<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BF ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
BF ENTERPRISES, INC.
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-------------
TO BE HELD
WEDNESDAY, MAY 27, 1998
9:30 A.M.
To the Stockholders:
The annual meeting of stockholders of BF ENTERPRISES, INC. will be held at
9:30 a.m. on Wednesday, May 27, 1998, at the Wyndham Harbour Island Hotel, 725
S. Harbour Island Boulevard, Tampa, Florida. The meeting will be held for the
following purposes:
1. To elect five directors to hold office until the next annual meeting
of stockholders or until their successors are elected. The present Board of
Directors intends to nominate for election as directors: Brian P. Burns,
Daniel S. Mason, Ralph T. McElvenny, Jr., Charles E.F. Millard and Paul
Woodberry.
2. To consider and act upon the Company's proposed 1997 Long-Term
Incentive Plan.
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement of the meeting.
Only stockholders of record at the close of business on April 6, 1998 are
entitled to notice of, and to vote at, the meeting and any adjournment or
postponement of the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
CAROL L. YOUNG, SECRETARY
San Francisco, California
April 21, 1998
--IMPORTANT--
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POST-PAID ENVELOPE. IF
YOU ATTEND THE MEETING AND SO DESIRE, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON.
THANK YOU FOR ACTING PROMPTLY.
<PAGE>
BF ENTERPRISES, INC.
------------
PROXY STATEMENT
-------------
INTRODUCTION
The enclosed proxy is solicited on behalf of the present Board of Directors
(sometimes referred to as the "Board") of BF Enterprises, Inc., a Delaware
corporation (the "Company"), the principal executive offices of which are
located at 100 Bush Street, Suite 1250, San Francisco, California 94104. The
approximate date on which this proxy statement and the enclosed proxy are being
mailed to the Company's stockholders is April 21, 1998. The proxy is solicited
for use at the annual meeting of stockholders (the "Meeting") to be held at 9:30
a.m. on Wednesday, May 27, 1998, at the Wyndham Harbour Island Hotel, 725 S.
Harbour Island Boulevard, Tampa, Florida.
Only holders of record of the Company's $.10 par value common stock ("Common
Stock") on April 6, 1998 will be entitled to vote at the Meeting and any
adjournment or postponement of the Meeting. At the close of business on March
30, 1998, there were 3,654,893 shares of Common Stock outstanding. Each
stockholder will be entitled to one vote per share of Common Stock held on each
proposal considered at the Meeting. A majority of the outstanding shares of
Common Stock will constitute a quorum at the Meeting. Shares of Common Stock
held by persons who abstain from voting and broker "non-votes" will be counted
in determining whether a quorum is present at the Meeting.
A stockholder giving a proxy in the form accompanying this proxy statement
has the power to revoke the proxy prior to its exercise. A proxy can be revoked
by an instrument of revocation delivered prior to the Meeting to the Secretary
of the Company, by a duly executed proxy bearing a date later than the date of
the proxy being revoked, or at the Meeting if the stockholder is present and
elects to vote in person.
The cost of soliciting proxies will be borne by the Company. Solicitations
may be made by directors, officers or employees of the Company by telephone or
personal interview as well as by mail. Solicitation by such persons will be made
on a part-time basis, and no special compensation other than reimbursement of
actual expenses incurred in connection with such solicitation will be paid.
The Company meets the definition of a small business issuer under
regulations promulgated by the Securities and Exchange Commission (the "SEC").
PROPOSAL ONE
NOMINATION AND ELECTION OF DIRECTORS
NOMINEES OF THE PRESENT BOARD OF DIRECTORS
The full Board of Directors, consisting of five directors, will be elected
at the Meeting to hold office until the next annual meeting or until the
directors' successors are elected. It is intended that the proxies will be voted
for the election of the five nominees named below. All five of the nominees are
presently directors of the Company. The present term of office of all directors
will expire upon election of directors at the Meeting.
The proxies cannot be voted for more than five persons. Should any nominee
become unavailable to serve as a director for any reason, proxies will be voted
for the balance of those named and such substitute nominee as may be selected by
the Board. The Board does not expect any nominee to become unavailable. The
affirmative vote of a majority of the outstanding shares of Common Stock present
in person or by proxy at the Meeting and entitled to vote is necessary to elect
each nominee. Proxies solicited by the Board will be voted "FOR" the election of
the five nominees named below unless stockholders specify in their
1
<PAGE>
proxies to the contrary. Shares of Common Stock held by persons who abstain from
voting and broker non-votes will not be voted for or against any of the
nominees. Shares held by persons abstaining will be counted in determining
whether a quorum is present for the purpose of voting for the election of
directors, but broker non-votes will not be counted for this purpose.
The following table lists the name and age of each person nominated by the
Board for election as a director and all positions and offices with the Company
held by the nominee.
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY
NAME AGE IN ADDITION TO DIRECTOR
- ----------------------------------------------- --- -----------------------------------------------
<S> <C> <C>
Brian P. Burns................................. 61 Chairman of the Board, President and
Chief Executive Officer
Daniel S. Mason................................ 49
Ralph T. McElvenny, Jr......................... 56
Charles E.F. Millard........................... 65
Paul Woodberry................................. 70 Executive Vice President and Chief
Financial Officer
</TABLE>
Messrs. Burns and Woodberry were first elected to office in May 1987.
Messrs. McElvenny and Millard have served as directors of the Company since June
1987. Mr. Mason was elected a director on October 16, 1996.
Mr. Burns has been Chairman of the Board of Directors and Chief Executive
Officer of the Company since May 1987, and President since March 1988. He also
is a director of Kendall-Jackson Winery and a director and Chairman of the
Finance Committee of Digital Gene Technologies, Inc.
Mr. Mason has been managing partner of the San Francisco law firm of Furth,
Fahrner & Mason for more than the past five years.
Mr. McElvenny has been Chairman of the Board of Directors and Chief
Executive Officer of Golden Oil Company ("Golden"), a natural resources
exploration and production company with principal offices in Houston and Tulsa,
and predecessor companies for more than the past five years. He also served as
Chief Executive Officer of Cobb Resources Corporation ("Cobb"), an oil and gas
exploration and production company in which Golden is a substantial shareholder,
from October 1990 until March 1992, when Cobb shareholders approved the sale of
Cobb's oil and gas assets to Golden. For more than the past five years Mr.
McElvenny also has been Chairman of the Board of Directors and Chief Executive
Officer of USR Industries, Inc., a diversified holding company based in Houston.
Mr. Millard has been managing partner of Millard/O'Reilly Enterprises, a
Fairfield, Connecticut firm engaged in real estate, investments and consulting
for more than the past five years. Mr. Millard also is President of Sanctuary
Ventures, Ltd., a private real estate and investment firm.
Mr. Woodberry has been Executive Vice President and Chief Financial Officer
of the Company since May 1987, and served as Treasurer of the Company from May
1987 to May 1992. For more than the past five years, he has been a consultant to
Alleghany Corporation, an asset management company based in New York, or certain
of its subsidiaries, and has devoted a majority of his time to such activities.
He is a director of Alleghany Corporation and certain subsidiaries of Alleghany
Corporation, including World Minerals Inc., Underwriters Re Group, Inc. and
Alleghany Properties, Inc.
THE BOARD AND COMMITTEES
The Board of Directors has standing Audit, Compensation and Executive
Committees. The Board currently has no standing nominating committee.
2
<PAGE>
The Audit Committee, currently composed of Messrs. McElvenny (Chairman) and
Millard, met twice during 1997. In addition, members of the Audit Committee met
from time to time with the Company's internal finance and accounting staff and
with representatives of Arthur Andersen LLP, the Company's independent auditors.
The function of the Audit Committee is to recommend to the full Board of
Directors the firm to be retained by the Company as its independent auditors, to
consult with the auditors with regard to the scope of audit practices and the
plan of audit, the results of the audit and the audit report, and to confer with
the auditors with regard to the adequacy of internal accounting controls.
The Compensation Committee, currently composed of Messrs. Millard (Chairman)
and McElvenny, met once during 1997. In addition, Mr. Millard, as Chairman, met
from time to time with the Chairman of the Board to review and consider various
compensation matters. The function of the Compensation Committee is to recommend
to the full Board of Directors compensation arrangements for the Company's
senior management and the adoption of any compensation plans in which officers
and directors are eligible to participate, and to review and advise the full
Board of Directors with respect to trends in management compensation.
The Executive Committee, currently composed of Messrs. Burns (Chairman),
McElvenny and Millard, did not meet during 1997. The Executive Committee has all
of the powers of the Board of Directors, with certain specific exceptions
required by Delaware law.
The Board had four meetings during 1997. Each director attended at least 75%
of the meetings of the Board and of the committees of the Board on which he
served.
EXECUTIVE OFFICERS
The executive officers of the Company are:
<TABLE>
<CAPTION>
NAME* AGE OFFICE
- --------------------------- --- ------------------------------------------------------------------
<S> <C> <C>
Brian P. Burns............. 61 Chairman of the Board, President and Chief Executive Officer
Paul Woodberry............. 70 Executive Vice President and Chief Financial Officer
Stuart B. Aronoff.......... 65 Senior Vice President--Operations and Assistant Secretary
S. Douglas Post............ 57 Vice President and Treasurer
</TABLE>
Mr. Aronoff has been Senior Vice President--Operations and Assistant
Secretary of the Company since May 1987.
Mr. Post has been Vice President of the Company since July 1991 and
Treasurer since March 1998.
* Throughout 1997, and until his untimely death on March 4, 1998, John M.
Price served as the Company's Senior Vice President, General Counsel,
Secretary and Treasurer.
All of the executive officers serve at the pleasure of the Board of
Directors, subject to the terms of employment agreements, if any, relating to
certain of such officers; see "Compensation of Executive Officers and
Directors--Employment Contract, Termination of Employment and Change in Control
Arrangements" below.
3
<PAGE>
BENEFICIAL STOCK OWNERSHIP
The following table sets forth information as of March 30, 1998 concerning
beneficial ownership of Common Stock, the Company's only class of equity
securities currently outstanding, by (i) the only persons known to the Company
to be beneficial owners of more than 5% of the outstanding Common Stock, (ii)
all directors, (iii) the Chief Executive Officer and (iv) all directors and
executive officers as a group.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
NAME OF BENEFICIALLY COMMON
BENEFICIAL OWNER OWNED(1) STOCK
- -------------------------------------------------------------------------------- -------------------- -------------
<S> <C> <C>
Brian P. Burns.................................................................. 1,809,338(2) 45.3%(2)
100 Bush Street
San Francisco, CA 94104
Frederick P. Furth ............................................................. 690,000(3) 18.9%(3)
201 Sansome Street
San Francisco, CA 94104
Jeffrey T. and Karen T. Nebel .................................................. 233,050 6.4%
2055 94th Ave., N.E.
Bellevue, WA 98004
J. Stephen Schaub .............................................................. 202,604(4) 5.5%(4)
9 North Post-Suite 241
Spokane, WA 99201
Thomas Nebel ................................................................... 200,040(5) 5.5%(5)
1710 Bellevue Way, N.E.
Bellevue, WA 98004
Daniel S. Mason................................................................. 3,250(6) *
Ralph T. McElvenny, Jr.......................................................... 10,000(7) *
Charles E.F. Millard............................................................ 24,100(7)(8) *
Paul Woodberry.................................................................. 190,588(9) 5.1%(9)
All directors and executive officers as a group
(8 persons)(2)(6)(7)(8)(9)(10)................................................ 2,437,915 56.0%
</TABLE>
- ------------------------
* Less than 1%
(1) Named persons have sole voting and investment power, except as otherwise
indicated.
(2) Includes 342,000 shares subject to presently exercisable options. Also
includes 678,200 shares owned by Frederick P. Furth, as to which Mr. Burns
holds an irrevocable proxy until May 31, 2001 and as to which Mr. Burns
disclaims beneficial ownership. Excludes all shares now or hereafter owned
by Messrs. Thomas Nebel, Paul Woodberry, Stuart Aronoff, Douglas Post and
the estate of John Price and five others as to which shares Mr. Burns has
rights of first refusal with respect to future sales. An aggregate of at
least 470,097 of the outstanding shares of Common Stock currently are
subject to these rights.
(3) Includes 11,800 shares owned by the Furth Foundation, a charitable
foundation of which Mr. Furth is Chairman of the Board of Directors, as to
which shares Mr. Furth has shared voting and dispositive powers. Mr. Furth
has granted Mr. Burns an irrevocable proxy to vote all his shares (excluding
shares held by the Furth Foundation) during the period ending May 31, 2001.
(4) Includes 10,611 shares as to which Mr. Schaub disclaims beneficial ownership
and 18,100 shares as to which Mr. Schaub has shared voting and dispositive
powers.
4
<PAGE>
(5) Includes 50,528 shares as to which Mr. Nebel has shared voting and
dispositive powers with his wife.
(6) Includes (i) 2,000 shares as to which Mr. Mason has shared voting and
dispositive powers with his wife, and (ii) 1,250 shares subject to presently
exercisable options.
(7) Includes 8,000 shares subject to presently exercisable options.
(8) Includes 1,400 shares held in a deferred compensation account by a company
of which Mr. Millard was formerly Chairman of the Board of Directors and
Chief Executive Officer, as to which shares Mr. Millard disclaims present
beneficial ownership.
(9) Consists of (i) 108,088 shares owned by a trust of which Mr. Woodberry and
his wife are co-trustees, in which capacities Mr. and Mrs. Woodberry share
voting and investment power with respect to all such shares, and (ii) 82,500
shares subject to presently exercisable options.
(10) Includes (i) 259,000 shares subject to presently exercisable options, in
addition to those described in the foregoing footnotes, held by two
executive officers and the estate of John M. Price and (ii) 87,170 shares
owned by a trust of which one of those officers and his wife are
co-trustees, in which capacity they share voting and investment power with
respect to all of such shares, and 700 shares owned by the wife of that
officer, as to which shares the officer disclaims beneficial ownership.
5
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The following table sets forth the total compensation that the Company paid
or accrued to its Chief Executive Officer, Brian P. Burns, during fiscal years
1995, 1996 and 1997. No other executive officer of the Company received salary
and bonus in excess of $100,000 for services rendered in all capacities to the
Company during 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------- ------------------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER SECURITIES ALL
ANNUAL RESTRICTED UNDERLYING OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
SALARY BONUS SATION AWARDS SARS PAYOUTS SATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)(1)
- --------------------------------- ---- -------- ----- -------- ------------ ----------- ------------- ---------
Brian P. Burns 1997 $269,167 -- -- -- 40,000 -- $ 16,000
Chairman of the Board, 1996 240,000 -- -- -- 39,000 -- 15,000
President and Chief 1995 180,000 -- -- $ 63,750(2) 39,000 -- 15,000
Executive Officer
</TABLE>
- ------------------------------
(1) Amounts accrued in 1997, 1996, and 1995 and paid in 1998, 1997 and 1996,
respectively, on behalf of Mr. Burns as fully vested contributions to the
Company's Profit Sharing Plan, a defined contribution plan.
(2) The value, on the date of grant, January 3, 1995, of 15,000 shares of
restricted stock granted Mr. Burns, pursuant to the Company's 1993 Long-Term
Equity Incentive Plan, all of which shares became vested six months
following the grant. These shares had a value on December 31, 1997 (based on
the closing bid price for the Common Stock on that date) of $123,750, and
will receive any dividends payable on Common Stock which may be declared in
the future.
OPTION GRANT DURING 1997; VALUE OF OPTIONS AT YEAR-END
The following table sets forth certain information covering the grant of
options to the Company's Chief Executive Officer, Mr. Burns, during the fiscal
year ended December 31, 1997, and unexercised options held by Mr. Burns as of
that date. Mr. Burns did not exercise any options during fiscal year 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
NUMBER OF -------------------------
SECURITIES % OF TOTAL OPTIONS/SARS EXERCISE OR
UNDERLYING OPTIONS/ GRANTED TO EMPLOYEES IN BASE PRICE
NAME SARS GRANTED (#) FISCAL YEAR ($/SH) EXPIRATION DATE
- -------------------------------- ------------------- ------------------------- ------------- --------------------
<S> <C> <C> <C> <C>
Brian P. Burns 40,000(1) 41.7% $ 8.25 December 8, 2007
</TABLE>
- ------------------------------
(1) Non-qualified stock option to purchase Common Stock issued, subject to
stockholder approval at the 1998 Annual Meeting of Stockholders of the
Company's proposed 1997 Long-Term Incentive Plan, on December 9, 1997,
granted at 100% of fair market value on that date, and exercisable in whole
or in part at any time prior to the expiration date of the option or its
earlier termination in accordance with that plan. The exercise price, and
any related income tax withholding obligations, may be satisfied by delivery
of cash, secured recourse promissory note, Common Stock owned by Mr. Burns
for at least six months, or any combination thereof.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
-------------------------------- -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------ ----------- ------------------- ------------ -----------------
<S> <C> <C> <C> <C>
Brian P. Burns 342,000 0 $ 1,472,500 n/a
</TABLE>
6
<PAGE>
EMPLOYMENT CONTRACT, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Brian P. Burns, Chairman of the Board, President and Chief Executive
Officer, has an employment agreement with the Company terminating December 31,
2002, pursuant to which Mr. Burns receives an annual salary of $275,000,
effective March 1, 1997. Under his employment agreement, Mr. Burns also is
eligible to receive an annual cash bonus not exceeding his base salary, although
he did not receive a cash bonus for 1995, 1996 or 1997. The amount of any bonus
is determined by the Board of Directors in its sole discretion. In the event Mr.
Burns's employment is terminated involuntarily other than for cause, or
voluntarily within thirty days following a change in control of the Company, Mr.
Burns will be paid, at his election, either (i) his salary, at the rate in
effect on the date of termination, plus an equal amount annually in lieu of a
bonus, through the stated expiration date of his agreement, or (ii) the present
value of such payments, subject in either case to the limitation that Mr. Burns
will not receive any amount that would not be deductible by the Company under
applicable provisions of the Internal Revenue Code of 1986, as amended.
COMPENSATION OF DIRECTORS
Each director of the Company who is not also an employee of the Company
receives an annual fee of $10,000 for services as a director and $750 for each
board meeting attended. Outside directors also receive annual fees of $2,500 as
chairman and $1,500 as a member of the Executive, Audit and Compensation
Committees. Directors receive reimbursement for travel and other expenses
directly related to activities as directors, and outside directors receive an
additional $500 for each board meeting they attend which is held more than three
hours' air travel from their residences.
The Company's 1994 Stock Option Plan for Outside Directors (the "Outside
Directors' Plan"), which was approved by the Company's stockholders on May 5,
1994, provides for the periodic, automatic granting of non-qualified stock
options to non-employee directors of the Company (currently Messrs. Mason,
McElvenny and Millard) on the date each person is elected or appointed a
director (or, for Messrs. McElvenny and Millard, on May 5, 1994) and thereafter
on the date of each annual meeting of stockholders at which he or she, having
served at least one year as a non-employee director, is re-elected a director.
The initial grant is a non-qualified option for the purchase of 5,000 shares of
Common Stock. At each subsequent annual meeting of stockholders, an eligible
non-employee director will receive a non-qualified option for the purchase of
2,000 shares of Common Stock. All options granted under the Outside Directors'
Plan have an exercise price equal to the fair market value of Common Stock on
the grant date, have a term of ten years and one day and vest at the rate of 25%
per year for each of the first four years, except that upon the death,
disability or retirement of a non-employee director, or upon a director's
failure to win reelection after nomination at the recommendation of the Board of
Directors, or upon a change of control (as defined in the Outside Directors'
Plan), all options vest automatically and immediately. All options held by a
director terminate on the date that such individual ceases to be a director,
provided that all options vested and exercisable on that date may be exercised
for a period of up to one year following termination or, in the case of
termination by reason of death, disability, retirement or failure to win
reelection, as described above, for a period of three years. A total of 100,000
shares of Common Stock has been authorized for issuance under the Outside
Directors' Plan. Messrs. McElvenny and Millard, were each granted an option for
the purchase of 2,000 shares of Common Stock, pursuant to the Outside Directors'
Plan, on May 14, 1997 (the date of the 1997 Annual Meeting of Stockholders),
with an exercise price of $9.00 per share, the fair market value of a share of
Common Stock on that date. Mr. Mason was granted an option for the purchase of
5,000 shares of Common Stock, pursuant to the Outside Directors' Plan, on
October 16, 1996 (the date of his election to the Board), with an exercise price
of $6.25 per share, the fair market value of a share of Common Stock on that
date.
7
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has retained the law firm of Furth, Fahrner & Mason, of which
Mr. Mason is managing partner, to represent the Company with reference to
certain matters during 1996, 1997, and 1998.
PROPOSAL TWO
APPROVAL OF THE 1997 LONG-TERM INCENTIVE PLAN
BACKGROUND
The Company's 1993 Long-Term Equity Incentive Plan (the "1993 Plan") was
adopted by the Board of Directors of the Company on February 13, 1993 and
approved by the stockholders on June 24, 1993. As of December 1, 1997, options
for 418,500 shares were outstanding under the 1993 Plan, 41,000 shares had been
issued pursuant to stock option exercises or stock purchase grants under the
1993 Plan, and 40,500 shares remained available for future grants under the 1993
Plan. On December 9, 1997, the Compensation Committee of the Board of Directors
(the "Compensation Committee") desired to award options for 96,000 shares of the
Company's common stock ("Common Stock") to employees and officers of the
Company. The Compensation Committee awarded options to purchase 40,500 shares of
Common Stock under the 1993 Plan, leaving no shares available for grants under
the 1993 Plan, and, subject to stockholder approval of the Plan, granted options
under the Plan to purchase 55,500 shares of Common Stock to three executive
officers of the Company. Therefore, on December 10, 1997, the Board of Directors
unanimously adopted the 1997 Long-Term Incentive Plan of BF Enterprises, Inc.
(the "Plan"), and reserved 560,000 shares of the Company's Common Stock for
issuance thereunder. The Plan is summarized below.
The Board proposes the Plan principally to provide a continuing benefit
program for attracting and retaining employees, officers, and consultants
important to the future of the Company. The Board believes that incentive
programs, such as those available under the Plan, are commonly employed by many
companies as an important element of a total compensation program.
GENERAL
The purposes of the Plan are to provide an additional incentive for
employees, officers, and consultants to further the growth, development, and
financial success of the Company by personally benefiting through the ownership
of Company stock and/or rights which recognize such growth, development and
financial success, and to enable the Company to obtain and retain the services
of employees and consultants considered essential to the long-range success of
the Company by offering them an opportunity to own stock in the Company and/or
rights which will reflect the growth, development and financial success of the
Company. Historically, the Company has utilized its ability to grant options and
other awards under its employee benefit plans as an important element of its
total compensation package for officers and other employees of the Company,
often doing so in lieu of implementing salary increases and/or annual cash
bonuses. While the Company currently anticipates continuing the use of option
grants and other awards under the Plan, subject to stockholder approval of the
Plan, the Company may at any time in the future or from time to time elect to
implement salary increases or to grant annual cash bonuses. The Plan is designed
to permit the Company to provide several different forms of benefits to meet
competitive conditions and the particular circumstances of individuals who may
be eligible to receive benefits under the Plan. To accomplish these purposes,
the Plan authorizes the grant of several different forms of benefits including
non-qualified stock options, incentive stock options, restricted stock awards,
performance awards, deferred stock awards, stock payments, and stock
appreciation rights.
The following summary of certain provisions of the Plan is qualified in its
entirety by reference to the copy of the Plan set forth in Exhibit A to this
proxy statement.
8
<PAGE>
ADMINISTRATION
The Plan provides that grants of options, awards and/or rights and other
determinations under the Plan shall be made by the Compensation Committee or
such other committee (the "Committee") constituted to satisfy the applicable
requirement of Rule 16b-3 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and Section 162(m) of the Code. The Committee has the
exclusive authority to grant options, awards and/or rights and otherwise
administer the Plan, except that the Committee may delegate its authority to the
extent consistent with applicable law and Securities and Exchange Commission
("SEC") rules.
ELIGIBILITY
Officers and other employees of the Company and its subsidiaries, and
(except as to incentive stock options) consultants to the Company and its
subsidiaries, selected by the Committee will be eligible to receive options,
awards and/or rights under the Plan.
The maximum number of shares which may be subject to options or stock
appreciation rights granted under the Plan to any one participant, in aggregate,
in any calendar year, cannot exceed 200,000 shares. There is no maximum number
of persons eligible to receive options, awards, and/or rights under the Plan.
The Plan provides that the aggregate fair market value (determined as of the
time the option is granted) of the common shares with respect to which incentive
stock options may become exercisable for the first time by any individual during
any calendar year may not exceed $100,000.
ADJUSTMENTS
The Plan provides for adjustment, at the discretion of the Committee, in the
number of shares reserved, the shares covered by each outstanding option, award,
and/or right, the vesting period, and other matters, in the event of a stock
dividend or stock split and for continuation of any option, award, and/or right
and other equitable adjustment in the event of any dividend or other
distribution (whether in the form of cash, Common Stock, other securities, or
other property), recapitalization, reclassification, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company (including,
but not limited to, a Corporate Transaction (as defined in the Plan)), or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event.
STOCK OPTIONS
The Plan provides that either incentive stock options or nonstatutory stock
options may be granted to employees (including officers and directors) of the
Company or any of its subsidiaries. In addition, the Plan provides that
nonstatutory stock options may be granted to consultants of the Company or any
of its subsidiaries. The Committee selects the optionees and determines the
number of shares to be subject to each option. In making such determination, a
number of factors are taken into account, including the duties and
responsibilities of the optionee, the value of the optionee's services to the
Company, the optionee's present and potential contribution to the success of the
Company, and other relevant factors.
On December 9, 1997, the Compensation Committee awarded options to purchase
40,500 shares of Common Stock under the 1993 Plan, leaving no shares available
for grants under the 1993 Plan, and, subject to stockholder approval of the
Plan, granted options under the Plan to purchase 55,500 shares of Common Stock
to three executive officers of the Company, as follows: Brian P. Burns, Chairman
and Chief Executive Officer, 40,000 shares; Paul Woodberry, Executive Vice
President and Chief Financial Officer, 15,000 shares; and Stuart B. Aronoff,
Senior Vice President--Operations, 500 shares. Mr. Aronoff was also
9
<PAGE>
granted options for 9,500 shares under the 1993 Plan by the Compensation
Committee on December 9, 1997. Mr. Burns and Mr. Woodberry were not granted any
options in 1997 under the 1993 Plan.
The price per share of the Common Stock subject to each option shall be set
by the Committee. However, the Plan provides that the purchase price of the
Common Stock subject to any incentive stock option, and any non-qualified stock
option intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, shall be at least 100 percent of the fair
market value of the common shares at the time the option is granted. The
Committee may provide for the payment of the purchase price in cash, by delivery
of other common shares of the Company having a market value equal to the
purchase price of such shares, or by any other method, such as delivery of
promissory notes.
The Committee may add conditions and limitations to any option granted to
any participant who is subject to Section 16 of the Exchange Act or to any
feature of such option as the Committee deems necessary or desirable to comply
with such Section and the rules thereunder, or to obtain an exemption therefrom.
STOCK APPRECIATION RIGHTS
A stock appreciation right may be awarded either (i) with respect to Common
Stock subject to an option held by an optionee, or (ii) without reference to an
option. If an option is an incentive stock option, a stock appreciation right
granted with respect to such option may be granted only at the time of grant of
the related incentive stock option, but if the option is a non-qualified stock
option, the stock appreciation right may be granted either simultaneously with
the grant of the related non-qualified stock option or at any time during the
term of such related non-qualified stock option. The Committee, in its
discretion, may determine whether a stock appreciation right is to qualify as
performance-based compensation as described in section 162(m)(4)(c) of the Code.
A stock appreciation right shall be exercisable at such times and in whole
or in part, each as determined by the Committee. If a stock appreciation right
is granted with respect to an option, the stock appreciation right shall be
exercisable only when and to the extent the related option is exercisable. If a
stock appreciation right is unrelated to an option, it is generally exercisable
only while the grantee is an employee or consultant; provided, that the
Committee may determine that a stock appreciation right may be exercised
subsequent to termination of employment or termination of consultancy without
cause, following a Change in Control (as defined in the Plan), or because of the
grantee's retirement, death or disability, or otherwise. A stock appreciation
right granted to a participant who is subject to Section 16 of the Exchange Act
may be exercised only after six months and one day from its grant date (unless
such exercise would not affect the exemption under Rule 16b-3 under the Exchange
Act). A stock appreciation right shall be exercisable upon such additional terms
and conditions as may be prescribed by the Committee in its sole discretion, but
in no event shall it be exercisable after the expiration of the related stock
option.
Upon the exercise of a stock appreciation right, the grantee shall be
entitled to receive payment in Common Stock, cash, or a combination of cash and
Common Stock, as determined by the Committee, which in the aggregate shall have
a value equal to that computed by dividing (A) an amount (the "Stock
Appreciation Right Spread"), rounded to the nearest whole dollar, equal to the
product computed by multiplying (x) the excess of (1) the fair market value on
the date the stock appreciation right is exercised, over (2) the exercise price
per share of Common Stock of the related option, or in the case of a stock
appreciation right granted without reference to an option, such other price as
the Committee establishes at the time the stock appreciation right is granted,
by (y) the number of shares of Common Stock with respect to which a stock
appreciation right is being exercised by (b) the fair market value on the date
the stock appreciation right is exercised.
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RESTRICTED STOCK AWARDS
Restricted stock awards will consist of common shares issued to
participants, as additional compensation for their services to the Company or
one of its subsidiaries. Restricted stock awards shall be subject to such terms
and conditions as the Committee determines are appropriate, including without
limitation, restrictions on the sale or other disposition of such shares and
rights of the Company to reacquire such shares upon termination of the
participant's employment within specified periods. Subject to such other
restrictions as are imposed by the Committee, the common shares covered by a
restricted stock award granted to a participant who is subject to Section 16 of
the Exchange Act may be sold or otherwise disposed of only after six months and
one day from the grant date of the award (unless such sale would not affect the
exemption under Rule 3 under the Exchange Act).
The Committee shall provide in the terms of each individual restricted stock
agreement that the Company shall have the right to repurchase from the
restricted stockholder the restricted stock then subject to restrictions under
the restricted stock agreement immediately upon a termination of employment or,
if applicable, upon a termination of consultancy between the restricted
stockholder and the Company, at a cash price per share equal to the price paid
by the restricted stockholder for such restricted stock; provided, however, that
provision may be made that no such right of repurchase shall exist in the event
of a termination of employment or termination of consultancy without cause, or
following a Change in Control or because of the restricted stockholder's
retirement, death or disability, or otherwise.
PERFORMANCE AWARDS, DEFERRED STOCK, AND STOCK PAYMENTS
An employee or consultant selected by the Committee may be granted one or
more performance awards. The Plan permits the grant of performance awards in the
form of performance units or performance shares. Performance units consist of
monetary awards and performance shares consist of common shares or awards
denominated in common shares, which may be earned in whole or in part if the
Company achieves certain goals established by the Committee over a designated
period of time. Any employee or consultant selected by the Committee may be
granted one or more performance awards.
The value of such performance awards may be linked to the earnings per
share, return on equity, return on assets, total shareholder return, net
profits, or net operating income of the Company, or to the market value, book
value, or other measure of the value of Common Stock or other specific
performance criteria determined appropriate by the Committee, in each case on a
specified date or dates or over any period or periods determined by the
Committee, or may be based upon the appreciation in the earnings per share,
return on equity, return on assets, total shareholder return, net profits, or
net operating income of the Company, or upon the appreciation in the market
value, book value, or other measure of the value of a specified number of shares
of Common Stock over a fixed period or periods determined by the Committee. In
making such determinations, the Committee shall consider (among such other
factors as it deems relevant in light of the specific type of award) the
contributions, responsibilities and other compensation of the particular
employee or consultant. Partial achievement of goals may result in payment or
vesting corresponding to the level of achievement. Payment of an award earned
may be in cash or in common shares, or in a combination of both, and may be made
when earned, or vested and deferred, as the Committee in its sole discretion
determines.
An employee or consultant selected by the Committee may receive stock
payments and/or an award of deferred stock in the manner determined from time to
time by the Committee. The number of shares, whether with respect to a stock
payment or an award of deferred stock, shall be determined by the Committee and
may be based upon or linked to the earnings per share, return on equity, return
on assets, total shareholder return, net profits, or net operating income of the
Company, or to the market value, book value, or other measure of the value of
Common Stock or other specific performance criteria determined appropriate by
the Committee.
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A performance award, award of deferred stock and/or stock payment is
exercisable or payable only while the grantee is an employee or consultant;
provided that the Committee may determine that the performance award, award of
deferred stock and/or stock payment may be exercised or paid subsequent to
termination of employment or termination of consultancy without cause, or
following a Change in Control, or because of the grantee's retirement, death or
disability, or otherwise.
NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS
The options, awards, and rights granted or awarded under the Plan may not be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or the laws of descent and distribution, pursuant to a
qualified domestic relations order, or, when authorized by the Committee in its
sole discretion, by gift of an option, subject to certain conditions, to the
spouse, former spouse, child or other lineal descendent of the employee or to a
trust, partnership, or other entity established for the sole benefit of or under
the sole control of one or more of those family members, or any other transferee
specifically approved by the Committee. During the lifetime of the optionee or
grantee, only he or she may exercise an option or other award or right granted
to him or her, unless it has been disposed of pursuant to a qualified domestic
relations order or a transfer authorized by the Committee as noted in the
preceding sentence.
AMENDMENTS AND TERMINATION
The Plan is subject to amendment or termination by the Board of Directors or
Committee without shareholder approval as deemed in the best interests of the
Company. However, the Company shall obtain stockholder approval for any
amendment to the Plan to increase the maximum number of shares of Common Stock
reserved under the Plan and to the extent necessary to comply with Section
162(m) and Section 422 of the Code, or any similar rule or statute. No such
action by the Board or stockholders may alter or impair any option or stock
purchase right previously granted under the Plan without the written consent of
the optionee. No options, awards, or rights may be granted or awarded during any
period of suspension or after termination of the Plan, and in no event may any
incentive stock options be granted after December 10, 2007.
FEDERAL INCOME TAX CONSEQUENCES
Under existing law and regulations, the grant of non-qualified stock options
or stock appreciation rights generally will not result in income taxable to the
employee or director or provide a deduction to the Company upon their grant.
However, the exercise of a non-qualified stock option or a stock appreciation
right will generally result in ordinary income taxable to the holder, subject to
income and employment tax withholding requirements. If appropriate income and
employment tax withholding is made and certain other conditions are satisfied,
the Company is generally entitled to a deduction equal in amount to the ordinary
income recognized by the optionee at the time of exercise of a non-qualified
option or stock appreciation right. At the time of the exercise of a
non-qualified stock option, the amount so taxable and so deductible will be the
excess of the fair market value as of the date of exercise of the shares
purchased over their option price.
Upon the exercise of a stock appreciation right, the participant will have
ordinary income taxable to the holder in the amount of the cash and the fair
market value as of the date of exercise of the shares received by the employee,
on account of such exercise.
Under the Code, no income is recognized by an optionee when an incentive
stock option is granted or exercised. If the holder holds the shares received on
exercise of an incentive stock option for at least two years from the date of
grant and one year from date of exercise, any gain realized by the holder on the
disposition of the stock will be accorded long-term capital gain treatment, and
no deduction is allowed to the Company. If the holding period requirements are
not satisfied, the employee will recognize ordinary income at the time of
disposition equal to the lesser of (i) the gain realized on the disposition, or
(ii) the
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<PAGE>
difference between the option price and the fair market value of the shares on
the date of exercise. Any additional gain on the disposition not reflected above
will be long-term or short-term capital gain, depending upon the length of time
the shares are held. The Company is entitled to an income tax deduction equal to
the amount of any ordinary income recognized by the employee.
An employee who is granted a restricted stock award will not be taxed upon
the acquisition of such shares so long as the interest in such shares is subject
to a "substantial risk of forfeiture" within the meaning of Section 83 of the
Code. Upon lapse or release of the restrictions, the recipient will be taxed at
ordinary income tax rates on an amount equal to the current fair market value of
the shares as of the date such restrictions lapse or are released. A recipient
of a restricted stock award that is not subject to a substantial risk of
forfeiture will recognize ordinary income at the time of grant in an amount
equal to the fair market value of the shares as of the date of grant. The
Company will be entitled to a corresponding deduction when a restricted stock
award recipient recognizes taxable income on account of his or her restricted
stock award. The basis of restricted shares held after lapse or termination of
restrictions will be equal to their fair market value on the date of lapse or
termination of restrictions, and upon subsequent disposition any further gain or
loss will be long-term or short-term capital gain or loss, depending upon the
length of time the shares are held.
An employee may elect to be taxed at ordinary income tax rates on the full
fair market value of the restricted shares at the time of transfer. If such an
election is made, the basis of the shares so acquired will be equal to the fair
market value at the time of transfer. If the election is not made, no tax will
be payable upon the subsequent lapse or release of the restrictions, and any
gain or loss upon disposition of the shares will be a capital gain or loss.
A participant will realize ordinary income as a result of his or her receipt
of performance awards at the time common shares are issued or cash is paid in an
amount equal to the value of the shares delivered or the cash paid.
The recipient of deferred stock will not have taxable income upon the grant
of deferred stock, and the Company will not then be entitled to a deduction. In
general, when deferred stock vests and shares of common stock are issued, the
recipient will realize ordinary income, and the Company will be entitled to a
deduction, in an amount equal to the fair market value of the common stock on
the date of issuance.
A recipient of a stock payment will recognize ordinary income upon the
distribution in an amount equal to the fair market value of the common stock
received on the date of issuance, and the Company will have a deduction in the
same amount.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON OPTIONEES, HOLDERS OF STOCK PURCHASE RIGHTS, HOLDERS OF PERFORMANCE AWARDS,
AND THE COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF OPTIONS, STOCK
PURCHASE RIGHTS, AND PERFORMANCE AWARDS UNDER THE PLAN. IT DOES NOT PURPORT TO
BE COMPLETE, AND DOES NOT DISCUSS THE TAX CONSEQUENCES UPON AN OFFICER'S,
EMPLOYEE'S, OR CONSULTANT'S DEATH OR THE PROVISIONS OF THE INCOME TAX LAW OF ANY
MUNICIPALITY, STATE, OR FOREIGN COUNTRY IN WHICH THE OFFICER, EMPLOYEE, OR
CONSULTANT MAY LIVE.
NEW PLAN BENEFITS
1997 LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
DOLLAR
VALUE NUMBER OF
NAME AND POSITION ($)(1) UNITS(2)
- ---------------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Brian P. Burns,......................................................................... 330,000 40,000
Chairman and Chief Executive Officer
</TABLE>
- --------------------------
(1) Calculated on the basis of the fair market value of the Common Stock ($8.25
per share) on the date of grant.
(2) Options for Common Shares granted December 10, 1997, subject to stockholder
approval of the Plan, at an exercise price of $8.25 per share, 100% of fair
market value on the date of grant.
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<PAGE>
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares represented
and voting at the Annual Meeting is required to approve the adoption of the
Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE
COMPANY'S 1997 LONG-TERM INCENTIVE PLAN.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, has acted as the
Company's auditors since 1987, and the Board intends to reappoint Arthur
Andersen LLP to audit the books, records and accounts of the Company for the
year ending December 31, 1998. Representatives of that firm will be present at
the Meeting with the opportunity to make a statement if they desire to do so.
They will also be available to respond to appropriate questions.
ANNUAL REPORT TO SEC
STOCKHOLDERS WHO WISH TO OBTAIN, WITHOUT CHARGE, A COPY OF THE COMPANY'S
FORM 10-KSB REPORT FOR THE YEAR ENDED DECEMBER 31, 1997, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, SHOULD ADDRESS A WRITTEN REQUEST TO:
SECRETARY, BF ENTERPRISES, INC., 100 BUSH STREET, SUITE 1250, SAN FRANCISCO, CA
94104. EXHIBITS TO THAT REPORT ARE AVAILABLE UPON WRITTEN REQUEST AND PAYMENT OF
A REASONABLE FEE EQUAL TO THE COMPANY'S COSTS OF COPYING AND MAILING SUCH
EXHIBITS.
STOCKHOLDER PROPOSALS
To be considered for presentation at the 1999 Annual Meeting of
Stockholders, a stockholder proposal must be received at the offices of the
Company not later than January 27, 1999.
OTHER MATTERS
The proxy holders are authorized to vote, in their discretion, upon any
other business that comes before the Meeting and any adjournment or postponement
of the Meeting. The Board knows of no other matters which will be presented to
the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
CAROL L. YOUNG, SECRETARY
San Francisco, California
April 21, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED, POST-PAID ENVELOPE.
14
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EXHIBIT 1
1997 LONG-TERM INCENTIVE PLAN
OF
BF ENTERPRISES, INC.
The Board of Directors of BF Enterprises, a Delaware corporation (the
"Company") on December 10, 1997 adopted the Company's 1997 Long-Term Incentive
Plan, subject to approval by the Company stockholders at the Company's 1998
Annual Meeting of Stockholders.
The purposes of this Plan are as follows:
(1) To provide an additional incentive for Employees and consultants to
further the growth, development and financial success of the Company by
personally benefiting through the ownership of Company stock and/or rights
which recognize such growth, development and financial success.
(2) To enable the Company to obtain and retain the services of Employees
and consultants considered essential to the long range success of the
Company by offering them an opportunity to own stock in the Company and/or
rights which will reflect the growth, development and financial success of
the Company.
ARTICLE I
DEFINITIONS
1.1 GENERAL. Wherever the following terms are used in this Plan they shall
have the meanings specified below, unless the context clearly indicates
otherwise.
1.2 AWARD LIMIT. "Award Limit" shall mean 200,000 shares of Common Stock,
as may be adjusted in accordance with Section 10.3.
1.3 BOARD. "Board" shall mean the Board of Directors of the Company.
1.4 CHANGE IN CONTROL. "Change in Control" shall mean a change in
ownership or control of the Company effected through either of the following
transactions:
(a) any person or related group of persons (other than the Company or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) that directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities pursuant to a
tender or exchange offer made directly to the Company's stockholders which
the Board does not recommend such stockholders to accept; or
(b) there is a change in the composition of the Board over a period of
thirty- six (36) consecutive months (or less) such that a majority of the
Board members (rounded up to the nearest whole number) ceases, by reason of
one or more proxy contests for the election of Board members, to be
comprised of individuals who either (i) have been Board members continuously
since the beginning of such period or (ii) have been elected or nominated
for election as Board members during such period by at least a majority of
the Board members described in clause (i) who were still in office at the
time such election or nomination was approved by the Board.
1.5 CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.6 COMMITTEE. "Committee" shall mean the Compensation Committee of the
Board, or another committee of the Board, appointed as provided in Section 9.1.
1.7 COMMON STOCK. "Common Stock" shall mean the common stock of the
Company, par value $.10 per share, and any equity security of the Company issued
or authorized to be issued in the future, but excluding any preferred stock and
any warrants, options or other rights to purchase Common Stock. Debt
<PAGE>
securities of the Company convertible into Common Stock shall be deemed equity
securities of the Company.
1.8 COMPANY. "Company" shall mean BF Enterprises, Inc., a Delaware
corporation.
1.9 CORPORATE TRANSACTION. "Corporate Transaction" shall mean any of the
following stockholder-approved transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change
the State in which the Company is incorporated, form a holding company or
effect a similar reorganization as to form whereupon this Plan and all
Options are assumed by the successor entity;
(b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions to
clause (a), above; or
(c) any reverse merger in which the Company is the surviving entity but
in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities are
transferred or issued to a person or persons different from those who held
such securities immediately prior to such merger.
1.10 DEFERRED STOCK. "Deferred Stock" shall mean Common Stock awarded
under Article VII of this Plan.
1.11 DIRECTOR. "Director" shall mean a member of the Board.
1.12 EMPLOYEE. "Employee" shall mean any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Company, or of
any corporation which is a Subsidiary.
1.13 EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
1.14 FAIR MARKET VALUE. "Fair Market Value" of a share of Common Stock as
of any given date shall mean:
(a) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the National Market
System of the National Association of Securities Dealers, Inc. Automated
Quotation System, the closing sales price for the Common Stock, as reported
on such system or exchange (or the largest such exchange) for the date the
value is to be determined (or if there is no sale for such date, then for
the last preceding business day on which there was a sale), as reported in
the Wall Street Journal or similar publication.
(b) If the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, the mean between the high bid
and low asked prices for the Common Stock on the date the value is to be
determined (or if there are no quoted prices for the date of grant, then for
the last preceding business day on which there were quoted prices).
(c) In the absence of an established market for the Common Stock, as
determined in good faith by the Committee.
1.15 GRANTEE. "Grantee" shall mean an Employee or consultant granted a
Performance Award, Stock Payment or Stock Appreciation Right, or an award of
Deferred Stock, under this Plan.
1.16 INCENTIVE STOCK OPTION. "Incentive Stock Option" shall mean an option
which conforms to the applicable provisions of Section 422 of the Code and which
is designated as an Incentive Stock Option by the Committee.
1.17 INDEPENDENT DIRECTOR. "Independent Director" shall mean a Director
who is not an Employee.
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<PAGE>
1.18 NON-QUALIFIED STOCK OPTION. "Non-Qualified Stock Option" shall mean
an Option which is not designated as an Incentive Stock Option by the Committee.
1.19 OPTION. "Option" shall mean a stock option granted under Article III
of this Plan. An Option granted under this Plan shall, as determined by the
Committee, be either a Non-Qualified Stock Option or an Incentive Stock Option;
PROVIDED, HOWEVER, that Options granted to consultants shall be Non-Qualified
Stock Options.
1.20 OPTIONEE. "Optionee" shall mean an Employee or consultant granted an
Option under this Plan.
1.21 PERFORMANCE AWARD. "Performance Award" shall mean a cash bonus, stock
bonus or other performance or incentive award that is paid in cash, Common Stock
or a combination of both, awarded under Article VII of this Plan.
1.22 PLAN. "Plan" shall mean this 1997 Long-Term Incentive Plan of BF
Enterprises, Inc.
1.23 QDRO. "QDRO" shall mean a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
1.24 RESTRICTED STOCK. "Restricted Stock" shall mean Common Stock awarded
under Article VI of this Plan.
1.25 RESTRICTED STOCKHOLDER. "Restricted Stockholder" shall mean an
Employee or consultant granted an award of Restricted Stock under Article VI of
this Plan.
1.26 RULE 16B-3. "Rule 16b-3" shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.
1.27 STOCK APPRECIATION RIGHT. "Stock Appreciation Right" shall mean a
stock appreciation right granted under Article VIII of this Plan.
1.28 STOCK PAYMENT. "Stock Payment" shall mean (i) a payment in the form
of shares of Common Stock, or (ii) an option or other right to purchase shares
of Common Stock, as part of a deferred compensation arrangement, made in lieu of
all or any portion of the compensation, including without limitation, salary,
bonuses and commissions, that would otherwise become payable to an Employee or
consultant in cash, awarded under Article VII of this Plan.
1.29 SUBSIDIARY. "Subsidiary" shall mean any corporation in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
50 percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
1.30 TERMINATION OF CONSULTANCY. "Termination of Consultancy" shall mean
the time when the engagement of an Optionee, Grantee or Restricted Stockholder
as a consultant to the Company or a Subsidiary is terminated for any reason,
with or without cause, including, but not by way of limitation, by resignation,
discharge, death or retirement; but excluding terminations where there is a
simultaneous commencement of employment with the Company or any Subsidiary. The
Committee, in its absolute discretion, shall determine the effect of all matters
and questions relating to Termination of Consultancy, including, but not by way
of limitation, the question of whether a Termination of Consultancy resulted
from a discharge for good cause, and all questions of whether particular leaves
of absence constitute Terminations of Consultancy. Notwithstanding any other
provision of this Plan, the Company or any Subsidiary has an absolute and
unrestricted right to terminate a consultant's service at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
3
<PAGE>
1.31 TERMINATION OF EMPLOYMENT. "Termination of Employment" shall mean the
time when the employee-employer relationship between an Optionee, Grantee or
Restricted Stockholder and the Company or any Subsidiary is terminated for any
reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement; but
excluding (i) terminations where there is a simultaneous reemployment or
continuing employment of an Optionee, Grantee or Restricted Stockholder by the
Company or any Subsidiary, (ii) at the discretion of the Committee, terminations
which result in a temporary severance of the employee-employer relationship, and
(iii) at the discretion of the Committee, terminations which are followed by the
simultaneous establishment of a consulting relationship by the Company or a
Subsidiary with the former employee. The Committee, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination
of Employment, including, but not by way of limitation, the question of whether
a Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular leaves of absence constitute Terminations of
Employment; PROVIDED, HOWEVER, that, unless otherwise determined by the
Committee in its discretion, a leave of absence, change in status from an
employee to an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Employment if, and to the extent
that, such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section. Notwithstanding
any other provision of this Plan, the Company or any Subsidiary has an absolute
and unrestricted right to terminate an Employee's employment at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
ARTICLE II
SHARES SUBJECT TO PLAN
2.1 SHARES SUBJECT TO PLAN.
(a) The shares of stock subject to Options, awards of Restricted Stock,
Performance Awards, awards of Deferred Stock, Stock Payments or Stock
Appreciation Rights shall be Common Stock, initially shares of the Company's
Common Stock, par value $.10 per share. The aggregate number of such shares
which may be issued upon exercise of such options or rights or upon any such
awards under the Plan shall not exceed Five Hundred Sixty Thousand
(560,000). The shares of Common Stock issuable upon exercise of such options
or rights or upon any such awards may be either previously authorized but
unissued shares or treasury shares.
(b) The maximum number of shares which may be subject to Options or
Stock Appreciation Rights granted under the Plan to any individual in any
calendar year shall not exceed the Award Limit. To the extent required by
Section 162(m) of the Code, shares subject to Options which are canceled
continue to be counted against the Award Limit and if, after grant of an
Option, the price of shares subject to such Option is reduced, the
transaction is treated as a cancellation of the Option and a grant of a new
Option and both the Option deemed to be canceled and the Option deemed to be
granted are counted against the Award Limit. Furthermore, to the extent
required by Section 162(m) of the Code, if, after grant of a Stock
Appreciation Right, the base amount on which stock appreciation is
calculated is reduced to reflect a reduction in the Fair Market Value of the
Common Stock, the transaction is treated as a cancellation of the Stock
Appreciation Right and a grant of a new Stock Appreciation Right and both
the Stock Appreciation Right deemed to be canceled and the Stock
Appreciation Right deemed to be granted are counted against the Award Limit.
2.2 ADD-BACK OF OPTIONS AND OTHER RIGHTS. If any Option, or other right to
acquire shares of Common Stock under any other award under this Plan, expires or
is canceled without having been fully exercised, or is exercised in whole or in
part for cash as permitted by this Plan, the number of shares subject to such
Option or other right but as to which such Option or other right was not
exercised prior to its expiration, cancellation or exercise may again be
optioned, granted or awarded hereunder, subject to
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the limitations of Section 2.1. Furthermore, any shares subject to Options or
other awards which are adjusted pursuant to Section 10.3 and become exercisable
with respect to shares of stock of another corporation shall be considered
canceled and may again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. Shares of Common Stock which are delivered by the
Optionee or Grantee or withheld by the Company upon the exercise of any Option
or other award under this Plan, in payment of the exercise price thereof, may
again be optioned, granted or awarded hereunder, subject to the limitations of
Section 2.1. If any share of Restricted Stock is forfeited by the Grantee or
repurchased by the Company pursuant to Section 6.5 hereof, such share may again
be optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Notwithstanding the provisions of this Section 2.2, no shares of Common
Stock may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an incentive stock option under
Section 422 of the Code.
ARTICLE III
GRANTING OF OPTIONS
3.1 ELIGIBILITY. Any Employee or consultant selected by the Committee
pursuant to Section 3.4(a)(i) shall be eligible to be granted an Option.
3.2 DISQUALIFICATION FOR STOCK OWNERSHIP. No person may be granted an
Incentive Stock Option under this Plan if such person, at the time the Incentive
Stock Option is granted, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
then existing Subsidiary or parent corporation (within the meaning of Section
422 of the Code) unless such Incentive Stock Option conforms to the applicable
provisions of Section 422 of the Code.
3.3 QUALIFICATION OF INCENTIVE STOCK OPTIONS. No Incentive Stock Option
shall be granted to any person who is not an Employee.
3.4 GRANTING OF OPTIONS.
(a) The Committee shall from time to time, in its absolute discretion,
and subject to applicable limitations of this Plan:
(i) Select from among the Employees and consultants (including
Employees or consultants who have previously received Options or other
awards under this Plan) such of them as in its opinion should be granted
Options;
(ii) Subject to the Award Limit, determine the number of shares to
be subject to such Options granted to the selected Employees and
consultants;
(iii) Subject to Section 3.3, determine whether such Options are to
be Incentive Stock Options or Non-Qualified Stock Options and whether
such Options are to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such Options, consistent
with this Plan; PROVIDED, HOWEVER, that the terms and conditions of
Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall include, but not be
limited to, such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code.
(b) Upon the selection of an Employee or consultant to be granted an
Option, the Committee shall instruct the Secretary of the Company to issue
the Option and may impose such conditions on the grant of the Option as it
deems appropriate. Without limiting the generality of the preceding
sentence, the Committee may, in its discretion and on such terms as it deems
appropriate, require as a condition on the grant of an Option to an Employee
or consultant that the Employee or consultant surrender for cancellation
some or all of the unexercised Options, awards of Restricted Stock or
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Deferred Stock, Performance Awards, Stock Appreciation Rights, or Stock
Payments or other rights which have been previously granted to him under
this Plan or otherwise. An Option, the grant of which is conditioned upon
such surrender, may have an option price lower (or higher) than the exercise
price of such surrendered Option or other award, may cover the same (or a
lesser or greater) number of shares as such surrendered Option or other
award, may contain such other terms as the Committee deems appropriate, and
shall be exercisable in accordance with its terms, without regard to the
number of shares, price, exercise period or any other term or condition of
such surrendered Option or other award.
(c) Any Incentive Stock Option granted under this Plan may be modified
by the Committee to disqualify such option from treatment as an "incentive
stock option" under Section 422 of the Code.
ARTICLE IV
TERMS OF OPTIONS
4.1 OPTION AGREEMENT. Each Option shall be evidenced by a written Stock
Option Agreement, which shall be executed by the Optionee and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee shall determine, consistent with this Plan. Stock Option Agreements
evidencing Options intended to qualify as performance-based compensation, as
described in Section 162(m)(4)(C) of the Code, shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Stock Option Agreements evidencing Incentive Stock Options
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
4.2 OPTION PRICE. The price per share of the shares subject to each Option
shall be set by the Committee; PROVIDED, HOWEVER, that such price shall be no
less than the par value of a share of Common Stock, unless otherwise permitted
by applicable state law, and (i) in the case of Incentive Stock Options and
Options intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, such price shall not be less than 100% of the
Fair Market Value of a share of Common Stock on the date the Option is granted;
and (ii) in the case of Incentive Stock Options granted to an individual then
owning (within the meaning of Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation thereof (within the meaning of Section 422 of
the Code) such price shall not be less than 110% of the Fair Market Value of a
share of Common Stock on the date the Option is granted.
4.3 OPTION TERM. The term of an Option shall be set by the Committee in
its discretion; PROVIDED, HOWEVER, that, in the case of Incentive Stock Options,
the term shall not be more than ten (10) years from the date the Incentive Stock
Option is granted, or five (5) years from such date if the Incentive Stock
Option is granted to an individual then owning (within the meaning of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary or parent corporation thereof
(within the meaning of Section 422 of the Code). Except as limited by
requirements of Section 422 of the Code and regulations and rulings thereunder
applicable to Incentive Stock Options, the Committee may extend the term of any
outstanding Option in connection with any Termination of Employment or
Termination of Consultancy of the Optionee, or amend any other term or condition
of such Option relating to such a termination.
4.4 OPTION VESTING.
(a) The period during which the right to exercise an Option in whole or
in part vests in the Optionee shall be set by the Committee and the
Committee may determine that an Option may not be exercised in whole or in
part for a specified period after it is granted; PROVIDED, HOWEVER, that,
unless the Committee otherwise provides in the terms of the Option or
otherwise, no Option shall be exercisable by any Optionee who is then
subject to Section 16 of the Exchange Act within the period
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ending six months and one day after the date the Option is granted. At any
time after grant of an Option, the Committee may, in its sole and absolute
discretion and subject to whatever terms and conditions it selects,
accelerate the period during which an Option vests.
(b) No portion of an Option which is unexercisable at Termination of
Employment or Termination of Consultancy, as applicable, shall thereafter
become exercisable, except as may be otherwise provided by the Committee in
the case of Options granted to Employees or consultants either in the Stock
Option Agreement or by action of the Committee following the grant of the
Option.
(c) To the extent that the aggregate Fair Market Value of stock with
respect to which "incentive stock options" (within the meaning of Section
422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by an Optionee during any calendar year
(under the Plan and all other incentive stock option plans of the Company
and any Subsidiary) exceeds $100,000, such Options shall be treated as
Non-Qualified Options to the extent required by Section 422 of the Code. The
rule set forth in the preceding sentence shall be applied by taking Options
into account in the order in which they were granted. For purposes of this
Section 4.4(c), the Fair Market Value of stock shall be determined as of the
time the Option with respect to such stock is granted.
ARTICLE V
EXERCISE OF OPTIONS
5.1 PARTIAL EXERCISE. An exercisable Option may be exercised in whole or
in part. However, an Option shall not be exercisable with respect to fractional
shares and the Committee may require that, by the terms of the Option, a partial
exercise be with respect to a minimum number of shares.
5.2 MANNER OF EXERCISE. All or a portion of an exercisable Option shall be
deemed exercised upon delivery of all of the following to the Secretary of the
Company or his office:
(a) A written notice complying with the applicable rules established by
the Committee stating that the Option, or a portion thereof, is exercised.
The notice shall be signed by the Optionee or other person then entitled to
exercise the Option or such portion;
(b) Such representations and documents as the Committee in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any
other federal or state securities laws or regulations. The Committee or
Board may, in its absolute discretion, also take whatever additional actions
it deems appropriate to effect such compliance including, without
limitation, placing legends on share certificates and issuing stop-transfer
notices to agents and registrars;
(c) In the event that the Option shall be exercised pursuant to Section
10.1 by any person or persons other than the Optionee, appropriate proof of
the right of such person or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for the shares
with respect to which the Option, or portion thereof, is exercised. However,
the Committee may, in its discretion (i) allow a delay in payment up to
thirty (30) days from the date the Option, or portion thereof, is exercised;
(ii) allow payment, in whole or in part, through the delivery of shares of
Common Stock owned by the Optionee, duly endorsed for transfer to the
Company with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof; (iii)
allow payment, in whole or in part, through the surrender of shares of
Common Stock then issuable upon exercise of the Option having a Fair Market
Value on the date of Option exercise equal to the aggregate exercise price
of the Option or exercised portion thereof; (iv) allow payment, in whole or
in part, through the delivery of property of any kind which constitutes good
and valuable consideration; (v) allow payment,
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in whole or in part, through the delivery of a full recourse promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code) and payable upon such terms as may be
prescribed by the Committee or the Board; (vi) allow payment, in whole or in
part, through the delivery of a notice that the Optionee has placed a market
sell order with a broker with respect to shares of Common Stock then
issuable upon exercise of the Option, and that the broker has been directed
to pay a sufficient portion of the net proceeds of the sale to the Company
in satisfaction of the Option exercise price; or (vii) allow payment through
any combination of the consideration provided in the foregoing subparagraphs
(ii), (iii), (iv), (v) and (vi). In the case of a promissory note, the
Committee may also prescribe the form of such note and the security to be
given for such note. The Option may not be exercised, however, by delivery
of a promissory note or by a loan from the Company when or where such loan
or other extension of credit is prohibited by law.
5.3 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. The Company shall not be
required to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed;
(b) The completion of any registration or other qualification of such
shares under any state or federal law, or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental
regulatory body which the Committee or Board shall, in its absolute
discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may establish from time to time for reasons
of administrative convenience; and
(e) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.
5.4 RIGHTS AS STOCKHOLDERS. The holders of Options shall not be, nor have
any of the rights or privileges of, stockholders of the Company in respect of
any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders.
5.5 OWNERSHIP AND TRANSFER RESTRICTIONS. The Committee, in its absolute
discretion, may impose such restrictions on the ownership and transferability of
the shares purchasable upon the exercise of an Option as it deems appropriate.
Any such restriction shall be set forth in the respective Stock Option Agreement
and may be referred to on the certificates evidencing such shares. The Committee
may require an Employee to give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(i) two years from the date of granting such Option to such Employee or (ii) one
year after the transfer of such shares to such Employee. The Committee may
direct that the certificates evidencing shares acquired by exercise of an Option
refer to such requirement to give prompt notice of disposition.
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ARTICLE VI
AWARD OF RESTRICTED STOCK
6.1 AWARD OF RESTRICTED STOCK.
(a) The Committee may from time to time, in its absolute discretion:
(i) Select from among the Employees and consultants (including
Employees or consultants who have previously received other awards under
this Plan) such of them as in its opinion should be awarded Restricted
Stock; and
(ii) Determine the purchase price, if any, and other terms and
conditions applicable to such Restricted Stock, consistent with this
Plan.
(b) The Committee shall establish the purchase price, if any, and form
of payment for Restricted Stock; PROVIDED, HOWEVER, that such purchase price
shall be no less than the par value of the Common Stock to be purchased,
unless otherwise permitted by applicable state law. In all cases, legal
consideration shall be required for each issuance of Restricted Stock.
(c) Upon the selection of an Employee or consultant to be awarded
Restricted Stock, the Committee shall instruct the Secretary of the Company
to issue such Restricted Stock and may impose such conditions on the
issuance of such Restricted Stock as it deems appropriate.
6.2 RESTRICTED STOCK AGREEMENT. Restricted Stock shall be issued only
pursuant to a written Restricted Stock Agreement, which shall be executed by the
selected Employee or consultant and an authorized officer of the Company and
which shall contain such terms and conditions as the Committee shall determine,
consistent with this Plan.
6.3 RIGHTS AS STOCKHOLDERS. Upon delivery of the shares of Restricted
Stock to the escrow holder pursuant to Section 6.6, the Restricted Stockholder
shall have, unless otherwise provided by the Committee, all the rights of a
stockholder with respect to said shares, subject to the restrictions in his
Restricted Stock Agreement, including the right to receive all dividends and
other distributions paid or made with respect to the shares; PROVIDED, HOWEVER,
that in the discretion of the Committee, any extraordinary distributions with
respect to the Common Stock shall be subject to the restrictions set forth in
Section 6.4.
6.4 RESTRICTIONS. All shares of Restricted Stock issued under this Plan
(including any shares received by holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Restricted Stock
Agreement, be subject to such restrictions as the Committee shall provide, which
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of employment with
the Company, Company performance and individual performance; PROVIDED, HOWEVER,
that, unless the Committee otherwise provides in the terms of the Restricted
Stock Agreement or otherwise, no share of Restricted Stock granted to a person
subject to Section 16 of the Exchange Act shall be sold, assigned or otherwise
transferred until at least six months and one day have elapsed from the date on
which the Restricted Stock was issued, and PROVIDED, FURTHER, that by action
taken after the Restricted Stock is issued, the Committee may, on such terms and
conditions as it may determine to be appropriate, remove any or all of the
restrictions imposed by the terms of the Restricted Stock Agreement. Restricted
Stock may not be sold or encumbered until all restrictions are terminated or
expire. Unless provided otherwise by the Committee, if no consideration was paid
by the Restricted Stockholder upon issuance, a Restricted Stockholder's rights
in unvested Restricted Stock shall lapse upon Termination of Employment or, if
applicable, upon Termination of Consultancy with the Company.
6.5 REPURCHASE OF RESTRICTED STOCK. The Committee shall provide in the
terms of each individual Restricted Stock Agreement that the Company shall have
the right to repurchase from the Restricted Stockholder the Restricted Stock
then subject to restrictions under the Restricted Stock Agreement
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immediately upon a Termination of Employment or, if applicable, upon a
Termination of Consultancy between the Restricted Stockholder and the Company,
at a cash price per share equal to the price paid by the Restricted Stockholder
for such Restricted Stock; PROVIDED, HOWEVER, that provision may be made that no
such right of repurchase shall exist in the event of a Termination of Employment
or Termination of Consultancy without cause, or following a Change in Control or
because of the Restricted Stockholder's retirement, death or disability, or
otherwise.
6.6 ESCROW. The Secretary of the Company or such other escrow holder as
the Committee may appoint shall retain physical custody of each certificate
representing Restricted Stock until all of the restrictions imposed under the
Restricted Stock Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.
6.7 LEGEND. In order to enforce the restrictions imposed upon shares of
Restricted Stock hereunder, the Committee shall cause a legend or legends to be
placed on certificates representing all shares of Restricted Stock that are
still subject to restrictions under Restricted Stock Agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby.
ARTICLE VII
PERFORMANCE AWARDS, DEFERRED STOCK, STOCK PAYMENTS
7.1 PERFORMANCE AWARDS. Any Employee or consultant selected by the
Committee may be granted one or more Performance Awards. The value of such
Performance Awards may be linked to the earnings per share, return on equity,
return on assets, total shareholder return, net profits, or net operating income
of the Company, or to the market value, book value, or other measure of the
value of Common Stock or other specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates or over
any period or periods determined by the Committee, or may be based upon the
appreciation in the earnings per share, return on equity, return on assets,
total shareholder return, net profits, or net operating income of the Company,
or upon the appreciation in the market value, book value, or other measure of
the value of a specified number of shares of Common Stock over a fixed period or
periods determined by the Committee. In making such determinations, the
Committee shall consider (among such other factors as it deems relevant in light
of the specific type of award) the contributions, responsibilities and other
compensation of the particular Employee or consultant.
7.2 STOCK PAYMENTS. Any Employee or consultant selected by the Committee
may receive Stock Payments in the manner determined from time to time by the
Committee. The number of shares shall be determined by the Committee and may be
based upon the Fair Market Value, book value, net profits or other measure of
the value of Common Stock or other specific performance criteria determined
appropriate by the Committee, determined on the date such Stock Payment is made
or on any date thereafter.
7.3 DEFERRED STOCK. Any Employee or consultant selected by the Committee
may be granted an award of Deferred Stock in the manner determined from time to
time by the Committee. The number of shares of Deferred Stock shall be
determined by the Committee and may be linked to the market value, book value,
net profits or other measure of the value of Common Stock or other specific
performance criteria determined to be appropriate by the Committee, in each case
on a specified date or dates or over any period or periods determined by the
Committee. Common Stock underlying a Deferred Stock award will not be issued
until the Deferred Stock award has vested, pursuant to a vesting schedule or
performance criteria set by the Committee. Unless otherwise provided by the
Committee, a Grantee of Deferred Stock shall have no rights as a Company
stockholder with respect to such Deferred Stock until such time as the award has
vested and the Common Stock underlying the award has been issued.
7.4 PERFORMANCE AWARD AGREEMENT, DEFERRED STOCK AGREEMENT, STOCK PAYMENT
AGREEMENT. Each Performance Award, award of Deferred Stock and/or Stock Payment
shall be evidenced by a written
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agreement, which shall be executed by the Grantee and an authorized officer of
the Company and which shall contain such terms and conditions as the Committee
shall determine, consistent with this Plan.
7.5 TERM. The term of a Performance Award, award of Deferred Stock and/or
Stock Payment shall be set by the Committee, in its discretion, but shall not
exceed ten years.
7.6 EXERCISE UPON TERMINATION OF EMPLOYMENT. A Performance Award, award of
Deferred Stock and/or Stock Payment is exercisable or payable only while the
Grantee is an Employee or consultant; provided that the Committee may determine
that the Performance Award, award of Deferred Stock and/or Stock Payment may be
exercised or paid subsequent to Termination of Employment or Termination of
Consultancy without cause, or following a Change in Control, or because of the
Grantee's retirement, death or disability, or otherwise.
7.7 PAYMENT ON EXERCISE. Payment of the amount determined under Section
7.1 above shall be in cash, in Common Stock or a combination of both, as
determined by the Committee. To the extent any payment under this Article VII is
effected in Common Stock, it shall be made subject to satisfaction of all
provisions of Section 5.3.
ARTICLE VIII
STOCK APPRECIATION RIGHTS
8.1 RELATIONSHIP TO OPTIONS: NO PAYMENT BY PARTICIPANT. A Stock
Appreciation Right may be awarded either (i) with respect to Common Stock
subject to an Option held by an Optionee, or (ii) without reference to an
Option. If an Option is an Incentive Stock Option, a Stock Appreciation Right
granted with respect to such Option may be granted only at the time of grant of
the related Incentive Stock Option, but if the Option is a Non-Qualified Stock
Option, the Stock Appreciation Right may be granted either simultaneously with
the grant of the related Non-Qualified Stock Option or at any time during the
term of such related Non-Qualified Stock Option. The Committee, in its
discretion, may determine whether a Stock Appreciation Right is to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code,
and Stock Appreciation Right Agreements evidencing Stock Appreciation Rights
intended to so qualify shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the Code. No
consideration shall be paid by a participant with respect to a Stock
Appreciation Right.
8.2 WHEN EXERCISABLE. A Stock Appreciation Right shall be exercisable at
such times and in whole or in part, each as determined by the Committee. If a
Stock Appreciation Right is granted with respect to an Option, the Stock
Appreciation Right shall be exercisable only when and to the extent the related
Option is exercisable. If a Stock Appreciation Right is unrelated to an Option,
it is exercisable only while the Grantee is an Employee or consultant; PROVIDED,
that the Committee may determine that the Stock Appreciation Right may be
exercised subsequent to Termination of Employment or Termination of Consultancy
without cause, or following a Change in Control, or because of the Grantee's
retirement, death or disability, or otherwise.
8.3 EFFECT ON RELATED RIGHT; TERMINATION OF STOCK APPRECIATION RIGHT. If a
Stock Appreciation Right granted with respect to an Option is exercised, the
Option shall cease to be exercisable and shall be canceled to the extent of the
number of shares with respect to which the Stock Appreciation Right was
exercised. Upon the exercise or termination of an Option, related Stock
Appreciation Rights shall terminate to the extent of the number of shares as to
which the Option was exercised or terminated, except that, unless otherwise
determined by the Committee at the time of grant, a Stock Appreciation Right
granted with respect to less than the full number of shares covered by a related
Option shall not be reduced until the number of shares covered by exercise or
termination of the related Option exceeds the number of shares not covered by
the Stock Appreciation Right. A Stock Appreciation Right granted independently
from an Option shall terminate and shall be no longer exercisable at the time
determined by
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the Committee at the time of grant, but not later than 10 years from the date of
grant. Upon Termination of Employment or Termination of Consultancy, as the case
may be, a Stock Appreciation Right granted with respect to an Option shall be
exercisable only to the extent to which the Option is then exercisable.
8.4 FORM OF PAYMENT UPON EXERCISE. Despite any attempt by an Employee or
consultant to elect payment in a particular form upon exercise of a Stock
Appreciation Right, the Committee, in its discretion, may elect to cause the
Company to pay cash, Common Stock, or a combination of cash and Common Stock
upon exercise of the Stock Appreciation Right.
8.5 AMOUNT OF PAYMENT UPON EXERCISE. Upon the exercise of a Stock
Appreciation Right, the Grantee shall be entitled to receive one of the
following payments, as determined by the Committee under Section 8.4:
(a) COMMON STOCK. That number of whole shares of Common Stock equal to
the number computed by dividing (i) an amount (the "Stock Appreciation Right
Spread"), rounded to the nearest whole dollar, equal to the product computed
by multiplying (x) the excess of (1) the Fair Market Value on the date the
Stock Appreciation Right is exercised, over (2) the exercise price per share
of Common Stock of the related Option, or in the case of a Stock
Appreciation Right granted without reference to an Option, such other price
as the Committee establishes at the time the Stock Appreciation Right is
granted, by (y) the number of shares of Common Stock with respect to which a
Stock Appreciation Right is being exercised by (ii) the Fair Market Value on
the date the Stock Appreciation Right is exercised; plus, if the foregoing
calculation yields a fractional share, an amount of cash equal to the
applicable Fair Market Value multiplied by such fraction (such payment to be
the difference of the fractional share); or
(b) CASH. An amount in cash equal to the Stock Appreciation Right
Spread; or
(c) CASH AND COMMON STOCK. A combination of cash and Common Stock, the
combined value of which shall equal the Stock Appreciation Right Spread.
ARTICLE IX
ADMINISTRATION
9.1 COMPENSATION COMMITTEE. The Compensation Committee (or another
committee or a subcommittee of the Board assuming the functions of the Committee
under this Plan) shall consist solely of two or more Independent Directors
appointed by and holding office at the pleasure of the Board, each of whom is
both a "non-employee director" as defined by Rule 16b-3 and an "outside
director" for purposes of Section 162(m) of the Code. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members may
resign at any time by delivering written notice to the Board. Vacancies in the
Committee may be filled by the Board.
9.2 DUTIES AND POWERS OF COMMITTEE. It shall be the duty of the Committee
to conduct the general administration of this Plan in accordance with its
provisions. The Committee shall have the power to interpret this Plan and the
agreements pursuant to which Options, awards of Restricted Stock or Deferred
Stock, Performance Awards, Stock Appreciation Rights or Stock Payments are
granted or awarded, and to adopt such rules for the administration,
interpretation, and application of this Plan as are consistent therewith and to
interpret, amend or revoke any such rules. Any such grant or award under this
Plan need not be the same with respect to each Optionee, Grantee or Restricted
Stockholder. Any such interpretations and rules with respect to Incentive Stock
Options shall be consistent with the provisions of Section 242 of the Code. In
its absolute discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Committee under this Plan except
with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or
any regulations or rules issued thereunder, are required to be determined in the
sole discretion of the Committee.
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9.3 MAJORITY RULE; UNANIMOUS WRITTEN CONSENT. The Committee shall act by a
majority of its members in attendance at a meeting at which a quorum is present
or by a memorandum or other written instrument signed by all members of the
Committee.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 NOT TRANSFERABLE. Options, Restricted Stock awards, Deferred Stock
awards, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments under this Plan may not be sold, pledged, assigned, or
transferred in any manner unless and until such rights or awards have been
exercised, or the shares underlying such rights or awards have been issued, and
all restrictions applicable to such shares have lapsed; provided, however, such
rights or awards may be sold, pledged, assigned, or otherwise transferred (i) by
will or the laws of descent and distribution, (ii) pursuant to a QDRO, or (iii)
when authorized by the Committee, at any time and in its sole discretion, by
gift of an Option by an Employee to a Permitted Transferee (as defined below)
subject to the following terms and conditions: (a) an Option transferred to a
Permitted Transferee shall not be assignable or transferable by the Permitted
Transferee other than by domestic relations order or by will or the laws of
descent and distribution; (b) any Option which is transferred to a Permitted
Transferee shall continue to be subject to all the terms and conditions of the
Option as applicable to the original holder (other than the ability to further
transfer the Option); (c) the Employee and the Permitted Transferee shall
execute any and all documents reasonably requested by the Committee, including
without limitation documents to (i) confirm the status of the transferee as a
Permitted Transferee, (ii) satisfy any requirements for exemption for the
transfer under applicable federal and state securities laws, and (iii) evidence
of the transfer; (d) the shares of Common Stock acquired by a Permitted
Transferee through exercise of an Option have not been registered under the
Securities Act of 1933, as amended, or any state securities act, and may not be
transferred, nor will any assignee or transferee thereof be recognized as an
owner of such shares of Common Stock for any purpose, unless a registration
statement under the Securities Act of 1933, as amended, and any applicable state
securities act with respect to such shares shall then be in effect or unless the
availability of an exemption from registration with respect to any proposed
transfer or disposition of such shares shall be established to the satisfaction
of counsel for the Company. As used in this Section 10.1, "Permitted Transferee"
shall mean (i) one or more of the following family members of an Employee:
spouse, former spouse, child (whether natural or adopted), stepchild, and any
other lineal descendent of the Employee, (ii) a trust, partnership, or other
entity established and existing for the sole benefit of, or under the sole
control of, one or more of the above family members of the Employee, or (iii)
any other transferee specifically approved by the Committee after taking into
account any state or federal tax or securities laws applicable to transferable
Options.
No Option, Restricted Stock award, Deferred Stock award, Performance Award,
Stock Appreciation Right or Stock Payment or interest or right therein shall be
liable for the debts, contracts or engagements of the Optionee, Grantee or
Restricted Stockholder or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law, by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
During the lifetime of the Optionee or Grantee, only he may exercise an
Option or other right or award (or any portion thereof) granted to him under the
Plan, unless it has been disposed of pursuant to a QDRO or a transfer authorized
by the Committee in accordance with Section 10.1(iii). After the death of the
Optionee or Grantee, any exercisable portion of an Option or other right or
award may, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Stock Option Agreement
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or other agreement, be exercised by his personal representative or by any person
empowered to do so under the deceased Optionee's or Grantee's will or under the
then applicable laws of descent and distribution.
10.2 AMENDMENT, SUSPENSION OR TERMINATION OF THIS PLAN. Except as
otherwise provided in this Section 10.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee. However, without approval of the
Company's stockholders given within twelve months before or after the action by
the Board or the Committee, no action of the Board or the Committee may, except
as provided in Section 10.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan or modify the Award
Limit, and no action of the Board or the Committee may be taken that would
otherwise require stockholder approval as a matter of applicable law, regulation
or rule. No amendment, suspension or termination of this Plan shall, without the
consent of the holder of Options, Restricted Stock awards, Deferred Stock
awards, Performance Awards, Stock Appreciation Rights or Stock Payments, alter
or impair any rights or obligations under any Options, Restricted Stock awards,
Deferred Stock awards, Performance Awards, Stock Appreciation Rights or Stock
Payments theretofore granted or awarded, unless the award itself otherwise
expressly so provides. No Options, Restricted Stock, Deferred Stock, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments may be
granted or awarded during any period of suspension or after termination of this
Plan, and in no event may any Incentive Stock Option be granted under this Plan
after the first to occur of the following events:
(a) The expiration of ten years from the date the Plan is adopted by the
Board; or
(b) The expiration of ten years from the date the Plan is approved by
the Company's stockholders under Section 10.4.
10.3 CHANGES IN COMMON STOCK OR ASSETS OF THE COMPANY, ACQUISITION OR
LIQUIDATION OF THE COMPANY AND OTHER CORPORATE EVENTS.
(a) Subject to Section 10.3(d), in the event that the Committee
determines that any dividend or other distribution (whether in the form of
cash, Common Stock, other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, or sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company (including, but not limited
to, a Corporate Transaction), or exchange of Common Stock or other
securities of the Company, issuance of warrants or other rights to purchase
Common Stock or other securities of the Company, or other similar corporate
transaction or event, in the Committee's sole discretion, affects the Common
Stock such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with
respect to an Option, Restricted Stock award, Performance Award, Stock
Appreciation Right, Deferred Stock award or Stock Payment, then the
Committee shall, in such manner as it may deem equitable, adjust any or all
of:
(i) the number and kind of shares of Common Stock (or other
securities or property) with respect to which Options, Performance
Awards, Stock Appreciation Rights or Stock Payments may be granted under
the Plan, or which may be granted as Restricted Stock or Deferred Stock
(including, but not limited to, adjustments of the limitations in Section
2.1 on the maximum number and kind of shares which may be issued and
adjustments of the Award Limit);
(ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options, Performance
Awards, Stock Appreciation Rights, or Stock Payments, and in the number
and kind of shares of outstanding Restricted Stock or Deferred Stock; and
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(iii) the grant or exercise price with respect to any Option,
Performance Award, Stock Appreciation Right or Stock Payment.
(b) Subject to Sections 10.3(b)(vii) and 10.3(d), in the event of any
Corporate Transaction or other transaction or event described in Section
10.3(a) or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate, or of changes in applicable laws, regulations, or
accounting principles, the Committee in its discretion is hereby authorized
to take any one or more of the following actions whenever the Committee
determines that such action is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to any option, right or other award
under this Plan, to facilitate such transactions or events or to give effect
to such changes in laws, regulations or principles:
(i) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide, either by
the terms of the agreement or by action taken prior to the occurrence of
such transaction or event and either automatically or upon the request of
an Optionee, Restricted Stockholder or Grantee for either the purchase of
any such Option, Performance Award, Stock Appreciation Right or Stock
Payment, or any Restricted Stock or Deferred Stock for an amount of cash
equal to the amount that could have been attained upon the exercise of
such Option, right or award or realization of the rights of the Optionee,
Restricted Stockholder or Grantee had such Option, right or award been
currently exercisable or payable or fully vested or the replacement of
such option, right or award with other rights or property selected by the
Committee in its sole discretion;
(ii) In its sole and absolute discretion, the Committee may provide,
either by the terms of such Option, Performance Award, Stock Appreciation
Right or Stock Payment, or Restricted Stock or Deferred Stock or by
action taken prior to the occurrence of such transaction or event that it
cannot be exercised after such event;
(iii) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide, either by
the terms of such Option, Performance Award, Stock Appreciation Right or
Stock Payment, or Restricted Stock or Deferred Stock or by action taken
prior to the occurrence of such transaction or event, that for a
specified period of time prior to such transaction or event, such Option,
right or award shall be exercisable as to all shares covered thereby,
notwithstanding anything to the contrary in (i) Section 4.4 or (ii) the
provisions of such Option, Performance Award, Stock Appreciation Right or
Stock Payment, or Restricted Stock or Deferred Stock;
(iv) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide, either by
the terms of such Option, Performance Award, Stock Appreciation Right or
Stock Payment, or Restricted Stock or Deferred Stock or by action taken
prior to the occurrence of such transaction or event, that upon such
event, such Option, right or award be assumed by the successor or
survivor corporation, or a parent or subsidiary thereof, or shall be
substituted for by similar options, rights or awards covering the stock
of the successor or survivor corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares
and prices;
(v) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may make adjustments in
the number and type of shares of Common Stock (or other securities or
property) subject to outstanding Options, Performance Awards, Stock
Appreciation Rights or Stock Payments, and in the number and kind of
outstanding Restricted Stock or Deferred Stock and/or in the terms and
conditions of (including the grant or exercise price), and the criteria
included in, outstanding options, rights and awards and options, rights
and awards which may be granted in the future;
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(vi) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide either by
the terms of a Restricted Stock award or Deferred Stock award or by
action taken prior to the occurrence of such event that, for a specified
period of time prior to such event, the restrictions imposed under a
Restricted Stock Agreement or a Deferred Stock Agreement upon some or all
shares of Restricted Stock or Deferred Stock may be terminated, and, in
the case of Restricted Stock, some or all shares of such Restricted Stock
may cease to be subject to repurchase under Section 6.5 or forfeiture
under Section 6.4 after such event; and
(vii) In the event of any Corporate Transaction, each outstanding
Option, Performance Award, Stock Appreciation Right, Stock Payment,
Restricted Stock, or Deferred Stock award shall, immediately prior to the
effective date of the Corporate Transaction, automatically become fully
exercisable for all of the shares of Common Stock at the time subject to
such rights or fully vested, as applicable, and may be exercised for any
or all of those shares as fully-vested shares of Common Stock. However,
an outstanding right shall not so accelerate if and to the extent: (i)
such right is, in connection with the Corporate Transaction, either to be
assumed by the successor or survivor corporation (or parent thereof) or
to be replaced with a comparable right with respect to shares of the
capital stock of the successor or survivor corporation ( or parent
thereof) or (ii) the acceleration of exercisability of such right is
subject to other limitations imposed by the Committee at the time of
grant. The determination of comparability of rights under clause (i)
above shall be made by the Committee, and its determination shall be
final, binding and conclusive.
(c) Subject to Section 10.3(d) and 10.7, the Committee may, in its
discretion, include such further provisions and limitations in any Option,
Performance Award, Stock Appreciation Right, or Stock Payment, or Restricted
Stock or Deferred Stock agreement or certificate, as it may deem equitable
and in the best interests of the Company.
(d) With respect to Incentive Stock Options and Options and Stock
Appreciation Rights intended to qualify as performance-based compensation
under Section 162(m), no adjustment or action described in this Section 10.3
or in any other provision of the Plan shall be authorized to the extent that
such adjustment or action would cause the Plan to violate Section 422(b)(1)
of the Code or would cause such Option or Stock Appreciation Right to fail
to so qualify under Section 162(m), as the case may be, or any successor
provisions thereto. Furthermore, no such adjustment or action shall be
authorized to the extent such adjustment or action would result in
short-swing profits liability under Section 16 or violate the exemptive
conditions of Rule 16b-3 unless the Committee determines that the option or
other award is not to comply with such exemptive conditions. The number of
shares of Common Stock subject to any option, right or award shall always be
rounded to the next whole number.
10.4 APPROVAL OF PLAN BY STOCKHOLDERS. This Plan will be submitted for the
approval of the Company's stockholders within twelve months after the date of
the Board's initial adoption of this Plan. Options, Performance Awards, Stock
Appreciation Rights or Stock Payments may be granted and Restricted Stock or
Deferred Stock may be awarded prior to such stockholder approval, provided that
such Options, Performance Awards, Stock Appreciation Rights or Stock Payments
shall not be exercisable and such Restricted Stock or Deferred Stock shall not
vest prior to the time when this Plan is approved by the stockholders, and
provided further that if such approval has not been obtained at the end of said
twelve-month period, all Options, Performance Awards, Stock Appreciation Rights
or Stock Payments previously granted and all Restricted Stock or Deferred Stock
previously awarded under this Plan shall thereupon be canceled and become null
and void.
10.5 TAX WITHHOLDING. The Company shall be entitled to require payment in
cash or deduction from other compensation payable to each Optionee, Grantee or
Restricted Stockholder of any sums required by
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federal, state or local tax law to be withheld with respect to the issuance,
vesting or exercise of any Option, Restricted Stock, Deferred Stock, Performance
Award, Stock Appreciation Right or Stock Payment. The Committee may in its
discretion and in satisfaction of the foregoing requirement allow such Optionee,
Grantee or Restricted Stockholder to elect to have the Company withhold shares
of Common Stock otherwise issuable under such Option or other award (or allow
the return of shares of Common Stock) having a Fair Market Value equal to the
sums required to be withheld.
10.6 LOANS. The Committee may, in its discretion, extend one or more loans
to Employees in connection with the exercise or receipt of an Option,
Performance Award, Stock Appreciation Right or Stock Payment granted under this
Plan, or the issuance of Restricted Stock or Deferred Stock awarded under this
Plan. The terms and conditions of any such loan shall be set by the Committee.
10.7 LIMITATIONS APPLICABLE TO SECTION 16 PERSONS AND PERFORMANCE-BASED
COMPENSATION. Notwithstanding any other provision of this Plan, this Plan, and
any Option, Performance Award, Stock Appreciation Right or Stock Payment
granted, or Restricted Stock or Deferred Stock awarded, to any individual who is
then subject to Section 16 of the Exchange Act, shall be subject to any
addi-tional limitations set forth in any applicable exemptive rule under Section
16 of the Exchange Act (including any amendment to Rule 16b-3) that are
requirements for the application of such exemptive rule. To the extent permitted
by applicable law, the Plan, Options, Performance Awards, Stock Appreciation
Rights, Stock Payments, Restricted Stock and Deferred Stock granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule. Furthermore, notwithstanding any other provision of
this Plan, any Option or Stock Appreciation Right intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall be subject to any additional limitations set forth in Section 162(m) of
the Code (including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for qualification
as performance-based compensation as described in Section 162(m)(4)(C) of the
Code, and this Plan shall be deemed amended to the extent necessary to conform
to such requirements.
10.8 EFFECT OF PLAN UPON OPTIONS AND COMPENSATION PLANS. The adoption of
this Plan shall not affect Options outstanding before the Board adopted this
Plan or any other compensation or incentive plans in effect for the Company or
any Subsidiary. Nothing in this Plan shall be construed to limit the right of
the Company (i) to establish any other forms of incentives or compensation for
Employees or consultants of the Company or any Subsidiary or (ii) to grant or
assume options or other rights otherwise than under this Plan in connection with
any proper corporate purpose including, but not by way of limitation, the grant
or assumption of options in connection with the acquisition by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, partnership, limited liability company, firm or association.
10.9 COMPLIANCE WITH LAWS. This Plan, the granting and vesting of Options,
Restricted Stock awards, Deferred Stock awards, Performance Awards, Stock
Appreciation Rights or Stock Payments under this Plan and the issuance and
delivery of shares of Common Stock and the payment of money under this Plan or
under Options, Performance Awards, Stock Appreciation Rights or Stock Payments
granted or Restricted Stock or Deferred Stock awarded hereunder are subject to
compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
this Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan, Options, Restricted Stock awards,
Deferred Stock awards, Performance Awards, Stock Appreciation Rights or Stock
Payments granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.
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10.10 TITLES. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Plan.
10.11 GOVERNING LAW. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
* * *
I hereby certify that the foregoing Plan was duly adopted by the Board of
Directors of BF Enterprises, Inc. on December 10, 1997.
Executed on this 21st day of April , 1998.
/s/ CAROL L. YOUNG
----------------------------------
Secretary
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BF ENTERPRISES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Brian P. Burns and Daniel S. Mason, or
either of them, with full power of substitution, proxies to vote at the Annual
Meeting of Stockholders of BF Enterprises, Inc. (the "Company") to be held on
May 27, 1998, in Tampa, Florida, at 9:30 a.m., eastern daylight time, and at
any adjournment or adjournments thereof, hereby revoking any proxies
heretofore given, to vote all shares of common stock of the Company held on
record by the undersigned on April 6, 1998, as directed below, and in their
discretion upon such other matters as may come before the meeting.
(TO BE SIGNED ON REVERSE SIDE)
Please sign, date and return this proxy promptly in the enclosed envelope,
which requires no postage.
SEE REVERSE
SIDE
<PAGE>
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. /X/
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES NAMED IN PROPOSAL 1.
FOR WITHHELD NOMINEES: Brian P. Burns, Daniel S. Mason,
Ralph T. McElvenny, Jr.,
1. ELECTION OF Charles E.F. Millard and
DIRECTORS / / / / Paul Woodberry
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
FOR AGAINST WITHHELD
2. Approval of the 1997 / / / / / /
Long-Term Incentive Plan
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR PROPOSAL 2.
SIGNATURE(S)_____________________________________________DATE _____________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign
in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
