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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant x | |
Filed by a Party other than the Registrant o | |
Check the appropriate box: |
o Preliminary Proxy Statement | |
o Confidential for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
x Definitive Proxy Statement | |
o Definitive Additional Materials | |
o Soliciting Material under Rule 14a-12 |
Dave & Buster’s, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required. | |
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) Title of each class of securities to which transaction applies: |
(2) Aggregate number of securities to which transaction applies: |
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: |
(4) Proposed maximum aggregate value of transaction: |
(5) Total fee paid: |
o Fee paid previously with preliminary materials. |
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number or the form or schedule and the date of its filing. |
(1) Amount Previously Paid: |
(2) Form, Schedule or Registration Statement No.: |
(3) Filing Party: |
(4) Date Filed: |
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(a) Election of one class of directors (consisting of three directors) to serve for a three-year term, or until their successors have been elected and qualified; | |
(b) Approval of the Dave & Buster’s 2005 Long-Term Incentive Plan and to reserve 600,000 shares of the Company’s common stock, $.01 par value per share, for issuance to participants thereunder; | |
(c) Ratification of the appointment of the Company’s independent auditors for fiscal 2005; and | |
(d) Such other business as may properly come before the Annual Meeting or any adjournment thereof. |
By Order of the Board of Directors, | |
Nancy J. Duricic | |
Senior Vice President, Human Resources and | |
Corporate Secretary |
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Shares Beneficially | ||||||||
Owned(1) | ||||||||
Name | Number | Percent | ||||||
5% or more Stockholders: | ||||||||
Barclays Global Investors, NA(2) | 1,744,066 | 12.4 | % | |||||
Cramer Rosenthal McGlynn, LLC(3) | 816,500 | 5.8 | % | |||||
Directors and Executive Officers: | ||||||||
David O. Corriveau(4) | 822,085 | 5.7 | % | |||||
James W. Corley(5) | 877,717 | 6.1 | % | |||||
William C. Hammett, Jr.(6) | 109,100 | * | ||||||
Sterling R. Smith(7) | 124,067 | * | ||||||
J. Michael Plunkett(8) | 93,509 | * | ||||||
Allen J. Bernstein(9) | 30,000 | * | ||||||
Peter A. Edison(10) | 196,824 | 1.4 | % | |||||
Walter J. Humann(11) | 15,000 | * | ||||||
Mark A. Levy(12) | 15,015 | * | ||||||
Christopher C. Maguire(13) | 33,000 | * | ||||||
David B. Pittaway(14) | 15,000 | * | ||||||
Patricia P. Priest(15) | 15,000 | * | ||||||
All directors and executive officers as a group (16 persons) (16) | 2,431,979 | 15.9 | % |
* | Indicates less than 1%. |
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(1) | Pursuant to the rules of the Securities and Exchange Commission (“SEC”), shares of Common Stock that a person has the right to acquire within 60 days (i.e. on or before June 11, 2005) are deemed to be outstanding for the purposes of computing the percentage ownership of such person but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. | |
(2) | Based upon a Schedule 13G filed with the SEC on February 14, 2005. The address of Barclays Global Investors, N.A. is 45 Fremont Street, San Francisco, California 94105. | |
(3) | Based upon a Schedule 13G filed with the SEC on February 11, 2005. The address of Cramer Rosenthal McGlynn, LLC is 520 Madison Avenue, New York, New York 10022. | |
(4) | Includes 380,000 shares subject to options exercisable within 60 days and 70,000 shares of restricted stock for which Mr. Corriveau has sole voting power only. Mr. Corriveau shares voting and dispositive power with respect to 74,545 shares owned of record by a family limited partnership. Mr. Corriveau disclaims beneficial ownership with respect to such shares. Substantially all of the shares owned directly by Mr. Corriveau have been pledged as collateral to secure various personal bank loans and margin trading in personal brokerage accounts. | |
(5) | Includes 380,000 shares subject to options exercisable within 60 days and 70,000 shares of restricted stock for which Mr. Corley has sole voting power only. Mr. Corley shares voting and dispositive power with respect to 99,559 shares owned of record by a family limited partnership. Mr. Corley disclaims beneficial ownership with respect to such shares. | |
(6) | Includes 75,000 shares subject to options exercisable within 60 days, 800 shares owned by a family member and 25,000 shares of restricted stock for which Mr. Hammett has sole voting power only. | |
(7) | Includes 95,567 shares subject to options exercisable within 60 days and 15,000 shares of restricted stock for which Mr. Smith has sole voting power only. | |
(8) | Includes 66,000 shares subject to options exercisable within 60 days and 17,500 shares of restricted stock for which Mr. Plunkett has sole voting power. | |
(9) | Includes 30,000 shares subject to options exercisable within 60 days. |
(10) | Includes 190,980 shares owned by a charitable foundation of which Mr. Edison is a director, 5,784 shares held in trust for the benefit of a family member, and 60 shares owned directly by a family member. Mr. Edison disclaims beneficial ownership of all of such shares. |
(11) | Includes 15,000 shares subject to options exercisable within 60 days. |
(12) | Includes 15,000 shares subject to options exercisable within 60 days. Also includes 15 shares owned directly by a family member, as to which shares Mr. Levy disclaims beneficial ownership. |
(13) | Includes 30,000 shares subject to options exercisable within 60 days. |
(14) | Includes 15,000 shares subject to options exercisable within 60 days. |
(15) | Includes 15,000 shares subject to options exercisable within 60 days. |
(16) | Includes a total of 1,267,400 shares subject to options exercisable within 60 days and 285,000 shares of restricted stock for which such officers hold sole voting power only. |
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Nominees for Director (Current Terms Expire 2005) |
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Directors Continuing in Office (Current Terms Expire 2006) |
Directors Continuing in Office (Current Terms Expire 2007) |
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• | offer non-employee directors and selected employees, including officers, an equity ownership interest and opportunity to participate in the Company’s growth and financial success and to accumulate capital for retirement on a competitive basis; | |
• | provide the Company an opportunity to attract and retain the best available personnel for positions of substantial responsibility; | |
• | create long-term value and encourage equity participation in the Company by eligible participants by making available to them the benefits of a larger Common Stock ownership through stock options, stock appreciation rights, and restricted stock Awards; | |
• | provide incentives to our non-employee directors and employees by means of market-driven and performance-related incentives to achieve long-term performance goals; and | |
• | promote the growth and success of the Company’s business by aligning the financial interests of the non-employee directors and employees with that of the stockholders. |
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• | interpret the Incentive Plan and all Awards; | |
• | establish and amend rules and regulations for the Incentive Plan’s operation; | |
• | select recipients of Awards; | |
• | determine the form, amount and other terms and conditions of Awards; | |
• | establish procedures to exercise Awards; | |
• | amend or waive restrictions on Awards; and | |
• | accelerate Awards. |
• | stock options; | |
• | stock appreciation rights; and | |
• | restricted stock awards. |
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• | incentive stock options, as defined in the Internal Revenue Code; or | |
• | nonqualified stock options, which do not qualify for treatment as incentive stock options. |
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• | net income as a percentage of revenue; | |
• | earnings per share of Common Stock; | |
• | earnings before interest, taxes, depreciation and amortization; | |
• | return on net assets employed before interest and taxes; | |
• | operating margin as a percentage of revenue; | |
• | safety performance relative to industry standards and the Company annual target; | |
• | strategic team goals; | |
• | net operating profit after taxes; | |
• | net operating profit after taxes per share of Common Stock; | |
• | return on invested capital; | |
• | return on assets or net assets; |
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• | total stockholder return; | |
• | relative total stockholder return (as compared with a peer group of the Company); | |
• | earnings before income taxes; | |
• | net income; | |
• | free cash flow; | |
• | free cash flow per share of Common Stock; | |
• | revenue (or any component thereof); | |
• | revenue growth; or | |
• | any other performance objective approved by the stockholders in accordance with Section 162(m) of the Internal Revenue Code. |
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• | two years from the date the option is granted; and | |
• | one year from the date the Common Stock is transferred to the employee pursuant to the exercise of the incentive stock option. |
• | the fair market value of the Common Stock on the date of exercise minus the option exercise price; and | |
• | the amount realized on disposition minus the option exercise price. |
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Fiscal 2003 | Fiscal 2004 | ||||||||
Audit Fees(a) | $ | 226,000 | $ | 579,000 | |||||
Audit-Related Fees(b) | 363,451 | 210,000 | |||||||
Tax Fees(c) | 282,449 | 247,649 | |||||||
All Other Fees | — | — | |||||||
Total | 871,900 | 1,036,649 | |||||||
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(a) | Includes fees for services for the audits of our annual financial statements and internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act, the reviews of our interim financial statements and assistance with SEC filings. | |
(b) | Includes fees for services related to transaction due diligence and consultations with respect to compliance with Section 404 of the Sarbanes-Oxley Act. | |
(c) | Includes fees for services related to tax compliance, preparation and planning services (including U.S. federal, state and local returns) and tax examination assistance. |
Patricia P. Priest,Chairman | |
Mark A. Levy | |
David B. Pittaway |
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Long Term Compensation | |||||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||||
Restricted | Securities | All Other | |||||||||||||||||||||||
Salary(2) | Bonus(2) | Stock Awards | Underlying | Compensation | |||||||||||||||||||||
Name and Principal Position | Year | ($) | ($) | ($)(3) | Options/SARs(#) | ($)(4) | |||||||||||||||||||
James W. Corley | 2004 | $ | 480,000 | $ | 280,000 | $ | 176,600 | 40,000 | — | ||||||||||||||||
(CEO & COO) | 2003 | $ | 482,308 | $ | 372,400 | — | — | — | |||||||||||||||||
2002 | $ | 582,692 | $ | 60,000 | — | — | — | ||||||||||||||||||
David O. Corriveau | 2004 | $ | 480,000 | $ | 280,000 | $ | 176,600 | 40,000 | — | ||||||||||||||||
(President) | 2003 | $ | 482,308 | $ | 372,400 | — | — | — | |||||||||||||||||
2002 | $ | 582,692 | $ | 60,000 | — | — | — | ||||||||||||||||||
William C. Hammett, Jr. | 2004 | $ | 260,962 | $ | 115,000 | $ | 132,450 | — | — | ||||||||||||||||
(Senior Vice President | 2003 | $ | 247,663 | $ | 114,000 | — | — | — | |||||||||||||||||
and Chief Financial | 2002 | $ | 234,510 | $ | 50,000 | — | — | $ | 16,152 | (5) | |||||||||||||||
Officer) | |||||||||||||||||||||||||
Sterling R. Smith | 2004 | $ | 224,089 | $ | 88,000 | $ | 132,450 | — | $ | 7,748 | |||||||||||||||
(Senior Vice President, | 2003 | $ | 216,945 | $ | 79,000 | — | — | $ | 7,471 | ||||||||||||||||
Dave & Buster’s | 2002 | $ | 213,115 | $ | 20,000 | — | — | $ | 5,862 | ||||||||||||||||
Operations) | |||||||||||||||||||||||||
J. Michael Plunkett | 2004 | $ | 194,615 | $ | 85,000 | $ | 132,450 | — | $ | 6,042 | |||||||||||||||
(Senior Vice President | 2003 | $ | 173,700 | $ | 68,000 | — | — | $ | 2,006 | ||||||||||||||||
Jillian’s Operations and | 2002 | $ | 165,750 | $ | 17,927 | — | — | $ | 2,316 | ||||||||||||||||
Kitchen Operations) |
(1) | The value of perquisites and other personal benefits is not reported where such amount does not exceed the lesser of $50,000 or 10% of the total annual salary and bonus reported for the Named Executive Officer. |
(2) | Amounts earned were determined by the Company’s Compensation Committee. Base salaries for Mr. Corley and Mr. Corriveau were reduced by 20% in 2003. See “Report of the Compensation Committee.” |
(3) | All restricted stock awards granted in fiscal 2004 vest on June 8, 2009, subject to acceleration if the Company achieves specific financial performance measures in earlier fiscal years. As of January 31, 2005, the number and value of restricted stock holdings by the Named Executive Officers was as follows: Mr. Corley 70,000 shares, $1,313,900; Mr. Corriveau 70,000 shares, $1,313,900; Mr. Hammett 32,500 shares, $610,025; Mr. Smith 22,500 shares, $422,325; and Mr. Plunkett 17,500 shares, $328,475. |
(4) | Includes matching contributions to the Company’s 401k plan. |
(5) | Includes non-qualified and qualified moving expenses for Mr. Hammett in fiscal 2002. |
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Percentage | Potential Realizable Value at Assumed | |||||||||||||||||||||||
of Total | Annual Rates of Stock Price | |||||||||||||||||||||||
Options/SAR’s | Exercise or | Appreciation for Option Term(1) | ||||||||||||||||||||||
Number of | Granted To | Base Price in | ||||||||||||||||||||||
Options/SARs | Employees in | Dollars Per | Expiration | |||||||||||||||||||||
Name | Granted(#) | Fiscal Year | Share | Date | 5% ($) | 10% ($) | ||||||||||||||||||
James W. Corley | 40,000 | 24.62 | % | $ | 17.6600 | 06/08/14 | $ | 444,251 | $ | 1,125,820 | ||||||||||||||
David O. Corriveau | 40,000 | 24.62 | % | $ | 17.6600 | 06/08/14 | $ | 444,251 | $ | 1,125,820 | ||||||||||||||
William C. Hammett, Jr. | — | 0.00 | % | — | — | — | — | |||||||||||||||||
Sterling R. Smith | — | 0.00 | % | — | — | — | — | |||||||||||||||||
J. Michael Plunkett | — | 0.00 | % | — | — | — | — |
(1) | The 5% and 10% assumed compounded annual rates of appreciation are mandated by the rules of the SEC and do not reflect the Company’s estimates or projections of future prices of the shares of the Company’s common stock. There can be no assurance that the amounts reflected in this table will be achieved. |
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Value of Unexercised | ||||||||||||||||||||||||
Number of Unexercised | In-the-Money Options at | |||||||||||||||||||||||
Options at January 30, 2005 | January 30, 2005(1) | |||||||||||||||||||||||
Shares | Value | |||||||||||||||||||||||
Exercised | Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | |||||||||||||||||||
Name | (#) | ($) | (#) | (#) | ($) | ($) | ||||||||||||||||||
James W. Corley | — | — | 380,000 | — | $ | 2,299,900 | — | |||||||||||||||||
David O. Corriveau | — | — | 380,000 | — | $ | 2,299,900 | — | |||||||||||||||||
William C. Hammett, Jr. | — | — | 75,000 | — | $ | 924,000 | — | |||||||||||||||||
Sterling R. Smith | 9,700 | $ | 63,280 | 96,567 | — | $ | 655,827 | — | ||||||||||||||||
J. Michael Plunkett | 15,750 | $ | 93,320 | 66,000 | — | $ | 659,380 | — |
(1) | Based upon the closing price of the Common Stock of the Company on January 31, 2005 of $18.77 per share. |
Number of Securities Remaining | |||||||||||||
Number of Securities to | Weighted-Average Exercise | Available for Future Issuance | |||||||||||
be Issued Upon Exercise | Price of Outstanding | Under Equity Compensation Plans | |||||||||||
of Outstanding Options, | Options, Warrants and | (Excluding Securities Reflected in | |||||||||||
Plan Category | Warrants and Rights | Rights | Column (a)) | ||||||||||
Equity compensation plans approved by security holders | 2,324,649 | (1) | $ | 12.29 | 188,234 | ||||||||
Equity compensation plans not approved by security holders | None | None | None | ||||||||||
Total | 2,324,649 | (1) | $ | 12.29 | 188,234 |
(1) | Includes 377,000 shares of restricted stock |
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Compensation Philosophy and Overall Objectives of Executive Compensation Programs |
• | Provide a competitive total executive compensation package that enables the Company to attract, motivate and retain key executives. | |
• | Integrate all pay programs with the Company’s annual and long-term business objectives and strategy, and focus executives on the fulfillment of these objectives. | |
• | Provide variable compensation opportunities that are directly linked with the financial and strategic performance of the Company. |
Cash Compensation |
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Long-Term Incentives |
CEO Compensation |
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Deductibility of Executive Compensation |
Summary |
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David B. Pittaway,Chairman | |
Allen J. Bernstein | |
Walter J. Humann |
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![(PERFORMANCE GRAPH)](https://capedge.com/proxy/DEF 14A/0000950134-05-008588/d24491dd2449101.gif)
01/30/00 | 02/04/01 | 02/03/02 | 02/02/03 | 02/01/04 | 01/31/05 | |||||||||||||||||||
Dave & Buster’s, Inc. | 100.00 | 143.27 | 118.55 | 118.40 | 181.38 | 273.02 | ||||||||||||||||||
S&P 500 | 100.00 | 90.06 | 81.50 | 63.01 | 87.28 | 91.45 | ||||||||||||||||||
S&P Restaurants | 100.00 | 92.14 | 95.21 | 63.74 | 114.76 | 140.98 | ||||||||||||||||||
S&P SmallCap Restaurants | 100.00 | 125.57 | 181.49 | 159.19 | 229.72 | 274.74 |
* | $100 invested on 1/30/00 in stock or on 1/31/00 in index-including reinvestment of dividends. |
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2.2.1. No director qualifies as “independent” unless the Board affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company), other than such director’s capacity as a member of the Board, the Committee or any other Board committee. | |
2.2.2. No director shall be considered “independent” if such director is affiliated with the Company or any subsidiary thereof in any capacity, other than in such director’s capacity as a member of the Board, the Committee or any other Board committee. | |
2.2.3. No director shall be considered “independent” if such director receives any consulting, advisory or other compensatory fee from the Company, other than fees received in such director’s capacity as a member of the Board, the Committee or any other Board committee. | |
2.2.4. No director shall be considered “independent” if such director is, or has been within the last three (3) years, an employee of the Company, or has an immediate family member who is, or has been within the last three years, an executive officer, of the Company. | |
2.2.5. No director shall be considered “independent” if such director has received, or has an immediate family member who has received, during any twelve-month period within the last three (3) years, more than $100,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). |
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2.2.6. No director shall be considered “independent” if (i) the director or an immediate family member is a current partner of the Internal (as hereinafter defined) or External Auditor, (ii) the director is a current employee of the Internal or External Auditor, (iii) the director has an immediate family member who is a current employee of the Internal or External Auditor and who participates in the Internal or External Auditor’s audit, assurance or tax compliance (but not tax planning) practice or (iv) the director or an immediate family member was within the last three (3) years (but is no longer) a partner or employee of the Internal or External Auditor and personally worked on the Company’s audit within that time. | |
2.2.7. No director shall be considered “independent” if such director or an immediate family member is, or has been within the last three (3) years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s Compensation Committee. | |
2.2.8. No director shall be considered “independent” if such director is a current employee, or has an immediate family member who is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three (3) fiscal years, exceeds the greater of $1 million, or two percent (2%) of such other company’s consolidated gross revenues. | |
2.2.9. Employment of an immediate family member of a director in a non-officer position (as defined with reference to Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended, or any successor rule) does not preclude the Board from determining that such director is “independent.” The term “immediate family member” includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such person’s home. |
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6.2.1. Committee Pre-Approval. No audit services or non-audit services shall be performed by the External Auditor for the Company unless first pre-approved by the Committee and unless permitted by applicable federal securities laws and the rules and regulations of the SEC. If the Committee approves an audit service within the scope of the engagement of the External Auditor, such audit service shall be deemed to have been pre-approved for purposes of this Section. | |
6.2.2. Delegation of Pre-Approval Authority. The Committee may delegate to one (1) or more members of the Committee the authority to grant pre-approval of non-audit services required by this Section. The decision of any member to whom such authority is delegated to pre-approve non-audit services shall be reported to the full Committee at its next scheduled meeting. |
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(i) in the case of a Director, the commission of an act of fraud or intentional misrepresentation or an act of embezzlement, misappropriation or conversion of assets or opportunities of the Company or any Affiliate; and | |
(ii) in the case of an Optionee or Grantee whose employment with the Company or an Affiliate is subject to the terms of an employment agreement between such Optionee or Grantee and the Company or Affiliate, which employment agreement includes a definition of “Cause,” the term “Cause” as used in the Plan or any agreement establishing an Award shall have the meaning set forth in such employment agreement during the period that such employment agreement remains in effect; and |
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(iii) in all other cases, (a) an intentional failure to perform reasonably assigned duties, (b) dishonesty or willful misconduct in the performance of duties, (c) an intentional violation of material Company or Affiliate policies, (d) involvement in a transaction or act in connection with the performance of duties to the Company or any Affiliate which transaction or act is adverse to the interests of the Company or any Affiliate and which is engaged in for personal profit, or (e) the willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses). |
(i) an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (a) the then outstanding shares of Common Stock (the“Outstanding Common Stock”) or (b) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of its directors (the“Outstanding Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege), (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (D) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (a), (b) and (c) of paragraph (iii) of this Section 3.5 are satisfied; or | |
(ii) individuals who, as of the effective date of the Plan as set forth herein, 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 Company’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 14.A 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) the approval by the shareholders of the Company of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (a) more than 50% of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and more than 50% of 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 Common Stock and Outstanding 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 Common Stock and Outstanding Voting Securities, as the case may be; (b) no Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such reorganization, merger or consolidation and any such Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 30% or more of the Outstanding Common Stock or Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, 30% or more of 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 |
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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) the approval by the shareholders of the Company of (a) a complete liquidation or dissolution of the Company or (b) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation with respect to which, following such sale or other disposition, (A) more than 50% of the then outstanding shares of common stock of such corporation and more than 50% of 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 entities who were the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding 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 Common Stock or Outstanding Voting Securities, as the case may be; (B) no Person (excluding the Company and any employee benefit plan (or related trust) of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 30% or more of the Outstanding Common Stock or Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly 30% or more of the then outstanding shares of common stock of such corporation or 30% or more of 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 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 Company. |
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(i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such a share of Common Stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the day of determination (or if no such price or bid is reported on that day, on last market trading day prior to the day of determination), as reported inThe Wall Street Journalor such other source as the Committee deems reliable. | |
(ii) In the absence of any such established markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Committee. |
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(a) Net income as a percentage of revenue; | |
(b) Earnings per share of Common Stock; | |
(c) Earnings before interest, taxes, depreciation and amortization; | |
(d) Return on net assets employed before interest and taxes; | |
(e) Operating margin as a percentage of revenue; | |
(f) Safety performance relative to industry standards and the Company annual target; | |
(g) Strategic team goals; | |
(h) Net operating profit after taxes; | |
(i) Net operating profit after taxes per share of Common Stock; | |
(j) Return on invested capital; |
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(k) Return on assets or net assets; | |
(l) Total stockholder return; | |
(m) Relative total stockholder return (as compared with a peer group of the Company); | |
(n) Earnings before income taxes; | |
(o) Net income; | |
(p) Free cash flow; | |
(q) Free cash flow per share of Common Stock; | |
(r) Revenue (or any component thereof); | |
(s) Revenue growth; or | |
(t) Any other performance objective approved by the stockholders of the Company in accordance with Section 162(m) of the Code. |
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(i) To interpret and administer this Plan and to apply its provisions; | |
(ii) To adopt, amend or rescind rules, procedures and forms relating to this Plan; | |
(iii) To authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of this Plan; | |
(iv) Unless otherwise specified by the terms of this Plan, to determine when Awards are to be granted under this Plan; | |
(v) Unless otherwise specified by the terms of this Plan, to select the Directors and Employees to whom Awards may be awarded from time to time; | |
(vi) Unless otherwise specified by the terms of this Plan, to determine the type or types of Award to be granted to each Grantee hereunder; | |
(vii) Unless otherwise specified by the terms of this Plan, to determine the number of shares to be made subject to each Award; | |
(viii) To determine the Fair Market Value of the shares of Common Stock and the exercise price per share of Awards to be granted; | |
(ix) Unless otherwise specified by the terms of this Plan, to prescribe the terms, conditions and restrictions, not inconsistent with the provisions of this Plan, of any Award granted hereunder and, with the consent of the Grantees, modify or amend each Award; | |
(x) Unless otherwise specified by the terms of this Plan, to determine whether, to what extent, and under what circumstances Awards may be settled in cash, reduced, canceled or suspended; | |
(xi) To amend or modify any outstanding Awards, in its discretion, in accordance with Section 11.12(iv); | |
(xii) To establish procedures for an Optionee (A) to have withheld from the total number of shares of Common Stock to be acquired upon the exercise of an Option that number of shares of Common Stock having a Fair Market Value, which, together with such cash as shall be paid in respect of fractional shares, shall equal the exercise price of the Option, and (B) to exercise a portion of an Option by delivering that number of Qualifying Shares having a Fair Market Value which shall equal the exercise price of the Option; |
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(xiii) To establish procedures whereby a number of shares of Common Stock may be withheld from the total number of shares of Common Stock to be issued upon exercise of an Option or Stock Appreciation Right, or surrendered by a Grantee in connection with the exercise of an Option or Stock Appreciation Right or the vesting of any Restricted Stock Award, to meet the obligation of withholding for federal, state, local and other taxes, if any, incurred by the Grantee upon such exercise or vesting; | |
(xiv) To establish and interpret Performance Goals and the specific performance factors and targets in relation to the Performance Goals in connection with any grant of Restricted Stock Awards that are designated as Performance Awards; provided that in any case, the Performance Goals may be based on either a single period or cumulative results, aggregate or per-share data or results computed independently or with respect to a peer group; | |
(xv) Evaluate the level of performance over a Performance Period and certify the level of performance attained with respect to Performance Goals and specific performance factors and targets related to Performance Goals; | |
(xvi) Make any adjustments to this Plan (including but not limited to adjustment of the number of shares of Common Stock available under this Plan or any Award) and any Award granted under this Plan, as may be appropriate pursuant to Section 12.1; | |
(xvii) Appoint such agents as it shall deem appropriate for proper administration of this Plan; and | |
(xviii) To take any other actions deemed necessary or advisable for the administration of this Plan. |
(i) Form of Option Grant. Each Option granted under the Plan shall be evidenced by a written Option Agreement in such form (which need not be the same for each Optionee) as the Committee from time to time approves, but which is not inconsistent with the Plan, including any provisions that may be necessary to assure that any Option that is intended to be an Incentive Stock Option will comply with Section 422 of the Code. | |
(ii) Date of Grant. The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option unless otherwise specified by the Committee. The Option Agreement evidencing the Option will be delivered to the Optionee with a copy of the Plan and other relevant Option documents, within a reasonable time after the date of grant. | |
(iii) Exercise Price. The exercise price of an Option shall be not less than the Fair Market Value of the shares of Common Stock covered by the Option on the date of grant of the Option. The exercise price of any Incentive Stock Option granted to a Ten Percent Shareholder shall be not less |
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than 110% of the Fair Market Value of the shares of Common Stock covered by the Option on the date of grant of the Option. | |
(iv) Exercise Period. Options shall be exercisable within the time or times or upon the event or events determined by the Committee and set forth in the Option Agreement; provided, however, that no Option shall be exercisable later than the day prior to the expiration of ten (10) years from the date of grant of the Option, and provided further, that no Incentive Stock Option granted to a Ten Percent Shareholder shall be exercisable after the expiration of five (5) years from the date of grant of the Option. | |
(v) Limitations on Incentive Stock Options. The aggregate Fair Market Value (determined as of the date of grant of an Option) of Common Stock which any Employee is first eligible to purchase during any calendar year by exercise of Incentive Stock Options granted under the Plan and by exercise of incentive stock options (within the meaning of Section 422 of the Code) granted under any other incentive stock option plan of the Company or an Affiliate shall not exceed $100,000. If the Fair Market Value of stock with respect to which all incentive stock options described in the preceding sentence held by any one Optionee are exercisable for the first time by such Optionee during any calendar year exceeds $100,000, the Options (that are intended to be Incentive Stock Options on the date of grant thereof) for the first $100,000 worth of shares of Common Stock to become exercisable in such year shall be deemed to constitute incentive stock options within the meaning of Section 422 of the Code and the Options (that are intended to be Incentive Stock Options on the date of grant thereof) for the shares of Common Stock in the amount in excess of $100,000 that become exercisable in that calendar year shall be treated as Non-Qualified Stock Options. If the Code or the Treasury regulations promulgated thereunder are amended after the effective date of the Plan to provide for a different limit than the one described in this Section 9.1(v), such different limit shall be incorporated herein and shall apply to any Options granted after the effective date of such amendment. | |
(vi) Transferability of Options. Options granted under the Plan, and any interest therein, shall not be transferable or assignable by the Optionee, and may not be made subject to execution, attachment or similar process, otherwise than by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of the Optionee only by the Optionee; provided, that the Optionee may, however, designate persons who may exercise his Options following his death. | |
(vii) Acquisitions and Other Transactions. The Committee may, from time to time, assume outstanding options granted by another entity, whether in connection with an acquisition of such other entity or otherwise, by either (a) granting an Option under the Plan in replacement of or in substitution for the option assumed by the Company, or (b) treating the assumed option as if it had been granted under the Plan if the terms of such assumed option could be applied to an Option granted under the Plan. Such assumption shall be permissible if the holder of the assumed option would have been eligible to be granted an Option hereunder if the other entity had applied the rules of this Plan to such grant. The Committee also may grant Options under the Plan in settlement of or substitution for, outstanding options or obligations to grant future options in connection with the Company or an Affiliate acquiring another entity, an interest in another entity or an additional interest in an Affiliate whether by merger, stock purchase, asset purchase or other form of transaction. Notwithstanding the foregoing provisions of this Section 9.1, in the case of an Option issued or assumed pursuant to this Section 9.1(vii), the exercise price for the Option shall be determined in accordance with the principles of Section 424(a) of the Code and the Treasury regulations promulgated thereunder. | |
(viii) Death or Disability. If an Optionee’s employment with the Company or an Affiliate terminates as a result of the death or Disability of the Optionee, all Options, then held by or on behalf of the Optionee shall become fully vested and exercisable. |
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(i) Notice. Options may be exercised only by delivery to the Company of a written exercise notice approved by the Committee (which need not be the same for each Optionee), stating the number of shares of Common Stock being purchased, the method of payment, and such other matters as may be deemed appropriate by the Company in connection with the issuance of shares of Common Stock upon exercise of the Option, together with payment in full of the exercise price for the number of shares of Common Stock being purchased. Such exercise notice may be part of an Optionee’s Option Agreement. | |
(ii) Payment. Payment for the shares of Common Stock to be purchased upon exercise of an Option may be made (a) in cash, (b) by certified check, (c) if a public market for the Common Stock exists, through a “same-day sale” arrangement between the Optionee and a broker-dealer that is a member of the National Association of Securities Dealers, Inc. (an“NASD Dealer”) whereby the Optionee elects to exercise the Option and to sell a portion of the shares of Common Stock so purchased to pay for the exercise price and whereby the NASD Dealer commits upon receipt of such shares of Common Stock to forward the exercise price directly to the Company, (d) if a public market for the Common Stock exists, through a “margin” commitment from the Optionee and an NASD Dealer whereby the Optionee elects to exercise the Option and to pledge the shares of Common Stock so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the exercise price, and whereby the NASD Dealer commits upon receipt of such shares of Common Stock to forward the exercise price directly to the Company, or (e) by surrender for cancellation of Qualifying Shares at the Fair Market Value per share at the time of exercise (provided that such surrender does not result in an accounting charge for the Company). In no event will the Committee permit the exercise price to be paid with a form of consideration, including a loan or a “cashless exercise,” if such form of consideration would violate the Sarbanes-Oxley Act of 2002 as determined by the Committee. No shares of Common Stock may be issued until full payment of the purchase price therefor has been made. | |
(iii) Withholding Taxes. The Committee may establish such rules and procedures as it considers desirable in order to satisfy any obligation of the Company to withhold the statutory prescribed minimum amount of federal or state income taxes or other taxes with respect to the exercise of any Option granted under the Plan. Prior to issuance of the shares of Common Stock upon exercise of an Option, the Optionee shall pay or make adequate provision acceptable to the Committee for the satisfaction of the statutory minimum prescribed amount of any federal or state income or other tax withholding obligations of the Company, if applicable. Upon exercise of an Option, the Company shall withhold or collect from the Optionee an amount sufficient to satisfy such tax-withholding obligations. | |
(iv) Exercise of Option Following Termination of Continuous Service. |
(a) An Option may not be exercised after the expiration date of such Option set forth in the Option Agreement and may be exercised following the termination of an Optionee’s Continuous Service only to the extent provided in the Option Agreement. | |
(b) Where the Option Agreement permits an Optionee to exercise an Option following the termination of the Optionee’s Continuous Service for a specified period, the Option shall terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Option, whichever occurs first. | |
(c) Any Option designated as an Incentive Stock Option, to the extent not exercised within the time permitted by law for the exercise of Incentive Stock Options following the termination of an Optionee’s Continuous Service, shall convert automatically to a Non-Qualified Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified in the Option Agreement. |
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(d) The Committee shall have discretion to determine whether the Continuous Service of an Optionee has terminated and the effective date on which such Continuous Service terminates and whether the Optionee’s Continuous Service terminated as a result of the Disability of the Optionee. |
(v) Limitations on Exercise. |
(a) The Committee may specify a reasonable minimum number of shares of Common Stock or a percentage of the shares subject to an Option that may be purchased on any exercise of an Option; provided, that such minimum number will not prevent an Optionee from exercising the full number of shares of Common Stock as to which the Option is then exercisable. | |
(b) The obligation of the Company to issue any shares of Common Stock pursuant to the exercise of any Option shall be subject to the condition that such exercise and the issuance and delivery of such shares pursuant thereto comply with Section 409A of the Code, the Securities Act, all applicable state securities laws and the requirements of any stock exchange or national market system upon which the shares of Common Stock may then be listed or quoted, as in effect on the date of exercise. The Company shall be under no obligation to register the shares of Common Stock with the Securities and Exchange Commission or to effect compliance with the registration, qualification or listing requirements of any state securities laws or stock exchange or national market system, and the Company shall have no liability for any inability or failure to do so. | |
(c) As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the shares of Common Stock are being purchased only for investment and without any present intention to sell or distribute such shares of Common Stock if, in the opinion of counsel for the Company, such a representation is required by any securities or other applicable laws. |
(vi) Modification, Extension And Renewal of Options. Except as otherwise permitted specifically by the terms of this Plan, the Committee shall not have the power to modify, cancel, extend or renew outstanding Options or to authorize the grant of new Options and/or Restricted Stock Awards in substitution therefor. In addition, the Committee may not take any action to modify, cancel extend or renew outstanding Options under the Plan that would (a) impair any rights under any Option previously granted to such Optionee, without the Optionee’s written consent, (b) cause the Option or the Plan to become subject to Section 409A of the Code, or (c) cause any Option to lose its status as “performance-based” compensation under Section 162(m) of the Code. Notwithstanding any provision of this Section 9.2(vi) or any other provision of the Plan to the contrary, the Committee may not reprice any Option, except pursuant to Section 12.1 hereof or in accordance with Section 424(h) of the Code (and in a manner that would not cause an Option to be treated as deferred compensation under Section 409A of the Code). | |
(vii) Privileges of Stock Ownership. No Optionee will have any of the rights of a shareholder with respect to any shares of Common Stock subject to an Option until such Option is properly exercised and the purchased shares are issued and delivered to the Optionee, as evidenced by an appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to such date of issuance and delivery, except as provided in the Plan. | |
(viii) Proceeds of Option Exercise. The proceeds received by the Company from the sale of shares of its Common Stock pursuant to Options exercised under the Plan shall be used for general corporate purposes. |
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(i) Exercise. A Stock Appreciation Right granted in connection with an Option shall be exercisable at such time or times and only to the extent that the related Options are exercisable, and will not be transferable except to the extent the related Option may be transferable. | |
(ii) Amount Payable. Upon the exercise of a Stock Appreciation Right related to an Option, the Grantee shall be entitled to receive an amount payable in whole shares of Common Stock determined by multiplying (a) the excess of the Fair Market Value of a share of Common Stock on the date of exercise of such Stock Appreciation Right over the option exercise price of the Stock Appreciation Right, by (ii) the number of shares of Common Stock as to which such Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to any Stock Appreciation Right by including such a limit in the applicable Stock Appreciation Right Agreement. | |
(iii) Treatment of Related Options and Stock Appreciation Rights Upon Exercise. Upon the exercise of a Stock Appreciation Right granted in connection with an Option, the Option shall be canceled to the extent of the number of shares of Common Stock as to which the Stock Appreciation Right is exercised, and upon the exercise of an Option granted in connection with a Stock Appreciation Right, the Stock Appreciation Right shall be canceled to the extent of the number of shares of Common Stock as to which the Option is exercised or surrendered. |
(i) Terms; Duration. Stock Appreciation Rights unrelated to Options shall contain such terms and conditions as to exercisability, vesting and duration as the Committee shall determine, but in no event shall they have a term of greater than ten (10) years. However, each Stock Appreciation Right shall be exercisable only during such portion of its term as the Committee shall determine and, unless provided otherwise by the specific provisions of the Stock Appreciation Right Agreement, only if the Grantee is employed by the Company or an Affiliate at the time of such exercise. | |
(ii) Amount Payable. Upon exercise of a Stock Appreciation Right unrelated to an Option, the Grantee shall be entitled to receive an amount payable in whole shares of Common Stock determined by multiplying (a) the excess of the Fair Market Value of a share of Common Stock on the date of exercise of such Stock Appreciation Right over the Fair Market Value of a share of Common Stock |
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on the date the Stock Appreciation Right was granted, by (b) the number of shares of Common Stock as to which the Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to any Stock Appreciation Right by including such a limit in the applicable Stock Appreciation Right Agreement. | |
(iii) Non-Transferability. No Stock Appreciation Right unrelated to an Option shall be transferable by the Grantee otherwise than by will or the laws of descent and distribution, and such Stock Appreciation Right shall be exercisable during the lifetime of such Grantee only by the Grantee or his or her guardian or legal representative. |
(i) A Stock Appreciation Right may not be exercised after the expiration date of such Stock Appreciation Right set forth in the Stock Appreciation Right Agreement and may be exercised following the termination of a Grantee’s Continuous Service only to the extent provided in the Stock Appreciation Right Agreement. | |
(ii) Where the Stock Appreciation Right Agreement permits Grantee to exercise a Stock Appreciation Right following the termination of the Grantee’s Continuous Service for a specified period, the Stock Appreciation Right shall terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Stock Appreciation Right, whichever occurs first. | |
(iii) The Committee shall have discretion to determine whether the Continuous Service of Grantee has terminated and the effective date on which such Continuous Service terminates and whether the Grantee’s Continuous Service terminated as a result of the Disability of the Grantee. |
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(i) The Committee may specify a reasonable minimum number of shares of Common Stock covered by a Stock Appreciation Right or a percentage of the shares subject to a Stock Appreciation Right that may be purchased on any exercise of a Stock Appreciation Right; provided, that such minimum number will not prevent Grantee from exercising the full number of shares of Common Stock as to which the Stock Appreciation Right is then exercisable. | |
(ii) The obligation of the Company to issue any shares of Common Stock pursuant to the exercise of any Stock Appreciation Right shall be subject to the condition that such exercise and the issuance and delivery of such shares pursuant thereto comply with Section 409A of the Code, the Securities Act, all applicable state securities laws and the requirements of any stock exchange or national market system upon which the shares of Common Stock may then be listed or quoted, as in effect on the date of exercise. The Company shall be under no obligation to register the shares of Common Stock with the Securities and Exchange Commission or to effect compliance with the registration, qualification or listing requirements of any state securities laws or stock exchange or national market system, and the Company shall have no liability for any inability or failure to do so. | |
(iii) As a condition to the exercise of a Stock Appreciation Right, the Company may require the person exercising such Stock Appreciation Right to represent and warrant at the time of any such exercise that the shares of Common Stock are being purchased only for investment and without any present intention to sell or distribute such shares of Common Stock if, in the opinion of counsel for the Company, such a representation is required by any securities or other applicable laws. |
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(i) Performance Period. Performance Awards will be awarded in connection with a Performance Period, as determined by the Committee in its discretion; provided, however, that a Performance Period may be no shorter than twelve (12) months. | |
(ii) Eligible Grantees. Prior to the commencement of a Performance Period, the Committee will determine the Employees who will be eligible to receive a Performance Award with respect to that Performance Period; provided that the Committee may determine the eligibility of any Employee, other than a Covered Employee, after the commencement of the Performance Period. The Committee shall provide a Restricted Stock Agreement to each Grantee who receives a grant of a Performance Award under this Plan as soon as administratively feasible after such Grantee receives such Award. A Restricted Stock Agreement for a Performance Award shall specify the applicable Performance Period, and the Performance Goals, specific performance factors and targets related to the Performance Goals, award criteria, and the targeted amount of his Performance Award, as well as any other applicable terms of the Performance Award for which he is eligible. |
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(iii) Performance Goals; Specific Performance Targets; Award Criteria. |
(a) Prior to the commencement of each Performance Period, the Committee shall fix and establish in writing (1) the Performance Goals that will apply to that Performance Period with respect to each Performance Award; (2) with respect to Performance Goals, the specific performance factors and targets related to each Grantee and, if achieved, the targeted amount of his or her Performance Award; and (3) subject to Section 11.12(iv) below, the criteria for computing the amount that will be paid with respect to each level of attained performance. The Committee shall also set forth the minimum level of performance, based on objective factors and criteria, that must be attained during the Performance Period before any Performance Goal is deemed to be attained and any Performance Award will be earned and become payable, and the percentage of the Performance Award that will become earned and payable upon attainment of various levels of performance that equal or exceed the minimum required level. | |
(b) The Committee may, in its discretion, select Performance Goals and specific performance factors and targets that measure the performance of the Company or one or more business units, divisions or Affiliates of the Company. The Committee may select Performance Goals and specific performance targets that are absolute or relative to the performance of one or more peer companies or an index of peer companies. Performance Awards awarded to Grantees who are not Covered Employees will be based on the Performance Goals and payment formulas that the Committee, in its discretion, may establish for these purposes. These Performance Goals and formulas may be the same as or different than the Performance Goals and formulas that apply to Covered Employees. |
(iv) Adjustments. |
(a) In order to assure the incentive features of this Plan and to avoid distortion in the operation of this Plan, the Committee may make adjustments in the Performance Goals, specific performance factors and targets related to those Performance Goals and award criteria established by it for any Performance Period under this Section 11.12 whether before or after the end of the Performance Period to the extent it deems appropriate in its sole discretion, which shall be conclusive and binding upon all parties concerned, to compensate for or reflect any extraordinary changes which may have occurred during the Performance Period which significantly affect factors that formed part of the basis upon which such Performance Goals, specific performance targets related to those Performance Goals and award criteria were determined. Such changes may include, without limitation, changes in accounting practices, tax, regulatory or other laws or regulations, or economic changes not in the ordinary course of business cycles. The Committee also reserves the right to adjust Performance Awards to insulate them from the effects of unanticipated, extraordinary, major business developments, e.g., unusual events such as a special asset writedown, sale of a division, etc. The determination of financial performance achieved for any Performance Period may, but need not be, adjusted by the Committee to reflect such extraordinary, major business developments. Any such determination shall not be affected by subsequent adjustments or restatements. | |
(b) In the event of any change in outstanding shares of the Company by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, the Committee shall make such adjustments, if any, that it deems appropriate in the Performance Goals, specific performance factors and targets related to those Performance Goals and award criteria established by it under this Section 11.12 for any Performance Period not then completed; any and all such adjustments shall be conclusive and binding upon all parties concerned. | |
(c) Notwithstanding the foregoing provisions of this Section 11.12(iv), with respect to Performance Awards to Covered Employees, the Committee shall not have any discretion granted by this Section 11.12(iv) or any other discretion to increase the amount payable to any Grantee that would otherwise be due upon attainment of the Performance Goals, to the extent reserving |
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or exercising such discretion would cause any such Performance Award not to qualify for the exemption from the limitation on deductibility imposed by Section 162(m) of the Code. |
(v) Section 162(m) of the Code. It is the intent of the Company and the Committee that Performance Awards be “performance-based compensation” for purposes of Section 162(m) of the Code, that this Section 11.12 be interpreted in a manner that satisfies the applicable requirements of Section 162(m)(4)(C) of the Code and related regulations, and that this Plan be operated so that the Company may take a full tax deduction for Performance Awards. If any provision of this Plan or any Performance Award would otherwise frustrate or conflict with this intent, that provision shall be interpreted and deemed amended so as to avoid this conflict and such terms or provisions shall be deemed inoperative to the extent necessary to avoid the conflict with the requirements of Section 162(m) of the Code without invalidating the remaining provisions hereof. With respect to Section 162(m) of the Code, if this Plan does not contain any provision required to be included herein under Section 162(m) of the Code, such provisions shall be deemed to be incorporated herein with the same force and effect as if such provision had been set out at length herein. Without limiting the generality of the preceding provisions of this paragraph (v), the Committee may apply any restrictions it deems appropriate to the payment of dividends declared with respect to shares of Common Stock covered by a Performance Award, such that the dividends and/or the shares of Common Stock maintain eligibility for the “performance-compensation exception” under Section 162(m) of the Code. In the event that any dividend constitutes a derivative security or an equity security pursuant to the rules under Section 16 of the Exchange Act, if applicable, such dividend shall be subject to a vesting period equal to the remaining vesting period of the shares of Common Stock subject to the Performance Award with respect to which the dividend is paid. |
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THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE PROPOSALS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please Mark Here for Address Change or Comments SEE REVERSE SIDE | o |
The Board of Directors recommends a vote FOR Proposals 1, 2 and 3.
1. | Election of Directors |
FORall nominees | WITHHOLD | |
listed below | AUTHORITY | |
(except as marked | to vote for all nominees | |
to the contrary) | listed below | |
o | o |
Nominees: 01 David O. Corriveau, 02 Mark A. Levy, 03 Christopher C. Maguire
WITHHELD FOR: (Write that nominee’s name in the space provided below.)
FOR | AGAINST | ABSTAIN | ||||||
2. | Ratification of Appointment of Ernst & Young LLP as Independent Auditors for Fiscal 2005 | o | o | o | ||||
FOR | AGAINST | ABSTAIN | ||||||
3. | Approval of the Dave & Buster’s 2005 Long-Term Incentive Plan and to reserve 600,000 shares of the Company’s common stock, $.01 par value per share, for issuance to participants thereunder. | o | o | o |
Signature | Signature | Date | ||||||||
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
http://www.proxyvoting.com/dab Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site. | OR | 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Mail Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
NOTE: If voting by phone or Internet, you may vote until 11:59 p.m. (est), June 5, 2005.
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
THANK YOU FOR VOTING.
You can view the Annual Report and Proxy Statement
on the Internet at www.daveandbusters.com
http://www.daveandbusters.com
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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
DAVE & BUSTER’S, INC.
The undersigned hereby appoints James W. Corley and W.C. Hammett, or each of them, his proxies, with full power of substitution and revocation, for and in the name, place and stead of the undersigned, to vote upon and act with respect to all of the shares of Common Stock of the Company standing in the name of the undersigned or with respect to which the undersigned is entitled to vote and act at said meeting or at any adjournment or postponement thereof, and the undersigned directs that his proxy be voted as designated on the other side.
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR DIRECTORS, FOR RATIFICATION OF THE APPOINTMENT OF AUDITORS AND FOR APPROVAL OF THE DAVE & BUSTER’S 2005 LONG-TERM INCENTIVE PLAN.
The undersigned hereby revokes any proxy or proxies heretofore given to Vote upon or act with respect to such stock and hereby ratifies and confirms all that said proxies, their substitutes, or any of them, may lawfully do by virtue hereof.
(Continued, and to be marked, dated and signed, on the other side)
Address Change/Comments (Mark the corresponding box on the reverse side)
You can now access your Dave & Buster’s, Inc. account online.
Access your Dave & Buster’s, Inc. shareholder account online via Investor ServiceDirectSM (ISD).
Mellon Investor Services LLC, Transfer Agent for Dave & Buster’s, Inc., now makes it easy and convenient to get current information on your shareholder account.
• View account status | • View payment history for dividends | |
• View certificate history | • Make address changes | |
• View book-entry information | • Obtain a duplicate 1099 tax form | |
• Establish/change your PIN |
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