<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 1, 1997.
Registration No. 33-89460
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------
STB SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1855896
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1651 NORTH GLENVILLE DRIVE
RICHARDSON, TEXAS 75081
(Address of Principal Executive Offices) (Zip Code)
---------------
1995 LONG TERM INCENTIVE PLAN
(Full title of the plan)
WILLIAM E. OGLE
CHIEF EXECUTIVE OFFICER
STB SYSTEMS, INC.
1651 NORTH GLENVILLE DRIVE
RICHARDSON, TEXAS 75081
(972) 234-8750
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
---------------
Copy to:
JOHN MCKNIGHT
LOCKE PURNELL RAIN HARRELL
(A PROFESSIONAL CORPORATION)
2200 ROSS AVENUE, SUITE 2200
DALLAS, TEXAS 75201
(214) 740-8000
CALCULATION OF REGISTRATION FEE
<TABLE>
=====================================================================================================
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price per Aggregate Offering Registration Fee*
Share* Price*
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 150,000 shares $28.75 $4,312,500 $1,307.00
par value
=====================================================================================================
</TABLE>
* Estimated solely for the purpose of calculating the registration fee. This
fee was calculated pursuant to Rule 457(c) and (h) under the Securities Act
of 1933, as amended, on the basis of the average of the high and low prices
for the Common Stock of the Company reported on the NASDAQ - National
Market System on October 30, 1997.
In addition, pursuant to Rule 416 under the Securities Act of 1933, as
amended, this Registration Statement also covers shares of Common Stock of
the Company issuable to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
<PAGE>
This Post-Effective Amendment No. 1 to Registration Statement
No. 33-89460 on Form S-8 (the "Registration Statement") is being filed to
register 150,000 additional shares of Common Stock of STB Systems, Inc. (the
"Company") pursuant to General Instruction E to Form S-8; accordingly, the
contents of the Registration Statement are incorporated by reference in this
Post-Effective Amendment No. 1.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information specified by Item 1 and Item 2 of Part I of Form S-8 is
omitted from this filing in accordance with provisions of Rule 428 under the
Securities Act of 1933 (the "Securities Act") and the introductory Note to Part
I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents set forth below are incorporated by reference in this
Registration Statement. All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act"), prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part
hereof commencing on the respective dates on which such documents are filed.
Any statement contained in a document 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 superseded, to constitute a part of this
Registration Statement.
(1) Annual Report on Form 10-K for the year ended October 31, 1996.
(2) Annual Report on Form 10-K/A for the year ended October 31, 1996.
(3) Quarterly Reports on Form 10-Q for the quarters ended April 30 and
January 31, 1997.
(4) The description of the Common Stock which is contained in the
company's Registration Statement on Form 8-A dated February 9, 1995,
filed pursuant to Section 12 of the Exchange Act, and all amendments
thereto and reports which have been filed for the purpose of updating
such description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act (the "TBCA") permits a
corporation to indemnify certain persons, including officers and directors and
former officers and directors, and to purchase insurance with respect to
liability arising out of their capacity or status as officers and directors.
Article Eleven of the Company's Amended and Restated Articles of
Incorporation provides as follows:
The corporation shall indemnify any person who was, is, or is threatened
to be made a named defendant or respondent in a proceeding (as hereinafter
defined) because the person (a) is or was a director or officer of the
corporation or (b) while a director or officer of the corporation, is or
I-1
<PAGE>
was serving at the request of the corporation as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, or similar
functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan, or
other enterprise, to the fullest extent that a corporation may grant
indemnification to a person serving in such capacity under the Texas
Business Corporation Act, as the same exists or may hereafter be
amended.
Such right shall be a contract right and shall include the right to be
paid by the corporation for all expenses incurred in defending any
such proceeding in advance of its final disposition to the maximum
extent permitted under the Texas Business Corporation Act, as the same
exists or may hereafter be amended. If a claim for indemnification or
advancement of expenses hereunder is not paid in full by the
corporation within 90 days after a written claim has been received by
the corporation, the claimant may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim and,
if successful in whole or in part, the claimant shall be entitled to
be paid also the expenses of prosecuting such claim. It shall be a
defense to any such action that such indemnification or advancement of
costs of defense is not permitted under the Texas Business Corporation
Act, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its
Board of Directors or any committee thereof, special legal counsel, or
shareholders) to have made its determination prior to the commencement
of such action that indemnification of, or advancement of costs of
defense to, the claimant is permissible in the circumstances nor an
actual determination by the corporation (including its Board of
Directors or any committee thereof, special legal counsel, or
shareholders) that such indemnification or advancement is not
permissible shall be a defense to the action or create a presumption
that such indemnification or advancement is not permissible.
The corporation additionally may indemnify any person covered by the
grant of mandatory indemnification contained above to such further
extent as is permitted by law and may indemnify any other person to
the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened, pending,
or completed action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, any appeal in such an
action, suit, or proceeding, and any inquiry or investigation that
could lead to such an action, suit, or proceeding.
In addition, Article IX of the Company's Amended and Restated Bylaws
provides for such indemnification of officers and directors within the limits
set forth in the Amended and Restated Articles of Incorporation and applicable
provisions of Texas law. The Company has also entered into indemnification
agreements with each of its directors and director nominees which provide that
such persons will be indemnified to the fullest extent permitted by the Texas
Business Corporation Act.
Article Twelve of the Company's Amended and Restated Articles of
Incorporation additionally includes a provision eliminating the monetary
liability of a director to the Company or its shareholders for an act or
omission in the director's capacity as a director to the fullest extent
permitted by Texas law.
As of December 16, 1994, the Company, on the one hand, and Messrs. William
E. Ogle, William D. Balthaser, Jr. and Mark Sims (the "Founding Shareholders"),
on the other, entered into a Tax Allocation and Indemnification Agreement (the
"Tax Agreement") relating to their respective income tax liabilities. Since the
Company became subject to corporate income taxation as a C corporation and
terminated its status as an S corporation upon the completion of its initial
public offering of shares of its Common Stock, the reallocation of income and
deductions between the period during which the Company was treated as an S
corporation and a period during which the Company was or will be subject to
corporate income taxation as a C corporation may increase the taxable income of
one party in one period while decreasing that of another party in another
period. The Tax Agreement generally provides that the Founding Shareholders are
to be indemnified by the Company with respect to federal and state income taxes
(plus interest and penalties) arising due to taxable income shifted from a C
corporation taxable year to a taxable year in which the Company was an S
corporation, and that the Company is to
I-2
<PAGE>
be indemnified by the Founding Shareholders with respect to federal and state
income taxes (plus interest and penalties) arising due to taxable income
shifted from an S corporation taxable year to a C corporation taxable year;
provided, however, that only in the case of the Founding Shareholders'
obligation to indemnify the Company, such obligation shall be reduced by an
amount equal to the federal or state tax benefit (if any) derived by the
Company due to the shift of taxable income from a taxable year in which the
Company was an S corporation to a C corporation taxable year and shall not
exceed the amount, if any, by which (i) the amount of the reduction in the
liability for taxes and interest thereon of a Founding Shareholder that
results from the shifting of S corporation taxable income to a C corporation
taxable year of the Company, exceeds (ii) all reasonable costs incurred by
the Founding Shareholder reasonably attributable to securing such reduction
in liability for taxes. Any payment made by the Company to the Founding
Shareholders pursuant to the Tax Agreement may be considered by the Internal
Revenue Service or the state taxing authorities to be nondeductible by the
Company for income tax purposes.
The Company anticipates obtaining liability insurance coverage for its
officers and directors which will entitle the Company to be reimbursed up to
$5.0 million for certain indemnity payments it may be required or permitted
to make to such persons with respect to actions arising out of the
performance of their duties.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
5.1 Opinion of Locke Purnell Rain Harrell (A Professional Corporation).
23.1 Consent of Price Waterhouse LLP, Independent Accountants.
23.2 Consent of Locke Purnell Rain Harrell (A Professional Corporation)
(included in opinion filed as Exhibit 5.1).
*24.1 Powers of Attorney.
99.1 STB Systems, Inc. 1995 Long Term Incentive Plan (as amended and
restated effective November 1, 1996).
- ----------
* Previously filed
ITEM 9. UNDERTAKINGS.
The Company herein 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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in the
Registration Statement;
I-3
<PAGE>
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Securities and Exchange Commission by the Company
pursuant to Section 13 or Section 15(d) of 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.
(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.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Company'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 that time shall be deemed to be the initial bona
fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company 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 Company of expenses
incurred or paid by a director, officer or controlling person of the
Company 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 Company 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.
I-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Richardson, State of
Texas on October 31, 1997.
STB SYSTEMS, INC.
By: /s/ WILLIAM E. OGLE
-----------------------------------
William E. Ogle
Chairman of the Board of Directors
and Chief Executive Officer
I-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Chief Executive Officer and October 31, 1997
/s/ WILLIAM E. OGLE Chairman of the Board of
- ------------------------- Directors (Principal Executive
William E. Ogle Officer)
Executive Vice President, Chief October 31, 1997
* Operating Officer, Assistant
- ------------------------- Secretary and Director
Randall D. Eisenbach
Chief Financial Officer, Vice October 31, 1997
* President of Strategic
- ------------------------- Marketing and Director
James L. Hopkins
Vice President of Sales and October 31, 1997
* Marketing and Director
- -------------------------
J. Shane Long
Director of Legal and Finance, October 31, 1997
* Secretary and Treasurer
- ------------------------- (Principal Financial Officer
Bryan F. Keyes and Principal Accounting Officer)
* Director October 31, 1997
- -------------------------
James J. Byrne
* Director October 31, 1997
- -------------------------
Lawrence E. Wesneski
/s/ DENNIS G. SABO Director October 31, 1997
- -------------------------
Dennis G. Sabo
*By: /s/ WILLIAM E. OGLE
- -------------------------
Attorney-in-fact
I-6
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
------- -------
5.1 Opinion of Locke Purnell Rain Harrell (A Professional
Corporation).
23.1 Consent of Price Waterhouse LLP, Independent Accountants.
23.2 Consent of Locke Purnell Rain Harrell (A Professional
Corporation) (included in opinion filed as Exhibit 5.1).
24.1 Powers of Attorney.
99.1 STB Systems, Inc. 1995 Long Term Incentive Plan (as amended
and restated effective November 1, 1996).
<PAGE>
EXHIBIT 5.1
(214)740-8675
November 1, 1997
STB Systems, Inc.
1651 North Glenville Drive
Richardson, Texas 75081
RE: REGISTRATION OF AN ADDITIONAL 150,000 SHARES OF COMMON STOCK,
PAR VALUE $.01 PER SHARE, PURSUANT TO A POST-EFFECTIVE AMENDMENT NO. 1
TO THE COMPANY'S REGISTRATION STATEMENT ON FORM S-8, REGISTRATION
NO. 33-89460
Gentlemen:
We have acted as counsel for STB Systems, Inc., a Texas corporation (the
"Company"), in connection with the registration under the Securities Act of
1933, as amended (the "Securities Act"), pursuant to a Post-Effective Amendment
No. 1 to a Registration Statement on Form S-8 (the "Registration Statement"), of
150,000 shares of common stock, par value $.01 per share, of the Company (the
"Common Stock") to be offered to employees of the Company pursuant to the STB
Systems, Inc. 1995 Long Term Incentive Plan (as amended and restated effective
November 1, 1996) (the "Plan").
Based upon our examination of such papers and documents as we have deemed
relevant or necessary in rendering this opinion, and based on our review of the
Texas Business Corporation Act, we hereby advise you that we are of the opinion
that, assuming with respect to shares of Common Stock issued after the date
hereof, (i) the receipt of proper consideration for the issuance thereof in
excess of the par value thereof, (ii) the availability of a sufficient number of
shares of Common Stock authorized by the Company's Amended and Restated Articles
of Incorporation then in effect, (iii) compliance with the terms of any
agreement entered into in connection with any options or shares of Common Stock
issued under the Plan, (iv) no change occurs in the applicable law or the
pertinent facts, and (v) the proper grant of options under the Plan, shares of
Common Stock purchasable under the Plan will be legally issued, fully paid
and non-assessable shares of Common Stock.
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement filed by the Company with the Securities and Exchange Commission for
the registration under the
<PAGE>
STB Systems, Inc.
November 1, 1997
Page 2
Securities Act of 150,000 shares of Common Stock covered by the Plan. By so
consenting, we do not thereby admit that our firm's consent is required by
Section 7 of the Securities Act.
Very truly yours,
LOCKE PURNELL RAIN HARRELL
(A Professional Corporation)
By: /s/ JOHN B. MCKNIGHT
-------------------------------
John B. McKnight
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8, as amended by Post-Effective Amendment No. 1., of our
report dated December 2, 1996, which appears on page 17 of the 1996 Annual
Report to Shareholders of STB Systems, Inc., which is incorporated by reference
in STB Systems, Inc.'s Annual Report on Form 10-K for the year ended October 31,
1996. We also consent to the incorporation by reference of our report on the
Financial Statement Schedule, which appears in such Annual Report on Form 10-K.
PRICE WATERHOUSE LLP
Dallas, Texas
October 31, 1997
<PAGE>
EXHIBIT 99.1
STB SYSTEMS, INC.
1995 LONG TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 1, 1996)
1. PURPOSE
The STB SYSTEMS, INC. 1995 LONG TERM INCENTIVE PLAN (AS AMENDED AND
RESTATED EFFECTIVE NOVEMBER 1, 1996) (the "RESTATED PLAN") has been established
by STB SYSTEMS, INC. (the "CORPORATION") to:
(a) Attract and retain key executives and other key employees;
(b) Motivate participating employees, by means of appropriate
incentives, to achieve long-range goals;
(c) Provide incentive compensation opportunities that are competitive
with those of other corporations; and
(d) Further identify the interests of eligible employees with those
of the Corporation's other shareholders through compensation alternatives based
on the Corporation's Common Stock;
and thereby promote the long-term financial interest of the Corporation,
including the growth in value of the Corporation's equity and enhancement of
long-term shareholder return.
2. SCOPE
Awards under the Restated Plan may be granted in the form of (i)
incentive stock options ("INCENTIVE STOCK OPTIONS") as provided in Section 422
of the Internal Revenue Code of 1986, as amended (the "CODE"), (ii)
non-qualified stock options ("NON-QUALIFIED OPTIONS") (unless otherwise
indicated, references in the Restated Plan to "options" include incentive
stock options and non-qualified options), (iii) shares of the Common Stock of
the Corporation (the "COMMON STOCK") that are restricted as provided in
paragraph 12 hereof ("RESTRICTED SHARES") or (iv) units valued based upon the
long-term performance of the Corporation as determined pursuant to paragraph
13 hereof ("PERFORMANCE UNITS"). Options may be accompanied by stock
appreciation rights ("RIGHTS"). Rights may also be granted without
accompanying options. The maximum aggregate number of performance units,
shares of Common Stock with respect to which options and restricted shares
are granted, and rights granted without accompanying options, which may be
awarded from time to time under the Restated Plan shall be 1,000,000 (subject
to adjustment as described in paragraph 16 hereof). The maximum number of
Shares of Common Stock with respect to which incentive stock options,
non-qualified options, restricted shares and performance units may be granted
in any one year to any employee shall not exceed 250,000. Shares of Common
Stock with respect to which awards are granted may be, in whole or in part,
authorized and unissued shares, authorized and issued shares held in the
treasury of the Corporation, or issued shares reacquired by the Corporation,
as the Board of Directors of the Corporation (the "BOARD OF DIRECTORS") shall
from time to time determine. If for any reason (other than surrender of
options or Deemed Options (as herein defined) upon exercise of rights as
provided in paragraph 9 hereof) any shares as to which an option has been
granted cease to be subject to purchase thereunder, or any restricted shares
are forfeited to the Corporation, or any right issued without accompanying
options terminates or expires without being exercised, then the shares in
respect of which such option or right was granted, or such restricted shares,
shall become available for subsequent awards under the Restated Plan to the
extent permitted by the Code and other applicable law.
<PAGE>
3. EFFECTIVE DATE
The Plan originally became effective on January 1, 1995 and, unless
sooner terminated pursuant to the terms hereof, the Plan shall terminate on
December 31, 2004. The Restated Plan was adopted effective on November 1, 1996.
The Restated Plan (and each award granted under the Restated Plan) will become
null and void unless the Restated Plan is approved by the affirmative vote of
the holders of a majority of the shares of voting stock of all classes of the
Corporation present, or represented, and entitled to vote at a meeting of
shareholders of the Corporation at which a majority of the outstanding shares of
the Corporation's voting stock is voted on the proposal to approve the Restated
Plan. The agreement relating to each award granted under the Restated Plan
prior to approval of the Restated Plan by shareholders as aforesaid shall
expressly provide that such award will not be exercisable or payable prior to
such approval and that such award will become null and void unless the Restated
Plan is approved by the shareholders. Effective November 1, 1996, it is the
intent of the Corporation for the Restated Plan to comply with new Rule 16b-3,
issued by the Securities and Exchange Commission on May 31, 1996, "New Rule
16b-3.".
4. ADMINISTRATION
(a) The Restated Plan shall be administered, construed and
interpreted by the Board of Directors of the Corporation; provided, that the
Board of Directors, in its discretion, may delegate any or all of its authority,
powers and discretion under the Restated Plan to the Stock Option Committee of
the Board of Directors. (All references herein to the "Committee" shall be
deemed to refer exclusively to the Stock Option Committee or any successor
thereto of the Board of Directors of the Corporation.) Notwithstanding anything
in this paragraph 4 to the contrary, the Committee shall consist of two or more
"outside directors," as such term is defined under the Treasury Regulations
under Code section 162(m), who are also "non-employee directors," as such term
as defined under New Rule 16b-3.
(b) With respect to persons subject to Section 16 of the Securities
Exchange Act of 1934 (the "1934 Act"), transactions under the Restated Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the 1934 Act. To the extent any provision of the Restated Plan
or action by the Board of Directors or the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Board of Directors or the Committee, as applicable.
(c) The Board of Directors shall have plenary authority in its sole
discretion and subject to the express provisions of the Restated Plan, to grant
options, to determine the purchase price of the Common Stock covered by each
option (the "EXERCISE PRICE"), the term of each option and to change the same,
the class or classes of shares of Common Stock to be covered by each option, the
Employees (as defined in paragraph 5 hereof) to whom, and the time or times at
which, options shall be granted and the number of shares to be covered by each
option; to designate options as incentive stock options or non-qualified options
and to determine which options shall be accompanied by rights; to grant rights
without accompanying options; to determine the Employees to whom and the time or
times at which such rights shall be granted and the exercise price, term, and
number of shares of Common Stock covered by any Deemed Option (as defined in
paragraph 9 hereof) corresponding thereto; to grant restricted shares and
performance units and to determine the term of the restricted period and
appropriate long-term objectives and other conditions applicable to such
restricted shares or performance units, the Employees to whom and the time or
times at which restricted shares or performance units shall be granted and the
number of restricted shares or performance units to be covered by each grant; to
interpret the Restated Plan; to prescribe, amend and rescind rules and
regulations relating to the Restated Plan; to determine the terms and provisions
of the option agreements, and the right, restricted share and performance unit
agreements entered into in connection with awards under the Restated Plan; to
accelerate outstanding awards and extend the exercisability thereof in its
discretion; to prepare and distribute in such manner as the Board of Directors
determines to be appropriate information concerning the Restated Plan, and to
make all other determinations deemed necessary or advisable for the
administration of the
2
<PAGE>
Restated Plan. The Board of Directors may delegate to one or more of its
members or to one or more agents such administrative duties as it may deem
advisable, and the Board of Directors or any person to whom it has delegated
duties as aforesaid may employ one or more persons to render advice with
respect to any responsibility the Board of Directors or such person may have
under the Restated Plan; PROVIDED, HOWEVER, that except as authorized in
paragraph 4(a) above, the Board of Directors shall not delegate its authority
to construe and interpret the Restated Plan, to determine which Employees may
participate in the Restated Plan, or its authority to make grants of options,
restricted shares, performance units and rights.
(d) If appointed, the Committee shall function as follows. The
Committee may adopt such rules as it deems necessary, desirable or appropriate.
The Committee may act at a meeting or in writing without a meeting. The
Committee shall elect one of its members as chairman, appoint a secretary (who
may or may not be a Committee member, as the case may be) and advise the Board
of Directors of such actions. The secretary shall keep a record of all minutes
and forward all necessary communications to the Corporation. A majority of the
Committee shall constitute a quorum. All decisions of the Committee shall be
made by a vote of not less than a majority of the Committee members present at a
meeting of the Committee at which a quorum is present or by a written consent
signed by all of the members of the Committee. A dissenting Committee member
who, within a reasonable time after he has knowledge of any action or failure to
act in accordance with the preceding sentence, registers his dissent in writing
delivered to the other Committee members and to the Board of Directors, shall
not be responsible for any such action or failure to act.
(e) All usual and reasonable expenses of the Committee shall be paid
by the Corporation, and no member shall receive compensation with respect to his
services for the Committee except as may be authorized by the Board of
Directors. The Board of Directors and the Committee may employ attorneys,
consultants, accountants or other persons, and the Board of Directors, the
Committee, the Corporation and its officers and directors shall be entitled to
rely upon the advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the Board of Directors
or the Committee in good faith shall be final and binding upon all Employees who
have received awards, the Corporation and all other interested persons. No
member of Board of Directors or the Committee shall be personally liable for any
action, determination, or interpretation taken or made in good faith with
respect to the Restated Plan or awards made thereunder, and the Corporation
shall indemnify and hold harmless each member of the Board of Directors or the
Committee against all loss, cost, expenses or damages, occasioned by any act or
omission to act in connection with any such action, determination or
interpretation under or of the Restated Plan, consistent with the Corporation's
articles of incorporation and bylaws.
(f) Subject to such limitations or restrictions as may be imposed by
the Code or other applicable law, the Board of Directors may grant to an
Employee who has been granted an award under the Restated Plan or any other
benefit plan maintained by the Corporation or any of its subsidiaries, or any
predecessor or successor thereto, in exchange for the surrender and cancellation
of such prior award, a new award with such terms and conditions as the Board of
Directors may deem appropriate consistent with the provisions of the Restated
Plan.
5. ELIGIBILITY; FACTORS TO BE CONSIDERED IN GRANTING AWARDS
(a) Awards shall be granted only to persons who are regular full-time
employees (meaning an employee who works thirty (30) hours or more per week for
the Corporation) of the Corporation or one or more of its subsidiaries (as
defined below) and either are officers of, or in the opinion of the Board of
Directors hold key positions in or for, the Corporation or any subsidiary
("Employees"). In determining the Employees to whom awards shall be granted,
the number of shares and class or classes of Common Stock with respect to which
each award shall be granted, the number of performance units granted by each
award, and the terms and conditions of each award, the Board of Directors shall
take into account the nature of the Employee's duties, his or her present and
potential contributions to the growth and success of the Corporation, and such
other factors as the Board of Directors shall
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deem relevant in connection with accomplishing the purposes of the Restated
Plan. The chief executive officer of the Corporation shall assist the Board
of Directors in this determination by making recommendations. An Employee
who has been granted an award or awards under the Restated Plan may be
granted an additional award or awards, subject to such limitations as may be
imposed by the Code on the grant of incentive stock options or other
applicable law.
(b) For purposes of this Restated Plan, the term "SUBSIDIARY" means
any corporation (other than the Corporation) during any period of which fifty
percent (50%) or more of the total combined voting power of all classes of stock
is owned, directly or indirectly, by the Corporation. For purposes of this
Restated Plan, the term "AFFILIATE" shall have the same meaning as in Rule 12b-2
promulgated under the 1934 Act.
6. OPTION PRICE; FAIR MARKET VALUE
The per share exercise price of each option for shares of Common Stock
shall be determined by the Board of Directors, but shall be one hundred percent
(100%) of the Fair Market Value on the date the option is granted unless the
Board of Directors expressly determines otherwise, subject to the requirements
for incentive stock options set forth in paragraph 10 hereof. For purposes of
this Restated Plan, the term "FAIR MARKET VALUE PER SHARE" as of any date shall
mean, except as provided in paragraph 9(d) hereof, for shares of Common Stock
with respect to which restricted shares, options and rights shall be granted,
the closing price of such Common Stock on such date (or if there are no sales on
such date, on the next preceding date on which there were sales), as reported on
the New York Stock Exchange Composite Tape, or if such Common Stock is not
listed or admitted to trading on the New York Stock Exchange, as reported on the
principal consolidated transaction reporting system for the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or if such Common Stock is not listed or admitted to trading on any national
securities exchange, the closing price of such Common Stock as reported on the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ"), or if such Common Stock is not listed or
admitted to trading on the NASDAQ National Market System, the last quoted sales
price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the NASDAQ System or such other
system as may then be in use, or if such Common Stock is not reported on any
such system and is not listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such Common Stock selected by the
Board of Directors, or if no such market maker is making a market in such Common
Stock, the fair value of such Common Stock as determined in good faith by the
Board of Directors by applying generally recognized principles of valuing
closely-held securities; PROVIDED, HOWEVER, that in any event the Fair Market
Value per Share shall be appropriately adjusted to reflect events described in
paragraph 16 hereof. The Board of Directors shall determine the date on which
an option is granted, provided that such date is consistent with the Code and
any applicable rules or regulations thereunder; in the absence of such
determination, the date on which the Board of Directors adopts a resolution
granting an option shall be considered the date on which such option is granted,
provided the Employee to whom the option is granted is promptly notified of the
grant and a written option agreement is duly executed as of the date of the
resolution. The exercise price so determined shall also be applicable in
connection with the exercise of any related right.
7. TERM OF OPTIONS
The term of each option granted under the Restated Plan shall be as
the Board of Directors shall determine, but in no event shall any option have a
term of more than ten (10) years from the date of grant, subject to earlier
termination as provided in paragraphs 14 and 15 hereof. If the holder of an
incentive stock option owns Common Stock possessing more than ten percent (10%)
of the combined voting power of all classes of stock of the Corporation or any
subsidiary, the term of such incentive stock option shall not exceed five (5)
years from the date of grant.
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8. EXERCISE OF OPTIONS
(a) Subject to the provisions of this Restated Plan and unless
otherwise provided in the option agreement, an option granted under the Restated
Plan shall become one hundred percent (100%) vested at the earliest of the
Employee's retirement from active employment at or after Retirement Age (as
defined in paragraph 14 hereof) or the Employee's death or total and permanent
disability (as defined in paragraph 15 hereof). Prior to becoming one hundred
percent (100%) vested, each option shall become exercisable in such cumulative
installments and upon such events as the Board of Directors may determine in its
sole discretion. Subject to the foregoing, the unvested portion of any option
or right granted under the Restated Plan shall be forfeited on the date the
Employee ceases to be a full-time Employee of the Corporation. The Board of
Directors may also, in its sole discretion, accelerate the exercisability of any
option or installment thereof at any time.
(b) An option may be exercised at any time or from time to time
(subject, in the case of an incentive stock option, to such restrictions as may
be imposed by the Code), as to any or all full shares of Common Stock as to
which the option has become exercisable; PROVIDED, HOWEVER, that an option shall
not be exercised at any time as to less than fifty (50) shares (or less than the
number of shares of Common Stock as to which the option is then exercisable, if
that number is less than fifty (50) shares).
(c) At the time of exercise of any option, the per share exercise
price of such option shall be paid in full for each share of Common Stock with
respect to which such option is exercised. Payment may be made in cash or, with
the approval of the Board of Directors, in shares of the Common Stock, valued at
the Fair Market Value per Share on the date of exercise. If the Corporation
shall have a class of its Common Stock registered pursuant to Section 12 of the
1934 Act, an option holder may also make payment at the time of exercise of an
option for such class of Common Stock by delivering to the Corporation a
properly executed exercise notice together with irrevocable instructions to a
broker approved by the Corporation that upon such broker's sale of shares with
respect to which such option is exercised, it is to deliver promptly to the
Corporation the amount of sale proceeds necessary to satisfy the option exercise
price and any required withholding taxes (subject to the provisions of paragraph
19 hereof).
(d) No option granted under this Plan prior to the effective date of
the Restated Plan and unless otherwise expressly provided in the option
agreement, no option granted after the effective date of the Restated Plan, may
be exercised prior to the expiration of six (6) months from the date of the
award thereof.
(e) Upon the exercise of an option or portion thereof in accordance
with the Restated Plan, the option agreement and such rules and regulations as
may be established by the Board of Directors, the holder thereof shall have the
rights of a shareholder with respect to the Common Stock issued as a result of
such exercise.
9. AWARD AND EXERCISE OF RIGHTS
(a) The Board of Directors may grant a right as a primary right or an
additional right (each as defined in this paragraph) in the manner set forth in
this paragraph 9. A right granted in connection with an option may be granted
either at the time the option is granted or, in the case of an option that is
not an incentive stock option, thereafter at any time prior to the exercise,
termination or expiration of such option. Each right shall be subject to the
same terms and conditions as the related option or Deemed Option (as defined in
paragraph 9(b)) and shall be exercisable only to the extent the option or Deemed
Option is exercisable.
(b) A primary right may be awarded by the Board of Directors either
alone or in connection with any option granted under the Restated Plan. Each
primary right granted without a corresponding option shall nevertheless be
deemed for certain purposes described in this paragraph 9 to have been
accompanied by an option (a "DEEMED OPTION"). A Deemed Option shall have no
value, and no shares of Common Stock (or other
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consideration) shall be delivered upon exercise thereof, but such Deemed
Option shall serve solely to establish the terms and conditions of the
corresponding primary right. At the time of grant of a primary right not
granted in connection with an option, the Board of Directors shall set forth
the terms and conditions of the corresponding Deemed Option. The terms and
conditions of such Deemed Option shall include all terms and conditions that
at the time of grant are required, and, in the discretion of the Board of
Directors, may include any additional terms and conditions that at such time
are permitted, to be included in options granted under this Restated Plan. A
primary right shall entitle the Employee to surrender unexercised the related
option or Deemed Option (or any portion or portions thereof that the Employee
determines to surrender) and to receive in exchange, subject to the
provisions of the Restated Plan and such rules and regulations as from time
to time may be established by the Board of Directors, a payment having an
aggregate value equal to (i) the excess of (A) the Fair Market Value per
Share on the exercise date over (B) the per share exercise price of the
option or Deemed Option, multiplied by (ii) the number of shares of Common
Stock subject to the option, Deemed Option or portion thereof that is
surrendered. Surrender of an option or Deemed Option or portion thereof in
exchange for a payment as described in this paragraph is referred to as the
"EXERCISE OF A PRIMARY RIGHT." Upon exercise of a primary right, payment
shall be made in the form of cash, shares of Common Stock, or a combination
thereof, as elected by the Employee, provided that the Board of Directors
shall have sole discretion to approve or disapprove the election of an
Insider to receive all or part of a payment in cash (which approval or
disapproval may be given at any time after the election to which it relates).
Shares of Common Stock paid upon exercise of a primary right will be valued
at the Fair Market Value per Share on the exercise date. Cash will be paid in
lieu of any fractional share of Common Stock based upon the Fair Market Value
per Share on the exercise date. Subject to paragraph 19 hereof, no payment
will be required from the Employee upon exercise of a primary right.
(c) An additional right may be awarded by the Board of Directors in
connection with any option granted under the Restated Plan. An additional right
shall entitle the Employee to receive, upon the exercise of a related option, a
cash payment equal to (i) the product determined by multiplying (A) the excess
of (x) the Fair Market Value per Share on the date of exercise of the related
option over (y) the option price per share at which such option is exercisable
by (B) the number of shares of Common Stock with respect to which the related
option is being exercised, multiplied by (ii) a percentage factor (which may be
any percentage factor equal to or greater than ten percent (10%) and equal to or
less than one hundred percent (100%)) as determined by the Board of Directors at
the time of the grant of such additional right or as determined in accordance
with a formula for determination of such percentage factor established by the
Board of Directors at the time of the grant of such additional right. If no
percentage factor or formula is otherwise specified by the Board of Directors at
the time of grant of such additional right, the percentage factor shall be
deemed to be one hundred percent (100%). The Board of Directors at any time, or
from time to time, after the time of grant may in its discretion increase such
percentage factor (or amend such formula so as to increase such factor) to not
more than one hundred percent (100%).
(d) Upon exercise of a primary right, the number of shares of Common
Stock subject to exercise under the related option or Deemed Option shall
automatically be reduced by the number of shares of Common Stock represented by
the option, Deemed Option or portion thereof surrendered. Shares of Common
Stock subject to options, Deemed Options or portions thereof surrendered upon
the exercise of rights shall not be available for subsequent awards under the
Restated Plan.
(e) A right related to an incentive stock option may only be
exercised if the Fair Market Value per Share on the exercise date (as determined
pursuant to paragraph 6) exceeds the exercise price of the option per share of
Common Stock.
(f) If neither the right nor, in the case of a right (whether primary
or additional) with a related option, the related option, is exercised before
the end of the day on which the right ceases to be exercisable, such right shall
be deemed exercised as of such date and, subject to paragraph 19 hereof, a
payment in the amount prescribed by paragraph 9(b) or paragraph 9(c), as the
case may be, shall be paid to the Employee in cash.
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10. INCENTIVE STOCK OPTIONS
(a) The Board of Directors shall designate the Employees to whom
incentive stock options, as described in Section 422 of the Code or any
successor section thereto, are to be awarded under the Restated Plan and shall
determine the class or classes and the number of shares of Common Stock to be
covered by each incentive stock option. Incentive stock options shall be
awarded only to regular full-time Employees of the Corporation. In no event
shall the aggregate Fair Market Value of all Common Stock (determined at the
time the option is awarded) with respect to which incentive stock options are
exercisable for the first time by an individual during any calendar year (under
all plans of the Corporation and its subsidiaries) exceed $100,000.
(b) The purchase price of a share of Common Stock under each
incentive stock option shall be determined by the Board of Directors; PROVIDED,
HOWEVER, that in no event shall such price be less than one hundred percent 100%
of the Fair Market Value Per Share as of the date of grant or one hundred ten
percent (110%) of such Fair Market Value Per Share if the holder of the
incentive stock option owns Common Stock possessing more than ten percent (10%)
of the combined voting power of all classes of stock of the Corporation or any
subsidiary.
(c) Except as provided in paragraphs 14 and 15 hereof, no incentive
stock option shall be exercised at any time unless the holder thereof is then a
regular full-time Employee of the Corporation or one of its subsidiaries. For
this purpose, "SUBSIDIARY" shall include, as under Treasury Regulations Section
1.421-7(h)(3)-(4), example (3), any corporation that is a subsidiary of the
Corporation during the entire portion of the requisite period of employment
during which it is the employer of the holder.
(d) In the event of amendments to the Code or applicable rules or
regulations relating to incentive stock options subsequent to the date hereof,
the Corporation may amend the provisions of the Restated Plan, and the
Corporation and the Employees holding such incentive stock options may agree to
amend outstanding option agreements to conform to such amendments.
11. LIMITED TRANSFERABILITY OF OPTIONS AND RIGHTS
Incentive stock options granted under the Restated Plan shall not be
transferable otherwise than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act of 1974, as amended, or the
rules thereunder, and incentive stock options shall be exercisable during the
lifetime of the Employee only by the Employee or by the Employee's guardian or
legal representative (unless such exercise would disqualify an option as an
incentive stock option). Effective with respect to non-qualified options and
rights granted after the effective date of the Restated Plan, and unless the
agreement regarding the award of non-qualified options or rights expressly
provides otherwise, non-qualified options and rights may be transferred by the
holder to Permitted Transferees, provided that there cannot be any consideration
for the transfer. For purposes of this Restated Plan, "Permitted Transferees"
shall mean Immediate Family Members of the optionee, trusts for the benefit of
such Immediate Family Members, and partnerships in which such optionee and/or
such Immediate Family Members are the only partners. The term "Immediate Family
Member" shall mean an optionee's descendants (children, grandchildren and more
remote descendants), and shall include step-children and relationships arising
from legal adoption. Otherwise, neither options nor rights, nor any interest
therein may be sold, assigned, conveyed, gifted, pledged, hypothecated or
otherwise transferred in any manner other than by will or the laws of descent
and distribution. During the recipient's lifetime, a non-qualified option or
right may only be exercised by the optionee, the optionee's guardian or legal
representative, or a Permitted Transferee.
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12. AWARD AND DELIVERY OF RESTRICTED SHARES
(a) At the time an award of restricted shares is made, the Board of
Directors shall establish a period or periods of time (each a "RESTRICTED
PERIOD") applicable to such award that shall not be more than ten (10) years.
Each award of restricted shares may have a different Restricted Period or
Restricted Periods. The Board of Directors may, in its sole discretion, at the
time an award is made, provide for the incremental lapse of Restricted Periods
with respect to a portion or portions of the restricted shares awarded, and for
the lapse or termination of restrictions upon all or any portion of the
restricted shares upon the satisfaction of other conditions in addition to or
other than the expiration of the applicable Restricted Period. The Board of
Directors may also, in its sole discretion, shorten or terminate a Restricted
Period or waive any conditions for the lapse or termination of restrictions with
respect to all or any portion of the restricted shares. Notwithstanding the
foregoing, all restrictions shall lapse or terminate with respect to all
restricted shares upon the Employee's death, total and permanent disability (as
defined in paragraph 15 hereof), or retirement from active employment at or
after the Retirement Age (as defined in paragraph 14 hereof).
(b) At the time a grant of restricted shares is made to an Employee,
a stock certificate representing a number of shares of Common Stock equal to the
number of such restricted shares shall be registered in the Employee's name but
shall be held in custody by the Corporation for such Employee's account. The
Employee shall generally have the rights and privileges of a shareholder as to
such restricted shares, including, without limitation, the right to vote such
restricted shares, except that, subject to the earlier lapse or termination of
restrictions as herein provided, the following restrictions shall apply: (i) the
Employee shall not be entitled to delivery of the stock certificate evidencing
restricted shares until the expiration or termination of the Restricted Period
applicable to such shares and the satisfaction of any other conditions
prescribed by the Board of Directors; (ii) none of the shares then subject to a
Restricted Period shall be sold, transferred, assigned, pledged, or otherwise
encumbered or disposed of during the Restricted Period applicable to such shares
and until the satisfaction of any other conditions prescribed by the Board of
Directors; and (iii) all of the shares then subject to a Restricted Period shall
be forfeited and all rights of the Employee to such restricted shares shall
terminate without further obligation on the part of the Corporation if the
Employee ceases to be a regular full-time Employee of the Corporation or any of
its subsidiaries before the expiration or termination of such Restricted Period
and the satisfaction of any other conditions prescribed by the Board of
Directors applicable to such restricted shares. Dividends in respect of
restricted shares shall be currently paid; PROVIDED, HOWEVER, that in lieu of
paying currently a dividend of shares of Common Stock in respect of restricted
shares, the Board of Directors may, in its sole discretion, register in the name
of an Employee a stock certificate representing such shares of Common Stock
issued as a dividend in respect of restricted shares, and may cause the
Corporation to hold such certificate in custody for the Employee's account
subject to the same terms and conditions as such restricted shares. Upon the
forfeiture of any restricted shares, such forfeited restricted shares shall be
transferred to the Corporation without further action by the Employee. The
Employee shall have the same rights and privileges, and be subject to the same
restrictions, with respect to any shares received pursuant to paragraph 16
hereof.
(c) Upon the expiration or termination of the Restricted Period
applicable to such shares and the satisfaction of any other conditions
prescribed by the Board of Directors or at such earlier time as provided for
herein, the restrictions applicable to the shares subject to such Restricted
Period shall lapse and a certificate for a number of shares of Common Stock
equal to the number of restricted shares with respect to which the restrictions
have expired or terminated shall be delivered, free of all such restrictions,
except any that may be imposed by law, to the Employee or the Employee's
Beneficiary (as defined in paragraph 14(b)). The Corporation shall not be
required to deliver any fractional share of Common Stock but shall pay to the
Employee or the Employee's Beneficiary, in lieu thereof, the product of (i) the
Fair Market Value per Share (determined as of the date the restrictions expire
or terminate) and (ii) the fraction of a share to which such Employee would
otherwise be entitled. Subject to paragraph 19 hereof, no payment will be
required from the Employee upon the issuance or delivery of any Common Stock
upon the expiration or termination of a Restricted Period with respect to
restricted shares.
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13. AWARD OF PERFORMANCE UNITS
(a) At the time an award of performance units is made, the Board of
Directors shall prescribe a range of long-term financial or other performance
objectives, including minimum, maximum and target objectives of the Corporation
("LONG-TERM OBJECTIVES") during the Incentive Period (as defined in paragraph
13(c) hereof) applicable to such performance units, and shall determine a range
of dollar values of each performance unit associated with such range of
long-term earnings objectives. If the minimum long-term objective prescribed
by the Board of Directors for any performance unit is not achieved or
exceeded, then such performance unit shall have no value and no amount shall
be payable with respect thereto. If such minimum long-term objective is
achieved or exceeded, then the dollar value of all performance units to be
paid with respect thereto shall be based upon the level of long-term
objective achieved, subject to any maximum performance unit value imposed by
the Board of Directors. If during the course of an Incentive Period there
shall occur significant events that were not foreseen in establishing the
minimum long-term objective for such Incentive Period and which the Board of
Directors expects to have a substantial effect on such objective during such
Incentive Period, in its discretion, the Board of Directors may revise such
objective.
(b) Any Employee who is an Employee of the Corporation or a
subsidiary as of the Valuation Date (as defined in paragraph 13(c)) with respect
to performance units that have been previously awarded to him, shall, if the
minimum long-term objective specified in paragraph 13(a) is met, be eligible to
receive a cash award equal to the value of such performance units determined
pursuant to such paragraph 13(a) as of the Valuation Date applicable thereto.
Payment of such cash award shall be made as soon as practicable following the
Valuation Date of such performance units. Except as otherwise provided in
paragraph 14 hereof, any performance units awarded to an Employee during his
employment period for which the Incentive Period has not ended shall be
forfeited upon the date such employment terminates, and he shall not be entitled
to any payment in respect thereof.
(c) For purposes of the Restated Plan,
(i) the "INCENTIVE PERIOD" with respect to a performance unit
shall be a period beginning on the date such performance unit is granted and
lasting for such period, not shorter than two (2) years nor longer than ten
years, as the Board of Directors shall designate; and
(ii) the "VALUATION DATE" means the last day of the Incentive
Period for a performance unit.
14. TERMINATION OF EMPLOYMENT
(a) In the event that the employment of an Employee to whom an option
or right has been granted under the Restated Plan terminates for any reason
(except pursuant to an authorized leave of absence for military or government
service as determined by the Board of Directors or as set forth in paragraph 15
hereof), such Employee shall have a period of ninety (90) days following
termination of employment in which to exercise any then vested options or rights
under the Restated Plan, and at the end of the 90-day period, all rights of such
Employee under any then outstanding option or right shall terminate and shall be
forfeited immediately as to any unexercised portion thereof.
(b) Unless otherwise determined by the Board of Directors, if an
Employee to whom performance units have been granted ceases to be an Employee of
the Corporation or of a subsidiary prior to the end of the Incentive Period with
respect to such performance units for any reason other than death, total and
permanent disability or retirement from active employment at or after the
Retirement Age, the Employee shall immediately forfeit all such performance
units. If an Employee to whom performance units have been granted terminates
employment by reason of retirement on or after the Retirement Age, total and
permanent disability or death, he shall,
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if the minimum long-term objectives specified in paragraph 13(a) hereof are
met, be eligible to receive a cash award equal to the value of such
performance units, determined pursuant to such paragraph 13(a) and payable as
soon as practicable following the Valuation Date of such performance units.
If the Employee terminates employment due to his death or if an Employee who
retires from active employment on or after his Retirement Age or terminated
employment due to total and permanent disability dies prior to receipt of any
such payment, then his designated Beneficiary (as defined below) shall, if
the minimum long-term objectives specified in paragraph 13(a) are met, be
entitled to receive a cash award equal to the value of such performance
units, determined pursuant to such paragraph 13(a), and payable as soon as
practicable following the Valuation Date of such performance units. In the
event that the person designated by the Employee as his Beneficiary shall not
be living at the time, or if no designation has been made, then the payment
of such cash award shall be made to the estate of the Employee. An Employee's
Retirement Age ("RETIREMENT AGE") hereunder is sixty (60). An Employee's
"BENEFICIARY" is a person or persons (natural or otherwise) designated by
such Employee, pursuant to a written instrument executed by such Employee and
filed with the Board of Directors, to receive any benefits payable hereunder
in the event of such Employee's death.
(c) Awards granted under the Restated Plan shall not be affected by
any change of duties or position so long as the holder continues to be a regular
full-time Employee of the Corporation or any subsidiary thereof. Any option or
right, restricted share or performance unit agreement, and any rules and
regulations relating to the Restated Plan, may contain such provisions as the
Board of Directors shall approve with reference to the determination of the date
employment terminates and the effect of leaves of absence. Any such rules and
regulations with reference to any option agreement shall be consistent with the
provisions of the Code and any applicable rules and regulations thereunder.
Nothing in the Restated Plan or in any award granted pursuant to the Restated
Plan shall confer upon any Employee any right to continue in the employ of the
Corporation or any subsidiary or interfere in any way with the right of the
Corporation or any subsidiary to terminate such employment at any time.
15. DEATH OR TOTAL AND PERMANENT DISABILITY OF EMPLOYEE
If an Employee to whom an option or right has been granted under the
Restated Plan shall die or suffer a total and permanent disability while
employed by the Corporation or a subsidiary, such option or right may be
exercised, to the extent that the Employee was entitled to do so at the
termination of employment (including by reason of death or total and permanent
disability), as set forth herein (subject to any restrictions set forth in
paragraph 9 with respect to Insiders) by the Employee, legal guardian of the
Employee (unless such exercise would disqualify an option as an incentive stock
option), a legatee or legatees of the Employee under the Employee's last will,
or by the Employee's personal representatives or distributees, whichever is
applicable, at any time within twelve (12) months after the date of the
Employee's death or total and permanent disability, but in no event later than
the date on which the option or right terminates. Notwithstanding the above, if
an Employee who terminates employment by reason of total and permanent
disability shall die, a legatee or legatees of such Employee under the
Employee's last will, or the executor of such Employee's estate, shall only have
the right to exercise such option or right, to the extent that the Employee was
entitled to do so at the termination of employment, during the period ending
twelve (12) months after the date of the Employee's termination of employment by
reason of total and permanent disability. For purposes hereof, "TOTAL AND
PERMANENT DISABILITY" shall have the meaning set forth in Code Section 22(e)(3)
or any successor provision thereto.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC.
Notwithstanding any other provision of the Restated Plan, the Board of
Directors shall make or provide for such adjustments to the Restated Plan, to
the number and classes of shares available thereunder, to the terms and number
of shares of Common Stock or other securities available, and/or to the purchase
price of a share of Common Stock or other securities available under, any
outstanding options, rights, restricted shares or performance units as it shall
deem appropriate to prevent dilution or enlargement, including adjustments in
the event of changes
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in the outstanding Common Stock by reason of stock dividends, split-ups,
recapitalizations, mergers, consolidations, combinations or exchanges of
shares, separations, reorganizations, liquidations and the like. In the event
of any offer to holders of Common Stock generally relating to the acquisition
of their shares, the Board of Directors shall make such adjustment as it
deems equitable in respect to outstanding options, rights, restricted shares
and performance units, including revision of outstanding options, rights,
restricted shares and performance units so that they may be exercisable or
redeemable for or payable in the consideration payable in the acquisition
transaction. Any such determination by the Board of Directors shall be
conclusive. Any fractional shares resulting from such adjustments to
options, rights, or restricted shares shall be eliminated.
17. BUSINESS COMBINATIONS.
The following provisions shall apply unless an Employee's written
agreement evidencing an award of options, rights, restricted shares or
performance units under the Restated Plan provides otherwise. In the event
that, while any options, rights, restricted shares or performance units are
outstanding under the Restated Plan, there shall occur (a) a merger or
consolidation of the Corporation with or into another corporation in which the
Corporation shall not be the surviving corporation (for purposes of this
paragraph 17, the Corporation shall not be deemed the surviving corporation in
any such transaction if, as the result thereof, it becomes a wholly-owned
subsidiary of another corporation), (b) a dissolution of the Corporation, (c) a
transfer of all or substantially all of the assets or shares of stock of the
Corporation in one transaction or a series of related transactions to one or
more other persons or entities, (d) if any "person" or "group" as those terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Act"), other than Excluded Persons, becomes the "beneficial owner" (as defined
in Rule 13d-3 of the Act), directly or indirectly, of securities of the
Corporation representing 50% or more of the combined voting power of the
Corporation's then outstanding securities, or (e) during any period of two
consecutive years commencing on or after April 1, 1995, individuals who at the
beginning of the period constituted the Board cease for any reason to constitute
at least a majority, unless the election of each director who was not a director
at the beginning of the period has been approved in advance by directors
representing at least two-thirds (2/3) of the directors then in office who were
directors at the beginning of the period, then, with respect to each option,
right, restricted share and performance unit outstanding immediately prior to
the consummation of such transaction, if provision is not otherwise made in
writing in connection with such transaction for the substitution of securities
of another corporation, and without the necessity of any action by the Board of
Directors, each such option, right, restricted shares or performance units shall
terminate, but (A) each holder of an outstanding option shall be entitled,
immediately prior to the effective date of such transaction, to purchase the
number of shares that are then vested and exercisable, (B) the holder of any
right shall be entitled, immediately prior to the effective date of such
transaction, to exercise such right to the extent the related option or Deemed
Option is exercisable at such time in accordance with its terms, (C) the holder
of any additional rights shall be entitled to receive, to the extent the related
option is exercised immediately prior to the effective date of such transaction,
the full amount of cash he would have been entitled to receive if the related
option had been exercised to such extent, to the extent that such additional
rights are then vested, and (D) the recipient of any performance unit shall be
entitled, immediately prior to the effective date of such transaction, to
receive the then vested values under such unit. The unexercised portion of any
option, right, Deemed Option or any additional right relating to the unexercised
portion of a related option shall be deemed cancelled and terminated as of the
effective date of such transaction. Notwithstanding the foregoing, the Board of
Directors may provide that upon the occurrence of such events as the Board of
Directors shall deem appropriate, all outstanding options, rights, restricted
shares and performance units shall become fully vested and exercisable. The
term "Excluded Persons" means each of William E. Ogle, William D. Balthaser, Jr.
and Mark S. Sims, and any person, entity or group under the control of any of
them, or a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation.
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18. TERMINATION AND AMENDMENT
The Board of Directors of the Corporation shall have the right to
amend, suspend or terminate the Restated Plan at any time; PROVIDED, HOWEVER,
that an amendment shall be subject to shareholder approval if such approval is
required by Rule 16b-3 promulgated under the 1934 Act or under any successor
rule, the Code or the rules of any securities exchange or market system on which
securities of the Corporation are listed or admitted to trading at the time such
amendment is adopted. The Board of Directors may delegate to the Committee all
or any portion of its authority under this paragraph 18. If the Restated Plan
is terminated, the terms of the Restated Plan shall, notwithstanding such
termination, continue to apply to awards granted prior to such termination. In
addition, no suspension, termination, modification or amendment of the Restated
Plan may, without the consent of the Employee to whom an award shall theretofore
have been granted, adversely affect the rights of such Employee under such
award.
19. WITHHOLDING TAX
(a) The Corporation shall have the right to deduct from all amounts
paid in cash in consequence of the exercise of an option or right, or the
settlement of a performance unit, under the Restated Plan any taxes required by
law to be withheld with respect to such cash payments. Subject to paragraph
19(c) below, where an Employee or other person is entitled to receive shares of
Common Stock pursuant to the exercise of an option or a right pursuant to the
Restated Plan, the Corporation shall have the right to require the Employee or
such other person to pay to the Corporation the amount of any taxes that the
Corporation is required to withhold with respect to such shares, or, in lieu
thereof, to retain, or sell without notice, a sufficient number of such shares
to cover the amount required to be withheld. Upon the disposition (within the
meaning of Code Section 424(c)) of shares of Common Stock acquired pursuant to
the exercise of an incentive stock option prior to the expiration of the holding
period requirements of Code Section 422(a)(1), the Employee shall be required to
give notice to the Corporation of such disposition and the Corporation shall
have the right to require the Employee to pay to the Corporation the amount of
any taxes that are required by law to be withheld with respect to such
disposition.
(b) Upon termination of the Restricted Period with respect to any
restricted shares (or such earlier time, if any, as an election is made by the
Employee under Code Section 83(b), or any successor provisions thereto, to
include the value of such shares in taxable income), the Corporation shall have
the right to require the Employee or other person receiving shares of Common
Stock in respect of such restricted shares to pay to the Corporation the amount
of taxes that the Corporation is required to withhold with respect to such
shares of Common Stock or, in lieu thereof, to retain or sell without notice a
sufficient number of shares of Common Stock held by it to cover the amount
required to be withheld. The Corporation shall have the right to deduct from
all dividends paid with respect to restricted shares the amount of taxes that
the Corporation is required to withhold with respect to such dividend payments.
(c) In the case of an Employee or other person who is subject to
Section 16 of the 1934 Act, all tax withholding obligations shall be satisfied
through the withholding or surrender of shares of Common Stock as necessary to
comply with Section 16 of the 1934 Act and the rules and regulations thereunder
or to obtain any exemption therefrom.
20. WRITTEN AGREEMENTS; STOCK LEGENDS
Each award of options, rights, restricted shares or performance units
shall be evidenced by a written agreement, executed by the Employee and the
Corporation, which shall contain such restrictions, terms and conditions as the
Board of Directors may require, and certificates evidencing shares of Common
Stock issued under the Restated Plan shall have conspicuously noted thereon such
restrictions on transferability as the Corporation may require in order to
ensure compliance with applicable federal and state securities laws and
regulations.
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21. EFFECT ON OTHER STOCK PLANS
The adoption of the Restated Plan shall have no effect on awards made
or to be made pursuant to other plans covering Employees of the Corporation or
its subsidiaries, or any predecessors or successors thereto.
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