Exhibit 10.1
HEILIG-MEYERS COMPANY
DIRECTOR STOCK OWNERSHIP PLAN
As Amended Effective July 1, 1999
HEILIG-MEYERS COMPANY (the "Company") hereby adopts the Heilig-Meyers
Company Director Stock Ownership Plan.
1. Purpose. The purpose of the Director Stock Ownership Plan is to
increase the level of ownership of the Company's common stock by non-employee
directors. The Plan replaces the practice of paying director retainer fees
solely in cash by paying at least 50% of such fees in Company common stock and
allowing directors to receive up to 100% of the fees in Company common stock all
as set forth in the Plan. The Plan has been adopted by the Board of Directors of
the Company subject to approval by the Company's shareholders. The Plan is
intended to conform to the provisions of Rule 16b-3 of the Securities Exchange
Act of 1934, as amended, or any replacement rule in effect from time to time.
2. Definitions. As used in the Plan, the following terms have the
meanings indicated:
(a) "Annual Meeting Date" means the date of the annual meeting
of the Company's shareholders at which directors are
elected.
(b) "Award" means the award of Company Stock under the Plan.
(c) "Award Date" means the first day on which the New York
Stock Exchange is open in the month immediately following
the Annual Meeting Date.
(d) "Beneficiary" is the person(s) and/or entity(ies)
designated by a Participant to receive the Participant's
Deferred Stock Account at the death of the Participant. If
no Beneficiary is designated, or if none of the designated
Beneficiary(ies) survive the Participant, the Beneficiary
shall be the Participant's surviving spouse, for married
Participants, or the Participant's estate, for unmarried
participants.
(e) "Board" means the Board of Directors of the Company.
(f) "Committee" means the Compensation Committee of the Board
that shall administer the Plan.
(g) "Company" means Heilig-Meyers Company, a Virginia
corporation, or any successor corporation.
(h) "Company Stock" means common stock of the Company. In the
event of a change in the capital structure of the Company
(as provided in Section 10), the shares resulting from
such a change shall be deemed to be Company Stock within
the meaning of the Plan.
(i) "Compensation" means the amount of retainer fees payable
to each Eligible Director with respect to services
rendered to the Company as a director during a Service
Period. Compensation does not include fees for attending
meetings of the Board or committees of the Board.
(j) "Deferred Stock" means shares of Company Stock deferred
pursuant to a deferral election under Section 8.
(k) "Deferred Stock Account" means an account maintained by
the Company or as part of the Trust established hereunder.
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(l) "Effective Date" means the date the Plan is approved by
the Company's shareholders.
(m) "Election Period" means the 120-day period immediately
preceding the first day of a Service Period, or such other
period as determined by the Committee. For the first
Service Period beginning with the Effective Date, the
Election Period shall be the period beginning on the
Effective Date and ending on the first Award Date. For the
first Service Period following a director's first election
to the Board, the Election Period shall be the period
beginning on the date of the director's election to the
Board and ending on the first Award Date after the
director's election.
(n) "Eligible Director" means a director who is not an
employee of the Company or a Subsidiary.
(o) "Fair Market Value" means, on the Award Date, the average
of the highest and lowest registered sales prices of the
Company Stock on the exchange on which the Company Stock
generally has the greatest trading volume.
(p) "Participant" means any Eligible Director entitled to
receive an Award under the Plan.
(q) "Plan" means this Heilig-Meyers Company Director Stock
Ownership Plan.
(r) "Rule 16b-3" means Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended. A reference
in the Plan to Rule 16b-3 shall include a reference to any
corresponding subsequent rule or any amendments to Rule
16b-3 enacted after the Effective Date.
(s) "Service Period" means the period beginning with the
Annual Meeting Date and ending on the day preceding the
next Annual Meeting Date.
(t) "Subsidiary" means an entity of which the Company owns 50%
or more of the total combined voting power of all classes
of stock.
(u) "Trust" means the Heilig-Meyers Company Director Deferred
Compensation Trust or an individual trust established for
the benefit of an Eligible Director.
3. Participation. All Eligible Directors shall automatically
participate in the Plan.
4. Stock. The Company has reserved an aggregate of 600,000 shares of
Company Stock for issuance pursuant to the Plan. The aggregate number is subject
to adjustment as provided in Section 10. In the event of a change in the capital
structure of the Company (as provided in Section 10), the shares resulting from
such change shall be deemed to be Company Stock within the meaning of the Plan.
The aggregate number of shares of Company Stock reserved shall be reduced by the
issuance of shares under the Plan.
5. Automatic Share Awards. As of each Award Date, each Participant will
receive the number of shares of Company Stock (rounded down to the nearest whole
share) determined by dividing (i) an amount equal to 50% of the Participant's
Compensation, by (ii) the Fair Market Value of the Company Stock.
6. Election of Additional Company Stock.
(a) During the Election Period related to each Service Period,
a Participant may elect to receive an additional percentage of the Participant's
Compensation in the form of Company Stock. The election may be for any
percentage of the Compensation above 50% up to 100%. The election shall be
irrevocable as to the Award for the Service Period and shall be made by filing a
written election with the Company during the Election Period.
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(b) If a Participant makes an election pursuant to Section
6(a), as of the next Award Date, the Participant will receive the number of
shares of Company Stock (rounded down to the nearest whole share) determined by
dividing (i) the elected percentage of the Participant's Compensation, by (ii)
the Fair Market Value of the Company Stock.
7. Provisions Relating to Company Stock. All Company Stock granted
under the Plan shall be subject to the provisions of this Section.
(a) Company Stock shall automatically be awarded under the
Plan as provided under Sections 5 and 6. If at any time there may not be
sufficient shares available under the Plan to permit automatic Awards, the
automatic Awards shall be reduced pro rata (to zero, if necessary) so as not to
exceed the number of shares then available under the Plan.
(b) When Company Stock is issued, a certificate representing
the shares of Company Stock awarded shall be registered in each Participant's
name or other evidence of ownership shall be provided to the Participant by the
Company's transfer agent.
8. Deferred Stock.
(a) During the Election Period prior to each Service Period, a
Participant may elect to defer receipt of part or all of the Participant's
Company Stock payable with respect to the Service Period. A Participant shall
designate a date on which payment shall be made. The deferral election shall be
irrevocable as to Awards for the Service Period and shall be made by filing a
written election with the Company during the Election Period.
(b) If a Participant makes an election pursuant to (a), the
Company shall credit to the Participant's Deferred Stock Account the number of
shares of Company Stock granted under the Award (the Deferred Stock). A
Participant's interest in such Deferred Stock Account may not be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered. At its discretion,
the Company may also transfer the same number of shares of Company Stock to the
Trust.
(c) When a cash dividend is paid on Company Stock, the
dividend shall be reinvested in additional shares of Company Stock that shall be
added to the Participant's Deferred Stock Account. Each Participant's Deferred
Stock Account shall be adjusted to take into account any stock dividends or
other non-cash distributions pursuant to Section 10 below.
(d) A Participant shall receive payment of the Deferred Stock
Account on the distribution date specified by the Participant. A Participant may
change the distribution date previously elected by filing a new election with
the Company. The new election shall not be effective until six months after the
Company receives it.
(e) If a Participant dies before receiving payment of the
Deferred Stock Account pursuant to subsection (d) above, the Beneficiary of the
Participant shall receive payment of the Deferred Stock Account in accordance
with the Participant's election.
(f) If a Participant or Beneficiary has the right to receive
payment of the Participant's Deferred Stock Account pursuant to subsection (d)
or (e) above, the Company shall distribute or cause the Trust to distribute to
the Participant or Beneficiary that number of whole shares of Company Stock that
is equal to the number of whole shares of Company Stock that are then credited
to the Participant's Deferred Stock Account. The shares of Company Stock so
distributed shall not be subject to the provisions described in Section 7.
9. Issuance of Company Stock. The Company shall not be required to
issue or deliver any certificate for shares of Company Stock before (i) approval
of the Plan by the Company's shareholders, (ii) the admission of such shares to
listing on any stock exchange on which the Company Stock may then be listed,
(iii) receipt of any required registration or other qualification of such shares
under any state or federal law or regulation that the Company's counsel shall
determine is necessary or advisable, and (iv) the Company is satisfied that all
applicable legal requirements have been complied with. The Company may place on
a certificate representing Company Stock any legend deemed necessary by the
Company's counsel to comply with federal or state securities laws. Until a
certificate has been issued in the Participant's name for the shares of Company
Stock acquired, the Participant shall possess no shareholder rights with respect
to the shares.
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10. Effect of Stock Dividends and Other Changes in Capital Structure.
Appropriate adjustments shall be made automatically to the number and kind of
shares to be issued under the Plan, and any other relevant provisions of the
Plan if there are any changes in the Company Stock by reason of a stock
dividend, stock split, combination of shares, spin-off, reclassification,
recapitalization, merger, consolidation or other change in the Company's capital
stock (including, but not limited to, the creation or issuance to shareholders
generally of rights, options or warrants for the purchase of common stock or
preferred stock of the Company). If the adjustment would produce fractional
shares, the fractional shares shall be eliminated by rounding to the nearest
whole share. Any such adjustments shall neither enhance nor diminish the rights
of a Participant.
11. Administration of the Plan. The Committee shall be responsible for
the proper implementation of the Plan. The Committee shall not exercise any
discretion with respect to the administration of the Plan. The Committee shall
have all powers vested in it by the terms of the Plan. Any decision of the
Committee with respect to the Plan shall be final and conclusive. The Committee
may act only by a majority of its members in office, except that the members may
authorize any one or more of their number or any officer of the Company to
execute and deliver documents on behalf of the Committee. The Committee may
consult with counsel, who may be counsel to the Company, and shall not incur any
liability for action taken in good faith in reliance upon the advice of counsel.
12. Expiration and Termination of the Plan. Company Stock shall be
awarded under the Plan until the Plan is terminated by the Board or until such
earlier date when termination of the Plan shall be required by law. If not
sooner terminated, the Plan shall terminate automatically on the tenth
anniversary of the Effective Date.
13. Amendments. The Board may from time to time make such changes in
and additions to the Plan as it may deem appropriate; provided that no change
shall be made that increases the total number of shares reserved for issuance
under the Plan (except pursuant to Section 10), unless such change is authorized
by the shareholders of the Company. The Board may unilaterally amend the Plan as
it deems appropriate to ensure compliance with Rule 16b-3. Except as provided in
the preceding sentence, the termination of the Plan or any change or addition to
the Plan shall not, without the consent of any Participant who is adversely
affected thereby, alter any Awards previously made to the Participant pursuant
to the Plan.
14. Rights Under the Plan. Participation in the Plan and the right to
receive Company Stock under the Plan shall not give a Participant any
proprietary interest in the Company, or any Subsidiary or any of their assets,
nor ensure that the Participant will be nominated for election to the Board in
the future.
15. Notice. All notices and other communications required or permitted
to be given under the Plan shall be in writing and shall be deemed to have been
duly given if delivered personally or mailed first class, postage prepaid, as
follows: (a) if to the Company, at its principal business address, to the
attention of the Secretary; (b) if to any Participant, at the last address of
the Participant known to the sender at the time the notice or other
communication is sent.
16. Governing Law/Interpretation. Generally, the Plan shall be governed
by the laws of the Commonwealth of Virginia. The terms of this Plan are also
subject to all present and future rulings of the Securities Exchange Commission
with respect to Rule 16b-3. If any provision of the Plan would cause the Plan to
fail to meet the requirements of Rule 16b-3, then that provision of the Plan
shall be void and of no effect.
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