Registration No. 333-_____________
As filed with the Securities and Exchange Commission on June 3, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
_______________________
USFREIGHTWAYS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3790696
(State or other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
9700 Higgins Road (847) 696-0200
Rosemont, Illinois 60018 (Telephone number, including
(Address, including Zip Code, of area code, of registrant's
registrant's principal executive offices) principal executive offices)
USFREIGHTWAYS CORPORATION LONG-TERM INCENTIVE PLAN
J. Campbell Carruth
Chief Executive Officer
USFreightways Corporation
9700 Higgins Road
Rosemont, Illinois 60018
(847) 696-0200
Copy to:
Richard C. Pagano
Vice President, General Counsel & Secretary
9700 Higgins Road, Suite 570
Rosemont, Illinois 60018
Telephone: (847) 692-0286
(Name, address, including zip code and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
Title of each class of Proposed maximum Proposed maximum
securities to be Amount to be offering price per aggregate offering Amount of
registered registered* share** price** registration fee**
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
Common Stock, par
value $.01 per share 2,000,000 $ 25.3125 $ 50,625,000.00 $ 15,339.38
======================== ====================== ====================== ======================= ======================
</TABLE>
* This Registration Statement includes any additional shares of the
registrant's Common Stock that may be issued pursuant to antidilution
provisions contained in the plan.
** Pursuant to Rule 457(h), the registration fee was computed on the basis of
the high and low prices of the registrant's Common Stock on the NASDAQ/National
Market System on June 2, 1997.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which have heretofore been filed by
USFreightways Corporation (the "Company") with the Securities and Exchange
Commission (the "Commission"), are incorporated by reference in this
Registration Statement, except to the extent that any statement or information
therein is modified, superseded or replaced by a statement or information
contained in any other subsequently filed document incorporated herein by
reference:
i. the Company's Annual Report on Form 10-K for the year ended
December 28, 1996;
ii. the Company's Quarterly Report on Form 10-Q for the period ended
March 29, 1997;
iii. the Company's Current Reports contained on Form 8-K dated January 7, 1997;
iv. the description of the Company's Common Stock, $0.01 par value per share,
contained in the Company's Registration Statement on Form 10 under the
Exchange Act with respect to such stock and all amendments and reports
filed for purposes of updating such descriptions; and
v. the description of the Company's stock purchase rights contained in the
Company's Registration Statement on Form 8-A, dated March 18, 1994,
including any amendment or report filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act after the date hereof, and prior to the filing of a
post-effective amendment 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 herein and to be a part hereof from the date of
filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The By-laws of the Company provide that the Company shall indemnify
its officers and directors to the fullest extent permitted by applicable law.
Section 145 of the Delaware General Corporation Law (the "DGCL") provides, in
general, that each director and officer of a corporation may be indemnified
against expenses (including attorneys' fees, judgments, fines and amounts paid
in settlement) actually and reasonably incurred in connection with the defense
or settlement of any threatened, pending or completed legal proceedings in
which he is involved by reason of the fact that he is or was a director or
officer if he acted in good faith and in a manner that he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, if he had no reasonable cause to
believe that his conduct was unlawful. If the legal proceeding, however, is by
or in the right of the corporation, the director or officer may not be
indemnified in respect of any claim, issue or matter as to which he shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the company unless a court determines otherwise.
The Restated Certificate of Incorporation of the Company provides that
the personal liability of the directors of the Company shall be eliminated to
the fullest extent permitted by applicable law. The DGCL permits a
corporation's certificate of incorporation to provide that no director of the
corporation shall be personally liable to the corporation or its stockholders
for monetary damages for any breach of his fiduciary duty as a director,
provided, however, that such provision shall not apply to any liability of a
director (1) for any breach of a director's duty of loyalty to the corporation
or its stockholders, (2) for acts or omissions that are not in good faith or
involve intentional misconduct or a knowing violation of the law, (3) under
Section 174 of the DGCL or (4) for any transaction from which the director
derived an improper personal benefit.
<PAGE>
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8.Exhibits.
See Exhibit Index which is incorporated herein by reference.
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
a. 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 (the "Securities Act");
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 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 Exchange
Act that are incorporated by reference in the registration statement.
b. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
c. 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.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act 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.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to officers, directors, and
controlling persons of the registrant pursuant to the registrant's
certificate of incorporation or by-laws, or otherwise, the registrant
has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
The Registrant. 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 Rosemont, State of Illinois, on
the 3rd day of June, 1997.
USFreightways Corporation
By: /s/ Christopher L. Ellis
________________________
Christopher L. Ellis
Senior Vice President, Finance &
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in their respective
capacities on this 3rd day of June, 1997.
Signature Title
/s/ J. Campbell Carruth *
___________________
J. Campbell Carruth President, Chief Executive Officer and
Director (Principal Executive Officer)
/s/ Christopher L. Ellis
____________________
Christopher L. Ellis Senior Vice President, Finance, and
Chief Financial Officer
(Principal Financial Officer)
/s/ Robert S. Owen
______________
Robert S. Owen Controller and Principal Accounting Officer
/s/ Robert V. Delaney *
_________________
Robert V. Delaney Director
/s/ Robert P. Neuschel *
__________________
Robert P. Neuschel Director
/s/ Neil A. Springer *
_________________
Neil A. Springer Director
/s/ William N. Weaver, Jr. *
______________________
William N. Weaver, Jr. Director
/s/ Morley Koffman *
______________
Morley Koffman Director
/s/ John W. Puth *
____________
John W. Puth Director
*By: /s/ Christopher L. Ellis
____________________
Christopher L. Ellis,
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit Document
Number Description
_______ ___________
4.1 Amended and Restated Certificate of Incorporation of USFreightways
Corporation (incorporated by reference from Exhibit 3.1 to
USFreightways Corporation Transition Report on Form 10-K, from
June 29, 1991 to December 28, 1991); Certificate of Designation for
Series A Junior Participating Cumulative Preferred Stock
(incorporated by reference from Exhibit 3(a) to USFreightways
Corporation Annual Report on Form 10-K for the year ended
January 1, 1994); Certificate of Amendment of Restated Certificate
of Incorporation of USFreightways Corporation (incorporated by
reference from Exhibit 3(i) to USFreightways Corporation Report on
Form 10-Q for the quarter ended June 29, 1996).
4.2 Bylaws of USFreightways Corporation, as restated May 3, 1996
(incorporated by reference from Exhibit 3(ii) to USFreightways
Corporation Report on Form 10-Q for the quarter ended June 29,1996).
4.3 Form of Rights Agreement, dated as of February 4, 1994, between
USFreightways Corporation and Harris Trust and Savings Bank, as
Rights Agent (incorporated by reference to USFreightways
Corporation's registration statement on Form 8-A filed with the
Securities and Exchange Commission on March 18, 1994).
4.4 USFreightways Corporation Long-Term Incentive Plan
5 Opinion of Sachnoff & Weaver, Ltd.
23 Consent of KPMG Peat Marwick
24 Powers of Attorney
EXHIBIT 4.4
USFREIGHTWAYS CORPORATION
LONG-TERM INCENTIVE PLAN
1. PURPOSE
The USFreightways Corporation Long-Term Incentive Plan is adopted January 24,
1997. The Plan is designed to attract and retain selected employees of the
Company and its Affiliates, and reward them for making major contributions to
the success of the Company and its Affiliates. These objectives are
accomplished by making long-term incentive awards under the Plan that will offer
Participants an opportunity to have a greater proprietary interest in, and
closer identity with, the Company and its Affiliates and their financial
success.
The Awards may consist of:
(a) Incentive Options;
(b) Nonstatutory Options;
(c) Restricted Stock;
(d) Rights;
(e) Performance Awards; or
(f) Cash Awards
or any combination of the foregoing, as the Committee may determine.
The Plan is intended to qualify certain compensation awarded under the Plan for
tax deductibility under Section 162(m) of the Code to the extent deemed
appropriate by the Committee. The Plan and the grant of Awards hereunder are
expressly conditioned upon the Plan's approval by the stockholders of the
Company. If such approval is not obtained, then this Plan and all Awards
hereunder shall be null and void ab initio.
2. DEFINITIONS
(a) Affiliate means any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated association or other entity (other
than the Company) that, for purposes of Section 422 of the Code, is a subsidiary
of the Company, direct or indirect.
(b) Award means the grant to any employee of any form of Option, Restricted
Stock, Right, Performance Award, or Cash Award, whether granted singly, in
combination, or in tandem, and pursuant to such terms, conditions, and
limitations as the Committee may establish in order to fulfill the objectives
of the Plan.
(c) Award Agreement means an agreement entered into between the Company
and a Participant under which an Award is granted and which sets forth the
terms, conditions, and limitations applicable to the Award.
(d) Board means the Board of Directors of the Company.
(e) Cash Award means an Award of cash, subject to the requirements of
Section 11 and such other restrictions as the Committee deems appropriate or
desirable.
(f) Code means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto.
<PAGE>
(g) Committee means the committee to which the Board delegates the power
to act under or pursuant to the provisions of the Plan, or the Board if no
committee is selected. If the Board delegates powers to a committee, and if the
Company is or becomes subject to Section 16 of the Exchange Act, then, if
necessary for compliance therewith, such committee shall consist initially of
not less than two (2) members of the Board, each member of which must be a
"non-employee director," within the meaning of the applicable rules promulgated
pursuant to the Exchange Act. If the Company is or becomes subject to
Section 16 of the Exchange Act, no member of the Committee shall receive any
Award pursuant to the Plan or any similar plan of the Company or any Affiliate
while serving on the Committee, unless the Board determines that the grant of
such an Award satisfies the then current Rule 16b-3 requirements under the
Exchange Act. Notwithstanding anything herein to the contrary, and insofar as
it is necessary in order for compensation recognized by Participants pursuant
to the Plan to be fully deductible to the Company for federal income tax
purposes, each member of the Committee also shall be an "outside director"
(as defined in regulations or other guidance issued by the Internal Revenue
Service under Code Section 162(m)).
(h) Common Stock means the common stock of the Company.
(i) Company means USFreightways Corporation, a Delaware corporation, and
any successor or assignee corporation or corporations into which the Company
may be merged, changed, or consolidated; any corporation for whose securities
the securities of the Company shall be exchanged; and any assignee of or
successor to substantially all of the assets of the Company.
(j) Disability or Disabled means a permanent and total disability as
defined in Section 22(e)(3) of the Code.
(k) Exchange Act means the Securities Exchange Act of 1934, as amended from
time to time, or any successor statute thereto.
(l) Fair Market Value means, if the Shares are listed on any national
securities exchange, the closing sales price, if any, on the largest such
exchange on the valuation date, or, if none, on the most recent trade date
immediately prior to the valuation date provided such trade date is no more
than thirty (30) days prior to the valuation date. If the Shares are not then
listed on any such exchange, the fair market value of such Shares shall be the
closing sales price if such is reported, or otherwise the mean between the
closing "Bid" and the closing "Ask" prices, if any, as reported in the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") for the
valuation date, or if none, on the most recent trade date immediately prior to
the valuation date provided such trade date is no more than thirty (30) days
prior to the valuation date. If the Shares are not then either listed on any
such exchange or quoted in NASDAQ, or there has been no trade date within such
thirty (30) day period, the fair market value shall be the mean between the
average of the "Bid" and the average of the "Ask" prices, if any, as reported
in the National Daily Quotation System for the valuation date, or, if none, for
the most recent trade date immediately prior to the valuation date provided
such trade date is no more than thirty (30) days prior to the valuation date.
If the fair market value cannot be determined under the preceding three
sentences, it shall be determined in good faith by the Committee.
(m) Incentive Option means an Option that, when granted, is intended to be
an "incentive stock option," as defined in Section 422 of the Code.
(n) Nonstatutory Option means an Option that, when granted, is not intended
to be an "incentive stock option," as defined in Section 422 of the Code.
(o) Normal Retirement means termination of a Participant's employment with
the Company or one of its Affiliates after the Participant reaches the age
of 65.
(p) Option means a right or option to purchase Common Stock, including
Restricted Stock if the Committee so determines.
(q) Participant means an employee to whom one or more Awards are granted
under the Plan.
(r) Performance Award means an Award subject to the requirements of Section
10, and such performance conditions as the Committee deems appropriate or
desirable.
<PAGE>
(s) Plan means the USFreightways Corporation Long-Term Incentive Plan, as
amended from time to time.
(t) Restricted Stock means an Award made in Common Stock or denominated in
units of Common Stock and delivered under the Plan, subject to the requirements
of Section 8, such other restrictions as the Committee deems appropriate or
desirable, and as awarded in accordance with the terms of the Plan.
(u) Right means a stock appreciation right delivered under the Plan,
subject to the requirements of Section 9 and as awarded in accordance with the
terms of the Plan.
(v) Shares means the following shares of the capital stock of the Company
as to which Options or Restricted Stock have been or may be granted under the
Plan and upon which Rights or units of Restricted Stock may be based: treasury
or authorized but unissued Common Stock, $.01 par value, of the Company, or any
shares of capital stock into which the Shares are changed or for which they are
exchanged within the provisions of Section 17 of the Plan.
3. SHARES SUBJECT TO THE PLAN
The aggregate number of Shares as to which Awards may be granted from time to
time shall be Two Million (2,000,000) Shares (subject to adjustment for stock
splits, stock dividends, and other adjustments described in Section 17 hereof).
In accordance with Code Section 162(m), if applicable, the aggregate number of
Shares as to which Awards may be granted in any one calendar year to any one
employee shall not exceed Two Hundred Thousand (200,000) Shares (subject to
adjustment for stock splits, stock dividends, and other adjustments described
in Section 17 hereof).
From time to time, the Committee and appropriate officers of the Company shall
take whatever actions are necessary to file required documents with governmental
authorities and stock exchanges so as to make Shares available for issuance
pursuant to the Plan. Shares subject to Awards that expire or that are
forfeited, terminated, unexercised, canceled by agreement of the Company and
the Participant, settled in cash in lieu of Common Stock or in such manner that
all or some of the Shares covered by such Awards are not issued to a
Participant, or are exchanged for Awards that do not involve Common Stock, shall
immediately become available for Awards. Awards payable in cash shall not
reduce the number of Shares available for Awards under the Plan.
Except as otherwise set forth herein, the aggregate number of Shares as to which
Awards may be granted shall be subject to change only by means of an amendment
of the Plan duly adopted by the Company and approved by the stockholders of the
Company within one year before or after the date of the adoption of the
amendment.
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. A majority of the Committee
shall constitute a quorum at any meeting thereof (including by telephone
conference) and the acts of a majority of the members present, or acts
approved in writing by a majority of the entire Committee without a meeting,
shall be the acts of the Committee for purposes of this Plan. The Committee
may authorize one or more of its members or an officer of the Company to execute
and deliver documents on behalf of the Committee. A member of the Committee
shall not exercise any discretion respecting himself or herself under the Plan.
The Board shall have the authority to remove, replace or fill any vacancy of any
member of the Committee upon notice to the Committee and the affected member.
Any member of the Committee may resign upon notice to the Board. The Committee
may allocate among one or more of its members, or may delegate to one or more of
its agents, such duties and responsibilities as it determines. Subject to the
provisions of the Plan, the Committee is authorized to:
(a) Interpret the provisions of the Plan and any Award or Award Agreement,
and make all rules and determinations that it deems necessary or advisable to
the administration of the Plan;
<PAGE>
(b) Determine which employees of the Company or an Affiliate shall be
designated as Participants and which of the employees shall be granted Awards;
(c) Determine whether an Option to be granted shall be an Incentive Option
or Nonstatutory Option;
(d) Determine the number of Shares for which an Option or Restricted Stock
shall be granted;
(e) Determine the number of Rights, the Cash Award or the Performance Award
to be granted;
(f) Provide for the acceleration of the right to exercise any Award; and
(g) Specify the terms, conditions, and limitations upon which Awards may be
granted;
provided, however, that with respect to Incentive Options, all such
interpretations, rules, determinations, terms, and conditions shall be made and
prescribed in the context of preserving the tax status of the Incentive
Options as incentive stock options within the meaning of Section 422 of the
Code.
The Committee may delegate to the chief executive officer and to other senior
officers of the Company or its Affiliates its duties under the Plan pursuant to
such conditions or limitations as the Committee may establish, except that only
the Committee may select, and grant Awards to, Participants who are subject to
Section 16 of the Exchange Act. All determinations of the Committee shall be
made by a majority of its members. No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any Award.
The Committee shall have the authority at any time to cancel Awards for
reasonable cause and to provide for the conditions and circumstances under which
Awards shall be forfeited.
Any determination made by the Committee pursuant to the provisions of the Plan
shall be made in its sole discretion, and in the case of any determination
relating to an Award, may be made at the time of the grant of the Award or,
unless in contravention of any express term of the Plan or an Agreement, at any
time thereafter. All decisions made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Company
and the Participants. No determination shall be subject to de novo review if
challenged in court.
5. ELIGIBILITY FOR PARTICIPATION
Awards may be granted under this Plan only to employees of the Company or its
Affiliates. The foregoing notwithstanding, each Participant receiving an
Incentive Option must be an employee of the Company or of an Affiliate at the
time the Incentive Option is granted.
The Committee may at any time and from time to time grant one or more Awards to
one or more employees and may designate the number of Shares, if applicable,
to be subject to each Award so granted, provided, however that no Incentive
Option shall be granted after the expiration of ten (10) years from the earlier
of the date of the adoption of the Plan by the Company or the approval of the
Plan by the stockholders of the Company, and provided further, that the Fair
Market Value of the Shares (determined at the time the Option is granted) as to
which Incentive Options are exercisable for the first time by any employee
during any single calendar year (under the Plan and under any other incentive
stock option plan of the Company or an Affiliate) shall not exceed Two Million
Dollars ($2,000,000). To the extent that the Fair Market Value of such Shares
exceeds Two Million Dollars ($2,000,000), the Shares subject to Option in excess
of Two Million Dollars ($2,000,000) shall, without further action by the
Committee, automatically be converted to Nonstatutory Options.
Notwithstanding any of the foregoing provisions, the Committee may authorize the
grant of an Award to a person not then in the employ of, or engaged by, the
Company or of an Affiliate, conditioned upon such person becoming eligible to be
granted an Award at or prior to the execution of the Award Agreement evidencing
the actual grant of such Award.
<PAGE>
6. AWARDS UNDER THIS PLAN
As the Committee may determine, the following types of Awards may be granted
under the Plan on a stand alone, combination, or tandem basis:
(a) Incentive Option
An Award in the form of an Option that shall comply with the requirements of
Section 422 of the Code. Subject to adjustments in accordance with the
provisions of Section 17, the aggregate number of Shares that may be subject to
Incentive Options under the Plan shall not exceed Two Million (2,000,000).
(b) Nonstatutory Option
An Award in the form of an Option that shall not be intended to comply with the
requirements of Section 422 of the Code.
(c) Restricted Stock
An Award made to a Participant in Common Stock or denominated in units of Common
Stock, subject to future service and such other restrictions and conditions as
may be established by the Committee, and as set forth in the Award Agreement,
including but not limited to continuous service with the Company or its
Affiliates, achievement of specific business objectives, increases in specified
indices, attaining growth rates, and other measurements of Company or Affiliate
performance.
(d) Stock Appreciation Right
An Award in the form of a Right to receive the excess of the Fair Market Value
of a Share on the date the Right is exercised over the Fair Market Value of a
Share on the date the Right was granted.
(e) Performance Awards
An Award made to a Participant that is subject to performance conditions
specified by the Committee, including but not limited to continuous service with
the Company or its Affiliates, achievement of specific business objectives,
increases in specified indices, attaining growth rates, and other measurements
of Company or Affiliate performance.
(f) Cash Awards
An Award made to a Participant and denominated in cash, with the eventual
payment subject to future service and such other restrictions and conditions as
may be established by the Committee, and as set forth in the Award Agreement.
Each Award under the Plan shall be evidenced by an Award Agreement. Delivery
of an Award Agreement to each Participant shall constitute an agreement between
the Company and the Participant as to the terms and conditions of the Award.
7. TERMS AND CONDITIONS OF INCENTIVE OPTIONS AND NONSTATUTORY OPTIONS
Each Option shall be set forth in an Award Agreement, duly executed on behalf
of the Company and by the Participant to whom such Option is granted. Except
for the setting of the Option price under Section 7(a), no Option shall be
granted and no purported grant of any Option shall be effective until such Award
Agreement shall have been duly executed on behalf of the Company and by the
Participant. Each such Award Agreement shall be subject to at least the
following terms and conditions:
<PAGE>
(a) Option Price
The purchase price of the Shares covered by each Option granted under the Plan
shall be determined by the Committee. The Option price per share of the Shares
covered by each Nonstatutory Option shall be at such amount as may be determined
by the Committee in its sole discretion on the date of the grant of the Option.
In the case of an Incentive Option, if the Participant owns directly or by
reason of the applicable attribution rules ten percent (10%) or less of the
total combined voting power of all classes of share capital of the Company, the
Option price per share of the Shares covered by each Incentive Option shall be
not less than the Fair Market Value of the Shares on the date of the grant of
the Incentive Option. In all other cases of Incentive Options, the Option price
shall be not less than one hundred ten percent (110%) of the Fair Market Value
on the date of grant.
(b) Number of Shares
Each Option shall state the number of Shares to which it pertains.
(c) Term of Option
Each Incentive Option shall terminate not more than ten (10) years from the date
of the grant thereof, or at such earlier time as the Award Agreement may
provide, and shall be subject to earlier termination as herein provided, except
that if the Option price is required under Section 7(a) to be at least one
hundred ten percent (110%) of Fair Market Value, each such Incentive Option
shall terminate not more than five (5) years from the date of the grant thereof,
and shall be subject to earlier termination as herein provided. The Committee
shall determine the time at which a Nonstatutory Option shall terminate.
(d) Date of Exercise
Upon the authorization of the grant of an Option, or at any time thereafter,
the Committee may, subject to the provisions of Section 7(c), prescribe the
date or dates on which the Option becomes exercisable, and may provide that the
Option become exercisable in installments over a period of years, or upon the
attainment of stated goals.
(e) Medium of Payment
The Option price shall be payable upon the exercise of the Option, as set forth
in Section 7(j). It shall be payable in such form (permitted by Section 422 of
the Code in the case of Incentive Options) as the Committee shall, either by
rules promulgated pursuant to the provisions of Section 4 of the Plan, or in the
particular Award Agreement, provide.
(f) Termination of Employment
(1) A Participant who ceases to be an employee of the Company or of an
Affiliate for any reason other than death, Disability, Normal Retirement or
termination "for cause," as defined in Section 7(f)(2), may exercise any Option
granted to such Participant, to the extent that the right to purchase Shares
thereunder has become exercisable on the date of such termination, but only
within three (3) months after such date of termination, or, if earlier, within
the originally prescribed term of the Option. A Participant's employment shall
not be deemed terminated by reason of a transfer to another employer that is the
Company or an Affiliate.
<PAGE>
(2) A Participant who ceases to be an employee of the Company or of an
Affiliate "for cause" shall, upon such termination, cease to have any right to
exercise any Option. For purposes of this Plan, cause shall mean (A) a
Participant's theft or embezzlement, or attempted theft or embezzlement, of
money or property of the Company or of an Affiliate, a Participant's
perpetration or attempted perpetration of fraud, or a Participant's
participation in a fraud or attempted fraud, on the Company or of an Affiliate
or a Participant's unauthorized appropriation of, or a Participant's attempt to
misappropriate, any tangible or intangible assets or property of the Company or
of an Affiliate; (B) any act or acts of disloyalty, dishonesty, misconduct,
moral turpitude, or any other act or acts by a Participant injurious to the
interest, property, operations, business or reputation of the Company or of an
Affiliate; (C) a Participant's commission of a felony or any other crime the
commission of which results in injury to the Company or of an Affiliate; or
(D) any violation of any restriction on the disclosure or use of confidential
information of the Company or of an Affiliate or on competition with the
Company or of an Affiliate or any of its businesses as then conducted. The
determination of the Committee as to the existence of cause shall be conclusive
and binding upon the Participant and the Company or the Affiliate.
(3) A Participant who is absent from work with the Company or an Affiliate
because of temporary disability (any disability other than a Disability), or
who is on leave of absence for any purpose permitted by any authoritative
interpretation (i.e., regulation, ruling, case law, etc.) of Section 422 of the
Code, shall not, during the period of any such absence, be deemed, by virtue of
such absence alone, to have terminated his or her employment or relationship
with the Company or with an Affiliate, except as the Committee may otherwise
expressly provide or determine.
(4) Section 7(f)(1) shall control and fix the rights of a Participant who
ceases to be an employee of the Company or of an Affiliate for any reason other
than Disability, death, Normal Retirement or termination "for cause," and who
subsequently becomes Disabled or dies. Nothing in Section 7(g) and (h) shall be
applicable in any such case.
(g) Total and Permanent Disability
A Participant, who ceases to be an employee of the Company or of an Affiliate by
reason of Disability, may exercise any Option granted to such Participant
(notwithstanding that the Participant might not have been able to exercise the
Option as to some or all of the Shares if the Participant had not become
Disabled) within a period of not more than twelve (12) months after the date
that the Participant became Disabled as determined by the Committee, or, if
earlier, within the originally prescribed term of the Option.
(h) Death
In the event that a Participant to whom an Option has been granted ceases to be
an employee of the Company or of an Affiliate by reason of such Participant's
death, any Option granted to such Participant (notwithstanding that the
Participant might not have been able to exercise the Option as to some or all
of the Shares if the Participant had not died) may be exercised by the
Participant's estate or personal representative within a period of not more
than twelve (12) months after the date of death of such Participant or, if
earlier, within the originally prescribed term of the Option.
(i) Normal Retirement
Except as otherwise mandated by Code Section 422, a Participant, who ceases to
be an employee of the Company or of an Affiliate by reason of such Participant's
Normal Retirement, may exercise any Option (notwithstanding that the Participant
might not have been able to exercise the Option as to some or all of the Shares
if the Participant had not terminated his or her employment because of Normal
Retirement) within a period of not more than twelve (12) months after the date
of Normal Retirement, or, if earlier, within the originally prescribed term of
the Option.
<PAGE>
(j) Exercise of Option and Issuance of Stock
Options shall be exercised by giving written notice to the Company. Such
written notice shall: (1) be signed by the person exercising the Option,
(2) state the number of Shares with respect to which the Option is being
exercised, (3) contain the warranty required by Section 7(n), if applicable,
and (4) specify a date (other than a Saturday, Sunday or legal holiday) not less
than five (5) nor more than ten (10) days after the date of such written notice,
as the date on which the Shares will be purchased. Such tender and conveyance
shall take place at the principal office of the Company during ordinary business
hours, or at such other hour and place agreed upon by the Company and the person
or persons exercising the Option. On the date specified in such written
notice (which date may be extended by the Company in order to comply with any
law or regulation that requires the Company to take any action with respect to
the Option Shares prior to the issuance thereof), the Company shall accept
payment for the Option Shares in cash, by bank or certified check, by wire
transfer, or by such other means as may be approved by the Committee and shall
deliver to the person or persons exercising the Option in exchange therefor an
appropriate certificate or certificates for fully paid nonassessable Shares or
undertake to deliver certificates within a reasonable period of time. In the
event of any failure to take up and pay for the number of Shares specified in
such written notice on the date set forth therein (or on the extended date as
above provided), the right to exercise the Option shall terminate with respect
to such number of Shares, but shall continue with respect to the remaining
Shares covered by the Option and not yet acquired pursuant thereto.
If approved in advance by the Committee, payment in full or in part also may be
made (1) by delivering Shares already owned by the Participant having a total
Fair Market Value on the date of such delivery equal to the Option price;
(2) by the execution and delivery of a note or other evidence of indebtedness
(and any security agreement thereunder) satisfactory to the Committee;
(3) by authorizing the Company to retain Shares that otherwise would be
issuable upon exercise of the Option having a total Fair Market Value on the
date of delivery equal to the Option price; (4) by the delivery of cash or the
extension of credit by a broker-dealer to whom the Participant has submitted a
notice of exercise or otherwise indicated an intent to exercise an Option (in
accordance with part 220, Chapter II, Title 12 of the Code of Federal
Regulations, a so-called "cashless" exercise); or (5) by any combination of
the foregoing.
(k) Rights as a Stockholder
No Participant to whom an Option has been granted shall have rights as a
stockholder with respect to any Shares covered by such Option except as to such
Shares as have been registered in the Company's share register in the name of
such Participant upon the due exercise of the Option and tender of the full
Option price.
(l) Assignability and Transferability of Option
Unless otherwise permitted by the Code and by Rule 16b-3 of the Exchange Act,
if applicable, and approved in advance by the Committee, an Option granted to a
Participant shall not be transferable by the Participant and shall be
exercisable, during the Participant's lifetime, only by such Participant or, in
the event of the Participant's incapacity, his guardian or legal representative.
Except as otherwise permitted herein, such Option shall not be assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment, or similar process and any
attempted transfer, assignment, pledge, hypothecation or other disposition of
any Option or of any rights granted thereunder contrary to the provisions of
this Section 7(l), or the levy of any attachment or similar process upon an
Option or such rights, shall be null and void.
(m) Other Provisions
The Award Agreement for an Incentive Option shall contain such limitations and
restrictions upon the exercise of the Option as shall be necessary in order that
such Option can be an "incentive stock option" within the meaning of Section 422
of the Code. Further, the Award Agreements authorized under the Plan shall be
subject to such other terms and conditions including, without limitation,
restrictions upon the exercise of the Option, as the Committee shall deem
advisable and which, in the case of Incentive Options, are not inconsistent with
the requirements of Section 422 of the Code.
<PAGE>
(n) Purchase for Investment
If Shares to be issued upon the particular exercise of an Option shall not have
been effectively registered under the Securities Act of 1933, as now in force
or hereafter amended, the Company shall be under no obligation to issue the
Shares covered by such exercise unless and until the following conditions have
been fulfilled. The person who exercises such Option shall warrant to the
Company that, at the time of such exercise, such person is acquiring his or her
Option Shares for investment and not with a view to, or for sale in connection
with, the distribution of any such Shares, and shall make such other
representations, warranties, acknowledgments, and affirmations, if any, as the
Committee may require. In such event, the person acquiring such Shares shall be
bound by the provisions of the following legend (or similar legend) which shall
be endorsed upon the certificate(s) evidencing his or her Option Shares issued
pursuant to such exercise.
"The shares represented by this certificate have been acquired for investment
and they may not be sold or otherwise transferred by any person, including a
pledgee, in the absence of an effective registration statement for the shares
under the Securities Act of 1933 or an opinion of counsel satisfactory to the
Company that an exemption from registration is then available."
"The shares of stock represented by this certificate are subject to all of the
terms and conditions of a certain Agreement dated as of _________________,
_____, among the Company and certain of its stockholders. A copy of the
Agreement is on file in the office of the Secretary of the Company. The
Agreement provides, among other things, for restrictions upon
the holder's right to transfer the shares represented hereby, and for certain
prior rights to purchase and certain obligations to sell the shares of common
stock evidenced by this certificate at a designated purchase price determined in
accordance with certain procedures. Any attempted transfer of these shares other
than in compliance with the Agreement shall be void and of no effect. By
accepting the shares of stock evidenced by this certificate, any permitted
transferee agrees to be bound by all of the terms and conditions of said
Agreement."
Without limiting the generality of the foregoing, the Company may delay
issuance of the Shares until completion of any action or obtaining any consent
that the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
8. REQUIRED TERMS AND CONDITIONS OF RESTRICTED STOCK
(a) The Committee may from time to time grant an Award in Shares of Common
Stock or grant an Award denominated in units of Common Stock, for such
consideration, if any, as the Committee deems appropriate (which amount may be
less than the Fair Market Value of the Common Stock on the date of the Award),
and subject to such restrictions and conditions and other terms as the Committee
may determine at the time of the Award (including, but not limited to,
continuous service with the Company or its Affiliates, achievement of specific
business objectives, increases in specified indices, attaining growth rates, and
other measurements of Company or Affiliate performance), and subject further to
the general provisions of the Plan, the applicable Award Agreement, and the
following specific rules.
(b) If Shares of Restricted Stock are awarded, such Shares cannot be
assigned, sold, transferred, pledged, or hypothecated prior to the lapse of the
restrictions applicable thereto, and, in no event, prior to six (6) months from
the date of the Award. The Company shall issue, in the name of the Participant,
stock certificates representing the total number of Shares of Restricted Stock
awarded to the Participant, as soon as may be reasonably practicable after the
grant of the Award.
<PAGE>
(c) Restricted Stock issued to a Participant under the Plan shall be
governed by an Award Agreement that shall specify whether Shares of Common Stock
are awarded to the Participant, or whether the Award shall be one not of Shares
of Common Stock but one denominated in units of Common Stock, any consideration
required thereto, and such other provisions as the Committee shall determine.
(d) Subject to the provisions of Section 8(b) and (e) hereof and the
restrictions set forth in the related Award Agreement, the Participant receiving
an Award of Shares of Restricted Stock shall thereupon be a stockholder with
respect to all of the Shares represented by such certificate or certificates
and shall have the rights of a stockholder with respect to such Shares,
including the right to vote such Shares and to receive dividends and other
distributions made with respect to such Shares. All Common Stock received by a
Participant as the result of any dividend on the Shares of Restricted Stock, or
as the result of any stock split, stock distribution, or combination of the
Shares affecting Restricted Stock, shall be subject to the restrictions set
forth in the related Award Agreement.
(e) Restricted Stock or units of Restricted Stock awarded to a Participant
pursuant to the Plan will be forfeited, and any Shares of Restricted Stock or
units of Restricted Stock sold to a Participant pursuant to the Plan may, at the
Company's option, be resold to the Company for an amount equal to the price paid
therefor, and in either case, such Restricted Stock or units of Restricted Stock
shall revert to the Company, if the Company so determines in accordance with
Section 13 or any other condition set forth in the Award Agreement, or,
alternatively, if the Participant's employment with the Company or its
Affiliates terminates, other than for reasons set forth in Section 12, prior to
the expiration of the forfeiture or restriction provisions set forth in the
Award Agreement.
(f) The Committee, in its discretion, shall have the power to accelerate
the date on which the restrictions contained in the Award Agreement shall lapse
with respect to any or all Restricted Stock awarded under the Plan.
(g) The Committee may prescribe such other restrictions, conditions, and
terms applicable to Restricted Stock issued to a Participant under the Plan that
are neither inconsistent with nor prohibited by the Plan or the Award
Agreement, including, without limitation, terms providing for a lapse of the
restrictions of this Section or any Award Agreement in installments.
9. REQUIRED TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
If deemed by the Committee to be in the best interests of the Company, a
Participant may be granted a Right. Each Right shall be granted subject to such
restrictions and conditions and other terms as the Committee may specify in the
Award Agreement at the time the Right is granted, subject to the general
provisions of the Plan, and the following specific rules.
(a) Rights may be granted, if at all, either singly, in combination with
another Award, or in tandem with another Award. At the time of grant of a
Right, the Committee shall specify the base price of Common Stock to be used in
connection with the calculation described in Section 9(b), provided that the
base price shall not be less than one hundred percent (100%) of the Fair Market
Value of a Share of Common Stock on the date of grant, unless approved by the
Board.
(b) Upon exercise of a Right, which shall be not less than six (6) months
from the date of the grant, the Participant shall be entitled to receive in
accordance with Section 14, and as soon as practicable, the excess of the Fair
Market Value of one Share of Common Stock on the date of exercise over the base
price specified in such Right, multiplied by the number of Shares of Common
Stock then subject to the Right, or the portion thereof being exercised.
(c) Notwithstanding anything herein to the contrary, if the Award granted
to a Participant allows him or her to elect to cancel all or any portion of an
unexercised Option by exercising an additional or tandem Right, then the Option
price per Share of Common Stock shall be used as the base price specified in
Section 9(a) to determine the value of the Right upon such exercise and, in the
event of the exercise of such Right, the Company's obligation with respect to
such Option or portion thereof shall be discharged by payment of the Right
so exercised. In the event of such a cancellation, the number of Shares as to
which such Option was canceled shall become available for use under the Plan,
less the number of Shares, if any, received by the Participant upon such
cancellation in accordance with Section 14.
<PAGE>
(d) A Right may be exercised only by the Participant (or, if applicable
under Section 12, by a legatee or legatees of such Right, or by the
Participant's executors, personal representatives, or distributees).
10. PERFORMANCE AWARDS
(a) A Participant may be granted an Award that is subject to performance
conditions specified by the Committee. The Committee may use business criteria
and other measures of performance it deems appropriate in establishing any
performance conditions (including, but not limited to, continuous service with
the Company or its Affiliates, achievement of specific business objectives,
increases in specified indices, attaining growth rates, and other measurements
of Company or Affiliate performance), and may exercise its discretion to reduce
or increase the amounts payable under any Award subject to performance
conditions, except as otherwise limited under Section 10(c) and (d), below, in
the case of a Performance Award intended to qualify under Code Section 162(m).
(b) Any Performance Award will be forfeited if the Company so determines in
accordance with Section 13 or any other condition set forth in the Award
Agreement, or, alternatively, if the Participant's employment with the Company
or its Affiliates terminates, other than for reasons set forth in Section 12,
prior to the expiration of the time period over which the performance conditions
are to be measured.
(c) If the Committee determines that a Performance Award to be granted to
an employee should qualify as "performance-based compensation" for purposes of
Code Section 162(m), the grant and/or settlement of such Performance Award shall
be contingent upon achievement of preestablished performance goals and other
terms set forth in Section 10(c).
(1) Performance Goals Generally. The performance goals for such
Performance Awards shall consist of one or more business criteria and a targeted
level or levels of performance with respect to such criteria, as specified by
the Committee consistent with this Section 10(c). Performance goals shall be
objective and shall otherwise meet the requirements of Code Section 162(m),
including the requirement that the level or levels of performance targeted by
the Committee result in the performance goals being "substantially uncertain."
The Committee may determine that more than one performance goal must be
achieved as a condition to settlement of such Performance Awards. Performance
goals may differ for Performance Awards granted to any one Participant or to
different Participants.
(2) Business Criteria. One or more of the following business criteria for
the Company, on a consolidated basis, and/or for specified Affiliates or
business units of the Company (except with respect to the total stockholder
return and earnings per share criteria), shall be used exclusively by the
Committee in establishing performance goals for such Performance Awards:
(A) total stockholder return; (B) such total stockholder return as compared to
the total return (on a comparable basis) of a publicly available index such as,
but not limited to, the Standard & Poor's 500 or the Nasdaq-U.S. Index; (C) net
income; (D) pre-tax earnings; (E) EBITDA; (F) pre-tax operating earnings after
interest expense and before bonuses, service fees, and extraordinary or
special items; (G) operating margin; (H) earnings per share; (I) return on
equity; (J) return on capital; (K) return on investment; (L) operating income,
excluding the effect of charges for acquired in-process technology and before
payment of executive bonuses; (M) earnings per share, excluding the effect of
charges for acquired in-process technology and before payment of executive
bonuses; (N) working capital; and (O) total revenues. The foregoing business
criteria also may be used in establishing performance goals for Cash Awards
granted under Section 11 hereof.
(3) Compensation Limitation. No employee may receive a Performance Award
in excess of $1 million for any three (3) year period.
<PAGE>
(d) Achievement of performance goals in respect of such Performance Awards
shall be measured over such periods as may be specified by the Committee.
Performance goals shall be established on or before the dates that are required
or permitted for "performance-based compensation" under Code Section 162(m).
(e) Settlement of Performance Awards may be in cash or Shares, or other
property, in the discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in connection
with such Performance Awards, but may not exercise discretion to increase any
such amount payable in respect of a Performance Award subject to Code
Section 162(m).
11. REQUIRED TERMS AND CONDITIONS OF CASH AWARDS
(a) The Committee may from time to time authorize the award of cash
payments under the Plan to Participants, subject to such restrictions and
conditions and other terms as the Committee may determine at the time of
authorization (including, but not limited to, continuous service with the
Company or its Affiliates, achievement of specific business objectives,
increases in specified indices, attaining growth rates, and other measurements
of Company or Affiliate performance), and subject to the general provisions of
the Plan, the applicable Award Agreement, and the following specific rules.
(b) Any Cash Award will be forfeited if Company so determines in accordance
with Section 13 or any other condition set forth in the Award Agreement, or,
alternatively, if the Participant's employment with the Company or its
Affiliates terminates, other than for reasons set forth in Section 12, prior to
the attainment of any goals set forth in the Award Agreement or prior to the
expiration of the forfeiture or restriction provisions set forth in the Award
Agreement, whichever is applicable.
(c) The Committee, in its discretion, shall have the power to change the
date on which the restrictions contained in the Award Agreement shall lapse, or
the date on which goals are to be measured, with respect to any Cash Award.
(d) Any Cash Award, if not previously forfeited, shall be payable in
accordance with Section 14 as soon as practicable after the restrictions lapse
or the goals are attained.
(e) The Committee may prescribe such other restrictions, conditions, and
terms applicable to the Cash Awards issued to a Participant under the Plan that
are neither inconsistent with nor prohibited by the Plan or the Award Agreement,
including, without limitation, terms providing for a lapse of the restrictions,
or a measurement of the goals, in installments.
<PAGE>
12. TERMINATION OF EMPLOYMENT
Except as may otherwise be (A) provided in Section 7 for Options, (B) provided
for under the Award Agreement, or (C) permitted pursuant to Sections 12(a) and
(c) (subject to the limitations under the Code for Incentive Options), if the
employment of a Participant terminates, all unexpired, unpaid, unexercised, or
deferred Awards shall be canceled immediately.
(a) Retirement under a Company or Affiliate Retirement Plan. When a
Participant's employment terminates as a result of retirement as defined under
a Company or Affiliate retirement plan but such retirement is not a Normal
Retirement as defined under the Section 2(o) of the Plan, the Committee may
permit Awards to continue in effect beyond the date of retirement in accordance
with the applicable Award Agreement, and/or the exercisability and vesting of
any Award may be accelerated.
(b) Resignation in the Best Interests of the Company or an Affiliate.
When a Participant resigns from the Company or an Affiliate and, in the judgment
of the chief executive officer or other senior officer designated by the
Committee, the acceleration and/or continuation of outstanding Awards would be
in the best interests of the Company, the Committee may (i) authorize, where
appropriate, the acceleration and/or continuation of all or any part of Awards
granted prior to such termination and (ii) permit the exercise, vesting, and
payment of such Awards for such period as may be set forth in the applicable
Award Agreement, subject to earlier cancellation pursuant to Section 13 or at
such time as the Committee shall deem the continuation of all or any part of the
Participant's Awards are not in the Company's or its Affiliate's best interests.
(c) Death or Disability of a Participant
(1) In the event of a Participant's death, the Participant's estate or
beneficiaries shall have a period up to the earlier of (A) the expiration date
specified in the Award Agreement, or (B) he expiration date specified Section
7(h), within which to receive or exercise any outstanding Awards held by the
Participant under such terms as may be specified in the applicable Award
Agreement. Rights to any such outstanding Awards hall pass by will or the laws
of descent and distribution in the following order: (i) to beneficiaries so
designated by the Participant; (ii) to a legal representative of the
Participant; or (iii) to the persons entitled thereto as determined by a court
of competent jurisdiction. Awards so passing shall be made at such times and in
such manner as if the Participant were living.
(2) In the event a Participant is determined by the Company to be Disabled,
and subject to the limitations of section 7(g), Awards may be paid to, or
exercised by, the Participant, if legally competent, or by a legally
designated guardian or other representative if the Participant is legally
incompetent by virtue of such disability.
(3) After the death or Disability of a Participant, the Committee may in
its sole discretion at any time (A) terminate restrictions in Award Agreements;
(B) accelerate any or all installments and rights; and/or (C)instruct the
Company to pay the total of any accelerated payments in a lump sum to the
Participant, the Participant's estate, beneficiaries or representative,
notwithstanding that, in the absence of such termination of restrictions or
acceleration of payments, any or all of the payments due under the Awards
ultimately might have become payable to other beneficiaries.
<PAGE>
13. CANCELLATION AND RESCISSION OF AWARDS
Unless the Award Agreement specifies otherwise, the Committee may cancel any
unexpired, unpaid, unexercised, or deferred Awards at any time if the
Participant is not in compliance with the applicable provisions of the Award
Agreement, the Plan, or with the following conditions:
(a) A Participant shall not breach any protective agreement entered into
between him or her and the Company or any Affiliates, or render services for any
organization or engage directly or indirectly in any business which, in the
judgment of the chief executive officer of the Company or other senior officer
designated by the Committee, is or becomes competitive with the Company, or
which organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to or in conflict
with the interests of the Company. For a Participant whose employment has
terminated, the judgment of the chief executive officer shall be based on terms
of the protective agreement, if applicable, or on the Participant's position and
responsibilities while employed by the Company or its Affiliates, the
Participant's post-employment responsibilities and position with the other
organization or business, the extent of past, current, and potential
competitiors or conflict between the Company and other organization or
business, the effect of the Participant's assuming the post-employment position
on the Company's or its Affiliate's customers, suppliers, investors, and
competitors, and such other considerations as are deemed relevant given the
applicable facts and circumstances. A Participant may, however, purchase as
an investment or otherwise, stock or other securities of any organization or
business so long as they are listed upon a recognized securities exchange or
traded over-the-counter, and such investment does not represent a substantial
investment to the Participant or a greater than one percent (1%) equity interest
in the organization or business.
(b) A Participant shall not, without prior written authorization from the
Company, disclose to anyone outside the Company or its Affiliates, or use in
other than the Company's or Affiliate's business, any confidential information
or materials relating to the business of the Company or its Affiliates, acquired
by the Participant either during or after employment with the Company or its
Affiliates.
(c) A Participant shall disclose promptly and assign to the Company all
right, title, and interest in any invention or idea, patentable or not, made or
conceived by the Participant during employment with the Company or an
Affiliate, relating in any manner to the actual or anticipated business,
research, or development work of the Company or its Affiliates, and shall do
anything reasonably necessary to enable the Company or its Affiliates to secure
a patent, trademark, copyright, or other protectable interest where appropriate
in the United States and in foreign countries.
<PAGE>
Upon exercise, payment, or delivery pursuant to an Award, the Participant shall
certify on a form acceptable to the Committee that he or she is in compliance
with the terms and conditions of the Plan, including the provisions of this
Sections 13(a), (b) or (c). Failure to comply with the provisions of this
Sections 13(a), (b) or (c) prior to, or during the one (1) year period after,
any exercise, payment, or delivery pursuant to an Award shall cause such
exercise, payment, or delivery to be rescinded. The Company shall notify the
Participant in writing of any such rescission within two (2) years after such
exercise, payment, or delivery. Within ten (10) days after receiving such a
notice from the Company, the Participant shall pay to the Company the amount of
any gain realized or payment received as a result of the rescinded exercise,
payment, or delivery pursuant to the Award. Such payment shall be made either
in cash or by returning to the Company the number of Shares of Common Stock that
the Participant received in connection with the rescinded exercise, payment, or
delivery.
14. PAYMENT OF RESTRICTED STOCK, RIGHTS, PERFORMANCE AWARDS AND CASH AWARDS
Payment of Restricted Stock, Rights, Performance Awards and Cash Awards may be
made, as the Committee shall specify, in the form of cash, Shares of Common
Stock, or combinations thereof; provided, however, that a fractional Share of
Common Stock shall be paid in cash equal to the Fair Market Value of the
fractional Share of Common Stock at the time of payment.
15. WITHHOLDING
Except as otherwise provided by the Committee,
(a) The Company shall have the power and right to deduct or withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, and local taxes required by law to be withheld with respect to
any grant, exercise, or payment made under or as a result of this Plan; and
(b) In the case of payments of Awards, or upon any other taxable event
hereunder, a Participant may elect, subject to the approval in advance by the
Committee, to satisfy the withholding requirement, if any, in whole or in part,
by having the Company withhold Shares of Common Stock that would otherwise be
transferred to the Participant having a Fair Market Value, on the date the tax
is to be determined, equal to the minimum marginal tax that could be imposed on
the transaction. All elections shall be made in writing and signed by the
Participant.
16. SAVINGS CLAUSE
This Plan is intended to comply in all respects with applicable law and
regulations, including, (A) with respect to those Participants who are officers
or directors for purposes of Section 16 of the Exchange Act, Rule 16b-3 of the
Securities and Exchange Commission, if applicable, and (B) with respect to
executive officers, Code Section 162(m). In case any one or more provisions of
this Plan shall be held invalid, illegal, or unenforceable in any respect under
applicable law and regulation (including Rule 16b-3 and Code Section 162(m)),
the validity, legality, and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby and the invalid, illegal, or
unenforceable provision shall be deemed null and void; however, to the extent
permitted by law, any provision that could be deemed null and void shall first
be construed, interpreted, or revised retroactively to permit this Plan to be
construed in compliance with all applicable law (including Rule 16b-3 and Code
Section 162(m)) so as to foster the intent of this Plan. Notwithstanding
anything herein to the contrary, with respect to Participants who are officers
and directors for purposes of Section 16 of the Exchange Act, if applicable,
and if required to comply with rules promulgated thereunder, no grant of, or
Option to purchase, Shares shall permit unrestricted ownership of Shares by the
Participant for at least six (6) months from the date of grant or Option, unless
the Board determines that the grant of, or Option to purchase, Shares otherwise
satisfies the then current Rule 16b-3 requirements.
<PAGE>
17. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS
In the event that the outstanding Shares of the Company are changed into or
exchanged for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any reorganization, merger,
consolidation, recapitalization, reclassification, change in par value, stock
split-up, combination of shares or dividends payable in capital stock, or the
like, appropriate adjustments to prevent dilution or enlargement of the Awards
granted to, or available for, Participants shall be made in the manner and kind
of Shares for the purchase of which Awards may be granted under the Plan, and,
in addition, appropriate adjustment shall be made in the number and kind of
Shares and in the Option price per share subject to outstanding Options. The
foregoing notwithstanding, no such adjustment shall be made in an Incentive
Option which shall, within the meaning of Section 424 of the Code, constitute
such a modification, extension, or renewal of an Option as to cause it to be
considered as the grant of a new Option.
Notwithstanding anything herein to the contrary, the Company may, in its sole
discretion, accelerate the timing of the exercise provisions of any Award in the
event of a tender offer for the Company's Shares, the adoption of a plan of
merger or consolidation under which a majority of the Shares of the Company
would be eliminated, or a sale of all or any portion of the Company's assets or
capital stock. Alternatively, the Company may, in its sole discretion, cancel
any or all Awards upon any of the foregoing events and provide for the payment
to Participants in cash of an amount equal to the value or appreciated value,
whichever is applicable, of the Award, as determined in good faith by the
Committee, at the close of business on the date of such event. The preceding
two sentences of this Section 17 notwithstanding, the Company shall be required
to accelerate the timing of the exercise provisions of any Award if (i) any such
business combination is to be accounted for as a pooling-of-interests under
APB Opinion 16 and (ii) the timing of such acceleration does not prevent such
pooling-of-interests treatment.
Upon a business combination by the Company or any of its Affiliates with any
corporation or other entity through the adoption of a plan of merger or
consolidation or a share exchange or through the purchase of all or
substantially all of the capital stock or assets of such other corporation or
entity, the Board or the Committee may, in its sole discretion, grant Options
pursuant hereto to all or any persons who, on the effective date of such
transaction, hold outstanding options to purchase securities of such other
corporation or entity and who, on and after the effective date of such
transaction, will become employees or directors of, or consultants or advisors
to, the Company or its Affiliates. The number of Shares subject to such
substitute Options shall be determined in accordance with the terms of the
transaction by which the business combination is effected. Notwithstanding the
other provisions of this Plan, the other terms of such substitute Options shall
be substantially the same as or economically equivalent to the terms of the
options for which such Options are substituted, all as determined by the Board
or by the Committee, as the case may be. Upon the grant of substitute Options
pursuant hereto, the options to purchase securities of such other corporation or
entity for which such Options are substituted shall be cancelled immediately.
18. DISSOLUTION OR LIQUIDATION OF THE COMPANY
Upon the dissolution or liquidation of the Company other than in connection with
a transaction to which Section 17 is applicable, all Awards granted hereunder
shall terminate and become null and void; provided, however, that if the rights
of a Participant under the applicable Award have not otherwise terminated and
expired, the Participant may, if the Committee, in its sole discretion, so
permits, have the right immediately prior to such dissolution or liquidation to
exercise any Award granted hereunder to the extent that the right thereunder has
become exercisable as of the date immediately prior to such dissolution or
liquidation.
<PAGE>
19. TERMINATION OF THE PLAN
The Plan shall terminate (10) years from the earlier of the date of its adoption
by the Board or the date of its approval by the stockholders. The Plan may be
terminated at an earlier date by vote of the stockholders or the Board;
provided, however, that any such earlier termination shall not affect any Award
Agreements executed prior to the effective date of such termination.
Notwithstanding anything in this Plan to the contrary, any Options granted prior
to the effective date of the Plan's termination may be exercised until the
earlier of (A) the date set forth in the Award Agreement, or (B) in the case of
an Incentive Option, ten (10) years from the date the Option is granted; and the
provisions of the Plan with respect to the full and final authority of the
Committee under the Plan shall continue to control.
20. AMENDMENT OF THE PLAN
The Plan may be amended by the Board and such amendment shall become effective
upon adoption by the Board; provided, however, that any amendment that
(A) increases the numbers of Shares that may be granted under this Plan, other
than as provided by Section 17, (B) materially modifies the requirements as to
eligibility to participate in the Plan, (C) materially increases the benefits to
Participants, (D) extends the period during which Incentive Options may be
granted or exercised, or (E) changes the designation of the class of employees
eligible to receive Incentive Options, or otherwise causes the Incentive Options
to no longer qualify as "incentive stock options" as defined in Section 422 of
the Code, also shall be subject to the approval of the stockholders of the
Company within one (1) year either before or after such adoption by the Board,
subject to the requirements of Section 16 of the Plan.
21. EMPLOYMENT RELATIONSHIP
Nothing herein contained shall be deemed to prevent the Company or an Affiliate
from terminating the employment of a Participant, nor to prevent a Participant
from terminating the Participant's employment with the Company or an Affiliate.
<PAGE>
22. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against all reasonable expenses, including attorneys'
fees, actually and reasonably incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken by them as
directors or members of the Committee and against all amounts paid by them in
settlement thereof (provided such settlement is approved by the Board) or paid
by them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that the director or Committee member is liable for gross
negligence or willful misconduct in the performance of his or her duties. To
receive such indemnification, a director or Committee member must first offer in
writing to the Company the opportunity, at its own expense, to defend any such
action, suit or proceeding.
23. UNFUNDED PLAN
Insofar as it provides for payments in cash in accordance with Section 14, or
otherwise, the Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Participants who are entitled to cash, Common Stock,
or rights thereto under the Plan, any such accounts shall be used merely as a
bookkeeping convenience. The Company shall not be required to segregate any
assets that may at any time be represented by cash, Common Stock, or rights
thereto, nor shall the Plan be construed as providing for such segregation, nor
shall the Company, the Board, or the Committee be deemed to be a trustee of any
cash, Common Stock, or rights thereto to be granted under the Plan. Any
liability of the Company to any Participant with respect to a grant of cash,
Common Stock, or rights thereto under the Plan shall be based solely upon any
contractual obligations that may be created by the Plan and any Award Agreement;
no such obligation of the Company shall be deemed to be secured by any pledge or
other encumbrance on any property of the Company. Neither the Company nor the
Board nor the Committee shall be required to give any security or bond for the
performance of any obligation that may be created by the Plan.
24. MITIGATION OF EXCISE TAX
If any payment or right accruing to a Participant under this Plan (without the
application of this Section 24), either alone or together with other payments or
rights accruing to the Participant from the Company or an Affiliate, would
constitute a "parachute payment" (as defined in Section 280G of the Code and
regulations thereunder), such payment or right shall be reduced to the largest
amount or greatest right that will result in no portion of the amount payable or
right accruing under the Plan being subject to an excise tax under Section
4999 of the Code or being disallowed as a deduction under Section 280G of the
Code. The determination of whether any reduction in the rights or payments
under this Plan is to apply shall be made by the Company. The Participant shall
cooperate in good faith with the Company in making such determination and
providing any necessary information for this purpose.
25. EFFECTIVE DATE
This Plan shall become effective upon adoption by the Board, provided that the
Plan is approved by the stockholders of the Company before or at the Company's
next annual meeting, but in no event shall stockholder approval be sought more
than one (1) year after such adoption by the Board.
26. GOVERNING LAW
This Plan shall be governed by the laws of the State of Illinois and construed
in accordance therewith.
Adopted this 24th day of January, 1997.
EXHIBIT 5
June 3, 1997
USFreightways Corporation
9700 Higgins Road
Rosemont, Illinois 60018
Re: Registration Statement on Form S-8
USFreightways Corporation Long-Term Incentive Plan
Gentlemen and Ladies:
We have acted as counsel for USFreightways Corporation (the "Company")
in connection with the Registration Statement on Form S-8 filed by the Company
with the Securities and Exchange Commission to effect the registration, pursuant
to the Securities Act of 1933, of 2,000,000 shares of common stock, $0.01 par
value (the "Common Stock"), which may be offered by the Company under the
above-referenced Plan. In connection with this matter, we have examined such
documents and have reviewed such questions of law as we have considered
necessary and appropriate for the purposes of this opinion. We have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all the documents
submitted to us as certified or photostat copies and the authenticity of the
originals of such latter documents.
Based upon such examination, we advise you that, in our opinion:
The Company has corporate authority to issue the shares of Common
Stock proposed to be offered as set forth in the Registration Statement.
The shares of Common Stock proposed to be offered by the Company as
set forth in the Registration Statement have been duly authorized and, when
issued and sold as set forth in the Registration Statement, and in accordance
with the USFreightways Corporation Long-Term Incentive Plan referred to in the
Registration Statement, such shares will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement. In giving this consent, we do not
hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933 or the rules and regulations of
the Securities and Exchange Commission.
Very truly yours,
/s/ Sachnoff & Weaver, Ltd.
______________________
SACHNOFF & WEAVER, LTD.
EXHIBIT 23
CONSENT OF KPMG PEAT MARWICK
The Board of Directors
USFreightways Corporation
We consent to the use of our report incorporated by reference in this
registration statement on Form S-8 of USFreightways Corporation.
/s/ KPMG Peat Marwick LLP
____________________
KPMG Peat Marwick LLP
Chicago, Illinois
June 3, 1997
EXHIBIT 24
USFREIGHTWAYS CORPORATION
POWER OF ATTORNEY
The undersigned hereby appoints Christopher L. Ellis, Robert S. Owen and Richard
C. Pagano, and each of them, as my attorneys-in-fact to execute and file in my
name and in my behalf, in all capacities as an officer or director of
USFreightways Corporation, Registration Statements on Form S-8 and all
amendments thereto (including post-effective amendments) to be filed with the
Securities and Exchange Commission, relating to the issuance, through the
USFreightways Corporation Long-Term Incentive Plan, of common stock of
USFreightways Corporation, par value $0.01 per share.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney on
the 3rd day of June, 1997.
/s/ J. Campbell Carruth *
___________________
J. Campbell Carruth President, Chief Executive Officer and
Director (Principal Executive Officer)
/s/ Robert V. Delaney *
_________________
Robert V. Delaney Director
/s/ Robert P. Neuschel *
__________________
Robert P. Neuschel Director
/s/ Neil A. Springer *
_________________
Neil A. Springer Director
/s/ William N. Weaver, Jr. *
______________________
William N. Weaver, Jr. Director
/s/ Morley Koffman *
______________
Morley Koffman Director
/s/ John W. Puth *
____________
John W. Puth Director
