As filed with the Securities and Exchange Commission on March 14, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ATOMIC BURRITO, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 84-1131343
(State of Incorporation) (I.R.S. Employer Identification No.)
1601 NW Expressway, Suite 1610
Oklahoma City, Oklahoma 73118
(Address of principal executive offices)
Omnibus Equity Compensation Plan
(Full title of the Plan)
James E. Blacketer
President and Chief Executive Officer
1601 NW Expressway, Suite 1610
Oklahoma City, Oklahoma 73118
405-848-0996
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Gary W. Derrick
Derrick & Briggs, LLP
Bank One Center, 20th Floor
100 N. Broadway Ave.
Oklahoma City, Oklahoma 73102
405-235-1900
CALCULATION OF REGISTRATION FEE
Title of Proposed
Securities Maximum Proposed Max- Amount of
To Be Amount To Be Offering Price imum Aggregate Registration
Registered Registered (1) Per Share (2) Offering Price(2) Fee (2)
- --------------------------------------------------------------------------------
Common 572,208 shares $.75 $429,156 $113.30
Stock
$.001
par value
- --------------------------------------------------------------------------------
(1) The number of shares being registered is the number of shares issuable
under the Atomic Burrito, Inc. Omnibus Equity Compensation Plan (the
"Plan"), pursuant to Rule 457(h) under the Securities Act of 1933, as
amended (the "Act").
(2) Pursuant to Rule 457(h)(1) the Registration Fee was computed on the
basis of the price at which initial options may be exercised.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed by Atomic Burrito, Inc. (the "Company" or
the "Registrant") with the Securities and Exchange Commission are incorporated
by reference into this Registration Statement:
(1) the latest annual report of the Company filed pursuant to
Section13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"), or the latest prospectus filed pursuant to Rule 424(b) under the
Securities Act of 1933 (the "Securities Act") that contains audited financial
statements for the Company's latest fiscal year for which such statements have
been filed;
(2) all other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual report or
prospectus referred to in (1) above;
(3) the description of the Company's Common Stock, par value $.001 per
share, contained in the proxy statement for the 1999 annual meeting of
shareholders filed under Section 14 of the Exchange Act.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel
The legality of the Common Stock offered hereby will be passed upon for
the Company by Derrick & Briggs LLP, Oklahoma City, Oklahoma.
Item 6. Indemnification of Directors and Officers
The Company's Certificate of Incorporation contains provisions permitted
under Oklahoma law relating to the liability of directors. These provisions
eliminate a director's personal liability for monetary damages resulting from a
breach of fiduciary duty, except in circumstances involving wrongful acts, such
as:
o any breach of the director's duty of loyalty;
o acts or omissions which involve a lack of good faith, intentional
misconduct or a knowing violation of the law;
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o payment of dividends or approval of stock repurchases or redemptions
that are unlawful under Oklahoma law; or
o any transaction from which the director derives an improper personal
benefit.
These provisions do not limit or eliminate the Company's rights or any
shareholder's rights to seek non-monetary relief, such as an injunction or
rescission, in the event of a breach of director's fiduciary duty. These
provisions will not alter a director's liability under Federal securities laws.
The Company's bylaws require the Company to indemnify its directors and
executive officers to the fullest extent not prohibited by the Oklahoma law. The
Company may limit the extent of such indemnification by individual contracts
with its directors and executive officers. Further, the Company may decline to
indemnify any director or executive officer in connection with any proceeding
initiated by such person or any proceeding by such person against the Company or
its directors, officers, employees or other agents, unless such indemnification
is expressly required to be made by law or the proceeding was authorized by our
board of directors.
At present, there is no pending litigation or proceeding involving a
director, officer or employee of the Company for which indemnification is
sought, nor is the Company aware of any threatened litigation that may result in
claims for indemnification.
The Company has the power to indemnify its other officers, employees and
other agents, as permitted by Oklahoma law, but it is not required to do so.
Item 7. Exemption From Registration Claimed
Not applicable.
Item 8. Exhibits
The Exhibit Index immediately preceding the exhibits is incorporated
herein by reference.
Item 9. Undertakings
(1) 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; (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. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
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Commission pursuant to Rule 424(b) of the Securities Act if, in the aggregate,
the changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective 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 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 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to 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 the 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 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, 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Oklahoma City, State of Oklahoma, on March 9,
2000.
Atomic Burrito, Inc.
By:/s/ James E. Blacketer
--------------------------------------
James E. Blacketer
President and Chief Executive Officer
Power of Attorney
Each person whose signature appears below constitutes and appoints James
E. Blacketer as his attorney-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, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
President and Director
James E. Blacketer (Principal Executive Officer) March 9, 2000
--------------------------
James E. Blacketer
Chief Financial Officer and
Secretary (Principal Financial
Dominic W. Grimmett and Accounting) March 9, 2000
--------------------------
Dominic W. Grimmett
Joe R. Love Director March 9, 2000
-------------------------
Joe R. Love
John R. Ritter Director March 14, 2000
-------------------------
John R. Ritter
John E. Adams Director March 9, 2000
--------------------------
John E. Adams
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EXHIBIT INDEX
Sequential
Page
Exhibit Number Description Numbers
- -------------- ----------- ----------
5.1 Opinion of Derrick & Briggs LLP
23.1 Consent of Gray & Northcutt, Inc.,
Independent Accountants
23.2 Consent of Derrick & Briggs LLP is contained
in Exhibit 5.1 to this Registration Statement
24.1 Power of Attorney is contained on the
signature pages
99.1 Omnibus Equity Compensation Plan
EXHIBIT 5.1
[Derrick & Briggs, LLP letterhead]
March 6, 2000
Atomic Burrito, Inc.
1601 NW Expressway, Suite 1610
Oklahoma City, Oklahoma 73118
Re: Legal Opinion
Ladies and Gentlemen:
We have acted as your counsel in the preparation of a Registration
Statement on Form S-8 (the "Registration Statement") relating to the Company's
Omnibus Equity Compensation Plan, as amended (the "Plan"), filed by you with the
Securities and Exchange Commission covering 572,208 additional shares of the
Company's common stock (the "Common Stock") issuable pursuant to the Plan. In so
acting, we have examined and relied upon such records, documents, and other
instruments as in our judgment are necessary or appropriate in order to express
the opinions hereinafter set forth and have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity to the original documents of all documents submitted to us as
certified or photostatic copies.
Based upon the foregoing, we are of the opinion that the Common Stock,
when issued pursuant to and in accordance with the Plan, will be duly and
validly issued, fully paid, and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement. In giving our consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Commission.
Sincerely yours,
Derrick & Briggs LLP
/s/ Derrick & Briggs, LLP
------------------------------------
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 26, 1999 (except for Note 16,
as to which the date is April 14, 1999) relating to the financial statements,
which appear in Atomic Burrito, Inc.'s Form 10-KSB for the year ended December
31, 1998.
/s/ Gray & Northcutt, Inc.
--------------------------
Gray & Northcutt, Inc.
Oklahoma City, Oklahoma
March 14, 2000
EXHIBIT 99.1
ATOMIC BURRITO, INC.
OMNIBUS EQUITY COMPENSATION PLAN
1. Establishment and Purpose of the Plan. Atomic Burrito, Inc. creates
its Omnibus Equity Compensation Plan for the purpose of joining capable and
experienced people and entities to the Company's business purposes. The Plan
shall fulfill its purpose by compensating them with equity-based awards, whose
value is connected to the continued growth and profitability of the Company and
whose characteristics of ownership fosters a mutual interest with the Company's
shareholders.
2. Definitions.
(a) Affiliate: Any entity in which the Company has a substantial
direct or indirect interest, as determined by the Committee.
(b) Agent: An Employee, person, or entity performing services for
or selling goods to the Company or transacting business by or through its names,
or an employee of such person or entity.
(c) Award: A compensation grant related to the Company's equity,
including Director Options, Restricted Stock, Options, Stock Appreciation
Rights, and any Equity-Based Award.
(d) Awardee: An Agent to whom an Award is made.
(e) Board of Directors: The Board of Directors of the Company.
(f) Common Stock: The common stock of the Company, par value
$.001 a share, or such other class or kind of shares or other securities as may
be applicable under Section 11.
(g) Company: Atomic Burrito, Inc., an Oklahoma corporation, or
any successor to substantially all its business, and any entity owned in whole
or in part by it, if the context requires or permits.
(h) Committee: The Compensation Committee of the Board of
Directors, or such other committee designated by the Board of Directors,
designated to administer the Plan under Section 4.
(i) Director Options: Non-Qualified Options awarded under Section
7 of the Plan.
(j) Employee: A full-time managerial, administrative, or
professional person employed by the Company, including an officer or director
who is such an employee.
(k) Equity-Based Award. An award by the Committee under Section
10 of the Plan.
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(1) Fair Market Value. If the Common Stock is traded on the
over-the-counter market, the mean between the highest closing bid and lowest
closing asked prices for a share of the Common Stock as reported by the National
Association of Securities Dealers Automated Quotation System, or if not reported
by that system, the mean between the closing bid and asked prices as quoted by a
source designated by the Committee; if the Common Stock is listed on a national
or regional stock exchange, the closing sales price per share on such exchange;
or if the Common Stock is neither traded in the over-the-counter market nor
listed on an exchange, the per share value determined in good faith by the
Committee. The Committee may in its discretion average the Fair Market Value
over a period of time, may utilize a fair market value formula required by
Federal tax or securities laws, or may modify this definition in such ways as it
deems appropriate and consistent with the purposes of the Plan.
(m) Incentive Stock Option: Any Option which meets the
requirements of an incentive stock option as defined in Section 422A of the U.S.
Internal Revenue Code of 1986, as amended, or any statutory provision that may
replace such Section, other than an Option which states that it is not an
Incentive Stock Option.
(n) Non-Qualified Option: Any Option which is not an Incentive
Stock Option.
(o) Options: Any option or options granted from time to time
under the Plan other than Director Options.
(p) Plan: Atomic Burrito, Inc. Omnibus Equity Compensation Plan
herein set forth, as the same may from time to time be amended.
(q) Restricted Stock: Common Stock awarded by the Committee under
Section 8 of the Plan.
(r) Stock Appreciation Rights: Rights awarded by the Committee
under Section 9 of the Plan.
3. Eligibility. Any Agent is eligible to receive an Award, provided that
a director of the Company who is a member of the Committee or who is not an
Employee shall be eligible to receive only Director Options or Restricted Stock
as permitted under Sections 7 and 8 of the Plan.
4. Plan Administration.
(a) Administrator: The Plan shall be administered by the
Committee.
(b) Administrative Powers: The Committee shall have full power to
interpret and administer the Plan and full authority to act in selecting the
Agents or class of Agents to whom Awards will be granted, in determining the
type and amount of Award to be granted to each Agent or class of Agent, the
terms and conditions of Awards granted under the Plan and the terms of
agreements which will be entered into with Awardees. The Committee shall have
the power to make regulations for carrying out the Plan, and to make changes in
such regulations as they from time to time deem proper. Any interpretation by
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the Committee of the terms and provisions of the Plan and the administration
thereof, and all action taken by the Committee, shall be final, binding, and
conclusive on the Company, its shareholders, Affiliates, all Agents, their
respective legal representatives, successors, and assigns and upon all other
persons claiming under or through any of them. As to the selection of and grants
of awards to Awardees who are not subject to Sections 16(a) and 16(b) of the
Act, the Committee may delegate any or all of its responsibilities to
appropriate Employees of the Company.
(c) Administration Liability: Members of the Board of Directors,
members of the Committee, or Employees acting under the Plan shall incur no
liability except for gross negligence or willful misconduct in the performance
of their duties.
5. Shares Subject to Grant.
(a) Subject to adjustment as provided in Section 11, the total
number of shares of Common Stock which the Company may grant under the Plan
shall be fifteen percent (15%) of the total shares outstanding from time to
time; provided, however, that no more than one hundred eighty thousand (180,000)
shares of Common Stock shall be available for the grant of Incentive Stock
Options under the Plan. Any shares issued by the Company through the assumption
or substitution of outstanding grants from an acquired company shall not reduce
the shares available for grants under the Plan. Any shares issued hereunder may
consist, in whole or in part, of authorized and unissued shares or treasury
shares (if any). If any shares necessary to an Award are forfeited or the Award
otherwise terminates without the issuance of shares, the shares subject to such
Award, to the extent of any such forfeiture or termination, shall again be
available for grant under the Plan.
6. Option Rules and Conditions. The grant of Options shall be upon the
following rules and conditions:
(a) Options and Grants: Options shall be evidenced by Option
agreements. The agreements shall conform to the requirements of the Plan, and
may contain such other provisions (including restrictions upon the exercise of
the Option, and provisions for the protection of Options in the event of
mergers, consolidations, dissolutions, and liquidations) as the Committee shall
deem advisable.
(b) Option Price: The price at which Common Stock may be
purchased upon exercise of an Option shall be determined by the Committee in
accordance with its rules, or, in their absence, by the Committee's discretion.
(c) Terms of Options: The Option agreements shall specify when an
Option may be exercisable and the terms and conditions applicable in the event
of the Awardee's termination of employment during the Option's term.
(d) Incentive Stock Option: Each provision of the Plan and each
Option agreement relating to an Incentive Stock Option shall be construed so
that each Incentive Stock Option shall be an incentive stock option as defined
in Section 422A of the Internal Revenue Code of 1986, as amended, or any
statutory provision that may replace such Section, and any provisions thereof
that cannot be so construed shall be disregarded. In no event may an Awardee be
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granted Incentive Stock Options which do not comply with such grant and vesting
limitations as may be prescribed by Section 422A(b)(7) of the Internal Revenue
Code of 1986 as amended, or any successor section or limitation and any
implementing regulations.
(e) Payment of Option Price: The Option price of the shares of
Common Stock for which an Option shall be exercised shall be paid in full in
cash at the time of the exercise or, with the consent of the Committee, in whole
or in part in other consideration. An Awardee shall have no rights of a
shareholder with respect to any shares of Common Stock subject to an Option
unless and until a stock certificate for such shares shall have been issued to
him or her.
7. Director Options Rules and Conditions. Each incumbent director shall
receive at the Plan's effective date, and thereafter, each director who is not
an incumbent director shall receive upon his election and qualification (subject
to paragraph (a) below) Non-Qualified Options to purchase shares of Common Stock
equal to three tenths of one percent (0.3%) of the total number of the
outstanding shares of Common Stock. The grant is further subject to the
following rules and conditions:
(a) Director Option Grants: Director Options shall be evidenced
by a Director Option agreement providing for the grant as of the effective date
of the Plan or the date of the director's election and qualification, as the
case may be, provided that the Committee (excluding the director, if he or she
is a member) may defer the grant for up to six months from such date. The
agreements shall conform to the requirements of the Plan and may contain such
other provisions (including methods of option exercises and provisions for
protection of the Director Options in the event of mergers, consolidations,
dissolutions, and liquidations) as the Committee shall deem advisable.
(b) Director Option Price: The Committee shall determine the
exercise price of a Director Option, provided that the exercise price shall be
not less than the lowest Fair Market Value of the Common Stock at date of grant.
(c) Terms of Director Options: The Director Option agreements
shall specify when a Director Option may be exercisable and the terms and
conditions applicable in the event of the director's termination of service
during the Director Option's term.
(d) Payment of Director Option Price: The price of the shares of
Common Stock for which a Director Option shall be exercised shall be paid in
full in cash at the time of the exercise or, with the consent of the Committee
(excluding the exercising director, if he or she is a member), in whole or in
part in other consideration including Common Stock or Restricted Stock valued at
Fair Market Value. A director shall have no voting rights with respect to any
shares of Common Stock subject to Director Options unless and until a stock
certificate for such shares shall have been issued to him or her, but may have
such other rights and privileges as the Committee provides in the Director
Option Agreement.
(e) Further Restrictions. The Committee may restrict the Director
Option agreements so that the Plan will qualify for exemption from the
provisions of Section 16(b) of the Act.
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(f) Exclusivity. The Director Options shall not be the exclusive
means by which the Company may compensate its directors.
8. Restricted Stock Rules and Conditions. The grant of Restricted Stock
shall be upon the following rules and conditions:
(a) Restricted Stock Grants: Restricted Stock shall be evidenced
by Restricted Stock agreements. The agreements shall conform to the requirements
of the Plan and may contain such other provisions (including provisions for the
protection of Restricted Stock in the event of mergers, consolidations,
dissolutions, and liquidations, affecting either the agreement or the stock
issued thereunder) as the Committee shall deem advisable.
(b) Issuance of Restricted Stock: Upon determination of the
number of shares of Restricted Stock to be granted to an Awardee, the Committee
shall direct that a certificate representing the number of shares of Common
Stock be issued to the Awardee with the Awardee as the registered owner. The
certificate representing such shares shall either be legended to restrict the
sale, transfer, assignment, pledge, or other encumbrances during the restricted
period or deposited by the Awardee, together with a stock power endorsed in
blank, with the Company.
(c) Dividends and Voting Rights: During the restricted period the
Awardee shall have the right to receive dividends from and to vote the shares of
Restricted Stock.
(d) Delivery: The Restricted Stock agreement shall specify the
duration of the restricted period and the performance and/or employment
conditions under which the Restricted Stock may be forfeited to the Company. At
the end of the restricted period the restrictions imposed hereunder shall lapse
with respect to the number of shares of Restricted Stock as determined by the
Committee, and the legend may be removed or the shares delivered, as the case
may be, with respect to such number. The Committee may, in its sole discretion,
modify or accelerate the vesting of shares of Restricted Stock.
(e) Directors' Restricted Stock. Directors may receive, in lieu
of some or all of their authorized cash compensation, Restricted Stock awards
having a value not greater than the cash foregone, with the Committee's consent
(excluding the electing director, if he or she is a member). The awards shall
have such terms and conditions as the Committee shall determine in its
discretion.
9. Stock Appreciation Rights. The grant of Stock Appreciation Rights
("SARs") shall be subject to the following rules and conditions:
(a) Stock Appreciation Right Grants: Stock Appreciation Rights
are rights to receive a payment in cash, Common Stock, Restricted Stock, or
other Equity-Based Awards as selected by the Committee. These rights, which are
determined by the appreciation in Common Stock, shall be evidenced by Stock
Appreciation Rights agreements. Such agreements shall conform to the
requirements of the Plan and may contain such other provisions as the Committee
shall deem advisable. SARs may be granted in tandem with all or a portion of a
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related Option under the Plan ("Tandem SARs"), or may be granted separately
("Freestanding SARs"). Tandem SARs may be granted either at the time of the
grant of the option or at any time thereafter during the term of the option and
shall be capable of being exercised only to the extent that the related stock
option is capable of being exercised. If held by an Awardee subject to Section
16(b) of the Act, Freestanding SARs shall not be exercisable within the first
six months of its grant, or in the case of Tandem SARs, within the first six
months of the grant of the related Option.
(b) SAR Price: The exercise price of a Tandem SAR shall be the
option price under the related Option. The exercise price of a Freestanding SAR
shall be determined by the Committee. Notwithstanding the foregoing, the
Committee may unilaterally limit the appreciation in value of the Common Stock
attributable to the SAR at any time prior to its exercise.
(c) Exercise of SARs: Tandem SARs and Freestanding SARs shall
entitle the Awardee to receive a payment equal to the excess of the fair market
value of the shares of Common Stock covered by the SARs on the date of exercise
over the exercise price of the SARs or such lesser amount as determined by the
Committee. Such payment may be in cash, in shares of Common Stock, or Restricted
Stock, or any combination, as the Committee shall determine. Upon exercise of
Tandem SARs as to some or all of the shares covered by the grant, the related
Option shall be cancelled automatically to the extent of the number of shares
covered by such exercise. Conversely, if the related Option is exercised as to
some or all of the shares covered by the grant, the related Tandem SARs, if any,
shall be cancelled automatically to the extent of the number of shares covered
by the Option exercise. To the extent an SAR (or the related Option) has not
been exercised on its expiration, it will be exercised automatically and paid in
the form determined by the Committee.
(d) Terms of SARs: SARs shall be subject to the terms and other
conditions imposed by Rule 16(b)-3 of the Act, if the SARs are granted to an
Awardee who is subject to Section 16(b) of the Act. SARs shall also be subject
to such other terms and conditions not inconsistent with the Plan as shall be
determined by the Committee.
10. Equity-Based Awards. The grant of Equity-Based Awards shall be upon
the following rules and regulations:
(a) Equity-Based Awards: The Committee may grant awards which are
valued, in whole or in part, by reference to or otherwise based on the Common
Stock. All grants shall be evidenced by written agreements which conform to the
requirements of the Plan and may contain such other provisions as the Committee
shall deem advisable.
(b) In Conjunction With Other Awards: Any Equity Based Award may
be granted alone, in addition to, or in tandem with Restricted Stock, Options,
SARs, or other Equity-Based Awards as the Committee may determine.
11. Adjustments Upon Changes in Capitalization. In the event of a
reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation or any other change in the corporate structure of
the Company affecting Common Stock, or a sale by the Company of all or part of
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its assets, or any distribution to shareholders other than a normal cash
dividend, the Board of Directors shall make appropriate adjustment in the number
and kind of shares authorized by the Plan and any adjustments to outstanding
Awards as it determines appropriate. No fractional shares of Common Stock shall
be issued pursuant to such an adjustment, however, and the Fair Market Value of
any fractional shares resulting from adjustments pursuant to this section shall
be paid in cash to the Awardee.
12. Effective Date; Termination and Amendment. The Plan shall become
effective on April 18, 1997, subject to shareholder approval. The Plan shall
remain in full force and effect until terminated by the Board of Directors, who
shall have the power to amend, suspend or terminate the Plan at any time.
13. Forfeiture. Awards may be forfeited if the Awardee terminates his or
her employment or contractual relationship with the Company or an Affiliate for
any reason other than death or retirement, except that the Committee shall have
the authority to provide for the Award's continuation in whole or in part
whenever it shall determine that such continuation is in the best interests of
the Company. Awards may furthermore be forfeited by an Awardee if the Committee
determines that the Awardee has at any time engaged in any activity harmful to
the interest of or in competition with the Company or Affiliates or accepts
employment with a competitor.
14. Transferability. Unless otherwise restricted in the Award agreement,
an Awardee may assign or transfer an Award to any relative or spouse, or any
relative of such spouse, provided such relative is no further removed than the
fourth degree; to any trust or estate in which the Awardee, relative, spouse, or
combination thereof have a beneficial interest of 10% or more; to any
corporation or other organization in which the Awardee, relative, spouse, or
combination thereof have a beneficial interest of 10% or more; or to any other
person or entity if the Committee permits.
15. Beneficiary Upon Awardee's Death. An Awardee's Award shall be
transferable at his or her death to the beneficiary designated by the Awardee on
forms prescribed by and filed with the Committee. Upon the death of an Awardee,
such beneficiary shall succeed to the rights of the Awardee. If no such
designation of a beneficiary has been made, the Awardee's Awards shall succeed
to his or her legal representative and shall be transferable by will or pursuant
to the laws of descent and distribution.
16. Incorporation of Existing Plans. The Company's existing equity-based
compensation plans -- the 1994 and 1995 Stock Option Plans, and all existing
stock option agreements -- shall be incorporated into this Plan and made a part
of it and be considered subject and entitled to all of its obligations and
privileges, as if such plans had been originally adopted and made under this
Plan. Approval by the Company's shareholders of this Plan shall presume their
approval of all incorporated plans.
17. General Provisions.
(a) Nothing contained in the Plan, or in any Award granted
pursuant to the Plan, shall confer upon any Employee any right of continued
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employment by the Company or Affiliate, nor alter the right of the Company or
Affiliate to terminate the Employee's employment at any time with or without
cause.
(b) For purposes of this Plan, transfer of employment between the
Company and its Subsidiaries and Affiliates shall not be deemed termination of
employment.
(c) Nothing in this Plan, or in any Award granted pursuant to
this Plan, shall confer upon any non-Employee Agent any right of continued
relationship with the Company or Affiliate, or alter the relationship between
them, including any right of the Company or Affiliate to terminate its
relationship with the non-Employee Agent.
(d) Appropriate provision may be made for all taxes required to
be withheld in connection with any Award, the exercise thereof and the transfer
of shares of Common Stock in respect of any Federal, state, or local withholding
taxes whether domestic or foreign. In the case of the payment of Awards in the
form of Common Stock, the Company shall have the right to retain the number of
shares of Common Stock whose fair market value equals the amount to be withheld.
(e) If any day on or before which action under the Plan must be
taken falls on a Saturday, Sunday or legal holiday, such action may be taken on
the next succeeding day not a Saturday, Sunday or legal holiday.
(f) Without amending the Plan, awards may be granted to Agents
who are foreign nationals or employed outside the United States or both, on such
terms and conditions different from those specified in the Plan as may, in the
judgment of the Committee, be necessary or desirable to further the purpose of
the Plan.
(g) To the extent that Federal laws (such as the Securities
Exchange Act of 1934, the Internal Revenue Code of 1986, or the Employee
Retirement Income Security Act of 1974) do not otherwise control, the Plan and
all determinations made and actions taken pursuant hereto shall be governed by
the law of Oklahoma and construed accordingly.
(h) The Committee may amend or substitute any outstanding Awards
to the extent it deems appropriate. Such amendment or substitution may be
unilateral by the Company, provided that Award substitutions shall be for
comparable value.
(i) The Committee may defer or permit an Awardee to defer the
receipt of consideration under an Award pursuant to such rules as the Committee
may promulgate or as provided in an Award agreement. The Committee may provide
in Award agreements for the receipt of interest, dividends, or other
consideration which would have been received on the Common Stock underlying or
tied to the Award.
(j) Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change in Control:
(l)(a) The restrictions and limitations applicable to any
Director Options, Options, Restricted Stock, and other Equity-Based Awards, in
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each case to the extent not already vested under the Plan, shall lapse and such
shares and awards shall be deemed fully vested;
(l)(b) Any SARs outstanding for at least six months and any
Director Options and Options awarded under the Plan not previously exercisable
and vested shall become fully exercisable and vested;
(l)(c) The value of all outstanding Director Options, Options,
SARs, Restricted Stock, and other Equity-Based Awards, in each case to the
extent vested, shall unless otherwise determined by the Committee in its sole
discretion at or after grant but prior to any Change in Control, be cashed out
on the basis determined by the Committee as of the date such Change in Control
is determined to have occurred or such other date as the Committee may determine
prior to the Change in Control.
(2) Definition: "Change in Control" shall mean a change in
control of the Company of a nature that would be required to be reported in
response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
the Company is then subject to such reporting requirement; provided that,
without limitation, a Change in Control shall be deemed to have occurred if (A)
any individual, partnership, firm, corporation, association, trust,
unincorporated organization, or other entity, or any syndicate or group deemed
to be a person under Section 14(d)(2) of the Act, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 of the General Rules and Regulations under the
Act), directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the company's then outstanding securities
entitled to vote in the election of directors of the Company; or (B) during any
period of two (2) consecutive years (not including any period prior to the
execution of this Plan), individuals who at the beginning of such period
constitute the Board of Directors and any new directors, whose election by the
Board of Directors or nomination for election by the Company's shareholders was
approved by a vote of at least three quarters (3/4) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof. A change in control shall not be deemed
to be a Change in Control for purposes of this Plan if the Board of Directors
has approved such change in control prior to either (i) the occurrence of any of
the events described in the foregoing clauses (A) and (B), or (ii) the
commencement by any person other than the Company of a tender offer for the
Common Stock.
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