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EXHIBIT 10.1
MANAGEMENT AND EMPLOYEE RETENTION PLAN
AND TRUST AGREEMENT
FOR THE BENEFIT OF UNIFIED HOLDINGS, INC.
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 Unified Holdings, Inc. (the "Corporation") hereby establishes a
Management and Employee Retention Plan (the "Plan") and Trust (the "Trust"),
effective as of February 7, 1995, (the "Effective Date") upon the terms and
conditions hereinafter stated in this Management and Employee Retention Plan
and Trust Agreement (the "Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the
Trust assets existing on the date of this Agreement and all additions and
accretions thereto upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to: (a) retain officers and
employees of the Corporation, and/or its subsidiaries, with experience and
ability in key positions by providing such key employees of the Corporation,
and/or its subsidiaries, with a proprietary interest in the Corporation as
compensation for their contributions to the Corporation, and/or its
subsidiaries, and as an incentive to continue to make such contributions in
the future through the issuance of Plan Share Awards, or Grants; (b)
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promote the interests of the Corporation and its shareholders by affording an
incentive to certain key employees to remain in the employ of the Corporation
and/or its subsidiaries and in attracting, maintaining and developing capable
personnel of a caliber required to ensure the continued success of the
Corporation and its subsidiaries by means of an offer to such persons of an
opportunity to acquire or increase their proprietary interest in the
Corporation through the granting of options to purchase the Corporation's
stock pursuant to the terms of this Plan by means of Stock Option Agreements
as the stock incentive portion of the Plan; and (c) to compensate Directors
for their contributions to the Corporation, and/or its subsidiaries, and to
provide an incentive for their continued contributions as Directors in the
future by means of the Plan Share Awards and Stock Option Agreements (See
Section 9.10 below).
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Agreement with
an initial capital letter, unless the context clearly indicates otherwise,
shall have the meanings set forth below. Wherever appropriate, the masculine
pronouns shall include the feminine pronouns and the singular shall include
the plural.
3.01 "Award" means a Plan Share Award or Stock Option Agreement
granted under the Plan.
3.02 "Beneficiary" means the person or persons designated by a
Recipient to receive any benefits payable under the Plan in the event of such
Recipient's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time
to time by similar written notice to the Committee. In the absence of a
written designation, the Beneficiary shall be the Recipient's surviving
spouse, if any, or, if none, his estate.
3.03 "Board" means the Board of Directors of Unified Holdings, Inc.,
and "Director" shall mean any sitting member of the Board.
3.04 "Common Stock" means shares of the common stock of Unified
Holdings, Inc..
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3.05 "Corporation" means Unified Holdings, Inc..
3.06 "Disability" means any physical or mental impairment which
qualifies an Employee for disability benefits under the applicable long-term
disability plan maintained by the Corporation, or, if no such plan applies,
which would qualify such Employee for disability benefits under the Federal
Social Security System.
3.07 "Employee" means any person, who is employed by the Corporation,
and/or its subsidiaries, including officers.
3.08 "Plan Shares" or "Shares" means shares of Common Stock held in
the Trust which may be distributed to a Recipient pursuant to the Plan by
means of Plan Share Awards or granted in the form of a stock option to acquire
Plan Shares by means of a Stock Option Agreement.
3.09 "Plan Share Award" means a right granted under this Plan to
receive a distribution of Plan Shares upon completion of the service
requirements described herein.
3.10 "Privately Held" means that the Common Stock of the Corporation
has not been registered in such a manner so as to be placed into a
publicly-traded marketplace on an accredited exchange.
3.11 "Recipient" or "Participant" means an Employee (or a Director)
who receives a Plan Share Award or a Stock Option Agreement under the Plan.
3.12 "Registration" means the time that the Plan Shares shall be
registered under the Securities Act of 1933, as amended, or the 1934 Act
and/or any pertinent state securities laws relative to such registration.
3.13 "Stock Option Agreement" or "Option" means a grant of an option
to acquire Plan Shares reserved under the Plan under the terms and conditions
set forth in the Plan and in the Stock Option Agreement, attached hereto as
Exhibit "B" ("Options") pursuant to the Plan, more fully described herein.
3.14 "Trustee" means that person or entity appointed by the Board to
hold legal title to the Plan assets for the purposes set forth herein.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 Role of the Committee. The Plan shall be administered and
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interpreted by a committee (the "Committee"), appointed by the Board, and
whose membership shall be determined and reviewed from time to time by the
Board. The Committee shall consist of three members of the Board, and at
least one of the three members of the Committee shall not be an officer or
employee of the Corporation, and/or its subsidiaries. Committee members may,
however, own Common and/or Preferred Stock of the Corporation. The Committee
shall have all of the powers granted to it in this and other Sections of the
Plan. The Committee shall have any and all power and authority (including
discretion with respect to that power and authority) which shall be necessary,
properly advisable, desirable or convenient to enable it to carry out its
duties under the Plan. Subject to the express provisions and limitations of
the Plan, the Committee shall have full power and authority to construe,
interpret and administer the Plan and may from time to time adopt such rules,
procedures, rules, guidelines and regulations for carrying out the Plan as it
may deem proper, appropriate, and in the best interests of the Corporation and
in keeping with the objectives of the Plan for the conduct of its affairs.
This power includes, but is not limited to, establishing all Award terms and
conditions and adopting modifications, amendments, forms and procedures,
including subplans and the like, as may be necessary to comply with provisions
of any applicable regulatory rulings. The Committee may delegate part or all
of its administrative authority granted hereunder to one or more of
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its members, as the members by unanimous consent deem appropriate. Subject to
the terms, provisions and conditions of the Plan, the Committee shall have
exclusive jurisdiction: (i) to select the employees to whom awards (Plan
Share Awards and/or Stock Option Agreements) (the "Awards") shall be granted;
(ii) to determine the number of shares of Commons Stock subject to each Award;
(iii) to determine the time or times when Awards will be granted; (iv) to
fix such other provisions of the Plan Share Awards Agreement and the Stock
Option Agreement as it may deem necessary or desirable consistent with the
terms of the Plan; and (v) to determine all other questions relating to the
administration of the Plan. The interpretation and construction by the
Committee of any provisions of the Plan (including the administering of the
Plan) and/or any Plan Share Award or Stock Option Agreement granted hereunder
shall be final, conclusive, and binding upon all persons, and the officers of
the Corporation shall place into effect and shall cause the Corporation to
perform its obligations under the Plan in accordance with the determinations
of the Committee in administering the Plan.
Any member of the Committee shall resign his or her membership
immediately upon receiving notice that a majority of the members of the Board
have voted in favor of such resignation. The Committee shall act by vote or
written consent of a majority of its members.
The Committee shall determine the type of award to be granted to
each participant, either in the from of a Plan Share Award or a Stock Option
Agreement, and such awards may be granted singly, in combination or in tandem.
Awards may be made in combination or in tandem with, in replacement of or
substitution for, as alternatives to, or as the payment form for grants or
rights under any other employee or compensation plan of the Corporation,
including the plan of any acquired entity. The types of Awards that may be
granted under this Plan are:
(a) Plan Share Awards. A right granted under this Plan to
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receive a distribution of Plan Shares upon completion of the service
requirements described herein.
(b) Stock Option Agreements. A grant of a right to purchase a
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specified number of Shares during a specified period as determined by the
Committee.
The purchase price per Share for each Stock Option Agreement shall
be not less than 100% of the fair market value, as determined by the Committee
and more fully described herein, on the date of the grant, except that, in the
case of a stock option granted retroactively in tandem with or as a substitution
for another Award (Plan Share Awards), the exercise or designated price may be
no lower than the fair market value of a share on the date such other Award was
granted. The Stock Option portion of this Plan, (and, therefore, the Stock
Option Agreement) is in the form of an Incentive Stock Option which, in
addition to being subject to applicable terms, conditions and limitations
established by the Committee, complies with Section 422 of the Code. The
price at which the Shares of Common Stock may be purchased under a Stock
Option Agreement shall be paid in full at the time of the exercise in cash or
such other method permitted by the Committee. Notwithstanding the foregoing,
Options under this Plan shall not be exercisable for a period of at least six
months following the date of the grant.
Award Agreements (Plan Share Awards and Stock Option Agreements)
(see Exhibits A and B attached hereto) shall be evidenced by agreements that
set forth the terms, conditions and limitations for each Award which may
include the term of an Award (except that in no event shall the term of a
Stock Option Agreement exceed a period of ten years from the date of its
grant), the provisions applicable in the event the participant's employment
(or directorship) terminates, and the Committee's authority to unilaterally or
bilaterally amend, modify, suspend, cancel or rescind any Award. The
Committee may, but need not, require the execution of any such agreement, in
which case acceptance of the Award by the respective participant shall
constitute agreement to the terms of the Award.
Payments of Awards may be in the form of cash, Shares, other
Awards or combinations thereof as the Committee shall determine, and with such
restrictions as it may impose. The Committee also may require or permit
participants to elect to defer the issuance of Shares or the settlement of
Awards in cash under such rules and procedures as it may establish under the
Plan. It also may provide that deferred settlements include the payment or
crediting of interest on the deferred amounts, or the payment or crediting of
dividend equivalents where the deferral amounts are denominated in Shares.
4.02 Limitation on Liability. No member of the Board or the
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Committee shall be liable for any determination made in good faith with
respect to the Plan or any Plan Shares or Plan Share Awards or Stock Option
Agreements granted under it. If a member of the Board or the Committee is a
party to or is
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threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of anything done or not done by him in such capacity under or with
respect to the Plan, the Corporation shall indemnify such member against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation, and with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
ARTICLE V
CONTRIBUTIONS
5.01 Amount and Timing of Contributions. Subject to the
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limitations set forth in Section 5.02 and the second sentence of Section 5.03
hereof, the Board shall determine the amount (or the method of computing the
amount) and timing of any contributions by the Corporation to the Trust
established under this Plan. Such amounts may be paid in cash or in shares of
Common Stock and shall be paid to the Trust at the designated time of
contribution. No contributions by Employees shall be permitted.
5.02 Initial Funding and Investment of Trust Assets. The Trust
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shall be initially funded with Common Stock of the Corporation or with cash.
In the event that the initial funding is in the form of Common
Stock of the Corporation, the Committee shall determine which Employees will
be granted Plan Share Awards and the number of Shares covered by each Plan
Share Award and shall additionally determine which employees will be granted
Stock Option Agreements and the number of shares covered by each Stock Option
Agreement. The Trust shall then hold Shares no less than an amount equal to
the number of Shares covered by the Plan Share Awards and Stock Option
Agreements and no more than 80% of the authorized Shares of the Common Stock,
subject to Section 9.01 herein, that representing, as of the date first
written, 240,000 of the Company's 300,000 authorized Shares.
In the event that the initial funding is in cash, such cash shall
be invested by the Trustee in such interest-bearing accounts as the Trustee
shall determine to be appropriate; providing however, that as soon as
practicable, the Trustee shall invest all of the cash assets of the Trust
exclusively in Common Stock of the Corporation.
The Trustee may invest additional Trust assets (as may be
contributed by the Corporation) in Common Stock provided that the Trustee
shall not purchase, in the aggregate, an amount of Common Stock which would
exceed 80% of the amount of authorized Common Stock of the Corporation, that
being 240,000, as of the date first written, pursuant to Section 9.01 herein;
and, provided further that the Trustee shall only make such additional
investments of Trust assets after the Committee has determined: (a) which of
the Employees will be granted Plan Share Awards and/or Stock Option
Agreements, and (b) the number of Shares covered by each Plan Share Award
and/or Stock Option Agreement.
Any Shares issued under the Plan may consist in whole or in part
of authorized and unissued Shares or of treasury Shares, and no fractional
Shares shall, under normal circumstances, be issued under the Plan. Cash may
be paid in lieu of any fractional Shares in settlement of Awards under this
Plan.
Any cash earnings received with respect to Common Stock held in
the Trust shall be held in an interest-bearing account on behalf of each
recipient.
5.03 Creation of Plan Share Reserves. Immediately upon the
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formation of the Trust, the Corporation shall initially fund the Trust with
Two Hundred Forty Thousand (240,000) Shares of Common Stock, thereby
establishing a Plan Share Reserve of Two Hundred Forty Thousand (240,000)
Shares. Such Reserve shall be maintained until the Committee has granted Plan
Share Awards and/or Stock Option Agreements equal to the amount of the
Reserve.
Subject to the provisions of Section 9.01 herein, the shares to
be delivered upon the earning of of Plan Share Awards or the exercise of Stock
Option Agreements granted under the Plan shall be made available, at the
discretion of the Board, from the authorized unissued shares of the
Corporation's no par value common stock. Unless the context indicates
otherwise, as used herein, Common Stock shall refer to
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shares of the no par value common stock of the Corporation, or the common stock
of securities of a Successor of the Corporation that have been substituted
therefor under Section 9.01 of the Plan.
Subject to adjustments and substitutions made pursuant to the
provisions of Section 9.01 herein, the aggregate number of shares that may be
issued upon exercise of all options from Stock Option Agreements that may be
granted under the Plan and/or the Plan Share Awards that may be granted under
the Plan shall not exceed 80% of the Corporation's authorized shares of common
stock, that being 240,000 shares, as of the date first written, subject to
Section 9.01 herein.
If any Stock Option Agreement or Plan Share Award granted under
the Plan expires or terminates for any reason whatsoever without having been
earned or exercised in full in accordance with the terms of the Plan, the
shares of Common Stock subject to, but not delivered under, such Stock Option
Agreement or Plan Share Award shall become available for any lawful corporate
purpose, including for issuance pursuant to other Plan Share Awards and/or
Stock Option Agreements granted to the same employee or other employees
without decreasing the aggregate number of shares of Common Stock that may be
granted under the Plan.
For the purposes of this Section 5, the following shall apply:
(i) "Forfeited" shares means any Shares issued pursuant to Awards made under
this Plan which are forfeited to the Corporation pursuant to Award terms and
conditions; and (ii) "Tendered" shares means any Shares which have been
exchanged, either actually or by attestation, by a person as full or partial
payment made to the Corporation on or after the effective date of a Plan in
connection with any Award under the Plan.
More than one Stock Option Agreement and/or Plan Share Award may
be granted to an employee or director pursuant to this Plan.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 Eligibility. Plan Share Awards and Stock Option Agreements
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may be made to such Employees as is determined by the Committee. The
Committee may, but is not required to, request written recommendations from
the Chief Executive Officer. The Chief Executive Officer, at his discretion,
may implement certain procedures for presenting recommendations to him to be
further introduced before the Committee. Additionally, pursuant to Section
9.10 herein, Directors may be participants in the Plan and Recipients of
Awards under the terms and conditions more fully described in Section 9.10
herein..
6.02 Allocations. Effective as of the initial funding of the
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Trust, the Committee shall grant Plan Share Awards and/or Stock Option
Agreements to those Employees (and Directors) listed in Exhibits A and B
respectively hereto, in the amounts designated for those Employees (and
Directors). The number of Shares covered by such Plan Share Awards and Stock
Option Agreements shall, to the extent practicable, equal the number of Shares
held by the Trust immediately prior to the grant of such Plan Share Awards
and/or Stock Option Agreements, provided, however, that in no event shall any
Plan Share Awards or Stock Option Agreements be made which will violate the
Articles of Incorporation, Charter, or By-Laws of the Corporation or any
applicable Federal or state law or regulation. In the event Shares are
forfeited for any reason, the Committee shall, as soon as practicable,
determine which of the Employees will be granted additional Plan Share Awards
and/or Stock Option Agreements based upon such forfeited prior Plan Share
Awards and/or unexercised and forfeited Stock Option Agreements. In selecting
those Employees to whom Plan Share Awards and/or Stock Option Agreements will
be granted and the number of Shares covered by such Awards and/or Options, the
Committee shall consider the position and responsibilities of the eligible
Employees, their years of service, their contributions as supervisors,
officers, key committee-members, their contribution to the Company's
profitability, the value of their services to the Corporation, and any other
factors the Committee may deem relevant. The Committee may, but shall not be
required to, request the written recommendation of the Chief Executive Officer
of the Corporation.
6.03 Form of Allocation. As promptly as practicable after a
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determination is made pursuant to Section 6.02 that an Award (Plan Share Award
or Stock Option Agreement) is to be granted, the Committee shall notify the
Recipient in writing of the grant of the Award, the number of Plan Shares
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covered by the Award, and the terms upon which the Plan Shares subject to the
Award shall be distributed to the Employee. Such terms shall be reflected in
a written agreement with the Employee. The date on which the Committee so
notifies the Recipient shall be considered the date of grant of the Plan Share
Award and/or Stock Option Agreement. The Committee shall maintain records as
to all grants of Plan Share Awards and Stock Option Agreements under the Plan.
6.04 Stock Option Agreement. Each Stock Option Agreement
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granted under this Plan shall be evidenced by such Stock Option Agreement
being signed by a member of the Committee on behalf of the Corporation.
A Stock Option Agreement shall constitute a binding contract
between the Corporation and the optionee, and every optionee, upon acceptance
of such Stock Option Agreement, shall be bound by the terms and restrictions
of this Plan and of the Stock Option Agreement.
The terms of the Stock Option Agreement shall be in accordance
with this Plan, but may include additional provisions and restrictions,
provided that the same are not, as determined by the Committee, inconsistent
with the Plan.
6.05 Option Price. The price at which a Share of Common Stock
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may be purchased under a Stock Option Agreement pursuant to this Plan shall be
set by the grant but shall in no instance be less than fair market value on
the date of the grant. The fair market value, until such time as the Shares
are registered shall be determined by the Committee, in good faith, after such
fair market value has been determined by the Chief Financial Officer of the
Corporation. Unless circumstances arise that justify a different fair market
value than that determined by the Chief Financial Officer, the Committee shall
use such fair market value as determined by him. The Committee, however,
reserves the right at its sole discretion, to determine a different fair
market value than that of the Chief Financial Officer.
If the Common Stock is traded on the over-the-counter market, the
fair market value shall be the average of the closing bid and asked quotations
or the closing high bid quotation, whichever is available, for the Common
Stock in the over-the-counter market, as reported by the National Association
of Securities Dealers Automated Quotation System, but not exceeding the
average of the final closing price of the Common Stock on the twenty business
days immediately preceding the grant of the Stock Option Agreement.
If the Common Stock is listed on a national securities exchange,
the fair market value shall be the average of the closing prices of the Common
Stock on the Composite Tape for the ten (10) consecutive trading days
immediately preceding such given date.
The option price shall be subject to adjustments in accordance
with the provisions of Section 9.01 herein.
6.06 Exercise of Options. Any Stock Option Agreement granted
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under the Plan shall not be exercisable until the optionee has had cumulative
employment (or directorship) of at least five (5) years and continuous
employment (or directorship) with the Corporation for a period of at least two
(2) years after the date such Stock Option Agreement is granted and any and
all options must be exercised, if at all, within ten (10) years after the date
such Stock Option Agreement is granted.
Notwithstanding the foregoing, should an optionee's employment
with the Corporation, or tenure as a director, terminate due to the death of
the optionee, all options shall immediately become fully vested provided the
optionee has had continuous service with the Corporation for two (2) years,
and the optionee's successor in interest shall have sixty (60) days after the
optionee's date of death to exercise such option (provided, however, that such
option must be exercised within ten (10) years after the date such option is
granted) in accordance with the terms hereof. Any such exercisable option is
hereinafter referred to as a "Vested Option".
Subject to the terms and conditions of any applicable Stock Option
Agreement, any option granted under the Plan may be exercised in whole or in
part in installments at such time or times as the Committee may prescribe in
the applicable Stock Option Agreement.
Except as otherwise provided herein, no option granted under this
Plan may be exercised unless the optionee is at the time of such exercise an
employee (or director) of the Corporation or its subsidiaries.
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6.07 Issuance of Shares. No Shares of Common Stock shall be issued
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pursuant to the exercise of an option until:
(a) The requirements of such laws and regulations as may
be deemed by the Committee to be applicable are satisfied including
appropriate disclosure obligations;
(b) Any documents counsel for the Corporation deems
necessary are delivered by the optionee, including a letter evidencing the
optionee's investment intent in acquiring such shares;
(c) The optionee pays, or makes satisfactory arrangements
to pay, the option price for the shares to be issued; and
(d) Provision has been made for the payment of any and all
federal, state, and local taxes that may be required to be paid as a result of
the exercise of such option or the issuance of such shares.
No optionee, or legal representative, legatee, or distributee of
an optionee, shall be deemed to be the holder of any shares of Common Stock
subject to any option unless and until the certificate or certificates for
them have been issued. Nothing contained in this Plan or any Stock Option
Agreement shall obligate the Corporation to cause the Corporation's Common
Stock to be listed with any securities exchange or other regulatory agency.
Any shares issued under this Plan will be restricted stock and shall be
appropriately legended to restrict sale or transfer until the Corporation
shall have received a satisfactory opinion of legal counsel that such sale or
transfer is in accordance with all applicable securities laws. If the
Corporation's Common Stock becomes publicly traded on a national securities
exchange, then any shares issued under this Plan shall include any additional
restrictions imposed on the Corporation's Common Stock by such exchange.
If an optionee's employment (or directorship) by the Corporation
is terminated for any reason whatsoever, including death, such optionee or the
optionee's successor in interests shall have sixty (60) days after the date of
termination to exercise any Vested Option held by such optionee at the time of
his termination, provided that such option is exercised within ten (10) years
from after the date such option is granted. All other options held on the
date of termination shall expire automatically as of the date of termination.
The Committee shall be entitled to make such rules, regulations
and determinations as it deems appropriate under the Plan in respect of any
leave of absence taken by or disability of any optionee. Without limiting the
generality of the foregoing, the Committee shall be entitled to determine:
(i) whether or not any such leave of absence or disability shall constitute a
termination of employment within the meaning of the Plan, and (ii) the impact,
if any, of any such leave of absence or disability on Awards under this Plan
theretofore made to any optionee who takes such leave of absence or becomes
disabled.
6.08 Dividends and Dividend Equivalents.
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The Committee may provide than any Awards under the Plan earn
dividends or dividend equivalents. Such dividends or dividend equivalents may
be paid currently or may be credited to a participant's account. Any
crediting of dividends or dividend equivalents may be subject to such
restrictions and conditions as the Committee may establish, including
reinvestment in additional Shares or share equivalents.
(a) Plan Share Award Dividends. Dividends received with respect
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to Plan Shares held by the Trustee shall be paid to the Employees (or Directors,
if applicable) for whose benefit such Plan Shares are held, as soon as
practicable after the Trustee receives such dividends. Dividends received
with respect to Plan Shares which have not been the subject of a Plan Share
Award at the time a dividend is received shall, as the Committee in it sole
discretion shall determine, be either (i) retained by the Trustee and paid to
an Employee (or Director, if applicable) at such time as he receives an Award
of such Plan Shares or (ii) reinvested by the Trustee in additional shares of
Common Stock which shall be held by the Trustee as a part of the Trust.
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(b) Stock Option Agreement Dividends. In the event of a
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stock dividend, stock split or any other change which might affect the Shares
or the price of the Shares, the proportionate adjustments, if any, may be made
by the Committee in its discretion that it deems appropriate to reflect the
change shall be made with respect to (i) the aggregate number of Shares that
may be issued under this Plan; (ii) each outstanding Stock Option Agreement
granted under this Plan; and (iii) the exercise price per share for any
outstanding Stock Option Agreements under this Plan. Cash dividends shall be
paid only on Shares owned and fully vested, but the committee reserves the
right, but is not obligated, to invest such cash dividends into additional
Shares at the Fair Market Value on the date of the dividend.
6.09 Allocations Not Required to any Specific Employee.
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Notwithstanding anything to the contrary in Sections 6.01 and 6.02, no
Employee shall have any right or entitlement to receive a Plan Share Award
and/or Stock Option Agreement hereunder, such awards being at the total
discretion of the Committee.
Furthermore, that an employee has been granted an Award or Option
under this Plan shall not in any way affect or qualify the right of the
Corporation to terminate his employment at any time, subject to the terms and
conditions any employment agreement that may then be in effect. Nothing
contained in this Plan shall be construed to limit the right of the
Corporation to grant options or awards otherwise than under the Plan for any
proper and lawful corporate purpose, including but not limited to options or
awards granted to key employees. Key employees to whom Options or Awards may
be granted under the Plan will be those elected by the Committee from time to
time who, in the sole discretion of the Committee, have contributed in the
past or who may be expected to contribute materially in the future to the
successful performance of the Corporation.
ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES UNDER PLAN SHARE AWARDS;
GRANTING AND DISTRIBUTION OF PLAN SHARES UNDER STOCK OPTION
AGREEMENTS; VOTING RIGHTS
7.01 Earning Plan Shares; Forfeitures; Tendered.
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(a) General Rules.
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(i) Unless the Committee shall specifically state to the
contrary at the time a Plan Share Award is granted, Plan Shares
subject to a Plan Share Award shall be earned by a Recipient: (1)
at the time that the Plan Shares shall be registered under the
Securities Act of 1933, as amended, or the 1934 Act and/or any
pertinent state securities laws relative to such registration (the
"Registration"); or (2) if such Plan Shares have not been
registered by January 1, 2000, the Plan Shares subject to an award
shall be earned by Employee at the rate of twenty-percent (20%) of
the aggregate number of shares subject to an Award granted under
the Plan as of each January 1 following the January 1, 2000 date.
If the employment of a Recipient is terminated prior to
Registration or prior to the fifth (5th) January 1 following
the January 1, 2000 date for any reason (except as specifically
provided in subsections "b" below), the Recipient shall forfeit
the right to any Shares subject to the Award which have not
theretofore been earned, with no further action required on the
part of the Corporation.
In determining the number of Plan Shares which are to be earned
under a Plan Share Award, fractional Shares, if any, shall be rounded down to
the nearest whole number, provided that such fractional Shares shall be
aggregated and distributed on the fifth (5th) January 1 following the January
1, 2000 date, or at the time of Registration, whichever is the later.
(ii) Unless the Committee shall specifically state to the
contrary at the time a Stock Option Agreement is granted, the optionee may,
subject to Article VI herein, exercise the Option at any time
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provided for in and pursuant to the Stock Option Agreement, understanding that,
except as otherwise provided for herein, Stock Option Agreements may not be
exercised unless the optionee is either an employee or a director of the
Corporation. Furthermore, Plan Shares eligible under a Stock Option Agreement
may only be issued pursuant to: the terms and conditions of this Plan, Article
VI herein; the Stock Option Agreement at the time the Option is exercised; and
when the Plan Shares are fully paid. If the employment of a Recipient is
terminated prior to Registration or prior to the fifth (5th) January 1 following
the January 1, 2000 date for any reason (except as specifically provided in
subsections "b" below), the Recipient shall forfeit the right to any Shares
subject to the Award (Option) which have not theretofore been exercised, with no
further action required on the part of the Corporation.
(b) Exception for Terminations Due to Death or Disability.
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Unless the Committee shall specifically state to the contrary, at the time the
Plan Share Award is granted and notwithstanding the general rule contained in
Section 7.01 (a) above, all Plan Shares subject to a Plan Share Award held by a
Recipient whose employment with the Corporation ends due to his death or
Disability, shall be deemed earned upon Registration, and shall be distributed
as soon as practicable thereafter.
Unless the Committee shall specifically state to the contrary, at
the time a Stock Option Agreement is granted and notwithstanding the general
rule contained in Section 7.01 (a) above, all Plan Shares subject to a Stock
Option Agreement held by a Recipient (optionee) whose employment (or
Directorship) with the Corporation ends due to his death or Disability, the
optionee's successor in interests shall have sixty (60) days after the date of
termination to exercise any Vested Option held by such optionee at the time of
his termination, provided that such option is exercised within ten (10) years
from after the date such option is granted. All other unexercised Options
held on the date of termination shall expire automatically as of the date of
termination.
(c) Exception for Terminations after a Change in Control.
----------------------------------------------------
Notwithstanding the general rule contained in Section 7.01 (a) above, all
Plan Shares subject to a Plan Share Award held by a Recipient shall be deemed
to be earned in the event of a "Change in Control" of the Corporation or a
threatened Change in Control if such Change in Control or threatened Change in
Control occurs prior to the earlier of Registration or January 1, 2005. In
the event that such Change in Control or threatened Change in Control should
occur, all Plan Shares subject to a Plan Share Award shall be deemed to be
earned and shall be distributed as soon as practicable thereafter; provided,
however, that no Awards shall be distributed prior to six months from the date
of grant of the Plan Share Award.
Notwithstanding the general rule contained in Section 7.01 (a) above, all
Plan Shares subject to a Stock Option Agreement held by a Recipient
(optionee), upon a Change in Control or a threatened Change in Control as
defined herein, shall become immediately and fully exercisable or payable
according to the terms of this Plan and of the Stock Option Agreement and
according to the following additional terms:
(i) Any outstanding and unexercised Options shall become
immediately and fully exercisable, and shall remain exercisable until it would
otherwise expire by reason of lapse of time.
(ii) During the six month and seven day period from and after a
Change in Control (the "Exercise Period"), unless the Committee shall
determine otherwise at the time of grant, a Recipient shall have the right, in
lieu of the payment of the Base Price of the Shares being purchased under the
Stock Option Agreement and by giving notice to the Committee, to elect (within
the Exercise Period) in lieu of exercise thereof, subject to Section 6
herein, to surrender all or part of the Stock Option Agreement to the
Corporation and to receive in cash, within 30 days of such notice, an amount
equal to the amount by which the Change in Control Price per Share on the date
of such election shall exceed the Base Price per Share under the Stock Option
Agreement multiplied by the number of Shares granted under the Stock Option
Agreement as to which the right granted in Section 7.01 (c) (ii) herein shall
have been exercised. Notwithstanding the foregoing, the Change in Control
Price shall not exceed the market price of a Share to the extent required
pursuant to Section 422 of the Internal Revenue Code of 1986, as amended, on
the date of surrender thereof.
The Committee shall provide in the Stock Option Agreement for the
treatment to be given to any Shares awarded pursuant to this Plan which have
not expired or been forfeited or tendered before the occurrence of a Change in
Control.
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(d) Definition of Change in Control.
-------------------------------
For the purposes of this Plan, a CHANGE IN CONTROL of the
Corporation shall mean:
(i) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the "Exchange Act") (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20
percent or more of either (A) the then outstanding shares of common stock of
the Corporation (the "Outstanding Corporation Common Stock") or (B) the
combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however, that the
following acquisitions shall not constitute a Change in Control: (C) any
acquisition directly from the Corporation (excluding an acquisition by virtue
of the exercise of a conversion privilege), (D) any acquisition by the
Corporation, (E) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any corporation
controlled by the Corporation or (F) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation, the conditions
described in clauses (A), (B) and (C) of paragraph (iii) of this subsection
(c) are satisfied; or
(ii) Individuals who, as the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election,
or nomination for election by the Corporation's shareholders, was approved by
a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(iii) Approval by the shareholders of the
Corporation of a reorganization, merger, or consolidation, in each case,
unless, following such reorganization, merger or consolidation, (A) more than
fifty percent (50%) of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Corporation Common Stock and
Outstanding Corporate Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same proportions
as their ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Corporation Stock and Outstanding
Corporation Voting Securities, as the case may be, (B) no Person (excluding
the Corporation, any employee benefit plan (or related trust) of the
Corporation or such corporation resulting from such reorganization, merger or
consolidation and any Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly, twenty
percent (20%) or more of the Outstanding Corporation Stock or Outstanding
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting power of the
then outstanding voting securities of such corporation, entitled to vote
generally in the election of directors and (C) at least "A Majority" of the
members of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent Board at
the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(iv) Approval by the shareholders of the
Corporation of (A) a complete liquidation or dissolution of the Corporation or
(B) the sale or other disposition of all or substantially all of the assets of
the Corporation, other than to a corporation, with respect to which following
such sale or other disposition, (I) more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of
such corporation
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entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial owners, respectively,
of the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to
such sale or other disposition, of the Outstanding Corporation Common Stock
and Outstanding Corporation Voting Securities, as the case may be, (II) no
Person (excluding the Corporation and any employee benefit plan (or related
trust) of the Corporation or such corporation and any Person beneficially
owning, immediately prior to such sale or other disposition, directly or
indirectly, twenty percent (20%) or more of the Outstanding Corporation Common
Stock or Outstanding Corporation Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of directors and
(III) at least a majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of the execution
of the initial agreement or action of the Board providing for such sale or
other disposition of assets of the Corporation.
(v) Notwithstanding the provisions of (i) through
(iv) above, a Change in Control shall not be deemed to have occurred (A) if
before the occurrence of a transaction which otherwise would constitute a
Change in Control, a majority of the Board votes to accept, approve or
recommend such transaction, or (B) by reason of the acquisition of Plan Shares
pursuant to this Plan.
7.02 Distribution of Plan.
--------------------
(a) Timing of Distributions. Plan Shares shall be distributed
-----------------------
to a Recipient or his Beneficiary, as the case may be, as soon as practicable
after they have been earned (in the event of a Plan Share Award) or exercised
subject to the terms of the Stock Option Agreement, provided, however, that no
Plan Shares shall be distributed to a Recipient or Beneficiary pursuant to a
Plan Share Award or Stock Option Agreement within six months from the date on
which that Plan Share Award or Stock Option Agreement was granted to such
person. No Plan Shares shall be distributed unless and until all of the
requirements of law and of all regulatory agencies having jurisdiction over
the issuance and delivery of the Plan Shares shall have been fully complied
with.
(b) Form of Distributions. All Plan Shares, together with
---------------------
any Shares representing stock dividends, shall be distributed in the form of
Common Stock. One share of Common Stock shall be given for each Plan Share
earned and distributable. Payments representing cash dividends which have not
been reinvested in Common Stock shall be made in cash.
(c) Withholding. The Trustee may withhold from any cash payment
-----------
or Common Stock distribution made under this Plan sufficient amounts to cover
any applicable withholding and employment taxes, and, if the amount of a cash
payment is insufficient, the Trustee may require the Recipient or Beneficiary
to pay to the Trustee the amount required to be withheld as a condition of
delivering the Plan Shares. The Trustee shall pay over to the Corporation
which employs or employed such Recipient any such amount withheld from or paid
by the Recipient or Beneficiary.
Additionally, the Company shall have the right to deduct from
any settlement of an Award made under this Plan, including the delivery or
vesting of Shares, a sufficient amount to cover withholding of any federal,
state, or local taxes required by law, or to take such other action as may be
necessary to satisfy any such withholding obligations. The Committee may permit
Shares to be used to satisfy required tax withholding and such Shares shall be
valued at the Fair market Value as of the settlement date of the applicable
Award. Any election by a person subject to Section 16 of the Act to have Shares
withheld from the payment of an Award hereunder to satisfy tax withholding
obligations shall be made as soon as practicable, as contemplated by Rule
16b-3.
(d) Restrictions on Selling of Plan Shares. The Committee
--------------------------------------
may require the Recipient or his Beneficiary, as the case may be, to agree not
to sell or otherwise dispose of his Plan Shares except in
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accordance with all then applicable federal and state securities laws, and the
Committee may cause a legend to be placed on the stock certificate(s)
representing the Plan Shares in order to restrict the transfer of the Plan
Shares for such period of time or under such circumstances as the Committee,
upon the advice of counsel, may deem appropriate. The Recipient or his
Beneficiary shall agree to hold the Plan Shares for such time period as may be
required under applicable laws and regulations and a restrictive legend to such
effect shall be placed upon the stock certificate(s) evidencing the Plan Shares.
The Recipient shall have no right to require the Corporation to register any
Plan Shares under the Securities Act of 1933, as amended, or the 1934 Act or any
state securities laws.
7.03 Voting of Plan Shares. All shares of Common Stock held by the
---------------------
Trustee shall be voted by the Trustee in his/her/its sole discretion.
Trustee, however, shall not vote any shares of the Common stock which
he/she/it holds without consultation with the Committee. In the absence of
any such consultation with the Committee, the Trustee shall not vote any
shares of Common stock which it holds.
The Trustee shall vote all unearned or unissued shares funded into
the Plan, including those shares which, at the time of the requirement of said
vote, have not been granted. The Trustee for the Plan, by request of the
Board and the Committee, shall be the Company's Chairman and Chief Executive
Officer, unless otherwise changed by the unanimous vote of the Committee.
All earned Shares and those Shares issued pursuant to exercised
Stock Option Agreements shall be voted by the respective owner of said Shares,
pursuant to the terms and conditions provided for herein.
ARTICLE VIII
TRUST
8.01 Trust. The Trustee shall receive, hold, administer invest
-----
and make distributions and disbursements from the Trust in accordance with the
provisions of the Plan and Trust and the applicable directions, rules,
regulations procedures and policies established by the Committee pursuant to
the Plan.
8.02 Management of Trust. It is the intent of this Plan and
-------------------
Trust that the Trustee shall have complete authority and discretion with
respect to the arrangement, control and investment of the Trust, and that the
Trustee shall invest all assets of the Trust in Common Stock to the fullest
extent practicable, and except to the extent that the Trustee determines that
the holding of monies in cash or cash equivalents is necessary to meet the
obligations of the Trust. In performing its duties, the Trustee shall have
the power to do all things and execute such instruments as may be deemed
necessary or proper, including the following powers:
(a) To invest up to one hundred percent (100%) of all Trust
assets in Common Stock without regard to any law now or hereafter in force
limiting investments for trustees or other fiduciaries. The investment
authorized herein may constitute the only investment of the Trust, and in
making such investment, the Trustee is authorized to purchase Common Stock
from the Corporation or from any other source, and such Common Stock so
purchased may be outstanding, newly issued, or treasury shares.
(b) To invest any Trust assets not otherwise invested in
accordance with (a) above, in such deposit accounts and certificates of
deposit, obligations of the United States government or its agencies or such
other investments as shall be considered the equivalent of cash.
(c) To Sell, exchange or otherwise dispose of any property
at any time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be
registered in the name of a nominee, without the addition of words indication
that such security is an assets of the Trust (but accurate records shall be
maintained showing that such security is an asset of the Trust).
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(e) To hold cash without interest in such amounts as may in
the opinion of the Trustee be reasonable for the proper operation of the Plan
and Trust.
(f) To employ brokers, agents, custodians, consultants and
accountants.
(g) To hire counsel to render advice with respect to its
rights, duties and obligations hereunder, and such other legal services or
representation as it may deem desirable.
(h) To hold funds and securities representing the amount to
be distributed to a Recipient or his Beneficiary as a consequence of a dispute
as to the disposition thereof whether in a segregated account or held in
common with other assets of the Trust.
(i) To borrow or raise money for the purposes of the Trust
in such amount, and upon such terms and conditions, as the Trustee shall deem
advisable; and , for any sum so borrowed, to issue its promissory note as
Trustee and, in its sole discretion, to secure the repayment thereof by
pledging all or any part of the assets of the Trust. No person lending money
to the Trustee shall be bound to see the application of the money lent or
inquire into the validity, expediency or propriety of any such borrowing.
Notwithstanding the foregoing, the Trustee shall not be required
to make any inventory, appraisal or settlement or report to any court, or to
secure any order of court for the exercise of any power herein contained, or
give bond.
8.03 Records and Accounts. The Trustee shall maintain accurate
--------------------
and detailed records and accounts of all transactions of the Trust, which
shall be available at all reasonable times for inspection by any legally
entitled person or entity to the extent required by applicable law, or any
other person determined by the Committee.
8.04 Expenses. All costs and expenses incurred in the operation
--------
and administration of this Plan shall be borne by the Corporation.
8.05 Indemnification. Subject to the Corporation's By-Laws and
---------------
the applicable provisions of Delaware law, the Corporation shall indemnify,
defend and hold the Trustee harmless against all claims, expenses and
liabilities arising out of or related to the exercise of the Trustee's powers
and the discharge of its duties hereunder, unless the same shall be due to the
Trustee's gross negligence or misconduct.
ARTICLE IX
MISCELLANEOUS
9.01 Adjustments for Capital Changes. The aggregate number of
-------------------------------
Plan Shares available for distribution pursuant to Awards (Plan Share Awards
and/or Stock Option Agreements) and the number of Shares to which any Award
relates shall be proportionately adjusted for any increase or decrease in the
total number of outstanding shares of Common Stock issued subsequent to the
effective date of the Plan resulting from any split, subdivision or
consolidation of shares or other capital adjustment, or other increase or
decrease in such shares effected without receipt or payment of consideration
by the Corporation. Any stock dividend declared in respect of a Plan Share
held by the Trust will be held by the Trust on behalf of the Recipient until
earned by the Recipient and such stock dividend shall be treated as the other
Plan Shares held by the Trust under this Plan.
In the event of a capital adjustment in the Common Stock resulting
from a stock dividend, stock split, reorganization, merger, consolidation, or
a combination or exchange of shares, the number of shares of Common Stock
subject to this Plan and the number of Shares affected by Plan Share Awards
and Stock Option Agreements shall be automatically adjusted to take into
account such capital adjustment. By virtue of such a capital adjustment, the
price of any Share under a Stock Option Agreement shall be adjusted so that
there will be no change in the aggregate purchase price payable upon exercise
of any such Option.
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In the event the Corporation merges or consolidates with another
entity, or all or a substantial portion of the Corporation's assets or
outstanding capital stock are acquired (whether by merger, purchase or
otherwise) by another entity (such other entity being the "Successor"), the
kind of Shares that shall be subject to the Plan and to each outstanding Plan
Share Award and Stock Option Agreement shall, automatically by virtue of such
merger, consolidation or acquisition, be converted into and replaced by shares
of common stock, or such other class of securities having rights and
preferences no less favorable than the Shares of the Successor, and the number
of Shares subject to any Options and the purchase price per share upon
exercise of the Option shall be correspondingly adjusted, so that, by virtue
of such merger, consolidation or acquisition, each optionee shall have the
right to purchase [a] that number of shares of common stock of the Successor
that have a book value equal, as of the date of such merger, conversion or
acquisition, to the book value, as of the date of such merger, conversion or
acquisition, of the Shares theretofore subject to the optionee's option, [b]
for a purchase price that, when multiplied by the number of shares of common
stock of the Successor subjected to the option, shall equal the aggregate
exercise price at which the optionee could have acquired all of the Shares
theretofore optioned to the optionee.
The granting of an option pursuant to this Plan shall not affect
in any way the right and power of the Corporation to make adjustments,
reorganizations, reclassifications, or changes of its capital or business
structure or to merge, consolidate, dissolve, liquidate, sell or transfer all
or any part of its business or assets.
In the event of any stock dividend, stock split, combination or
exchange of Shares, merger, consolidation, spin-off, recapitalization or other
distribution (other than normal cash dividends) of the Corporation's assets to
stockholders, or any other change affecting Shares or the price of Shares,
such proportionate adjustments, if any, as the Committee in its discretion may
deem appropriate to reflect such change shall be made with respect to [a] the
aggregate number of Shares that may be issued under the Plan; [b] each
outstanding Award made under the Plan; and [c] the exercise price per Share
for any outstanding stock options or similar Awards under the Plan.
9.02 Amendment and Termination of the Plan. The Board shall
-------------------------------------
have the right, at any time, by resolution, to amend, suspend or terminate the
Plan in any respect that it may deem to be in the best interest of the
Corporation or to better achieve the purpose of the Plan, provided, however,
that no amendments shall be made in the Plan that would cause a modification,
extension or renewal to the terms of an Award granted hereunder within the
meaning of Section 424 (h) of the Internal Revenue Code of 1986, as amended.
Furthermore, any amendment that would cause the Plan not to comply with either
Rule 16b-3, or any successor rule, under the Act or Section 162(m) of the Code
shall not become effective without the approval of the Corporation's
shareholders.
Notwithstanding the foregoing, upon termination of the Plan, all
Plan Shares granted under Plan Share Awards will be distributed to the
Recipients regardless of whether or not such Plan Shares had otherwise been
earned under the service requirements set forth in Article VII, and all granted
Stock Option Agreements shall be fully exercisable under their terms; provided,
however, that no Plan Shares shall be distributed prior to six months from the
date of grant of the Plan Share Award or Stock Option Agreement unless
otherwise provided for herein.
9.03 Nontransferable. Plan Share Awards, Stock Option
---------------
Agreements and rights to Plan Shares shall not be transferable by a Recipient,
and during the lifetime of the Recipient, Plan Shares may only be earned by,
exercised by and/or paid to a Recipient who was notified in writing of an
Award by the Committee pursuant to Section 6.03. No Recipient or Beneficiary
shall have any right in or claim to any assets of the Plan or Trust, nor shall
the Corporation be subject to any claim for benefits hereunder.
A Stock Option Agreement granted under the Plan may not be
transferred by the optionee otherwise than by will or the laws of descent and
distribution, and during the lifetime of the optionee to whom granted, may be
exercised only by such optionee.
9.04 Future and Employment Rights. Neither the Plan nor any
----------------------------
grant of a Plan Share Award, Stock Option Agreement or Plan Shares hereunder
nor any action taken by the Trustee, the Committee or the Board in connection
with the Plan shall create any right on the part of any Employee to continue
in the employ of the Corporation.
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No person shall have any claim or rights to be granted an Award
under the Plan, and no participant shall have any rights under the Plan to be
retained in the employ or the Corporation or as a director.
Furthermore, unless otherwise specifically determined by the
Committee, settlements of Awards received by participants under the Plan shall
not be deemed a part of a participant's regular, recurring compensation for
purposes of calculating payments from or benefits under any of the
Corporation's benefit plans, severance programs, or severance pay laws of any
country. Further, the Corporation may adopt other compensation programs,
plans or arrangements as it deems appropriate or necessary.
9.05 Voting, Dividend and Shareholder Rights. No Recipient
---------------------------------------
shall have any voting or dividend rights or other rights of a stockholder in
respect to any Plan Shares covered by a Plan Share Award or Stock Option
Agreement, except as expressly provided in Sections 7.02 and 7.03 above, prior
to the time said Plan Shares are actually earned or exercised and distributed
to him. Furthermore, a participant shall have no rights as a shareholder with
respect to an Award until the participant actually becomes a holder of record
of Shares distributed with respect thereto.
9.06 Governing Law. The validity, construction and effect of
-------------
the Plan and Trust and any action taken or relating to the Plan, shall be
determined in accordance with and shall be governed by the laws of the State
of Indiana and applicable federal law. The invalidity or unenforceability of
any provision of this Plan or any Award granted pursuant to this Plan shall
not effect the validity and enforceability of the remaining provisions of this
Plan and the Awards granted hereunder, and such invalid or unenforceable
provision shall be stricken to the extent necessary to preserve the validity
and enforceability of this Plan and the Awards granted hereunder.
9.07 Effective Date. This Plan shall be effective as of
--------------
December 14, 1994 conditional upon its approval by the Board and by the
Shareholders of the Corporation.
9.08 Term of Plan. This Plan shall remain in effect until the
------------
earlier of : (1) twenty-one (21) years from the Effective Date, (2)
termination by the Board, or (3) the distribution to Recipients and
Beneficiaries of all assets of the Trust. This Plan shall be subject to the
approval by the shareholders of the Corporation, but if that approval has not
been obtained before June 14, 1996, the Plan shall be void, and any Awards
issued thereunder shall be void. If the Plan is terminated by the Board, no
Awards may be issued after the effective date of such termination, but,
subject to the preceding sentence, previously issued Awards shall remain
outstanding in accordance with their applicable terms and conditions and the
terms and conditions of this Plan.
Notwithstanding the foregoing, no options shall be granted under
the Plan after the effective date of termination, but any Stock Option
Agreements granted prior thereto may be exercised in accordance with their
terms. The Plan and all Awards granted pursuant to it are subject to all
laws, approvals, requirements and regulations of any governmental authority
that may be applicable thereto and, notwithstanding any provisions of the Plan
or its Awards, the holder of a Stock Option Agreement shall not be entitled to
exercise the option nor shall the Corporation be obligated to issue any Shares
to the holder if such exercise or issuance would violate any of the provisions
of the Plan.
9.09 Tax Status of Trust. It is intended that the Trust
-------------------
established hereby be treated as a Grantor Trust of the Corporation under the
provisions of Section 671 et seq. of the Internal Revenue Code of 1986, as
------
amended.
9.10 Director Participation. Notwithstanding any of the
-----------------------
foregoing, each member of the Board of Directors shall receive Five Hundred
Shares (500 shares) per year in Plan Share Awards. Such Plan Share Awards
shall be subject to the same terms and conditions as Employee Plan Share
Awards, including but not limited to the forfeiture of Shares if for reasons
other than death or disability a Director were not to serve on the Board at
the time of Registration.
Unless otherwise stated, Directors who are also employees, shall
receive their Five Hundred Shares (500 shares) of Plan Share Awards as part of
their employee Plan Share Awards. Directors which are non-employees shall
receive their Five Hundred (500) shares in a separate Plan Share Award.
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Directors which are non-employees shall be listed along with their Plan Share
Awards as part of Exhibit "A" attached hereto.
Additionally, each Director shall receive One Thousand Shares
(1,000 shares) of Stock Option Agreements per year. Such Stock Option
Agreements shall be subject to the same terms and conditions as those granted
to Employees, including but not limited to the forfeiture of unexercised
Options if, for reasons other than death or disability, a Director were not to
serve on the Board at the time of Registration or his termination.
Directors shall not be subject to approval or any voting by the
Committee on their Plan Share Awards and/or Stock Option Agreements, as such
Awards are limited and shall be automatically awarded annually pursuant to the
terms herein, and shall not be subject to the Committee's vote.
Directors which are non-employees may not receive Awards under
this Plan in excess of the fixed, limited amounts provided for in this Section
9.10 herein.
For the purposes of the terms and conditions which apply to
Directors participation pursuant to this Plan, the word "Employee" may be
substituted with the word "Director" herein for clarification purposes.
9.11 Designation of Beneficiaries. A participant may designate in
----------------------------
writing a beneficiary or beneficiaries to receive any distribution under the
Plan which is made after the participant's death, provided, however, that if
at any time such distribution is due, there is no designation of a beneficiary
in force or if any person (other than a trustee or trustees) as to whom a
beneficiary designation was in force at the time of the participant's death
shall have died before the payment became due and the participant has failed
to provide in such beneficiary designation for any person or persons to take
in lieu of such deceased person, the person or persons entitled to receive
such distribution (or part thereof, as the case may be) shall be the
participant's executor or administrator.
9.12 Notices. All notices or other communications made or
-------
given pursuant to this Plan shall be in writing and shall be sufficiently made
or given if hand delivered, or if mailed by certified mail, addressed to the
participant at the address contained in the records of the Corporation or to
the Corporation at its principal office, as applicable.
Furthermore, in the event that an offer is made to shareholders
or to the Corporation whereby a Change in Control may or will occur, the
Corporation, upon receipt of notice of said offer, shall promptly provide
notice to all optionees and Plan Share Award Recipients. Notwithstanding
anything to the contrary herein, upon receipt of notice of an intended Change
in Control, the optionee shall have the right to exercise any options granted
hereunder and to the extent permitted by applicable state and federal law,
thereafter to fully exercise his or her rights as a shareholder of the
Corporation.
9.13 Successors and Assigns. The Plan, and its Plan Share Awards and
----------------------
Stock Option Agreements, shall be binding on all successors and assigns of a
participant, including, without limitation, the estate of such participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the participant's creditors.
9.14 Assignment and Encumbrances. The right to receive an Award, and
---------------------------
the right to receive payment with respect to any Award under this Plan are not
assignable or transferable and shall not be subject to any encumbrances,
liens, pledges or charges of the participant or to claims of the participant's
creditors. Any attempt to assign, transfer, hypothecate or attach any rights
with respect to or derived from any Award, or any rights with respect to or
derived from an Award, shall be null and void and of no force and effect
whatsoever.
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