Registration No. ____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
under
The Securities Act of 1933
ROSEVILLE COMMUNICATIONS COMPANY
(Exact name of issuer as specified in its charter)
California 68-0365195
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
211 Lincoln Street, Roseville California 95678
(Address of principal executive offices) (Zip Code)
ROSEVILLE COMMUNICATIONS COMPANY
2000 EQUITY INCENTIVE PLAN
(Full title of the plan)
Jed E. Solomon, Esq.
Cooper, White & Cooper
201 California Street, 17th Floor
San Francisco, California 94111
(Name and address of agent for service)
Telephone Number, including area code, of agent for service:
(415) 433-1900
<PAGE>
CALCULATION OF REGISTRATION FEE
Proposed Proposed Amount of
Title of Maximum Maximum Registration
Securities to Amount to be Offering Price Aggregate Fee
be Registered Registered Share Offering Price (1)(2)
------------- ------------ -------------- -------------- --------------
Common Stock 800,000 shares $39.94 $31,952,000 $9,425.84
(1) Estimated pursuant to Rule 457 solely for purposes of calculating the
registration fee. Amount of the Registration Fee was calculated
pursuant to Section 6(b) of the Securities Act of 1933, as amended, and
was determined by multiplying the aggregate offering amount by .000295.
(2) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the filing fee on the basis of $39.94 per share, which
represents the fair market value per share of Common Stock of Roseville
Communications Company on August 1, 2000.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Roseville Communications Company (the "Company") hereby incorporates by
reference in this registration statement the following documents:
(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1999
filed with the Securities and Exchange Commission ("SEC") on March 24,
2000, as amended by Form 10K/A filed on August 2, 2000.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") since
the end of the fiscal year covered by the Company document referred to
in (a) above;
(c) The description of the Company's capital stock filed with the SEC on
or about May 4, 1995 in Registration Statement No. 33-58271, and the
Articles of Incorporation and Amendment thereto which appeared as
Exhibit 3(a) to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment to this registration statement which indicates that all securities
offered hereby have been sold or which deregisters all securities remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be a part hereof from the date of the filing of such documents.
Item 4. Description of Securities.
The class of securities to be offered is registered under Section 12 of
the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
Inapplicable.
Item 6. Indemnification of Directors and Officers.
Section 204 of the General Corporation Law of the State of California
("California Law") authorizes a corporation to adopt a provision in its articles
of incorporation eliminating the personal liability of directors to corporations
and their shareholders for monetary damages for breach or alleged breach of
directors' "duty of care." Following a California corporation's adoption of such
a provision, its directors are not accountable to corporations and their
shareholders for monetary damages for conduct constituting negligence (or gross
negligence) in the exercise of their fiduciary duties; however, directors
continue to be subject to equitable remedies such as injunction or rescission.
Under California Law, a director also continues to be liable for (1) a breach of
his or her duty of loyalty; (2) acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law; (3) illegal payments of
dividends; and (4) approval of any transaction from which a director derives an
improper personal benefit. The adoption of such a provision in the articles of
incorporation also does not limit directors' liability for violations of the
federal securities laws.
Section 317 of the California Law makes a provision for the indemnification
of officers, directors and other corporate agents in terms sufficiently broad to
indemnify such persons, under certain circumstances, for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). The indemnification provided by Section 317
is not exclusive to the extent additional rights are authorized in a
corporation's articles of incorporation.
The Company has adopted provisions in its Articles of Incorporation, as
amended, which eliminate the personal liability of its directors to the Company
and its shareholders for monetary damages for breach of the directors' fiduciary
duties in certain circumstances and authorize the Company to indemnify its
officers, directors and other agents to the fullest extent permitted by law.
Item 7. Exemption from Registration Claimed.
Inapplicable.
Item 8. Exhibits.
See Exhibit Index on page 8.
Item 9. Undertakings.
(d) Rule 415 Offering.
------------------
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 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.
(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.
(e) Filings Incorporating Subsequent Exchange Act Documents by
Reference.
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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.
(f) Regulation S-K Item 512(h) Undertaking for Registration Statement
on Form S-8.
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Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Roseville, State of California, on this 2nd day of
August, 2000.
ROSEVILLE COMMUNICATIONS COMPANY
By: /s/ Brian H. Strom
--------------
Brian H. Strom
President and Chief Executive Officer
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the persons whose signatures appear
below constitute and appoint Brian H. Strom and Michael D. Campbell, and each of
them, as true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities to sign the Form S-8 Registration Statement
pertaining to the Roseville Communications Company 2000 Equity Incentive Plan,
and any or all amendments (including post-effective amendments) to said Form S-8
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and these Amendments to Registration Statements have been
signed below by the following persons in the capacities and on the dates
indicated. Moreover, the undersigned hereby also certify that to the best of
their knowledge and belief the issuer meets all of the requirements for filing
on Form S-8.
Signature Title Date
/s/ Michael D. Campbell Executive Vice President and Chief July 31, 2000
Michael D. Campbell Financial Officer (Principal
Accounting Officer)
/s/ Robert L. Doyle Director July 31, 2000
Robert L. Doyle
/s/ Brian H. Strom Director
Brian H. Strom July 31, 2000
/s/ Thomas E. Doyle Director July 31, 2000
Thomas E. Doyle
/s/ Ralph E. Hoeper Director July 31, 2000
Ralph E. Hoeper
/s/ John R. Roberts III Director July 31, 2000
John R. Roberts III
/s/ Chris L. Branscum Director July 31, 2000
Chris L. Branscum
/s/ Neil J. Doerhoff Director July 31, 2000
Neil J. Doerhoff
<PAGE>
EXHIBIT INDEX
Exhibit No.
1-3 Not applicable.
4 None
5 Opinion re legality.
6-22 Not applicable.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
Found at page 10 of this registration statement.
23.2 Independent Auditors' Consent.
Found at page 11 of this registration statement.
23.3 Consent of Independent Accountants.
Found at page 12 of this registration statement.
23.4 Consent of Counsel. Contained with the opinion filed as
Exhibit 5 hereto.
24 Powers of attorney. Contained in the signature pages
(pages 6-7) of this Form S-8 registration statement.
25-98 Not applicable.
99 Roseville Communications Company 2000 Equity Incentive
Plan
<PAGE>
EXHIBIT 5
Roseville Communications Company
211 Lincoln Street
Roseville, CA 95678
Re: 800,000 Shares of Common Stock of Roseville Communications
Company Offered Pursuant to the Roseville Communications Company
2000 Equity Incentive Plan
Ladies and Gentlemen:
We have examined the proceedings taken and the instruments executed in
connection with the organization and present capitalization of Roseville
Communications Company (the "Company") and the reservation for issuance and
authorization of the sale and issuance from time to time of not in excess of
800,000 shares of the Company's Common Stock (the "Shares") pursuant to the
terms of the Roseville Communications Company 2000 Equity Incentive Plan (the
"Plan"). The Shares are the subject of a Registration Statement on Form S-8
under the Securities Act of 1933, as amended, which is being filed with the
Securities and Exchange Commission and to which this opinion is to be attached
as an exhibit.
Upon the basis of such examination, we are of the following opinion:
1. The authorized shares of the Company consist of 100,000,000 shares of
Common Stock.
2. The proper corporate proceedings necessary to the reservation for
issuance and the authorization of the sale and issuance from time to time of not
in excess of 800,000 shares of the Common Stock of the Company pursuant to the
Plan have been duly taken and, when issued pursuant to such plan, the Shares
will be duly and validly issued and fully paid and nonassessable.
3. When the above-mentioned registration statement relating to the Shares
has become effective, all authorizations, consents, approvals, or other orders
of all United States regulatory authorities required for the issuance of the
Shares will have been obtained.
You are further advised that we consent to the use of this opinion as an
exhibit to the above-mentioned Registration Statement.
Very truly yours,
/s/ COOPER, WHITE & COOPER LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Roseville Communications Company 2000 Equity
Incentive Plan of our report dated February 4, 2000, with respect to the
consolidated financial statements of Roseville Communications Company included
in its Annual Report (Form 10-K) for the year ended December 31, 1999, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Sacramento, California
July 27, 2000
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Roseville Communications Company (the "Company") on Form S-8 of our report
dated March 8, 2000 on the consolidated financial statements of Sacramento
Valley Limited Partnership and subsidiary, incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
July 28, 2000
<PAGE>
EXHIBIT 23.3
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 1, 1999 relating to the
consolidated financial statements and financial statement schedule of
Sacramento-Valley Limited Partnership, which appears in Roseville Communications
Company's Annual Report on Form 10-K for the year ended December 31, 1999, as
amended on August 2, 2000.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
July 28, 2000
<PAGE>
EXHIBIT 23.4
CONSENT OF COUNSEL
Contained with the opinion filed as Exhibit 5 hereto and incorporated herein by
reference.
<PAGE>
EXHIBIT 99
ROSEVILLE COMMUNICATIONS COMPANY
2000 EQUITY INCENTIVE PLAN
(As ADOPTED EFFECTIVE JANUARY 31, 2000)
TABLE OF CONTENTS
Page
ARTICLE 1. INTRODUCTION...................................................1
ARTICLE 2. DEFINITIONS....................................................1
ARTICLE 3. ADMINISTRATION.................................................4
3.1 Committee Composition........................................4
3.2 Committee Responsibilities...................................5
3.3 Committee for Non-Officer Grants.............................5
ARTICLE 4. SHARES AVAILABLE FOR GRANTS.........................5
4.1 Basic Limitation.............................................5
4.2 Forfeited Shares.............................................5
4.3 Dividend Equivalents.........................................6
ARTICLE 5. ELIGIBILITY.........................................6
5.1 Incentive Stock Options......................................6
5.2 Other Grants.................................................6
ARTICLE 6. OPTIONS.............................................6
6.1 Stock Option Agreement.......................................6
6.2 Number of Shares.............................................6
6.3 Exercise Price...............................................7
6.4 Exercisability and Term......................................7
6.5 Effect of Change in Control..................................7
6.6 Modification or Assumption of Options........................7
6.7 Buyout Provisions............................................7
ARTICLE 7. PAYMENT FOR OPTION SHARES...........................8
7.1 General Rule.................................................8
7.2 Surrender of Stock...........................................8
7.3 Exercise/Sale................................................8
7.4 Exercise/Pledge..............................................8
7.5 Promissory Note..............................................9
7.6 Other Forms of Payment.......................................9
ARTICLE 8. AUTOMATIC OPTION GRANTS TO OUTSIDE DIRECTORS........9
8.1 Annual Grants................................................9
8.2 Accelerated Exercisability...................................9
8.3 Exercise Price...............................................9
8.4 Term.........................................................9
ARTICLE 9. STOCK APPRECIATION RIGHTS..........................10
9.1 SAR Agreement...............................................10
9.2 Number of Shares............................................10
9.3 Exercise Price..............................................10
9.4 Exercisability and Term.....................................10
9.5 Effect of Change in Control.................................10
9.6 Exercise of SARs............................................10
9.7 Modification or Assumption of SARs..........................11
ARTICLE 10. RESTRICTED SHARES...........................................11
10.1 Restricted Stock Agreement..................................11
10.2 Payment for Awards..........................................11
10.3 Vesting Conditions..........................................11
10.4 Voting and Dividend Rights..................................11
ARTICLE 11. STOCK UNITS.................................................12
11.1 Stock Unit Agreement........................................12
11.2 Payment for Awards..........................................12
11.3 Vesting Conditions..........................................12
11.4 Voting and Dividend Rights..................................12
11.5 Form and Time of Settlement of Stock Units..................12
11.6 Death of Recipient..........................................13
11.7 Creditors' Rights...........................................13
ARTICLE 12. PERFORMANCE SHARES..........................................13
12.1 Performance Share Agreement.................................13
12.2 Grant of Performance Shares.................................13
12.3 Modification of Grant.......................................14
12.4 Terms of the Grant..........................................14
12.5 Payment of Performance Shares...............................14
ARTICLE 13. PROTECTION AGAINST DILUTION.................................15
13.1 Adjustments.................................................15
13.2 Dissolution or Liquidation..................................16
13.3 Reorganizations.............................................16
ARTICLE 14. DEFERRAL OF AWARDS..........................................16
ARTICLE 15. AWARDS UNDER OTHER PLANS....................................17
ARTICLE 16. PAYMENT OF DIRECTOR'S FEES IN SECURITIES....................17
16.1 Effective Date..............................................17
16.2 Elections to Receive NSOs, Restricted Shares or Stock Units.18
16.3 Number and Terms of NSOs, Restricted Shares or Stock Units..18
ARTICLE 17. LIMITATION ON RIGHTS........................................18
17.1 Retention Rights............................................18
17.2 Shareholders' Rights........................................18
17.3 Regulatory Requirements.....................................18
ARTICLE 18. WITHHOLDING TAXES...........................................19
18.1 General.....................................................19
18.2 Share Withholding...........................................19
ARTICLE 19. FUTURE OF THE PLAN..........................................19
19.1 Term of the Plan............................................19
19.2 Amendment or Termination....................................19
ARTICLE 20. LIMITATION ON PARACHUTE PAYMENTS............................19
20.1 Scope of Limitation.........................................19
20.2 Basic Rule..................................................20
20.3 Reduction of Payments.......................................20
20.4 Overpayments and Underpayments..............................21
20.5 Related Corporations........................................21
ARTICLE 21. EXECUTION........................................................21
ROSEVILLE COMMUNICATIONS COMPANY
2000 EQUITY INCENTIVE PLAN
ARTICLE 1......INTRODUCTION.
ARTICLE 1. INTRODUCTION.
The Plan was adopted by the Board effective January 31, 2000. The purpose
of the Plan is to promote the long-term success of the Company and creation of
shareholder value by (a) encouraging Employees, Outside Directors and
Consultants to focus on critical long-range objectives, (b) encouraging the
attraction and retention of Employees, Outside Directors and Consultants with
exceptional qualifications and (c) linking Employees, Outside Directors and
Consultants directly to shareholder interests through increased share ownership.
The Plan seeks to achieve this purpose by providing for Awards in the form of
Restricted Shares, Stock Units, Performance Shares, Options (which may
constitute incentive stock options or nonstatutory stock options) or stock
appreciation rights.
The Plan shall be governed by, and construed in accordance with, the laws
of the State of California (except their choice-of-law provisions).
ARTICLE 2......DEFINITIONS.
ARTICLE 2. DEFINITIONS.
2.1...."Affiliate" means any entity other than a Subsidiary, if the Company
and/or one or more Subsidiaries own not less than 50% of such entity.
2.2...."Award" means any award of an Option, an SAR, a Restricted Share, a
Stock Unit or a Performance Share under the Plan.
2.3...."Board" means the Company's Board of Directors, as constituted from
time to time.
2.4....A "Change in Control" shall be deemed to have occurred if
(A) any "person" (as such term is used in Section 13(d) and 14(d) of
the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing Twenty
percent (20%) or more of the combined voting power of the Company's then
outstanding voting securities;
(B) there is a merger or consolidation of the Company in which the
Company does not survive as an independent public company; or
(C) the business or businesses of the Company for which a
Participant's services are principally performed are disposed of by the
Company pursuant to a partial or complete liquidation of the Company, a
sale of assets (including stock of a Subsidiary) of the Company, or
otherwise. A transaction shall not constitute a Change in Control if its
sole purpose is to change the state of the Company's incorporation or to
create a holding company that will be owned in substantially the same
proportions by the persons who held the Company's securities immediately
before such transaction.
2.5...."Code" means the Internal Revenue Code of 1986, as amended.
2.6...."Committee" means the Compensation Committee of the Board, as
described in Article 3.
2.7...."Company" means Roseville Communications Company, a California
corporation.
2.8...."Consultant" means a consultant or adviser who provides bona fide
services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as a Consultant shall be considered employment
for all purposes of the Plan, except as provided in Section 5.1.
2.9...."Employee" means a common law employee of the Company, a Parent, a
Subsidiary or an Affiliate.
2.10..."Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.11..."Exercise Price," in the case of an Option, means the amount for
which one Share may be purchased upon exercise of such Option, as specified in
the applicable Stock Option Agreement. "Exercise Price," in the case of an SAR,
means an amount, as specified in the applicable SAR Agreement, which is
subtracted from the Fair Market Value of one Share in determining the amount
payable upon exercise of such SAR.
2.12..."Fair Market Value" means the market price of Shares, determined by
the Committee in good faith on such basis as it deems appropriate. Fair Market
Value may mean (i) if the Company's common stock is listed on a securities
exchange or is traded over the NASDAQ National Market System, the closing sales
price of one Share on such exchange or other such system on an applicable date
or, in the absence of reported sales on such date, the closing sales price on
the immediately preceding date on which sales were reported, or (ii) if the
Company's common stock is not listed on a securities exchange or traded over the
NASDAQ National Market System, the mean between the bid and offered prices of
the Share as quoted by the National Association of Securities Dealer through
NASDAQ, provided, that if the Committee determines that the fair market value is
not properly reflected by such NASDAQ quotations, the Fair Market Value will
mean the fair market value as determined by such other method as the Committee
determines in good faith to be reasonable. Such determination shall be
conclusive and binding on all persons.
2.13..."ISO" means an incentive stock option described in Section 422(b) of
the Code.
2.14..."NSO" means a stock option not described in Sections 422 or 423 of
the Code.
2.15..."Option" means an ISO or NSO granted under the Plan and entitling
the holder to purchase Shares.
2.16..."Optionee" means an individual or estate who holds an Option or SAR.
2.17..."Outside Director" means a member of the Board who is not an
Employee. Service as an Outside Director shall be considered employment for all
purposes of the Plan, except as provided in Section 5.1.
2.18..."Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.
2.19..."Participant" means an individual or estate who holds an Award.
2.20..."Performance Share" means an Award to a Participant under Article
12.
2.21..."Performance Share Agreement" means the agreement between the
Company and a Participant which contains the terms, conditions and restrictions
pertaining to such Performance Share.
2.22..."Plan" means this Roseville Communications Company 2000 Equity
Incentive Plan, as amended from time to time.
2.23..."Restricted Share" means a Share awarded under the Plan.
2.24..."Restricted Stock Agreement" means the agreement between the Company
and the recipient of a Restricted Share which contains the terms, conditions and
restrictions pertaining to such Restricted Share.
2.25..."SAR" means a stock appreciation right granted under the Plan.
2.26..."SAR Agreement" means the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to his
or her SAR.
2.27..."Share" means one share of the common stock of the Company.
2.28..."Stock Option Agreement" means the agreement between the Company and
an Optionee that contains the terms, conditions and restrictions pertaining to
his or her Option.
2.29..."Stock Unit" means a bookkeeping entry representing the equivalent
of one Share, as awarded under the Plan.
2.30..."Stock Unit Agreement" means the agreement between the Company and
the recipient of a Stock Unit which contains the terms, conditions and
restrictions pertaining to such Stock Unit.
2.31..."Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
ARTICLE 3......ADMINISTRATION.
ARTICLE 3. ADMINISTRATION.
3.1....Committee Composition
3.1 Committee Composition. The Plan shall be administered by the Committee.
The Committee shall consist exclusively of two or more directors of the Company,
who shall be appointed by the Board. In addition, the composition of the
Committee shall satisfy:
(a) Such requirements as the Securities and Exchange Commission may
establish for administrators acting under plans intended to quality for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and
(b) Such requirements as the Internal Revenue Service may establish
for Outside Directors acting under plans intended to qualify for exemption
under section 162(m)(4)(C) of the Code.
3.2....Committee Responsibilities
3.2 Committee Responsibilities. The Committee shall
(a) Select the Employees, Outside Directors and Consultants who are to
receive Awards under the Plan,
(b) Determine the type, number, vesting requirements and other
features and conditions of such Awards,
(c) Interpret the Plan and (d) make all other decisions relating to
the operation of the Plan. The Committee may adopt such rules or guidelines
as it deems appropriate to implement the Plan. The Committee's
determinations under the Plan shall be final and binding on all persons.
3.3....Committee for Non-Officer Grants
3.3 Committee for Non-Officer Grants. The Board may also appoint a
secondary committee of the Board, which shall be composed of two or more
directors of the Company who need not satisfy the requirements of Section 3.1.
Such secondary committee may administer the Plan with respect to Employees and
Consultants who are not considered officers or directors of the Company under
Section 16 of the Exchange Act, may grant Awards under the Plan to such
Employees and Consultants and may determine all features and conditions of such
Awards. Within the limitations of this Section 3.3, any reference in the Plan to
the Committee shall include such secondary committee.
ARTICLE 4......SHARES AVAILABLE FOR GRANTS.
ARTICLE 4. SHARES AVAILABLE FOR GRANTS.
4.1....Basic Limitation
4.1. Basic Limitation. Shares issued pursuant to the Plan shall be
authorized but unissued shares. The aggregate number of Options, SARs, Stock
Units, Restricted Shares and Performance Shares awarded under the Plan shall not
exceed Eight Hundred Thousand (800,000) Shares. The limitation of this Section
4.1 shall be subject to adjustment pursuant to Article 13.
4.2....Forfeited Shares
4.2. Annual Increase in Shares. If Restricted Shares, Performance Shares or
Shares issued upon the exercise of Options are forfeited, then such Shares shall
again become available for Awards under the Plan. If Stock Units, Options or
SARs are forfeited or terminate for any other reason before being exercised,
then the corresponding Shares shall again become available for Awards under the
Plan. If Stock Units are settled, then only the number of Shares (if any)
actually issued in settlement of such Stock Units shall reduce the number
available under Section 4.1 and the balance shall again become available for
Awards under the Plan. If SARs are exercised, then only the number of Shares (if
any) actually issued in settlement of such SARs shall reduce the number
available under Section 4.1 and the balance shall again become available for
Awards under the Plan. The foregoing notwithstanding, the aggregate number of
Shares that may be issued under the Plan upon the exercise of ISOs shall not be
increased when Restricted Shares, Performance Shares or other Shares are
forfeited.
4.3....Dividend Equivalents
4.4....Dividend Equivalents. Any dividend equivalents paid or credited
under the Plan shall not be applied against the number of Restricted Shares,
Performance Shares, Stock Units, Options or SARs available for Awards, whether
or not such dividend equivalents are converted into Stock Units.
ARTICLE 5......ELIGIBILITY
ARTICLE 5. ELIGIBILITY.
5.1....Incentive Stock Options
5.1 Incentive Stock Options. Only Employees who are common-law employees of
the Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs.
In addition, an Employee who owns more than 10% of the total combined voting
power of all classes of outstanding stock of the Company or any of its Parents
or Subsidiaries shall not be eligible for the grant of an ISO unless the
requirements set forth in section 422(c)(6) of the Code are satisfied.
5.2......Other Grants
5.2 Other Grants. Only Employees, Outside Directors and Consultants shall
be eligible for the grant of Restricted Shares, Performance Shares, Stock Units,
NSOs or SARs.
ARTICLE 6......OPTIONS
ARTICLE 6. OPTIONS.
6.1....Stock Option Agreement
6.1. Stock Option Agreement. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The Stock
Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a reduction in
the Optionee's other compensation. A Stock Option Agreement may provide that a
new Option will be granted automatically to the Optionee when he or she
exercises a prior Option and pays the Exercise Price in the form described in
Section 7.2.
6.2....Number of Shares
6.2. Number of Shares. Each Stock Option Agreement shall specify the
number of Shares subject to the Option and shall provide for the adjustment of
such number in accordance with Article 13. Options granted to any Optionee in a
single fiscal year of the Company shall not cover more than 200,000 Shares,
except that Options granted to a new Employee in the fiscal year of the Company
in which his or her service as an Employee first commences shall not cover more
than 25,000 Shares. The limitations set forth in the preceding sentence shall be
subject to adjustment in accordance with Article 13.
6.3....Exercise Price
6.3. Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price; provided that the Exercise Price under an ISO shall in no event be less
than 100% of the Fair Market Value of a Share on the date of grant and the
Exercise Price under an NSO shall in no event be less than 85% of the Fair
Market Value of a Share on the date of grant. In the case of an NSO, a Stock
Option Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the NSO is outstanding.
6.4....Exercisability and Term
6.4 Exercisability and Term. Each Stock Option Agreement shall specify the
date or event when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of the
Option; provided that the term of an ISO shall in no event exceed 10 years from
the date of grant. A Stock Option Agreement may provide for accelerated
exercisability in the event of the Optionee's death, disability or retirement or
other events and may provide for expiration prior to the end of its term in the
event of the termination of the Optionee's service. Options may be awarded in
combination with SARs, and such an Award may provide that the Options will not
be exercisable unless the related SARs are forfeited.
6.5....Effect of Change in Control
6.5 Effect of Change in Control. The Committee may determine, at the time
of granting an Option or thereafter, that such Option shall become exercisable
as to all or part of the Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company, subject to the limitations
that, in the case of an ISO, the acceleration of exercisability shall not occur
without the Optionee's written consent.
6.6......Modification or Assumption of Options
6.6 Modification or Assumption of Options. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.
6.7......Buyout Provisions
6.7. Buyout Provisions. The Committee may at any time
(a) Offer to buy out for a payment in cash or cash equivalents
an Option previously granted or
(b) authorize an Optionee to elect to cash out an Option
previously granted, in either case at such time and based
upon such terms and conditions as the Committee shall
establish.
ARTICLE 7......PAYMENT FOR OPTION SHARES
ARTICLE 7. PAYMENT FOR OPTION SHARES.
7.1....General Rule
7.1. General Rule. The entire Exercise Price of Shares issued upon exercise
of Options shall be payable in cash or cash equivalents at the time when such
Shares are purchased, except as follows:
(a) In the case of an ISO granted under the Plan, payment shall be made
only pursuant to the express provisions of the applicable Stock Option
Agreement. The Stock Option Agreement may specify that payment may be
made in any form(s) described in this Article 7. (b) In the case of an
NSO, the Committee may at any time accept payment in any form(s)
described in this Article 7.
7.2....Surrender of Stock
7.2. Surrender of Stock. To the extent that this Section 7.2 is applicable,
all or any part of the Exercise Price may be paid by surrendering, or attesting
to the ownership of, Shares that are already owned by the Optionee. Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan. The Optionee shall not surrender, or attest to the
ownership of, Shares in payment of the Exercise Price if such action would cause
the Company to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting purposes.
7.3....Exercise/Sale
7.3. Exercise/Sale. To the extent that this Section 7.3 is applicable, all
or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to a
securities broker approved by the Company to sell all or part of the Shares
being purchased under the Plan and to deliver all or part of the sales proceeds
to the Company.
7.4....Exercise/Pledge
7.4. Exercise/Pledge. To the extent that this Section 7.4 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to
pledge all or part of the Shares being purchased under the Plan to a securities
broker or lender approved by the Company, as security for a loan, and to deliver
all or part of the loan proceeds to the Company.
7.5....Promissory Note
7.5. Promissory Note. To the extent that this Section 7.5 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) a full-recourse promissory
note.
7.6....Other Forms of Payment
7.6. Other Forms of Payment. To the extent that this Section 7.6 is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations
and rules.
ARTICLE 8......AUTOMATIC OPTION GRANTS TO OUTSIDE DIRECTORS
ARTICLE 8. AUTOMATIC OPTION
GRANTS TO OUTSIDE DIRECTORS.
8.1....Annual Grants
8.1. Annual Grants. Upon the conclusion of each regular annual meeting of
the Company's stockholders held in the year 2000 or thereafter, each Outside
Director who will continue serving as a member of the Board thereafter shall
receive an NSO covering 1,250 Shares (subject to adjustment under Article 12).
NSOs granted under this Section 8.1 shall become exercisable in full on the
first anniversary of the date of grant.
8.2....Accelerated Exercisability
8.2 Accelerated Exercisability. All NSOs granted to an Outside Director
under this Article 8 shall also become exercisable in full in the event of:
(a) The termination of such Outside Director's service because of death,
total and permanent disability or retirement at or after age 70 and
1/2 ; or
(b) A Change in Control with respect to the Company.
8.3....Exercise Price
8.3. Exercise Price. The Exercise Price under all NSOs granted to an
Outside Director under this Article 8 shall be equal to 100% of the Fair Market
Value of a Share on the date of grant, payable in one of the forms described in
Sections 7.1, 7.2, 7.3 and 7.4.
8.4....Term
8.4 Term. All NSOs granted to an Outside Director under this Article 8
shall terminate on the earliest of
(a) the 10th anniversary of the date of grant,
(b) the date three (3) months after the termination of such Outside
Director's service for any reason other than death or total and
permanent disability or
(c) the date six (6) months after the termination of such Outside
Director's service because of death or total and permanent disability.
ARTICLE 9......STOCK APPRECIATION RIGHTS
ARTICLE 9. STOCK APPRECIATION RIGHTS.
9.1....SAR Agreement
9.1....SAR Agreement. Each grant of an SAR under the Plan shall be
evidenced by an SAR Agreement between the Optionee and the Company. Such SAR
shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan. The provisions of the
various SAR Agreements entered into under the Plan need not be identical. SARs
may be granted in consideration of a reduction in the Optionee's other
compensation.
9.2....Number of Shares
9.2. Number of Shares. Each SAR Agreement shall specify the number of
Shares to which the SAR pertains and shall provide for the adjustment of such
number in accordance with Article 13. SARs granted to any Optionee in a single
calendar year shall in no event pertain to more than 200,000 Shares, except that
SARs granted to a new Employee in the fiscal year of the Company in which his or
her service as an Employee first commences shall not pertain to more than 25,000
Shares. The limitations set forth in the preceding sentence shall be subject to
adjustment in accordance with Article 13.
9.3....Exercise Price
9.3. Exercise Price. Each SAR Agreement shall specify the Exercise Price.
An SAR Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the SAR is outstanding.
9.4....Exercisability and Term
9.4. Exercisability and Term. Each SAR Agreement shall specify the date
when all or any installment of the SAR is to become exercisable. The SAR
Agreement shall also specify the term of the SAR. An SAR Agreement may provide
for accelerated exercisability in the event of the Optionee's death, disability
or retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee's service. SARs may be
awarded in combination with Options, and such an Award may provide that the SARs
will not be exercisable unless the related Options are forfeited. An SAR may be
included in an ISO only at the time of grant but may be included in an NSO at
the time of grant or thereafter. An SAR granted under the Plan may provide that
it will be exercisable only in the event of a Change in Control.
9.5....Effect of Change in Control
9.5. Effect of Change in Control. The Committee may determine, at the time
of granting an SAR or thereafter, that such SAR shall become fully exercisable
as to all Shares subject to such SAR in the event that a Change in Control
occurs with respect to the Company.
9.6....Exercise of SARs
9.6. Exercise of SARs. Upon exercise of an SAR, the Optionee (or any person
having the right to exercise the SAR after his or her death) shall receive from
the Company
(a) Shares,
(b) Cash or
(c) A combination of Shares and cash, as the Committee shall determine.
The amount of cash and/or the Fair Market Value of Shares received
upon exercise of SARs shall, in the aggregate, be equal to the amount
by which the Fair Market Value (on the date of surrender) of the
Shares subject to the SARs exceeds the Exercise Price. If, on the date
when an SAR expires, the Exercise Price under such SAR is less than
the Fair Market Value on such date but any portion of such SAR has not
been exercised or surrendered, then such SAR shall automatically be
deemed to be exercised as of such date with respect to such portion.
9.7....Modification or Assumption of SARs
9.7. Modification or Assumption of SARs. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding SARs or may accept
the cancellation of outstanding SARs (whether granted by the Company or by
another issuer) in return for the grant of new SARs for the same or a different
number of shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of an SAR shall, without the consent of the
Optionee, alter or impair his or her rights or obligations under such SAR.
ARTICLE 10......RESTRICTED SHARES
ARTICLE 10. RESTRICTED SHARES.
10.1...Restricted Stock Agreement
10.1 Restricted Stock Agreement. Each grant of Restricted Shares under the
Plan shall be evidenced by a Restricted Stock Agreement between the recipient
and the Company. Such Restricted Shares shall be subject to all applicable terms
of the Plan and may be subject to any other terms that are not inconsistent with
the Plan. The provisions of the various Restricted Stock Agreements entered into
under the Plan need not be identical.
10.2...Payment for Awards
10.2. Payment for Awards. Restricted Shares may be sold or awarded under
the Plan for such consideration as the Committee may determine, including
(without limitation) cash, cash equivalents, full-recourse promissory notes,
past services and future services.
10.3...Vesting Conditions
10.3. Vesting Conditions. Each Award of Restricted Shares may or may not
be subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Stock Agreement. A
Restricted Stock Agreement may provide for accelerated vesting in the event of
the Participant's death, disability or retirement or other events. The Committee
may determine, at the time of granting Restricted Shares or thereafter, that all
or part of such Restricted Shares shall become vested in the event that a Change
in Control occurs with respect to the Company.
10.4...Voting and Dividend Rights
10.4 Voting and Dividend Rights. The holders of Restricted Shares awarded
under the Plan shall have the same voting, dividend and other rights as the
Company's other shareholders. A Restricted Stock Agreement, however, may require
that the holders of Restricted Shares invest any cash dividends received in
additional Restricted Shares. Such additional Restricted Shares shall be subject
to the same conditions and restrictions as the Award with respect to which the
dividends were paid.
ARTICLE 11......STOCK UNITS
ARTICLE 11. STOCK UNITS.
11.1...Stock Unit Agreement
11.1. Stock Unit Agreement. Each grant of Stock Units under the Plan shall
be evidenced by a Stock Unit Agreement between the recipient and the Company.
Such Stock Units shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Unit Agreements entered into under the Plan need
not be identical. Stock Units may be granted in consideration of a reduction in
the recipient's other compensation.
11.2...Payment for Awards
11.2. Payment for Awards. To the extent that an Award is granted in the
form of Stock Units, no cash consideration shall be required of the Award
recipients.
11.3...Vesting Conditions
11.3. Vesting Conditions. Each Award of Stock Units may or may not be
subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Stock Unit Agreement. A Stock
Unit Agreement may provide for accelerated vesting in the event of the
Participant's death, disability or retirement or other events. The Committee may
determine, at the time of granting Stock Units or thereafter, that all or part
of such Stock Units shall become vested in the event that a Change in Control
occurs with respect to the Company.
11.4...Voting and Dividend Rights
11.4 Voting and Dividend Rights. The holders of Stock Units shall have no
voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under
the Plan may, at the Committee's discretion, carry with it a right to dividend
equivalents. Such right entitles the holder to be credited with an amount equal
to all cash dividends paid on one Share while the Stock Unit is outstanding.
Dividend equivalents may be converted into additional Stock Units. Settlement of
dividend equivalents may be made in the form of cash, in the form of Shares, or
in a combination of both. Prior to distribution, any dividend equivalents which
are not paid shall be subject to the same conditions and restrictions as the
Stock Units to which they attach.
11.5...Form and Time of Settlement of Stock Units
11.5 Form and Time of Settlement of Stock Units. Settlement of vested Stock
Units may be made in the form of
(a) Cash,
(b) Shares or
(c) Any combination of both, as determined by the Committee. The actual
number of Stock Units eligible for settlement may be larger or smaller
than the number included in the original Award, based on predetermined
performance factors. Methods of converting Stock Units into cash may
include (without limitation) a method based on the average Fair Market
Value of Shares over a series of trading days. Vested Stock Units may
be settled in a lump sum or in installments. The distribution may
occur or commence when all vesting conditions applicable to the Stock
Units have been satisfied or have lapsed, or it may be deferred to any
later date. The amount of a deferred distribution may be increased by
an interest factor or by dividend equivalents. Until an Award of Stock
Units is settled, the number of such Stock Units shall be subject to
adjustment pursuant to Article 13.
11.6...Death of Recipient
11.6 Death of Recipient. Any Stock Units Award that becomes payable after
the recipient's death shall be distributed to the recipient's beneficiary or
beneficiaries. Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Award recipient's death.
If no beneficiary was designated or if no designated beneficiary survives the
Award recipient, then any Stock Units Award that becomes payable after the
recipient's death shall be distributed to the recipient's estate.
11.7...Creditors' Rights
11.7. Creditors' Rights. A holder of Stock Units shall have no rights other
than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Unit Agreement.
ARTICLE 12......PERFORMANCE SHARES
ARTICLE 12. PERFORMANCE SHARES
12.1...Performance Share Agreement
12.1. Performance Share Agreement. Each grant of Performance Shares under
the Plan shall be evidenced by a Performance Share Agreement between the
Participant and the Company. Such Performance Shares shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Performance Share
Agreements entered into under the Plan need not be identical.
12.2...Grant of Performance Shares
12.2. Grant of Performance Shares. Before the grant of Performance Shares,
the Committee shall:
(a) determine objective performance goals, which may consist of any one or
more of the following goals deemed appropriate by the Committee:
earnings (either in the aggregate or on a per-share basis), operating
income, cash flow, including EBITDA (earnings before interest, taxes,
depreciation and amortization), return on equity, per share rate of
return on the Shares (including dividends), general indices relative
to levels of general customer service satisfaction, as measured
through various randomly-generated customer service surveys, market
share (in one or more markets), customer retention rates, market
penetration rates, revenues, reductions in expense levels, and the
attainment by the Shares of a specified market value for a specified
period of time, in each case where applicable to be determined either
on a Company-wide basis or in respect of any one or more business
units, and the amount of compensation under the goals applicable to
such grant;
(b) designate a period for the measurement of the extent to which
performance goals are attained, which may begin prior to the date of
grant (the "Performance Period"); and
(c) assign a "Performance Percentage" to each level of attainment of
performance goals during the Performance Period, with the percentage
applicable to minimum attainment being zero percent and the percentage
applicable to maximum attainment to the determined by the Committee
from time to time, but not in excess of 250%.
12.3...Modification of Grant
12.3. Modification of Grant. If a Participant is promoted, demoted, or
transferred to a different business unit of the Company during a Performance
Period, then, to the extent the Committee determines any one or more of the
performance goals, Performance Period, or Performance Percentage are no longer
appropriate, the Committee may make any changes thereto as it deems appropriate
in order to make them appropriate.
12.4...Terms of the Grant
12.4. Terms of the Grant. When granted, Performance Shares may, but need
not, be identified with Shares subject to a specific Option, specific Restricted
Shares, or specific SARs of the Participant granted under the Plan in a number
equal to or different from the number of the Performance Shares so granted. If
Performance Shares are so identified, then, unless otherwise provided in the
applicable Award, the Participant's associated Performance Shares shall
terminate upon (a) the expiration, termination, forfeiture, or cancellation of
the Option, Restricted Shares, or SARs with which the Performance Shares are
identified, (b) the exercise of such Option or SARs, or (c) the date Restricted
Shares become nonforfeitable.
12.5...Payment of Performance Shares
12.5. Payment of Performance Shares. Unless otherwise provided in the
Performance Share Agreement, if the minimum performance goals applicable to such
Performance Shares have been achieved during the applicable Performance Period,
then the Company shall pay to the Participant that number of Shares equal to the
product of:
(a) the sum of (i) number of Performance Shares specified in the
applicable Award agreement and (ii) the number of Shares that would
have been issuable if such Performance Shares had been Shares
outstanding throughout the Performance Period and the stock dividends,
cash dividends (except as otherwise provided in the Performance Share
Agreement) and other property paid in respect of such shares had been
reinvested in additional Shares as of each dividend payment date,
multiplied by
(b) the Performance Percentage achieved during such Performance Period.
The Committee may, in its discretion, determine that cash be paid in
lieu of some or all of such Shares. The amount of cash payable in lieu
of a Share shall be determined by valuing such shares at its Fair
Market Value on the business day next preceding the date such cash is
to be paid. Payments pursuant to this Section shall be made as soon as
administratively practical after the end of the applicable Performance
Period. Any Performance Shares with respect to which the performance
goals shall not have been achieved by the end of the applicable
Performance period shall expire.
ARTICLE 13......PROTECTION AGAINST DILUTION
ARTICLE 13. PROTECTION AGAINST DILUTION.
13.1...Adjustments
13.1. Adjustments. In the event of a subdivision of the outstanding Shares,
a declaration of a dividend payable in Shares, a declaration of a dividend
payable in a form other than Shares in an amount that has a material effect on
the price of Shares, a combination or consolidation of the outstanding Shares
(by reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make
such adjustments as it, in its sole discretion, deems appropriate in one or more
of:
(a) The number of Options, SARs, Restricted Shares, Performance Shares and
Stock Units available for future Awards under Article 4;
(b) The limitations set forth in Sections 6.2 and 9.2;
(c) The number of NSOs to be granted to Outside Directors under Article 8;
(d) The number of Shares covered by each outstanding Option and SAR;
(e) The Exercise Price under each outstanding Option and SAR; or
(f) The number of Stock Units included in any prior Award which has not
yet been settled.
Except as provided in this Article 13, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.
13.2...Dissolution or Liquidation
13.2. Dissolution or Liquidation. To the extent not previously exercised or
settled, Options, SARs and Stock Units shall terminate immediately prior to the
dissolution or liquidation of the Company.
13.3...Reorganizations
13.3. Reorganizations. In the event that the Company is a party to a merger
or other reorganization, outstanding Awards shall be subject to the agreement of
merger or reorganization Such agreement shall provide for:
(a) The continuation of the outstanding Awards by the Company, if the
Company is a surviving corporation;
(b) The assumption of the outstanding Awards by the surviving corporation
or its parent or subsidiary;
(c) The substitution by the surviving corporation or its parent or
subsidiary of its own awards for the outstanding Awards;
(d) Full exercisability or vesting and accelerated expiration of the
outstanding Awards; or
(e) Settlement of the full value of the outstanding Awards in cash or cash
equivalents followed by cancellation of such Awards.
ARTICLE 14......DEFERRAL OF AWARDS
ARTICLE 14. DEFERRAL OF AWARDS.
The Committee (in its sole discretion) may permit or require a Participant to:
(a) Have cash that otherwise would be paid to such Participant as a result
of the exercise of an SAR or the settlement of Stock Units credited to
a deferred compensation account established for such Participant by
the Committee as an entry on the Company's books;
(b) Have Shares that otherwise would be delivered to such Participant as a
result of the exercise of an Option or SAR converted into an equal
number of Stock Units; or
(c) Have Shares that otherwise would be delivered to such Participant as a
result of the exercise of an Option or SAR or the settlement of Stock
Units converted into amounts credited to a deferred compensation
account established for such Participant by the Committee as an entry
on the Company's books. Such amounts shall be determined by reference
to the Fair Market Value of such Shares as of the date when they
otherwise would have been delivered to such Participant.
A deferred compensation account established under this Article 14 may be
credited with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no
rights other than those of a general creditor of the Company. Such an account
shall represent an unfunded and unsecured obligation of the Company and shall be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established under
this Article 14.
ARTICLE 15......AWARDS UNDER OTHER PLANS
ARTICLE 15. AWARDS UNDER OTHER PLANS.
The Company may grant awards under other plans or programs. Such awards may
be settled in the form of Shares issued under this Plan. Such Shares shall be
treated for all purposes under the Plan like Shares issued in settlement of
Stock Units and shall, when issued, reduce the number of Shares available under
Article 4.
ARTICLE 16......PAYMENT OF DIRECTOR'S FEES IN SECURITIES
ARTICLE 16. PAYMENT OF DIRECTOR'S FEES IN SECURITIES.
16.1...Effective Date
16.1. Effective Date. No provision of this Article 16 shall be effective
unless and until the Board has determined to implement such provision.
16.2...Elections to Receive NSOs, Restricted Shares or Stock Units
16.2. Elections to Receive NSOs, Restricted Shares or Stock Units. An
Outside Director may elect to receive his or her annual retainer payments and/or
meeting fees from the Company in the form of cash, NSOs, Restricted Shares or
Stock Units, or a combination thereof, as determined by the Board. Such NSOs,
Restricted Shares and Stock Units shall be issued under the Plan. An election
under this Article 16 shall be filed with the Company on the prescribed form.
16.3...Number and Terms of NSOs, Restricted Shares or Stock Units
16.3 Number and Terms of NSOs, Restricted Shares or Stock Units. The number
of NSOs, Restricted Shares or Stock Units to be granted to Outside Directors in
lieu of annual retainers and meeting fees that would otherwise be paid in cash
shall be calculated in a manner determined by the Board. The terms of such NSOs,
Restricted Shares or Stock Units shall also be determined by the Board.
ARTICLE 17......LIMITATION ON RIGHTS
ARTICLE 17. LIMITATION ON RIGHTS.
17.1...Retention Rights
17.1. Retention Rights. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an Employee,
Outside Director or Consultant. The Company and its Parents, Subsidiaries and
Affiliates reserve the right to terminate the service of any Employee, Outside
Director or Consultant at any time, with or without cause, subject to applicable
laws, the Company's articles of incorporation and bylaws and a written
employment agreement (if any).
17.2...Shareholders' Rights
17.2. Shareholders' Rights. A Participant shall have no dividend rights,
voting rights or other rights as a shareholder with respect to any Shares
covered by his or her Award prior to the time when a stock certificate for such
Shares is issued or, if applicable, the time when he or she becomes entitled to
receive such Shares by filing any required notice of exercise and paying any
required Exercise Price. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to such time, except as expressly
provided in the Plan.
17.3...Regulatory Requirements
17.3 Regulatory Requirements. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Shares under the Plan
shall be subject to all applicable laws, rules and regulations and such approval
by any regulatory body as may be required. The Company reserves the right to
restrict, in whole or in part, the delivery of Shares pursuant to any Award
prior to the satisfaction of all legal requirements relating to the issuance of
such Shares, to their registration, qualification or listing or to an exemption
from registration, qualification or listing.
ARTICLE 18......WITHHOLDING TAXES
ARTICLE 18. WITHHOLDING TAXES.
18.1...General
18.1. General. To the extent required by applicable federal, state, local
or foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Shares or make any cash payment under the Plan until such
obligations are satisfied.
18.2...Share Withholding
18.2. Share Withholding. The Committee may permit a Participant to satisfy
all or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Shares that otherwise would be issued
to his or her or by surrendering all or a portion of any Shares that he or she
previously acquired. Such Shares shall be valued at their Fair Market Value on
the date when taxes otherwise would be withheld in cash.
ARTICLE 19......FUTURE OF THE PLAN
ARTICLE 19. FUTURE OF THE PLAN.
19.1...Term of the Plan
19.1. Term of the Plan. The Plan, as set forth herein, shall become
effective on January 31, 2000. The Plan shall remain in effect until it is
terminated under Section 19.2, except that no ISOs shall be granted on or after
the 10th anniversary of the later of (a) the date when the Board adopted the
Plan or (b) the date when the Board adopted the most recent increase in the
number of Shares available under Article 4 which was approved by the Company's
shareholders.
19.2...Amendment or Termination
19.2. Amendment or Termination. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's shareholders only to the extent required by
applicable laws, regulations or rules. No Awards shall be granted under the Plan
after the termination thereof. The termination of the Plan, or any amendment
thereof, shall not affect any Award previously granted under the Plan.
ARTICLE 20.....LIMITATION ON PARACHUTE PAYMENTS
ARTICLE 20. LIMITATION ON PARACHUTE PAYMENTS.
20.1...Scope of Limitation
20.1. Scope of Limitation. This Article 20 shall apply to an Award only if:
(a) The independent auditors most recently selected by the Board (the
"Auditors") determine that the after-tax value of such Award to the
Participant, taking into account the effect of all federal, state and
local income taxes, employment taxes and excise taxes applicable to
the Participant (including the excise tax under section 4999 of the
Code), will be greater after the application of this Article 20 than
it was before the application of this Article 20, or
(b) The Committee, at the time of making an Award under the Plan or at any
time thereafter, specifies in writing that such Award shall be subject
to this Article 20 (regardless of the after-tax value of such Award to
the Participant).
If this Article 20 applies to an Award, it shall supersede any contrary
provision of the Plan or of any Award granted under the Plan.
20.2...Basic Rule
20.2. Basic Rule. In the event that the independent auditors most recently
selected by the Board (the "Auditors") determine that any payment or transfer by
the Company under the Plan to or for the benefit of a Participant (a "Payment")
would be nondeductible by the Company for federal income tax purposes because of
the provisions concerning "excess parachute payments" in Section 28OG of the
Code, then the aggregate present value of all Payments shall be reduced (but not
below zero) to the Reduced Amount. For purposes of this Article 20, the "Reduced
Amount" shall be the amount, expressed as a present value, which maximizes the
aggregate present value of the Payments without causing any Payment to be
nondeductible by the Company because of Section 28OG of the Code.
20.3...Reduction of Payments
20.3. Reduction of Payments. If the Auditors determine that any Payment
would be nondeductible by the Company because of Section 28OG of the Code, then
the Company shall promptly give the Participant notice to that effect and a copy
of the detailed calculation thereof and of the Reduced Amount, and the
Participant may then elect, in his or her sole discretion, which and how much of
the Payments shall be eliminated or reduced (as long as after such election the
aggregate present value of the Payments equals the Reduced Amount) and shall
advise the Company in writing of his or her election within 10 days of receipt
of notice. If no such election is made by the Participant within such 10-day
period, then the Company may elect which and how much of the Payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the Payments equals the Reduced Amount) and shall notify the
Participant promptly of such election. For purposes of this Article 20, present
value shall be determined in accordance with Section 28OG(d)(4) of the Code. All
determinations made by the Auditors under this Article 20 shall be binding upon
the Company and the Participant and shall be made within 60 days of the date
when a Payment becomes payable or transferable. As promptly as practicable
following such determination and the elections hereunder, the Company shall pay
or transfer to or for the benefit of the Participant such amounts as are then
due to him or her under the Plan and shall promptly pay or transfer to or for
the benefit of the Participant in the future such amounts as become due to him
or her under the Plan.
20.4.....Overpayments and Underpayments20.4 Overpayments and Underpayments.
As a result of uncertainty in the application of Section 28OG of the Code at the
time of an initial determination by the Auditors hereunder, it is possible that
Payments will have been made by the Company that should not have been made (an
"Overpayment") or that additional Payments that will not have been made by the
Company could have been made (an "Underpayment"), consistent in each case with
the calculation of the Reduced Amount hereunder. In the event that the Auditors,
based upon the assertion of a deficiency by the Internal Revenue Service against
the Company or the Participant that the Auditors believe has a high probability
of success, determine that an Overpayment has been made, such Overpayment shall
be treated for all purposes as a loan to the Participant which he or she shall
repay to the Company, together with interest at the applicable federal rate
provided in Section 7872(f)(2) of the Code; provided, however, that no amount
shall be payable by the Participant to the Company if and to the extent that
such payment would not reduce the amount subject to taxation under Section 4999
of the Code. In the event that the Auditors determine that an Underpayment has
occurred, such Underpayment shall promptly be paid or transferred by the Company
to or for the benefit of the Participant, together with interest at the
applicable federal rate provided in Section 7872(f)(2) of the Code.
20.5...Related Corporations
20.5. Related Corporations. For purposes of this Article 20, the term
"Company" shall include affiliated corporations to the extent determined by the
Auditors in accordance with Section 28OG(d)(5) of the Code.
ARTICLE 21......EXECUTION
ARTICLE 21. EXECUTION.
To record the adoption of the Plan by the Board, the Company has caused its
duly authorized officer to execute this document in the name of the Company.
ROSEVILLE COMMUNICATIONS COMPANY
By:
Title:
