Exhibit 10(b)
THE DAVEY TREE EXPERT COMPANY
1994 OMNIBUS STOCK PLAN
1. PURPOSE
The Davey Tree Expert Company 1994 Omnibus Stock Plan
(the "Plan") is designed to foster and promote the long-term
growth and performance of the Company by: (a) enhancing the
Company's ability to attract and retain qualified employees and
Directors and (b) motivating employees and Directors through
stock ownership and performance-based incentives. To achieve
this purpose, this Plan provides authority for the grant of Stock
Options, Director Options, Stock Equivalent Units, Stock
Appreciation Rights, and other stock and performance-based
incentives and the maintenance of an employee stock purchase
program.
2. DEFINITIONS
(a) "AFFILIATE" AND "ASSOCIATE" - These terms have the
meanings given to them in Rule 12b-2 under the Exchange Act.
(b) "AWARD" - The grant of Stock Options, Director
Options, Restricted Stock, Stock Equivalent Units, Stock
Appreciation Rights, Stock Purchase Rights, Cash Awards, and
other stock and performance-based incentives under this Plan.
(c) "AWARD AGREEMENT" - Any agreement between the
Company and a Participant that sets forth terms, conditions, and
restrictions applicable to an Award.
(d) "BOARD OF DIRECTORS" - The Board of Directors of
the Company.
(e) "CASH AWARD" - This term has the meaning given to
it in Section 6(b)(vi).
(f) "CHANGE IN CONTROL" - A "Change in Control" will
be deemed to occur if at any time after the date of the adoption
of this Plan:
(i) Any person or group (other than The Davey
Tree Expert Company, any of its subsidiaries, any employee
benefit plan or employee stock ownership plan of The Davey
Tree Expert Company, or any Person organized, appointed, or
established by The Davey Tree Expert Company for or pursuant
to the terms of any such plan), alone or together with any
of its Affiliates or Associates, becomes the Beneficial
Owner of 20% or more of the Common Shares then outstanding,
or any such person or group commences or publicly announces
an intent to commence a tender offer or exchange offer the
consummation of which would result in the person or group
becoming the Beneficial Owner of 20% or more of the Common
Shares then outstanding. For this purpose, the term
"beneficial Owner" has the meaning given to it in Rule 13d-3
under the Exchange Act.
(ii) At any time during a period of 24
consecutive months, individuals who were Directors at the
beginning of the period no longer constitute a majority of
the members of the Board of Directors, unless the election,
or the nomination for election by The Davey Tree Expert
Company's shareholders, of each Director who was not a
Director at the beginning of the period is approved by at
least a majority of the Directors who are in office at the
time of the election or nomination and were Directors at the
beginning of the period.
(iii) A record date is established for
determining shareholders entitled to vote upon (A) a merger
or consolidation of the Davey Tree Expert Company with
another corporation in which The Davey Tree Expert Company
is not the surviving or continuing corporation or in which
all or part of the outstanding Common Shares are to be
converted into or exchanged for cash, securities, or other
property, (B) a sale or other disposition of all or
substantially all of the assets of The Davey Tree Expert
Company, or (C) the dissolution of The Davey Tree Expert
Company.
(iv) Any person who proposes to make a "control
share acquisition" of The Davey Tree Expert Company, within
the meaning of Section 1701.01(Z) of the Ohio General
Corporation Law, submits or is required to submit an
acquiring person statement to The Davey Tree Expert Company.
(g) "CODE" - The Internal Revenue code of 1986, or any
law that supersedes or replaces it, as amended from time to time.
(h) "COMMITTEE" - The Compensation Committee of the
Board of Directors, or any other committee of the Board of
Directors that the Board of Directors authorizes to administer
this Plan. The Committee will be constituted in a manner that
satisfies all applicable legal requirements, including satisfying
the disinterested administration standard set forth in Rule 16b-
3.
(i) "COMMON SHARES" or "SHARES" - Common Shares
without par value of The Davey Tree Expert Company, including
authorized and unissued shares and treasury shares.
(j) "COMPANY" - The Davey Tree Expert Company, an Ohio
corporation, and its direct and indirect subsidiaries.
(k) "CONTINUING DIRECTOR" - A Director who was a
Director prior to a Change in Control or was recommended or
elected to succeed a Continuing Director by a majority of the
Continuing Directors then in office.
(l) "DIRECTOR" - A director of The Davey Tree Expert
Company.
(m) "DIRECTOR OPTION" - A right to purchase Common
Shares granted to a Director pursuant to Section 7.
(n) "EXCHANGE ACT" - Securities Exchange Act of 1934,
and any law that supersedes or replaces it, as amended from time
to time.
(o) "FAIR MARKET VALUE" of Common Shares - The value
of the Common Shares determined by the Committee, or pursuant to
rules established by the Committee on a basis consistent with
regulations under the Code; except that, "Fair Market Value" with
respect to Director Options has the meaning set forth in Section
7(h).
(p) "INCENTIVE STOCK OPTION" - A Stock Option that
meets the requirements of Section 422 of the Code.
(q) "NON-EMPLOYEE DIRECTOR" - A Director who is not an
employee of the Company.
(r) "NOTICE OF AWARD" - Any notice by the Committee to
a Participant that advises the Participant of the grant of an
Award or sets forth terms, conditions, and restrictions
applicable to an Award.
(s) "PARTICIPANT" - Any person to whom an Award has
been granted under this Plan.
(t) "RESTRICTED STOCK" - An Award of Common Shares
that are subject to restrictions or risk of forfeiture.
(u) "RULE 16B-3" - Rule 16b-3 under the Exchange Act,
or any rule that supersedes or replaces it, as amended from time
to time.
(v) "STOCK APPRECIATION RIGHT" - This term has the
meaning given to it in Section 6(b)(ii).
(w) "STOCK AWARD" - This term has the meaning given to
it in Section 6(b)(iii).
(x) "STOCK EQUIVALENT UNIT" - An Award that is valued
by reference to the value of Common Shares.
(y) "STOCK OPTION" - This term has the meaning given
to it in Section 6(b)(iv).
(z) "STOCK PURCHASE RIGHT" - This term has the meaning
given to it in Section 6(b)(v).
3. ELIGIBILITY
All employees of the Company and its Affiliates are
eligible for the grant of Awards (other than Director Options).
The selection of the employees to receive Awards (other than
Direction Options) will be within the discretion of the
Committee. More than one Award may be granted to the same
employee.
All Non-Employee Directors are eligible for the grant
of Director Options, as provided in Section 7. Non-Employee
Directors are not, however, eligible for the grant of any Awards
other than Direction Options.
4. COMMON SHARES AVAILABLE FOR AWARDS; ADJUSTMENT
(a) NUMBER OF COMMON SHARES. The aggregate number of
Common Shares that may be subject to Awards granted under this
Plan in any fiscal year of the Company during the term of this
Plan will be equal to the sum of (i) up to five percent (5.0%) of
the number of Common Shares outstanding as of the first day of
that fiscal year plus (ii) the number of Common Shares that were
available for the grant of Awards, but not granted, under this
Plan in previous fiscal years; provided that, in no event will
the number of Common Shares available for the grant of Awards in
any fiscal year exceed eight percent (8.0%) of the Common Shares
outstanding as of the first day of that fiscal year. The Plan
will terminate on the tenth anniversary of its approval. The
maximum number of Common Shares that may be issued upon exercise
of incentive stock options is 400,000.
The assumption of awards granted by an
organization acquired by the Company, or the grant of Awards
under this Plan in substitution for any such awards, will not
reduce the number of Common Shares available in any fiscal year
for the grant of Awards under this Plan.
Common Shares subject to an Award that is
forfeited, terminated, or canceled without having been exercised
(other than Common Shares subject to a Stock Option that is
canceled upon the exercise of a related Stock Appreciation Right)
will again be available for grant under this Plan, without
reducing the number of Common Shares available in any fiscal year
for grant of Awards under this Plan, except to the extent that
the availability of those Common Shares would cause this Plan or
any Awards granted under this Plan to fail to qualify for the
exemption provided by Rule 16b-3.
(b) NO FRACTIONAL SHARES. No fractional shares will
be issued, and the Committee will determine the manner in which
the value of fractional shares will be treated.
(c) ADJUSTMENT. In the event of any change in the
Common Shares by reason of a merger, consolidation,
reorganization, recapitalization, or similar transaction, or in
the event of a stock dividend, stock split, or distribution to
shareholders (other than normal cash dividends), the Committee
will adjust the number and class of shares that may be issued
under this Plan, the number and class of shares subject to
outstanding Awards, the exercise price applicable to outstanding
Awards, and the Fair Market Value of the Common Shares and any
other value determinations applicable to outstanding Awards.
5. ADMINISTRATION
(a) COMMITTEE. This Plan will be administered by the
Committee. The Committee will, subject to the terms of this
Plan, have the authority to: (i) select the eligible employees
who will receive Awards, (ii) grant Awards (other than Director
Options), (iii) determine the number and types of Awards to be
granted to employees (iv) determine the terms, conditions,
vesting periods, and restrictions applicable to Awards (other
than Director Options), (v) adopt, alter and repeal
administrative rules and practices governing this Plan, (vi)
interpret the terms and provisions of this Plan and any Awards
granted under this Plan, (vii) prescribe the forms of any Notices
of Award, Awards Agreements, or other instruments relating to
Awards, and (viii) otherwise supervise the administration of this
Plan. All decisions by the Committee will be made with the
approval of not less than a majority of its members.
(b) DECISIONS FINAL. All decisions by the Committee
will be final and binding on all persons.
6. AWARDS
(a) GRANT OF AWARDS. The Committee will determine the
type or types of Awards to be granted to each Participant and
will set forth in the related Notice of Award or Award Agreement
the terms, conditions, vesting periods, and restrictions
applicable to each Award. Awards may be granted singly or in
combination or tandem with other Awards. Awards may also be
granted in replacement of, or in substitution for, other awards
granted by the Company, whether or not granted under this Plan;
without limiting the foregoing, if a Participant pays all or part
of the exercise price or taxes associated with an Award by the
transfer of Common Shares of the surrender of all or part of an
Award (including the Award being exercised), the Committee may,
in its discretion, grant a new Award to replace the Common Shares
that were transferred or the Award that was surrendered. The
Company may assume awards granted by an organization acquired by
the Company or may grant Awards in replacement of, or in
substitution for, any such awards.
(b) TYPES OF AWARDS. Awards may include, but are not
limited to, the following:
(i) DIRECTOR OPTION - A right to purchase Common
Shares granted to a Director pursuant to Section 7.
(ii) STOCK APPRECIATION RIGHT - A right to receive
a payment, in cash or Common Shares, equal to the excess of
(A) the Fair Market Value, or other specified valuation, of
a specified number of Common Shares on the date the right is
exercised over (B) the Fair market Value, or other specified
valuation, on the date the right is granted, all as
determined by the Committee. The right may be conditioned
upon the occurrence of certain events, such as a Change in
Control of the Company, or may be unconditional, as
determined by the Committee.
(iii) STOCK AWARD - An Award that is made in
Common Shares, Restricted Stock, or Stock Equivalent Units
or that is otherwise based on, or valued in whole or in part
by reference to, the Common Shares. All or part of any
Stock Award may be subject to conditions, restrictions, and
risks of forfeiture, as and to the extent established by the
Committee. Stock Awards may be based on the Fair Market
Value of the Common Shares, or on other specified values or
methods of valuation, as determined by the Committee.
(iv) STOCK OPTION - A right to purchase a
specified number of Common Shares, during a specified
period, and at a specified exercise price, all as determined
by the Committee. A Stock Option may be an Incentive Stock
Option or a Stock Option that does not qualify as an
Inventive Stock Option. In addition to the terms,
conditions, vesting periods, and restrictions established by
the Committee, Inventive Stock Options must comply with the
requirements of Section 422 of the Code. The exercise price
of a Stock Option that does not qualify as an Incentive
Stock Option may be more or less than the Fair Market Value
of the Common Shares on the date the Stock Option is
granted.
(v) STOCK PURCHASE RIGHT - A right to participate
in a stock purchase program, including but not limited to a
stock purchase program that meets the requirements of
Section 423 of the Code.
Among other requirements, Section 423
currently provides that (A) only employees of The Davey Tree
Expert Company, or of any direct or indirect subsidiary of
The Davey Tree Expert Company designated by the Committee,
may receive Stock Purchase Rights that qualify under Section
423 ("Section 423 Rights"), (B) Section 423 Rights may not
be granted to any Participant who, immediately after the
Section 423 Rights are granted, owns stock possessing five
percent (5%) or more of the total combined voting power or
value of all classes of stock of The Davey Tree Expert
Company, (C) Section 423 Rights must be granted to all
employees of The Davey tree Expert Company, and of any
direct of indirect subsidiary of The Davey Tree Expert
Company designated by the Committee, except that there may
be excluded (1) employees who have been employed less than
two years, (2) employees whose customary employment is 20
hours or less per week, (3) employees whose customary
employment is for not more than five months in any calendar
year, and (4) highly compensated employees (within the
meaning of Section 414(q) of the Code), (D) all employees
granted Section 423 Rights must have the same rights and
privileges, except that the number of Common Shares that may
be purchased by any employee upon exercise of Section 423
Rights may bear a uniform relationship to the total
compensation, or the basic or regular rate of compensation,
of the employee, (E) the exercise price of Section 423
Rights may not be less than eighty-five percent (85%) of the
Fair Market Value of the Common Shares at the time Section
423 Rights are granted; (F) Section 423 Rights cannot be
exercised after the expiration of 27 months from the date
the Section 423 Rights are granted, and (G) no employee may
be granted Section 423 Rights, under this Plan and any other
stock purchase plans of The Davey Tree Expert Company and
its subsidiaries, that permit the purchase of Common shares
with a Fair Market Value of more than $25,000 (determined at
the time the Section 423 Rights are granted) in any calendar
year.
(vi) CASH AWARD - An Award denominated in cash.
All or part of any cash award may be subject to conditions
established by the Committee, including but not limited to
future service with the Company or the achievement of
specific performance objectives.
7. DIRECTOR OPTIONS
(a) GRANT OF DIRECTOR OPTIONS. Each Non-Employee
Director in office immediately following the 1994 Annual Meeting
of Shareholders of The Davey Tree Expert Company will receive a
Director Option on that date. Each Non-Employee Director who is
first elected or appointed as a Director after the 1994 Annual
Meeting of Shareholders will receive a Director Option on the
date that he or she is elected or appointed. Each Director who
ceases to be an employee of the Company during his or her term in
office will receive a Director Option on the date that he or she
is first elected as a Director after ceasing to be an employee.
Each Non-Employee Director who receives a Director Option under
the Plan and continues in office will receive an additional
Director Option each time he or she is re-appointed or re-elected
a Director. No action by the Committee will be required to
effect the grant of these Director Options.
(b) NUMBER OF COMMON SHARES SUBJECT TO EACH DIRECTOR
OPTION. Each Director Option shall give the Director the right
to purchase 1,000 Common Shares. Notwithstanding the provisions
of Section 14, the amount set forth in this Section 7(b) may not
be amended more than once every six months, other than to-comport
with changes in the Code, the Employee Retirement Income Security
Act, as amended, or the rules thereunder.
(c) EXERCISE PRICE. The exercise price per share of
each Director Option will be the latest available semi-annual
valuation per share performed for The Davey Tree Expert Company
Employee Stock Ownership Trust, as long as this valuation
continues to be made at least once a year. If the valuation is
no longer made, the exercise price per share will be the same as
the price per share used by the Company in purchasing Common
Shares under Article SIXTH of its Articles of Incorporation, as
amended from time to time.
(d) DATE DIRECTOR OPTIONS BECOME EXERCISABLE. Each
Director Option will become exercisable six months after the date
of grant or upon the earlier occurrence of a Change in Control.
(e) EXPIRATION DATE. Unless terminated earlier
pursuant to the next sentence, each Director Option will
terminate, and the right of the holder to purchase Common Shares
upon exercise of the Director Option will expire, at the Close of
business on the sixth anniversary date of the date of grant.
Each Director Option will terminate, and the right of the holder
to purchase Common Shares upon exercise of the Director Option
will expire, upon completion of a transaction of the type
identified in Section 2(f)(iii), but only if provision
satisfactory to the Committee is made for the payment to the
holder of the Director Option of the excess of (i) the Fair
Market Value of the Common Shares subject to the Director Option
immediately prior to the completion of the transaction over (ii)
the exercise price.
(f) NOT INCENTIVE STOCK OPTIONS. None of the Director
Options will be Incentive Stock Options.
(g) CONTINUOUS SERVICE AS A DIRECTOR. No Director
Option may be exercised unless the Non-Employee Director to whom
the Director Option was granted has continued to be a Non-
Employee Director from the time of grant through the time of
exercise, except as provided in this Section 7(g).
(i) If the service in office of a Non-Employee
Director is terminated due to the death of the Non-Employee
Director, the Non-Employee Director's estate, executor,
administrator, personal representative, or beneficiary will
have the right to exercise the Director Option in the whole
or in part prior to the earlier of (i) 12 months after the
date of the holder's death and (ii) the expiration of the
Director Option.
(ii) If a Non-Employee Director ceases to be a Non-
Employee Director by reason of his employment by the
Company, the Director Option granted to that Non-Employee
Director will be treated the same as Stock Options held by
employees and will continue to be exercisable prior to the
expiration of the Director Option, subject to the
limitations on exercise following termination of employment
established by the Committee pursuant to Section 11.
(iii)If the service in office of a Non-Employee
Director is terminated for any reason other than those set
forth in Sections 7(g)(i) and 7(g)(ii), the holder of the
Director Option may exercise the Director Option in whole or
in part only with the consent of the Committee. In any such
event, the consent of the Committee must be obtained and the
Director Option exercised prior to the earlier of (i) three
months after the date of the termination of service in
office of a Non-Employee Director and (ii) the expiration of
the Director Option.
8. DEFERRAL OF PAYMENT
With the approval of the Committee, the delivery of the
Common Shares, cash, or any combination thereof subject to an
Award (other than Director Options) may be deferred, either in
the form of installments or a single future delivery. The
Committee may also permit selected Participants to defer the
payment of some or all of their Awards, as well as other
compensation, in accordance with procedures established by the
Committee to assure that the recognition of taxable income is
deferred under the Code. Deferred amounts may, to the extent
permitted by the Committee, be credited as cash or Stock
Equivalent Units. The Committee may also establish rules and
procedures for the crediting of interest on deferred cash
payments and dividend equivalents on Stock Equivalent Units.
9. PAYMENT OF EXERCISE PRICE
The exercise price of a Stock Option (other than an
Incentive Stock Option), Director Option, Stock Purchase Right,
and any Stock Award for which the Committee has established an
exercise price may be paid in cash, by the transfer of Common
Shares, by the surrender of all or part of an Award (including
the Award being exercised), or by a combination of these methods,
as and to the extent permitted by the Committee. The exercise
price of an Incentive Stock Option may be paid in cash, by the
transfer of Common Shares, or by a combination of these methods,
as and to the extent permitted by the Committee at the time of
grant, but may not be paid by the surrender of all or part of an
Award. The Committee may prescribe any other method of paying
the exercise price that it determines to be consistent with
applicable law and the purpose of this Plan.
In the event shares of Restricted Stock are used to pay
the exercise price of a Stock Award, a number of the Common
Shares issued upon the exercise of the Award equal to the number
of shares of Restricted Stock used to pay the exercise price will
be subject to the same restrictions as the Restricted Stock.
10. TAXES ASSOCIATED WITH AWARD
Prior to the payment of an Award, the Company may
withhold, or require a Participant to remit to the Company, an
amount sufficient to pay any Federal, state, and local taxes
associated with the Award. The Committee may, in its discretion
and subject to such rules as the Committee may adopt, permit a
Participant to pay any or all taxes associated with the Award
(other than an Incentive Stock Option) in cash, by the transfer
of Common Shares, by the surrender of all or part of an Award
(including the Award being exercised), or by a combination of
these methods. The Committee may permit a Participant to pay any
or all taxes associated with an Incentive Stock Option in cash,
by the transfer of Common Shares, or by a combination of these
methods.
11. TERMINATION OF EMPLOYMENT
If the employment of a Participant terminates for any
reason, all unexercisable, deferred, and unpaid Awards may be
exercisable or paid only in accordance with rules established by
the Committee. These rules may provide, as the Committee deems
appropriate, for the expiration, continuation, or acceleration of
the vesting of all or part of the Awards.
12. TERMINATION OF AWARDS UNDER CERTAIN CONDITIONS
The Committee may cancel any unexpired, unpaid, or
deferred Awards at any time if the Participant is not in
compliance with all applicable provisions of this Plan or with
any Notice of Award or Award Agreement or if the Participant,
without the prior written consent of the Company, engages in any
of the following activities:
(i) Renders services for an organization, or engages
in a business, that is, in the judgment of the Committee, in
competition with the Company.
(ii) Discloses to anyone outside of the Company, or
uses for any purpose other than the Company's business, any
confidential information or material relating to the
Company, whether acquired by the Participant during or after
employment with the Company.
The Committee may, in its discretion and as a condition
to the exercise of an Award, require a Participant to acknowledge
in writing that he or she is in compliance with all applicable
provisions of this Plan and of any Notice of Award or Award
Agreement and has not engaged in any activities referred to in
clauses (i) and (ii) above.
13. CHANGE IN CONTROL
In the event of a Change in Control of the Company,
unless and to the extent otherwise determined by the Board of
Directors, (i) all Stock Appreciation Rights, Stock Options, an
other Stock Purchase Rights then outstanding will become fully
exercisable as of the date of the Change in Control, (ii) all
restrictions and conditions applicable to Restricted Stock and
other Stock Award will be deemed to have been satisfied as of the
date of the Change in Control, and (iii) all Cash Awards will be
deemed to have been fully earned as of the date of the Change in
Control. Any such determination by the Board of Directors that
is made after the occurrence of a Change in Control will not be
effective unless a majority of the Directors then in office are
Continuing Directors and the determination is approved by a
majority of the Continuing Directors.
14. AMENDMENT, SUSPENSION, OR TERMINATION OF THIS PLAN;
AMENDMENT OF OUTSTANDING AWARDS
(a) Amendment, Suspension, or Termination of this
Plan. The Board of Directors may amend, suspend, or terminate
this Plan at any time. Shareholder approval for any such
amendment will be required only to the extent necessary to
preserve the exemption provided by Rule 16b-3 for this Plan and
Awards granted under this Plan.
(b) AMENDMENT OF OUTSTANDING AWARDS. The Committee
may, in its discretion, amend the terms of any Award (other than
a Director Option), prospectively or retroactively, but no such
amendment may impair the rights of any Participant without his or
her consent. The Committee may, in whole or in part, waive any
restrictions or conditions applicable to, or accelerate the
vesting of, any Award (other than a Director Option).
15. AWARDS TO FOREIGN NATIONALS AND EMPLOYEES OUTSIDE OF
THE UNITED STATES
To the extent that the Committee deems appropriate to
comply with foreign law or practice and to further the purpose of
the Plan, the Committee may, without amending this Plan, (i)
establish special rules applicable to Awards granted to
Participants who are foreign nationals, are employed outside the
United States, or both, including rules that differ from those
set forth in this Plan, and (ii) grant Awards to such
Participants in accordance with those rules.
16. NONASSIGNABILITY
Unless otherwise determined by the Committee (i) no
Award granted under this Plan may be transferred or assigned by
the Participant to whom it is granted other than by will,
pursuant to the laws of descent and distribution, or pursuant to
a qualified domestic relations order and (ii) an Award granted
under this Plan may be exercised, during the Participant's
lifetime, only by the Participant or by the Participant's
guardian or legal representative; except that, no Incentive Stock
Option and no Section 423 Right may be transferred or assigned
pursuant to a qualified domestic relations order or exercised,
during the Participant's lifetime, by the Participant's guardian
or legal representative.
17. GOVERNING LAW
The interpretation, validity, and enforcement of this
Plan will, to the extent not otherwise governed by the Code or
the securities laws of the United States, be governed by the law
of the State of Ohio.
18. RIGHTS OF EMPLOYEES
Nothing in this Plan will confer upon any Participant
the right to continued employment by the Company or limit in any
way the Company's right to terminate any Participant's employment
at will.
19. EFFECTIVE AND TERMINATION DATE
(a) EFFECTIVE DATE. This Plan will become effective
on the date it is approved by the holders of a majority of the
Common Shares then outstanding.
(b) TERMINATION DATE. This Plan will continue in
effect until terminated by the Board of Directors.