EXHIBIT (10.1) ATTACHED TO THE CURRENT REPORT
ON FORM 8-K DATED NOVEMBER 17, 1995.
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 a qualified party shall be 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 Xxxxxxxx Xxxxxxxx, Xxxxx Xxxxxxxxxx and Xxxxx Xxxx. 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 Administrative 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:
Xxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxx
Xxxxx X. X'Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxx
Xxxx Xxxxxxx
Xxx Xxxxxxxxxxxxx"
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 ______ day of November, 1995.
BIG O TIRES, INC.
By ___________________________
