<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 3, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
BURLINGTON RESOURCES INC.
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 91-1413284
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
5051 WESTHEIMER, SUITE 1400
HOUSTON, TEXAS 77056
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
BURLINGTON RESOURCES INC.
1993 STOCK INCENTIVE PLAN
(FULL TITLE OF THE PLAN)
GERALD J. SCHISSLER
SENIOR VICE PRESIDENT, LAW
5051 WESTHEIMER, SUITE 1400
HOUSTON, TEXAS 77056
(713) 624-9500
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S AGENT FOR SERVICE)
<TABLE>
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) FEE
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<S> <C> <C> <C> <C>
Common Stock, $0.01 par value . . . . . 10,000,000 shares $41.50 $415,000,000 $143,104.45
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The number of shares of Common Stock registered herein is subject to
adjustment to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) and based on the average of the high and low
prices of the Common Stock on the New York Stock Exchange on May 31,
1994, as the exercise price of the shares.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by the Company pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), are incorporated
in this Registration Statement by reference:
(a) Annual Report on Form 10-K of the Company for the
fiscal year ended December 31, 1993;
(b) The Quarterly Report on Form 10-Q for the quarter
ended March 31, 1994; and
(c) The description of the Company's Common Stock
contained in the Company's Registration Statement on Form 8-A
(Commission File No. 1-9971) dated June 21, 1988, filed with the
Commission under Section 12 of the Exchange Act, as amended by Form 8
dated June 22, 1988.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this
Registration Statement since the class of securities to be offered is
registered under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the Common Stock offered hereby is being passed on for
the Company by L. David Hanower, Vice President, Law of the Company. On the
date of this Registration Statement, Mr. Hanower owned approximately 4200
shares of Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation -- a "derivative action"),
if they acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement
of such action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement or otherwise.
Article X of the By-Laws of the Company requires indemnification to
the full extent permitted under Delaware law as from time to time in effect.
Subject to any liabilities imposed by Delaware law, the By-Laws provide an
unconditional right to indemnification for all expenses, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) actually and reasonably incurred by any person
in connection with any actual or
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threatened proceeding (including, to the extent permitted by law, any
derivative action) by reason of the fact that such person is or was serving as
a director or officer of the registrant or, at the request of the registrant,
of another corporation, partnership, joint venture, trust or other enterprise,
including an employee benefit plan. The By-Laws also provide that the
registrant may, by action of its Board of Directors, provide indemnification to
its employees and agents with the same scope and effect as the foregoing
indemnification of directors and officers.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
enterprise, against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would otherwise have the power to indemnify him under Section 145.
Officers and directors of the Company are covered by insurance which (with
certain exceptions and within certain limitations) indemnifies them against
losses and liabilities arising from any alleged "wrongful act" including any
alleged error or misstatement or misleading statement, or wrongful act or
omission or neglect or breach of duty.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (i) any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
payments of unlawful dividends or unlawful stock repurchases or redemption, or
(iv) any transaction from which the director derived an improper benefit.
Article 13 of the Certificate of Incorporation of the Company provides
that to the full extent that the Delaware General Corporation Law, as it now
exists or may hereafter be amended, permits the limitation or elimination of
the liability of directors, a director of the registrant shall not be liable to
the registrant or its stockholders for monetary damages for breach of fiduciary
duty as a director. Any amendment to or repeal of such Article 13 shall not
adversely affect any right or protection of a director of the registrant for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The information required by Item 7 is not applicable to this
Registration Statement.
ITEM 8. EXHIBITS
The following documents are listed as exhibits to this Registration
Statement and are filed herewith unless otherwise indicated.
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<CAPTION>
Exhibit Number Description
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4.1 Certificate of Incorporation of the Company, as amended, is incorporated by
reference to Exhibit 3.1 of the Company's Form 8, filed March 1990.
4.2 By-Laws of the Company, as amended, are incorporated by reference
to Exhibit 3.2 of the Company's Form 8, filed March 1993.
5.1* Opinion of L. David Hanower, Vice President, Law of the Company as to the
legality of the securities being registered.
23.1* Consent of L. David Hanower, Vice President, Law of the Company to the use of
his opinion in this Registration Statement is contained in such opinion filed as
Exhibit 5.1 to this Registration Statement.
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<TABLE>
<CAPTION>
Exhibit Number Description
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<S> <C>
23.2* The consent of Coopers & Lybrand is included in Part II of this Registration
Statement.
24.1* A power of attorney, pursuant to which amendments to this Registration
Statement may be filed, is included on the signature page contained in Part II
of this Registration Statement.
99.1* The Burlington Resources Inc. 1993 Stock Incentive Plan.
</TABLE>
______________________________
* Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
Provided, however, that the paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form S-3
or Form S-8, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is,
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therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on the 2nd day of
June, 1994.
BURLINGTON RESOURCES INC.
BY: /S/ JOHN E. HAGALE
------------------------------
JOHN E. HAGALE
SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
John E. Hagale and Gerald J. Schissler and each of them as attorneys-in-fact
with full power of substitution, to execute in the name and on behalf of such
person, individually and in each capacity stated below, and to file, any and
all amendments to this Registration Statement, including any and all
post-effective amendments.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ THOMAS H. O'LEARY Chairman of the Board, President and June 2, 1994
- ------------------------------ Chief Executive Officer
Thomas H. O'Leary
/s/ JOHN E. HAGALE Senior Vice President and Chief June 2, 1994
- ------------------------------ Financial Officer
John E. Hagale
/s/ HAYS R. WARDEN Vice President and Controller June 2, 1994
- ------------------------------ (Chief Accounting Officer)
Hays R. Warden
/s/ JOHN V. BYRNE Director June 2, 1994
- ------------------------------
John V. Byrne
/s/ S. PARKER GILBERT Director June 2, 1994
- ------------------------------
S. Parker Gilbert
/s/ JAMES F. MCDONALD Director June 2, 1994
- ------------------------------
James F. McDonald
/s/ DONALD M. ROBERTS Director June 2, 1994
- ------------------------------
Donald M. Roberts
/s/ WALTER SCOTT, JR. Director June 2, 1994
- ------------------------------
Walter Scott, Jr.
/s/ WILLIAM E. WALL Director June 2, 1994
- ------------------------------
William E. Wall
</TABLE>
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CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of Burlington Resources Inc. on Form S-8 of our reports dated January
12, 1994 on our audits of the consolidated financial statements and financial
statement schedules of Burlington Resources Inc. as of December 31, 1993 and
1992, and for each of the three years in the period ended December 31, 1993,
which reports are included in the Burlington Resources Inc. Annual Report on
Form 10-K for the year ended December 31, 1993, filed with the Securities and
Exchange Commission.
COOPERS & LYBRAND
Houston, Texas
June 2, 1994
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EXHIBIT INDEX
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<CAPTION>
Exhibit Number Description
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<S> <C>
4.1 Certificate of Incorporation of the Company, as amended, is incorporated by
reference to Exhibit 3.1 of the Company's Form 8, filed March 1990.
4.2 By-Laws of the Company, as amended, are incorporated by reference
to Exhibit 3.2 of the Company's Form 8, filed March 1993.
5.1* Opinion of L. David Hanower, Vice President, Law of the Company as to the
legality of the securities being registered.
23.1* Consent of L. David Hanower, Vice President, Law of the Company to the use of
his opinion in this Registration Statement is contained in such opinion filed as
Exhibit 5.1 to this Registration Statement.
23.2* The consent of Coopers & Lybrand is included in Part II of this Registration
Statement.
24.1* A power of attorney, pursuant to which amendments to this Registration
Statement may be filed, is included on the signature page contained in Part II
of this Registration Statement.
99.1* The Burlington Resources Inc. 1993 Stock Incentive Plan.
</TABLE>
______________________________
* Filed herewith.
<PAGE> 1
EXHIBIT 5.1
June 3, 1994
Burlington Resources Inc.
5051 Westheimer, Suite 1400
Houston, Texas 77056
Dear Sirs:
I refer to the proposed registration of 10,000,000 shares of common
stock, par value $.01 per share (the "Shares"), of Burlington Resources Inc. on
Form S-8 to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended.
I am familiar with the proceedings taken with respect to the adoption
of the Burlington Resources Inc. 1993 Stock Incentive Plan (the "Plan"), and
have examined the Registration Statement and such other documents as I have
considered relevant for purposes of this opinion.
Based upon the foregoing, I am of the opinion that, upon the filing of
the Registration Statement and any amendments thereto and upon the Registration
Statement becoming effective, the Shares registered when issued and paid for in
accordance with the terms of the Plan will be validly issued, fully paid and
non-assessable.
I hereby consent to the use of this opinion in the above-mentioned
Registration Statement and to the reference to my name under Item 5 of the
Registration Statement.
Very truly yours,
L. David Hanower
Vice President, Law
<PAGE> 1
EXHIBIT 99.1
1993 BURLINGTON RESOURCES INC.
STOCK INCENTIVE PLAN
SECTION 1. PURPOSE
The purpose of the 1993 Burlington Resources Inc. Stock Incentive Plan (the
"Plan") is to promote the interests of Burlington Resources Inc. (the "Company")
and its stockholders by strengthening the Company's ability to attract and
retain officers and key employees in the employ of the Company and its
subsidiaries by furnishing suitable recognition of their ability and industry
which contributed materially to the success of the Company and to align the
interests and efforts of the Company's officers and key employees to the long
term interests of the Company's stockholders. The Plan provides for the grant of
stock options, stock appreciation rights, limited stock appreciation rights,
restricted stock and stock purchase rights in accordance with the terms and
conditions set forth below.
SECTION 2. DEFINITIONS
Unless otherwise required by the context, the following terms when used in
the Plan shall have the meanings set forth in this Section 2:
2.1 BENEFICIARY
The person or persons designated by the Participant pursuant to Section
6.4(f) to whom payments are to be paid pursuant to the terms of the Plan in the
event of the Participant's death.
2.2 BOARD OF DIRECTORS
The Board of Directors of the Company.
2.3 BONUS
The annual incentive award paid by the Company or any Subsidiary under its
Incentive Compensation Plan or any successor or similar plans during any
calendar year to any employee thereof, including officers and directors of the
Company who are full-time, salaried employees, in recognition of performance of
services to the Company or its Subsidiaries.
2.4 CAUSE
The Company may terminate the Participant's employment for Cause. A
termination for Cause is a termination evidenced by a resolution adopted in good
faith by two-thirds ( 2/3) of the Board of Directors that the Participant (a)
willfully and continually failed to substantially perform the Participant's
duties with the Company (other than a failure resulting from the Participant's
incapacity due to physical or mental illness), which failure continued for a
period of at least thirty (30) days after a written notice of demand for
substantial performance was delivered to the Participant specifying the manner
in which the Participant failed to substantially perform or (b) willfully
engaged in conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise; provided, however, that no termination of the
Participant's employment shall be for Cause as set forth in clause (b) above
until (i) there shall have been delivered to the Participant a copy of a written
notice setting forth that the Participant was guilty of the conduct set forth in
clause (b) above and specifying the particulars thereof in detail and (ii) the
Participant shall have been provided an opportunity to be heard by the Board of
Directors (with the assistance of the Participant's counsel if the Participant
so desires). No act, or failure to act, on the Participant's part shall be
considered "willful" unless the Participant has acted, or failed to act, with an
absence of good faith and without a reasonable belief that the Participant's
action or failure to act was in the best interest of the Company.
Notwithstanding
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anything contained in the Plan to the contrary, no failure to perform by the
Participant after notice of termination is given by the Participant shall
constitute Cause.
2.5 CHANGE IN CONTROL
As used in the Plan, a Change in Control shall be deemed to occur (a) if
any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing
twenty percent (20%) or more of the combined voting power of the Company's
then-outstanding securities, (b) upon the first purchase of the Common Stock
pursuant to a tender or exchange offer (other than a tender or exchange offer
made by the Company), (c) upon the approval by the Company's stockholders of a
merger or consolidation, a sale or disposition of all or substantially all the
Company's assets or a plan of liquidation or dissolution of the Company, or (d)
if, during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board of Directors cease for any reason
to constitute at least a majority thereof, unless the election or nomination for
the election by the Company's stockholders of each new director was approved by
a vote of at least two-thirds ( 2/3) of the directors then still in office who
were directors at the beginning of the period.
2.6 CODE
The Internal Revenue Code of 1986, as amended and in effect from time to
time, and the temporary or final regulations of the Secretary of the U.S.
Treasury adopted pursuant thereto.
2.7 COMMON STOCK
The Common Stock of the Company, $.01 par value per share, or such other
class of shares or other securities as may be applicable pursuant to the
provisions of Section 5.
2.8 EXCHANGE ACT
The Securities Exchange Act of 1934, as amended.
2.9 FAIR MARKET VALUE
As applied to a specific date, the mean between the highest and lowest
quoted selling prices at which Common Stock was sold on such date as reported in
the NYSE-Composite Transactions by The Wall Street Journal on such date or, if
no Common Stock was traded on such date, on the next preceding day on which
Common Stock was so traded. Notwithstanding the foregoing, upon the exercise,
(a) during the thirty (30) day period following a Change in Control,
of a stock appreciation right or of a limited stock appreciation right
granted in connection with a Nonqualified Option more than six (6) months
prior to a Change in Control or
(b) during the seven (7) month period following a Change in Control,
of a stock appreciation right or of a limited stock appreciation right
granted in connection with a Nonqualified Option to an Insider Participant
less than six (6) months prior to a Change in Control,
Fair Market Value on the date of exercise shall be deemed to be the greater of
(i) the highest price per share of Common Stock as reported in the
NYSE-Composite Transactions by The Wall Street Journal during the sixty (60) day
period ending on the day preceding the date of exercise of the stock
appreciation right or the limited stock appreciation right, as the case may be,
and (ii) if the Change in Control is one described in clause (b) or (c) of
Section 2.5, the highest price per share paid for Common Stock in connection
with such Change in Control.
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2.10 GOOD REASON
The occurrence of any of the following events or conditions:
(a) a change in the Participant's status, title, position or
responsibilities (including reporting responsibilities) which, in the
Participant's reasonable judgment, represents a substantial reduction of
the status, title, position or responsibilities as in effect immediately
prior thereto; the assignment to the Participant of any duties or
responsibilities which, in the Participant's reasonable judgment, are
inconsistent with such status, title, position or responsibilities; or any
removal of the Participant from or failure to reappoint or reelect the
Participant to any of such positions, except in connection with the
termination of the Participant's employment for Cause, for Permanent
Disability or as a result of his or her death, or by the Participant other
than for Good Reason;
(b) a reduction in the Participant's annual base salary;
(c) the Company's requiring the Participant (without the consent of
the Participant) to be based at any place outside a thirty-five (35) mile
radius of his or her place of employment prior to a Change in Control,
except for reasonably required travel on the Company's business which is
not materially greater than such travel requirements prior to the Change in
Control;
(d) the failure by the Company to (i) continue in effect any material
compensation or benefit plan in which the Participant was participating at
the time of the Change in Control, including, but not limited to, the Plan,
the Burlington Resources Inc. Pension Plan, the Burlington Resources Inc.
Supplemental Benefits Plan, the Burlington Resources Inc. Incentive
Compensation Plan, the Burlington Resources Inc. Deferred Compensation
Plan, and the Burlington Resources Inc. Retirement Savings Plan, or (ii)
provide the Participant with compensation and benefits at least equal (in
terms of benefit levels and/or reward opportunities) to those provided for
under each employee benefit plan, program and practice as in effect
immediately prior to the Change in Control (or as in effect following the
Change in Control, if greater);
(e) any material breach by the Company of any provision of the Plan;
or
(f) any purported termination of the Participant's employment for
Cause by the Company which does not otherwise comply with the terms of the
Plan.
2.11 INCENTIVE STOCK OPTION
An option intended to meet the requirements of an Incentive Stock Option as
defined in Section 422 of the Code, as in effect at the time of grant of such
option, or any statutory provision that may hereafter replace such Section.
2.12 INSIDER PARTICIPANT
Any person who is selected by the Plan Administrator to receive options,
stock appreciation rights, limited stock appreciation rights, Restricted Stock
and/or Stock Purchase Rights hereunder and who is subject to the requirements of
Section 16 of the Exchange Act, and the rules and regulations issued thereunder.
2.13 MAXIMUM ANNUAL EMPLOYEE GRANT
The Maximum Annual Employee Grant set forth in Section 6.1.
2.14 NONQUALIFIED OPTION
An option not intended to meet the requirements of an Incentive Stock
Option.
2.15 OPTION PRICE
The price per share of Common Stock at which each option is exercisable.
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2.16 PARTICIPANT
An eligible employee to whom an option, stock appreciation right, limited
stock appreciation right, Restricted Stock or Stock Purchase Right is granted
under the Plan as set forth in Section 4.
2.17 PERFORMANCE SHARE UNIT
A Performance Share Unit awarded under the Performance Unit Plan, which has
become payable under the Performance Unit Plan.
2.18 PERFORMANCE UNIT PLAN
The Company's 1992 Performance Share Unit Plan or any successor or similar
plans.
2.19 PERMANENT DISABILITY
A Participant shall be deemed to have a Permanent Disability for purposes
of the Plan if the Chief Executive Officer of the Company shall find upon the
basis of medical evidence satisfactory to the Chief Executive Officer that the
Participant is totally disabled, whether due to a physical or mental condition,
so as to be prevented from engaging in further employment by the Company or any
Subsidiary, and that such disability will be permanent and continuous during the
remainder of the Participant's life; provided, however, that for officers and
directors of the Company who are subject to Section 16 of the Exchange Act, such
determination shall be made by the Plan Administrator.
2.20 PLAN ADMINISTRATOR
The Board of Directors or the committee appointed and/or authorized
pursuant to Section 3 to administer the Plan.
2.21 PURCHASE DATE
For any Stock Purchase Right, a date within thirty (30) days after the date
any Bonus is paid or any Performance Share Unit becomes payable, which date
shall be the only date on which such Stock Purchase Right may be exercised.
2.22 RESTRICTED STOCK
Common Stock granted under the Plan that is subject to the requirements of
Section 9 and such other restrictions as the Plan Administrator deems
appropriate.
2.23 RULE 16B-3
Rule 16b-3 of the General Rules and Regulations under the Exchange Act.
2.24 STOCK PURCHASE PRICE
The price per share of Common Stock acquired upon exercise of a Stock
Purchase Right as determined by the Plan Administrator, which price shall not be
less than seventy-five percent (75%) of the Fair Market Value of a share of
Common Stock on the Purchase Date.
2.25 STOCK PURCHASE RIGHT
A right to purchase Common Stock granted under the Plan.
2.26 SUBSIDIARY
An entity that is designated by the Plan Administrator as a subsidiary for
purposes of the Plan and that is a corporation (or other form of business
association that is treated as a corporation for tax purposes) of which
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shares (or other ownership interests) having more than fifty percent (50%) of
the voting power are owned or controlled, directly or indirectly, by the Company
so as to qualify as a "subsidiary corporation" (within the meaning of Section
424(f) of the Code).
SECTION 3. ADMINISTRATION
3.1 The Plan shall be administered by the Board of Directors or, in the
event the Board of Directors shall appoint and/or authorize a committee or
committees to administer the Plan, by such committee or committees. The
administrator of the Plan shall hereinafter be referred to as the "Plan
Administrator."
In the event a member of the Board of Directors (or the committee) may be
eligible, subject to the restrictions set forth in Section 4, to participate in
or receive or hold options, stock appreciation rights, limited stock
appreciation rights, Restricted Stock and/or Stock Purchase Rights under the
Plan, no member of the Board of Directors or the committee shall vote with
respect to the granting of options, stock appreciation rights, limited stock
appreciation rights, Restricted Stock and/or Stock Purchase Rights hereunder to
himself or herself, as the case may be, and, if state corporate law does not
permit a committee to grant options, stock appreciation rights, limited stock
appreciation rights, Restricted Stock and Stock Purchase Rights to directors,
then any option, stock appreciation right, limited stock appreciation right,
Restricted Stock or Stock Purchase Right granted under the Plan to a director
for his or her services as such shall be approved by the full Board of
Directors.
The members of any committee serving as Plan Administrator shall be
appointed by the Board of Directors for such term as the Board of Directors may
determine. The Board of Directors may from time to time remove members from, or
add members to, the committee. Vacancies on the committee, however caused, may
be filled by the Board of Directors.
With respect to grants made under the Plan to officers and directors of the
Company who are subject to Section 16 of the Exchange Act, the Plan
Administrator shall be constituted at all times so as to meet the requirements
of Rule 16b-3 so long as any of the Company's equity securities are registered
pursuant to Section 12(b) or 12(g) of the Exchange Act.
3.2 Except for the terms and conditions explicitly set forth in the Plan,
the Plan Administrator shall have full authority to construe and interpret the
Plan, to establish, amend and rescind rules and regulations relating to the
Plan, to select persons eligible to participate in the Plan, to grant options,
stock appreciation rights, limited stock appreciation rights, Restricted Stock
and Stock Purchase Rights thereunder, to administer the Plan, to make
recommendations to the Board of Directors, to take all such steps and make all
such determinations in connection with the Plan and the options, stock
appreciation rights, limited stock appreciation rights, Restricted Stock and
Stock Purchase Rights granted thereunder as it may deem necessary or advisable,
which determination shall be final and binding upon all Participants, so long as
such interpretation and construction with respect to Incentive Stock Options
correspond to the requirements of Section 422 of the Code. The Plan
Administrator shall cause the Company at its expense to take any action related
to the Plan which may be required or necessary to comply with the provisions of
any federal or state law or any regulations issued thereunder.
3.3 Each member of any committee acting as Plan Administrator, while
serving as such, shall be considered to be acting in his or her capacity as a
director of the Company. Members of the Board of Directors and members of any
committee acting under the Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability except for gross
negligence or willful misconduct in the performance of their duties.
3.4 The fact that a member of the Board of Directors is, or shall
theretofore have been or thereafter may be, a person who has received or is
eligible to receive an option, stock appreciation right, limited stock
appreciation right, Restricted Stock and/or Stock Purchase Right shall not
disqualify him or her from taking part in and voting at any time as a member of
the Board of Directors in favor of or against any amendment or repeal of the
Plan.
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SECTION 4. ELIGIBILITY
To be eligible for selection by the Plan Administrator to receive a grant
of an option, stock appreciation right, limited stock appreciation right,
Restricted Stock or Stock Purchase Right under the Plan, an individual must be
an officer or a key employee of the Company, or of any Subsidiary, as of the
date on which the Plan Administrator grants to such individual such option,
stock appreciation right, limited stock appreciation right, Restricted Stock or
Stock Purchase Right and a person who, in the judgment of the Plan
Administrator, holds a position of responsibility and is able to contribute
substantially to the Company's continued success.
SECTION 5. SHARES AVAILABLE FOR THE PLAN
5.1 Subject to Section 5.3, the maximum number of shares for which
options, stock appreciation rights, limited stock appreciation rights,
Restricted Stock and Stock Purchase Rights may at any time be granted under the
Plan is ten million (10,000,000) shares of Common Stock, all such shares to be
held in the Company's treasury or out of the authorized but unissued shares of
the Company, or partly out of each, as shall be determined by the Board of
Directors. Upon (a) the expiration or termination in whole or in part of
unexercised options, stock appreciation rights, limited stock appreciation
rights and Stock Purchase Rights or the surrender of an option, or portion
thereof, upon exercise of a related stock appreciation right for cash or of a
limited stock appreciation right or (b) to the extent permissible under Rule
16b-3, the forfeiture of Restricted Stock, shares of Common Stock which were
subject thereto shall again be available for grants of options, stock
appreciation rights, limited stock appreciation rights, Restricted Stock and
Stock Purchase Rights under the Plan.
5.2 Notwithstanding the foregoing, and subject to Section 5.3, the number
of shares for which Restricted Stock may be granted pursuant to Section 9 of the
Plan may not exceed one million (1,000,000) shares of Common Stock and the
number of shares which may issued upon exercise of Stock Purchase Rights granted
under Section 10 of the Plan may not exceed two million (2,000,000) shares of
Common Stock.
5.3 In the event of a recapitalization, stock split, stock dividend,
exchange of shares, merger, reorganization, change in corporate structure or
shares of the Company or similar event, the Board of Directors, upon the
recommendation of the Plan Administrator, may make appropriate adjustments in
the number of shares authorized for the Plan, the Maximum Annual Employee Grant
and, with respect to outstanding options, stock appreciation rights, limited
stock appreciation rights, Restricted Stock and Stock Purchase Rights, the Plan
Administrator may make appropriate adjustments in the number of shares and the
Option Price or Stock Purchase Price.
SECTION 6. STOCK OPTIONS
6.1 Options may be granted to eligible employees in such number and at
such times during the term of the Plan as the Plan Administrator shall
determine, the Plan Administrator taking into account the duties of the
respective employees, their present and potential contributions to the success
of the Company, and such other factors as the Plan Administrator shall deem
relevant in accomplishing the purposes of the Plan; provided, that the maximum
number of shares with respect to which an option or options may be granted to
any eligible employee in any one year will not exceed five hundred thousand
(500,000) shares (the "Maximum Annual Employee Grant"). The granting of an
option shall take place when the Plan Administrator by resolution, written
consent or other appropriate action determines to grant such an option to a
particular Participant at a particular price. Each option shall be evidenced by
a written instrument delivered by or on behalf of the Company containing
provisions not inconsistent with the Plan.
6.2 An option granted under the Plan may be either an Incentive Stock
Option or a Nonqualified Option.
6.3 Each provision of the Plan and each Incentive Stock Option granted
thereunder shall be construed so that each such option shall qualify as an
Incentive Stock Option, and any provision thereof that cannot be so construed
shall be disregarded, unless the Participant agrees otherwise. The total number
of shares which
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may be purchased upon the exercise of Incentive Stock Options granted under the
Plan shall not exceed the total specified in Section 5.1. Incentive Stock
Options, in addition to complying with the other provisions of the Plan relating
to options generally, shall be subject to the following conditions:
(a) A Participant must not, immediately before an Incentive Stock
Option is granted, own stock representing more than ten percent (10%) of
the voting power or value of all classes of stock of the Company or a
Subsidiary. This requirement is waived if (i) the Option Price of the
Incentive Stock Option to be granted is at least one hundred ten percent
(110%) of the Fair Market Value of the stock subject to the option,
determined at the time the option is granted, and (ii) the option is not
exercisable more than five (5) years from the date the option is granted.
(b) To the extent that the aggregate Fair Market Value (determined at
the time of the grant of the option) of the stock with respect to which
Incentive Stock Options are exercisable for the first time by the
Participant during any calendar year exceeds One Hundred Thousand Dollars
($100,000), such options shall be treated as Nonqualified Options.
(c) Any other terms and conditions which the Plan Administrator
determines, upon advice of counsel, must be imposed for the option to be an
Incentive Stock Option.
6.4 Except as otherwise provided in Section 6.3, all Incentive Stock
Options and Nonqualified Options under the Plan shall be granted subject to the
following terms and conditions:
(a) OPTION PRICE
The Option Price shall be determined by the Plan Administrator at the time
of grant, but shall not be less than one hundred percent (100%) of the Fair
Market Value of the Common Stock on the date the option is granted.
(b) DURATION OF OPTIONS
Options shall be exercisable at such time and under such conditions as set
forth in the option grant, but in no event shall any Incentive Stock Option be
exercisable subsequent to the day before the tenth anniversary of the date on
which the option is granted, nor shall any other option be exercisable later
than the tenth anniversary of the date of its grant.
(c) EXERCISE OF OPTIONS
Subject to Section 6.4(j), an optionee may not exercise an option until he
or she has completed one (1) year of continuous employment with the Company or
one of its Subsidiaries from and including the date on which the option is
granted, or such longer period as the Plan Administrator may determine in a
particular case. This requirement is waived in the event of death or Permanent
Disability of an optionee before such period of continuous employment is
completed. Thereafter, shares of Common Stock covered by an option may be
purchased at one time or in such installments during the option period as may be
provided in the option grant. Any shares not purchased on the applicable
installment date may be purchased at one time or in such installments over the
balance of the option period as may be provided in the option grant. To the
extent that the right to purchase shares has accrued thereunder, options may be
exercised from time to time by written notice to the Company setting the number
of shares with respect to which the option is being exercised.
(d) PAYMENT
The purchase price of shares purchased under options shall be paid in full
to the Company upon the exercise of the option by delivery of consideration
equal to the product of the Option Price and the number of shares purchased.
Such consideration may be either (i) in cash or (ii) at the discretion of the
Plan Administrator, in Common Stock already owned by the Participant for at
least six (6) months, or any combination of cash and Common Stock. The Fair
Market Value of such Common Stock as delivered shall be valued as of the day
prior to delivery. The Plan Administrator can determine at the time the option
is granted that additional forms of payment will be permitted. To the extent
permitted by the Plan Administrator and applicable laws and regulations
(including, but not limited to, federal tax and securities laws and regulations
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and state corporate law), an option may also be exercised by delivery of a
properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company the amount of sale or loan proceeds to
pay the purchase price of shares purchased under the option. If specifically
authorized in the option grant, shares of Common Stock with a Fair Market Value
equal to all or a portion of the purchase price of shares purchased under
options may be withheld from the shares issuable to the Participant upon the
exercise of the option. The Fair Market Value of such Common Stock as is
withheld shall be valued as of the day prior to exercise of the option. In the
event an option grant to an Insider Participant provides that the purchase price
of shares purchased under options may be paid in whole or in part by having
shares with a Fair Market Value equal to all or a portion of the purchase price
withheld from the shares issuable to the optionee upon the exercise of the
option, the following restrictions shall apply. To the extent required for
compliance with Rule 16b-3, the withholding of shares issuable upon the exercise
of an option to pay the purchase price of shares acquired upon exercise of an
option by an Insider Participant must be approved by the Plan Administrator and
must be made (x) pursuant to an irrevocable election made six (6) months in
advance of the transaction, (y) during the period beginning on the third
business day following the date of release for publication of the quarterly or
annual summary statements of sales and earnings of the Company and ending on the
twelfth business day following such date, or (z) otherwise in accordance with
Rule 16b-3 and interpretations thereunder.
(e) RESTRICTIONS
The Plan Administrator shall determine and reflect in the option grant,
with respect to each option, the nature and extent of the restrictions, if any,
to be imposed on the shares of Common Stock which may be purchased thereunder,
including, but not limited to, restrictions on the transferability of such
shares acquired through the exercise of such options for such periods as the
Plan Administrator may determine and, further, that in the event a Participant's
employment by the Company or a Subsidiary terminates during the period in which
such shares are nontransferable, the Participant shall be required to sell such
shares back to the Company at such prices as the Plan Administrator may specify
in the option.
(f) NONTRANSFERABILITY OF OPTIONS
During a Participant's lifetime, an option may be exercisable only by the
Participant and options granted under the Plan and the rights and privileges
conferred thereby shall not be subject to execution, attachment or similar
process and may not be transferred, assigned, pledged or hypothecated in any
manner (whether by operation of law or otherwise) other than by will or by the
applicable laws of descent and distribution. Notwithstanding the foregoing, to
the extent permitted by applicable law and Rule 16b-3, the Plan Administrator
may permit a recipient of a Nonqualified Option to (i) designate in writing
during the Participant's lifetime a Beneficiary to receive and exercise the
Participant's Nonqualified Options in the event of such Participant's death (as
provided in Section 6.4(i)) or (ii) transfer a Nonqualified Option. Any other
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any
option under the Plan or of any right or privilege conferred thereby, contrary
to the provisions of the Plan, or the sale or levy or any attachment or similar
process upon the rights and privileges conferred hereby, shall be null and void.
(g) PURCHASE FOR INVESTMENT
The Plan Administrator shall have the right to require that each
Participant or other person who shall exercise an option under the Plan, and
each person into whose name shares of Common Stock shall be issued pursuant to
the exercise of an option, represent and agree that any and all shares of Common
Stock purchased pursuant to such option are being purchased for investment only
and not with a view to the distribution or resale thereof and that such shares
will not be sold except in accordance with such restrictions or limitations as
may be set forth in the option. This Section 6.4(g) shall be inoperative during
any period of time when the Company has obtained all necessary or advisable
approvals from governmental agencies and has completed all necessary or
advisable registrations or other qualifications of shares of Common Stock as to
which options may from time to time be granted as contemplated in Section 11.
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(h) TERMINATION OF EMPLOYMENT
Upon the termination of a Participant's employment for any reason other
than death, the Participant's option shall be exercisable only to the extent
that it was then exercisable and, unless the term of the option expires sooner,
such option shall expire according to the following schedule; provided, however,
that the Plan Administrator may at any time determine in a particular case that
specific limitations and restrictions under the Plan shall not apply:
(i) Retirement
The option shall expire, unless exercised, thirty-six (36) months after the
Participant's retirement from the Company or any Subsidiary.
(ii) Disability
The option shall expire, unless exercised, thirty-six (36) months
after the Participant's Permanent Disability.
(iii) Termination With Approval
The option shall expire, unless exercised, thirty-six (36) months
after a Participant resigns or is terminated as an employee of the Company
or any Subsidiary, unless the Chief Executive Officer of the Company shall
have determined in a specific case that the option should terminate when
the Participant's employment status ceases; provided, however, that for
officers and directors who are subject to Section 16 of the Exchange Act,
such determination shall be made by the Plan Administrator.
(iv) Termination Following a Change in Control
The option shall expire, unless exercised, within thirty-six (36)
months of a Participant's termination of employment (other than a
termination by the Company for Cause or a voluntary termination by the
Participant other than for Good Reason) following a Change in Control,
provided that said termination of employment occurs within two (2) years
following a Change in Control.
(v) All Other Terminations
Except as provided in subparagraphs (iii) and (iv) above, the option
shall expire upon termination of employment.
Leaves of absence for such period and purposes conforming to the personnel
policy of the Company or of its Subsidiaries, as applicable, shall not be deemed
terminations or interruptions of employment.
(i) DEATH OF PARTICIPANT
Upon the death of a Participant, whether during the Participant's period of
employment or during the thirty-six (36) month period referred to in Section
6.4(h)(i), (ii) and (iii), the option shall expire, unless the term of the
option expires sooner, twelve (12) months after the date of the Participant's
death, unless the option is exercised within such twelve (12) month period by
the Participant's Beneficiary, legal representatives, estate or the person or
persons to whom the Participant's option rights shall have passed by will or the
laws of descent and distribution; provided, however, that the Plan Administrator
may determine in a particular case that specific limitations and restrictions
under the Plan shall not apply. Notwithstanding other Plan provisions pertaining
to the times at which options may be exercised, no option shall continue to be
exercisable, pursuant to Section 6.4(h) or this Section 6.4(i), at a time that
would violate the maximum duration of Section 6.4(b).
(j) CHANGE IN CONTROL
Notwithstanding other Plan provisions pertaining to the times at which
options may be exercised, all outstanding options, to the extent not then
currently exercisable, shall become exercisable in full upon the occurrence of a
Change in Control; provided, that the Plan Administrator may determine that such
acceleration will not occur if it would render unavailable "pooling of interest"
accounting treatment for any reorganization, merger or consolidation of the
Company. In no event, however, shall any intended Incentive
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Stock Option first become exercisable, pursuant to Section 6.4(c) or this
Section 6.4(j), without the consent of the Participant, if the result would be
to cause such option, when granted, not to be treated as an Incentive Stock
Option (whether by reason of the possible future violation of the annual
limitation of Section 6.3(b) or otherwise).
(k) RIGHTS AS STOCKHOLDER
A Participant shall have none of the rights of a stockholder until the
shares of Common Stock are issued to the Participant.
SECTION 7. STOCK APPRECIATION RIGHTS
7.1 The Plan Administrator may grant stock appreciation rights to eligible
employees in connection with any option granted under the Plan, either at the
time of the grant of such option or at any time thereafter during the term of
the option. Such stock appreciation rights shall cover the same shares covered
by the options (or such lesser number of shares of Common Stock as the Plan
Administrator may determine) and shall, except as provided in Section 7.3, be
subject to the same terms and conditions as the related options and such further
terms and conditions not inconsistent with the Plan as shall from time to time
be determined by the Plan Administrator.
7.2 Each stock appreciation right shall entitle the holder of the related
option to surrender to the Company unexercised the related option, or any
portion thereof, and to receive from the Company in exchange therefor an amount
equal to the excess of the Fair Market Value of one (1) share of Common Stock on
the date the right is exercised over the Option Price per share times the number
of shares covered by the option, or portion thereof, which is surrendered.
Payment shall be made in shares of Common Stock valued at Fair Market Value as
of the date the right is exercised, or in cash, or partly in shares and partly
in cash, at the discretion of the Plan Administrator; provided, however, that
payment shall be made solely in cash with respect to a stock appreciation right
which is exercised within seven (7) months following a Change in Control.
Notwithstanding the foregoing and to the extent required for compliance with
Rule 16b-3, a payment, in whole or in part, of cash upon exercise of a stock
appreciation right held by an Insider Participant may be made only if the Plan
Administrator approves such election to receive cash and the right is exercised
(a) during the period beginning on the third business day following the date of
release for publication of the quarterly or annual summary statements of sales
and earnings of the Company and ending on the twelfth business day following
such date or (b) otherwise in accordance with the provisions of Rule 16b-3 and
interpretations thereunder. Stock appreciation rights may be exercised from time
to time upon actual receipt by the Company of written notice stating the number
of shares of Common Stock with respect to which the stock appreciation right is
being exercised. The value of any fractional shares shall be paid in cash.
7.3 Stock appreciation rights are subject to the following restrictions:
(a) Each stock appreciation right shall be exercisable at such time
or times that the option to which it relates shall be exercisable or at
such other times as the Plan Administrator may determine; provided,
however, that stock appreciation rights granted to Insider Participants
shall not be exercisable until the Participant shall have completed a six
(6) month period of continuous employment with the Company or any
Subsidiary immediately following the date on which the stock appreciation
right is granted. In the event of death or Permanent Disability of a
Participant during employment but before the Participant has completed such
period of continuous employment, such stock appreciation right shall be
exercisable only within the period specified in the related option. In the
event of a Change in Control, the requirement that a Participant shall have
completed a six (6) month period of continuous employment is waived with
respect to a Participant who is employed by the Company at the time of the
Change in Control but who, within the six (6) month period, voluntarily
terminates employment for Good Reason or is terminated by the Company other
than for Cause; provided, that the Plan Administrator may determine that
such waiver will not occur if it would render unavailable "pooling of
interest" accounting treatment for any reorganization, merger or
consolidation of the Company. Notwithstanding the
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foregoing, a stock appreciation right may not be exercised for cash by an
Insider Participant under any circumstances until the expiration of the six
(6) month period following the date of grant.
(b) Except in the event of a Change in Control, the Plan
Administrator in its sole discretion may approve or deny in whole or in
part a request to exercise a stock appreciation right. Denial or approval
of such request shall not require a subsequent request to be similarly
treated by the Plan Administrator.
(c) The right of a Participant to exercise a stock appreciation right
shall be canceled if and to the extent the related option is exercised. To
the extent that a stock appreciation right is exercised, the related option
shall be deemed to have been surrendered, unexercised and canceled.
(d) A holder of stock appreciation rights shall have none of the
rights of a stockholder until shares of Common Stock, if any, are issued to
such holder pursuant to such holder's exercise of such rights.
(e) The acquisition of Common Stock pursuant to the exercise of a
stock appreciation right shall be subject to the same terms and conditions
as would apply to the acquisition of Common Stock acquired upon acquisition
of the related option, as set forth in Section 6.4.
SECTION 8. LIMITED STOCK APPRECIATION RIGHTS
8.1 The Plan Administrator may grant limited stock appreciation rights to
eligible employees in connection with any options granted under the Plan, either
at the time of the grant of such option or at any time thereafter during the
term of the option. Such limited stock appreciation rights shall cover the same
shares covered by the options (or such lesser number of shares of Common Stock
as the Plan Administrator may determine) and shall, except as provided in
Section 8.3, be subject to the same terms and conditions as the related options
and such further terms and conditions not inconsistent with the Plan as shall
from time to time be determined by the Plan Administrator.
8.2 Each limited stock appreciation right shall entitle the holder of the
related option to surrender to the Company the unexercised portion of the
related option and to receive from the Company in exchange therefor an amount in
cash equal to the excess of the Fair Market Value of one (1) share of Common
Stock on the date the right is exercised over the Option Price per share times
the number of shares covered by the option, or portion thereof, which is
surrendered.
8.3 Limited stock appreciation rights are subject to the following
restrictions:
(a) Each limited stock appreciation right shall be exercisable in full
for a period of seven (7) months following the date of a Change in Control
regardless of whether the holder is employed by the Company or any of its
Subsidiaries on the date the right is exercised; provided, however, that
limited stock appreciation rights may not be exercised under any
circumstances by Insider Participants until the expiration of the six (6)
month period following the date of grant. Limited stock appreciation rights
shall be exercisable only to the same extent and subject to the same
conditions as the options related thereto are exercisable, as provided in
Section 6.4(j).
(b) The right of a Participant to exercise a limited stock
appreciation right shall be canceled if and to the extent the related
option is exercised. To the extent that a limited stock appreciation right
is exercised, the related option shall be deemed to have been surrendered,
unexercised and canceled.
(c) Limited stock appreciation rights shall not be exercisable if the
event constituting the Change in Control is an event in which the
consideration to be paid to the Company's stockholders consists solely of
equity securities registered under Section 12 of the Exchange Act.
SECTION 9. RESTRICTED STOCK
9.1 Restricted Stock may be granted to eligible employees in such number
and at such times during the term of the Plan as the Plan Administrator shall
determine, the Plan Administrator taking into account the duties of the
respective Participants, their present and potential contributions to the
success of the Company,
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and such other factors as the Plan Administrator shall deem relevant in
accomplishing the purposes of the Plan. The granting of Restricted Stock shall
take place when the Plan Administrator by resolution, written consent or other
appropriate action determines to grant such Restricted Stock to a particular
Participant. Each grant shall be evidenced by a written instrument delivered by
or on behalf of the Company containing provisions not inconsistent with the
Plan. The Participant receiving a grant of Restricted Stock shall be recorded as
a stockholder of the Company and, subject to the provisions hereof, shall have
all the rights of a stockholder with respect to such shares, including the right
to vote the shares and receive all dividends or other distributions made or paid
with respect to such shares; provided, however, that the shares themselves, and
any new, additional or different shares or securities which the Participant may
be entitled to receive with respect to such shares by virtue of a stock split or
stock dividend or any other change in the corporate or capital structure of the
Company, shall be subject to the restrictions hereinafter described.
9.2 A grant of Restricted Stock shall entitle a Participant to receive, on
the date or dates designated by the Plan Administrator, upon payment to the
Company of consideration determined by the Plan Administrator, which
consideration shall be at least equal to the par value of the Common Stock, in a
manner determined by the Plan Administrator, the number of shares of Common
Stock selected by the Plan Administrator. The Plan Administrator may require,
under such terms and conditions as it deems appropriate or desirable, that the
certificates for Restricted Stock delivered under the Plan may be held in
custody by a bank or other institution, or that the Company may itself hold such
shares in custody until the Restriction Period (as defined in Section 9.3)
expires or until restrictions thereon otherwise lapse, and may require, as a
condition of any receipt of Restricted Stock, that the Participant shall have
delivered a stock power endorsed in blank relating to the shares of Restricted
Stock.
9.3 During a period of years following the date of grant, as determined by
the Plan Administrator, which shall in no event be less than one (1) year (the
"Restriction Period"), the Restricted Stock may not be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered or disposed of by the
recipient, except in the event of death or Permanent Disability, the Plan
Administrator's waiver or modification of such restrictions in the agreement
evidencing the grant of Restricted Stock or by resolution of the Plan
Administrator adopted at any time.
9.4 Except as provided in Section 9.5 or 9.6, if a Participant terminates
employment with the Company for any reason before the expiration of the
Restriction Period, all shares of Restricted Stock still subject to restriction
shall be forfeited by the Participant to the Company. In addition, in the event
of any attempt by the Participant to sell, exchange, transfer, pledge or
otherwise dispose of shares of Restricted Stock in violation of the terms of the
Plan, such shares shall be forfeited to the Company.
9.5 The Restriction Period for any Participant shall be deemed to end and
all restrictions on shares of Restricted Stock shall lapse upon the
Participant's death or Permanent Disability or any termination of employment
determined by the Plan Administrator to end the Restriction Period.
9.6 The Restriction Period for any Participant shall be deemed to end and
all restrictions on shares of Restricted Stock shall terminate immediately upon
a Change in Control.
9.7 When the restrictions imposed by Section 9.3 expire or otherwise lapse
with respect to one (1) or more shares of Restricted Stock, the Company shall
deliver to the Participant (or the Participant's legal representative,
Beneficiary or heir) one (1) share of Common Stock for each share of Restricted
Stock. At that time, the written instrument referred to in Section 9.1, as it
relates to such shares, shall be terminated.
9.8 Subject to Section 9.2, each Participant entitled to receive
Restricted Stock under the Plan shall be issued a certificate for such shares.
Such certificate shall be registered in the name of the Participant.
SECTION 10. STOCK PURCHASE RIGHTS
10.1 The Plan Administrator may grant to any Participant Stock Purchase
Rights that entitle a Participant to purchase, on the Purchase Date, up to the
maximum number of shares of Common Stock authorized by Section 10.2 at the Stock
Purchase Price; provided, however, that the Plan Administrator may
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provide that a Participant automatically and without any act on the
Participant's part will be deemed to have exercised the Participant's Stock
Purchase Right on the Purchase Date.
10.2 The maximum number of shares of Common Stock subject to a Stock
Purchase Right granted to any Participant in any Plan Year shall equal the
number of shares that can be purchased on the Purchase Date at the Stock
Purchase Price with the Participant's Bonus and/or the amount payable in respect
of the Participant's Performance Share Units. A Stock Purchase Right granted to
any Participant may cover a number of shares that is less than the maximum
number permitted by this Section 10.2.
10.3 All Stock Purchase Rights shall be granted in writing and shall
express an offer by the Company to sell a number of shares of Common Stock, not
to exceed the maximum number provided in Section 10.2, on the Purchase Date at
the Stock Purchase Price.
10.4 With respect to each Stock Purchase Right, the Plan Administrator
shall determine and reflect in the grant of the Stock Purchase Right the nature
and extent of the restrictions, if any, to be imposed in connection with the
purchase of shares of Common Stock thereunder, including but not limited to,
restrictions on the transferability of shares acquired through the exercise of
such Stock Purchase Rights. Unless the written grant of a Stock Purchase Right
provides otherwise, shares acquired upon exercise of a Stock Purchase Right for
a Stock Purchase Price of less than one hundred percent (100%) of the Fair
Market Value of Common Stock on the Purchase Date shall be issued as "SPR
Restricted Stock" that shall be subject to a minimum Restriction Period of three
years and such other conditions as the Plan Administrator may provide in the
grant of such Stock Purchase Rights and shall otherwise be subject to the terms
and conditions of Section 9. Notwithstanding the foregoing, the Restriction
Period for any Participant shall be deemed to end and all restrictions on shares
of SPR Restricted Stock shall lapse upon (i) a Participant's retirement, (ii) a
determination by the Plan Administrator that the Participant has incurred a
severe and unexpected financial hardship, (iii) a Change of Control or (iv) a
Participant's termination of employment with the Company or a subsidiary.
10.5 Common Stock shall be purchased by the exercise of Stock Purchase
Rights granted hereunder. Stock Purchase Rights granted to any Participant shall
be exercisable only on the Purchase Date for such Stock Purchase Right.
10.6 A Stock Purchase Right may be exercised in whole or in part. To the
extent a Participant does not purchase the maximum number of shares covered by a
Stock Purchase Right on the Purchase Date, the Stock Purchase Right shall
terminate.
10.7 A Participant shall exercise a Stock Purchase Right by providing
written notice to the Company on or before the Purchase Date on a form provided
by the Company for such purpose. Notice to the Company of the exercise of a
Stock Purchase Right shall be irrevocable and shall specify the number of
shares, subject to the maximum specified in the grant of the Stock Purchase
Right, to be purchased by the Participant on the Purchase Date. The Company
shall treat such notice by a Participant as a binding commitment to deliver to
the Company as soon as practicable following the Purchase Date the Stock
Purchase Price for the number of shares specified in the notice. The Stock
Purchase Price shall be paid in full to the Company solely in cash.
10.8 Except as provided in this Section 10.8, as soon as administratively
feasible after the Purchase Date, certificates representing the shares of Common
Stock purchased by the Participant shall be issued in the Participant's name and
sent to the Participant unless such shares are issued as SPR Restricted Stock.
10.9 Except as provided in Section 10.10, a Participant shall be
ineligible to exercise a Stock Purchase Right unless the Participant is an
employee of the Company or a Subsidiary on the Purchase Date for such Stock
Purchase Right.
10.10 A Participant (or the Participant's legal representative in the case
of his or her death) who has received a Bonus or who holds a Performance Share
Unit but who retires, dies, or suffers a Permanent Disability after December
31st of the year for which the Bonus was granted or after the Performance Share
Unit became payable but before the Purchase Date, shall be entitled to exercise
his or her Stock Purchase Rights in respect of such Bonus or Performance Share
Unit on the Purchase Date.
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SECTION 11. REGULATORY APPROVALS AND LISTING
11.1 The Company shall not be required to issue any certificate for shares
of Common Stock upon the exercise of an option, stock appreciation right or
Stock Purchase Right granted under the Plan prior to:
(a) the obtaining of any approval or ruling from the Securities and
Exchange Commission, the Internal Revenue Service or any other governmental
agency which the Company, in its sole discretion, shall determine to be
necessary or advisable;
(b) the listing of such shares on any stock exchange on which the
Common Stock may then be listed; or
(c) the completion of any registration or other qualification of such
shares under any federal or state laws, rulings or regulations of any
governmental body which the Company, in its sole discretion, shall
determine to be necessary or advisable.
11.2 All certificates for shares delivered pursuant to Section 9.8 in
respect of Restricted Stock awards or pursuant to Section 10.8 in respect of the
exercise of Stock Purchase Rights shall be subject to such stop-transfer orders
and other restrictions as the Plan Administrator may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which Common Stock is then listed and any
applicable federal or state securities laws, and the Plan Administrator may
cause a legend or legends to be placed on any such certificates to make
appropriate reference to such restrictions. The foregoing provisions of this
Section 11.2 shall not be effective if and to the extent that the shares of
Common Stock delivered under the Plan are covered by an effective and current
registration statement under the Securities Act of 1933, as amended, or if and
so long as the Plan Administrator determines that application of such provisions
is no longer required or desirable. In making such determination, the Plan
Administrator may rely upon an opinion of counsel for the Company.
SECTION 12. EFFECTIVE DATE AND TERM OF THE PLAN
The Plan shall be dated as of December 8, 1993 and shall be effective upon
adoption by the Board of Directors, but the Plan shall be void unless it is
approved by the Company's stockholders within the earlier of the date of the
Company's next annual meeting of stockholders and twelve (12) months after the
date the Plan is adopted by the Board of Directors. Subject to the foregoing
condition, options, stock appreciation rights, limited stock appreciation
rights, Restricted Stock and Stock Purchase Rights may be granted pursuant to
the Plan from time to time within the period commencing upon adoption of the
Plan by the Board of Directors and ending ten (10) years after the earlier of
such adoption and the approval of the Plan by the stockholders. Options, stock
appreciation rights, limited stock appreciation rights, Restricted Stock and
Stock Purchase Rights theretofore granted may extend beyond that date, and the
terms and conditions of the Plan shall continue to apply thereto and to shares
of Common Stock acquired thereunder. To the extent required for compliance with
Rule 16b-3, shares of Common Stock underlying options, stock appreciation rights
or Stock Purchase Rights and shares of Restricted Stock granted subject to
subsequent stockholder approval of the Plan to Insider Participants may not be
sold until a date at least six (6) months after the date such stockholder
approval is obtained, and stock appreciation rights that are granted subject to
stockholder approval of the Plan to Insider Participants may not be exercised
for cash until a date at least six (6) months after the date such stockholder
approval is obtained.
SECTION 13. GENERAL PROVISIONS
13.1 Nothing contained in the Plan, or in any option, stock appreciation
right, limited stock appreciation right, Restricted Stock or Stock Purchase
Right granted pursuant to the Plan, shall confer upon any employee any right
with respect to continuance of employment by the Company or a Subsidiary, or
interfere in any way with the right of the Company or a Subsidiary to terminate
the employment of such employee at any time with or without assigning any reason
therefor.
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13.2 Grants, vesting or payment of options, stock appreciation rights,
limited stock appreciation rights, Restricted Stock or Stock Purchase Rights
shall not be considered as part of a Participant's salary or used for the
calculation of any other pay, allowance, pension or other benefit unless
otherwise permitted by other benefit plans provided by the Company or a
Subsidiary, or required by law or by contractual obligations of the Company or a
Subsidiary.
13.3 The right of a Participant or Beneficiary to the payment of any
compensation under the Plan may not be assigned, transferred, pledged or
encumbered, nor shall such right or other interests be subject to attachment,
garnishment, execution or other legal process.
13.4 Leaves of absence for such periods and purposes conforming to the
personnel policy of the Company or a Subsidiary, as applicable, shall not be
deemed terminations or interruptions of employment. The foregoing
notwithstanding, with respect to Incentive Stock Options, employment shall not
be deemed to continue beyond the first ninety (90) days of such leave unless the
Participant's reemployment rights are guaranteed by statute or contract.
13.5 Subject to Section 6.4(h) in the event a Participant is transferred
from the Company to a Subsidiary, or vice versa, or is promoted or given
different responsibilities, the options, stock appreciation rights, limited
stock appreciation rights, Restricted Stock and/or Stock Purchase Rights granted
to the Participant prior to such date shall not be affected.
13.6 The Plan shall be construed and governed in accordance with the laws
of the State of Washington, except that it shall be construed and governed in
accordance with applicable federal law in the event that such federal law
preempts state law.
13.7 Appropriate provision shall be made for all taxes required to be
withheld in connection with the exercise, grant or other taxable event with
respect to options, stock appreciation rights, limited stock appreciation
rights, Restricted Stock and Stock Purchase Rights under the applicable laws or
regulations of any governmental authority, whether federal, state or local and
whether domestic or foreign. Unless otherwise provided in the option grant, a
Participant is permitted to deliver shares of Common Stock (including shares
acquired pursuant to the exercise of an option or Stock Purchase Right other
than the option or Stock Purchase Right currently being exercised, to the extent
permitted by applicable regulations) for payment of withholding taxes on the
exercise of an option, stock appreciation right or Stock Purchase Right or upon
the vesting of the Restricted Stock. The Fair Market Value of such Common Stock
as delivered shall be valued as of the day prior to delivery. At the election of
the Plan Administrator or, subject to approval of the Plan Administrator at its
sole discretion, at the election of a Participant, shares of Common Stock may be
withheld from the shares issuable to the optionee upon exercise of an option,
stock appreciation right or Stock Purchase Right or upon the vesting of the
Restricted Stock to satisfy tax withholding obligations. The Fair Market Value
of such Common Stock as is withheld shall be valued as of the day prior to
exercise of the option, stock appreciation right or Stock Purchase Right or the
vesting of the Restricted Stock. The withholding of shares to pay tax
obligations in connection with the exercise of an option, stock appreciation
right or Stock Purchase Right or the vesting of the Restricted Stock by an
Insider Participant must be approved by the Plan Administrator and must occur
(i) pursuant to an irrevocable election made six (6) months in advance of the
transaction, (ii) during the period beginning on the third business day
following the date of release for publication of the quarterly or annual summary
statements of sales and earnings of the Company and ending on the twelfth
business day following such date, or (iii) otherwise in accordance with the
provisions of Rule 16b-3 and interpretations thereunder. In the event Rule 16b-3
is amended or interpreted to permit shares to be withheld to pay tax withholding
obligations outside of the periods described in clause (i) or (ii) of the
preceding sentence, or without Plan Administrator approval, the Plan
Administrator may determine that such provisions shall no longer apply to
Insider Participants.
Tax advice should be obtained by the Participant prior to the Participant's
(a) entering into any transaction under or with respect to the Plan, (b)
designating or choosing the time of distributions under the Plan, or (c)
disposing of any shares of Common Stock issued under the Plan.
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SECTION 14. AMENDMENT, TERMINATION OR DISCONTINUANCE OF THE PLAN
14.1 Subject to the Board of Directors and Section 14.2, the Plan
Administrator may from time to time make such amendments to the Plan as it may
deem proper and in the best interest of the Company without further approval of
the stockholders of the Company, including, but not limited to, any amendment
necessary to ensure that the Company may obtain any regulatory approval referred
to in Section 11; provided, however, that no change in any option, stock
appreciation right, limited stock appreciation right, Restricted Stock or Stock
Purchase Right therefore granted may be made without the consent of the
Participant which would impair the right of the Participant to acquire or retain
Common Stock or cash that the Participant may have acquired as a result of the
Plan.
14.2 To the extent required for compliance with applicable law or
regulation, including Rule 16b-3, the Plan Administrator and the Board of
Directors may not amend the Plan without the approval of the stockholders of the
Company, including any amendment which would (a) materially increase the number
of securities that may be issued under the Plan to Insider Participants; (b)
materially modify the requirements as to eligibility for participation in the
Plan to add a class of Insider Participants; or (c) otherwise materially
increase the benefits accruing under the Plan to Insider Participants; provided,
however, that any increase in the number of shares available under the Plan for
grant as Incentive Stock Options and any change in the designation of the group
of employees eligible to receive Incentive Stock Options under the Plan shall be
subject to stockholder approval in accordance with Section 422 of the Code.
14.3 The Board of Directors may at any time suspend the operation of or
terminate the Plan with respect to any shares of Common Stock or rights not at
the time subject to any option, stock appreciation right, limited stock
appreciation right, Stock Purchase Right or grant of Restricted Stock.
SECTION 15. SALES BY INSIDER PARTICIPANTS
Except in the case of sales by an executor or administrator of the estate
of a deceased Participant, if an Insider Participant disposes of shares of
Common Stock acquired by such Participant upon exercise of an option, stock
appreciation right, Stock Purchase Right or the grant of Restricted Stock within
six (6) months after the date the option, stock appreciation right, Restricted
Stock or Stock Purchase Right was granted, the grant of such option, stock
appreciation right, Restricted Stock or Stock Purchase Right will be deemed a
nonexempt matchable purchase for purposes of Section 16(b) as of the date of
grant.
SECTION 16. COMPLIANCE WITH RULE 16B-3
It is the intention of the Company that, so long as any of the Company's
equity securities are registered pursuant to Section 12(b) or 12(g) of the
Exchange Act, the Plan shall comply in all respects with Rule 16b-3 and, if any
Plan provision is later found not to be in compliance with such Section, that
provision shall be deemed null and void, and in all events the Plan shall be
construed in favor of its meeting the requirements of Rule 16b-3.
Notwithstanding anything in the Plan to the contrary, the Board of Directors, in
its absolute discretion, may bifurcate the Plan so as to restrict, limit or
condition the use of any provision of the Plan to Insider Participants without
so restricting, limiting or conditioning the Plan with respect to other
Participants.
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