SECOND AMENDMENT
TO
EMPLOYEE STOCK OWNERSHIP PLAN
AND
TRUST AGREEMENT
OF
BIG O TIRES, INC.
THIS AMENDMENT is made by Big O Tires, Inc. (hereinafter referred to as the
"Employer" or "Corporation").
WHEREAS, the Employer restated its Employee Stock Ownership Plan and Trust
Agreement (hereinafter referred to as the "Plan") effective January 1, 1989; and
WHEREAS, Section 10.5(a) of the Plan, as amended, provides in part as
follows:
"The Corporation may at any time and from time to time amend this
Plan and Trust Agreement..."; and
WHEREAS, the Employer now desires to amend the Plan.
NOW, THEREFORE, the Employer does hereby amend the Plan in the following
particulars:
ARTICLE I
Section 2.1 -- "Administrator" is hereby amended to read as follows:
"SECTION 2.1 -- "ADMINISTRATOR" means Big O Tires, Inc. acting through
a Plan Administrative Committee selected pursuant to the provisions of
Section 8.10 below."
ARTICLE II
Section 2.19 is hereby amended to read as follows:
"SECTION 2.19 -- "QUALIFYING EMPLOYER SECURITY" OR "EMPLOYER SECURITY"
means common stock issued by the Employer (or by a corporation which
is a member of the same controlled group as the Employer as defined in
Section 4.09(l) of the Code) which has a combination of voting power
and dividend rights equal to or in excess of that class of common
stock of the Employer having the greatest voting power and that class
of common stock of the Employer having the greatest dividend rights."
ARTICLE III
Section 2.21 -- "Trustee" is hereby amended to read as follows:
"SECTION 2.21 -- "TRUSTEE" means the Trustee or Trustees of the Trust
Fund established pursuant to this Plan and Trust Agreement and any
duly appointed and qualified successor or additional Trustees. The
Trustee shall be an independent corporate trustee as provided in
Section 9.14.
ARTICLE IV
Section 4.1 of the Plan is hereby amended by adding the following language
to the end of such section:
"For the Plan Years ending December 31, 1996 through the Plan Year
ending December 31, 2001, the Company shall be required to make a
contribution in the amount of at least five percent (5%) of the
Compensation of Participants in the Plan for each of such Plan Years.
Such contribution may be either in the form of Qualifying Employer
Securities or cash as provided pursuant to Section 7.10(c)(iv)."
ARTICLE V
Section 5.3(b) is hereby added to the Plan and shall read in its entirety
as follows:
"(B) CONFIDENTIALITY OF ACCOUNTS. The allocation of a
Participant's account between Qualifying Employer Securities and other assets
shall be maintained as confidential by the Trustee and shall not be
disclosed to any employee of the Employer other than the employee for
whose benefit such account is maintained. The Trustee may disclose to
the Employer and the Administrator the total account balance of each
Participant's account. The allocation of a Participant's account
between Employer Securities and other investments can be disclosed to
the Employer, its employees and agents after the employment of the
employee for whose benefit the account is maintained has been
terminated."
ARTICLE VI
Section 5.5(b) of the Plan is hereby amended by adding the following
language to such subsection:
"For the purpose of establishing the value of Employer Securities
which are to be repurchased by the Employer pursuant to Section 7.10
of the Plan, the valuation of the securities shall be made annually by
appraisal as of the end of each Plan Year on an enterprise basis and
no minority discount shall be imposed nor shall any discount be
imposed for lack of liquidity. The appraiser shall be a qualified
party selected by the Employer with the consent of the Plan
Administrative Committee."
ARTICLE VII
Section 7.3(a) is hereby amended to read in its entirety as follows:
"(A) IN GENERAL. If a Participant's employment terminates for
any reason other than retirement, disability or death, the portion of
the Participant's vested account that is not invested in Qualifying
Employer Securities shall be distributable immediately. The portion
of a Participant's vested account which is invested in Qualifying
Employer Securities shall be distributable commencing within ninety
(90) days after the end of the Plan Year in which the employee
terminates employment if the Participant's vested account balance as of the
date of termination of employment does not exceed Seventy-five
Thousand Dollars ($75,000). If the Participant's vested account balance
exceeds Seventy-five Thousand Dollars ($75,000), the portion of the
Participant's account invested in Qualifying Employer Securities shall
be distributable commencing within ninety (90) days following the end
of the Plan Year in which the Participant incurs a one (1) year break
in service.
ARTICLE VIII
Section 7.3(d) is hereby amended to read in its entirety as follows:
"(D) REQUIRED COMMENCEMENT DATE. Distribution of the interest
of the Participant shall commence under this subsection no later than
the sixtieth (60th) day following the latest of (i) the Plan Year in
which the Participant terminates employment, (ii) the Plan Year in
which the Participant attains the normal retirement age of 65, or
(iii) the Plan Year in which occurs the tenth (10th) anniversary of
the date on which the Participant commenced participation in the Plan,
unless the Participant files a notice with the Plan Administrator to
defer the commencement of his distribution, provided that such
deferral does not extend beyond the required distribution commencement date
set forth in Section 7.4."
ARTICLE IX
Section 7.10(c) of the Plan is hereby amended to read in its entirety as
follows:
"(C) OPTION TO SELL NON-PUBLICLY TRADED DISTRIBUTED SECURITIES TO
EMPLOYER. The Employer, by the adoption of this Plan and Trust
Agreement, hereby grants to any participant, or the Participant's
donee, estate or Beneficiary who receives securities of the Employer
not readily tradable on an established market pursuant to the
provisions of this Article VII, an option to sell such securities to the
Employer upon the following terms and subject to the following
conditions:
(i) Such option shall be at a price which shall be the fair
market value of such securities as of the last regular valuation date
determined pursuant to Section 5.5(b) hereof. In the case of a
Participant who terminates employment prior to January 1, 1998, the
Employer shall pay the greater of the price determined under the
foregoing sentence or $16.50 per share in the event the employee's
termination of employment occurs after the normal retirement age of
sixty-five (65) or as a result of termination by the Employer as a
result of a reduction in work force. A reduction in work force occurs
if an employee's position is terminated and not filled by another
employee for a period of at least six (6) months. The option shall be
exercisable for a period of at least sixty (60) days following the
date of distribution of the Qualifying Employer Securities and, if the
option is not exercised within such sixty (60) day period, an
additional period of at least sixty (60) days in the following Plan Year
(to be determined by the Employer) shall be provided within which the
option may be exercised.
(ii) In the event the value of the stock distributed to the
Participant does not exceed Seventy-five Thousand Dollars ($75,000),
the Employer shall repurchase such stock for cash within thirty (30)
days after the exercise of the option. In the event the value of the
stock distributed to the Participant exceeds Seventy-five Thousand
Dollars ($75,000), the Employer shall provide a down payment of
Seventy-five Thousand Dollars ($75,000) within thirty (30) days after
the exercise of the option and shall provide the terminated
Participant a promissory note for the balance of the purchase price in
substantially equal periodic payments at least annually not exceeding
five (5) years with interest at the rate of one percentage point over
the prime lending rate of the principal bank utilized by the
Employer.
Notwithstanding the foregoing, if Seventy-five Thousand Dollars
($75,000) is less than the first required annual installment on a five
(5) year note, the down payment shall be sufficient to be equal to the
first required annual installment. A Participant may exercise any
right provided under this Section to a rollover Individual Retirement
Account established by a Participant.
(iii) Except as provided in this Section 7.10, the
Plan is prohibited from obligating itself to acquire Employer
Securities from a particular security holder at an indefinite time determined
upon the happening of an event such as the death of the holder.
(iv) Upon the Employer's election and provided Employer
provides the Plan with sufficient cash to meet the obligations of this
Section 7.10(c), the Employer may assign to the Plan the obligations
to purchase stock pursuant to this Section 7.10(c)."
ARTICLE X
Section 8.10 is hereby added to the Plan and shall read in its entirety as
follows:
"SECTION 8.10 -- SELECTION OF MEMBERS OF ADMINISTRATIVE COMMITTEE.
The Administrative Committee shall consist of at least three
(3) members. The Administrative Committee Members as of the date of
this amendment shall be ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇. Each such member shall serve as a member of the Administrative
Committee until the end of his or her term or until resignation or
election of a successor member of the Administrative Committee. In
the event of the resignation of any of the members of the Administra-
tive Committee, a successor member of the Administrative Committee
shall be elected by a vote of the Participants in the Plan. The
remaining Administrative Committee members shall establish such
procedures as are necessary to conduct the election for the successor
member of the Administrative Committee. An Administrative Committee
member may be removed only by the affirmative vote of the remaining
members of the Administrative Committee. The term of each
Administrative Committee member shall be for a period of three (3) years. The
terms of the initial members of the Administrative Committee shall
extend through December 31, 1996, 1997 and 1998, respectively. An
Administrative Committee member cannot be one of the following
individuals:
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ARTICLE XI
Section 8.11 is hereby added to the Plan and shall read in its entirety as
follows:
"SECTION 8.11 -- ELECTION OF BOARD MEMBERS.
At any time at which the ESOP is entitled to representation
on the Board of Directors of the Employer or any corporation which
owns more than fifty percent (50%) of the Employer, the board member
or members for the ESOP shall be elected by the Administrative
Committee. The Administrative Committee may not elect any individual to
serve as the director selected by the ESOP if such person would not be
eligible to be a member of the Administrative Committee pursuant to
the provisions of Section 8.10 above."
ARTICLE XII
Section 9.12 is hereby amended to read in its entirety as follows:
"SECTION 9.12 -- VOTING REQUIREMENTS.
(A) IN GENERAL. Each Participant or beneficiary shall have
the right to direct the Trustee as to the manner in which the voting
rights under Employer Securities which are allocated to the accounts
of such Participant or beneficiary are to be exercised. Each
Participant shall be considered a named fiduciary with respect to the
Employer Securities allocated to the Participant's account. The Administrator
shall establish such procedures as are necessary to carry out
the requirements of this Section. Subject to the provisions of
subsection (b) below, the Administrator shall direct the Trustee
concerning the exercise of any voting rights under Employer Securities
which are not passed through to Participants or are not exercised by
Participants under this Section, including securities which are held
in an unallocated suspense account.
(B) VOTING PROCEDURES RELATED TO MERGER AGREEMENT DATED
JULY 24, 1995. The provisions of this subsection shall apply to the
voting of shares in conjunction with the merger contemplated by the
merger agreement dated July 24, 1995, as amended (the "Transaction").
The Trustee shall pass the voting rights relating to the Transaction
to each Participant on shares allocated to such Participant's account
which shall be voted in the manner directed by such Participant. All
of (i) the allocated shares for which the votes have not been timely
communicated to the Trustee, (ii) the unallocated shares which have
been forfeited, and (iii) any unallocated suspense account shares
shall be voted by the Trustee in the same proportion as the allocated
shares for which votes have been timely communicated to the Trustee.
Shares voted in favor of the Transaction shall be converted to
Qualifying Employer Securities pursuant to the terms of the Transaction if
the Transaction closes. Shares which are not voted in the affirmative
for the Transaction (the "Non-Exchanged Shares") shall be converted
into the right to receive the Merger Consideration (as defined in the
merger agreement dated July 24, 1995, as amended) in the same manner
as the shares of the non-ESOP shareholders pursuant to the terms of
the Transaction, if the Transaction closes. The proceeds for such
Non-Exchanged Shares shall be allocated to the accounts of the
Participants in the Plan in whose accounts such shares were allocated and to
the forfeiture and suspense accounts in proportion as each account was
voted against the Transaction. If the Transaction closes, allocations
of forfeitures and from the suspense accounts shall be proportional
between cash and Qualifying Employer Securities in the same
proportions as each such account is invested in cash and Qualifying Employer
Securities as of the allocation date. The Trustee and the
Administrator shall establish procedures covering the voting of shares with
respect to the Transaction and the dissemination of information
concerning the Transaction. The Trustee shall collect from the
Participants the directions as to their vote and the vote of each
Participant shall be maintained as confidential by the Trustee and
shall not be disclosed to the Employer."
ARTICLE XIII
Section 9.14 is hereby added to the Plan and shall read in its entirety as
follows:
"SECTION 9.14 -- REQUIREMENT OF TRUSTEE INDEPENDENCE.
Trustee and each successor trustee shall be an independent
corporate trustee. For this purpose, "independent" shall mean that no
officer or director of the Employer shall be an officer or director or
more than a one percent (1%) shareholder of the Trustee or any entity
owning an interest in the Trustee."
ARTICLE XIV
Section 10.5(e) is hereby added to the Plan and shall read in its entirety
as follows:
"(E) RESTRICTIONS ON AMENDMENT. If the Transaction described in
Section 9.12(b) does not close pursuant to its terms, the provisions
of this Amendment other than subsection (b) of Section 9.12 as amended
by Article XII of this Amendment may be amended at any time. Subject
to the following sentence, no provision of the Plan as amended by the
Second Amendment to the Plan dated November 14, 1995, may be amended
by action of the Corporation except to the extent necessary to comply
with changes to the Internal Revenue Code of 1986, the Employee
Retirement Income Security Act of 1974 or any rules or regulations
issued pursuant thereto and the Participant rights to distribution and
the rights to sell stock to the Employer shall be considered as non-
terminable rights protected under the provisions of the Plan that
relate to non-terminable rights applicable after the plan ceases to be
an Employee Stock Ownership Plan. Notwithstanding the foregoing and
subject to applicable law, the provisions of this Plan as amended by
this Amendment other than Articles I, VI, VII, IX, XIII and XIV can
be amended by the Employer with the unanimous consent of the
Administrative Committee at any time after December 31, 2000."
ARTICLE XV
The provisions of this amendment (other than Articles XII and XIV of this
Amendment) shall become effective upon the closing date of the Transaction
described in Section 9.12(b). The provisions of Articles XII and XIV of this
Amendment shall be effective November 14, 1995.
ARTICLE XVI
Except as amended above, the Employer hereby readopts, reaffirms and
redeclares each and every provision of the Plan.
IN WITNESS WHEREOF, the Employer has executed this Amendment by an officer,
duly authorized by the Board of Directors this 14th day of November, 1995.
BIG O TIRES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Member, Office of the Chief Executive
and Chairman of the Board of Directors
