the average of the high and low prices
per share of the Registrant's common stock as reported on the
New York Stock Exchange on December 8, 2000.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Morgan Keegan, Inc. (the "Registrant") has sent or given
or will send or give documents containing the information
specified by Part I of this Form S-8 Registration Statement
(the "Registration Statement") to participants in the plans
listed on the cover of this Registration Statement (the "Plans"),
as specified in rule 428(b)(1) promulgated by the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Securities Act"). The Registrant is not filing
such documents with the SEC, but these documents constitute (along
with the documents incorporated by reference into the Registration
Statement pursuant to Item 3 of Part II hereof) a prospectus that
meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), are hereby incorporated by
reference as of their respective dates:
a. The Registrant's Annual Report on Form 10-K for the fiscal year
ended July 31, 2000;
b. The Registrant's Form 8-K filed December 19, 2000;
c. All other reports of the Registrant filed pursuant to Section 13(a)
or 15(d) of the Exchange Act since July 31, 2000; and
d. The description of the Registrant's Common Stock, $0.625 par
value per share (the "Common Stock"), contained in the effective
registration statement filed with the SEC by the Registrant on
Form 8-A dated April 17, 1983, including all amendments and reports
filed for the purpose of updating such description prior to the
termination of the offering of the Common Stock offered hereby.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14, and 15(d) of the Exchange Act after the date hereof and
prior to the filing of a post-effective amendment that indicates
that all securities offered hereby have been sold or that deregisters
all securities then remaining unsold shall be deemed to be incorporated
by reference herein 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 hereof to the extent that a statement
contained herein (or in any other subsequently filed document which also
is incorporated by reference herein) modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed to constitute
a part hereof except as so modified or superseded.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
An opinion as to the legality of the securities being registered
is being provided by Bass, Berry & Sims PLC.
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Item 6. Indemnification of Directors and Officers.
The Registrant is a Tennessee corporation. Sections 48-18-501
through 48-18-509 of the Tennessee Business Corporation Act contain
detailed provisions on indemnification of directors and officers of a
Tennessee corporation. A corporation may indemnify such directors and
officers against liability incurred in certain proceedings if the
individual's conduct was in good faith and the individual reasonably
believed, in the case of conduct in the individual's official capacity,
that such conduct was in the best interests of the corporation and, in
all other cases, that such conduct was at least not opposed to the best
interests of the corporation. If the proceeding is criminal, the individual
must also have had no reasonable cause to believe that such conduct was
unlawful. The statute requires a corporation to indemnify an individual
who is wholly successful in the defense of any such proceeding against
reasonable expenses incurred by such individual in connection with such
proceeding, unless the corporation's charter provides otherwise.
The corporation may pay for or reimburse the reasonable expenses
incurred by a director or officer who is a party to a proceeding in
advance of final disposition of the proceeding if certain conditions
are satisfied. Unless otherwise provided in the corporation's charter,
a director or officer may apply for court-ordered indemnification if the
court determines that (i) the director is entitled to mandatory
indemnification, in which case indemnification shall also include
reasonable expenses incurred to obtain the indemnification order or
(ii) the director is fairly and reasonably entitled to indemnification
in view of all the relevant circumstances. Except in the case of
mandatory indemnification or court-ordered indemnification, a corporation
may indemnify a director or officer only after it determines that the
individual meets the standard of conduct described above. In addition,
a corporation may indemnify and advance expenses to an officer, whether
or not a director, to the extent consistent with public policy, in
accordance with the provisions of its charter, bylaws, general or
specific action of its Board of Directors or contract. Section
48-18-508 of the Tennessee Business Corporation Act empowers a
Tennessee corporation to purchase and maintain insurance on behalf
of any director or officer against any liability asserted against,
or incurred by, such individual in any such capacity or arising
out of his or her status as such, whether or not the corporation
would have had the power to indemnify against such liability. The
Registrant's Bylaws provide that officers and directors shall be
indemnified by the Registrant to the fullest extent allowed by
Tennessee law.
In addition, the Company has entered into an indemnification agreement
with each of its outside directors pursuant to which such director will be
indemnified and held harmless by the Company from and against all liabilities
incurred as a result of being a director of the Company to the extent
permitted by law.
The directors and officers of the Registrant are covered by an
insurance policy indemnifying them against certain civil liabilities,
including liabilities under the federal securities laws, which might be
incurred by them in such capacity.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
See the Index to Exhibits (page II-7) and Item 9 below.
Item 9. Undertakings.
A. The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
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the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement; (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; provided, however, that
clauses (i) and (ii) of this paragraph do not apply if the information
required to be included in a post-effective amendment by those clauses I
s contained in periodic reports filed with or furnished to the Securities
and Exchange Commission by the Registrant pursuant to Section 13 or
15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities 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 hereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. The Registration hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act (and each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Memphis, State of Tennessee,
on this 15th day of December, 2000.
MORGAN KEEGAN, INC.
By:
Joseph C. Weller
Executive Vice President, Chief Financial
Officer, and Secretary-Treasurer
KNOW ALL MEN BY THESE PRESENTS, each person whose signature appears
below hereby constitutes and appoints Joseph C. Weller and Charles Maxwell,
and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name,
place, and stead, in any and all capacities, to sign any and all amendments
to this Registration Statement, and to file the same, with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or
their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-8 has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
----------------------
Kenneth F. Clark, Jr. Director December 15, 2000
----------------------
G. Douglas Edwards Director December 15, 2000
----------------------
James E. Harwood Director December 15, 2000
----------------------
Stephen P. Laffey Director December 15, 2000
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----------------------
Allen B. Morgan, Jr. Chairman and Director December 15, 2000
----------------------
Donald Ratajczak Director December 15, 2000
----------------------
Robert M. Solmson Director December 15, 2000
----------------------
John W. Stokes, Jr. Vice President December 15, 2000
and Director
----------------------
Joseph C. Weller Executive Vice President, December 15, 2000
Chief Financial Officer,
Secretary/Treasurer and
Director
----------------------
Spence L. Wilson Director December 15, 2000
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INDEX TO EXHIBITS
Exhibit Number
Description
4.1 Morgan Keegan, Inc. 2000 Equity Compensation Plan (filed as
Exhibit I to the Registrant's Proxy Statement dated October
20, 2000 and incorporated herein by reference).
4.2 Morgan Keegan, Inc. 2000 Employee Stock Purchase Plan
(filed as Exhibit II to the Registrant's Proxy Statement
dated October 20, 2000 and incorporated herein by reference).
4.3 Morgan Keegan, Inc. 2000 Non-Employee Director Stock Option
Plan (filed as Exhibit III to the Registrant's Proxy Statement
dated October 20, 2000 and incorporated herein by reference).
5 Opinion of Bass, Berry & Sims PLC
23.1 Consent of Ernst & Young LLP
23.2 Consent of Bass, Berry & Sims PLC (contained in Exhibit 5)
24 Power of Attorney (included at pages II-5 and II-6)
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Exhibit I
2000 EQUITY COMPENSATION PLAN
OF
MORGAN KEEGAN, INC.
1. Purpose, Awards, Effective Date.
(a) Purpose. The purpose of the 2000 Equity Compensation Plan of
Morgan Keegan, Inc. (the "Plan") is to further the success and advance
the interests of Morgan Keegan, Inc., a Tennessee corporation (the
"Corporation"), by encouraging and enabling selected employees and
officers of the Corporation and its Related Corporations, if any, to
acquire or to increase their holdings of common stock, $0.625 par value
per share, of the Corporation (the "Common Stock") and other
proprietary interests in the Corporation in order to promote a closer
identification of their interests with those of the Corporation and its
shareholders, thereby further stimulating their efforts to enhance the
efficiency, soundness, profitability, growth and shareholder value of
the Corporation.
(b) Awards. Pursuant to the Plan, the Corporation intends to grant
(i) incentive stock options ("Incentive Stock Options"), as such term
is defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), to purchase shares of Common Stock; (ii) similar
options to purchase Common Stock that will not, however, be qualified
as Incentive Stock Options ("Non-Qualified Options"); (iii) shares of
Common Stock that are subject to restrictions on transfer or lienation,
vesting and forfeitability provisions and such other terms and
conditions as the Committee may determine and as may be set forth in
an Agreement in respect thereof ("Restricted Stock"); and (iv) stock
appreciation rights ("SARs") pursuant to which a recipient may
recognize in cash the benefit from appreciation in the price of the
Common Stock. Incentive Stock Options and Non-Qualified Options shall
be referred to herein collectively as
"Options."
(c) Effective Date. The Plan shall become effective on the date of
approval by the Board of Directors and the shareholders of the
Corporation (the "Effective Date").
2. Definitions.
(a) As used in the Plan, the following terms have the following
respective meanings:
"10% Shareholder" means a person who owns stock possessing more
than 10% of the total combined voting power of all classes of stock of
the Corporation or of any Parent or Subsidiary of the Corporation after
giving effect to the attribution of stock ownership provisions of
Section 424(d) of the Code.
"Affiliate" means any Person that directly or indirectly through
one or more intermediaries controls or is controlled by or is under
common control with the Corporation. For purposes of this definition,
(i) "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect
to any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
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"Agreement" means any written agreement or agreements between the
Corporation and the recipient of an Award pursuant to the Plan relating
to the terms, conditions and restrictions of Options, SARs, Restricted
Stock and any other Awards conferred herein.
"Award" means any grant of an Option or SAR, and any award of
Restricted Stock under the Plan, whether singly, in combination, or in
tandem, to an Eligible Person by the Committee pursuant to such terms,
conditions, restrictions and/or limitations, if any, as the Committee
may establish.
"Board" means the Board of Directors of the Corporation.
"Change of Control" shall be deemed to have occurred if: (i)
after the effective date of the Plan, any "person" as defined in
Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and
14(d) thereof, including any "group" as defined in Section 13(d) of the
Exchange Act, but excluding the Corporation and any Related
Corporation, any of the Corporation's existing shareholders as of the
effective date of the Plan and any employee benefit plan sponsored or
maintained by the Corporation or any Related Corporation (including
any trustee of such plan acting as trustee), directly or indirectly,
becomes a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of securities of the Corporation representing fifty
percent (50%) or more of the voting power of the then outstanding
securities of the Corporation; (ii) the shareholders of the
Corporation approve (or, if shareholder approval is not required, the
Board approves) an agreement providing for (A) the merger or
consolidation of the Corporation with another corporation where the
shareholders of the Corporation, immediately prior to the merger or
consolidation, will not beneficially own, immediately after the merger
or consolidation, shares entitling such shareholders to a majority of
all votes to which all shareholders of the surviving corporation would
be entitled in the election of directors, or where the members of the
Board, immediately prior to the merger or consolidation, would not,
immediately after the merger or consolidation, constitute a majority of
the board of directors of the surviving corporation, (B) a sale or
other disposition of all or substantially all of the assets of the
Corporation, or (C) a liquidation or dissolution of the Corporation; or
(iii) any person has commenced a tender offer or exchange offer for
thirty-five percent (35%) or more of the voting power of the then
outstanding shares of the Corporation.
"Chief Executive Officer" means the Chief Executive Officer of the
Corporation, or if there is no Chief Executive Officer, the President,
Chief Operating Officer or other highest ranking officer of the
Corporation.
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"Code" has the meaning set forth in Section 1(b) above.
References to any provision of the Code shall be deemed to include
successor provisions thereto and rules and regulations thereunder.
"Committee" means the Compensation Committee of Morgan Keegan &
Company, Inc.
"Common Stock" has the meaning set forth in Section 1(a) above.
"Corporation" has the meaning set forth in Section 1(a) above.
"Covered Employee" shall have the meaning given the term in
Section 162(m) of the Code or the regulations thereunder.
"Effective Date" has the meaning set forth in Section 1(c) above.
"Election" has the meaning set forth in Section 10 below.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange
Act shall be deemed to include successor provisions thereto and rules
and regulations thereunder.
"Exercise Price" has the meaning set forth in Section 6(b) below.
"Fair Market Value" as of a given date for purposes of the Plan
and any Option Agreement means (i) the closing sales price for the
shares of Common Stock on the New York Stock Exchange or any national
exchange on which shares of Common Stock are traded on such date (or if
such market or exchange was not open for trading on such date, the next
preceding date on which it was open); or (ii) if the Common Stock is
not listed on the New York Stock Exchange or on an established and
recognized exchange, such value as the Board, in good faith, shall
determine based on such relevant facts, which may include opinions of
independent experts, as may be available to the Board.
"Free Standing SAR" has the meaning set forth in Section 7(a)
below.
"Immediate Family" means a Participant's spouse, former spouse,
parents, children, stepchildren, adoptive relationships, sisters,
brothers, nieces, nephews, grandchildren and any person sharing the
Participant's household other than a tenant (and, for this purpose,
shall also include the Participant).
"Incentive Stock Option" has the meaning set forth in Section 1(b)
above.
"Modification" means any change in the terms of an Option which
would constitute a "modification" as defined in Section 424(h)(3) of
the Code, including, without limitation, such a modification to an
Option as effected by a change in the Plan and any other change in the
Plan which would increase the number of shares reserved for Options
under the Plan, materially change the administration of the Plan or
otherwise materially increase the benefits accruing to, or available
for, participants in the Plan; provided, however, that registration of
Common Stock underlying Options under the Securities Act, as amended,
shall not be deemed a Modification.
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"Non-Employee Director" has the meaning set forth in Rule 16b-3,
promulgated under the Exchange Act.
"Non-Qualified Option" has the meaning set forth in Section 1(b)
above.
"Option" has the meaning set forth in Section 1(b) above.
"Parent" or "parent corporation" shall mean any corporation (other
than the Corporation) in an unbroken chain of corporations ending with
the Corporation if each corporation other than the Corporation owns
stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in another corporation in the
chain.
"Participant" means an individual eligible to receive an Award
under Section 5 below and selected by the Committee as an individual to
whom an Award shall be granted.
"Permanent Disability" has the meaning ascribed to the term
"disability" or any substantially similar term in the Corporation's
long-term income disability plan as in effect from time to time or, if
no such plan exists, the meaning ascribed to the term "permanent and
total disability" in Section 22(e)(3) of the Code.
"Person" means an individual, firm, partnership, association,
unincorporated organization, trust, corporation, or any other entity,
including, without limitation, a government or any department, agency
or instrumentality thereof.
"Plan" has the meaning set forth in Section 1(a) above.
"Predecessor" or "predecessor corporation" means a corporation
which was a party to a transaction described in Section 424(a) of the
Code (or which would be so described if a substitution or assumption
under that Section had occurred) with the Corporation, or a corporation
which is a Parent or Subsidiary of the Corporation, or a predecessor of
any such corporation.
"Related Corporation" means any Parent, Subsidiary or predecessor
of the Corporation.
"Related Option" has the meaning set forth in Section 7(a) below.
"Restricted Stock" has the meaning set forth in Section 1(b)
above.
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"Retirement" means retirement from active employment under a
retirement plan of the Company, or pursuant to an employment agreement
with the Corporation, or termination of employment at or after age 55
under circumstances which the Committee, in its sole discretion, deems
equivalent to retirement.
"SARs" has the meaning set forth in Section 1(b) above.
"Securities Act" means the Securities Act of 1933, as amended from
time to time. References to any provision of the Securities Act shall
be deemed to include successor provisions thereto and rules and
regulations thereunder.
"Subsidiary" or "subsidiary corporation" means any corporation
that is a "subsidiary corporation" as such term is defined in Section
424(f) of the Code.
"Tandem SAR" has the meaning set forth in Section 7(a) below.
"Tax Date" has the meaning set forth in Section 10 below.
(b) References in these definitions to provisions of the Code shall,
when appropriate to effectuate the purpose of the Plan, be deemed to be
references to such provisions of the Code and regulations promulgated
thereunder as the same may from time to time be amended or to successor
provisions to such provisions.
1. Administration.
(a) Administrator. The Plan shall be administered by the
Committee.
(b) Authority of Committee. Any action of the Committee with
respect to the Plan may be taken by a written instrument signed by all
of the members of the Committee and any such action so taken by written
consent shall be as fully effective as if it had been taken by a
majority of the members at a meeting duly held and called. Subject to
the provisions of the Plan, and unless authority is granted to the
Chief Executive Officer as provided in Section 3(d), the Committee
shall have the full and final authority in its sole discretion to take
any action with respect to the Plan including, without limitation, the
authority to: (i) select the persons to receive Awards under the Plan;
(ii) determine the form of an Award and whether, if such Award is an
Option, such Option is to operate on a tandem basis and/or in
conjunction with or apart from other Awards made by the Corporation,
either within or outside of this Plan; (iii) determine the number of
shares of Common Stock to be covered by each Award hereunder; (iv)
determine the terms and conditions, not inconsistent with the terms of
this Plan, of any Award hereunder (including, but not limited to, any
restriction or limitation on transfer, any vesting schedule or
acceleration thereof, and any forfeiture provision or waiver thereof),
regarding any Award and the shares of Common Stock relating thereto,
based on such factors as the Committee shall determine, in its sole and
absolute discretion; and (v) make any other determination or take any
action that the Committee deems necessary or desirable
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for the administration of the Plan. The Committee shall also have
authority, in its sole discretion, to accelerate the date that any
Award which was not otherwise exercisable or vested shall become
exercisable or vested in whole or in part without any obligation to
accelerate such date with respect to any other Award granted to any
recipient.
(c) Power of Committee. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual
determinations and to adopt or amend such rules, regulations,
agreements and instruments for implementing the Plan and for the
conduct of its business as it deems necessary or advisable, in its sole
discretion. The Committee's interpretations of the Plan and all
determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having
any interest in the Plan or in any Awards granted hereunder. All
powers of the Committee shall be executed in its sole discretion, in
the best interest of the Corporation, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to
similarly situated individuals.
(d) Delegation. Notwithstanding Section 3(b) and Section 3(c)
above, the Committee may delegate to the Chief Executive Officer the
authority to grant Awards, and to make any or all of the determinations
reserved for the Committee in the Plan and summarized in Section 3(b)
or Section 3(c) above with respect to such Awards, to any individual
who, at the time of said grant or other determination, (i) is not
deemed to be an officer or director of the Corporation within the
meaning of Section 16 of the Exchange Act; (ii) is not deemed to be a
Covered Employee; and (iii) is otherwise eligible under Section 5
below. To the extent that the Committee has delegated authority to
grant Awards pursuant to this Section 3(d) to the Chief Executive
Officer, references to the Committee shall include references to such
person, subject, however, to the requirements of the Plan, Rule 16b-3
and other applicable law.
4. Shares of Stock Subject to the Plan; Award Limitations.
(a) Number of Shares. The number of shares of Common Stock
that may be issued pursuant to Awards shall be three million
(3,000,000).
(b) Sources of Shares. The shares to be issued hereunder shall
be issued from authorized but unissued shares. The Corporation hereby
reserves sufficient authorized shares of Common Stock to meet the grant
of Awards hereunder.
(c) Excess Shares. Any shares subject to an Award which is
subsequently forfeited, expires or is terminated may again be the
subject of an Award granted under the Plan. To the extent that any
shares of Common Stock subject to an Award are not delivered to a
Participant (or his beneficiary) because the Award is forfeited or
canceled or because the Award is settled in cash, such shares shall not
be deemed to have been issued for purposes of determining the maximum
number of shares of Common Stock available for issuance under the Plan.
If the option price of an Option granted under the Plan is satisfied by
tendering shares of Common Stock, only the number of shares issued
net of the shares of Common Stock tendered shall be deemed issued for
purposes of determining the maximum number of shares of Common Stock
available for issuance under the Plan.
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(d) Adjustment. If there is any change in the number or kind of
shares of Common Stock outstanding (i) by reason of a stock dividend,
spin off, recapitalization, stock split, or combination or exchange of
shares; (ii) by reason of a merger, reorganization or consolidation
involving the Corporation; by reason of a reclassification or change in
par value; or (iv) by reason of any other extraordinary or unusual
event affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration, or if the value of outstanding
shares of Common Stock is substantially reduced as a result of a
spinoff or the Corporation's payment of an extraordinary dividend or
distribution, the maximum number of shares of Common Stock available
for Awards, the maximum number of shares of Common Stock for which any
individual participating in the Plan may receive Awards in any year,
the number of shares covered by outstanding Awards, the kind of shares
issued under the Plan, and the price per share of such Awards shall be
equitably adjusted by the Committee to reflect any increase or decrease
in the number of, or change in the kind or value of, issued shares of
Common Stock to preclude, to the extent practicable, the enlargement or
dilution of rights and benefits under such Awards; provided, however,
that any fractional shares resulting from such adjustment shall be
eliminated. Any adjustments determined by the Committee shall be
final, binding and conclusive.
5. Eligibility for Participation.
(a) General Qualifications. A Participant must be an employee
of the Corporation or a Related Corporation. For purposes of the Plan,
an individual shall be considered to be an "employee" only if there
exists between the individual and the Corporation or a Related
Corporation the legal and bona fide relationship of employer and
employee. In determining the persons to whom Awards shall be made and
the number of shares to be covered by each Award, the Committee may
take into account the nature of the services rendered by, and the
responsibilities borne by, such eligible persons, their present and
potential contributions to the Corporation's success and such other
factors as the Committee in its discretion shall deem relevant. Awards
may be made to persons who hold or have held options, restricted stock
and/or stock appreciation rights under previous plans, and a person who
has received an Award under the Plan may receive additional Awards
under the Plan or under any future stock or option plan if the
Committee shall so determine.
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(b) Incentive Stock Options. Incentive Stock Options under
this Plan may be granted only to officers (who are employees) and to
other employees of the Corporation or a Related Corporation, as
determined by the Committee. A director of the Corporation may receive
an Incentive Stock Option under this Plan only if such person is
otherwise an employee of the Corporation or a Related Corporation.
(c) Other Awards. Employees of the Corporation or a Related
Corporation who the Committee determines are providing bona fide
services to the Corporation or a Related Corporation, whether or not
otherwise compensated, may receive any form of Award, except an
Incentive Stock Option, at the discretion of the Committee.
6. Granting of Options.
(a) General. Subject to the limitations of the Plan, the
Committee may in its sole and absolute discretion grant Options to such
eligible individuals in such numbers, upon such terms and at such times
as the Committee shall determine. Notwithstanding the foregoing,
however, no Participant shall during any fiscal year be granted Options
to purchase greater than 10% of the total number of shares of Common
Stock available for issuance under the Plan. Both Incentive Stock
Options and Non-Qualified Options may be granted under the Plan. To the
extent necessary to comply with Section 422 of the Code and related
regulations, if an Option is designated as an Incentive Option but does
not qualify as such under Section 422 of the Code, the Option (or
portion thereof) shall be treated as a Non-Qualified Option. An
Incentive Option shall be considered to be granted on the date that the
Committee acts to grant the Option, or on any later date specified by
the Committee as the effective date of the Option. A Non-Qualified
Option shall be considered to be granted on the date the Committee acts
to grant the Option or any other date specified by the Committee as the
date of grant of the Option.
(b) Option Price. The price per share at which an Option may
be exercised (the "Exercise Price") shall be established by the
Committee at the time the Option is granted and shall be set forth in
the terms of the agreement evidencing the grant of the Option;
provided, that (i) in the case of an Incentive Stock Option, the
Exercise Price shall be no less than the Fair Market Value per share of
the Common Stock on the date the Incentive Stock Option is granted and
(ii) in no event shall the Exercise Price of any Option be less than
the par value per share of the Common Stock. Notwithstanding the
foregoing, the Exercise Price of an Incentive Stock Option granted to a
10% Shareholder shall not be less than one hundred ten percent (110%)
of the Fair Market Value of the Common Stock on the date of grant.
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(c) Limits on Incentive Stock Options. Each Incentive Stock
Option shall provide that, if the aggregate Fair Market Value of the
Common Stock on the date of the grant with respect to which Incentive
Stock Options are exercisable for the first time by a Participant
during any calendar year, under the Plan or any other stock option plan
of the Corporation (or a Parent or Subsidiary of the Corporation),
exceeds $100,000, then the Option, as to the excess, shall be treated
as a Non-Qualified Stock Option. An Incentive Stock Option shall not be
granted to any person who is not an employee of the Corporation or a
Parent or Subsidiary of the Corporation. If and to the extent that an
Option designated as an Incentive Stock Option fails so to qualify
under the Code, the Option shall remain outstanding according to its
terms as a Non-Qualified Stock Option.
(d) Option Term. The term of an Option shall be determined by
the Committee at the time the Option is granted. With respect to
Incentive Stock Options, such period shall not extend more than ten
years from the date on which the Option is granted; provided, however,
that the term of an Incentive Stock Option granted to an employee who
is a 10% Shareholder shall not exceed five years from the date of
grant. Any Option or portion thereof not exercised before expiration of
the option period shall terminate.
(e) Exercisability of Options. Options shall become
exercisable in accordance with such terms and conditions, consistent
with the Plan, as may be determined by the Committee and specified in
the Agreement or an amendment to the Agreement. The Committee may
accelerate the exercisability of any or all outstanding Options at any
time for any reason.
(f) Exercise of Options. A Participant may exercise an Option
that has become exercisable, in whole or in part, by delivering written
notice to the Corporation at such place as the Corporation shall
direct. Such notice shall specify the number of shares to be purchased
pursuant to an Option and the aggregate purchase price to be paid
therefor, and shall be accompanied by the payment of the Exercise
Price. Such payment shall be in the form of (i) cash; (ii) delivery of
written notice of exercise to the Corporation and delivery to a broker
of written notice of exercise and irrevocable instructions to promptly
deliver to the Corporation the amount of sale or loan proceeds to pay
the option price; or (iii) a combination of the foregoing methods, as
elected by the Participant. Shares of Common Stock tendered or
withheld in payment on the exercise of an Option shall be valued at
their Fair Market Value on the date of exercise. Any shares of Common
Stock used to exercise an Option shall have been held by the
Participant for the requisite period of time to avoid adverse
accounting consequences to the Corporation with respect to the exercise
of the Option. The Participant shall pay the Exercise Price and the
amount of any withholding tax due at the time of exercise. Shares of
Common Stock shall not be issued upon exercise of an Option until the
Exercise Price is fully paid and any required withholding is made.
(g) Nontransferability of Options. Options shall not be
transferable other than by will or the laws of intestate succession.
The designation of a beneficiary does not constitute a transfer. An
Option shall be exercisable during the Participant's lifetime only by
him or by his guardian or legal representative. If a Participant is
subject to Section 16 of the Exchange Act, shares of Common Stock
acquired upon exercise of an Option may not, without the consent of the
Committee, be disposed of by the Participant until the expiration of
six months after the date the Option was granted.
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7. Stock Appreciation Rights.
(a) Grant of SARs. Subject to the limitations of the Plan,
the Committee may in its sole and absolute discretion grant SARs to
such eligible individuals, in such numbers, upon such terms and at such
times as the Committee shall determine. SARs may be granted to an
optionee of an Option (hereinafter called a "Related Option") with
respect to all or a portion of the shares of Common Stock subject to
the Related Option (a "Tandem SAR") or may be granted separately to an
eligible key employee (a "Freestanding SAR"). Subject to the
limitations of the Plan, SARs shall be exercisable in whole or in part
upon notice to the Corporation upon such terms and conditions as are
provided in the Agreement relating to the grant of the SAR.
(b) Tandem SARs. A Tandem SAR may be granted either
concurrently with the grant of the Related Option or (if the Related
Option is a Non-Qualified Option) at any time thereafter prior to the
complete exercise, termination, expiration or cancellation of such
Related Option. Tandem SARs shall be exercisable only at the time and
to the extent that the Related Option is exercisable (and may be
subject to such additional limitations on exercise as the Committee may
provide in the Agreement), and in no event after the complete
termination or full exercise of the Related Option. For purposes of
determining the number of shares of Common Stock that remain subject to
such Related Option and for purposes of determining the number of
shares of Common Stock in respect of which other Awards may be granted,
upon the exercise of Tandem SARs, the Related Option shall be
considered to have been surrendered to the extent of the number of
shares of Common Stock with respect to which such Tandem SARs are
exercised. Upon the exercise or termination of the Related Option, the
Tandem SARs with respect thereto shall be canceled automatically to the
extent of the number of shares of Common Stock with respect to which
the Related Option was so exercised or terminated. Subject to the
limitations of the Plan, upon the exercise of a Tandem SAR, the
Participant shall be entitled to receive from the Corporation, for each
share of Common Stock with respect to which the Tandem SAR is being
exercised, consideration equal in value to the excess of the Fair
Market Value of a share of Common Stock on the date of exercise over
the Related Option price per share; provided, that the Committee may,
in any agreement granting Tandem SARs, establish a maximum value
payable for such SARs.
(c) Freestanding SARs. Unless an individual agreement
provides otherwise, the base price of a Freestanding SAR shall be not
less than one hundred percent (100%) of the Fair Market Value of the
Common Stock on the date of grant of the Freestanding SAR. Subject to
the limitations of the Plan, upon the exercise of a Freestanding SAR,
the Participant shall be entitled to receive from the Corporation, for
each share of Common Stock with respect to which the Freestanding SAR
is being exercised, consideration equal in value to the excess of the
Fair Market Value of a share of Common Stock on the date of exercise
over the base price per share of such Freestanding SAR; provided, that
the Committee may, in any agreement granting Freestanding SARs,
establish a maximum value payable for such SARs.
(d) Exercise of SARs. Subject to the terms of the Plan, SARs
shall be exercisable in whole or in part upon such terms and conditions
as are provided in the Agreement relating to the grant of the SAR. The
period during which an SAR may be exercisable shall not exceed ten (10)
years from the date of grant or, in the case of Tandem SARs, such
shorter term as may apply to the Related Option. Any SAR or portion
thereof not exercised before expiration of the period stated in the
Agreement relating to the grant of the SAR shall terminate. SARs may
be exercised by giving written notice to the Corporation at such place
as the Committee shall direct. The date of exercise of the SAR shall
mean the date on which the Corporation shall have received notice from
the Participant of the exercise of such SAR.
(e) Consideration; Election. The consideration to be received
upon the exercise of the SAR by the Participant shall be paid in cash,
shares of Common Stock (valued at Fair Market Value on the date of
exercise of such SAR) or a combination of cash and shares of Common
Stock, as elected by the Participant, subject to the terms of the Plan
and the applicable Agreement. Ownership by the Participant (or his
beneficiary) of the shares of Common Stock acquired upon exercise of an
SAR for shares shall be reflected by a book entry in the stock records
maintained by the Corporation and its transfer agent as soon as
practicable following receipt of notice of exercise. No fractional
shares of Common Stock will be issuable upon exercise of the SAR and,
unless otherwise provided in the applicable Agreement, the Participant
will receive cash in lieu of fractional shares.
(f) Limitations. The applicable Agreement shall contain such
terms, conditions and limitations consistent with the Plan as may be
specified by the Committee. Unless otherwise so provided in the
applicable agreement or the Plan, any such terms, conditions or
limitations relating to a Tandem SAR shall not restrict the
exercisability of the Related Option.
(g) Nontransferability. SARs shall not be transferable other
than by will or the laws of intestate succession. The designation of a
beneficiary does not constitute a transfer. SARs may be exercised
during the Participant's lifetime only by him or by his guardian or
legal representative. If the Participant is subject to Section 16 of
the Exchange Act, shares of Common Stock acquired upon exercise of an
SAR may not, without the consent of the Committee, be disposed of by
the Participant until the expiration of six months after the date the
SAR was granted.
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8. Restricted Stock Awards.
(a) Restricted Stock Awards. Subject to the limitations of
the Plan, the Committee may grant Restricted Stock Awards to such
Eligible Persons, in such amounts and subject to such terms and
conditions, as the Committee may determine in its sole discretion,
including such restrictions on transferability and other restrictions
as the Committee may impose, which restrictions may lapse separately or
in combination at such times, under such circumstances, in such
installments, or otherwise, as the Committee shall determine.
(b) Issuance of Restricted Stock. Restricted Stock awarded
under the Plan shall be recorded as owned by the Participant by means
of a book entry in the stock records maintained by the Corporation and
its transfer agent, and the Corporation shall instruct its transfer
agent regarding the terms, conditions and restrictions applicable to
such Restricted Stock. Each Participant awarded Restricted Stock
shall have delivered a stock power to the Corporation, endorsed in
blank, relating to the Restricted Stock for so long as the Restricted
Stock is subject to a risk of forfeiture.
(c) Voting and Dividend Rights of Restricted Stock. Unless
otherwise determined by the Committee at the time of an Award, the
holder of Restricted Stock shall have the right to vote the Restricted
Stock and to receive dividends, if any, thereon, unless and until such
shares are forfeited.
(d) Nontransferability. The recipient of Restricted Stock
shall not sell, transfer, assign, pledge or otherwise encumber shares
subject to the Award until the restrictions have lapsed, expired or
until all conditions to vesting have been met. Restricted Stock shall
not be transferable other than by will or the laws of intestate
succession until the restrictions have lapsed, expired or until all
conditions to vesting have been met. The designation of a beneficiary
does not constitute a transfer. If a Participant of a Restricted Award
is subject to Section 16 of the Exchange Act, shares of Common Stock
subject to such Award may not, without the consent of the Committee, be
sold or otherwise disposed of within six (6) months following the date
of grant of such Award.
9. Termination of Employment.
(a) Death of Participant. In the event of the death of a
Participant, any Incentive Stock Options granted to such Participant
may be exercised by the person or persons to whom the Participant's
rights under any such Incentive Stock Options pass by will or by the
laws of descent and distribution (including the Participant's estate
during the period of administration) at any time prior the respective
expiration dates of any such Incentive Stock Options. In addition, all
Non-Qualified Options and SARs held by such Participant shall
immediately vest and become exercisable in accordance with their terms,
and all Restricted Stock held by such Participant shall immediately
vest and become non-forfeitable.
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(b) Permanent Disability of Participant. In the event that
any Participant's employment with the Corporation shall terminate as a
result of the Permanent Disability of such Participant, such
Participant may exercise any Incentive Stock Options granted to him
pursuant to the Plan at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii)
the date which is the first anniversary of the date of such termination
of employment. In addition, all Non-Qualified Options and SARs held by
such Participant shall immediately vest and become exercisable in
accordance with their terms, and all Restricted Stock held by such
Participant shall immediately vest and become non-forfeitable.
(c) Retirement of Participant. In the event of the Retirement
of a Participant, any Incentive Stock Options held by him under the
Plan shall immediately vest and shall be exercisable at any time prior
to the earlier of (i) the respective expiration dates of any such
Incentive Stock Options or (ii) the date which is ninety (90) days
after the date of such termination. In addition, all Non-Qualified
Options and SARs held by such Participant shall immediately vest and
become exercisable in accordance with their terms, and all Restricted
Stock held by such Participant shall immediately vest and become non-
forfeitable.
(d) Other Termination of Employment. Upon the termination of
any Participant's employment with the Corporation for any reason other
than death, Permanent Disability or Retirement, any Incentive Stock
Options held by him that are vested as of the date of such termination
shall be exercisable at any time prior to the earlier of (i) the
respective expiration dates of any such vested Incentive Stock Options
or (ii) the date which is ninety (90) days after the date of such
termination. In addition, the terms and conditions of Non-Qualified
Options, SARs and Restricted Stock shall be as specifically provided
for in the Agreement executed by the Participant at the time of an
Award.
(e) Non-Competition. Unless an Agreement specifies otherwise,
a Participant shall forfeit all unexercised, unearned, and/or unpaid
Awards, including, but not by way of limitation, Awards earned but not
yet paid, all unpaid dividends and dividend equivalents, and all
interest, if any, accrued on the foregoing if: (i) in the opinion of
the Committee, the Participant, without the prior written consent of
the Corporation, engages directly or indirectly in any manner or
capacity as a principal, agent, partner, officer, director,
shareholder, employee or otherwise, in any business or activity
competitive with the business conducted by the Corporation or any
Parent, Subsidiary or Affiliate of the Corporation; (ii) the
Participant at any time divulges to any person or entity other than the
Corporation (or any Parent, Subsidiary, or Affiliate of the
Corporation) any trade secrets, methods, processes or the proprietary
or confidential information of the Corporation (or any Parent,
Subsidiary, or Affiliate of the Corporation); (iii) the Participant
performs any act or engages in any activity which in the opinion of
Chief Executive Officer of the Corporation is inimical to the best
interests of the Corporation. Ownership of not more than four and
99/100 percent (4.99%) of the outstanding capital stock of a company
subject to the periodic and other reporting requirements of the
Exchange Act shall not be a violation of this Section 9(f).
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10. Withholding of Taxes. The Corporation shall withhold all
required local, state and federal taxes from any amount payable in cash
with respect to an Award. The Corporation shall require any recipient
of an Award payable in shares of the Common Stock to pay to the
Corporation in cash the amount of any tax or other amount required by
any governmental authority to be withheld and paid over by the
Corporation to such authority for the account of such recipient.
11. Consequences of a Change of Control. Notwithstanding any other
provision of the Plan to the contrary, in the event of a Change of
Control: (a) all Options and SARs outstanding as of the date of such
Change of Control shall become fully exercisable, whether or not then
otherwise exercisable; (b) all restrictions applicable to any
Restricted Stock Award shall be deemed to have expired, and such
Restricted Stock Awards shall become fully vested and payable to the
fullest extent of the original grant of the applicable Award.
Notwithstanding the foregoing, in the event of a merger, share
exchange, reorganization or other business combination affecting the
Corporation or a Related Corporation, the Committee may, in its sole
and absolute discretion, determine that any or all Awards granted
pursuant to the Plan shall not vest or become exercisable on an
accelerated basis, if the Board of Directors of the surviving or
acquiring corporation, as the case may be, shall have taken such
action, including but not limited to the assumption of Awards granted
under the Plan or the grant of substitute awards (in either case, with
substantially similar terms as Awards granted under the Plan), as in
the reasonable opinion of the Committee is equitable or appropriate to
protect the rights and interests of participants under the Plan. For
the purposes herein, the Committee authorized to make the
determinations provided for in this Section 11 shall be appointed by
the Board of Directors, two-thirds of the members of which shall have
been directors of the Corporation prior to the merger, share exchange,
reorganization or other business combinations affecting the Corporation
or a Related Corporation.
12. Performance Based Compensation. To the extent that Section
162(m) of the Code is applicable, the Committee shall have discretion
to determine the extent, if any, that Awards conferred under the Plan
to Covered Employees shall comply with the qualified performance-based
compensation exception to employer compensation deductions set forth in
Section 162(m) of the Code.
13. No Right or Obligation of Continued Employment. Nothing
contained in the Plan shall require the Corporation or a Related
Corporation to continue the employment or service of a Participant, nor
shall any such individual be required to remain in the employment or
service of the Corporation or a Related Corporation. Except as
otherwise provided in the Plan, Awards granted under the Plan to
employees of the Corporation or a Related Corporation shall not be
affected by any change in the duties or position of the Participant, as
long as such individual remains an employee of, or in service to, the
Corporation or a Related Corporation.
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14. Unfunded Plan; Retirement Plan. Neither a Participant nor any
other person shall, by reason of the Plan, acquire any right in or
title to any assets, funds or property of the Corporation or any
Related Corporation including, without limitation, any specific funds,
assets or other property which the Corporation or any related
corporation, in their discretion, may set aside in anticipation of a
liability under the Plan. A participant shall have only a contractual
right to the Common Stock or amounts, if any, payable under the Plan,
unsecured by any assets of the Corporation or any related corporation.
Nothing contained in the Plan shall constitute a guarantee that the
assets of such corporations shall be sufficient to pay any benefits to
any person. In no event shall any amounts accrued, distributable or
payable under the Plan be treated as compensation for the purpose of
determining the amount of contributions or benefits to which any person
shall be entitled under any retirement plan sponsored by the
Corporation or a related corporation that is intended to be a qualified
plan within the meaning of Section 401(a) of the Code.
15. Amendment and Termination of the Plan.
(a) Amendment. The Board may amend or terminate the Plan at
any time; provided, however, that if the Common Stock becomes publicly
traded, the Board shall not amend the Plan without shareholder approval
if such approval is required by (i) Section 162(m) of the Code and if
Section 162(m) is applicable to the Plan; (ii) the Securities Act; or
(iii) the Exchange Act.
(b) Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its effective date
unless terminated earlier by the Board or unless extended by the Board
with the approval of the shareholders.
(c) Termination and Amendment of Outstanding Awards. A
termination or amendment of the Plan that occurs after an Award is
granted shall not materially impair the rights of a Participant unless
the Participant consents. The termination of the Plan shall not impair
the power and authority of the Committee with respect to an outstanding
Award. No termination, Modification, or amendment of the Plan, may,
without the consent of the Participant to whom any Award shall
theretofore have been made, adversely affect the rights of such
Participant under such Award; nor shall any such Modification or
amendment be deemed to effect a Modification, extension or renewal of
any such Award previously made except pursuant to an express written
agreement to such effect, executed by the Corporation and the
Participant.
(d) Governing Document. The Plan shall be the controlling
document. No other statements, representations, explanatory materials
or examples, oral or written, may amend the Plan in any manner. The
Plan shall be binding upon and enforceable against the Corporation and
its successors and assigns.
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16. Restrictions on Shares. The Committee may impose such
restrictions on any shares representing Awards hereunder as it may deem
advisable, including without limitation restrictions under the
Securities Act, under the requirements of any stock exchange or similar
organization and under any blue sky or state securities laws applicable
to such shares. Notwithstanding any other Plan provision to the
contrary, the Corporation shall not be obligated to issue or deliver
shares of Common Stock under the Plan or make any other distribution of
benefits under the Plan, or take any other action, unless such
delivery, distribution or action is in compliance with all applicable
laws, rules and regulations (including but not limited to the
requirements of the Securities Act). The Corporation may give
instructions to its transfer agent regarding such restrictions as may
be prescribed from time to time by applicable laws and regulations or
as may be advised by legal counsel with respect to shares of Common
Stock issued pursuant to an Award hereunder.
17. No Fractional Shares. No fractional shares of Common Stock
shall be issued or delivered pursuant to the Plan or any Option. The
Committee shall determine whether cash, other awards or other property
shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.
18. Miscellaneous.
(a) Options in Connection with Corporate Transactions and
Otherwise. Nothing contained in this Plan shall be construed to (i)
limit the right of the Committee to grant Options under this Plan in
connection with the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business or assets of any
corporation, firm or association, including options granted to
employees thereof who become employees of the Corporation, or for other
proper corporate purpose, or (ii) limit the right of the Corporation to
grant stock options or make other awards outside of this Plan. Without
limiting the foregoing, the Committee may grant Options to an employee
of another corporation who becomes an employee of the Corporation by
reason of a corporate merger, consolidation, acquisition of stock or
property, reorganization or liquidation involving the Corporation or
any of its subsidiaries in substitution for a stock option or
restricted stock grant made by such corporation. The Committee shall
prescribe the provisions of the substitute Options.
(b) If the Committee determines that such action is advisable,
the Corporation may assist any Participant in obtaining financing from
the Corporation or from any bank or other third party, on such terms as
are determined by the Committee, and in such amount as is required to
accomplish the purposes of the Plan, including, but not limited to,
permitting the exercise of an Award and/or paying any taxes in respect
thereof to the extent permitted by law. Such assistance may take any
form that the Committee deems appropriate, including, but not limited
to, a direct loan from the Corporation, a guarantee of the obligation
by the Corporation, or the maintenance by the Corporation of deposits
with such bank or third party.
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(b) Compliance with Law. The Plan, the grant and exercise of
Options, and the obligations of the Corporation to issue or transfer
shares of Common Stock under Options shall be subject to all applicable
laws and to approvals by any governmental or regulatory agency as may
be required. The Committee may revoke any Award if it is contrary to
law or modify an Award to bring it into compliance with any valid and
mandatory government regulation. The Committee may also adopt rules
regarding the withholding of taxes on payments to Participants. The
Committee may, in its sole discretion, agree to limit its authority
under this Section 18(b).
(c) Ownership of Stock. A Participant shall have no rights as
a shareholder with respect to any shares of Common Stock covered by an
Option until the shares are issued or transferred to the Participant or
Successor Participant on the stock transfer records of the Corporation.
(e) Governing Law. The validity, construction, interpretation
and effect of the Plan and grant instruments issued under the Plan
shall exclusively be governed by and determined in accordance with the
law of the State of Tennessee, without regard to conflict of laws
principles.
(f) Time of Awards. Nothing contained in the Plan shall
constitute an Award hereunder. Any Award pursuant to the Plan shall
take place only upon approval by the Committee of a resolution
recommending an Award under this Plan. Notice of the determination
shall be given to each person to whom an Award is so made within a
reasonable time after the date of such Award. After the making of an
Award under this Plan, a written Agreement shall be duly executed by or
on behalf of the Corporation and the Participant.
(g) Form and Terms of Award Agreement. Agreements evidencing
Awards pursuant to the Plan shall be in such form and shall contain
such terms not inconsistent with the Plan as the Committee may approve.
Award Agreements may contain such terms, conditions, restrictions and
limitations in respect of Options, SARs and/or Restricted Stock (and
such provisions for the enforcement of compliance with the Securities
Act and/or with state "Blue Sky" laws) as the Committee, in its sole
discretion, may determine. To the extent any term in any Award
Agreement shall be inconsistent with any term of this Plan, the term in
this Plan shall govern.
(h) Partial Invalidity. The invalidity or unenforceability of
any particular provision of this Plan or any Award Agreement shall not
effect the other provisions of this Plan or such Award Agreement nor
affect the validity or enforceability of the other provisions of Award
Agreements under this Plan, and this Plan and Awards hereunder shall be
construed in all respects as if such invalid or unenforceable provision
were omitted.
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(i) Special Provisions with Respect to Incentive Stock Options
under this Plan and Non-Qualified Stock Options. The Committee in
making any Award of an Option shall indicate whether it intends the
Option to be an Incentive Stock Option under this Plan or a Non-
Qualified Stock Option and shall cause the Award Agreement with respect
thereto to indicate such intention. Should a person hold both one or
more Incentive Stock Options under this Plan and one or more Non-
Qualified Stock Options, all of such Options shall be exercisable in
accordance with their respective terms and limitations, and nothing in
this Plan shall be construed as causing the exercise of any such Option
to preclude the exercise of any such other Option in accordance with
its terms.
(j) Rule 16b-3 Savings Provision. It is the intent of the
Corporation that this Plan comply in all respects with any applicable
provisions of Rule 16b-3 and Rule 16a-1(c)(3) under the Exchange Act in
connection with any grant of Awards to or other transaction by a
Participant who is subject to Section 16 of the Exchange Act (except
for transactions exempted under alternative Exchange Act Rules or
acknowledged in writing to be non-exempt by such Participant).
Accordingly, if any provision of this Plan or any Award Agreement does
not comply with the requirements of Rule 16b-3 or Rule 16a-1(c)(3) as
then applicable to any such transaction, such provision will be
construed or deemed amended to the extent necessary to conform to the
applicable requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such
Participant shall avoid liability under Section 16(b).
(k) Headings. Section headings are for reference only. In the
event of a conflict between a title and the content of a Section, the
content of the Section shall control.
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Exhibit II
MORGAN KEEGAN, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
INTRODUCTION
1.1 Establishment of Plan. Morgan Keegan, Inc., a Tennessee
corporation ("Morgan Keegan") with its principal offices located in
Memphis, Tennessee, has adopted the following employee stock purchase
plan for its eligible employees. This Plan shall be known as the
Morgan Keegan, Inc. 2000 Employee Stock Purchase Plan.
1.2 Purpose. The purpose of this Plan is to provide an
opportunity for eligible employees of the Employer to become
shareholders of Morgan Keegan. It is believed that broad-based
employee participation in the ownership of the business will help to
achieve the unity of purpose conducive to the continued growth of the
Employer and to the mutual benefit of its employees and shareholders.
1.3 Qualification. This Plan is intended to be an employee
stock purchase plan which qualifies for favorable federal income tax
treatment under Section 423 of the Code and is intended to comply with
the provisions thereof, including the requirement of Section 423(b)(5)
of the Code that all Employees granted options to purchase Stock under
the Plan have the same rights and privileges with respect to such
options.
1.4 Rule 16b-3 Compliance. This Plan is intended to comply
with Rule 16b-3 under the Securities Exchange Act of 1934, and should
be interpreted in accordance therewith.
ARTICLE II
DEFINITIONS
As used herein, the following words and phrases shall have the
meanings specified below:
2.1 Board of Directors. The Board of Directors of Morgan
Keegan.
2.2 Code. The Internal Revenue Code of 1986, as amended from
time to time.
2.3 Commencement Date. The first day of each Option Period.
The first Commencement Date shall be January 10, 2001.
2.4 Contribution Account. As set forth in Article V, the
account established on behalf of a Participant to which shall be
credited the amount of the Participant's contributions.
2.5 Effective Date. The first date on which this Plan shall
have been approved by both the Board of Directors and shareholders of
Morgan Keegan.
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2.6 Employee. Each employee of an Employer except:
(a) any employee whose customary employment is
twenty(20) hours per week or less, or
(b) any employee whose customary employment is
for not more than five months in any calendar
year.
2.7 Employer. Morgan Keegan and any United States
corporation which is a Subsidiary of Morgan Keegan (except for a
Subsidiary which by resolution of the Board of Directors is expressly
not authorized to become a participating Employer). The term
"Employer" shall include any corporation into which an Employer may be
merged or consolidated or to which all or substantially all of its
assets may be transferred, provided that the surviving or transferee
corporation would qualify as a Subsidiary under Section 2.17.
2.8 Exercise Date. December 31 of each Option Period during
which options to purchase the Stock shall have been granted hereunder.
2.9 Exercise Price. The price per share of the Stock to be
charged to Participants at the Exercise Date, as determined in Section
6.3.
2.10 Fair Market Value. The closing sales price per share for
the shares of Common Stock on the New York Stock Exchange or any
national exchange on which shares of Common Stock are traded on such
date (or if such market or exchange was not open for trading on such
date, the next preceding date on which it was open) or, if the Common
Stock is not listed on the New York Stock Exchange or on an established
and recognized exchange, such value as the Board of Directors, in good
faith, shall determine based on such relevant facts, which may include
opinions of independent experts, as may be available to the Board of
Directors.
2.11 Five-Percent Shareholder. An Employee who, immediately
after an option is granted to purchase Stock under this Plan, owns five
percent (5%) or more of the total combined voting power or value of all
classes of stock of an Employer. In determining this five percent
test, shares of stock which the Employee may purchase under outstanding
options, warrants or other convertible securities, as well as stock
attributed to the Employee from members of his family or otherwise
under Section 424(d) of the Code, shall be treated as stock owned by
the Employee in the numerator, but treasury shares and shares of stock
which may be issued under options, warrants or other convertible
securities shall not be counted in the total of outstanding shares in
the denominator.
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2.12 Option Period. The period commencing on January 10 and
ending on December 31 of each calendar year during which the Plan is in
effect.
2.13 Participant. Any Employee of an Employer who has met the
conditions for eligibility as provided in Article IV and who has
elected to participate in the Plan.
2.14 Plan. Morgan Keegan, Inc. 2000 Employee Stock Purchase
Plan.
2.15 Plan Administrator. The Compensation Committee of Morgan
Keegan & Company, Inc., to whom authority is delegated by the Board of
Directors to administer the Plan.
2.16 Stock. Those shares of common stock of Morgan Keegan
which are reserved pursuant to Section 6.1 for issuance upon the
exercise of options granted under this Plan.
2.17 Subsidiary. Any United States corporation (other than
Morgan Keegan) in an unbroken chain of corporations beginning with
Morgan Keegan if, at the time of the granting of the option, each of
the corporations other than the last corporation in the unbroken chain
owns stock possessing fifty-one percent (51%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
ARTICLE III
SHAREHOLDER APPROVAL
This Plan must be approved by the shareholders of Morgan Keegan
within the period beginning twelve (12) months before and ending twelve
(12) months after its adoption by the Board of Directors.
ARTICLE IV
ELIGIBILITY AND PARTICIPATION
4.1 Conditions. Each Employee shall become eligible to
become a Participant for each Option Period on the Commencement Date of
such Option Period if such Employee is employed by the Employer as of
such Commencement Date; provided, however, that no Employee who is a
Five-Percent Shareholder shall be eligible to participate in the Plan.
Notwithstanding anything to the contrary contained herein, no
individual who is not an Employee shall be granted an option to
purchase Stock under the Plan.
4.2 Application for Participation. Each Employee who becomes
eligible to participate shall be furnished a summary of the Plan and an
enrollment form. If such Employee elects to participate hereunder,
Employee shall complete such form and file it with Employer no later
than December 31 immediately prior to the Option Period with respect to
which the Employee desires to participate (the "Enrollment Date"). The
completed enrollment form shall indicate the amount of Employee
contribution authorized by the Employee. If no new enrollment form is
filed by a Participant by the Enrollment Date for any Option Period
after the initial Option Period, that Participant shall be deemed to
have elected to continue to participate with the same contribution
previously elected (subject to the limits specified in Section 5.1). If
any Employee does not elect to participate in any given Option Period,
such Employee may elect to participate on any future Commencement Date
so long as such Employee continues to meet the eligibility
requirements.
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4.3 Date of Participation. All Employees who elect to
participate shall be enrolled in the Plan as of the Commencement Date
of the Option Period with respect to which they submitted an enrollment
form as described in Section 4.2 above. Upon becoming a Participant,
the Participant shall be bound by the terms of this Plan, including any
amendments whenever made.
4.4 Acquisition or Creation of Subsidiary. If the stock of a
corporation is acquired by Morgan Keegan or another Employer so that
the acquired corporation becomes a Subsidiary, or if a Subsidiary is
created, the Subsidiary in either case shall automatically become an
Employer, and its Employees shall become eligible to participate in the
Plan on the first Commencement Date after the acquisition or creation
of the Subsidiary, as the case may be. Notwithstanding the foregoing,
the Board of Directors may by appropriate resolutions (i) provide that
the acquired or newly created Subsidiary shall not be a participating
Employer, (ii) specify that the acquired or newly created Subsidiary
will become a participating Employer on a Commencement Date other than
the first Commencement Date after the acquisition or creation, or (iii)
attach any condition whatsoever (including denial of credit for prior
service) to eligibility of the employees of the acquired or newly
created Subsidiary, except to the extent such condition would not
comply with Section 423 of the Code.
ARTICLE V
CONTRIBUTION ACCOUNT
5.1 Employee Contributions. The enrollment form signed by
each Participant shall specify a fixed percentage of the Participant's
base pay per pay period to be withheld pursuant to this Plan, and the
Participant shall authorize the Employer to deduct said percentage from
the Participant's compensation for each pay period; provided, however,
that in no event shall a Participant contribute, with respect to any
one Option Period, more than (a) five percent (5%) of the Participant's
annual base pay as of the Commencement Date or (b) ten thousand
dollars, whichever is less. Base pay includes the Participant's wages
and salary, but does not include overtime payments, sales commissions,
incentive compensation, bonuses, expense reimbursements, fringe
benefits and other special payments. Base pay is not reduced by the
Participant's elective deferrals to a qualified plan under Section
401(k) of the Code, salary reduction contributions to a cafeteria plan
under Section 125 of the Code, or elective deferrals to a nonqualified
deferred compensation plan. The dollar amount deducted each payday
shall be credited to the Participant's Contribution Account.
Participant contributions will not be permitted to commence at any time
during the Option Period other than on a Commencement Date. No
interest will accrue on any contributions or on the balance in a
Participant's Contribution Account.
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5.2 Modification of Contribution Rate. No change shall be
permitted in a Participant's amount of withholding except upon a
Commencement Date, and then only if the Participant files a new
enrollment form with the Employer designating the desired withholding
rate on or prior to the Enrollment Date for the Option Period with
respect to which the change is desired. Notwithstanding the foregoing,
a Participant may notify the Employer at any time prior to December 31
of an Option Period that the Participant wishes to discontinue the
Participant's contributions for that Option Period. This notice shall
be in writing and on such forms as provided by the Employer and shall
become effective as of a date provided on the form not more than five
(5) days following its receipt by the Employer. The Participant shall
become eligible to recommence contributions on the next Commencement
Date.
5.3 Withdrawal of Contributions. A Participant may elect to
withdraw the balance of his Contribution Account at any time during the
Option Period prior to December 15. The option granted to a
Participant shall be canceled upon his withdrawal of the balance in his
Contribution Account. This election to withdraw must be in writing on
such forms as may be provided by the Employer. If contributions are
withdrawn in this manner, further contributions during that Option
Period will be discontinued in the same manner as provided in Section
5.2, and the Participant shall become eligible to recommence
contributions on the next Commencement Date.
ARTICLE VI
ISSUANCE AND EXERCISE OF OPTIONS
6.1 Reserved Shares of Stock. Morgan Keegan shall reserve
three million (3,000,000) shares of Stock for issuance upon exercise of
the options granted under this Plan.
6.2 Issuance of Options. As of the Commencement Date, each
Participant shall be granted an option to purchase Stock with the
number of shares and Exercise Price determined as provided in this
Article VI, subject to the limits specified in Section 6.6(a) and (b).
All such options shall be automatically exercised on the following
Exercise Date, except for options which are canceled when a Participant
withdraws the balance of his Contribution Account or which are
otherwise terminated under the provisions of this Plan.
6.3 Determination of Exercise Price. The Exercise Price of
the options granted under this Plan for any Option Period shall be the
lesser of the following two (2) amounts:
(a) eighty-five percent (85%) of the Fair Market
Value of the Stock on the Exercise Date or
(b) the greater of (i) eighty-five percent (85%) of
the Fair Market Value of the Stock on the
Commencement Date that such options were
granted or (ii) eighty-five percent (85%) of
the average of the Fair Market Value on the
first day of each calendar month during the
Option Period and on the Exercise Date (the
foregoing period having twelve (12) dates).
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6.4 Purchase of Stock. On an Exercise Date, all options shall
be automatically exercised, except that the options of a Participant
who has terminated employment pursuant to Section 7.1 or who has
withdrawn all his contribution shall expire. The Contribution Account
of each Participant shall be used to purchase the maximum number of
whole shares of Stock determined by dividing the Exercise Price into
the balance of the Participant's Contribution Account. Any money
remaining in a Participant's Contribution Account representing a
fractional share shall remain in his Contribution Account to be used in
the next Option Period along with new contributions in the next Option
Period; provided, however, that if the Participant does not enroll for
the next Option Period, the balance remaining shall be returned to such
Participant in cash.
6.5 Terms of Options. Options granted under this Plan shall
be subject to such amendment or modification as the Employer shall deem
necessary to comply with any applicable law or regulation, including
but not limited to Section 423 of the Code, and shall contain such
other provisions as the Employer shall from time to time approve and
deem necessary; provided, however, that any such provisions shall
comply with Section 423 of the Code.
6.6 Limitations on Options. The options granted hereunder
are subject to the following limitations:
(a) The maximum number of shares of Stock that
shall be offered during any Option Period
shall be determined by the Plan Administrator
in its sole discretion; provided, however,
that no more than seven hundred fifty thousand
(750,000) shares plus any unsold allotment
below seven hundred fifty thousand (750,000)
shares from any previous Option Period may be
offered during any Option Period. This maximum
number of shares shall be adjusted upon the
occurrence of an event described in Section 10.3.
(b) During any calendar year, no Participant shall
be permitted to accrue the right to purchase
Stock under this Plan (and any other plan of
the Employer or Subsidiary which is qualified
under Section 423 of the Code) having a market
value in excess of $25,000 (as determined on
the Commencement Date for the Option Period
on which the option to purchase each such share
of Stock was granted) as provided in Section
423(b)(8) of the Code.
(c) No option may be granted to a Participant if
the Participant immediately after the option
is granted would be a Five-Percent Shareholder.
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(d) No Participant may assign, transfer or otherwise
alienate any options granted to him under this
Plan, otherwise than by will or the laws of
descent and distribution, and such options may
be exercised during the Participant's lifetime
only by the Participant.
6.7 Pro-Rata Reduction of Optioned Stock. If the total
number of shares of Stock to be purchased under option by all
Participants on an Exercise Date exceeds the number of shares of Stock
remaining authorized for issuance under Section 6.1 or the number
authorized to be offered for the Option Period pursuant to Section
6.6(a), a pro-rata allocation of the shares of Stock available for
issuance will be made among Participants in proportion to their
respective Contribution Account balances on the Exercise Date, and any
money remaining in the Contribution Accounts shall be returned to the
Participants no later than the fifteenth day of February in the next
succeeding calendar year after the Option Period, together with
interest on the refund amount computed for one hundred eighty (180)
days at the average annual 90-day certificate of deposit rate as quoted
by The Wall Street Journal on the first working day of each month
during the Option Period; provided, however, that no refund amounting
to less than one hundred dollars ($100.00) shall bear interest.
6.8 State Securities Laws. Notwithstanding anything to the
contrary contained herein, Morgan Keegan shall not be obligated to
issue shares of Stock to any Participant if to do so would violate any
State securities law applicable to the sale of Stock to such
Participant. In the event that Morgan Keegan refrains from issuing
shares of Stock to any Participant in reliance on this Section, Morgan
Keegan shall return to such Participant the amount in such
Participant's Contribution Account that would otherwise have been
applied to the purchase of Stock.
ARTICLE VII
TERMINATION OF PARTICIPATION
7.1 Termination of Employment. Any Employee whose employment
with the Employer is terminated during the Option Period prior to the
Exercise Date for any reason except death, disability or retirement at
or after age 65 shall cease being a Participant immediately. The
balance of that Participant's Contribution Account shall be paid to
such Participant as soon as practicable after his termination. The
option granted to such Participant shall be null and void.
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7.2 Death. If a Participant should die while employed by the
Employer, no further contributions on behalf of the deceased
Participant shall be made. The legal representative of the deceased
Participant may elect to withdraw the balance in said Participant's
Contribution Account by notifying the Employer in writing prior to the
Exercise Date in the Option Period during which the Participant died.
In the event no election to withdraw is made prior to the Exercise
Date, the balance accumulated in the deceased Participant's
Contribution Account shall be used to purchase shares of Stock in
accordance with Section 6.4. Any money remaining which is insufficient
to purchase a whole share shall be paid to the legal representative.
7.3 Retirement. If a Participant shall retire from the
employment of the Employer at or after attaining age 65, no further
contributions on behalf of the retired Participant shall be made. The
Participant may elect to withdraw the balance in his Contribution
Account by notifying the Employer in writing prior to the Exercise Date
in the Option Period during which the Participant retired. In the
event no election to withdraw is made prior to the Exercise Date, the
balance accumulated in the retired Participant's Contribution Account
shall be used to purchase shares of Stock in accordance with Section
6.4. Any money remaining which is insufficient to purchase a whole
share shall be paid to the retired Participant.
7.4 Disability. If a Participant should terminate employment
with the Employer on account of disability, as determined by reference
to the definition of "disability" in the Employer's long-term
disability plan as amended from time to time or, if no such plan
exists, to the definition of "permanent and total disability" set forth
in Section 22(e)(3) of the Code, no further contributions on behalf of
the disabled Participant shall be made. The Participant may elect to
withdraw the balance in his Contribution Account by notifying the
Employer in writing prior to the Exercise Date in the Option Period
during which the Participant became disabled. In the event no election
to withdraw is made prior to the Exercise Date, the balance accumulated
in the disabled Participant's Contribution Account shall be used to
purchase shares of Stock in accordance with Section 6.4. Any money
remaining which is insufficient to purchase a whole share shall be paid
to the disabled Participant.
ARTICLE VIII
OWNERSHIP OF STOCK
8.1 Stock Ownership. Ownership of the Stock purchased through
the exercise of the options granted hereunder shall be recorded by book
entry in the stock records maintained by Morgan Keegan and its transfer
agent as soon as practical after the Exercise Date. Such ownership may
be recorded at the request of the Participant (i) in the name of the
Participant, (ii) jointly in the name of the Participant and a member
of the Participant's family, (iii) in trust to a trustee, (iv) to the
Participant as custodian for the Participant's child under the Gift to
Minors Act, or (v) to the legal representative of a deceased
Participant.
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8.2 Premature Sale of Stock. If a Participant (or former
Participant) sells or otherwise disposes of any shares of Stock
obtained under this Plan
(a) prior to two (2) years after the Commencement
Date on which the option to purchase such
shares was granted or
(b) prior to one (1) year after the Exercise Date
on which such shares were obtained,
that Participant (or former Participant) must notify the Employer
immediately in writing concerning such disposition.
8.3 Restrictions on Sale. The Plan Administrator may, in its
sole discretion, place restrictions on the sale or transfer of shares
of Stock purchased under the Plan during any Option Period by notice to
all Participants of the nature of such restrictions given in advance of
the Commencement Date of such Option Period. The restrictions may
prevent the sale, transfer or other disposition of any shares of Stock
purchased during the Option Period for a period of up to two years from
the Commencement Date on which the option to purchase such shares was
granted, subject to such exceptions as the Plan Administrator may
determine (e.g., termination of employment with the Employer). With
respect to such restricted shares, Morgan Keegan shall give
instructions to its transfer agent regarding the nature and duration of
the applicable restrictions. Any such restrictions determined by the
Plan Administrator shall be applicable equally to all shares of Stock
purchased during the Option Period for which the restrictions are first
applicable and to all shares of Stock purchased during subsequent
Option Periods unless otherwise determined by the Plan Administrator.
If the Plan Administrator should change or eliminate the restrictions
for a subsequent Option Period, notice of such action shall be given to
all Participants.
8.4 Transfer of Ownership. Shares of Stock purchased under
this Plan shall be deemed transferred at such time substantially all of
the rights of ownership of such shares of Stock have been transferred
in accordance with Section 1.421-1(f) of the Treasury Regulations as in
effect on the Effective Date. Such rights of ownership shall include
the right to vote, the right to receive declared dividends, the right
to share in the assets of the Employer in the event of liquidation, the
right to inspect the Employer's books and the right to pledge or sell
such Stock subject to the restrictions in the Plan.
ARTICLE IX
ADMINISTRATION AND AMENDMENT
9.1 Administration. The Plan Administrator shall (i)
administer the Plan, (ii) keep records of the Contribution Account
balance of each Participant, (iii) interpret the Plan, (iv) determine
all questions arising as to eligibility to participate, amount of
contributions permitted, determination of the Exercise Price, and all
other matters of administration, and (v) determine whether to place
restrictions on the sale and transfer of Stock and the nature of such
restrictions, as provided in Section 8.3. The Plan Administrator shall
have such duties, powers and discretionary authority as may be
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necessary to discharge the foregoing duties, and may delegate any or
all of the foregoing duties to any individual or individuals (including
officers or other Employees who are Participants). The Board of
Directors shall have the right at any time and without notice to remove
or replace any individual or committee of individuals serving as Plan
Administrator. All determinations by the Plan Administrator shall be
conclusive and binding on all persons. Any rules, regulations, or
procedures that may be necessary for the proper administration or
functioning of this Plan that are not covered in this Plan document
shall be promulgated and adopted by the Plan Administrator.
9.2 Amendment. The Board of Directors may at any time amend
the Plan in any respect, including termination of the Plan, without
notice to Participants. If the Plan is terminated, all options
outstanding at the time of termination shall become null and void and
the balance in each Participant's Contribution Account shall be paid to
that Participant. Notwithstanding the foregoing, no amendment to this
Plan shall increase the number of shares reserved under the Plan (other
than as provided in Section 10.3 below) without the approval of the
shareholders of Morgan Keegan. Approval by shareholders must comply
with applicable provisions of the corporate charter and bylaws of
Morgan Keegan and with Tennessee law prescribing the method and degree
of shareholder approval required for issuance of corporate stock or
options.
ARTICLE X
MISCELLANEOUS
10.1 Expenses. The Employer will pay all expenses of
administering this Plan that may arise in connection with the Plan.
10.2 No Contract of Employment. Nothing in this Plan shall be
construed to constitute a contract of employment between an Employer
and any Employee or to be an inducement for the employment of any
Employee. Nothing contained in this Plan shall be deemed to give any
Employee the right to be retained in the service of an Employer or to
interfere with the right of an Employer to discharge any Employee at
any time, with or without cause, regardless of the effect which such
discharge may have upon him as a Participant of the Plan.
10.3 Adjustment Upon Changes in Stock. The aggregate number
of shares of Stock reserved for purchase under the Plan as provided in
Section 6.1, and the calculation of the Exercise Price as provided in
Section 6.3, and the number of options outstanding shall be adjusted by
the Plan Administrator (subject to direction by the Board of Directors)
in an equitable manner to reflect changes in the capitalization of
Morgan Keegan, including, but not limited to, such changes as result
from merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split,
combination of shares, exchange of shares and change in corporate
structure. If any adjustment under this Section 10.3 would create a
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fractional share of Stock or a right to acquire a fractional share of
Stock, such fractional share shall be disregarded and the number of
shares available under the Plan and the number of shares covered under
any options granted pursuant to the Plan shall be the next lower number
of shares, rounding all fractions downward.
10.4 Employer's Rights. The rights and powers of any Employer
shall not be affected in any way by its participation in this Plan,
including but not limited to the right or power of any Employer to make
adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its
business or assets.
10.5 Limit on Liability. No liability whatever shall attach
to or be incurred by any past, present or future shareholders, officers
or directors, as such, of Morgan Keegan or any Employer, under or by
reason of any of the terms, conditions or agreements contained in this
Plan or implied therefore, and any and all liabilities of any and all
rights and claims against Morgan Keegan, an Employer, or any
shareholder, officer or director as such, whether arising at common law
or in equity or created by statute or constitution or otherwise,
pertaining to this Plan, are hereby expressly waived and released by
every Participant as a part of the consideration for any benefits under
this plan; provided, however, no waiver shall occur, solely by reason
of this Section 10.5, of any right which is not susceptible to advance
waiver under applicable law.
10.6 Gender and Number. For the purposes of the Plan, unless
the contrary is clearly indicated, the use of the masculine gender
shall include the feminine, and the singular number shall include the
plural and vice versa.
10.7 Governing Law. The validity, construction,
interpretation, administration and effect of this Plan, and any rules
or regulations promulgated hereunder, including all rights or
privileges of any Participants hereunder, shall be governed exclusively
by and in accordance with the laws of the State of Tennessee, except
that the Plan shall be construed to the maximum extent possible to
comply with Section 423 of the Code and the Treasury regulations
promulgated thereunder.
10.8 Severability. If any provision of this Plan is held by a court
to be unenforceable or is deemed invalid for any reason, then such provision
shall be deemed inapplicable and omitted, but all other provisions of this Plan
shall be deemed valid and enforceable to the full extent possible under
applicable law.
As duly adopted by the Board of Directors on November 21, 2000.
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Exhibit III
MORGAN KEEGAN, INC.
2000 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
Section 1. Purpose.
The purposes of the Non-Employee Director Stock Option Plan (the
"Plan") are to attract and retain well qualified persons for service as
directors of Morgan Keegan, Inc., a Tennessee corporation (the
"Company"), to provide directors with an opportunity to increase their
ownership interest in the Company, and thereby to increase their
personal interest in the Company's continued success, through the grant
of options (the "Options") to purchase shares of the $0.625 par value
common stock of the Company (the "Common Stock").
Section 2. Administration.
Responsibility and authority to administer and interpret the
provisions of the Plan shall rest with the Board of Directors of the
Company (the "Board"). The Board may employ attorneys, consultants,
accountants or other persons, and the Board, the Company and its
officers shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All usual and reasonable expenses of
the Board shall be paid by the Company. All actions taken and all
interpretations and determinations made by the Board in good faith
shall be final and binding upon all recipients who have received
awards, the Company and other interested persons. Notwithstanding the
foregoing, the Board shall have no discretion with respect to the
amount, price and timing of the awards. No member of the Board shall
be personally liable for any action, determination or interpretation
taken or made in good faith with respect to the Plan or awards made
hereunder, and all members of the Board shall be fully indemnified and
protected the Company in respect of any such action, determination or
interpretation.
Section 3. Eligibility.
All directors of the Company who are neither contractual nor
common law employees of the Company or any of its subsidiaries shall be
Participants in the Plan (singly, a "Participant" and collectively, the
"Participants").
Section 4. Options.
Each Participant shall automatically be granted Options to
purchase four thousand (4,000) shares of Common Stock on the first
business day after each Annual Meeting of Shareholders of the Company
occurring after the effective date of the Plan. Each Option granted
hereunder shall be evidenced by an Option Agreement acceptable to the
Company in its discretion. The Option shall be registered pursuant to
a Registration Statement on Form S-8 to be filed in compliance with the
Securities Act of 1933, as amended (the "Securities Act").
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Section 5. Terms and Conditions.
(a) Options to purchase up to five hundred thousand (500,000)
shares of Common Stock may be granted hereunder. In the event that any
Option granted hereunder expires unexercised or is canceled,
surrendered, or terminated without being exercised, in whole or in
part, for any reason, then the number of shares of Common Stock
theretofore subject to such Option which expired or were canceled,
surrendered or terminated without being exercised shall be added to the
remaining number of shares of Common Stock for which Options may be
granted hereunder.
(b) In the event that the outstanding shares of Common Stock
hereafter are changed into or exchanged for a different number or kind
of shares or other securities of the Company or of another corporation
by reason of merger, share exchange, consolidation, other
reorganization, recapitalization, reclassification, combination of
shares, stock split or stock dividend:
(i) The aggregate number and kind of shares subject to Options
which may be granted hereunder shall be adjusted appropriately; and
(ii) Rights under outstanding Options granted hereunder, both
as to the number of subject shares and the Option price, shall be
adjusted appropriately.
(c) The Options shall be exercisable only by the Participant
during his or her lifetime and may not be transferred other than by
will or the laws of descent and distribution. No transfer of an Option
held by a Participant by will or by the laws of descent and
distribution shall be effective to bind the Company unless the Company
shall have been furnished with written notice thereof and an
authenticated copy of the will and/or such other evidence as the Board
of Directors may deem necessary to establish the validity of the
transfer. During the lifetime of a Participant, the Option shall be
exercisable only by him, except that, in the case of a Participant who
is legally incapacitated, the Option shall be exercisable by his or her
guardian or legal representative.
(d) The exercise price per share for each Option granted under
the Plan shall be 100% of the Fair Market Value (as defined below) of a
share of Common Stock as of the date of grant. "Fair Market Value" as
of a given date for purposes of the Plan and any Option Agreement means
(i) the closing sales price per share for the shares of Common Stock on
the New York Stock Exchange or any national exchange on which shares of
Common Stock are traded on such date (or if such market or exchange was
not open for trading on such date, the next preceding date on which it
was open); or (ii) if the Common Stock is not listed on the New York
Stock Exchange or on an established and recognized exchange, such value
as the Board, in good faith, shall determine based on such relevant
facts, which may include opinions of independent experts, as may be
available to the Board.
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(e) Options granted hereunder shall vest and become
exercisable immediately upon the grant thereof and shall remain
exercisable, to the extent not exercised, until their expiration date.
(f) If a Participant's service with the Company terminates due
to the Participant's death or disability, the Options granted to such
Participant shall immediately vest and shall be exercisable for a
period of one (1) year thereafter (subject to expiration as provided
below). If a Participant's service with the Company terminates for any
other reason, all Options granted to such Participant which are not
then vested and exercisable shall be canceled, and all vested and
exercisable Options granted to such Participant shall continue to be
exercisable for 24 months thereafter (subject to expiration as provided
below).
(g) Payment of the exercise price shall be in cash. Shares of
Common Stock issued pursuant to the exercise of an Option under the
Plan shall be from authorized but unissued shares.
(h) Notwithstanding any other provision herein to the
contrary, each Option granted hereunder shall expire on the fifth
anniversary of its date of grant.
(i) A Participant shall have no rights as a shareholder with
respect to any shares covered by his or her Option until the date on
which the Participant becomes the holder of record of such shares. No
adjustment shall be made for dividends, distributions, or other rights
for which the record date is prior to the date on which he or she shall
have become the holder of record thereof except as provided in Section
5(b).
(j) The Company shall have the right to deduct from any payment
to be made pursuant to this Plan, or to otherwise require, prior to the
issuance or delivery of any shares of Common Stock, payment by the
Participant of any federal, state, or local taxes required by law to be
withheld.
Section 6. Change of Control.
(a) In the event of a "Change of Control" (as defined below),
all Options awarded under this Plan not previously exercisable and
vested shall become fully exercisable and vested, and the value of all
such outstanding Options shall be cashed out on the basis of the Change
of Control Price (as defined below) as of the date of such Change of
Control.
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(b) For purposes of this Section 6, a "Change of Control"
shall be deemed to have occurred if: (i) after the effective date of
the Plan, any "person" as defined in Section 3(a)(9) of the Exchange
Act and as used in Sections 13(d) and 14(d) thereof, including any
"group" as defined in Section 13(d) of the Exchange Act, but excluding
the Corporation and any Related Corporation, any of the Corporation's
existing shareholders as of the effective date of the Plan and any
employee benefit plan sponsored or maintained by the Corporation or any
Related Corporation (including any trustee of such plan acting as
trustee), directly or indirectly, becomes a "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of securities of the
Corporation representing fifty percent (50%) or more of the voting
power of the then outstanding securities of the Corporation; (ii) the
shareholders of the Corporation approve (or, if shareholder approval is
not required, the Board approves) an agreement providing for (A) the
merger or consolidation of the Corporation with another corporation
where the shareholders of the Corporation, immediately prior to the
merger or consolidation, will not beneficially own, immediately after
the merger or consolidation, shares entitling such shareholders to a
majority of all votes to which all shareholders of the surviving
corporation would be entitled in the election of directors, or where
the members of the Board, immediately prior to the merger or
consolidation, would not, immediately after the merger or
consolidation, constitute a majority of the board of directors of the
surviving corporation, (B) a sale or other disposition of all or
substantially all of the assets of the Corporation, or (C) a
liquidation or dissolution of the Corporation; or (iii) any person has
commenced a tender offer or exchange offer for thirty-five percent
(35%) or more of the voting power of the then outstanding shares of the
Corporation.
(c) For purposes of this Section 6, "Change of Control Price"
means the price per share paid for Common Stock in connection with the
Change of Control of the Company.
SECTION 7. Share Ownership.
The Company shall not be required to register on the stock records
of the Company the issuance of shares purchased upon the exercise of an
Option prior to the fulfillment of all of the following conditions:
(a) All such shares shall be subject to an effective
registration statement filed with the Securities and Exchange
Commission on such form as it shall require and shall otherwise be
qualified for issuance in any state wherein such shares are to be
issued;
(b) A listing application shall have been filed with the New
York Stock Exchange with respect to such shares and such shares shall
have been duly listed for trading thereon;
(c) All necessary approvals required for the issuance of such
shares shall have been obtained; and
(d) The issuance of such shares shall not violate any law or
regulation or the terms of any court order or decree, injunction, award
or any agreement between the Company and any other person or entity.
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Section 8. Amendment or Discontinuance.
The Board of Directors of the Company may at any time amend,
rescind or terminate the Plan, as it shall deem advisable; provided,
however, that (i) no change may be made in any Option previously made
under the Plan which would impair the recipient's rights without his or
her consent; (ii) no amendment to the Plan may be made without approval
of the Company's shareholders if the effect of the amendment would be
to: (a) materially increase the number of shares reserved hereunder or
benefits accruing to Participants under the Plan, (b) materially change
the requirements for eligibility under Section 3 hereof, or (c)
materially modify the method for determining the number of Options
granted under Section 4 hereof, except that any such increase or
modification that results from adjustments authorized by Section 5(b)
shall not require such approval; and (iii) no amendment may be made to
the Plan within six (6) months of a prior amendment, except as required
for compliance with the Internal Revenue Code of 1986, as amended from
time to time, or the regulations thereunder.
Section 9. Right of Board of Directors or Shareholders to
Terminate Director's Service.
Nothing in this Plan or in the grant of any Option hereunder shall
in any way limit or affect the right of the Board of Directors or the
shareholders of the Company to remove any director or otherwise
terminate his or her service as a director, pursuant to applicable law,
the Charter, or the Bylaws of the Company.
Section 10. Effective Date.
The Plan shall become effective as of November 21, 2000, subject
to the approval of a majority of the shareholders of the Company within
twelve (12) months of the adoption of the Plan by the Board of
Directors. Options granted prior to termination of the Plan shall,
notwithstanding termination of the Plan, continue to be effective and
shall be governed by the Plan.
Section 11. Governing Law.
The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of the State of Tennessee
pertaining to contracts made and to be performed wholly within such
jurisdiction.
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SIGNATURES
Pursuant to the requirements of the Securities 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 Memphis, State of Tennessee,
on this 15th day of December, 2000.
MORGAN KEEGAN, INC.
By: /s/Joseph C. Weller
Joseph C. Weller
Executive Vice President, Chief Financial Officer,
And Secretary-Treasurer
KNOW ALL MEN BY THESE PRESENTS, each person whose signature appears
below hereby constitutes and appoints Joseph C. Weller and Charles Maxwell,
and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name,
place, and stead, in any and all capacities, to sign any and all amendments
to this Registration Statement, and to file the same, with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or their substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-8 has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
/s/Kenneth F. Clark, Jr.
Kenneth F. Clark, Jr. Director December 15, 2000
/s/G. Douglas Edwards
G. Douglas Edwards Director December 15, 2000
/s/James E. Harwood
James E. Harwood Director December 15, 2000
/s/Stephen P. Laffey
Stephen P. Laffey Director December 15, 2000
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/s/Allen B. Morgan, Jr.
Allen B. Morgan, Jr. Chairman and Director December 15, 2000
/s/Donald Ratajczak
Donald Ratajczak Director December 15, 2000
/s/Robert M. Solmson
Robert M. Solmson Director December 15, 2000
/s/John W. Stokes, Jr.
John W. Stokes, Jr. Vice President December 15, 2000
and Director
/s/Joseph C. Weller
Joseph C. Weller Executive Vice President, December 15, 2000
Chief Financial Officer,
Secretary/Treasurer and
Director
/s/Spence L. Wilson
Spence L. Wilson Director December 15, 2000
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KNOXVILLE OFFICE:
1700 RIVERVIEW TOWER
KNOXVILLE, TN 37901-1509
(423) 521-6200
B A S S, B E R R Y & S I M S PLC
A PROFESSIONAL LIMITED LIABILITY COMPANY
ATTORNEYS AT LAW
THE TOWER AT PEABODY PLACE
100 PEABODY PLACE, SUITE 950
MEMPHIS, TENNESSEE 38103-2625
(901) 543-5900
www.bassberry.com
NASHVILLE OFFICE:
2700 FIRST AMERICAN CENTER
NASHVILLE, TN 37238-2700
(615) 742-6200
December 15, 2000
The Board of Directors of
Morgan Keegan, Inc.
50 North Front Street
Memphis, TN 38103
RE: Registration Statement on Form S-8 Relating to the Employee
Benefit Plans Listed on Exhibit A hereto
Ladies and Gentlemen:
We have acted as counsel to Morgan Keegan, Inc., a Tennessee corporation
("Morgan Keegan"), in connection with the preparation and filing of the
Registration Statement on Form S-8 (the "Registration Statement") relating
to 6,500,000 shares of common stock, par value $0.625 per share, of Morgan
Keegan (the "Common Stock") to be issued pursuant to the above referenced
plans (the "Plans").
In our capacity as such counsel, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such corporate
records of Morgan Keegan, such agreements and instruments, such certificates
of public officials, officers of Morgan Keegan and other persons, and such
other documents as we have deemed necessary or appropriate as a basis for
the opinions hereinafter expressed. In such examinations, we have assumed
the genuineness of all signatures, the legal capacity of all natural persons,
the authenticity and completeness of all documents submitted to us as
originals, the conformity to original documents of all documents submitted
to us as certified, conformed, photostatic or facsimile copies, and the
authenticity of the originals of such copies, and we have assumed all
certificates of public officials to have been properly given and to be
accurate.
As to factual matters relevant to this opinion letter, we have relied
upon the representations and warranties as to factual matters contained in
certificates and statements of officers of Morgan Keegan and certain public
officials. Except to the extent expressly set forth herein, we have made no
independent investigations with regard thereto, and, accordingly, we do not
express any opinion as to matters that might have been disclosed by independent
verification.
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On the basis of the foregoing, and subject to the limitations set
forth herein, we are of the opinion that the shares of Common Stock
issuable in connection with the Plans have been duly authorized and,
when issued in accordance with the terms of the Plans, will be validly
issued, fully paid and nonassessable.
We consent to the filing of this opinion letter as an exhibit to
the Registration Statement and to any related registration statement
subsequently filed by Morgan Keegan pursuant to Rule 462(b) promulgated
under the Securities Act of 1933, as amended (the "Act"), and to the use
of our name under the heading "Legal Opinions" in any prospectus
constituting a part thereof. In giving such consent, we do not thereby
admit that we are within the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the Securities
and Exchange Commission (the "Commission") thereunder.
This opinion letter is being furnished by us to Morgan Keegan and the
Commission solely for the benefit of Morgan Keegan and the Commission in
connection with the Registration Statement and is not to be used, circulated,
quoted or otherwise relied upon by any other person, or by Morgan Keegan or
the Commission for any other purpose, without our express written consent.
The only opinion rendered by us consists of those matters set forth in the
fourth paragraph hereof, and no opinion may be implied or inferred beyond
those expressly stated. This opinion letter is rendered as of the date
hereof, and we have no obligation to update this opinion letter.
Sincerely,
BASS, BERRY & SIMS PLC
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EXHIBIT A
Morgan Keegan, Inc. 2000 Equity Compensation Plan
Morgan Keegan, Inc. 2000 Employee Stock Purchase Plan
Morgan Keegan, Inc. 2000 Non-Employee Director Stock Option Plan
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Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 333-00000) pertaining to the Morgan Keegan,
Inc. 2000 Equity Compensation Plan, the Morgan Keegan, Inc. 2000
Employee Stock Purchase Plan and the Morgan Keegan, Inc. 2000
Non-Employee Director Stock Option Plan of our report dated September
20, 2000, with respect to the consolidated financial statements of
Morgan Keegan, Inc. incorporated by reference in its Annual Report
(Form 10-K) for the year ended July 31, 2000, filed with the Securities
and Exchange Commission.
/s/ Ernst & Young LLP
Memphis, Tennessee
December 15, 2000
