FORM 10-Q
Exhibit 10.1
CONE MILLS CORPORATION
AMENDED AND RESTATED 1992 STOCK PLAN
ARTICLE I - GENERAL PROVISIONS
1. PURPOSE
This Amended and Restated 1992 Stock Plan (the "Plan") is
intended as an incentive to encourage certain officers
and other key management employees of Cone Mills
Corporation (the "Corporation") and its subsidiaries to
acquire, or increase, a proprietary interest in the
Corporation and to encourage them to remain in the employ
of the Corporation or a subsidiary of the Corporation.
The Plan authorizes the grant of stock options,
restricted stock, and performance shares.
Stock options ("Options") granted pursuant to Article II,
paragraph 1 of the Plan are intended to qualify as
Incentive Stock Options under Section 422 of the Internal
Revenue Code of 1986, as amended, and, therefore, Article
II, paragraph 1 of this Plan and the Options granted
thereunder shall be construed and interpreted so as to
comply with the requirements of that section and of any
regulations issued thereunder. Options granted pursuant
to Article II, paragraph 2 of the Plan are not intended
to qualify as Incentive Stock Options.
2. ADMINISTRATION
The Plan shall be administered by a Stock Committee
appointed by the Board of Directors of the Corporation
(the "Committee"). The Committee shall consist of not
less than two members of the Corporation's Board of
Directors all of whom are disinterested persons within
the meaning of Rule 16b-3 of the Rules under the
Securities Exchange Act of 1934, as amended, and outside
directors within the meaning of Section 162(m) of the
Internal Revenue Code and the regulations promulgated
thereunder. The Board of Directors may from time to time
remove members from, or add members to, the Committee.
Vacancies on the Committee, howsoever caused, shall be
filled by the Board of Directors.
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FORM 10-Q
Exhibit 10.1 (continued)
The Committee shall select one of its members as Chairman
and shall hold meetings at such times and places as it
may determine. Acts by a majority of the members of the
Committee at a meeting at which a quorum is present, or
acts reduced to or approved in writing by all of the
members of the Committee, shall be the valid acts of the
Committee. Subject to the provisions of the Plan, the
Committee shall have plenary authority to interpret the
Plan and to prescribe, amend and rescind rules and
regulations relating to it.
The interpretation and construction by the Committee of
any provision of the Plan or any option or stock granted
under it shall be final and conclusive. No member of the
Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any option
granted under it.
3. SHARES SUBJECT TO PLAN
Shares of the Corporation's common stock, par value $.10
per share ("Common Stock"), will be subject to Options
and stock granted under the Plan. Shares deliverable
under the Plan will be shares of the Corporation's
authorized but unissued Common Stock. Shares deliverable
upon exercise of Options granted under the Plan will be
issued or transferred on the date that payment in full
for such shares is made.
The number of shares that may be granted as Restricted
Stock or Performance Shares (as defined in Articles III
and IV, respectively) or may be purchased upon the
exercise of Options granted under the Plan shall not
exceed in the aggregate 2,000,000 shares of Common Stock
and no individual Grantee may receive grants of shares or
Options to purchase shares exceeding in the aggregate
more than 200,000 under the Plan, subject, in both cases,
to adjustment as provided in Section 6 of this Article I.
In the event that any outstanding Option for any reason
expires or is terminated, any Restricted Stock is
forfeited, or any grant of Performance Shares lapses, the
shares of Common Stock allocable to the unexercised
portion of such Option, or the forfeited or lapsed stock
may again be subject to an Option or grant under the
Plan.
Page 35
FORM 10-Q
Exhibit 10.1 (continued)
4. ELIGIBILITY
Options or shares may be granted under the Plan to such
key management employees (including officers, whether or
not they are directors) of the Corporation or any of its
subsidiaries as the Committee shall select from time to
time. No Option or stock grant, however, may be granted
under the Plan to any person who is then a member of the
Committee.
5. GRANTING OF OPTIONS, RESTRICTED STOCK, AND PERFORMANCE
SHARES
The Committee may grant Options, Restricted Stock or
Performance Shares from time to time to such eligible
employees of the Corporation or any of its subsidiaries
as it shall determine ("Grantees"). Each Option shall be
granted pursuant to Article II.A of the Plan, in which
case it will be designated an Incentive Stock Option, or
pursuant to Article III.B of the Plan, in which case it
will be designated a Nonqualified Option. Restricted
Stock and Performance Shares shall be granted under
Articles III and IV, respectively. More than one Option
or stock grant may be granted to the same Grantee.
The date of valid action by the Committee approving the
granting of an Option, Restricted Stock or Performance
Shares, as the case may be, shall be considered as the
date on which such grant was made.
6. MERGER, CONSOLIDATION OR SALE OF ASSETS; RECAPITALIZATION
If the Corporation shall be a party to any merger or
consolidation in which it is not the surviving
corporation or pursuant to which the shareholders of the
Corporation exchange their Common Stock, or if the
Corporation shall dissolve or liquidate or sell all or
substantially all of its assets, all Options, invested
Restricted Stock and unearned Performance Shares
outstanding under this Plan shall terminate on the
effective date of such merger, consolidation,
dissolution, liquidation or sale; provided, however,
that, prior to such effective date, the Committee, in its
discretion, may accelerate the time at which any
outstanding Option may be exercised or any stock
restrictions lapse, waive any performance criteria,
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FORM 10-Q
Exhibit 10.1 (continued)
authorize a payment to each Grantee that approximates the
economic benefit that he would realize if his Option were
exercised or his stock vested immediately before such
effective date, authorize a payment in such other amount
as it deems appropriate to compensate each Grantee for
the termination of his Option or his stock grant, or
arrange for the granting of a substitute Option or stock
grant to each Grantee.
Subject to any required action by the shareholders of the
Corporation, the number of shares of Common Stock covered
by each outstanding Option or stock grant, and, in the
case of Options, the option price per share, shall be
proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock of the
Corporation resulting from a subdivision or consolidation
of shares or the payment of a stock dividend (but only on
the Common Stock) or any other increase or decrease in
the number of such shares effected without receipt of
consideration by the Corporation. Such adjustments shall
be made by the Committee, whose determination in that
respect shall be final, binding and conclusive.
In the event of a change in the Common Stock of the
Corporation as presently constituted, which is limited to
a change of all of its authorized shares with par value
into the same number of shares with a different par value
or without par value, the shares resulting from any such
change shall be deemed to be Common Stock within the
meaning of the Plan.
The grant of stock or an Option under the Plan shall not
affect in any way the right or power of the Corporation
to make adjustments, reclassifications, reorganizations
or changes in its capital or business structure.
7. RIGHTS AS A SHAREHOLDER
A Grantee, or a permitted transferee, of an Option or
Performance Shares shall have no rights as a shareholder
with respect to any shares issuable or deliverable
pursuant to this Plan until the date of the issuance of
a stock certificate to him for such shares. No
adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the
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FORM 10-Q
Exhibit 10.1 (continued)
record date is prior to the date such stock certificate
is issued, except as provided in Section 7 above.
Separate stock certificates shall be issued for shares
purchased upon exercise of an Incentive Stock Option and
for shares purchased upon exercise of a Nonqualified
Option, even if such shares are purchased at or about the
same time.
8. COMPLIANCE WITH SECURITIES LAWS
The Options granted under the Plan and the shares
issuable pursuant to the Plan may, at the option of the
Corporation, be registered under applicable federal and
state securities laws, but the Corporation shall have no
obligation to undertake such registrations and may, in
lieu thereof, issue Options and shares hereunder only
pursuant to applicable exemptions from such
registrations. In the event that no such registrations
are undertaken, Options and shares will be granted only
to persons who qualify to receive such Options or shares,
and in the case of Options, the underlying shares upon
exercise thereof, in accordance with the exemptions from
registration on which the Corporation relies. In
connection with the granting of any Option or the
issuance of any shares, the Committee may require
appropriate representations from the Grantee and take
such other action as the Committee deems necessary to
assure compliance with such exemptions from registration,
including but not limited to placing restrictive legends
on certificates evidencing such shares and delivering
stop transfer instructions to the Corporation's transfer
agent. Notwithstanding any other provision of the Plan,
no shares will be issued pursuant to this Plan unless
said shares have been registered under all applicable
federal and state securities laws or unless, in the
opinion of counsel satisfactory to the Corporation,
exemptions from such registrations are available.
9. WITHHOLDING FOR TAXES
No Grantee shall be entitled to issuance of a stock
certificate evidencing Performance Shares or shares
purchased by him upon exercise of a Nonqualified Option
or delivery of Restricted Stock held by the Secretary
until he has paid, or made arrangements for payment, to
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FORM 10-Q
Exhibit 10.1 (continued)
the Corporation of an amount equal to the income and
other taxes that the Corporation is required to withhold
from the Grantee as a result of the vesting of his
Restricted Stock or Performance Shares or his exercise of
the Nonqualified Option. In addition, such amounts as
the Corporation is required to withhold by reason of any
tax reimbursement payments made pursuant to Section 1 of
Article III shall be deducted from such payments.
10. OTHER PROVISIONS
The option agreements and stock grant agreements
authorized under the Plan shall contain such other
provisions not inconsistent with the Plan as the
Committee may in its discretion deem advisable from time
to time, including, without limitation, conditions
precedent to the exercise of the option or the vesting of
shares covered by any agreement, which conditions may
include the satisfaction of specified performance
criteria by the Corporation or the Grantee. If, at the
time any Option under the Plan is exercised or stock is
issued under the Plan, all or substantially all of the
shares of Common Stock then owned by employees of the
Corporation are subject to a shareholders' agreement by
which the transfer of such shares is restricted and/or a
voting agreement pursuant to which such shares will be
voted as provided therein, then all shares of Common
Stock issued pursuant to a Restricted Stock grant or upon
vesting of Performance Shares or exercise of an Option
shall be subject to the terms and provisions of such
shareholders' agreement and/or voting agreement.
11. TERM OF PLAN
Options and stock may be granted under the Plan from time
to time for a period of ten years from and after March
17, 1992, the date of adoption of the Plan by the Board
of Directors.
12. INDEMNIFICATION
Members or former members of the Committee shall be
entitled to indemnification by the Corporation to the
extent permitted by applicable law and by the
Corporation's Articles of Incorporation or Bylaws with
respect to any liability or expenses, including
attorneys' fees, arising out of such person's activities
as a Committee member.
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FORM 10-Q
Exhibit 10.1 (continued)
13. AMENDMENT OF THE PLAN
The Board of Directors of the Corporation may, from time
to time, with respect to any shares at the time not
subject to Options or grants, suspend or discontinue the
Plan or revise or amend it in any respect whatsoever
except that, without the approval of the shareholders, no
such revision or amendment shall increase the number of
shares subject to the Plan (except to the extent
permitted by Section 6 of this Article I) or expand the
designation of the class of employees eligible to receive
Options or grants.
14. APPLICATION OF FUNDS
The proceeds received by the Corporation of Common Stock
from the sale of Common Stock pursuant to Options granted
or Restricted Shares issued for cash consideration, if
any, under the Plan will be used for general corporate
purposes.
15. NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon
the Grantee to exercise such Option.
16. SURRENDER OF OPTIONS AND GRANTS
Subject to the terms and conditions and within the
limitations of the Plan, as now existing or hereafter
amended, the Committee may accept the surrender of
Options, Performance Shares, or Restricted Stock granted
under the Plan (to the extent not theretofore exercised
or vested) and authorize the granting of new Options and
substitutions thereof (to the extent not theretofore
exercised or vested).
17. PERFORMANCE CRITERIA
The Committee may, in its discretion, establish
achievement of specified performance criteria as a
condition to the vesting of any Option or Performance
Shares hereunder or the lapse of any risk of forfeiture
of Restricted Stock from among the following:
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FORM 10-Q
Exhibit 10.1 (continued)
(a) "Return on capital employed" means corporate
consolidated operating earnings of the Company
before interest and taxes adjusted for any discount
on sale of accounts receivable and adjusted for
equity in earnings or losses of Unconsolidated
Affiliates divided by average Net Current Cost
Investment. Net Current Cost Investment is defined
as the current cost of total assets less non-
interest bearing liabilities.
(b) "divisional return on capital employed" means
operating earnings of the division or other
operating unit, and allocated operating earnings of
Unconsolidated Affiliates divided by current cost
of assets of, or allocated to, the division or
operating unit, including current cost of assets of
Unconsolidated Affiliates allocated to the
respective division or operating unit.
(c) "Earnings per share" means consolidated net income
of the Company for a fiscal year less dividends on
Class A Preferred Stock, divided by the weighted
average common shares and common shares equivalents
outstanding on a fully diluted basis.
(d) "Return on equity" means consolidated net income of
the Company divided by average shareholders'
equity.
(e) "Divisional Return on Net Assets" means operating
earnings of the division or other operating unit,
including allocated earnings of Unconsolidated
Affiliates, divided by current cost assets net of
non-interest bearing liabilities of, or allocated
to, the division or operating unit, including
current cost of assets net of non-interest bearing
liabilities of Unconsolidated Affiliates allocated
to the respective division or operating unit.
"Unconsolidated Affiliates" is as defined by generally
accepted accounting principles, as recognized by the
American Institute of Certified Public Accountants and
Financial Accounting Standards Board, consistently
applied.
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FORM 10-Q
Exhibit 10.1 (continued)
Any extraordinary accounting item, accounting for
discontinued operations, and the cumulative effect of
accounting change that have the effect of reducing
consolidated operating earnings for "return on capital
employed" or consolidated net income for "earnings per
share" or "return on equity" shall be excluded in
determining operating earnings or net income unless the
Committee, in its absolute discretion, determines to
include such items in the aggregate or separately.
ARTICLE II - STOCK OPTIONS
1. INCENTIVE STOCK OPTIONS
Options granted pursuant to this Article II shall
constitute Incentive Stock Options under Section 422 of
the Internal Revenue Code of 1986, as amended, and shall
be designated as such by the Committee at the time of the
grant. Such Options shall be subject to the terms,
conditions and limitations set forth in Article I above
and Article II, paragraph 3, and to the following
additional limitation: The aggregate fair market value
(determined as of the time the Option is granted) of the
stock with respect to which Incentive Stock Options are
exercisable for the first time by any employee during any
calendar year (under Article II of this Plan and all
other Incentive Stock Option Plans of the Corporation and
its parent and subsidiary corporations) shall not exceed
$100,000.
2. NONQUALIFIED OPTIONS
Options granted pursuant to this Article II.2 shall
constitute Nonqualified Options and shall be designated
as such by the Committee at the time of the grant. Such
Options shall be subject to the terms, conditions and
limitations set forth in Article I above and Article II,
paragraph 3, and, in addition, to the following
additional terms:
(a) Tax Reimbursement
In view of the federal and state income tax savings
expected to be realized by the Corporation upon
exercise of a Nonqualified Option granted pursuant
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FORM 10-Q
Exhibit 10.1 (continued)
to Article III of the Plan, the Committee may, in
its discretion, grant Nonqualified Options the
terms of which provide that, upon exercise, the
Corporation will pay to the Grantee (or his
personal representatives or heirs) an amount in
cash equal to the amount of tax benefit, to the
extent such tax benefit is, or is expected to be,
realized by the Corporation through the utilization
of deductions claimed for income tax purposes as a
result of the exercise of a Nonqualified Option and
any cash reimbursement payment hereunder. Any tax
reimbursement payment authorized by the Committee
shall be made on or before the last day of the
calendar year in which taxable income is recognized
by a Grantee under Section 83 of the Internal
Revenue Code.
[No person subject to the operation of Section
16(b) of the Securities Exchange Act of 1934, as
amended, shall be entitled to any tax reimbursement
payment authorized by the Committee pursuant to
this Section 1, except with respect to Nonqualified
Options that are exercised during the period
beginning on the third business day and ending on
the twelfth business day following release of
quarterly and annual summary statements of sales
and earnings of the Corporation or any successor to
the Corporation which assumes the obligations of
the Corporation hereunder.]
(b) Modification, Extension and Renewal of Options
Subject to the terms and conditions and within the
limitations of the Plan, as now existing or
hereafter amended, the Committee may modify, extend
or renew outstanding Nonqualified Options granted
pursuant to the Plan. Notwithstanding the
foregoing, however, no modification of an Option
shall, without the consent of the Grantee, alter or
impair any rights or obligations under any Option
theretofore granted.
Page 43
FORM 10-Q
Exhibit 10.1 (continued)
3. TERMS AND CONDITIONS OF OPTIONS
Options granted under the Plan shall be evidenced by
agreements in such form as the Committee may from time to
time approve, which agreements shall comply with and be
subject to the following terms and conditions:
(a) Number of Shares; Designation
Each Option shall state the number of shares to
which it pertains and whether it is an Incentive
Stock Option or a Nonqualified Option.
(b) Option Price
Each Option shall state the option price, which
shall be not less than 100% of the fair market
value per share of the Common Stock of the
Corporation on the date the Option is granted and,
in the case of a Major Shareholder (as hereinafter
defined), not less than 110% of the fair market
value per share on the date the Option is granted.
Subject to the foregoing, the Committee shall have
full authority and discretion in fixing the option
price. For purposes of the Plan, the fair market
value per share of the Common Stock of the
Corporation on any day shall mean (i) if the Common
Stock is listed on any national securities exchange
or on the NASDAQ National Market System, the last
reported sale price on the composite tape or, if no
sale takes place on any day, the average of the
reported closing bid and asked prices on that day,
or (ii) if the Common Stock is not listed on a
national securities exchange or on the NASDAQ
National Market System, the average of the closing
bid and asked prices in the over-the-counter
market, as furnished by the National Association of
Securities Dealers, Inc., or (iii) if none of the
prices described above is available, the fair
market value per share of the Common Stock as most
recently determined by an independent appraiser
selected by the Board of Directors. "Major
Shareholder" shall mean any person who, immediately
before an Option is granted to him under the Plan,
owns stock possessing more than 10% of the total
combined voting power of all classes of stock of
either the Corporation or any parent or subsidiary
corporation of the Corporation.
Page 44
FORM 10-Q
Exhibit 10.1 (continued)
(c) Exercise of Options
Options granted under the Plan may be exercised by
the Grantee's delivery to the Corporation of
written notice, which notice shall specify the
number of shares to be purchased. The date of
actual receipt by the Corporation of such notice
shall be deemed the date of exercise of the Option.
If the Grantee makes full payment for option shares
in cash or by check, such full payment shall
accompany the notice of exercise of the Option. If
the Grantee makes payment for option shares, in
whole or in part, by delivery of Common Stock, as
provided in Section 6(d) of this Article I, he
shall deliver with the notice of exercise the duly
endorsed certificates evidencing such delivered
shares. Upon receipt of such notice and
certificates, the Corporation shall thereupon
determine the fair market value of the delivered
shares, as provided in Section 6(d). If the fair
market value of such delivered shares is equal to
the option price for the option shares, payment in
full shall be deemed to have been made. If the
fair market value of such delivered shares is less
than the option price for the option shares, the
Corporation shall promptly advise the Grantee of
the balance due on the option price, which amount
shall then be promptly paid by the Grantee. If the
fair market value of such delivered shares is
greater than the option price for the option
shares, the Corporation shall promptly return to
the Grantee a certificate (which may be a
certificate delivered by the Grantee or, if
necessary, a new certificate) evidencing the
smallest whole number of delivered shares which is
sufficient to reduce the fair market value of the
remaining delivered shares to an amount equal to or
less than the option price of the option shares.
Such returned certificate shall be accompanied by a
statement of the balance due, if any, on the option
price, which amount shall then be promptly paid by
the Grantee. No Grantee shall be entitled to
issuance of a certificate evidencing option shares
until payment in full for such shares has been made
as provided in this Section 6(c).
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FORM 10-Q
Exhibit 10.1 (continued)
Except as otherwise provided in this Article I, or
in the applicable option agreement, each Option
shall be for a term of ten years and shall be
exercisable in cumulative installments as follows:
(i) up to 20% of the total shares subject to
the Option at any time after the date of
grant and prior to termination of the
Option;
(ii) up to 40% of the total shares subject to
the Option (less any shares previously
purchased pursuant to the Option) at any
time after 12 months from the date of
grant and prior to termination of the
Option;
(iii) up to 60% of the total shares subject to
the Option (less any shares previously
purchased pursuant to the Option) at any
time after 24 months from the date of
grant and prior to termination of the
Option;
(iv) up to 80% of the total shares subject to
the Option (less any shares previously
purchased pursuant to the Option) at any
time after 36 months from the date of
grant and prior to termination of the
Option;
(v) up to 100% of the total shares subject to
the Option (less any shares previously
purchased pursuant to the Option) at any
time after 48 months from the date of
grant and prior to termination of the
Option; provided, however, that not less
than one hundred shares may be purchased
at any one time unless the number
purchased is the total number that may be
purchased under the Option at that time.
The Committee may, in its discretion,
grant Options that are exercisable in
amounts and at times other than those set
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FORM 10-Q
Exhibit 10.1 (continued)
forth above in this Section 6(c);
provided, however, that each Option shall
be subject to the limitations on exercise
contained in Section 6(f) below, and no
Option shall be exercisable after the
expiration of ten years from the date it
is granted. In addition, the Committee
may, in its discretion, accelerate the
time at which any outstanding Option may
be exercised. Notwithstanding any other
provision of this Section 6(c), any
Option granted to a Major Shareholder
shall provide that it is not exercisable
after the expiration of five years from
the date of grant.
(d) Medium of Payment
The option price may be paid in cash or by check
or, at the election of the Grantee and with the
prior consent of the Committee, it may be paid in
whole or in part by delivery to the Corporation of
duly endorsed certificates evidencing shares of
Common Stock. If a Grantee elects to make payment
for option shares by delivery of shares of Common
Stock, the fair market value of such delivered
shares, on the date of delivery to the Corporation,
shall be applied to the option price, as provided
in Section 6(c) above.
(e) Transferability
Options granted under the Plan shall not be
transferable by the Grantee otherwise than by will
or under the laws of descent and distribution.
During the Grantee's lifetime, his Options shall be
exercisable only by him.
(f) Termination of Employment; Death of Grantee
Subject to the provisions of this Section 6(f) with
respect to a Grantee's death or retirement from the
employ of the Corporation or any of its
subsidiaries, Options granted under the Plan may be
Page 47
FORM 10-Q
Exhibit 10.1 (continued)
exercised only while the Grantee is an employee of
the Corporation or any of its subsidiaries, except
that the Grantee may exercise his Options prior to
their expiration, in whole or in part, for a period
of three months after a severance of his employment
relationship with the Corporation or any of its
subsidiaries, but only to the extent that such
Options were exercisable on the date of such
severance. Except as so exercised, such Options
shall expire at the end of such three-month period.
Whether authorized leave of absence or absence on
military or government service shall constitute
severance of the employment relationship shall be
determined by the Committee at the time thereof.
For purposes of the Plan, the date of severance of
a Grantee's employment shall be determined by the
Committee, which determination shall be final and
conclusive.
If a Grantee shall retire in good standing from the
employ of the Corporation or any of its
subsidiaries under the then established retirement
policies of the Corporation, the Grantee shall have
the right to exercise his Option, prior to its
expiration, in whole or in part (regardless of the
extent to which such Option was exercisable
immediately prior to his retirement), for a period
of three months from and after his retirement, and,
except as so exercised, such Option shall expire at
the end of such three-month period.
If, before the date of expiration of his Options, a
Grantee shall retire in good standing from the
employ of the Corporation or any of its
subsidiaries by reason of disability under the then
established policies of the Corporation, the
Grantee shall have the right to exercise his
Options prior to their expiration, in whole or in
part (regardless of the extent to which such
Options were exercisable immediately prior to his
retirement), for a period of one year from and
after his retirement. Except as so exercised, such
Options shall expire at the end of such one-year
period.
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FORM 10-Q
Exhibit 10.1 (continued)
In the event of the death of a Grantee while in the
employ of the Corporation or any of its
subsidiaries and before the date of expiration of
his Options, his personal representatives, or any
person or persons who shall have acquired his
Options by bequest or inheritance from the Grantee,
shall have the right to exercise the Grantee's
Options prior to their expiration, in whole or in
part (regardless of the extent to which such
Options were exercisable immediately prior to the
Grantee's death), for a period of one year from and
after the Grantee's death. Except as so exercised,
such Options shall expire at the end of such one-
year period.
ARTICLE IV - RESTRICTED STOCK
1. GRANT OF RESTRICTED STOCK
The Committee may cause the Corporation to grant
Restricted Stock to Grantees under the Plan in such
amounts as the Committee, in its sole discretion, shall
determine. Such shares of Restricted Stock may be issued
either alone or in addition to other grants under the
Plan.
2. RESTRICTIONS AND CONDITIONS
Restricted Stock granted under the Plan shall be
evidenced by written agreements in such form as the
Committee may from time to time approve. The
restrictions and conditions imposed on Restricted Stock
granted under the Plan, including the satisfaction of
corporate or individual performance objectives, may
differ from one grant to another as the Committee shall,
in its discretion, determine as long as all grants
satisfy the requirements of the Plan. The Committee shall
have the discretion to determine that a grant may or may
not require payment of cash consideration by the
recipient.
Page 49
FORM 10-Q
Exhibit 10.1 (continued)
3. DURATION OF GRANTS
The restrictions and conditions imposed upon any
Restricted Stock shall lapse, in whole or in part, as
provided in the agreement pursuant to which the grant is
made, but in no event later than ten years from the date
of the grant.
4. RESTRICTED STOCK CERTIFICATES
Each certificate issued for shares of Restricted Stock
shall be registered in the name of the Grantee and shall
be deposited by him with the Corporation, to the
attention of the Secretary, together with a stock power
endorsed in blank. The shares shall be subject to such
restrictions and conditions as may be imposed by the
Committee at the time of making the Grant (the
"restrictions and conditions"), which shall be referenced
by a conspicuous legend on the reverse side of the stock
certificate representing the shares, and Restricted Stock
may not be transferred until all restrictions and
conditions have lapsed.
5. RIGHTS OF HOLDERS OF RESTRICTED STOCK
Subject to the restrictions and conditions, the Grantee
shall be the owner of the Restricted Stock and shall have
all of the rights of a shareholder, including, but not
limited to, the right to receive all dividends paid on
the Restricted Stock and the right to vote the shares.
In the event there is a change in the Common Stock as
described in Section 7 of Article I, any shares or other
securities issued with respect to shares subject to
restrictions and conditions under the Plan shall be
subject to the same restrictions and conditions, and the
certificates therefor, together with a stock power
endorsed in blank, shall be delivered to the Corporation,
to the attention of the Secretary.
6. DELIVERY OF RESTRICTED STOCK
Following the lapse of the restrictions and conditions
imposed on any Restricted Stock, the certificate or
certificates evidencing such shares shall be reissued by
the Corporation in the name of the Grantee without a
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FORM 10-Q
Exhibit 10.1 (continued)
legend (except to the extent that a legend may be
necessary for compliance with applicable securities laws)
and shall be delivered to the Grantee. The delivery of
Restricted Stock under the Plan shall be subject to the
withholding requirements as set forth in Section 10 of
Article I.
ARTICLE IV - PERFORMANCE SHARES
1. GRANT OF PERFORMANCE SHARES
The Committee may cause the Corporation to grant
Performance Shares to Grantees under the Plan in such
amounts as the Committee, in its sole discretion, shall
determine. Such Performance Shares may be issued either
alone or in addition to other grants under the Plan.
Each Performance Share grant shall confer upon the
Grantee the right to receive a specified number of shares
of Common Stock contingent upon the achievement of
specified corporate or individual performance objectives
within a specified period.
2. TERMS AND CONDITIONS
Performance Shares granted under the Plan shall be
evidenced by written agreements in such form as the
Committee may from time to time approve. The Committee
shall specify the performance objectives and the period
of duration of the Performance Shares grant at the time
granted. Any Performance Shares granted under this Plan
shall constitute an unfunded promise to issue shares of
Common Stock to the Grantee in the future upon the
completion of specified conditions. No Grantee shall be
deemed to be a holder of any shares subject to a
Performance Shares grant unless and until a stock
certificate or certificates for such are issued to such
Grantee under the terms of the Plan. No adjustment shall
be made for dividends (ordinary or extraordinary, whether
in cash, securities or other property) or distributions
or other rights for which the record date is prior to the
date stock certificates are issued pursuant to any
Performance Shares Grant, except as provided in Section
7 of Article I. The settlement of any Performance Shares
Grant shall be subject to the withholding requirement as
set forth in Section 10 of Article I.
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FORM 10-Q
Exhibit 10.1 (continued)
3. CASH IN LIEU OF STOCK
In lieu of some or all of the shares earned by
achievement of the specified performance objectives
within the specified period, the Committee may distribute
cash in an amount equal to the fair market value of the
stock at the time that the performance objective is
achieved within the specified period multiplied by the
number of Performance Shares.
4. PERFORMANCE OBJECTIVE PERIOD
The duration of the period within which to achieve the
performance objectives is to be determined by the
Committee, but in no event shall the duration be later
than ten years from the date of the grant.
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