EXHIBIT 1
FIRST PULASKI NATIONAL CORPORATION
1997 STOCK OPTION PLAN
SECTION 1. Purpose; Definitions.
The purpose of the First Pulaski National Corporation 1997 Stock Option
Plan (the "Plan") is to enable First Pulaski National Corporation (the
"Corporation") to attract, retain and reward key employees of the Corporation
and its Subsidiaries and Affiliates by awarding such key employees performance-
based stock options. The creation of the Plan shall not diminish or prejudice
other compensation programs approved from time to time by the Board.
For purposes of the Plan, the following terms shall be defined as set
forth below:
A. "Affiliate" means any entity other than the Corporation and its
Subsidiaries that is designated by the Board as a participating employer under
the Plan, provided that the Corporation directly or indirectly owns at least
20% of the combined voting power of all classes of stock of such entity or at
least 20% of the ownership interests in such entity.
B. "Board" means the Board of Directors of the Corporation.
C. "Cause" has the meaning provided in Section 6 of the Plan.
D. "Change in Control" has the meaning provided in Section 6 of the Plan.
E. "Change in Control Price" has the meaning provided in Section 6(d) of
the Plan.
F. "Common Stock" means the Corporation's Common Stock, par value $1.00
per share.
G. "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
H. "Committee" means the Committee referred to in Section 2 of the Plan.
I. "Corporation" means First Pulaski National Corporation, a corporation
organized under the laws of the State of Tennessee or any successor corporation.
J. "Disability" means disability as determined under the Corporation's
subsidiary's Group Long Term Disability Insurance Plan.
K. "Early Retirement" means retirement, for purposes of this Plan with the
express consent of the Corporation at or before the time of such retirement,
from active employment with the Corporation and any Subsidiary or Affiliate
prior to age 65, in accordance with any applicable early retirement policy of
the Corporation then in effect or as may be approved by the Committee.
L. "Effective Date" has the meaning provided in Section 10 of the Plan.
M. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
N. "Fair Market Value" means with respect to the Common Stock, as of any
given date or dates, unless otherwise determined by the Committee in good
faith, the reported closing price of a share of Common Stock on the Nasdaq
Stock Market or, if no such price is available, the average of the closing bid
and asked prices quoted (by electronic bulletin board, "pink sheets" or other
recognized quotation) in the over-the-counter market for the Common Stock, or,
if no such price is available on such date, the fair market value of a share of
Common Stock as determined by the Committee in good faith.
O. "Immediate Family" means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-
law, daughter-in-law, brother-in-law, or sister-in-law, and shall include
adoptive relationships.
P. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
Q. "Normal Retirement" means retirement from active employment with the
Corporation and any Subsidiary or Affiliate on or after age 65.
R. "Plan" means this First Pulaski National Corporation 1997 Stock Option
Plan, as amended from time to time.
S. "Retirement" means Normal or Early Retirement.
T. "Section 162(m) Maximum" has the meaning provided in Section 3(a)
hereof.
U. "Stock Option" or "Option" means any option to purchase shares of Common
Stock granted pursuant to Section 5 below.
V. "Subsidiary" means any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
SECTION 2. Administration.
The Plan shall be administered by a Committee of not less than two
Directors, who shall be appointed by the Board and who shall serve at the
pleasure of the Board. The functions of the Committee specified in the Plan
may be exercised by an existing Committee of the Board. The initial Committee
shall be the Salary and Compensation Committee of the Board. In the event that
administration of the Plan is not delegated to a Committee of the Board, the
Plan shall be administered by the Board and all references herein to the
Committee shall refer to the Board.
The Committee shall have authority to grant Stock Options, pursuant to the
terms of the Plan, to officers and other key employees.
In particular, the Committee, or the Board, as the case may be, shall have
the authority, consistent with the terms of the Plan:
(a) to select the officers and key employees to whom Stock Options
may from time to time be granted hereunder;
(b) to determine whether and to what extent Incentive Stock Options
or Non-Qualified Stock Options, or any combination thereof, are to be
granted hereunder to one or more eligible persons;
(c) to determine the number of shares to be covered by each such
award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation, or any
vesting acceleration or waiver of forfeiture restrictions regarding any
Stock Option or other award and/or the shares of Common Stock relating
thereto, based in each case on such factors as the Committee shall
determine, in its sole discretion); and to amend or waive any such terms
and conditions to the extent permitted by Section 7 hereof;
(e) to determine whether and under what circumstances a Stock Option
may be settled in cash under Section 5(1), instead of Common Stock;
(f) to determine whether to require payment withholding requirements
in shares of Common Stock; and
(g) to impose any holding period required to satisfy Section 16 under
the Exchange Act.
The Committee shall have the authority to adopt, alter, and repeal such
rules, guidelines, and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan and any
award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be made in the Committee's sole discretion and shall be final and binding
on all persons, including the Corporation and Plan participants.
SECTION 3. Shares of Common Stock Subject to Plan.
(a) As of the Effective Date, the aggregate number of shares of Common
Stock that may be issued under the Plan shall be 100,000 shares. The shares
of Common Stock issuable under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares. [No officer of the
Corporation or other person whose compensation may be subject to the
limitations on deductibility under Section 162(m) of the Code shall be eligible
to receive awards pursuant to this Plan relating to in excess of 100,000 shares
of Common Stock in any fiscal year (the "Section 162(m) Maximum").]
(b) If any shares of Common Stock that have been optioned cease to be
subject to a Stock Option, with respect to such shares of Common Stock, or any
such award otherwise terminates without a payment being made to the participant
in the form of Common Stock, such shares shall again be available for distribu-
tion in connection with future awards under the Plan.
(c) In the event of any merger, reorganization, consolidation, recapital-
ization, extraordinary cash dividend, stock dividend, stock split or other
change in corporate structure affecting the Common Stock, an appropriate
substitution or adjustment shall be made in the maximum number of shares that
may be awarded under the Plan, in the number and option price of shares subject
to outstanding Options granted under the Plan, the Section 162(m) Maximum and
in the number of shares subject to other outstanding awards granted under the
Plan as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award shall
always be a whole number.
SECTION 4. Eligibility.
Officers and other key employees who are responsible for or contribute to
the management, growth and/or profitability of the business of the Corporation
and/or its Subsidiaries and Affiliates are eligible to be granted awards under
the Plan.
SECTION 5. Stock Options.
Stock Options may be granted alone, in addition to, or in tandem with
other awards granted under the Plan and/or cash awards made outside of the
Plan. Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of Stock Options.
Options granted to officers and key employees under the Plan shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable.
(a) Option Price. The option price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant but shall be not less than 100% (or, in the case of any employee
who owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Corporation or of any of its Subsidiaries, not less
than 110%) of the Fair Market Value of the Common Stock at grant, in the case
of Incentive Stock Options, and not less than 50% of the Fair Market Value of
the Common Stock at grant, in the case of Non-Qualified Stock Options.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than
ten years (or, in the case of an employee who owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Corporation or any of its Subsidiaries or parent corporations, more than
five years) after the date the Option is granted.
(c) Exercisability. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined
by the Committee at or after grant; provided, however, that except as
provided in Section 5(g) and (h) and Section 6, unless otherwise deter-
mined by the Committee at or after grant, no Stock Option shall be
exercisable prior to the first anniversary date of the granting of the
Option. The Committee may provide that a Stock Option shall vest over a
period of future service at a rate specified at the time of grant, or that
the Stock Option is exercisable only in installments. If the Committee
provides, in its sole discretion, that any Stock Option is exercisable
only in installments, the Committee may waive such installment exercise
provisions at any time at or after grant, in whole or in part, based on
such factors as the Committee shall determine in its sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise
restrictions apply under Section 5(c), Stock Options may be exercised in
whole or in part at any time during the option period, by giving written
notice of exercise to the Corporation specifying the number of shares to
be purchased. Such notice shall be accompanied by payment in full of the
purchase price, either by check, note, or such other instrument as the
Committee may accept. As determined by the Committee, in its sole
discretion, at or (except in the case of an Incentive Stock Option) after
grant, payment in full or in part may also be made in the form of
unrestricted shares of Common Stock already owned by the optionee (valued
at the Fair Market Value of the Common Stock on the date the option is
exercised, as determined by the Committee). If payment of the exercise
price is made in part or in full with Common Stock, the Committee may
award to the employee a new Stock Option to replace the Common Stock which
was surrendered. No shares of Common Stock shall be issued until full
payment therefor has been made. An optionee shall generally have the
rights to dividends or other rights of a shareholder with respect to
shares subject to the Option when the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has given
the representation described in Section 9(a).
(e) Transferability of Options. No Non-Qualified Stock Option shall
be transferable by the optionee without the prior written consent of the
Committee other than (i) transfers by the Optionee to a member of his or
her Immediate Family or a trust for the benefit of the Optionee to a
member of his or her Immediate Family, or (ii) transfers by will or by the
laws of descent and distribution. No Incentive Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of
descent and distribution and all Incentive Stock Options shall be exercis-
able, during the optionee's lifetime, only by the optionee.
(f) Bonus for Taxes. In the case of a Non-Qualified Stock Option or
an optionee who elects to make a disqualifying disposition (as defined in
Section 422(a)(1) of the Code) of Common Stock acquired pursuant to the
exercise of an Incentive Stock Option, the Committee in its discretion may
award at the time of grant or thereafter the right to receive upon exer-
cise of such Stock Option a cash bonus calculated to pay part or all of
the federal and state, if any, income tax incurred by the optionee upon
such exercise.
(g) Termination by Death. Subject to Section 5(k), if an optionee's
employment by the Corporation and any Subsidiary or (except in the case
of an Incentive Stock Option) Affiliate terminates by reason of death, any
Stock Option held by such optionee may thereafter be exercised, to the
extent such option was exercisable at the time of death or (except in the
case of an Incentive Stock Option) on such accelerated basis as the
Committee may determine at or after grant (or except in the case of an
Incentive Stock Option, as may be determined in accordance with procedures
established by the Committee) by the legal representative of the estate or
by the legatee of the optionee under the will of the optionee, for a
period of one year (or such other period as the Committee may specify at
or after grant) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(h) Termination by Reason of Disability. Subject to Section 5(k), if
an optionee's employment by the Corporation and any Subsidiary or (except
in the case of an Incentive Stock Option) Affiliate terminates by reason
of Disability, any Stock Option held by such optionee may thereafter be
exercised by the optionee, to the extent it was exercisable at the time of
termination or (except in the case of an Incentive Stock Option) on such
accelerated basis as the Committee may determine at or after grant (or,
except in the case of an Incentive Stock Option, as may be determined in
accordance with procedures established by the Committee), for a period
of (i) three years (or such other period as the Committee may specify at
or after grant) from the date of such termination of employment or until
the expiration of the stated term of such Stock Option, whichever period
is the shorter, in the case of a Non-Qualified Stock Option and (ii) one
year from the date of termination of employment or until the expiration of
the stated term of such Stock Option, whichever period is shorter, in the
case of an Incentive Stock Option; provided however, that, if the optionee
dies within the period specified in (i) above (or other such period as the
Committee shall specify at or after grant), any unexercised Non-Qualified
Stock Option held by such optionee shall thereafter be exercisable to the
extent to which it was exercisable at the time of death for a period of
twelve months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is shorter. In the
event of termination of employment by reason of Disability, if an Incen-
tive Stock Option is exercised after the expiration of the exercise period
applicable to Incentive Stock Options, but before the expiration of any
period that would apply if such Stock Option were a Non-Qualified Stock
Option, such Stock Option will thereafter be treated as a Non-Qualified
Stock Option.
(i) Termination by Reason of Retirement. Subject to Section 5(k), if
an optionee's employment by the Corporation and any Subsidiary or (except
in the case of an Incentive Stock Option) Affiliate terminates by reason
of Normal or Early Retirement, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable
at the time of such Retirement or (except in the case of an Incentive
Stock Option) on such accelerated basis as the Committee may determine at
or after grant (or, except in the case of an Incentive Stock Option, as
may be determined in accordance with procedures established by the
Committee), for a period of (i) three years (or such other period as the
Committee may specify at or after grant) from the date of such termination
of employment or the expiration of the stated term of such Stock Option,
whichever period is the shorter, in the case of a Non-Qualified Stock
Option and (ii) three months from the date of such termination of employ-
ment or the expiration of the stated term of such Stock Option, whichever
period is the shorter, in the case of an Incentive Stock Option; provided
however, that, if the optionee dies within the period specified in (i)
above (or other such period as the Committee shall specify at or after
grant), any unexercised Non-Qualified Stock Option held by such optionee
shall thereafter be exercisable to the extent to which it was exercisable
at the time of death for a period of twelve months from the date of such
death or until the expiration of the stated term of such Stock Option,
whichever period is shorter. In the event of termination of employment by
reason of Retirement, if an Incentive Stock Option is exercised after the
expiration of the exercise period applicable to Incentive Stock Options,
but before the expiration of any period that would apply if such Stock
Option were a Non-Qualified Stock Option, the option will thereafter be
treated as a Non-Qualified Stock Option.
(j) Other Termination. Subject to Section 5(k), unless otherwise
determined by the Committee (or pursuant to procedures established by the
Committee) at or (except in the case of an Incentive Stock Option) after
grant, if an optionee's employment by the Corporation and any Subsidiary
or (except in the case of an Incentive Stock Option) Affiliate is involun-
tarily terminated for any reason other than death, Disability or Normal or
Early Retirement, the Stock Option shall thereupon terminate, except that
such Stock Option may be exercised, to the extent otherwise then exercis-
able, for the lesser of three months or the balance of such Stock Option's
term if the involuntary termination is without Cause. For purposes of
this Plan, "Cause" means (i) a felony conviction of a participant or the
failure of a participant to contest prosecution for a felony, or (ii) a
participant's willful misconduct or dishonesty, which is directly and
materially harmful to the business or reputation of the Corporation or any
Subsidiary or Affiliate. If an optionee voluntarily terminates employment
with the Corporation and any Subsidiary or (except in the case of an
Incentive Stock Option) Affiliate (except for Disability, Normal or Early
Retirement), the Stock Option shall thereupon terminate; provided,
however, that the Committee at grant or (except in the case of an Incen-
tive Stock Option) thereafter may extend the exercise period in this
situation for the lesser of three months or the balance of such Stock
Option's term.
(k) Incentive Stock Options. Anything in the Plan to the contrary not-
withstanding, no term of this Plan relating to Incentive Stock Options
shall be interpreted, amended, or altered, nor shall any discretion or
authority granted under the Plan be so exercised, so as to disqualify the
Plan under Section 422 of the Code, or, without the consent of the
optionee(s) affected, disqualify any Incentive Stock Option under such
Section 422. No Incentive Stock Option shall be granted to any partici-
pant under the Plan if such grant would cause the aggregate Fair Market
Value (as of the date the Incentive Stock Option is granted) of the Common
Stock with respect to which all Incentive Stock Options are exercisable
for the first time by such participant during any calendar year (under all
such plans of the Company and any Subsidiary) to exceed $100,000. To the
extent permitted under Section 422 of the Code or the applicable regula-
tions thereunder or any applicable Internal Revenue Service pronouncement:
(i) if (x) a participant's employment is terminated by reason of
death, Disability, or Retirement and (y) the portion of any Incentive
Stock Option that is otherwise exercisable during the post-termination
period specified under Section 5(g), (h), or (i), applied without regard
to the $100,000 limitation contained in Section 422(d) of the Code, is
greater than the portion of such Option that is immediately exercisable as
an "Incentive Stock Option" during such post-termination period under
Section 422, such excess shall be treated as a Non-Qualified Stock Option;
and
(ii) if the exercise of an Incentive Stock Option is accelerated by
reason of a Change in Control, any portion of such Option that is not
exercisable as an Incentive Stock Option by reason of the $100,000
limitation contained in Section 422(d) of the Code shall be treated as a
Non-Qualified Stock Option.
(l) Buyout Provisions. The Committee may at any time offer to buy out for
a payment in cash of Common Stock an Option previously granted, based on such
terms and conditions as the Committee shall establish and communicate to the
optionee at the time that such offer is made.
(m) Performance and Other Conditions. The Committee may condition the
exercise of any Option upon the attainment of specified performance goals or
other factors as the Committee may determine, in its sole discretion. Unless
specifically provided in the option agreement, any such conditional Option
shall vest immediately prior to its expiration if the conditions to exercise
have not theretofore been satisfied.
SECTION 6. Change in Control Provisions.
(a) Impact of Event. In the event of:
(1) a "Change in Control" as defined in Section 6(b); or
(2) a "Potential Change in Control" as defined in Section 6(c), but
only if and to the extent so determined by the Committee or the Board at
or after grant (subject to any right or approval expressly reserved by the
Committee or the Board at the time of such determination),
(i) Subject to the limitations set forth in this Section 6(a), any
Stock Option awarded under the Plan not previously exercisable and vested
shall become fully exercisable and vested.
(ii) Subject to the limitations set forth below in this Section 6(a),
the value of all outstanding Stock Options shall, unless otherwise
determined by the Board or the Committee in its sole discretion prior to
any Change in Control, be cashed out on the basis of the "Change in
Control Price" as defined in Section 6(d) as of the date such Change in
Control or such Potential Change in Control is determined to have occurred
or such other date as the Board of Committee may determine prior to the
Change in Control.
(iii) The Board or the Committee may impose additional conditions on
the acceleration or valuation of any award in the award agreement.
(b) Definition of Change in Control. For purposes of Section 6(a), a
"Change in Control" means the happening of any of the following:
(i) any person or entity, including a "group" as defined in Section
13(d)(3) of the Exchange Act, other than the Corporation or a wholly-owned
subsidiary thereof or any employee benefit plan of the Corporation or any
of its Subsidiaries, becomes the beneficial owner of the Corporation's
securities having 35% or more of the combined voting power of the then
outstanding securities of the Corporation that may be cast for the elec-
tion of directors of the Corporation (other than as a result of an
issuance of securities initiated by the Corporation in the ordinary course
of business); or
(ii) as the result of, or in connection with, any cash tender or
exchange offer, merger or other business combination, sales of assets or
contested election, or any combination of the foregoing transactions, less
than a majority of the combined voting power of the then outstanding
securities of the Corporation or any successor corporation or entity
entitled to vote generally in the election of the directors of the
Corporation or such other corporation or entity after such transaction are
held in the aggregate by the holders of the Corporation's securities
entitled to vote generally in the election of directors of the Corporation
immediately prior to such transaction; or
(iii) during any period of two consecutive years, individuals who at
the beginning of any such period constitute the Board cease for any reason
to constitute at least a majority thereof, unless the election, or the
nomination for election by the Corporation's shareholders, of each
director of the Corporation first elected during such period was approved
by a vote of at least two-thirds of the directors of the Corporation then
still in office who were directors of the Corporation at the beginning of
any such period.
(c) Definition of Potential Change in Control. For purposes of Section
6(a), a "Potential Change in Control" means the happening of any one of the
following:
(i) The approval by shareholders of an agreement by the Corporation,
the consummation of which would result in a Change in Control of the
Corporation as defined in Section 6(b); or
(ii) The acquisition of beneficial ownership, directly or indirectly,
by any entity, person or group (other than the Corporation or a Subsidiary
or any Corporation employee benefit plan (including any trustee of such
plan acting as such trustee)) of securities of the Corporation representing
5% or more of the combined voting power of the Corporation's outstanding
securities and the adoption by the Committee of a resolution to the effect
that a Potential Change in Control of the Corporation has occurred for
purposes of this Plan.
(d) Change in Control Price. For purposes of this Section 6, "Change in
Control Price" means the highest price per share paid in any transaction
reported on the Nasdaq stock market or such other exchange or market as is the
principal trading market for the Common Stock, or paid or offered in any bona
fide transaction related to a Potential or actual Change in Control of the
Corporation at any time during the 60 day period immediately preceding the
occurrence of the Change in Control (or, where applicable, the occurrence of the
Potential Change in Control event), in each case as determined by the Committee
except that, in the case of Incentive Stock Options such price shall be based
only on transactions reported for the date of which the optionee exercises such
Stock Options or, where applicable, the date on which a cash out occurs under
Section 6(a)(ii).
SECTION 7. Amendments and Termination.
The Board may at any time amend, alter or discontinue the Plan; provided,
however, that, without the approval of the Corporation's shareholders, no amend-
ment or alteration may be made which would (a) except as a result of the
provisions of Section 3(c) of the Plan, increase the maximum number of shares
that may be issued under the Plan or increase the Section 162(m) Maximum,
(b) change the provisions governing Incentive Stock Options except as required
or permitted under the provisions governing incentive stock options under the
Code, or (c) make any change for which applicable law or regulatory authority
(including the regulatory authority of the "NASDAQ" or any other market or
exchange on which the Common Stock is traded) would require shareholder
approval or for which shareholder approval would be required to secure full
deductibility of compensation received under the Plan under Section 162(m) of
the Code. No amendment, alteration, or discontinuation shall be made which
would impair the rights of an optionee or participant under a Stock Option
theretofore granted, without the participant's consent.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Stock Options for
previously granted Stock Options (on a one for one or other basis), including
previously granted Stock Options having higher option exercise prices.
SECTION 8. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a partici-
pant or optionee by the Corporation, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a
general creditor of the Corporation. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Common Stock or payments in lieu of or with
respect to awards hereunder; provided, however, that, unless the Committee
otherwise determines with the consent of the affected participant, the
existence of such trusts or other arrangements is consistent with the
"unfunded" status of the Plan.
SECTION 9. General Provisions.
(a) The Committee may require each person purchasing shares pursuant
to a Stock Option to represent to and agree with the Corporation in
writing that the optionee or participant is acquiring the shares without a
view to distribution thereof. The certificates for such shares may
include any may include any legend which the Committee deems appropriate
to reflect any restrictions on transfer. All certificates for shares of
Common Stock or other securities delivered under the Plan shall be subject
to such stock-transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations, and other requirements of the
Commission, any stock exchange upon which the Common Stock is then listed,
and any applicable Federal or state securities law, and the Committee may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to share-
holder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any employee of
the Corporation or any Subsidiary or Affiliate any right to continued
employment with the Corporation or a Subsidiary or Affiliate, as the case
may be, nor shall it interfere in any way with the right of the Corpora-
tion or a Subsidiary or Affiliate to terminate the employment of any of
its employees at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for Federal income tax
purposes with respect to any award under the Plan, the participant shall
pay to the Corporation, or make arrangements satisfactory to the Committee
regarding the payment of, any Federal, state, or local taxes of any kind
required by law to be withheld with respect to such amount. The Committee
may require withholding obligations to be settled with Common Stock,
including Common Stock that is part of the award that gives rise to the
withholding requirement. The obligations of the Corporation under the
Plan shall be conditional on such payment or arrangements and the Corpora-
tion and its Subsidiaries or Affiliates shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the participant.
(e) The Plan and all awards made and actions taken hereunder shall be
governed by and construed in accordance with the laws of the State of
Tennessee.
(f) The members of the Committee and the Board shall not be liable to
any employee or other person with respect to any determination made
hereunder in a manner that is not inconsistent with their legal obligations
as members of the Board. In addition to such other rights of indemnifi-
cation as they may have as directors or as members of the Committee, the
members of the Committee shall be indemnified by the Corporation against
the reasonable expenses, including attorneys' fees actually and necessar-
ily incurred in connection with the defense of any action, suit or pro-
ceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under
or in connection with the Plan or any option granted thereunder, and
against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such Committee
member is liable for negligence or misconduct in the performance of his
duties; provided that within 60 days after institution of any such action,
suit or proceeding, the Committee member shall in writing offer the
Corporation the opportunity, at its own expense, to handle and defend the
same.
(g) In addition to any other restrictions on transfer that may be
applicable under the terms of this Plan or the applicable award agreement,
no Stock Option or other right issued under this Plan is transferable by
the participant without the prior written consent of the Committee, other
than (i) transfers by an optionee to a member of his or her Immediate
Family or a trust for the benefit of the optionee or a member of his or
her Immediate Family or (ii) transfers by will or by the laws of descent
and distribution. The designation of a beneficiary will not constitute a
transfer.
(h) The Committee may, at or after grant, condition the receipt of
any payment in respect of any award or the transfer of any shares subject
to an award on the satisfaction of a six-month holding period, if such
holding period is required for compliance with Section 16 under the
Exchange Act.
SECTION 10. Effective Date of Plan.
The Plan shall be effective on April 17, 1997, provided that it has been
approved by the Board of The Corporation and by a majority of the votes cast by
the holders of the Corporation's Common Stock at the annual shareholders'
meeting.
SECTION 11. Term of Plan.
No Stock Option shall be granted pursuant to the Plan on or after the
tenth anniversary of the Effective Date of the Plan, but awards granted prior
to such tenth anniversary may be extended beyond that date.