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FORM 10-K/A No. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Annual Report Pursuant to Section 13 of 15(d)
of the Securities Exchange Act of 1934
For the Fifty-two week period Ended January 29, 1994
Commission File Number 1-8765
CARTER HAWLEY HALE STORES, INC.
Delaware 94-0457907
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3880 North Mission Road
Los Angeles, California 90031
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (213) 227-2000
Securities Registered pursuant to Section 12(b) of the act:
Name of Each Exchange
TITLE OF CLASS ON WHICH REGISTERED
Common Stock and New York Stock Exchange and
Warrants Pacific Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of common stock held by non-affiliates of the registrant
as of April 25, 1994: $231,610,552
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes /X/ No / /
Number of shares of common stock outstanding as of April 25, 1994: 45,619,792
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates certain information by reference to the Company's
Definitive Proxy Statement Relating to the Annual Meeting of Stockholders to be
held on June 17, 1994.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K.
(a) The following documents are filed as part of this report:
(3) Exhibits
Exhibits are set forth below in the "INDEX TO EXHIBITS."
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this amendment to be signed on its
behalf by the undersigned thereunto duly authorized.
CARTER HAWLEY HALE STORES, INC.
By /S/ MARC E. BERCOON
--------------------------
Marc E. Bercoon
Senior Vice President,
General Counsel and Secretary
Date: May 11, 1994
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CARTER HAWLEY HALE STORES, INC.
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- - ------- -----------
3.1 Amended and Restated Certificate of Incorporation of the Company;
incorporated by reference to Exhibit 4.2 to the Form S-8 filed February
17, 1993.
3.2 Bylaws of the Company; incorporated by reference to Exhibit 3.2 to the
Form 10-K for the year ended January 30, 1993.
4.1 Form of Warrant Agreement; incorporated by reference to Exhibit 4.1 to
the Form 10-K for the year ended January 30, 1993.
4.2 Form of Certificate of Designation, Preferences and Rights of Series A
Exchangeable Preferred Stock of the Company; incorporated by reference
to Exhibit 4.3 to the Form S-8 dated February 17, 1993.
4.3 Loan Agreement dated as of August 27, 1987, among The Prudential
Insurance Company of America, Carter Hawley Hale Stores, Inc. and
Thalhimer Brothers, Inc. with respect to $350,000,000; incorporated by
reference to Exhibit 4.5 to the Form 10-K for the twenty-six weeks
ended August 1, 1987.
4.4 Amendment to Loan Agreement and Notes dated as of June 30, 1988 among
Carter Hawley Hale Stores, Inc., Thalhimer Brothers, Inc., and The
Prudential Insurance Company of America; incorporated by reference to
Exhibit 4.4 to the Form 10-K for the year ended February 1, 1992.
4.5 Amendment to Loan Agreement, Notes and License Agreement dated as of
August 3, 1990 among Carter Hawley Hale Stores, Inc., Thalhimer
Brothers, Inc., and The Prudential Insurance Company of America;
incorporated by reference to Exhibit 4.5 to the Form 10-K for the year
ended February 1, 1992.
4.6 Agreement and Release dated as of December 14, 1990 among Carter Hawley
Hale Stores, Inc., Thalhimer Brothers, Inc., and the Prudential
Insurance Company of America; incorporated by reference to Exhibit 4.6
to the Form 10-K for the year ended February 1, 1992.
4.7 Settlement Agreement dated as of December 31, 1991, among Carter Hawley
Hale Stores, Inc., The Prudential Insurance Company of America,
Zell/Chilmark Fund, L.P., and Z/C Subsidiary Corporation; incorporated
by reference to Exhibit 4.7 to the Form 10-K for the year ended January
30, 1993.
4.8 Loan Modification Implementation Agreement and Amendment to Loan
Agreements, License Agreement and Other Loan Documentation by and
between Carter Hawley Hale Stores, Inc. and The Prudential Insurance
Company of America dated as of October 8, 1992; incorporated by
reference to Exhibit 4.17 to the Form 10-K/A No.1 for the year ended
January 30, 1993.
4.9 Amended and Restated Secured Promissory Note of Carter Hawley Hale
Stores, Inc. in favor of The Prudential Insurance Company of America in
the amount of $7,395,000.00 dated as of October 8, 1992;
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EXHIBIT DESCRIPTION
NO.
incorporated by reference to Exhibit 4.18 to the Form 10-K/A No.1 for
the year ended January 30, 1993.
4.10 Amended and Restated Secured Promissory Note I of Carter Hawley Hale
Stores, Inc. in favor of The Prudential Insurance Company of America in
the amount of $157,638,000.00 dated as of October 8, 1992; incorporated
by reference to Exhibit 4.19 to the Form 10-K/A No. 1 for the year
ended January 30, 1993.
4.11 Amended and Restated Secured Promissory Note II of Carter Hawley Hale
Stores, Inc. in favor of The Prudential Insurance Company of America in
the amount of $19,875,000.00 dated as of October 8, 1992; incorporated
by reference to Exhibit 4.20 to the Form 10-K/A No. 1 for the year
ended January 30, 1993.
4.12 Amended and Restated Secured Promissory Note of Carter Hawley Hale
Stores, Inc. in favor of the Prudential Insurance Company of America in
the amount of $159,092,000.00; incorporated by reference to Exhibit
4.21 to the Form 10-K/A No. 1 for the year ended January 30, 1993.
4.13 Accrued Interest Note of Carter Hawley Hale Stores, Inc. in favor of
The Prudential Insurance Company of America in the amount of
$53,350,000.00 (subjected to increase) dated as of October 8, 1992;
incorporated by reference to Exhibit 4.22 to the Form 10-K/A No. 1 for
the year ended January 30, 1993.
4.14 Term Loan Agreement dated as of June 28, 1988, among Carter Hawley Hale
Stores, Inc., Thalhimer Brothers, Inc., the Banks Party thereto, and
Bank of America, as agent, with respect to $135,000,000; incorporated
by reference to Exhibit 4.8 to the Form 10-K for the year ended July
30, 1988.
4.15 Modification Agreement dated as of November 28, 1988 among Bank of
America National Trust and Savings Association as Bank and Agent,
Barclays Bank PLC, Security Pacific National Bank, Carter Hawley Hale
Stores, Inc., and Thalhimer Brothers, Inc.; incorporated by reference
to Exhibit 4.8 to the Form 10-K for the year ended February 1, 1992.
4.16 First Amendment to Term Loan Agreement dated as of December 30, 1988
among Bank of America National Trust and Savings Association as Bank
and Agent, Barclays Bank PLC, Security Pacific National Bank, Carter
Hawley Hale Stores, Inc., and Thalhimer Brothers, Inc.; incorporated by
reference to Exhibit 4.9 to the Form 10-K for the year ended February
1, 1992.
4.17 Second Amendment to Term Loan Agreement and Waiver dated as of May 31,
1989 among Bank of America National Trust and Savings Association as
Bank and Agent, Barclays Bank PLC, Security Pacific National Bank,
Carter Hawley Hale Stores, Inc., and Thalhimer Brothers, Inc.;
incorporated by reference to Exhibit 4.10 to the Form 10-K for the year
ended February 1, 1992.
4.18 Third Amendment to Term Loan Agreement dated as of July 26, 1989, among
Bank of America National Trust and Savings Association as Bank and
Agent, Barclays Bank PLC, Security Pacific National Bank, Carter Hawley
Hale Stores, Inc., and Thalhimer Brothers, Inc.; incorporated
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EXHIBIT DESCRIPTION
NO.
by reference to Exhibit 4.11 to the Form 10-K for the year ended
February 1, 1992.
4.19 Fourth Amendment to Term Loan Agreement dated as of September 22, 1989
among Bank of America National Trust and Savings Association as Bank
and Agent, Barclays Bank PLC, Security Pacific National Bank, Carter
Hawley Hale Stores, Inc., and Thalhimer Brothers, Inc.; incorporated by
reference to Exhibit 4.12 to the Form 10-K for the year ended February
1, 1992.
4.20 Agreement and Release dated as of December 12, 1990 by and among Bank
of America National Trust and Savings Association as Bank and Agent,
Barclays Bank PLC, Security Pacific National Bank, Carter Hawley Hale
Stores, Inc., and Thalhimer Brothers, Inc.; incorporated by reference
to Exhibit 4.13 to the Form 10-K for the year ended February 1, 1992.
4.21 Settlement Agreement dated as of July 28, 1991 between Carter Hawley
Hale Stores, Inc. and Bank of America National Trust and Savings
Association; incorporated by reference to Exhibit 4.15 to the Form 10-K
for the year ended January 30, 1993.
4.22 Amended and Restated Term Loan Agreement by and among the Banks party
thereto, Bank of America National Trust and Savings Association as
agent for Banks and Carter Hawley Hale Stores, Inc., dated as of
October 8, 1992; incorporated by reference to Exhibit 4.23 to the Form
10-K/A No. 1 for the year ended January 30, 1993.
4.23 Master Capitalized Interest Note in favor of Bank of America National
Trust and Savings Association as agent for certain banks in the amount
of $10,750,830.46 dated as of October 8, 1992; incorporated by
reference to Exhibit 4.24 to the Form 10-K/A No. 1 for the year ended
January 30, 1993.
4.24 Master Principal Note in favor of Bank of America National Trust and
Savings Association as agent for certain banks in the amount of
$89,662,700.00 dated as of October 8, 1992; incorporated by reference
to Exhibit 4.25 to the Form 10-K/A No. 1 for the year ended January 30,
1993.
4.25 Stockholder's Agreement between Carter Hawley Hale Stores, Inc. and
First Plaza Group Trust, by its Trustee Mellon Bank, N.A., dated as of
January 25, 1993; incorporated by reference to Exhibit 4.16 to the Form
10-K for the year ended January 30, 1993.
4.26 Waiver Agreement, dated as of May 13, 1993 by and between Carter Hawley
Hale Stores, Inc. and First Plaza Group Trust, by its trustee Mellon
Bank, N.A.; incorporated by reference to Exhibit 28.2 to Form S-3 filed
May 14, 1993.
4.27 Waiver Agreement, dated as of December 8, 1993 by and between Carter
Hawley Hale Stores, Inc. and First Plaza Group Trust, by its trustee
Mellon Bank, N.A.; incorporated by reference to Exhibit 28.1 to Form
S-3 filed December 8, 1993.
4.28 Receivables-Backed Credit Agreement among CHH Receivables, Inc., Blue
Hawk Funding Corporation and General Electric Capital Corporation, as
Agent; incorporated by reference to Exhibit 10.1 to the Form 10-K for
the year ended January 30, 1993.
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EXHIBIT DESCRIPTION
NO.
4.29 Assignment and Security Agreement among CHH Receivables, Inc., Blue
Hawk Funding Corporation, Cash Collateral Bank and General Electric
Corporation, as Agent, Letter of Credit Agent, Liquidity Agent and
Collateral Agent; incorporated by reference to Exhibit 10.2 to the Form
10-K for the year ended January 30, 1993.
4.30 Receivables Purchase Agreement among Carter Hawley Hale Stores, Inc.
and CHH Receivables, Inc.; incorporated by reference to Exhibit 10.3 to
the Form 10-K for the year ended January 30, 1993.
4.31 Promissory Note made by CHH Receivables, Inc. in favor of Blue Hawk
Funding Corporation; incorporated by reference to Exhibit 10.4 to the
Form 10-K for the year ended January 30, 1993.
4.32 Letter of Credit Reimbursement Agreement among CHH Receivables, Inc.,
Blue Hawk Funding Corporation, and General Electric Capital
Corporation, as Letter of Credit Agent; incorporated by reference to
Exhibit 10.5 to the Form 10-K for the year ended January 30, 1993.
4.33 Subordinated Retailer Security Agreement made by Carter Hawley Hale
Stores, Inc. in favor of CHH Receivables, Inc.; incorporated by
reference to Exhibit 10.6 to the Form 10-K for the year ended January
30, 1993.
4.34 Credit Agreement, dated as of October 8, 1992, among Carter Hawley Hale
Stores, Inc., Certain Commercial Lending Institutions, and General
Electric Capital Corporation, as the Agent for the Lenders;
incorporated by reference to Exhibit 10.9 to the Form 10-K for the year
ended January 30, 1993.
4.35 Form of Revolving Credit Note; incorporated by reference to Exhibit
10.10 to the Form 10-K for the year ended January 30, 1993.
4.36 Pledge and Security Agreement made by Carter Hawley Hale Stores, Inc.
in favor of General Electric Capital Corporation; incorporated by
reference to Exhibit 10.11 to the Form 10-K for the year ended January
30, 1993.
4.37 Trademark Security Agreement made by Carter Hawley Hale Stores, Inc. in
favor of General Electric Capital Corporation; incorporated by
reference to Exhibit 10.12 to the Form 10-K for the year ended January
30, 1993.
4.38 Letter agreement dated as of April 29, 1993, by and between General
Electric Capital Corporation, as agent and as a lender, and Carter
Hawley Hale Stores, Inc.; incorporated by reference to Exhibit 4.1 to
the Form 10-Q for the period ended May 1, 1993.
4.39 Second Amendment to Credit Agreement, dated as of May 14, 1993, among
Carter Hawley Hale Stores, Inc., various financial institutions and
General Electric Capital Corporation, as agent for the lenders;
incorporated by reference to Exhibit 4.2 to the Form 10-Q for the
period ended May 1, 1993.
4.40 Amended and Restated Second Amendment to Credit Agreement, dated as of
August 20, 1993, among Carter Hawley Hale Stores, Inc., various
financial institutions and General Electric Capital Corporation, as
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EXHIBIT DESCRIPTION
NO.
agent for the lenders; incorporated by reference to Exhibit 4.1 to the
Form 10-Q for the period ended July 31, 1993.
4.41 Third Amendment to Credit Agreement, dated as of September 30, 1993,
among Carter Hawley Hale Stores, Inc., various financial institutions
and General Electric Capital Corporation, as agent for the lenders;
incorporated by reference to the Form 8-K dated October 25, 1993.
4.42 Fourth Amendment to Credit Agreement, dated as of October 31, 1993,
among Carter Hawley Hale Stores, Inc., various financial institutions
and General Electric Capital Corporation, as agent for the lenders;
incorporated by reference to the Form 8-K dated November 8, 1993.
4.43 Fifth Amendment to Credit Agreement, dated as of December 10, 1993,
among Carter Hawley Hale Stores, Inc., various financial institutions
and General Electric Capital Corporation, as agent for the lenders;
incorporated by reference to the Form 8-K dated December 21, 1993.
4.44 Sixth Amendment to Credit Agreement, dated as of February 26, 1994,
among Carter Hawley Hale Stores, Inc., various financial institutions
and General Electric Capital Corporation, as agent for the lenders;
incorporated by reference to the Form 8-K dated March 9, 1994.
4.45 Indenture dated as of December 21, 1993, between Carter Hawley Hale
Stores, Inc. and Continental Bank, National Association, as Trustee,
relating to Carter Hawley Hale Stores, Inc.'s 61/4% Convertible Senior
Subordinated Notes due 2000, incorporated by reference to Exhibit 4.1
to Form S-3 filed January 7, 1994.
4.46 Form of Convertible Senior Subordinated Notes (included in Exhibit 4.1
to the Registration Statement on Form S-3 filed on January 7, 1994),
incorporated by reference to Exhibit 4.2 to the Form S-3 filed January
7, 1994.
4.47 Registration Agreement, dated December 21, 1993, between Carter Hawley
Hale Stores, Inc. and Solomon Brothers Inc., incorporated by reference
to Exhibit 4.3 to Form S-3 filed January 7, 1994.
The Company has outstanding certain other long-term indebtedness. Such
long-term indebtedness does not exceed 10% of the total assets of the
Company and its subsidiaries; therefore, copies of instruments defining
the rights of holders of such indebtedness are not included as
exhibits. The Company agrees to furnish copies of such instruments to
the Securities and Exchange Commission upon request.
COMPENSATION ARRANGEMENTS
10.1 Deferred Compensation Plan of Carter Hawley Hale Stores, Inc. dated as
of June 3, 1976 and amended as of February 4, 1977; incorporated by
reference to Exhibit 15 to the Form 10-K for the fiscal year ended
January 29, 1977.
10.2 Amendment to the Deferred Compensation Plan of Carter Hawley Hale
Stores, Inc. executed on February 6, 1980; incorporated by reference to
Exhibit 20 to the Form 10-K for the fiscal year ended February 2, 1980.
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EXHIBIT DESCRIPTION
NO.
10.3 Amendment to the Deferred Compensation Plan of Carter Hawley Hale
Stores, Inc. executed on April 7, 1983; incorporated by reference to
Exhibit 10.13 to the Form 10-K for fiscal year ended January 29, 1983.
10.4 Amendment 1990-I to the Deferred Compensation Plan of Carter Hawley
Hale Stores, Inc. effective as of August 1, 1990, incorporated by
reference to Exhibit 4.6 to Post-Effective Amendment No. 7 to the
Registration Statement (No. 2-6810) of Carter Hawley Hale Stores, Inc.
filed November 7, 1990.
10.5 Amendment to the Deferred Compensation Plan of Carter Hawley Hale
Stores, Inc.; incorporated by reference to Exhibit 4.5 to
Post-Effective Amendment No. 5 to the Registration Statement (No.
2-68102) of Carter Hawley Hale Stores, Inc. filed July 31, 1987.
10.6 Carter Hawley Hale Savings & Investment Plan, as amended and restated
as of March 1, 1993; incorporated by reference to Exhibit 4.1 to the
Registration Statement (No. 33-58478) of Carter Hawley Hale Stores,
Inc. filed February 17, 1993.
10.7 Carter Hawley Hale Stores, Inc. 1992 Stock Incentive Plan, as amended;
incorporated by reference to Exhibit 10.19 to the Form 10-K for the
year ended January 30, 1993.
10.8 Carter Hawley Hale Stores, Inc. Executive Retention Incentive Plan
effective as of February 1, 1991; incorporated by reference to Exhibit
10.15 of the Form 10-K for the year ended February 1, 1992.
10.9 Carter Hawley Hale Store, Inc. Special Severance Pay Plan effective as
of February 1, 1991; incorporated by reference to Exhibit 10.16 of the
Form 10-K for the year ended February 1, 1992.
10.10 Carter Hawley Hale Stores, Inc. Retirement Plan for Non-employee
Directors dated as of February 1, 1989; incorporated by reference to
Exhibit 10.17 of the Form 10-K for the year ended February 1, 1992.
10.11 Carter Hawley Hale Stores, Inc. Directors Deferred Compensation Plan
effective as of February 1, 1986; incorporated by reference to Exhibit
10.18 of the Form 10-K for the year ended February 1, 1992.
10.12 Carter Hawley Hale Stores, Inc. Management Deferred Compensation Plan;
incorporated by reference to Exhibit 10.19 to the Registration
Statement (No. 33-16115) of Carter Hawley Hale Stores, Inc. filed July
28, 1987.
10.13 Carter Hawley Hale Stores, Inc. Deferred Compensation Plan for
Executives; incorporated by reference to Exhibit 10.20 to the
Registration Statement (No. 33-16115) of Carter Hawley Hale Stores,
Inc. filed July 28, 1987.
10.14 Pension Plan for Employees of Carter Hawley Hale Stores, Inc.;
incorporated by reference to Exhibit 10.14 to the Form 10-K/A No. 1 for
the year ended January 30, 1993.
10.15 Carter Hawley Hale Stores, Inc. Supplemental Executive Retirement Plan;
incorporated by reference to Exhibit 10.14 to the Form 10-K for the
fiscal year ended January 28, 1984.
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EXHIBIT DESCRIPTION
NO.
10.16 Amendment No. 4 to Supplemental Executive Retirement Plan of Carter
Hawley Hale Stores, Inc. dated January 7, 1991; incorporated by
reference to Exhibit 10.17 to Form 10-K/A No. 1 for the year ended
January 30, 1993.
10.17 Form of employment agreement between Carter Hawley Hale Stores, Inc.
and certain officers; incorporated by reference to Exhibit 10.17 to the
Form 10-K for the year ended January 30, 1993.
10.18** Listing of officers covered as of January 29, 1994 by form of
employment agreement referenced at Exhibit 10.17.
10.19** Employment agreement between Carter Hawley Hale Stores, Inc. and Mr.
David L. Dworkin dated March 24, 1993.
10.20** Loan agreement between Carter Hawley Hale Stores, Inc. and Mr. Robert
J. Lambert dated January 3, 1994.
10.21 Assumption and amendment to employment agreement between Carter Hawley
Hale Stores, Inc. and Philip M. Hawley, dated August 14, 1992;
incorporated by reference to Exhibit 10.30 to Form 10-K for the year
ended January 30, 1993.
10.22 Agreement between Carter Hawley Hale Stores, Inc. and Philip M. Hawley,
dated October 12, 1992; incorporated by reference to Exhibit 10.31 to
Form 10-K for the year ended January 30, 1993.
10.23 Agreement between Carter Hawley Hale Stores, Inc. and Philip M. Hawley,
dated December 30, 1992; incorporated by reference to Exhibit 10.32 to
the Form 10-K for the year ended January 30, 1993.
10.24 Form of indemnification agreement between Carter Hawley Hale Stores,
Inc. and each of its directors; incorporated by reference to Annex XV
to the Registration Statement (No. 33-16115) of Carter Hawley Hale
Stores, Inc. filed July 28, 1987.
10.25 Form of indemnification agreement between Carter Hawley Hale Stores,
Inc. and certain of its officers; incorporated by reference to Exhibit
10.31 to the Registration Statement (No. 33-16115) of Carter Hawley
Hale Stores, Inc. filed July 28, 1987.
10.26 Employee Benefits Agreement dated as of July 24, 1987 between Carter
Hawley Hale Stores, Inc. and The Neiman Marcus Group, Inc.;
incorporated by reference to Exhibit 3 to the Form 8-K dated August 20,
1987.
10.27 Postpetition Store Modernization Facility Conversion Agreement dated as
of August 18, 1992 between Carter Hawley Hale Stores, Inc. and
Zell/Chilmark Fund, L.P.; incorporated by reference to Exhibit 10.7 to
the Form 10-K for the year ended January 30, 1993.
10.28 Agreement by and among Carter Hawley Hale Stores, Inc., the Neiman
Marcus Group, Inc. and General Cinema Corporation, dated July 7, 1992;
incorporated by reference to Exhibit 10.8 to the Form 10-K for the year
ended January 30, 1993.
10.29* Restatement of Carter Hawley Hale Stores, Inc. 1992 Stock Incentive
Plan, as amended.
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EXHIBIT DESCRIPTION
NO.
11.** Computation of Earnings per Share.
22.** Carter Hawley Hale Stores, Inc. Subsidiaries.
24.** Consent of Price Waterhouse.
25.** Powers of Attorney.
*Exhibit filed with this Form 10-K/A No. 1.
**Previously Filed
Copies of any of the foregoing exhibits may be obtained by making a
written request to the Secretary of the Company at the address shown on the
cover. Copies will be furnished at a price of $.20 per page with a minimum
charge of $10 per exhibit.
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EXHIBIT 10.29
RESTATEMENT OF CARTER HAWLEY HALE STORES, INC.
1992 STOCK INCENTIVE PLAN, AS AMENDED
1. PURPOSE; TYPES OF AWARDS; CONSTRUCTION.
The name of this plan is the 1992 Stock Incentive Plan, as amended
(the "Plan"). The purpose of the Plan is to enable Carter Hawley Hale Stores,
Inc. (the "Company") or any subsidiary of the Company which now exists or
hereafter is organized or acquired by the Company, to attract and retain
competent personnel, consultants, and directors by affording such individuals an
opportunity to acquire a proprietary interest in the Company, to provide an
incentive for such individuals to increase stockholder value by increasing their
efforts on behalf of the Company and promoting the success of the Company's
business, and to align the interests of such individuals with the interests of
the stockholders of the Company. The Committee may grant options pursuant to
Section 6 of the Plan which shall constitute "incentive stock options"
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, and the regulations and interpretations issued
thereunder (the "Code"), options pursuant to Section 7 of the Plan which shall
constitute "nonqualified stock options" ("Nonqualified Stock Options") for
federal income tax purposes, and stock appreciation rights ("Rights") pursuant
to Section 9 of the Plan.
2. DEFINITIONS.
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "Award" shall mean an Option or a Right granted pursuant to
the Plan.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Cause" shall mean (i) action by the Participant involving
willful malfeasance or gross negligence in connection with the Participant's
employment or service which is materially injurious to the Company, monetarily
or otherwise, or the conviction of the Participant for the commission of any
criminal act involving intentional misconduct or moral turpitude, or (ii)
violation by the Participant of the Company's or any of its subsidiary's rules
and regulations concerning conflicts of interest.
(d) "Change in Control of the Company" shall mean the occurrence
of any of the following --
(i) any Person acquires "beneficial ownership" (as defined
in Rule 13d-3 under the Exchange Act) of securities representing more
than 30% of the combined voting power of the Company and more than the
percentage of the combined voting power of the Company owned by Z/C
Fund; or
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board
and any new director (other than a director designated by a Person who
has entered into an agreement with the Company to effect a transaction
described in subsections 2(d)(i), 2(d)(iii) or 2(d)(iv)) whose election
by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved, cease, for any reason to constitute a majority thereof,
provided, however, that a Change in Control of the Company shall not be
treated as having occurred by
<PAGE>
reason of the application of this Section 2(d)(ii) if, during such
entire two-year period, Z/C Fund owns beneficially, at least 30% of the
combined voting power of the Company; or
(iii) the stockholders of the Company approve a Merger (as
such term is defined in Section 10 hereof) other than (A) a Merger
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit plan of
the Company, at least 51% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such Merger or (B) a Merger effected to implement a
recapitalization of the Company (or similar transaction) in which no
Person acquires more than 30% of the combined voting power of the
Company's then outstanding securities and more than the percentage of
the combined voting power of the Company owned by Z/C Fund; or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an Asset Sale (as such term is
defined in Section 10 hereof).
(e) "Committee" shall mean a committee of the Board meeting the
requirements set forth in Section 3 hereof, as appointed from time to time by
the Board.
(f) "Common Stock" shall mean shares of common stock of the
Company following the Effective Date to be authorized pursuant to the
Reorganization Plan.
(g) "Disability" shall mean a Participant's inability, due to
illness or injury, to engage in any gainful occupation for which the Participant
is suited by education, training or experience, which condition continues for a
period of at least six (6) months.
(h) "Early Retirement Age" shall mean the earliest date on which a
Participant has both attained age fifty-five (55) and completed fifteen (15)
years of service with the Company and any of its affiliates.
(i) "Effective Date" shall mean the date specified as the
Effective Date of the Reorganization Plan in Article VIII thereof.
(j) "Effective Date Fair Market Value" per share shall mean the
average of the Fair Market Values per share of Common Stock for the twenty (20)
consecutive trading days commencing on the tenth (10th) trading day immediately
following the Effective Date.
(k) "Effective Date Options" shall mean Options granted on or
prior to the Effective Date. All Effective Date Options shall be Nonqualified
Stock Options.
(l) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as now or hereafter amended, construed, interpreted, and applied by regulations,
rulings, and cases.
(m) "Fair Market Value" per share, as of any particular date,
shall mean (i) the closing sales price per share of Common Stock on the
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national securities exchange on which the Common Stock is principally traded,
for the last preceding date on which there was a sale of such Common Stock on
such exchange, or (ii) if the shares of Common Stock are then traded in an
over-the-counter market, the average of the closing bid and asked prices for the
shares of Common Stock in such over-the-counter market for the last preceding
date on which there was a sale of such Common Stock in such market, or (iii) if
the shares of Common Stock are not then listed on a national securities exchange
or traded in an over-the-counter market, such value as the Committee, in its
sole discretion, shall determine.
(n) "Option" shall mean a grant to a Participant of an option to
purchase shares of Common Stock. Options granted by the Committee pursuant to
the Plan shall constitute Nonqualified Stock Options or Incentive Stock Options.
(o) "Participant" shall mean an individual to whom an Award is
granted pursuant to the Plan.
(p) "Parent Corporation" shall mean any corporation (other than
the Company) in an unbroken chain of corporations ending with the employer
corporation if, at the time of granting an Option, each of the corporations
other than the employer corporation owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
(q) "Person" shall mean any "person" (as defined in sections 13(d)
and 14(d) of the Exchange Act), other than (i) the Company, (ii) any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its subsidiaries, (iii) any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company, or (iv) Z/C Fund or any wholly-owned
subsidiary thereof.
(r) "Reorganization Plan" shall mean the Plan of Reorganization
for Carter Hawley Hale Stores, Inc. (July 7, 1992), filed with the United States
Bankruptcy Court for the Central District of California or, in the event such
court ceases to exercise jurisdiction over the Company's case pending in such
court under chapter 11, title 11 of the United States Code (the "Bankruptcy
Code"), such other court or adjunct thereof that exercises jurisdiction over
such case.
(s) "Retirement" shall mean a Participant's termination of
employment at or after the attainment of age sixty-two (62).
(t) "Right" shall mean the grant to a Participant of a stock
appreciation right entitling such Participant to all or all of the increase in
the value of the shares of Common Stock subject thereto. Rights granted by the
Committee may be either alone (an "Unrelated Right") or in connection with the
grant of an Option (a "Related Right").
(u) "Subsidiary Corporation" shall mean any corporation (other
than the Company) in an unbroken chain of corporations beginning with the
employer corporation if, at the time of granting an Option, each of the
corporations other than the last corporations in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(v) "Ten Percent Stockholder" shall mean a Participant who, at the
time an Incentive Stock Option is granted, owns stock possessing more
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than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of its Parent or Subsidiary Corporations.
(w) "Threshold Cost" per share shall mean $10.22.
(x) "Z/C Fund" shall mean Zell/Chilmark Fund, L.P., a Delaware
limited partnership and any Person which is controlled by the Person which is
currently the sole general partner of Zell/Chilmark Fund, L.P.
3. ADMINISTRATION.
Notwithstanding anything to the contrary contained in the Plan, the
Plan shall be administered by the Committee, which shall be composed, at all
times, of at least two (2) members of the Board.
The Committee shall have the authority in its discretion, subject to
and not inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically granted
to it under the Plan or necessary or advisable in the administration of the
Plan, including, without limitation, the authority to grant Options; to
determine the purchase price of the shares of Common Stock covered by each
Option or Right (the "Exercise Price"); to determine the persons to whom, and
the time or times at which Options or Rights shall be granted; to determine the
number of shares to be covered by each Option or Right granted; to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions (which need not be identical) of the
agreements ("Award Agreements") entered into in connection with Options or
Rights granted under the Plan; to cancel or suspend Options or Rights, as
necessary; and to make all other determinations deemed necessary or advisable
for the administration of the Plan. The Committee may delegate to one or more
of its members or to one or more agents such administrative duties as it may
deem advisable, and the Committee or any person to whom it has delegated duties
as aforesaid may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. All
decisions, determinations and interpretations of the Committee shall be final
and binding on all Participants.
The Board shall fill all vacancies, however caused, in the
Committee. The Board may from time to time appoint additional members to the
Committee, and may at any time remove one or more Committee members and
substitute others. The Committee shall hold its meetings at such times and
places as it shall deem advisable. All determinations of the Committee shall be
made by a majority of its members either present in person or participating by
conference telephone at a meeting or by written consent. The Committee may
appoint a chairman and a secretary and make such rules and regulations for the
conduct of its business as it shall deem advisable, and shall keep minutes of
its meetings.
No member of the Board or Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any Award
granted hereunder.
4. ELIGIBILITY.
Awards may be granted to key employees, consultants and directors of
the Company and its subsidiaries, including officers and directors who are
employees and who are responsible for or contribute to the management, growth
and/or profitability of the business of the Company or its subsidiaries and
directors who are not employees of the Company. In determining the persons to
whom Awards shall be granted and the number of shares to be covered by each
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Award, the Committee shall take into account the duties of the respective
persons, their present and potential contributions to the success of the Company
and such other factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan.
5. COMMON STOCK SUBJECT TO THE PLAN.
The maximum number of shares of Common Stock reserved for issuance
pursuant to Awards granted pursuant to the Plan shall be 5,900,000* subject to
adjustment as provided in Section 10 hereof. Such shares may, in whole or in
part, be authorized but unissued shares or shares that shall have been or may be
reacquired by the Company.
If any outstanding Award under the Plan should, for any reason
expire, be cancelled or be terminated, without having been exercised in full,
the shares of Common Stock allocable to the unexercised, cancelled or terminated
portion of such Award shall (unless the Plan shall have been terminated) become
available for subsequent grants of Awards under the Plan.
6. INCENTIVE STOCK OPTIONS.
Options granted pursuant to this Section 6 are intended to
constitute Incentive Stock Options and shall be subject to the following special
terms and conditions, in addition to the general terms and conditions specified
in Section 8 hereof. Incentive Stock Options shall only be granted to
individuals who are employees of the Company or any Parent or Subsidiary
Corporation of the Company.
(a) VALUE OF SHARES. The aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted) of the Shares
of Common Stock with respect to which Incentive Stock Options granted under this
Plan and all other option plans of the Company and any Parent or Subsidiary
Corporation become exercisable for the first time by a Participant during any
calendar year shall not exceed $100,000.
(b) TEN PERCENT STOCKHOLDER. In the case of an Incentive Stock
Option granted to a Ten Percent Stockholder, (i) the Exercise Price shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the shares
of Common Stock of the Company on the date of grant of such Incentive Stock
Option, and (ii) the exercise period shall not exceed five (5) years from the
date of grant of such Incentive Stock Option.
7. NONQUALIFIED STOCK OPTIONS.
Options granted pursuant to this Section 7 are intended to
constitute Nonqualified Stock Options and shall be subject only to the general
terms and conditions specified in Section 8 hereof.
8. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted pursuant to the Plan shall be evidenced by an
Award Agreement between the Company and the Participant in such form as the
Committee shall from time to time approve, which Award Agreement shall be
subject to and set forth terms and conditions not inconsistent with the
following:
- - -------------------
* The Board of Directors approved an increase in shares from 3,900,000 to
5,900,000, subject to stockholder approval at the 1993 annual meeting
of stockholders.
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(a) NUMBER OF SHARES. Each Award Agreement shall state the
number of shares of Common Stock to which the Option relates.
(b) TYPE OF OPTION. Each Award Agreement shall specifically
identify the portion, if any, of the Option which constitutes an Incentive Stock
Option and the portion, if any, which constitutes a Nonqualified Stock Option.
(c) TERM AND EXERCISABILITY OF OPTIONS.
(i) Effective Date Options shall become exercisable as to
one-third (1/3) of the shares of Common Stock subject thereto on the
first anniversary of the Effective Date and as to an additional
one-third (1/3) of such shares on each of the second and third
anniversaries of the Effective Date. Options other than Effective Date
Options shall be exercisable at the times and upon the conditions that
the Committee may determine, as reflected in the Award Agreement.
Notwithstanding the foregoing, the Committee shall have the authority
to accelerate the exercisability of any outstanding Option at such
times and under such circumstances as it, in its sole discretion, deems
appropriate.
(ii) Upon a Participant's death, Disability or, in the case
of an employee Participant, Retirement, or upon the occurrence of a
Change in Control of the Company, each Option theretofore granted to
such Participant or, upon the occurrence of a Change in Control of the
Company, all outstanding Options, shall become immediately and fully
exercisable, whether or not otherwise exercisable; PROVIDED,
HOWEVER, that the foregoing shall not apply to Options other than
Effective Date Options to the extent provided otherwise in a
Participant's Award Agreement with respect to such Option.
(iii) Except as specifically provided in Section 8(f)
hereof, all Options shall expire ten (10) years from the date of grant
of such Option or on such earlier date as may be prescribed by the
Committee and set forth in the Award Agreement. An Option may be
exercised, as to any or all full shares of Common Stock as to which the
Option has become exercisable, by giving written notice of such
exercise to the Committee or its designated agent; provided, however,
that an Option may not be exercised at any one time as to fewer than
100 shares (or such number of shares as to which the Option is then
exercisable if such number of shares is less than 100).
(d) EXERCISE PRICE. Each Award Agreement shall state the
Exercise Price. With respect to Effective Date Options, the Exercise Price per
share of Common Stock shall, as of any particular date, be equal to (i) in the
event the Effective Date Fair Market Value per share is less than the Threshold
Cost per share, the Threshold Cost per share, and (ii) in the event the
Effective Date Fair Market Value per share equals or exceeds the Threshold Cost
per share, the Effective Date Fair Market Value per share. With respect to all
other Options granted hereunder, the Exercise Price per share shall not be less
than the Fair Market Value per share of Common Stock on the date of grant and
may, in the Committee's discretion at the time of grant of such Options,
increase over time, so long as such Exercise Price is both fixed and
determinable on the date of grant of such Options. The Exercise Price shall be
subject to adjustment as provided in Section 10 hereof. The date on which the
Committee adopts a resolution expressly granting an Option shall be considered
the day on which such Option is granted, except to the extent any such
resolution provides otherwise, but in no event shall an Option be granted prior
to the Effective Date.
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<PAGE>
(e) METHOD AND TIME OF PAYMENT. Each Award Agreement shall
require that the Exercise Price be paid in full, at the time of exercise of an
Option, in cash, by certified or cashier's check or in shares of Common Stock
(whether previously owned by, or issuable upon the exercise of such Option to,
the Participant) having a Fair Market Value equal to such Exercise Price, or in
a combination of cash and Common Stock.
(f) TERMINATION OF EMPLOYMENT
(i) GENERAL. Except as otherwise provided in this Section
8(f) and in Section 8(c) hereof, each Option granted hereunder (to the
extent otherwise exercisable in accordance with the provisions of
Section 8(c) hereof as of the date of a Participant's termination of
employment or service) may, unless earlier terminated in accordance
with its terms, be exercised at any time within ninety (90) days
following the termination of the Participant's employment or service
with the Company and all of its subsidiaries for any reason; provided,
however, that if (A) the employment or service of a Participant shall
be involuntarily terminated by a Company (x) for Cause, then all
Options theretofore granted to such Participant (to the extent
otherwise exercisable in accordance with the provisions of Section 8(c)
hereof as of the date of such termination) shall, to the extent not
theretofore exercised, expire on the date of such termination, or (y)
for any reason other than Cause, then all Options theretofore granted
to such Participant (to the extent otherwise exercisable in accordance
with the provisions of Section 8(c) hereof as of the date of such
termination) shall, to the extent not theretofore exercised, remain
exercisable until the date which is one (1) year following the date of
such termination, or (B) in the case of an employee Participant, such
Participant voluntarily terminates employment on or after his Early
Retirement Age, all Options theretofore granted to such Participant (to
the extent otherwise exercisable in accordance with the provisions of
Section 8(c) hereof as of the date of such termination) shall, to the
extent not theretofore exercised, remain exercisable until the date
which is one (1) year following the date of such termination.
(ii) DEATH OR DISABILITY OF PARTICIPANT. If a Participant
shall die while employed by or in the service of the Company or a
subsidiary thereof, or within ninety (90) days after the date of
termination of such Participant's employment or service other than as a
result of his termination for Cause, or if the Participant's employment
or service shall terminate by reason of Disability, all Options
theretofore granted to such Participant (to the extent otherwise
exercisable in accordance with the provisions of Section 8(c) hereof as
of the date of such termination) may, unless earlier terminated in
accordance with their terms, be exercised by the Participant or by the
Participant's estate or by a person who acquired the right to exercise
such Options by bequest or inheritance or otherwise by reason of the
death or Disability of the Participant, at any time within three (3)
years after the date of death or Disability of the Participant. In the
event that an Option granted hereunder shall be exercised by the legal
representatives of a deceased or former Participant, written notice of
such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal
representative to exercise such Option.
(iii) RETIREMENT. In the case of an employee Participant,
if such Participant's employment with the Company or any of its
subsidiaries terminates by reason of Retirement, all Options
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<PAGE>
theretofore granted to such Participant may be exercised in accordance
with their terms.
(iv) JOB ELIMINATION. In the case of an employee
Participant, if such Participant's employment with the Company and all
of its subsidiaries is terminated by the Company due to job
elimination, all Options theretofore granted to such Participant (to
the extent otherwise exercisable in accordance with the provisions of
Section 8(c) hereof as of the date of such termination) may, unless
earlier terminated in accordance with their terms, be exercised at any
time within one (1) year after the date of such termination.
(g) OTHER PROVISIONS. The Award Agreements evidencing Options
under the Plan shall contain such other terms and conditions, not inconsistent
with the Plan, as the Committee may determine.
9. STOCK APPRECIATION RIGHTS.
(a) GENERAL. The Committee shall have authority to grant
Unrelated Rights to any Participant or Related Rights to the holder of any
Option granted under the Plan (the "Related SAR Option") with respect to all or
some of the shares covered by such Related SAR Option. Each Right granted
pursuant to the Plan shall be evidenced by an Award Agreement, which Award
Agreement shall be subject to and set forth terms and conditions not
inconsistent with the following:
(b) RELATED RIGHTS. A Related Right may be granted either at
the time of grant of the Related SAR Option or, with respect to Related SAR
Options which are Nonqualified Stock Options, at any time thereafter during its
term. Each Related Right shall be exercisable only if, and to the extent that,
the Related SAR Option is exercisable and will not be transferable except to the
extent the Related SAR Option may be transferable. A Related Right granted in
respect of an incentive Stock Option shall be exercisable only if the Fair
Market Value per share of Common Stock exceeds the Exercise Price per share.
Upon the exercise of a Related Right, the Related SAR Option shall cease to be
exercisable to the extent of the shares of Common Stock with respect to which
such Related Right is exercised, but shall be considered to have been exercised
to that extent for purposes of determining the number of shares available for
the grant of further Options and Rights pursuant to the Plan. Upon the exercise
or termination of a Related SAR Option, the Related Right with respect to such
Related SAR Option shall terminate to the extent of the shares of Common Stock
with respect to which the Related SAR Option was exercised or terminated.
(c) UNRELATED RIGHTS. Unrelated Rights shall contain such terms
and conditions as the Committee shall determine, but in no event shall they have
a term of greater than ten (10) years.
(d) EXERCISE PRICE. The Exercise Price per share of a Related
Right shall be equal to the Exercise Price per share of the Related SAR Option.
The Exercise Price per share of an Unrelated Right shall be determined by the
Committee, in its discretion, but shall be equal to at least the Fair Market
Value per share on the date of grant of the Unrelated Right.
(e) AMOUNT AND FORM OF PAYMENT. Upon the exercise of a Right, a
Participant shall, subject to paragraph (g) of this Section 9, be entitled at
the Participant's election to receive:
(i) that number of shares of Common Stock equal to the
quotient computed by dividing the Spread (as defined in paragraph (f)
hereof) by the Fair Market Value per share of Common Stock on the
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<PAGE>
date of exercise of the Right, provided, however, that in lieu of
fractional shares, the Company shall pay cash equal to the same
fraction of the Fair Market Value per share of Common Stock on the date
of exercise of the Right; or
(ii) an amount in cash equal to the Spread; or
(iii) a combination of cash and a number of shares
calculated as provided in clause (i) of this paragraph (e) (after
reducing the Spread by such cash amount), plus cash in lieu of any
fractional shares as above provided.
(f) SPREAD. The term "Spread" as used in this Section 9 shall
mean an amount equal to the product computed by multiplying (i) the excess of
(A) the Fair Market Value per share of Common Stock on the date the Right is
exercised over (B) the Exercise Price per share at which the Right is
exercisable, by (ii) the number of shares with respect to which such Right is
exercised.
(g) RESTRICTIONS. Notwithstanding the provisions of paragraph
(e) of this Section 9, the Committee shall have sole discretion to consent to or
disapprove an election to receive cash in whole or in part ("Cash Election")
upon the exercise of a Right by any individual who is, at the time of such
election, subject to the reporting requirements of Section 16(a) of the Exchange
Act. A Cash Election by such a person and related exercise may be made only
during the period beginning on the third business day following the date of
release for publication of the quarterly and annual summary statements of sales
and earnings of the Company and ending on the 12th business day following such
date.
(h) METHOD OF EXERCISE. To exercise a Right, the Participant
shall (i) give written notice thereof to the Committee in form satisfactory to
the Committee specifying (A) the number of shares of Common Stock with respect
to which the Right is being exercised and (B) the amount the Participant elects
to receive in cash and shares of Common Stock with respect to the exercise of
the Right, and (ii) if requested by the Committee, deliver the Award Agreement
to the Committee, who shall endorse thereon a notation of such exercise and
return the Award Agreement to the Participant. The date of exercise of a Right
that is validly exercised shall be deemed to be the date on which there shall
have been delivered the instruments referred to in the first sentence of this
paragraph (h).
10. EFFECT OF CERTAIN CHANGES.
If, after the Effective Date, there is any increase, reduction,
change or exchange of the shares of Common Stock for a different number or kind
of shares or other securities of the Company by reason of a reclassification,
recapitalization, reorganization, declaration of extraordinary dividend,
spin-off, stock dividend, stock split, combination or exchange of shares,
repurchase of shares, or in the event of a sale of all or substantially all of
the assets of the Company (an "Asset Sale"), or the merger or consolidation of
the Company with or into another corporation (a "Merger"), or in the event of
other similar transactions, the Committee may, in its discretion, provide for
any of the following:
(a) all outstanding Awards shall be immediately and fully
exercisable as of the date immediately prior to the effective date of any such
transaction;
(b) the number of shares of Common Stock available for Awards,
the number of such shares covered by outstanding Options and Rights, and the
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Exercise Price per share of such Options and Rights or the applicable market
value of outstanding Rights, shall be proportionately adjusted by the Committee
to reflect any such increase, reduction, change or exchange of the shares of
Common Stock of the Company, provided that any such adjustment shall preserve
the value inherent in outstanding Options and Rights;
(c) each Option or Right shall be converted into an Option or
Right entitling the holder thereof upon exercise (at its then Exercise Price) to
receive the kind and amount of shares of stock and other securities, property,
cash or any combination thereof receivable by a holder of the number of shares
of Common Stock which would be receivable by such holder upon the exercise of
such Option or Right immediately prior to the effective date of such
transaction; or
(d) in the event of an Asset Sale or Merger, each outstanding
Option or Right whether or not then exercisable shall be cancelled in connection
with such transaction in exchange for a cash payment in an amount per share
subject to such Option or Right equal to the excess of (i) the greater of (A)
the highest Fair Market Value of the shares of Common Stock during the sixty
(60) day period ending on the date of such Change in Control or (B) the highest
price paid per share of Common Stock to holders of such shares in any such
transaction, over (ii) the Exercise Price of such Option or Right.
(e) Alternatively, in the event of the dissolution or
liquidation of the Company, any corporate separation or division, including, but
not by way of limitation, split-up, split-off, spin-off or other similar
transaction, or in the event of an Asset Sale or Merger, the Committee may
provide that any or all outstanding Options and Rights shall become immediately
and fully exercisable and that:
(i) Participants shall have the right to exercise such
Options and Rights; or
(ii) each Option or Right granted under the Plan shall
terminate as of a date to be fixed by the Committee, and that not less
than thirty (30) days' written notice of the date so fixed shall be
given to each Participant, who shall have the right, during the period
of thirty (30) days preceding such termination, to exercise (to the
extent exercisable) with respect to such Option or Right all or any
part of the shares of Common Stock covered thereby.
11. PERIOD DURING WHICH AWARDS MAY BE GRANTED.
Awards may be granted pursuant to the Plan from time to time within
a period of ten (10) years from the Effective Date.
12. NONTRANSFERABILITY OF AWARDS.
Awards granted under the Plan shall not be transferable otherwise
than by will or by the laws of descent and distribution, and Awards may be
exercised or otherwise realized, during the lifetime of the Participant, only by
the Participant or by his guardian or legal representative.
13. BENEFICIARY.
A Participant may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
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survives the Participant, the executor or administrator of the Participant's
estate shall be deemed to be the Participant's beneficiary.
14. WITHHOLDING TAXES.
If the Committee shall so require, as a condition of exercise of an
Award or other realization of an Award granted hereunder, each Participant shall
agree that no later than the date of exercise or other realization of such
Award, the Participant will pay to the Company or make arrangements satisfactory
to the Committee regarding payment of any federal, state or local taxes of any
kind required by law to be withheld upon the exercise of an Award or other
realization of an Award. To the extent provided in the applicable Award
Agreement, such payment may be made by the Participant with shares of Common
Stock (whether previously owned by, or issuable upon the exercise of such Option
or Right to, such Participant) having a Fair Market Value equal to the amount of
such taxes. Alternatively, the Committee may provide that a Participant may
elect, to the extent permitted or required by law, to have the Company deduct
federal, state and local taxes of any kind required by law to be withheld upon
the exercise of an Award or realization of any Award from any payment of any
kind due to the Participant. In the event a Participant does not pay to the
Company or make arrangements satisfactory to the Committee regarding the payment
of any such taxes, the Committee shall be permitted to deduct any such taxes
required to be withheld upon the exercise of an Award or realization of any
Award from any payment of any kind due to the Participant.
15. RIGHTS AS A STOCKHOLDER.
A Participant or a transferee of an Award shall have no rights as a
stockholder with respect to any shares covered by the Award until the date of
the issuance of a stock certificate to him for such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distribution of other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
Section 10 hereof.
16. NO RIGHTS TO EMPLOYMENT OR CONTINUED SERVICE.
Nothing in the Plan or in any Award granted or Award Agreement
entered into pursuant hereto shall confer upon any Participant the right to
continue in the employ or service of the Company or any of its subsidiaries or
to be entitled to any remuneration or benefits not set forth in the Plan or such
Award Agreement or to interfere with or limit in any way the right of the
Company to terminate such Participant's employment or service with the Company.
17. APPROVAL OF STOCKHOLDERS.
The Plan, and any grants of Awards hereunder, shall be deemed to
constitute a part of the Reorganization Plan and the approval by a majority of
the existing shares of common stock of the Company voted with respect to the
Reorganization Plan shall constitute stockholder approval of the Plan. In the
event the Reorganization Plan is approved pursuant to the "cram-down" provisions
of the Bankruptcy Code and without the favorable vote of the existing
stockholders of the Company, then the approval of the Reorganization Plan by
Class 6 (as such term is defined in the Reorganization Plan) shall be deemed to
constitute approval of the Plan by the stockholders of the Company. In the
event that the Reorganization Plan is not approved for any purposes under the
Bankruptcy Code, then upon such event this Plan and all rights hereunder shall
immediately terminate and no Participant (or any permitted
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transferee thereof) shall have any remaining rights under the Plan, or any Award
Agreement entered into in connection herewith.
18. AMENDMENT AND TERMINATION OF THE PLAN.
The Board at any time and from time to time may suspend, terminate,
modify or amend the Plan; provided, however, that any amendment that would, in
accordance with the principles of Rule 16b-3 promulgated under the Exchange Act
(as now or hereafter amended, construed, interpreted, and applied by
regulations, rulings and cases), require the approval of the holders of the
Common Stock issued and outstanding shall be subject to such approval. Except
as provided in Section 10 hereof, no suspension, termination, modification or
amendment of the Plan may adversely affect any Award previously granted, without
the express written consent of the Participant.
19. GOVERNING LAW.
The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof.
20. EFFECTIVE DATE AND DURATION OF THE PLAN.
This Plan shall, subject to Section 17 hereof, be effective as of
the Effective Date and shall terminate on the tenth anniversary of the Effective
Date.
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