SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended Commission file number
May 31, 1994 0-14690
WERNER ENTERPRISES, INC.
(Exact name of registrant as specified in its charter.)
NEBRASKA 47-0648386
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
INTERSTATE 80 & HIGHWAY 50
POST OFFICE BOX 37308
OMAHA, NEBRASKA 68137 (402)895-6640
(Address of principal (Zip Code) (registrant's telephone number)
executive offices)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
As of June 30, 1994, 25,334,016 shares of the registrant's common stock, par
value $.01 per share, were outstanding.
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
The interim consolidated financial statements contained herein reflect all
adjustments which, in the opinion of management, are necessary for a fair
statement of the financial condition and results of operations for the periods
presented. They have been prepared in accordance with the instructions to Form
10-Q and do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements.
Operating results for the three-month period ended May 31, 1994 are not
necessarily indicative of the results that may be expected for the year ending
February 28, 1995. In the opinion of management, the information set forth in
the accompanying consolidated condensed balance sheets is fairly stated in all
material respects in relation to the consolidated balance sheets from which it
has been derived.
These interim consolidated financial statements should be read in conjunction
with the Company's latest annual report (which is incorporated by reference in
the Form 10-K for the fiscal year ended February 28, 1994).
Consolidated Statements of Income for the
Three Months Ended May 31, 1994 and 1993 ....................... Page 3
Consolidated Condensed Balance Sheets as of
May 31, 1994 and February 28, 1994.............................. Page 4
Consolidated Statements of Cash Flows for the
Three Months Ended May 31, 1994 and 1993........................ Page 5
Notes to Consolidated Financial Statements
as of May 31, 1994.............................................. Page 6
2
<PAGE>
<TABLE>
WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION> Three Months Ended
(Amounts in thousands, except per share data) May 31
1994 1993
(Unaudited)
<S> <C> <C>
Operating revenues $126,899 $101,228
Operating expenses:
Salaries, wages and benefits 45,201 36,467
Fuel 10,083 10,417
Supplies and maintenance 10,994 9,204
Taxes and licenses 11,204 9,066
Insurance and claims 4,508 3,751
Depreciation 12,694 10,694
Rent and purchased transportation 15,434 7,868
Communications and utilities 2,435 1,940
Other (638) (204)
Total operating expenses 111,915 89,203
Operating income 14,984 12,025
Other expense (income):
Interest expense 136 450
Interest income (138) (81)
Other 57 35
Total other expense 55 404
Income before income taxes 14,929 11,621
Income taxes 5,822 4,100
Net income $ 9,107 $ 7,521
Average common shares outstanding 25,334 22,886
Earnings per share $ .36 $.33
<FN>
</TABLE>
3
<PAGE>
<TABLE>
WERNER ENTERPRISES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
(In thousands) May 31 February 28
1994 1994
(Unaudited)
ASSETS
<S>
Current assets: <C> <C>
Cash and cash equivalents $ 9,670 $ 10,833
Accounts receivable, net 48,759 45,681
Prepaid expenses and other current assets 21,513 22,068
Total current assets 79,942 78,582
Property and equipment 421,160 399,129
Less - accumulated depreciation 102,636 97,282
Property and equipment, net 318,524 301,847
$398,466 $380,429
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,993 $ 13,825
Accrued payroll 10,549 9,115
Current maturities of
capitalized lease obligations 2,066 4,310
Income taxes payable 7,692 3,189
Other current liabilities 20,825 21,243
Total current liabilities 60,125 51,682
Insurance and claims accruals 21,200 21,200
Other long-term liabilities 3,136 3,136
Deferred income taxes 56,220 55,100
Stockholders' equity 257,785 249,311
$398,466 $380,429
<FN>
</TABLE>
4
<PAGE>
<TABLE>
WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months Ended
(In thousands) May 31
1994 1993
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 9,107 $ 7,521
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 12,694 10,694
Deferred income taxes 1,120 556
Gain on disposal of operating equipment (853) (677)
Tax benefit from exercise of stock options - 43
Changes in certain working capital items:
Accounts receivable, net (3,078) (2,923)
Prepaid expenses and other current assets 555 2,421
Accounts payable 5,168 (11,589)
Accrued payroll 1,434 485
Other current liabilities 4,085 3,492
Net cash provided by operating activities 30,232 10,023
Cash flows from investing activities:
Additions to property and equipment (34,390) (25,765)
Retirements of property and equipment 5,872 5,448
Net cash used in investing activities (28,518) (20,317)
Cash flows from financing activities:
Short-term borrowing - 10,000
Repayments of capitalized lease
obligations (2,244) (676)
Dividends on common stock (633) (458)
Stock options exercised - 65
Net cash provided by (used in)
financing activities (2,877) 8,931
Net decrease in cash and cash equivalents (1,163) (1,363)
Cash and cash equivalents, beginning of period 10,833 6,441
Cash and cash equivalents, end of period $ 9,670 $ 5,078
<FN>
</TABLE>
<TABLE>
Supplemental disclosures of cash flow information:
<CAPTION>
<S> <C> <C>
Cash paid during the period for:
Interest $ 136 $ 423
Income taxes 199 (1,154)
<FN>
</TABLE>
5
<PAGE>
WERNER ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Commitments
As of May 31, 1994, the Company has committed to capital expenditures of
approximately $61,000,000 (net cost, after revenue equipment trade-in allowances
of approximately $21,000,000).
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Financial Condition:
During the three months ended May 31, 1994, cash flow from operations
generated $30.2 million, which enabled the Company to make net property
additions of $28.5 million, repay capitalized lease obligations of $2.2
million and pay common stock dividends of $.6 million.
The Company's long-term debt obligations to equity ratio at February 28,
1994 and at May 31, 1994 was 0%.
Results of Operations:
Three Months Ended May 31, 1994 and 1993
Operating revenues increased 25% in the three months ended May 31, 1994,
compared to the same period in the prior year. The average number of
tractors increased by 21%. Revenue per mile increased 3.6% while tractor
utilization (miles per tractor) was almost unchanged. The increase in the
average number of tractors primarily reflects the Company's continued growth
in the regional, dedicated and temperature controlled markets as customer
demand remains strong. The revenue per mile increase was the result of the
Company's continued expansion into markets where the average revenue per mile
is higher and the average miles per trip are less and as a result of rate
increases obtained by the Company.
Operating expenses, expressed as a percentage of operating revenues,
were 88.2% for the three months ended May 31, 1994, compared to 88.1% for the
three months ended May 31, 1993. Salaries, wages and benefits decreased from
36.0% of revenues to 35.6% of revenues due primarily to an increase in the
percentage of owner-operator tractors compared to company-owned or controlled
tractors, offset partially by an increase in driver pay due to a 2 cent per
mile driver pay increase effective May 1, 1994 and the retention of more
experienced, higher paid drivers. Owner-operators are independent contractors
under contract with the Company and are responsible for such costs as their
own salaries, wages and benefits; fuel; supplies and maintenance, taxes and
licenses and depreciation. Owner-operator costs are included in the rent and
purchased transportation expense category. Fuel decreased from 10.3% of
revenues to 7.9% of revenues as a result of lower fuel prices, improved fuel
efficiency, and an increase in the percentage of owner-operator tractors.
Supplies and maintenance decreased from 9.1% of revenues to 8.7% of revenues
due to the increase in the percentage of owner-operator tractors. Taxes and
licenses decreased from 8.9% of revenues to 8.8% of revenues due to an
increase in the percentage of owner-operator tractors, offset by an increase
in the Federal diesel fuel tax rate of 4.3 cents per gallon which became
effective October 1, 1993. Depreciation decreased from 10.6% of revenues to
10.0% of revenues due to the increase in the percentage of owner-operator
tractors, offset partially by an increase in the trailer to tractor ratio.
The increase in the trailer to tractor ratio provides additional trailers and
improved service for customers. Other operating expenses decreased from
(.2)% of revenues to (.5)% of revenues due to an increase in gains realized
on the sale of revenue equipment.
7
<PAGE>
Rent and purchased transportation increased from 7.8% of revenues to
12.2% of revenues due to an increase in the percentage of owner-operator
tractors as compared to company-owned or controlled tractors. The average
number of owner-operator tractors for the quarter ended May 31, 1994 was 560
compared to an average of 340 for the quarter ended May 31, 1993.
The Company's effective income tax rate (income tax expense divided by
income before income taxes) increased to 39.0% for the three months ended May
31, 1994, compared to 35.3% for the three months ended May 31, 1993. This
increase in the effective income tax rate was due primarily to the Federal
income tax rate increase enacted August 10, 1993, and the adoption of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" effective March 1, 1993, which resulted in a $200,000 reduction of
income tax expense during the quarter ended May 31, 1993.
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of Werner Enterprises, Inc. was held
on June 21, 1994, for the purpose of electing a board of directors and voting
on the proposals described below. Proxies for the meeting were solicited
pursuant to Section 14(a) of the Securities Exchange Act of 1934 and there
was no solicitation in opposition to management's solicitations. All of the
nominees for directors as listed in the proxy were elected.
The Company's proposal to amend the Company's Articles of Incorporation
to authorize the establishment of up to three classes of directors was
approved by the following vote:
Shares Shares Shares
Voted Voted Voted
"FOR" "AGAINST" "ABSTAIN"
17,269,401 6,795,069 26,215
The Company's proposal to amend the Company's Stock Option Plan as set
forth in the Proxy Statement for Annual Meeting of Stockholders, June 21,
1994, was approved by the following vote:
Shares Shares Shares
Voted Voted Voted
"FOR" "AGAINST" "ABSTAIN"
23,297,963 736,733 127,510
8
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
3(i) Articles of Amendment to Articles of Incorporation
of Werner Enterprises, Inc.
3(ii) Revised and Amended By-Laws of Werner Enterprises,
Inc.
10 Amended and Restated Stock Option Plan of Werner
Enterprises, Inc.
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for
the quarter ended May 31, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WERNER ENTERPRISES, INC.
Date: July 13, 1994 By:/s/Robert E. Synowicki, Jr.
Robert E. Synowicki, Jr.,
Vice President of Finance, Treasurer and
Chief Financial Officer
Date: July 13, 1994 By:/s/John J. Steele
John J. Steele
Secretary and Controller
9
<PAGE>
ARTICLES OF AMENDMENT EXHIBIT 3(i)
TO
ARTICLES OF INCORPORATION
OF
WERNER ENTERPRISES, INC.
KNOW ALL MEN BY THESE PRESENTS, that the Articles of
Incorporation of Werner Enterprises, Inc., have been amended in
accordance with the Nebraska Business Corporations Act, Section 21-
2056 and 21-2060 in the following respect:
I.
The name of the corporation is WERNER ENTERPRISES, INC., and
the effective date of its incorporation is September 14, 1982.
II.
Article X of the Articles of Incorporation has been amended to
read as follows:
"ARTICLE X
The Board of Directors of the Corporation may be divided into
up to three classes, each class to consist of not less than three
directors and to be as nearly equal in number as possible. The
number of classes of directors and the terms of office for
directors in each such class shall be set forth in the Bylaws of
the Corporation.
Any vacancy in the office of a director shall be filled by the
vote of the remaining directors, even if less than a quorum, or by
the sole remaining director. The director class of any directors
chosen to fill vacancies shall be designated by the Board and such
directors shall hold office until the next election of directors of
the class of which they are a member and until their successors
shall be elected and qualified.
Any newly created directorship resulting from any increase in
the number of directors may be filled by the Board of Directors,
acting by a majority of the directors then in office, even if less
than a quorum, or by a sole remaining director. The director class
of any directors chosen to fill newly created directorships shall
be designated by the Board and such directors shall hold office
until the next election of directors of the class of which they are
a member and until their successors shall be elected and
qualified."
III.
The date of adoption of this amendment by the shareholders was
June 21, 1994.
<PAGE>
IV.
The number of shares of the corporation outstanding at the
time of such adoption was Twenty-Five Million Three Hundred Thirty
Four Thousand and Sixteen (25,334,016) shares; and the number of
shares entitled to vote thereon was Twenty-Five Million Three
Hundred Thirty-Four Thousand and Sixteen (25,334,016) shares.
V.
The number of shares voting for such amendment were Seventeen
Million Two Hundred Sixty-Nine Thousand Four Hundred One
(17,269,401) shares; and the number of shares voted against such
amendment were Six Million Seven Hundred Ninety-Five and Sixty Nine
(6,795,069) shares.
VI.
The amendment does not provide for exchange, reclassification,
or cancellation of issued shares.
Dated at Omaha, Nebraska, on this 21st day of June, 1994.
ATTEST:
/s/John J. Steele /s/Richard S. Reiser
John J. Steele, Richard S. Reiser
Secretary Vice-President
STATE OF NEBRASKA )
) ss.
COUNTY OF SARPY )
On the 23rd day of June, 1994, before me, the undersigned
Notary Public, personally came Richard S. Reiser, Vice-President of
Werner Enterprises, Inc., and John J. Steele, Secretary of Werner
Enterprises, Inc., to me known to be the identical persons whose
names are affixed to the foregoing instrument and acknowledged the
execution thereof to be their voluntary act and deed.
Subscribed and sworn to before me on the day last above
written.
/s/Sheila Lenagh
Notary Public
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
WERNER ENTERPRISES, INC.
KNOW ALL MEN BY THESE PRESENTS, that the Articles of
Incorporation of Werner Enterprises, Inc., have been amended in
accordance with the Nebraska Business Act, Section 21-2056 and 21-
2060 in the following respect:
I.
The name of the Corporation is WERNER ENTERPRISES, INC., and
the effective date of its incorporation is September 14, 1982.
II.
Article V of the Articles of Incorporation has been amended to
read as follows:
"ARTICLE V
The aggregate number of shares of common stock which this
corporation shall have authority to issue is 60,000,000 shares,
having a par value of $0.01 each.
All transfers of the shares of this corporation shall be made
in accordance with the provisions of the By-Laws of the
corporation."
III.
The date of adoption of this amendment by the shareholders was
September 29, 1993.
IV.
The number of shares of the corporation outstanding at the
time of such adoption was Twenty-Two Million Nine Hundred Thirty
Seven Thousand Eight Hundred Sixty-Six (22,937,866) shares; and the
number of shares entitled to vote thereon was Twenty-Two Million
Nine Hundred Thirty Seven Thousand Eight Hundred Sixty-Six
(22,937,866) shares.
<PAGE>
V.
The number of shares voting for such amendment were seventeen
million five hundred ninety-four thousand six hundred ninety-nine
(17,594,699) shares; and the number of shares voted against such
amendment were two million one hundred seventy-three thousand seven
hundred ninety-five shares (2,173,795).
VI.
The amendment does not provide for exchange, reclassification,
or cancellation of issued shares.
Dated at Omaha, Nebraska on this 29th day of September, 1993.
ATTEST:
/s/John J. Steele /s/Richard S. Reiser
John J. Steele Richard S. Reiser
Secretary Vice-President
STATE OF NEBRASKA :
: ss.
COUNTY OF SARPY :
On the 29th day of September, 1993, before me, the undersigned
Notary Public, personally came Richard S. Reiser, Vice-President of
Werner Enterprises, Inc., and John J. Steele, Secretary of Werner
Enterprises, Inc., to be known to be the identical persons whose
names are affixed to the foregoing instrument and acknowledged the
execution thereof to be their voluntary act and deed.
Subscribed and sworn to before me on the day last above
written.
/s/Donna R. Ingram
Notary Public
<PAGE>
EXHIBIT 3(ii)
REVISED AND AMENDED BY-LAWS
OF
WERNER ENTERPRISES, INC.
(Amended June 21, 1994)
ARTICLE I.
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the
Shareholders shall be held on the second Tuesday in the month of
June in each year, or such other time on such other day within such
month as shall be fixed by the Board of Directors, for the purpose
of electing Directors and for the transaction of such other
business as may come before the meeting. If the day fixed for the
annual meeting shall be a legal holiday in the State of Nebraska,
such meeting shall be held on the next succeeding business day.
Annual meetings shall be held in the office of the corporation or
at such other place, either within or without the State of
Nebraska, as shall be determined by the Board of Directors. If the
election of Directors shall not be held on the day designated
herein for any annual meeting of the Shareholders, or at any
adjournment thereof, the Board of Directors shall cause the
election to be held at a special meeting of the Shareholders as
soon thereafter as conveniently may be.
Section 2. Special Meetings. Special meetings of the
Shareholders may be called by the Chairman of the Board, the
President or a majority of the Board of Directors. Special
meetings shall be held at such place, either within or without the
State of Nebraska, as shall be stated in the notice.
Section 3.. Notice of Meeting. Written or printed notice
stating the place, day and hour of the meeting and, in the case of
a special meeting, the purpose or purposes for which the meeting is
called, shall be delivered not less than ten (10) nor more than
fifty (50) days before the date of the meeting, either personally
or by mail, by or at the direction of the President, the Secretary,
or the officer or persons calling the meeting, to each Shareholder
of record entitled to vote at such meeting.
Section 4. Closing of Transfer Books or Fixing of Record
Date. For the purpose of determining
Shareholders entitled to notice of or to vote at any meeting of
Shareholders or any adjournment thereof, or Shareholders entitled
to receive payment of any dividend, or in order to make a
determination of Shareholders for any other proper purpose, the
Board of Directors of the corporation may provide that the stock
transfer books shall be closed for a stated period but not to
exceed, in any case, fifty (50) days. If the stock transfer books
shall be closed for the purpose of determining Shareholders
entitled to notice of or to vote at a meeting of Shareholders, such
books shall be closed for at least ten (10) days immediately
preceding such meeting. In lieu of closing the stock transfer
<PAGE>
books, the Board of Directors may fix in advance a date as the
record date for any such determination of Shareholders, such date
in any case to be not more than fifty (50) days and, in the case of
a meeting of Shareholders, not less than ten (10) days prior to the
date on which the particular action, requiring such determination
of Shareholders, is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of
Shareholders entitled to notice of or to vote at a meeting of
Shareholders, or Shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the
date on which the resolution of the Board of Directors declaring
such dividend is adopted, as the case may be, shall be the record
date for such determination of Shareholders. When a determination
of Shareholders entitled to vote at any meeting of Shareholders has
been made as provided in this section, such determination shall
apply to any adjournment thereof.
Section 5. Voting Record. The officer or agent having
charge of the stock transfer books for shares of the corporation
shall make, at least ten (10) days before each meeting of
Shareholders, a complete record of the Shareholders entitled to
vote at such meeting, or any adjournment thereof, arranged in
alphabetical order with the address of and the number of shares
held by each. For a period of ten (10) days prior to such meeting,
the list shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any Shareholder
at any time during usual business hours. Such record, or a
duplicate thereof, shall also be produced and kept open at the time
and place of the meeting and shall be subject to the inspection of
any Shareholder during the whole time of the meeting. The original
stock transfer book shall be prima facie evidence as to who are the
Shareholders entitled to examine such record or transfer books or
to vote at any meeting of Shareholders.
Section 6. Quorum. A majority of the outstanding shares
entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of Shareholders. The holders or
their representatives of a majority of the shares present at a
meeting, even though less than a majority of the shares
outstanding, may adjourn the meeting from time to time without
notice other than an announcement at the meeting, until such time
as a quorum is present. At any such adjourned meeting at which a
quorum is present, any business may be transacted which might have
been transacted at the original meeting. If a quorum is present,
the affirmative vote of the majority of the shares represented at
the meeting and entitled to vote on the subject matter shall be the
act of the Shareholders, unless the vote of a greater number is
required by law, by the Articles of Incorporation, or by these By-
Laws.
Section 7. Proxies. At all meetings of the Shareholders,
a Shareholder may vote either in person or by proxy executed in
<PAGE>
writing by a Shareholder or his duly authorized attorney in fact.
Proxies solicited on behalf of the management shall be voted as
directed by the Shareholder or, in the absence of such direction,
as determined by a majority of the Board of Directors. No proxy
shall be valid after eleven (11) months from the date of its
execution unless otherwise provided in the proxy.
Section 8. Voting of Shares. Subject to the provisions
of Sections 9 and 10 of this Article I, each Shareholder entitled
to vote shall be entitled to one (1) vote for each share of stock
held by him upon each matter submitted to a vote at a meeting of
Shareholders.
Section 9. Voting of Shares by Certain Holders. Treasury
shares shall not be voted at any meeting or counted in determining
the total number of outstanding shares at any given time.
Shares standing in the name of another corporation may be
voted by such officer, agent, or proxy as the By-Laws of such
corporation may prescribe, or in the absence of such provision, as
the Board of Directors of such corporation may determine.
Shares held by an administrator, executor, guardian, or
conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing
in the name of a trustee may be voted by him, either in person or
by proxy.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may
be voted by such receiver without the transfer thereof into his
name if authority to do so be contained in an appropriate order of
the Court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the
name of the pledgee and thereafter the pledgee shall be entitled to
vote the shares so transferred.
Section 10. Cumulative Voting. At each election for
directors, every Shareholder entitled to vote at such election
shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to
be elected and for whose election he has a right to vote, or to
cumulate said shares and give one candidate as many votes as the
number of directors multiplied by the number of his shares shall
equal, or to distribute them upon the same principle among as many
candidates as he shall think fit.
Section 11. Informal Action by Shareholders. Any action
required to be taken at a meeting of the Shareholders, or any
action which may be taken at a meeting of the Shareholders, may be
<PAGE>
taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the Shareholders
entitled to vote with respect to the subject matter thereof. Such
consent shall have the same force and effect as a unanimous vote of
Shareholders and may be stated as such in any articles or document
filed with the Secretary of State under applicable state law.
Section 12. Inspectors of Election. In advance of any
meeting of Shareholders, the Board of Directors may appoint any
persons, other than nominees for office, as inspectors of election
to act at such meeting or any adjournment thereof. The number of
inspectors shall be either one (1) or three (3). If the Board of
Directors so appoints either one (1) or three (3) inspectors, that
appointment shall not be altered at the meeting. If inspectors of
election are not so appointed, the Chairman of the Board of
Directors or the President may make such appointment at the
meeting. In case any person appointed as inspector fails to appear
or fails or refuses to act, the vacancy may be filled by
appointment by the Board of Directors in advance of the meeting or
at the meeting by the Chairman of the Board of Directors or the
President.
Unless otherwise prescribed by applicable regulations, the
duties of such inspectors shall include: determining the number of
shares of stock and the voting power of each share, the shares of
stock represented at the meeting, the existence of a quorum, the
authenticity, validity, and effect of proxies; receiving votes,
ballots, or consents; hearing and determining all challenges and
questions in any way arising in connection with the right to vote;
counting and tabulating all votes or consents; determining the
result; and such acts as may be proper to conduct the election or
vote with fairness to all Shareholders.
Section 13. Nominations. The Board of Directors shall act
as a nominating committee for selecting the management nominees for
election as directors. Except in the case of a nominee substituted
as a result of the death or other incapacity of a management
nominee, the nominating committee shall deliver written nominations
to the Secretary no less than fifteen (15) days prior to the date
of the annual meeting. Provided such committee makes such
nominations, no nominations for directors except those made by the
nominating committee shall be voted upon at the annual meeting
unless other nominations by Shareholders are made in writing and
delivered to the Secretary of the corporation at least ten (10)
days prior to the date of the annual meeting.
Section 14. New Business. Any new business to be taken up
at the annual meeting shall be stated in writing and filed with the
Secretary of the corporation at least twenty (20) days before the
date of the annual meeting, and all business so stated, proposed
and filed shall be considered at the annual meeting, but no other
proposal shall be acted upon at the annual meeting. Any
<PAGE>
Shareholder may make any other proposal at the annual meeting and
the same may be discussed and considered, but, unless stated in
writing and filed with the Secretary at least twenty (20) days
before the meeting, such proposal shall be laid over for action at
an adjourned, special, or annual meeting of the Shareholders taking
place thirty (30) days or more thereafter. This provision shall
not prevent the consideration and approval or disapproval at the
annual meeting of reports of officers, directors and committees,
but, in connection with such reports, no new business shall be
acted upon at such annual meeting unless stated and filed as herein
provided.
ARTICLE II
DIRECTORS
Section 1. Number and Qualifications. The business and
affairs of the corporation shall be managed by a Board of Directors
consisting of nine (9) Directors. The Directors need not be
residents of the State of Nebraska, nor Shareholders of the
corporation. Although the number and qualifications of the
Directors may be changed from time to time by amendment to these
By-Laws, no change shall affect the incumbent Directors during the
terms for which they were elected.
Section 2. Classification of Board. The Board of
Directors shall be divided, with respect to the time during which
the Directors shall hold office, into classes which are designated
as Classes I, II and III. The number of Directors in each such
class shall be the same as in each other such class to the extent
possible. When creating a new directorship through expansion of
the size of the Board of Directors or when eliminating a
directorship through reduction of the size of the Board of
Directors, the Board shall designate the class of the new or
eliminated directorship and any newly created or eliminated
directorships resulting from an increase or decrease shall be
apportioned by the Board among the classes of Directors so as to
maintain such classes as nearly equal as possible. The term of
office of the Class I will expire at the 1995 annual meeting of
Shareholders, the term of office of the Class II will expire at the
1996 annual meeting of Shareholders and the term of office of the
Class III will expire at the 1997 annual meeting of Shareholders
with Directors in each class to hold office until his or her
successor shall have been duly elected and qualified. The class
into which each Director elected at the 1994 annual meeting of
Shareholders shall be designated and the Directors then elected
will hold office for terms corresponding to their respective class.
At each subsequent annual meeting of Shareholders, Directors
elected to succeed those Directors whose terms then expire shall be
elected for a term of office to expire at the third succeeding
annual meeting of Shareholders after their election, with each
<PAGE>
Director to hold office until his or her successor is elected and
qualified.
Section 3. Removal and Vacancies. A Director may be
removed by vote of the holders of a majority of the shares entitled
to vote at an election of Directors which vote is taken at a
meeting of the Shareholders called expressly for that purpose.
However, if less than the entire Board is to be removed at such
special meeting, then no individual Director may be removed if the
votes cast against the removal of such Director would be sufficient
to elect such Director if then cumulatively voted at an election of
Directors for the class of which such Director is a member. Any
vacancies in the Board of Directors, occurring for any reason,
shall be filled by the vote of the remaining Directors, even if
less than a quorum, or by a sole remaining Director. The Director
class of any Directors chosen to fill vacancies shall be designated
by the Board and such Directors shall hold office until the next
election of Directors of the class of which they are a member and
until their successors shall be elected and qualified.
Section 4. Quorum. A majority of the number of directors
fixed by the By-Laws shall constitute a quorum for the transaction
of any business at any meeting of the Board of Directors. The act
of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors,
unless a greater number is specified by the Articles of
Incorporation or these By-Laws. If less than a quorum is present
at any meeting, the majority of these present may adjourn the
meeting from time to time, without notice other than announcement
at the meeting, until a quorum is present.
Section 5. Annual Meeting. The annual meeting of the
Board of Directors shall be held without notice other than this By-
Law immediately following adjournment of the annual meeting of
Shareholders and shall be held at the same place as the annual
meeting of Shareholders unless some other place is agreed upon.
Section 6. Special Meetings. Special meetings of the
Board of Directors may be called by the Chairman of the Board or
the President or a majority of the Board of Directors, and shall be
held at the office of the corporation or at such other place,
either within or without the State of Nebraska, as the notice may
state.
Section 7. Notice. Notice of special meetings shall be
mailed to each director at his last known address at least five (5)
days prior to the date of holding said meetings. Any director at
a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting
<PAGE>
of the Board of Directors need be specified in the notice or waiver
of notice of such meeting.
Section 8. Action Without a Meeting. Any action required
to be taken at a meeting of the Board of Directors, or of any
committee, may be taken without a meeting, if a consent in writing,
setting forth the action so taken, shall be signed by all of the
directors, or all of the members of the committee, as the case may
be. Such consent shall have the same effect as a unanimous vote.
The consent may be executed by the directors in counterparts.
Section 9. Voting. At all meetings of the Board of
Directors, each director shall have one (1) vote irrespective of
the number of shares he may hold. Members of the Board of
Directors may vote and participate in meetings by means of
conference telephone or similar communications equipment by which
all persons participating in the meeting can hear each other.
Section 10. Presumption of Assent. A director of the
corporation who is present at a meeting of the Board of Directors
at which action on any corporate matter is taken shall be presumed
to have assented to the action taken unless his dissent shall be
entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as the
Secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the Secretary of the
corporation immediately after the adjournment of the meeting. Such
right to dissent shall not apply to a director who voted in favor
of such action.
<PAGE>
Section 11. Compensation. By resolution of the Board of
Directors, the directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors, and may be
paid a fixed sum for attendance at each meeting of the Board of
Directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
Section 12. Committees. The Board of Directors may, by
resolution or resolutions passed by a majority of the whole Board,
appoint an executive committee, an audit committee, and one or more
other committees, each committee to consist of two (2) or more
directors of the corporation, which committees shall, to the extent
permitted by law, have and may exercise such powers of the Board of
Directors in the management of the business and affairs of the
corporation as shall be delegated to them.
Section 13. Advisory Directors. The Board of Directors may
by resolution appoint advisory directors to the Board, who shall
serve as directors emeritus, and shall have such authority and
receive such compensation and reimbursement as the Board of
<PAGE>
Directors shall provide. Advisory directors shall not have the
authority to participate by vote in the transaction of business.
ARTICLE III
OFFICERS
Section 1. Number and qualifications. The officers of the
corporation shall be a Chairman of the Board, a President, one or
more Vice-Presidents (as the Board of Directors shall determine),
a Secretary, and a Treasurer and such other officers and agents as
may be deemed necessary by the Board of Directors. Any two (2) or
more offices may be held by the same person.
Section 2. Election and Tenure. The officers of the
corporation shall be elected by the Board of Directors at its
annual meeting. Each officer shall hold office for a term of one
(1) year or until his successor shall have been duly elected and
shall have become qualified, unless his service is specified by an
employment contract of greater length or is terminated sooner
because of death, resignation, or otherwise. The Board of
Directors may authorize the corporation to enter into an employment
contract with any officer in accordance with state law.
Section 3. Removal. Any officer or agent of the
corporation, elected or appointed by the Board of Directors, may be
removed by the Board of Directors whenever in its judgment the best
interests of the corporation should be served thereby, but such
removal shall be without prejudice to the contract rights, if any,
of the person so removed. Election or appointment of an officer or
agent shall not of itself create contract rights.
<PAGE>
Section 4. Vacancies. Vacancies occurring in any office
by reason of death, resignation, or otherwise may be filled by the
Board of Directors at any meeting.
Section 5. Chairman of the Board. The Chairman of the
Board shall be the Chief Executive Officer of the corporation and,
subject to the control of the Board of Directors, shall, in
general, supervise and control all of the business and affairs of
the corporation. He shall, when present, preside at all meetings
of the Shareholders and of the Board of Directors. He may sign,
with the Secretary or any other proper officer of the corporation
thereunto authorized by the Board of Directors, certificates for
shares of the corporation, any deeds, mortgages, bonds, contracts,
or other instruments which the Board of Directors has authorized to
be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or
by the By-Laws to some other officer or agent of the corporation,
or shall be required by law to be otherwise signed or executed; and
in general shall perform all duties incidental to the office of
<PAGE>
President and such other duties as may be prescribed by the Board
of Directors from time to time.
Section 6. The President. The President shall be the
principal operating officer of the corporation and, subject to the
control of the Board of Directors and the direction of the Chairman
of the Board, shall in general supervise and control the operation
of the business and affairs of the corporation. He shall, in the
absence of the Chairman of the Board, preside at all meetings of
the Shareholders and of the Board of Directors. He may sign, with
the Secretary or any other proper officer of the corporation,
certificates for shares of the corporation, and deeds, mortgages,
bonds, contracts, or other instruments which the Board of Directors
has authorized to be executed, except in cases where the signing
and execution thereof shall be expressly delegated by the Board of
Directors or by these By-Laws to some other officer or agent of the
corporation, or shall be required by law to be otherwise signed or
executed; and in general, shall perform all duties incident to the
office of President and such other duties as may be prescribed by
the Board of Directors from time to time.
Section 7. The Vice-Presidents. In the absence of the
President or in the event of his death, inability, or refusal to
act, the Vice-President (or in the event there shall be more than
one Vice-President, the Vice-Presidents in the order designated at
the time of their election, or in the absence of any such
designation, then in the order of their election) shall perform the
duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the
President. Any Vice-President may sign with the Secretary or any
other proper officer of the corporation, certificates for shares of
the corporation; and shall perform such other duties as from time
to time may be assigned to him by the President or by the Board of
Directors.
Section 8. Secretary. The Secretary shall: (a) keep
minutes of the proceedings of the Shareholders and of the Board of
Directors in one or more books provided for that purpose; (b) see
that all notices are duly given in accordance with the provisions
of these By-Laws or as required by law; (c) be the custodian of the
corporate records and of the seal of the corporation and see that
the seal of the corporation is affixed to all documents, the
execution of which on behalf of the corporation under its seal is
duly authorized; (d) keep a register of the post office address of
each Shareholder which shall be furnished to the Secretary by such
Shareholder (e) sign with the Chairman of the Board of Directors,
President or a Vice-President, certificates for shares of the
corporation, the issuance of which shall be authorized by
resolution of the Board of Directors; (f) have general charge of
the stock transfer books of the corporation; and (g) in general
perform all duties incident to the office of Secretary and such
<PAGE>
other duties as from time to time may be assigned to him by the
President or by the Board of Directors.
Section 9. The Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the corporation; (b) receive and give receipts for
monies due and payable to the corporation from any source
whatsoever, and deposit all such monies in the name of the
corporation in such banks, trust companies, or in other
depositories as shall be selected in accordance with the provisions
of these By-Laws; and (c) in general perform all of the duties
incident to the office of Treasurer and such other duties as from
time to time may be assigned by the President or by the Board of
Directors. If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his duties in such
sum and with such surety or sureties as the Board of Directors
shall determine.
Section 10. Other Officers. Other officers shall perform
such duties and have such powers as may be assigned to them by the
Board of Directors.
Section 11. Salaries. The salaries of the officers shall
be fixed from time to time by the Board of Directors, and no
officer shall be prevented from receiving such salary by reason of
the fact that he is also a director of the corporation.
ARTICLE IV
SEAL
The corporate seal of the corporation shall contain the name
of the corporation and shall be in such form as the Board of
Directors shall prescribe.
ARTICLE V
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. The shares of the
corporation shall be represented by certificates signed by the
Chairman of the Board of Directors or by the President or a Vice-
President and by the Treasurer or by the Secretary of the
corporation, and may be sealed with the seal of the corporation or
a facsimile thereof. Any or all of the signatures upon a
certificate may be facsimiles if the certificate is countersigned
by a transfer agent, or registered by a registrar, other than the
corporation itself or an employee of the corporation. If an
officer who has signed or whose facsimile signature has been placed
upon such certificate shall have ceased to be such officer before
the certificate is issued, it may be issued by the corporation with
<PAGE>
the same effect as if he were such officer at the date of its
issue.
Section 2. Form of Share Certificates. Each certificate
representing shares shall state upon the face thereof; that the
corporation is organized under the laws of the State of Nebraska;
the name of the person to whom issued; the number and class of
shares; the designation of the series, if any, which such
certificate represents; the par value of each share represented by
such certificate, or a statement that the shares are without par
value. Other matters in regard to the form of the certificates
shall be determined by the Board of Directors.
Section 3. Loss or Destruction. In case of loss or
destruction of a certificate of stock, no new certificate shall be
issued in lieu thereof except upon satisfactory proof to the Board
of Directors of such loss or destruction, and upon the giving of
satisfactory security by bond or otherwise against loss to the
corporation.
Section 4. Transfer of Shares. Transfer of shares of
capital stock of the corporation shall be made only on its stock
transfer books. Authority for such transfer shall be given only by
the holder of record thereof or by his legal representative, who
shall furnish proper evidence of such authority, or by his attorney
thereunto authorized by power of attorney duly executed and filed
with the corporation. Such transfer shall be made only on
surrender for cancellation of the certificate for such shares. The
person in whose name shares of capital stock stand on the books of
<PAGE>
the corporation shall be deemed by the corporation to be the owner
thereof for all purposes.
ARTICLE VI
DIVIDENDS AND BANK ACCOUNT
Section 1. Dividends. In addition to other dividends
authorized by law, the Board of Directors, by resolution, may from
time to time declare dividends to be paid out of the unreserved and
unrestricted earned surplus of the corporation, but no dividend
shall be paid when the corporation is insolvent, when the payment
thereof would render the corporation insolvent or when otherwise
prohibited by law.
Section 2. Bank Account. The funds of the corporation
shall be deposited in such banks, trust funds, or depositories as
the Board of Directors may designate and shall be withdrawn upon
the signature of the President and upon the signatures of such
other person or persons as the directors may by resolution
authorize.
<PAGE>
ARTICLE VII
AMENDMENTS
These By-Laws may be altered, amended or repealed and new By-
Laws may be adopted by the Board of Directors at any regular or
special meeting of the Board of Directors.
ARTICLE VIII
WAIVER OF NOTICE
Whenever any notice is required to be given to any Shareholder
or Director of the corporation under the provisions of the Articles
of Incorporation or under the provisions of applicable state law,
a waiver thereof in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated
therein, shall be equivalent to the giving of such notice.
ARTICLE IX
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
At the discretion of the Board of Directors, and subject to
the provisions of the Articles of Incorporation, the corporation
may indemnify any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or
other agent of another corporation, partnership, trust, or other
enterprise as permitted by the Nebraska Business Corporation Act,
as amended from time to time.
ARTICLE X
DIRECTORS' INTEREST IN CONTRACTS
In the absence of fraud, no contract or other transaction
between the corporation and any other person, corporation, firm,
syndicate, association, partnership or joint venture shall be
either void or voidable or otherwise affected by reason of the fact
that one or more directors of the corporation are or become
directors or officers of such other corporation, firm, syndicate or
association or members of such partnership or joint venture, or are
pecuniarily or otherwise interested in such contract or
transaction, provided that (1) the fact such director or directors
of the corporation are so situated or so interested, or both, is
disclosed or known to the Board of Directors or committee which
authorizes, approves, or ratifies the contract or transaction by a
vote or consent sufficient for the purpose without counting the
votes or consents of such interested directors; (2) that such fact
is disclosed or known to the Shareholders entitled to vote and they
authorize, approve, or ratify such contract or transaction by vote
or written consent; or (3) the contract or transaction is fair and
reasonable to the corporation. Any director of the corporation who
<PAGE>
is also a director or officer of such other corporation, firm,
syndicate, or association, or a member of such partnership or joint
venture or is pecuniarily or otherwise interested in such contract
or transaction, may be counted for the purpose of determining the
presence of a quorum at any meeting of the Board of Directors which
shall authorize any such contract or transaction.
ARTICLE XI
FISCAL YEAR
Section 1. Fiscal Year. The fiscal year of the
corporation shall begin on the 1st day of March in each year, or at
such other time as may be determined by the Board of Directors.
<PAGE>
WERNER ENTERPRISES, INC. EXHIBIT 10
FIRST AMENDED AND RESTATED
STOCK OPTION PLAN
1. Purpose. The purpose of the Werner Enterprises, Inc. (the
"Company") Stock Option Plan (the "Plan") is to advance the
interests of the Company and its shareholders by attracting and
retaining those individuals whose skill and initiative enhance the
Company's continued success, growth and profitability. This Plan is
a nonqualified stock option plan, with stock appreciation rights.
This Plan authorizes the grant of nonqualified stock options and
stock appreciation rights in order to help attract and retain key
employees, by providing them with participatory rights in the future
success and growth of the Company, without necessarily requiring a
financial outlay by these employees to ensure their participation in
the Plan benefits.
2. Definitions. The following words shall have the following
meaning:
(a) "Company" shall mean Werner Enterprises, Inc., a
Nebraska corporation.
(b) "Board of Directors" shall mean the Board of
Directors of the Company.
(c) "Committee" shall mean the Option Committee, which
is appointed by the Board of Directors, and which shall be
composed of three or more members of the Board of Directors,
none of whom shall be eligible to participate in the Plan while
members of the Committee and none of whom, for one year prior
to his or her appointment to the Committee, has been granted or
awarded any equity security, including any derivative security
such as an Option or Stock Appreciation Right, of the Company
pursuant to this Plan or any other plan of the Company.
(d) "Common Stock" shall mean the common stock of the
Company, par value $.01 per share.
(e) "Option" shall mean a right to purchase Common Stock,
granted pursuant to the Plan.
(f) "Option Price" shall mean the purchase price for
Common Stock under an Option, as determined in Section 6 below.
(g) "Plan" shall mean this Werner Enterprises, Inc. Stock
Option Plan.
(h) "Participant" shall mean an employee of the Company
(or any of its subsidiaries) to whom an Option is granted under
the Plan.
<PAGE>
(i) "Stock Appreciation Right" shall mean a right to
receive cash or stock, granted pursuant to Section 8 below.
3. Stock To Be Optioned. Subject to the provisions of
Section 13 of the Plan, the maximum number of shares of Common Stock
that may be optioned or sold under the Plan is 1,000,000 shares.
Such shares may be treasury, or authorized but unissued, shares of
Common Stock of the Company.
4. Administration. The Plan shall be administered by the
Committee. Two members of the Committee shall constitute a quorum
for the transaction of business. The Committee is granted the
authority to determine the recipients of the Options and the Stock
Appreciation Rights, the number of shares subject to such Options
and the corresponding Stock Appreciation Rights, the date on which
these Options and Stock Appreciation Rights are to be granted and
are exercisable, whether or not such Options and Stock Appreciation
Rights may be exercisable in installments, and any other terms of
the Options and Stock Appreciation Rights consistent with the terms
of this Plan. Options for no more than 250,000 shares in the
aggregate may be granted to one person, and Options may be granted
at any time during the Plan's duration. The interpretation and
construction of any provision of the Plan by the Committee shall be
final, unless otherwise determined by a majority of the entire Board
of Directors. No member of the Board of Directors or the Committee
shall be liable for any action or determination made by him in good
faith.
5. Eligibility. The Committee may grant Options to any
management employee (including an employee who is a director and/or
an officer) of the Company and its subsidiaries; provided, however,
that no such grant may be made to any management employee who is a
member of the Committee while he or she is a member of the
Committee. Options may be awarded by the Committee at any time and
may include or exclude new or previous Participants as the Committee
shall determine. Options granted at different times need not
contain similar provisions.
6. Option Price. The purchase price of Common Stock under
each Option shall be 100 percent of the fair market value of the
Common Stock on the date the Option is granted, but in no event less
than the par value of the Common Stock. If the Common Stock is
traded in a public trading market, the fair market value will be the
last reported sales price on the date preceding the date of
determination. If there is no active public trading market for the
Common Stock, the fair market value shall be determined in good
faith by the Committee. In addition, the Plan allows, at the
discretion of the Committee, the surrender of an Option and its
subsequent regrant. The regranting of the Option may allow for
lower-priced shares (as then valued) to be granted or for a lesser
number of shares than originally intended to be issued. However, as
with the originally issued option shares, the price to the
Participant may not be less than the fair market value of the
regranted optioned shares, as determined at the time of regrant.
<PAGE>
7. Terms and Conditions of Options. Options granted pursuant
to this Plan shall comply with and be subject to the following terms
and conditions:
(a) Time and Method of Payment. The Option Price shall
be paid in full in cash at the time an Option is exercised
under the Plan. Exercise of an Option without concurrent
payment in full in cash shall be invalid and of no effect. Upon
the exercise of an Option and the payment of the full Option
Price, the Participant shall be entitled to the issuance of a
stock certificate evidencing his ownership of such Common Stock
and, as of that date, the Participant shall have all the rights
of a shareholder. No adjustment will be made for dividends or
other rights for which the record date is prior to the date the
Participant is entitled to the issuance of a stock certificate.
(b) Number of Shares. Each Option shall state the total
number of shares of Common Stock to which it pertains. The
number of shares to which a Participant is entitled under an
Option shall be reduced by the number of Stock Appreciation
Rights (described in Section 8 below) related to the Option
that have been previously exercised by the Participant.
(c) Option Period and Limitations on Exercise of Options.
The Committee may in its discretion provide that an Option may
become exercisable only after the expiration of a period of
time specified in the Option agreement. Except as provided in
the Option agreement, Options shall not be exercisable until
the expiration of six months from the date the Option is
granted, and any Option may be exercised in whole or in part.
No Option may be exercised after the expiration of ten years
and one day from the date it is granted. Unless otherwise noted
in the Option agreement, no Option may be exercised for a
fractional share of Common Stock.
8. Terms and Conditions of Stock Appreciation Rights. The
Committee may grant Stock Appreciation Rights at the same time as
Participants are awarded Options under the Plan. Such Stock
Appreciation Rights shall be evidenced by agreements which shall
comply with, and be subject to, the following terms and conditions:
(a) Grant. Each Stock Appreciation Right shall relate
to a specific Option under the Plan and shall be awarded to a
Participant concurrently with the grant of such Option. The
number of Stock Appreciation Rights granted to a Participant
may be equal to the number of shares that the Participant is
entitled to receive pursuant to the related Option. The number
of Stock Appreciation Rights held by a Participant shall be the
number of Stock Appreciation Rights granted reduced by:
(1) the number of Stock Appreciation Rights
exercised for Common Stock or cash pursuant to the Stock
Appreciation Rights agreement;
(2) the number of shares of Common Stock purchased
by such Participant pursuant to the related Option.
<PAGE>
(b) Manner of Exercise. A Participant shall exercise
Stock Appreciation Rights by giving written notice of such
exercise to the Company. The date on which such written notice
is received by the Company shall be the exercise date for the
Stock Appreciation Rights.
(c) Appreciation Available. Each Stock Appreciation
Right shall entitle a Participant to the excess of the fair
market value of a share of Common Stock on the exercise date
over the Option Price of the related Option.
(d) Payment of Appreciation. In the discretion of the
Committee, the appreciation available to a Participant from an
exercise of Stock Appreciation Rights may be paid to the
Participant either in cash or Common Stock. If paid in cash,
the amount thereof shall be the amount of appreciation
available (see (d) above). If paid in Common Stock, the number
of shares that shall be issued pursuant to the exercise of
Stock Appreciation Rights shall be determined by dividing the
amount of appreciation by the fair market value of a share of
Common Stock on the exercise date of the Stock Appreciation
Rights; provided, however, that no fractional shares shall be
issued upon the exercise of Stock Appreciation Rights.
(e) Limitations Upon Exercise of Stock Appreciation
Rights. If a Participant exercises a Stock Appreciation Right
for cash, the Option to which the Stock Appreciation Right
relates shall expire. Stock Appreciation Rights may be
exercised only at such times and by such persons as may
exercise Options under the Plan. Adjustment to the number of
shares in the Plan and the price per share pursuant to
Section 13 below shall also be made to any Stock Appreciation
Rights held by each Participant.
<PAGE>
9. Termination of Employment. A Participant's Options and
Stock Appreciation Rights will immediately terminate and his or her
right to exercise Options and Stock Appreciation Rights will
immediately terminate upon the involuntary termination by the
Company of the Participant's employment with the Company or a
subsidiary of the Company. If a Participant's employment with the
Company or a subsidiary of the Company is voluntarily terminated by
the Participant, the Participant may exercise his or her Options or
Stock Appreciation Rights that are otherwise exercisable pursuant to
this Plan on the date of such termination for up to and including
one hundred and eighty (180) days after such termination of his or
her employment, but in no event shall any Option or Stock
Appreciation Right be exercisable more than ten years and one day
from the date it was granted. The Committee has the right to cancel
an Option or Stock Appreciation Right during such 180 day period if
the Participant engages in employment or activities contrary, in the
opinion of the Committee, to the best interests of the Company. The
Committee shall also determine in each case whether a termination of
employment (including a termination due to disability) shall be
considered voluntary or involuntary. In addition, the Committee
shall determine, subject to applicable law, whether a leave of
absence or similar circumstance shall constitute a termination of
employment and the date upon which a termination resulting therefrom
became effective. Any such determination of the Committee shall be
final and conclusive, unless overruled by the entire Board of
Directors at its next regular or special meeting. A Participant's
right to exercise Options or Stock Appreciation Rights after his or
her death are governed by Section 10 of this Plan.
10. Rights in Event of Death. If a Participant dies while
employed by the Company, or within one hundred and eighty (180) days
after having retired or voluntarily terminated his or her
employment, and at the time of death had unexercised Options or
Stock Appreciation Rights, the executors or administrators, or
legatees or heirs, of his estate shall have the right to exercise
such Options and Stock Appreciation Rights within one year of the
Participant's death to the extent that such deceased Participant was
entitled to exercise the Options and Stock Appreciation Rights on
the date of his death; provided, however, that in no event shall the
Options or Stock Appreciation Rights be exercisable more than ten
years and one day from the date they were granted. As a condition to
any such exercise, the Committee may require any such executor,
administrator, legatee or heir seeking to exercise such Options or
Stock Appreciation Rights to provide evidence satisfactory to the
Committee, in its sole discretion, of his or her authority to
exercise such Options or Stock Appreciation Rights on behalf of the
Participant's estate.
<PAGE>
11. No Obligation To Exercise Option of Stock Appreciation
Rights. The granting of an Option or Stock Appreciation Rights
shall impose no obligation upon the Participant to exercise such
Option or Stock Appreciation Rights.
12. Nonassignability. Options and Stock Appreciation Rights
shall not be transferable other than by will or by the laws of
descent and distribution and during a Participant's lifetime shall
be exercisable only by such Participant.
13. Effect of Change in Stock Subject to the Plan. The
aggregate number of shares of Common Stock available for Options
under the Plan, the shares subject to any Option, the price per
share, and the number of related Stock Appreciation Rights shall all
be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock subsequent to the effective
date of the Plan resulting from (1) a subdivision or consolidation
of shares or any other capital adjustment, (2) the payment of a
stock dividend or (3) other increase or decrease in such shares
effected without receipt of consideration by the Company. If the
Company shall be the surviving corporation in any merger or
consolidation, any Option or Stock Appreciation Rights shall
pertain, apply and relate to the securities to which a holder of the
number of shares of Common Stock subject to the Option would have
been entitled after the merger or consolidation. Upon dissolution or
liquidation of the Company, or upon a merger or consolidation in
which the Company is not the surviving corporation, all outstanding
Options and Stock Appreciation Rights under the Plan shall
terminate; provided, however, that each Participant shall have the
right, immediately prior to such dissolution or liquidation, or such
merger or consolidation, to exercise such Options and Stock
Appreciation Rights in whole or in part, but only those Options and
Stock Appreciation Rights exercisable on the date of the
dissolution, liquidation, merger or consolidation.
14. Amendment. The Board of Directors, by resolution, may
terminate, amend or revise the Plan with respect to any shares as to
which Options have not been granted. Neither the Board of Directors
nor the Committee may, without the consent of the holder of an
Option, alter or impair any Options or Stock Appreciation Rights
previously granted pursuant to the Plan, except as authorized
herein.
15. Agreement and Representation of Employees. As a condition
to the exercise of a portion of any Options or Stock Appreciation
Rights, the Company may require the person exercising such Options
or Stock Appreciation Rights to represent and warrant at the time of
such exercise that any shares of Common Stock acquired by exercise
are being acquired only for investment and without any present
intention to sell or distribute such shares, if, in the opinion of
<PAGE>
counsel for the Company, such a representation is required under the
Securities Act of 1933 or any other applicable law, regulation or
rule of any governmental agency.
16. Reservation of Shares of Common Stock. The Company,
during the term of the Plan, will at all times reserve and keep
available the number of shares of Common Stock that shall be
sufficient to satisfy the requirements of this Plan. The inability
of the Company to obtain from any regulatory body having
jurisdiction the authority deemed necessary by legal counsel for the
Company for the lawful issuance and sale of its Common Stock
hereunder shall relieve the Company of any liability in respect of
the failure to issue or sell Common Stock as to which the requisite
authority has not been obtained.
17. Effective Date of Plan. The Plan shall be effective as
of June 9, 1987.
18. Termination Date of Plan. This Plan may be terminated by
the Board of Directors, in its sole discretion, and no Options or
Stock Appreciation Rights shall be granted pursuant to this Plan
after such termination. Termination of this Plan shall not affect
any Options or Stock Appreciation Rights granted during the term of
this Plan.
