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As filed with the Securities and Exchange Commission on June 28, 1996
Registration No. 333-________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
PACIFIC GREYSTONE CORPORATION
(Exact name of registrant as specified in its charter)
___________________
Delaware 95-4337490
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6767 Forest Lawn Drive, Suite 300, Los Angeles, California 90068
(Address of principal executive offices)
PACIFIC GREYSTONE CORPORATION 1996 STOCK OPTION AND AWARD PLAN
(Full title of the plan)
______________
ROBERT W. GARCIN, ESQ.
PACIFIC GREYSTONE CORPORATION
6767 Forest Lawn Drive, Suite 300
Los Angeles, California 90068
(Name and address of agent for service)
___________________
Telephone number, including area code, of agent for service: (213) 436-6300
___________________
Copy to:
Richard A. Boehmer, Esq.
O'Melveny & Myers LLP
400 South Hope Street, Suite 1500
Los Angeles, California 90071
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
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Common Stock, $.01 825,000(1) $11.6875(2) $9,642,187.50(2) $3,324.89(2)
par value shares
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(1) This Registration Statement covers, in addition to the number of shares
of Common Stock stated above, options and other rights to purchase or
acquire the shares of Common Stock covered by the Prospectus and,
pursuant to Rule 416, an additional indeterminate number of shares which
by reason of certain events specified in the Plan may become subject to
the Plan.
(2) Pursuant to Rule 457(h), the maximum offering price, per share and in the
aggregate, and the registration fee were calculated based upon the
average of the high and low prices of the Common Stock on June 25, 1996
as reported on the New York Stock Exchange and published in the Western
Edition of the Wall Street Journal.
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PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form
S-8 (plan information and registrant information) will be sent or given to
employees as specified by Securities and Exchange Commission Rule 428(b)(1).
Such documents need not be filed with the Securities and Exchange Commission
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. These documents, which include the statement
of availability required by Item 2 of Form S-8, and the documents incorporated
by reference in this Registration Statement pursuant to Item 3 of Form S-8
(Part II hereof), taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933.
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PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of Pacific Greystone Corporation (the
"Company") filed with the Securities and Exchange Commission are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1995;
(b) The Company's Quarterly Report on Form 10-Q for the period ending
March 31, 1996;
(c) The description of the Company's Common Stock contained in its Form 8-
A dated June 20, 1996 and any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, 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 are deemed to be incorporated by reference into the prospectus and to be
a part hereof from the date of filing of such documents. Any statement
contained herein or in a document, all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or amended, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware law provides for the indemnification of officers and
directors in terms sufficiently broad to include indemnification under certain
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the Securities Act of 1933. Pursuant to Section 145 of the
Delaware General Corporation Law, a corporation may indemnify an officer or
director if that person acted in good faith and in a manner reasonably believed
to be in or not opposed to the best interests of the corporation and, with
respect to criminal actions or proceedings, had no reason to believe the conduct
was unlawful.
The Company has adopted provisions in its Bylaws which limit the
liability of its directors and officers to the fullest extent permitted by
Delaware law. The Company will indemnify its directors and officers for claims
against them arising out of their duties as directors or officers of the
Company. Such indemnification includes any judgments, fines and amounts paid in
settlement actually or reasonably incurred by a director or officer, provided
such director or officer acted in good faith and in a manner reasonably believed
to be in or not opposed to the best interests of the Company. The Company may
also advance expenses (including attorneys' fees) to its directors and officers
relating to such claims. The Company has purchased and maintains insurance
covering any liabilities asserted against and incurred by its directors and
officers acting in such capacities, whether or not the Company would have the
power or obligation to indemnify such directors or officers under its Articles
of Incorporation.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See the attached Exhibit Index.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 (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; and
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(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 information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") that are incorporated by reference in the
Registration Statement;
(2) 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; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, 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.
(c) 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 provisions described in Item 6 above, 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 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on this 25th day of
June, 1996.
PACIFIC GREYSTONE CORPORATION
By: /s/ Jack R. Harter
---------------------------
Jack R. Harter
Chairman, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Jack R. Harter Chairman, President and June 25, 1996
- -------------------------- Chief Executive Officer
Jack R. Harter (Principal Executive Officer)
/s/ Antonio B. Mon Vice Chairman and June 25, 1996
- ---------------------------
Antonio B. Mon Chief Financial Officer
(Principal Financial Officer)
/s/ Bruce E. Gross Vice President and Controller June 25, 1996
- --------------------------- (Principal Accounting Officer)
Bruce E. Gross
/s/ Sidney Lapidus Director June 25, 1996
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Sidney Lapidus
/s/ Reuben S. Leibowitz Director June 25, 1996
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Reuben S. Leibowitz
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/s/ John D. Santoleri Director June 25, 1996
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John D. Santoleri
/s/ David Kaplan Director June 25, 1996
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David Kaplan
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EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
4 Pacific Greystone Corporation 1996 Stock Option
and Award Plan
5. Opinion of O'Melveny & Myers LLP
23.1 Consent of Independent Public Accountants
23.2 Consent of Counsel (included in Exhibit 5)
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EXHIBIT 4
PACIFIC GREYSTONE CORPORATION
1996 STOCK OPTION AND AWARD PLAN
<PAGE>
TABLE OF CONTENTS
Page
----
I. THE PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Administration and Authorization; Power and Procedure. . . . . . . 1
1.3 Participation. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Shares Available for Awards. . . . . . . . . . . . . . . . . . . . 3
1.5 Grant of Awards. . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.6 Award Period . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7 Limitations on Exercise and Vesting of Awards. . . . . . . . . . . 4
1.8 Acceptance of Notes to Finance Exercise. . . . . . . . . . . . . . 5
1.9 No Transferability . . . . . . . . . . . . . . . . . . . . . . . . 6
II. EMPLOYEE OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Limitations on Grant and Terms of Incentive Stock Options. . . . . 7
2.4 Limits on 10% Holders. . . . . . . . . . . . . . . . . . . . . . . 8
2.5 Option Repricing/Cancellation and Regrant/Waiver of
Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.6 Options and Rights in Substitution for Stock Options Granted by
Other Corporations . . . . . . . . . . . . . . . . . . . . . . . . 8
III. STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Exercise of SARs . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Limited SARs . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
IV. RESTRICTED STOCK AWARDS . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Return to the Corporation. . . . . . . . . . . . . . . . . . . . . 11
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES. . . . . . . . . . . . . . . 11
5.1 Grants of Performance Share Awards . . . . . . . . . . . . . . . . 11
5.2 Grants of Stock Bonuses. . . . . . . . . . . . . . . . . . . . . . 12
5.3 Deferred Payments. . . . . . . . . . . . . . . . . . . . . . . . . 12
5.4 Special Performance-Based Share Awards . . . . . . . . . . . . . . 12
VI. OTHER PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.1 Rights of Eligible Employees, Participants and Beneficiaries . . . 13
6.2 Adjustments; Acceleration. . . . . . . . . . . . . . . . . . . . . 14
6.3 Termination of Service; Termination of Subsidiary Status;
Discretionary Provisions . . . . . . . . . . . . . . . . . . . . . 15
6.4 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . 16
6.5 Tax Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.6 Plan Amendment, Termination and Suspension . . . . . . . . . . . . 17
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6.7 Privileges of Stock Ownership. . . . . . . . . . . . . . . . . . . 18
6.8 Effective Date of this Plan. . . . . . . . . . . . . . . . . . . . 18
6.9 Term of this Plan. . . . . . . . . . . . . . . . . . . . . . . . . 18
6.10 Governing Law/Construction/Severability. . . . . . . . . . . . . . 18
6.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.12 Non-Exclusivity of Plan. . . . . . . . . . . . . . . . . . . . . . 20
VII. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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PACIFIC GREYSTONE CORPORATION
1996 STOCK OPTION AND AWARD PLAN
I. THE PLAN.
1.1 PURPOSE.
The purpose of this Plan is to promote the success of the Company and
the interest of its stockholders by providing an additional means through the
grant of Awards to attract, motivate, retain and reward key employees and other
selected persons by providing them long-term incentives to improve the financial
performance of the Company. "Corporation" means Pacific Greystone Corporation,
a Delaware corporation, and its successors, and "Company" means the Corporation
and its Subsidiaries, collectively. These terms and other capitalized terms are
defined in Article VII.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
(a) COMMITTEE. This Plan shall be administered by, and all Awards
to Eligible Employees shall be authorized by, the Committee. Action of the
Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by written consent of its members.
(b) PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE. Subject to
the express provisions of this Plan, the Committee shall have the authority:
(i) to determine the particular Eligible Employees who will
receive Awards;
(ii) to grant Awards to Eligible Employees, determine the
price at which securities will be offered or awarded and the amount of
securities to be offered or awarded to any of such persons, and
determine the other specific terms and conditions of such Awards
consistent with the express limits of this Plan, and establish the
installments (if any) in which such Awards shall become exercisable or
shall vest, or determine that no delayed exercisability or vesting is
required, and establish the events of termination or reversion of such
Awards;
(iii) to approve the forms of Award Agreements (which need not
be identical either as to type of award or among Participants);
(iv) to construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and Employee
Participants under this Plan, further define the terms used in this
Plan, and prescribe, amend and rescind rules and regulations relating
to the administration of this Plan;
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(v) to cancel, modify, or waive the Corporation's rights
with respect to, or modify, discontinue, suspend, or terminate any or
all outstanding Awards held by Eligible Employees, subject to any
required consent under Section 6.6;
(vi) to accelerate or extend the exercisability or extend the
term of any or all such outstanding Awards within the maximum ten-year
term of Awards under Section 1.6; and
(vii) to make all other determinations and take such other
action as contemplated by this Plan or as may be necessary or
advisable for the administration of this Plan and the effectuation of
its purposes.
(c) BINDING DETERMINATIONS. Any action taken by, or inaction of,
the Corporation, any Subsidiary, the Board or the Committee relating or pursuant
to this Plan shall be within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. No member of the Board or
Committee, or officer of the Corporation or any Subsidiary, shall be liable for
any such action or inaction of the entity or body, of another person or, except
in circumstances involving bad faith, of himself or herself. Subject only to
compliance with the express provisions hereof, the Board and Committee may act
in their absolute discretion in matters within their authority related to this
Plan.
(d) RELIANCE ON EXPERTS. In making any determination or in taking
or not taking any action under this Plan, the Committee or the Board, as the
case may be, may obtain and may rely upon the advice of experts, including
professional advisors to the Corporation. No director, officer or agent of the
Company shall be liable for any such action or determination taken or made or
omitted in good faith.
(e) DELEGATION. The Committee may delegate ministerial,
non-discretionary functions to individuals who are officers or employees of the
Company.
1.3 PARTICIPATION.
Awards may be granted by the Committee only to those persons
that the Committee determines to be Eligible Employees. An Eligible Employee
who has been granted an Award may, if otherwise eligible, be granted additional
Awards if the Committee shall so determine. Non-Employee Directors shall not be
eligible to receive any Awards.
1.4 SHARES AVAILABLE FOR AWARDS.
Subject to the provisions of Section 6.2, the capital stock
that may be delivered under this Plan shall be shares of the Corporation's
authorized but unissued Common Stock. The shares may be delivered for any
lawful consideration.
(a) NUMBER OF SHARES. The maximum number of shares of Common Stock
that may be delivered pursuant to Awards granted to Eligible Employees under
this Plan shall not exceed 825,000 shares. The maximum number of shares subject
to those options and stock appreciation rights that during any calendar year are
granted to any individual shall be limited to 185,000 and the maximum number of
shares in the aggregate subject to all Awards that during any calendar year are
granted to any individual under this Plan shall be 185,000. Each
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of the three foregoing numerical limits shall be subject to adjustment as
contemplated by this Section 1.4 and Section 6.2.
(b) CALCULATION OF AVAILABLE SHARES AND REPLENISHMENT. Shares
subject to outstanding Awards of derivative securities (as defined in Rule
16a-1(c) under the Exchange Act) shall be reserved for issuance. If any Option
or other right to acquire shares of Common Stock under or receive cash or shares
in respect of an Award shall expire or be cancelled or terminated without having
been exercised or paid in full, or any Common Stock subject to a Restricted
Stock Award or other Award shall not vest or be delivered, the unpurchased,
unvested or undelivered shares of Common Stock subject thereto shall again be
available for the purposes of this Plan, subject only to any applicable
limitations under Rule 16b-3 or Section 162(m) of the Code. If the Corporation
withholds shares of Common Stock pursuant to Section 6.5, the number of shares
that would have been deliverable with respect to an Award but that are withheld
pursuant to the provisions of Section 6.5 may in effect not be issued, but the
aggregate number of shares issuable with respect to the applicable Award and
under this Plan shall be reduced by the number of shares withheld and such
shares shall not be available for additional Awards under this Plan. Subject
only to the preceding sentence, Section 1.4(c) and Section 6.10(c), (1) Awards
payable solely in cash, and Awards that do not constitute equity securities as
defined in Rule 16a-1(d), shall not reduce the number of shares available for
Awards under this Plan, (2) any imputed charges to the maximum number of shares
deliverable under this Plan (through reserves or otherwise) shall be reversed in
the case of Awards actually paid in cash, and (3), to the extent any shares were
previously reserved in respect of Awards payable in cash or shares, the number
of shares not delivered shall again be available for purposes of this Plan.
(c) PROVISIONS FOR CERTAIN CASH AWARDS. The number of awards
payable solely in cash or actually paid in cash ("Cash Awards") shall be
determined by reference to the number of shares by which the value or price of
the Award is measured and shall not, together with the aggregate number of
shares theretofore delivered and subject to then outstanding Awards payable in
shares (or alternatively payable in cash or shares) under this Plan, exceed the
aggregate or individual limits of Section 1.4(a), subject to adjustments under
this Section 1.4 and Section 6.2. Cash Awards that are forfeited or for any
reason are not paid in cash under this Plan may again, subject to Section
6.10(c), be the subject of and available for subsequent Awards under the Plan.
If an Award satisfies the requirements for an exclusion from the definition of
derivative security under Rule 16a-1(c) that does not require that the Award be
made under a Rule 16b-3 plan and is not intended to constitute a performance-
based award for purposes of Section 162(m) of the Code, such Award need not be
counted against the limits under Section 1.4(a), (b) or (c).
1.5 GRANT OF AWARDS.
Subject to the express provisions of this Plan, the Committee
has the authority to determine those individuals who are Eligible Employees,
whether any of them will receive an Award and, if so, the type of Award, the
number of shares of Common Stock subject to each Award, the price (if any) to be
paid for the shares or the Award, the other terms of the Award, and, in the case
of Performance Share Awards, in addition to the matters addressed in Section
1.2(b), the specific objectives, goals and performance criteria (such as an
increase in sales, market value, earnings or book value over a base period, the
years of service before vesting, the relevant job classification or level of
responsibility or other factors) that
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further define the terms of the Performance Share Award. Each Award shall be
evidenced by an Award Agreement signed by the Corporation and, if required by
the Committee, by the Participant. The Award Agreement shall set forth the
material terms and conditions of the Award established by the Committee
consistent with the specific provisions of this Plan.
1.6 AWARD PERIOD.
Each Award and all executory rights or obligations under the
related Award Agreement shall expire on such date (if any) as shall be
determined by the Committee, but in the case of Options, stock appreciation
rights ("SARs") or other rights to acquire Common Stock not later than ten (10)
years after the Award Date.
1.7 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS.
(a) PROVISIONS FOR EXERCISE. Unless the Committee otherwise
expressly provides in the applicable Award Agreement, no Award shall be
exercisable or shall vest until at least six months after the initial Award
Date, and once exercisable an Award shall remain exercisable until the
expiration or earlier termination of the Award.
(b) PROCEDURE. Any exercisable Award shall be deemed to be
exercised when the Corporation receives written notice of such exercise from the
Participant, together with any required payment in accordance with Sections 2.2
and 6.5.
(c) FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share interests
shall be disregarded, but may be accumulated. The Committee, however, may
determine in the case of Eligible Employees that cash, other securities, or
other property will be paid or transferred in lieu of any fractional share
interests. No fewer than 100 shares may be purchased on exercise of any Award
at one time unless the number purchased is the total number at the time
available for purchase under the Award.
1.8 ACCEPTANCE OF NOTES TO FINANCE EXERCISE.
The Corporation may, with the Committee's approval, accept one
or more notes from any Eligible Employee in connection with the exercise or
receipt of any outstanding Award; PROVIDED that any such note shall be subject
to the following terms and conditions:
(a) The principal of the note shall not exceed the amount required
to be paid to the Corporation upon the exercise or receipt of one or more Awards
under this Plan and the note shall be delivered directly to the Corporation in
consideration of such exercise or receipt.
(b) The initial term of the note shall be determined by the
Committee; PROVIDED that the term of the note, including extensions, shall not
exceed a period of 10 years.
(c) The note shall provide for full recourse to the Employee
Participant and shall bear interest at a rate determined by the Committee but
not less than the interest rate necessary to avoid the imputation of interest
under the Code.
(d) If the employment of the Employee Participant terminates, the
unpaid principal balance of the note shall become due and payable on the 10th
business day after such
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termination; PROVIDED, HOWEVER, that if a sale of such shares would cause such
Employee Participant to incur liability under Section 16(b) of the Exchange Act,
the unpaid balance shall become due and payable on the 10th business day after
the first day on which a sale of such shares could have been made without
incurring such liability assuming for these purposes that there are no other
transactions (or deemed transactions in securities of this Corporation) by the
Employee Participant subsequent to such termination.
(e) If required by the Committee or by applicable law, the note
shall be secured by a pledge of any shares or rights financed thereby in
compliance with applicable law.
(f) The terms, repayment provisions, and collateral release
provisions of the note and the pledge securing the note shall conform with all
applicable laws, including rules and regulations of the Federal Reserve Board as
then in effect.
1.9 NO TRANSFERABILITY.
(a) LIMIT ON EXERCISE. Except as provided herein and subject to
Section 6.10, Awards may be exercised only by, and amounts payable or shares
issuable pursuant to an Award shall be paid only to (or for the account of), the
Participant or, if the Participant has died, the Participant's Beneficiary or,
if the Participant has suffered a Disability, the Participant's Personal
Representative, if any, or if there is none, the Participant. Subject to
Section 6.4 and 6.10, the Committee may by express written authorization permit
Awards to be exercised by and/or paid to certain persons or entities related to
the Participant who are transferees of the Participant without consideration, or
to such other persons as the Committee deems appropriate, pursuant to such
conditions and procedures as the Committee in writing may establish and set
forth in or by amendment to an Award Agreement.
(b) LIMIT ON TRANSFER. No option, right or other Award granted
under this Plan including, without limitation, any undistributed performance
share or share of Restricted Stock that has not vested, shall be transferrable
by the Participant or shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge (other
than to the Corporation), except (i) by will or the laws of descent and
distribution, or (ii) pursuant to a qualified domestic relations order or
pursuant to any other exception to transfer restrictions expressly permitted by
the Committee and set forth in the Award Agreement (or an amendment thereto),
but (in the case of Awards intended to satisfy the conditions of Rule 16b-3),
only to the extent permitted by Section 6.10(d) and Rule 16b-3, and (iii) in the
case of Awards comprising Incentive Stock Options, as permitted by the Code.
The Corporation shall disregard any attempted transfer in violation of these
provisions, and the attempt shall be void.
(c) DESIGNATION OF BENEFICIARY. The designation of a Beneficiary
shall not constitute a transfer prohibited by the foregoing provisions.
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II. EMPLOYEE OPTIONS
2.1 GRANTS.
One or more Options may be granted under this Article to any
Eligible Employee. Each Option granted shall be designated by the Committee in
the applicable Award Agreement as either a Nonqualified Stock Option or an
Incentive Stock Option.
2.2 OPTION PRICE.
(a) PRICING LIMITS. The purchase price per share of the Common
Stock covered by each Option shall be determined by the Committee at the time of
the Award, but in the case of Incentive Stock Options shall not be less than
100% (110% in the case of a Participant described in Section 2.4) of the Fair
Market Value of the Common Stock on the date of grant.
(b) PAYMENT PROVISIONS. The purchase price of any shares purchased
on exercise of an Option granted under this Article shall be paid in full at the
time of each purchase in one or a combination of the following methods: (i) in
cash or by electronic funds transfer; (ii) by certified or cashier's check
payable to the order of the Corporation; (iii) if authorized by the Committee or
specified in the applicable Award Agreement, by a promissory note of the
Participant consistent with the requirements of Section 1.8; or (iv) by the
delivery of shares of Common Stock of the Corporation already owned by the
Participant, PROVIDED, HOWEVER, that the Committee may in its absolute
discretion limit the Participant's ability to exercise an Award by delivering
shares, and PROVIDED FURTHER that any shares delivered which were initially
acquired upon exercise of a stock option must have been owned by the Participant
at least six months as of the date of delivery. Shares of Common Stock used to
satisfy the exercise price of an Option shall be valued at their Fair Market
Value on the date of exercise. In addition to the payment methods described
above, the Committee may provide that the Option can be exercised and payment
made by delivering a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Corporation the amount of
sale proceeds necessary to pay the exercise price and, unless otherwise allowed
by the Committee, any applicable tax withholding under Section 6.5. The
Corporation shall not be obligated to deliver certificates for the shares unless
and until it receives full payment of the exercise price therefor and any
related withholding obligations have been satisfied.
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS.
(a) $100,000 LIMIT. To the extent that the aggregate Fair Market
Value of stock with respect to which incentive stock options first become
exercisable by a Participant in any calendar year exceeds $100,000, taking into
account both Common Stock subject to Incentive Stock Options under this Plan and
stock subject to incentive stock options under all other plans of the Company or
any parent corporation, such options shall be treated as nonqualified stock
options. For this purpose, the Fair Market Value of the stock subject to
options shall be determined as of the date the options were awarded. In
reducing the number of options treated as incentive stock options to meet the
$100,000 limit, the most recently granted options shall be reduced first. To
the extent a reduction of simultaneously granted options is necessary to meet
the $100,000 limit, the Committee may, in the manner and to the extent permitted
by law, designate which shares of Common Stock are to be treated as shares
acquired pursuant to the exercise of an Incentive Stock Option.
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(b) OPTION PERIOD. Each Option and all rights thereunder shall
expire no later than ten years after the Award Date or at such earlier time as
provided in or pursuant to Section 6.3.
(c) OTHER CODE LIMITS. There shall be imposed in any Award
Agreement relating to Incentive Stock Options such terms and conditions as from
time to time are required in order that the Option be an "incentive stock
option" as that term is defined in Section 422 of the Code.
(d) OPTIONEE NOTICE REQUIREMENT. A holder of shares of Common
Stock acquired upon exercise of an Incentive Stock Option shall give written
notice to the Company of the disposition of the shares within two years of the
Award Date or one year of the date of exercise.
2.4 LIMITS ON 10% HOLDERS.
No Incentive Stock Option may be granted to any person who, at
the time the Option is granted, owns (or is deemed to own under Section 424(d)
of the Code) shares of outstanding Common Stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation, unless
the exercise price of such Option is at least 110% of the Fair Market Value of
the stock subject to the Option and such Option by its terms is not exercisable
after the expiration of five years from the date such Option is granted.
2.5 OPTION REPRICING/CANCELLATION AND REGRANT/WAIVER OF
RESTRICTIONS.
Subject to Section 1.4 and Section 6.6 and the specific
limitations on Awards contained in this Plan, the Committee from time to time
may authorize, generally or in specific cases only, for the benefit of any
Eligible Employee any adjustment in the exercise or purchase price, the vesting
schedule, the number of shares subject to, the restrictions upon or the term of,
an Award granted under this Article by cancellation of an outstanding Award and
a subsequent regranting of an Award, by amendment, by substitution of an
outstanding Award, by waiver or by other legally valid means. Such amendment or
other action may result, among other changes, in an exercise or purchase price
which is higher or lower than the exercise or purchase price of the original or
prior Award, provide for a greater or lesser number of shares subject to the
Award, or provide for a longer or shorter vesting or exercise period.
2.6 OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY
OTHER CORPORATIONS.
Options and Stock Appreciation Rights may be granted to
Eligible Employees under this Plan in substitution for employee stock options
granted by other entities to persons who are or who become employees of the
Company, in connection with a distribution, merger or reorganization by or with
the granting entity or an affiliated entity, or the acquisition by the Company,
directly or indirectly, of all or a substantial part of the stock or assets of
the employing entity.
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III. STOCK APPRECIATION RIGHTS.
3.1 GRANTS.
In its discretion, the Committee may grant to any Eligible
Employee SARs concurrently with the grant of Options [or other Awards or in
respect of an outstanding Award, in whole or in part, or independently of any
other Award, all] on such terms as set forth by the Committee in the Award
Agreement. Any SAR granted in connection with an Incentive Stock Option shall
contain such terms as may be required to comply with the provisions of Section
422 of the Code and the regulations promulgated thereunder, unless the holder
otherwise agrees.
3.2 EXERCISE OF SARS.
(a) EXERCISABILITY. An SAR granted independently of any other
Award shall be exercisable pursuant to the terms of the Award Agreement. Unless
the Award Agreement or the Committee otherwise provides, an SAR related to
another Award shall be exercisable at such time or times, and to the extent,
that the related Award shall be exercisable and only when the Fair Market Value
of the stock subject to the related Award exceeds the base price of the SAR.
(b) EFFECT ON AVAILABLE SHARES. To the extent that a SAR is
exercised, the number of shares of Common Stock subject to any related Award
shall be charged against the maximum amount of Common Stock that may be
delivered pursuant to Awards under this Plan. The number of shares subject to
the SAR and the related Award of the Participant shall also be reduced by such
number of shares, unless the Award Agreement otherwise provides.
(c) PROPORTIONATE REDUCTION. If an SAR extends to less than all
the shares covered by the related Award and if a portion of the related Award is
thereafter exercised, the number of shares subject to the unexercised SAR shall
be reduced only if and to the extent that the remaining number of shares covered
by such related Award is less than the remaining number of shares subject to the
SAR.
3.3 PAYMENT.
(a) AMOUNT. Unless the Committee otherwise provides in the
applicable Award Agreement, upon exercise of an SAR and surrender of an
exercisable portion of any related Award (to the extent required by Section
3.2), the Participant shall be entitled to receive, subject to Section 6.5,
payment of an amount determined by multiplying
(i) the difference obtained by subtracting the base price
per share of Common Stock under the SAR from the Fair Market Value of
a share of Common Stock on the date of exercise of the SAR, by
(ii) the number of shares with respect to which the SAR shall
have been exercised.
(b) FORM OF PAYMENT. The Committee, in its sole discretion, shall
determine the form in which payment shall be made of the amount determined under
paragraph (a) above,
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either solely in cash, solely in shares of Common Stock (valued at Fair Market
Value on the date of exercise of the SAR), or partly in such shares and partly
in cash, provided that the Committee shall have determined that such exercise
and payment are consistent with applicable law. If the Committee permits the
Participant to elect to receive cash or shares (or a combination thereof) on
such exercise, any such election shall be subject to such conditions as the
Committee may impose and, in the case of any Section 16 Person, any election to
receive cash shall be subject to any applicable limitations under Rule 16b-3,
unless the Committee otherwise provides.
3.4 LIMITED SARS.
The Committee may grant to any Eligible Employee SARs
exercisable only upon or in respect of a change in control or any other
specified event ("Limited SARs") and such Limited SARs may relate to or operate
in tandem or combination with or substitution for Options, other SARs or other
Awards (or any combination thereof), and may be payable in cash or shares based
on the spread between the base price of the SAR and a price based upon or equal
to the Fair Market Value of the Shares during a specified period (not more than
seven months) or at a specified time within a period of not more than seven
months before, after or including the date of such event.
IV. RESTRICTED STOCK AWARDS.
4.1 GRANTS.
The Committee may, in its discretion, grant one or more
Restricted Stock Awards to any Eligible Employee. Each Restricted Stock Award
Agreement shall specify the number of shares of Common Stock to be issued to the
Participant, the date of such issuance, the consideration for such shares (but
not less than the minimum lawful consideration under applicable state law) by
the Participant, the extent (if any) to which and the time (if ever) at which
the Participant shall be entitled to dividends, voting and other rights in
respect of the shares prior to vesting, and the restrictions (which may be based
on performance criteria, passage of time or other factors or any combination
thereof) imposed on such shares and the conditions of release or lapse of such
restrictions. Such restrictions shall not lapse earlier than one year after the
Award Date, except to the extent the Committee may otherwise provide in the
applicable Award Agreement. Stock certificates evidencing shares of Restricted
Stock pending the lapse of the restrictions ("Restricted Shares") shall bear a
legend making the appropriate reference to the restrictions imposed hereunder
and shall be held by the Corporation or by a third party designated by the
Committee until the restrictions on such shares shall have lapsed and the shares
shall have vested in accordance with the provisions of the Award and Section
1.7(a). Upon issuance of the Restricted Stock Award, the Participant may be
required to provide such further assurance and documents as the Committee may
require to enforce the restrictions.
4.2 RESTRICTIONS.
(a) PRE-VESTING RESTRAINTS. Except as provided in Section 4.1 and
1.9, restricted shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged
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or otherwise disposed of or encumbered, either voluntarily or involuntarily,
until the restrictions on such shares have lapsed and the shares become vested.
(b) DIVIDEND AND VOTING RIGHTS. Unless otherwise provided in the
applicable Award Agreement, the holder of a Restricted Stock Award shall not be
entitled to receive dividends on any of the shares of Restricted Stock until the
shares vest. Dividends so restricted shall be retained in a restricted account
until the shares have vested and shall revert to the Corporation if they fail to
vest. Holders of Restricted Stock shall be entitled to vote (or instruct
voting) prior to vesting.
(c) CASH PAYMENTS. If the Participant shall have paid or received
cash (including any dividends) or other property in connection with the
Restricted Stock Award, the Award Agreement shall specify whether and to what
extent such cash or other property shall be returned (with or without an
earnings factor) as to shares of Restricted Stock which do not vest.
4.3 RETURN TO THE CORPORATION.
Unless the Committee otherwise expressly provides, shares of
Restricted Stock that are subject to restrictions at the time of termination of
employment or are subject to other conditions to vesting that have not been
satisfied by the time specified in the applicable Award Agreement shall not vest
and shall be returned to the Corporation in such manner and on such terms as the
Committee shall therein provide.
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES.
5.1 GRANTS OF PERFORMANCE SHARE AWARDS.
The Committee may, in its discretion, grant Performance Share
Awards to Eligible Employees based upon such factors, which in the case of any
Award to a Section 16 Person shall include but not be limited to the
contributions, responsibilities and other compensation of the person as the
Committee shall deem relevant in light of the specific type and terms of the
award. An Award Agreement shall specify the maximum number of shares of Common
Stock (if any) subject to the Performance Share Award, the consideration (but
not less than the minimum lawful consideration) to be paid for any such shares
as may be issuable to the Participant, the duration of the Award and the
conditions upon which delivery of any shares or cash to the Participant shall be
based. The amount of cash or shares or other property that may be deliverable
pursuant to such Award shall be based upon the degree of attainment over a
specified period of not more than ten years (a "performance cycle") as may be
established by the Committee of such measure(s) of the performance of the
Company (or any part thereof) or the Participant as may be established by the
Committee. The Committee may provide for full or partial credit, prior to
completion of such performance cycle or the attainment of the performance
achievement specified in the Award, in the event of the Participant's death,
Retirement, or Total Disability, a Change in Control Event or in such other
circumstances as the Committee (consistent with Section 6.10(c)(2), if
applicable) may determine.
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5.2 GRANTS OF STOCK BONUSES.
The Committee may grant a Stock Bonus to any Eligible Employee
to reward exceptional or special services, contributions or achievements in the
manner and on such terms and conditions (including any restrictions on such
shares) as determined from time to time by the Committee. The number of shares
so awarded shall be determined by the Committee. The Award may be granted
independently or in lieu of a cash bonus.
5.3 DEFERRED PAYMENTS.
The Committee may authorize for the benefit of any Eligible
Employee the deferral of any payment of cash or shares that may become due or of
cash otherwise payable under this Plan, and provide for accreted benefits
thereon based upon such deferment, at the election or at the request of such
Participant, subject to the other terms of this Plan. Such deferment shall be
subject to such further conditions, restrictions or requirements as the
Committee may impose, subject to any then vested rights of Participants.
5.4 SPECIAL PERFORMANCE-BASED SHARE AWARDS
Without limiting the generality of the foregoing, and in
addition to awards granted under other provisions of this Plan, other
performance-based awards within the meaning of Section 162(m) of the Code
("Performance-Based Awards"), whether in the form of restricted stock,
performance stock, phantom stock or other rights, the vesting of which depends
on the performance of the Company on a consolidated, segment, subsidiary or
division basis with reference to net earnings (before or after tax), cash flow,
return on equity or on assets or on net investment, or cost containment or
reduction, or any combination thereof (the "criteria") relative to
preestablished performance goals, may be granted under this Plan. The
applicable business criteria and specific performance goal or goals ("targets")
must be approved by the Committee in advance of applicable deadlines under the
Code and while the performance relating to such targets remains substantially
uncertain. The applicable performance measurement period may be not less than
one nor more than ten years. Performance targets may be adjusted to mitigate
the unbudgeted impact of material, unusual or nonrecurring gains and losses,
accounting changes or other extraordinary events not foreseen at the time the
targets were set.
(a) ELIGIBLE CLASS. The eligible class of persons for Awards under
this Section 5.4 shall be executive officers of the Company.
(b) MAXIMUM AWARD. In no event shall grants made in any fiscal
year to any eligible person under this Section 5.4 relate to more than 143,500
shares or, if payable in cash, a cash amount of more than $3.5 million.
(c) COMMITTEE CERTIFICATION. Before any Performance-Based Award
under this Section 5.4 is paid, the Committee must certify that the material
terms of the Performance-Based Award were satisfied.
(d) TERMS AND CONDITIONS OF AWARDS. The Committee will have
discretion to determine the restrictions or other limitations of the individual
Awards under this Section 5.4, including the authority to reduce Awards, payouts
or vesting or to pay no Awards, in its sole
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discretion, if the Committee preserves such authority at the time of grant by
language to this effect in its authorizing resolutions, the applicable Award
Agreement or otherwise.
VI. OTHER PROVISIONS.
6.1 RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES.
(a) EMPLOYMENT STATUS. Status as an Eligible Employee shall not be
construed as a commitment that any Award will be made under this Plan to an
Eligible Employee or to Eligible Employees generally.
(b) NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in
any other documents related to this Plan or to any Award) shall confer upon any
Eligible Employee or other Participant any right to continue in the employ or
other service of the Company or constitute any contract or agreement of
employment or other service, nor shall interfere in any way with the right of
the Company to change such person's compensation or other benefits or to
terminate the employment of such person, with or without cause, but nothing
contained in this Plan or any document related hereto shall adversely affect any
independent contractual right or duty of such person without the consent of the
party to be bound.
(c) PLAN NOT FUNDED. Awards payable under this Plan shall be
payable in shares or from the general assets of the Corporation, and (except as
provided in Section 1.4(b)), no special or separate reserve, fund or deposit
shall be made to assure payment of such Awards. No Participant, Beneficiary or
other person shall have any right, title or interest in any fund or in any
specific asset (including shares of Common Stock, except as expressly otherwise
provided) of the Company by reason of any Award hereunder. Neither the
provisions of this Plan (nor of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary or other
person. To the extent that a Participant, Beneficiary or other person acquires
a right to receive payment pursuant to any Award hereunder, such right shall be
no greater than the right of any unsecured general creditor of the Company.
6.2 ADJUSTMENTS; ACCELERATION.
(a) ADJUSTMENTS. If there shall occur any extraordinary dividend
or other extraordinary distribution in respect of the Common Stock (whether in
the form of cash, Common Stock, other securities, or other property), or any
reclassification, recapitalization, stock split (including a stock split in the
form of a stock dividend), reverse stock split, reorganization, merger,
combination, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Common Stock or other securities of the Corporation, or there shall
occur any similar extraordinary corporate transaction (or event in respect of
the Common Stock) or a sale of substantially all the assets of the Corporation
as an entirety, then the Committee shall, in such manner and to such extent (if
any) as it deems appropriate and equitable (1) proportionately adjust any or all
of (a) the number and type of shares of Common Stock (or other securities) which
thereafter may be made the subject of Awards (including the specific maxima and
numbers of shares set forth elsewhere in this Plan), (b) the number, amount and
type of shares of Common Stock (or other securities or property) subject to any
or all
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outstanding Awards, (c) the grant, purchase, or exercise price of any or all
outstanding Awards, (d) the securities, cash or other property deliverable upon
exercise of any outstanding Awards, and/or (e) the performance standards
appropriate to any outstanding Awards, or (2) in the case of an extraordinary
dividend or other distribution, recapitalization, reclassification,
reorganization, merger, consolidation, combination, sale of assets, split up,
exchange, or spin off, make provision for a cash payment or for the substitution
or exchange of any or all outstanding Awards (or the cash, securities or
property deliverable to the holder of any or all outstanding Awards) based upon
the distribution or consideration payable to holders of the Common Stock of the
Corporation upon or in respect of such event; PROVIDED, HOWEVER, in each case,
that with respect to Awards of Incentive Stock Options, no such adjustment shall
be made which would cause the Plan to violate Section 424(a) of the Code or any
successor provisions thereto without the written consent of holders materially
adversely affected thereby. In any of such events, the Committee may take such
action sufficiently prior to such event if necessary to permit the Participant
to realize the benefits intended to be conveyed with respect to the underlying
shares in the same manner as is available to shareholders generally.
(b) ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. Unless prior to
a Change in Control Event the Committee determines that, upon its occurrence,
there shall be no acceleration of benefits under Awards or determines that only
certain or limited benefits under Awards shall be accelerated and the extent to
which they shall be accelerated, and/or establishes a different time in respect
of such Event for such acceleration, then upon the occurrence of a Change in
Control Event
(i) each Option and SAR shall become immediately
exercisable,
(ii) Restricted Stock shall immediately vest free of
restrictions, and
(iii) the number of shares, cash or other property covered by
each Performance Share Award shall be issued to the Participant;
PROVIDED, HOWEVER, that in no event shall any Award be accelerated as to any
Section 16 Person to a date less than six months after the Award Date of such
Award. The Committee may override the limitations on acceleration in this
Section 6.2(b) by express provision in the Award Agreement and may accord any
Eligible Employee a right to refuse any acceleration, whether pursuant to the
Award Agreement or otherwise, in such circumstances as the Committee may
approve. Any acceleration of Awards shall comply with applicable legal
requirements.
(c) POSSIBLE EARLY TERMINATION OF ACCELERATED AWARDS. If any
Option or other right to acquire Common Stock under this Plan has been fully
accelerated as permitted by Section 6.2(b), the holder thereof has been accorded
an opportunity to exercise or otherwise realize the benefits thereof and the
Option or other right is not exercised prior to (i) a dissolution of the
Corporation, or (ii) an event described in Section 6.2(a) that the Corporation
does not survive, or (iii) the consummation of an event described in Section
6.2(a) that results in a Change of Control approved by the Board, the Option or
right shall thereupon terminate, subject to any provision that has been
expressly made by the Committee for the survival, substitution, exchange or
other settlement of the Option or right.
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6.3 TERMINATION OF SERVICE; TERMINATION OF SUBSIDIARY STATUS;
DISCRETIONARY PROVISIONS.
(a) OPTIONS/SAR - RESIGNATION OR DISMISSAL. Unless the Committee
otherwise provides in the applicable Award Agreement, if the Participant's
employment by or service to the Company terminates for any reason other than
Retirement, Total Disability or death, the Participant shall have, subject to
earlier termination pursuant to or as contemplated by Section 1.6 or 6.2, three
months from the date of termination to exercise any Option to the extent it
shall have become exercisable on the date of termination, and any Option to the
extent not exercisable on that date shall terminate.
(b) OPTIONS/SAR - RETIREMENT, DEATH OR DISABILITY. Unless the
Committee otherwise provides in the applicable Award Agreement, and except for
limitations under the Code in respect of ISOs, if the Participant's employment
by or service to the Company terminates as a result of Retirement, Total
Disability or death, the Participant, Participant's Personal Representative or
his or her Beneficiary, as the case may be, shall have, subject to earlier
termination pursuant to or as contemplated by Section 1.6, 12 months from the
date of termination to exercise any Option or SAR to the extent it shall have
become exercisable by the date of termination, and any Option or SAR to the
extent not exercisable on that date shall terminate.
(c) CERTAIN SARS. Each SAR granted concurrently or in tandem with
an Option shall have the same post-termination provisions and exercisability
periods as the Option to which it relates, unless the Committee otherwise
provides.
(d) OTHER AWARDS. The Committee shall establish in respect of each
other Award granted hereunder the Participant's rights and benefits (if any) in
the event of a termination of employment or service and in so doing may make
distinctions based upon the cause of termination and the nature of the Award.
(e) CHANGE IN SUBSIDIARY STATUS/CHANGE IN SERVICE. For purposes of
this Plan and any Award hereunder, if an entity ceases to be a Subsidiary, a
termination of employment shall be deemed to have occurred with respect to each
employee of such Subsidiary who does not continue as an employee of another
entity owned, controlled by or under common control with the Company. In the
case of Awards to or held by an Other Eligible Person, the Committee shall
determine the applicable service requirements and the effect of a change in the
extent, status or terms of service.
(f) COMMITTEE DISCRETION. Notwithstanding the foregoing provisions
of this Section 6.3, in the event of, or in anticipation of, a termination of
employment or service with the Company for any reason, other than discharge for
cause, the Committee may, in its discretion, increase the portion of the
Participant's Award available to the Participant, or Participant's Beneficiary
or Personal Representative, as the case may be, or, subject to the provisions of
Section 1.6, extend the exercisability period upon such terms as the Committee
shall determine and expressly set forth in or by amendment to the Award
Agreement.
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6.4 COMPLIANCE WITH LAWS.
This Plan, the granting and vesting of Awards under this Plan
and the offer, issuance and delivery of shares of Common Stock and/or the
payment of money under this Plan or under Awards granted hereunder are subject
to compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, agency or any
regulatory or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith. Any securities
delivered under this Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Corporation, provide such
assurances and representations to the Corporation as the Corporation may deem
necessary or desirable to assure compliance with all applicable legal
requirements.
6.5 TAX WITHHOLDING.
Upon any exercise, vesting, or payment of any Award (or upon
the disposition of shares of Common Stock acquired pursuant to the exercise of
an Incentive Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code), the Company shall have the right at
its option to (i) require the Participant (or Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment of the amount of
any taxes which the Company may be required to withhold with respect to such
Award event or payment or (ii) deduct from any amount payable the amount of any
taxes which the Company may be required to withhold with respect to such cash
payment. In any case where a tax is required to be withheld in connection with
the delivery of shares of Common Stock under this Plan, the Committee may in its
sole discretion grant (either at the time of the Award or thereafter) to the
Participant the right to elect, pursuant to such rules and subject to such
conditions as the Committee may establish, to have the Corporation reduce the
number of shares to be delivered by (or otherwise reacquire) the appropriate
number of shares valued at their then Fair Market Value, to satisfy such
withholding obligation.
6.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION.
(a) BOARD OR COMMITTEE AUTHORIZATION. The Board may, at any time,
terminate or, from time to time, amend, modify or suspend this Plan, in whole or
in part. No Awards may be granted during any suspension of this Plan or after
termination of this Plan, but the Committee shall retain jurisdiction as to
Awards then outstanding in accordance with the terms of this Plan.
(b) SHAREHOLDER APPROVAL. To the extent then required by Rule
16b-3 to secure benefits thereunder or to avoid liability under Section 16 of
the Exchange Act (and Rules thereunder) or required under Sections 422 and 424
of the Code or any other applicable law, or deemed necessary or advisable by the
Board, any amendment to this Plan shall be subject to shareholder approval.
(c) AMENDMENTS TO AWARDS. Without limiting any other express
authority of the Committee under, but subject to the express limits, of this
Plan, the Committee by agreement or resolution may waive conditions of or
limitations on Awards to Eligible Employees that the Committee in the prior
exercise of its discretion has imposed, without the consent of a
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Participant, and may make other changes to the terms and conditions of Awards
that do not affect, in any manner materially adverse to the Employee
Participant, his or her rights and benefits under an Award.
(d) LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No amendment,
suspension or termination of this Plan or change of or affecting any outstanding
Award shall, without written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits of the Participant
or obligations of the Corporation under any Award granted under this Plan prior
to the effective date of such change. Changes contemplated by Section 6.2 shall
not be deemed to constitute changes or amendments for purposes of this
Section 6.6.
6.7 PRIVILEGES OF STOCK OWNERSHIP.
Except as otherwise expressly authorized by the Committee or
this Plan, a Participant shall not be entitled to any privilege of stock
ownership as to any shares of Common Stock not actually delivered to and held of
record by him or her. No adjustment will be made for dividends or other rights
as a shareholders for which a record date is prior to such date of delivery.
6.8 EFFECTIVE DATE OF THIS PLAN.
This Plan shall be effective as of the date it is approved by
the Board, subject to approval of the shareholders of the Corporation.
6.9 TERM OF THIS PLAN.
No Award shall be granted under this Plan after January 31,
2006 (the "termination date"). Unless otherwise expressly provided in this Plan
or in an applicable Award Agreement, any Award granted prior to the termination
date may extend beyond such date, and all authority of the Committee with
respect to Awards hereunder, including the authority to amend an Award, shall
continue during any suspension of this Plan and shall continue in respect of
Awards outstanding on the termination date.
6.10 GOVERNING LAW/CONSTRUCTION/SEVERABILITY.
(a) CHOICE OF LAW. This Plan, the Awards, all documents evidencing
Awards and all other related documents shall be governed by, and construed in
accordance with the laws of the State of California.
(b) SEVERABILITY. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining provisions
of this Plan shall continue in effect.
(c) PLAN CONSTRUCTION.
(1) RULE 16b-3; BIFURCATION. It is the intent of the
Corporation that this Plan and Awards hereunder satisfy and be
interpreted in a manner that in the case of Participants who are or
may be subject to Section 16 of the Exchange Act
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satisfies the applicable requirements of Rule 16b-3 so that such
persons (unless they otherwise agree) will be entitled to the benefits
of Rule 16b-3 or other exemptive rules under Section 16 of the
Exchange Act and will not be subjected to avoidable liability
thereunder. If any provision of this Plan or of any Award would
otherwise frustrate or conflict with the intent expressed above, that
provision to the extent possible shall be interpreted and deemed
amended so as to avoid such conflict, but to the extent of any
remaining irreconcilable conflict with such intent as to such persons
in the circumstances, such provision shall be disregarded.
Notwithstanding anything to the contrary in this Plan, the provisions
of this Plan may at any time be bifurcated by the Board or the
Committee in any manner so that certain provisions of this Plan or any
Award Agreement intended (or required in order) to satisfy the
applicable requirements of Rule 16b-3 are only applicable to Section
16 Persons and to those Awards to Section 16 Persons intended to
satisfy the requirements of Rule 16b-3.
(2) SECTION 162(m). It is the further intent of the Company
that Options or SARs with an exercise or base price not less than Fair
Market Value on the date of grant and performance awards under Section
5.4 of this Plan that are granted to or held by an executive officer
of the Corporation shall (if so designated by the Committee) qualify
as performance-based compensation under Section 162(m) of the Code,
and this Plan shall be interpreted consistent with such intent.
(d) TRANSITION PERIOD PROVISIONS. During the applicable transition
period under new Rule 16b-3, any derivative security the grant of which is
intended to be exempt from Rule 16b-3 shall not be transferable other than as
permitted by former Rule 16b-3(d)(ii), and the consideration for any grant or
award shall conform to any additional limitations under former Rule 16b-3.
6.11 CAPTIONS.
Captions and headings are given to the sections and subsections
of this Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
6.12 NON-EXCLUSIVITY OF PLAN.
Nothing in this Plan shall limit or be deemed to limit the
authority of the Board or the Committee to grant awards or authorize any other
compensation, with or without reference to the Common Stock, under any other
plan or authority.
VII. DEFINITIONS.
7.1 DEFINITIONS.
(a) "AWARD" shall mean an award of any Option, SAR, Restricted
Stock, Stock Bonus, Performance-Based Award or other Performance Share Award,
dividend equivalent or deferred payment right or other right or security that
would constitute a "derivative security" under Rule 16a-1(c) of the Exchange
Act, or any combination thereof, whether alternative or cumulative, authorized
by and granted under this Plan.
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(b) "AWARD AGREEMENT" shall mean any writing setting forth the
terms of an Award that has been authorized by the Committee.
(c) "AWARD DATE" shall mean the date upon which the Committee took
the action granting an Award or such later date as the Committee designates as
the Award Date.
(d) "AWARD PERIOD" shall mean the period beginning on an Award Date
and ending on the expiration date of such Award.
(e) "BENEFICIARY" shall mean the person, persons, trust or trusts
designated by a Participant or, in the absence of a designation, entitled by
will or the laws of descent and distribution, to receive the benefits specified
in the Award Agreement and under this Plan in the event of a Participant's
death, and shall mean the Participant's executor or administrator if no other
Beneficiary is designated and able to act under the circumstances.
(f) "BOARD" shall mean the Board of Directors of the Corporation.
(g) "CHANGE IN CONTROL EVENT" shall mean any of the following:
(1) Approval by the shareholders of the Corporation of the
dissolution or liquidation of the Corporation;
(2) Approval by the shareholders of the Corporation of an
agreement to merge or consolidate, or otherwise reorganize, with or
into one or more entities that are not Subsidiaries, as a result of
which less than 50% of the outstanding voting securities of the
surviving or resulting entity immediately after the reorganization
are, or will be, owned, directly or indirectly, by shareholders of the
Corporation immediately before such reorganization (assuming for
purposes of such determination that there is no change in the record
ownership of the Corporation's securities from the record date for
such approval until such reorganization and that such record owners
hold no securities of the other parties to such reorganization, but
including in such determination any securities of the other parties to
such reorganization held by affiliates of the Corporation);
(3) Approval by the shareholders of the Corporation of the
sale, lease, conveyance or other disposition of all or substantially
all of the Corporation's business and/or assets to a person or entity
which is not a Subsidiary;
(4) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act but excluding any person described in and
satisfying the conditions of Rule 13d-1(b)(1) thereunder), other than
a person who is the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of more than 20% of the outstanding Shares of Common
Stock at the time of adoption of this Plan (or an affiliate,
successor, heir, descendent or related party of or to any such
person), becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) directly or indirectly, of securities of the
Corporation representing more than 25% of the combined voting power of
the Corporation's then outstanding securities entitled to then vote
generally in the election of directors of the Corporation; or
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(5) A majority of the Board of Directors of the Company not
being comprised of Continuing Directors. For purposes of this clause,
"Continuing Directors" are persons who were (A) members of the Board
of Directors of the Company at the time of adoption of this Plan or
(B) nominated for election or elected to the Board of Directors of the
Company with the affirmative vote of at least a majority of the
directors who were Continuing Directors at the time of such nomination
or election.
(h) "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(i) "COMMISSION" shall mean the Securities and Exchange Commission.
(j) "COMMITTEE" shall mean a committee appointed by the Board to
administer this Plan, which committee shall be comprised of at least two
directors, each of whom, during such time as one or more Participants may be
subject to Section 16 of the Exchange Act, shall be Disinterested; PROVIDED,
that until the Corporation has a class of securities registered pursuant to
Section 12 of the Exchange Act and the applicable transition period under Rule
16b-3 has expired, the Board as a whole shall comprise the Committee without
regard to whether its members are "Disinterested" unless the Board has appointed
a committee comprised of at least three Disinterested directors to administer
the Plan..
(k) "COMMON STOCK" shall mean the Common Stock of the Corporation
and such other securities or property as may become the subject of Awards, or
become subject to Awards, pursuant to an adjustment made under Section 6.2 of
this Plan.
(l) "COMPANY" shall mean, collectively, the Corporation and its
Subsidiaries.
(m) "CORPORATION" shall mean Pacific Greystone Corporation, a
Delaware corporation, and its successors.
(n) "DISINTERESTED" shall mean disinterested or "outside" director
within the meaning of any applicable regulatory requirements, including Rule
16b-3 and Section 162(m) of the Code.
(o) "ELIGIBLE EMPLOYEE" shall mean an officer (whether or not a
director) or key employee of the Company, or any Other Eligible Person, as
determined by the Committee in its discretion.
(p) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
(q) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(r) "FAIR MARKET VALUE" on any date shall mean (i) if the stock is
listed or admitted to trade on a national securities exchange, the closing price
of the stock on the Composite Tape, as published in the Western Edition of THE
WALL STREET JOURNAL, of the principal national securities exchange on which the
stock is so listed or admitted to trade, on
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such date, or, if there is no trading of the stock on such date, then the
closing price of the stock as quoted on such Composite Tape on the next
preceding date on which there was trading in such shares; (ii) if the stock is
not listed or admitted to trade on a national securities exchange, the last
price for the stock on such date, as furnished by the National Association of
Securities Dealers, Inc. ("NASD") through the NASDAQ National Market Reporting
System or a similar organization if the NASD is no longer reporting such
information; (iii) if the stock is not listed or admitted to trade on a national
securities exchange and is not reported on the National Market Reporting System,
the mean between the bid and asked price for the stock on such date, as
furnished by the NASD or a similar organization; or (iv) if the stock is not
listed or admitted to trade on a national securities exchange, is not reported
on the National Market Reporting System and if bid and asked prices for the
stock are not furnished by the NASD or a similar organization, the value as
established by the Committee at such time for purposes of this Plan.
(s) "INCENTIVE STOCK OPTION" shall mean an Option which is
designated and intended as an incentive stock option within the meaning of
Section 422 of the Code, the award of which contains such provisions (including
but not limited to the receipt of shareholder approval of this Plan, if the
award is made prior to such approval) and is made under such circumstances and
to such persons as may be necessary to comply with that section.
(t) "NONQUALIFIED STOCK OPTION" shall mean an Option that is
designated as a Nonqualified Stock Option and shall include any Option intended
as an Incentive Stock Option that fails to meet the applicable legal
requirements thereof. Any Option granted hereunder that is not designated as an
incentive stock option shall be deemed to be designated a nonqualified stock
option under this Plan and not an incentive stock option under the Code.
(u) "OPTION" shall mean an option to purchase Common Stock under
this Plan. The Committee shall designate any Option granted to an Eligible
Employee as a Nonqualified Stock Option or an Incentive Stock Option.
(v) "OTHER ELIGIBLE PERSON" shall mean any individual consultant or
advisor, or (to the extent provided in the next sentence) agent, who (A) renders
or has rendered BONA FIDE services (other than services in connection with the
offering or sale of securities of the Company in a capital raising transaction)
to the Company, (B) is not a director of the Corporation, and (C) is selected to
participate in this Plan by the Committee. A non-employee agent providing BONA
FIDE services to the Company (other than as an eligible advisor or consultant)
may also be selected as an Other Eligible Person if such agent's participation
in this Plan would not adversely affect (x) the Corporation's eligibility to use
Form S-8 to register under the Securities Act the offer and sale by the Company
of shares issuable under this Plan or (y) the Corporation's compliance with any
other applicable laws.
(w) "PARTICIPANT" shall mean an Eligible Employee who has been
granted an Award under this Plan.
(x) "PERFORMANCE SHARE AWARD" shall mean an award of a right to
receive shares of Common Stock under Section 5.1, or to receive shares of Common
Stock or other compensation (including cash) under Section 5.4, the issuance or
payment of which is
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contingent upon, among other conditions, the attainment of performance
objectives specified by the Committee.
(y) "PERSONAL REPRESENTATIVE" shall mean the person or persons who,
upon the disability or incompetence of a Participant, shall have acquired on
behalf of the Participant, by legal proceeding or otherwise, the power to
exercise the rights or receive benefits under this Plan by virtue of having
become the legal representative of the Participant.
(z) "PLAN" shall mean this Pacific Greystone Corporation 1996 Stock
Option and Award Plan.
(aa) "RESTRICTED STOCK" shall mean shares of Common Stock awarded to
a Participant subject to payment of such consideration, if any, and such
conditions on vesting (which may include, among others, the passage of time,
specified performance objectives or other factors) and such transfer and other
restrictions as are established in or pursuant to this Plan and the related
Award Agreement, for so long as such shares remain unvested under the terms of
the applicable Award Agreement.
(bb) "RETIREMENT" shall mean retirement with the consent of the
Company or retirement from active service as an employee or officer of the
Company on or after attaining age 65.
(cc) "RULE 16b-3" shall mean Rule 16b-3 as promulgated by the
Commission pursuant to the Exchange Act, as amended from time to time, but
subject to any applicable transition rules.
(dd) "SECTION 16 PERSON" shall mean a person subject to Section
16(a) of the Exchange Act.
(ee) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended from time to time.
(ff) "STOCK APPRECIATION RIGHT" or "SAR" shall mean a right
authorized under this Plan to receive a number of shares of Common Stock or an
amount of cash, or a combination of shares and cash, the aggregate amount or
value of which is determined by reference to a change in the Fair Market Value
of the Common Stock.
(gg) "STOCK BONUS" shall mean an Award of shares of Common Stock for
no consideration other than past services and without restriction other than
such transfer or other restrictions as the Committee may deem advisable to
assure compliance with law.
(hh) "SUBSIDIARY" shall mean any corporation or other entity a
majority of whose outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Corporation.
(ii) "TOTAL DISABILITY" shall mean a "permanent and total
disability" within the meaning of Section 22(e)(3) of the Code and such other
disabilities, infirmities, afflictions or conditions as the Committee by rule
may include.
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EXHIBIT 5
[O'MELVENY & MYERS LLP LETTERHEAD]
June
25th
1 9 9 6
Pacific Greystone Corporation
6767 Forest Lawn Drive, Suite 300
Los Angeles, California 90068
Ladies and Gentlemen::
This opinion is rendered in connection with the filing by Pacific
Greystone Corporation, a Delaware corporation (the "Company"), of a Registration
Statement on Form S-8 (the "Registration Statement") under the Securities Act of
1933, as amended, covering 825,000 shares of Common Stock, $.01 par value (the
"Shares"), of the Company to be issued pursuant to the Pacific Greystone
Corporation 1996 Stock Option and Award Plan (the "Plan").
We have examined such appropriate records of the Company and other
documents as we have deemed pertinent as a basis for this opinion.
Based upon such examination and upon such matters of fact and law as
we have deemed relevant, we are of the opinion that when the Shares are issued
and paid for, in accordance with the authorization by the Company's board of
directors and appropriate Committee action under the Plan and with the
provisions of the Plan and relevant agreements duly authorized by and completed
in accordance with the terms of the Plan, the Shares will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
O'MELVENY & MYERS LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 pertaining to the Pacific Greystone Corporation 1996 Stock Option and
Award Plan of our report dated January 24, 1996 included in the Pacific
Greystone Corporation Annual Report on Form 10-K for the year ended December 31,
1995.
ERNST & YOUNG LLP
Los Angeles, California
June 25, 1996
