Exhibit 4.8
AMENDED AND RESTATED
FIRSTPLUS FINANCIAL GROUP, INC.
1998 LONG TERM INCENTIVE PLAN
TABLE OF CONTENTS
PAGE
SECTION 1. GENERAL PROVISIONS RELATING
TO PLAN GOVERNANCE, COVERAGE AND BENEFITS.......................................................1
1.1 Purpose.........................................................................................1
1.2 Definitions.....................................................................................1
1.3 Administration..................................................................................4
1.4 Shares of Common Stock Subject to the Plan......................................................5
1.5 Participation...................................................................................6
1.6 Incentive Awards................................................................................6
SECTION 2. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS...........................................................6
2.1 Grant Of Options................................................................................6
2.2 Option Terms....................................................................................6
2.3 Option Exercises................................................................................7
2.4 Stock Appreciation Rights in Tandem with Options................................................8
2.5 Supplemental Payment on Exercise of Non-Qualified Stock
Options or Stock Appreciation Rights............................................................8
SECTION 3. RESTRICTED STOCK......................................................................................9
3.1 Award of Restricted Stock.......................................................................9
3.2 Restrictions....................................................................................9
3.3 Restriction Period.............................................................................10
3.4 Delivery of Shares of Common Stock.............................................................10
3.5 Supplemental Payment on Vesting of Restricted Stock............................................10
SECTION 4. PERFORMANCE UNITS AND PERFORMANCE SHARES.............................................................10
4.1 Performance Based Awards.......................................................................10
4.2 Supplemental Payment on Vesting of Performance Units or
Performance Shares ............................................................................11
SECTION 5. PROVISIONS RELATING TO PLAN PARTICIPATION............................................................12
5.1 Plan Conditions................................................................................12
5.2 Transferability................................................................................12
5.3 Rights as a Stockholder........................................................................13
5.4 Listing and Registration of Shares of Common Stock.............................................13
5.5 Change in Stock and Adjustments................................................................13
5.6 Termination of Employment, Death, Disability and Retirement....................................14
5.7 Changes in Control.............................................................................15
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5.8 Amendments to Incentive Awards.................................................................16
5.9 Exchange of Incentive Awards; Repricing........................................................16
5.10 Financing......................................................................................17
SECTION 6. MISCELLANEOUS........................................................................................17
6.1 Effective Date and Grant Period................................................................17
6.2 Funding........................................................................................17
6.3 Withholding Taxes..............................................................................18
6.4 Conflicts with Plan............................................................................18
6.5 No Guarantee of Tax Consequences...............................................................18
6.6 Severability...................................................................................18
6.7 Gender, Tense and Headings.....................................................................18
6.8 Amendment and Termination......................................................................18
6.9 Section 280G Payments..........................................................................19
6.10 Governing Law..................................................................................19
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AMENDED AND RESTATED
FIRSTPLUS FINANCIAL GROUP, INC.
1998 LONG TERM INCENTIVE PLAN
SECTION 1. GENERAL PROVISIONS RELATING
TO PLAN GOVERNANCE, COVERAGE AND BENEFITS
1.1 Purpose
The purpose of the Amended and Restated FIRSTPLUS Financial Group, Inc.
1998 Long Term Incentive Plan (the "Plan") is to foster and promote the
long-term financial success of FIRSTPLUS Financial Group, Inc. (the "Company" or
"FIRSTPLUS") and materially increase the value of the equity interests in the
Company by: (a) encouraging the long-term commitment of selected key employees
(defined in Section 1.2(i) below), (b) motivating superior performance of key
employees by means of long-term performance related incentives, (c) encouraging
and providing key employees with a formal program for obtaining an ownership
interest in the Company, (d) attracting and retaining outstanding key employees
by providing incentive compensation opportunities competitive with other major
companies and (e) enabling participation by key employees in the long-term
growth and financial success of the Company. The Plan provides for payment of
various forms of incentive compensation and, accordingly, is not intended to be
a plan that is subject to the Employee Retirement Income Security Act of 1974,
as amended, and shall be administered accordingly.
1.2 Definitions
The following terms shall have the meanings set forth below:
(a) Appreciation. The difference between the option exercise price per
share of the Option to which a Tandem Stock Appreciation Right relates and the
Fair Market Value of a share of Common Stock on the date of exercise of the
Tandem SAR.
(b) Board. The Board of Directors (or equivalent governing authority)
of the Company.
(c) Change in Control. Any of the events described in and subject to
Section 5.7.
(d) Code. The Internal Revenue Code of 1986, as amended.
(e) Compensation Committee or Committee. The Committee, which shall be
comprised of two or more members of the Board who shall be appointed by the
Board to administer the Plan, which Board shall have the power to fill vacancies
on the Committee arising by resignation, death, removal or otherwise. In the
absence of a Committee, reference thereto shall be to the Board.
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(f) Common Stock. Company Common Stock, par value $.01 per share, which
the Company is authorized to issue or may in the future be authorized to issue.
(g) Company. FIRSTPLUS Financial Group, Inc., its subsidiaries and any
successor corporation.
(h) Disability. Any complete and permanent disability as defined in
Section 22(e)(3) of the Code and determined in accordance with the procedures
set forth in the regulations thereunder.
(i) Employee. Any common-law employee of the Company or any parent or
Subsidiary, who, in the opinion of the Committee, is one of a select group of
executive officers, other officers or other key management personnel of the
Company or any parent or Subsidiary who is in a position to contribute
materially to the continued growth and development and to the continued
financial success of the Company or any parent or Subsidiary, including
executive officers and officers who are members of the Board and including
consultants and advisors.
(j) Exchange Act. The Securities Exchange Act of 1934, as amended.
(k) Fair Market Value. The closing sales price of Common Stock as
reported or listed on a national securities exchange on any relevant date for
valuation, or, if there is no such sale on such date, the applicable price as so
reported on the nearest preceding date upon which such sale took place. In the
event the shares of Common Stock are not listed on a national securities
exchange, the Fair Market Value of such shares shall be determined by the
Committee in its sole discretion.
(l) Grantee. Any Employee who in the opinion of the Committee performs
significant services for the benefit of the Company and who is granted an
Incentive Award under the Plan.
(m) Incentive Award. Any incentive award, individually or collectively,
as the case may be, including any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Unit, or Performance Share, as well as any Supplemental
Payment, granted under the Plan.
(n) Incentive Award Agreement. The written agreement entered into
between the Company and the Grantee pursuant to which an Incentive Award shall
be made under the Plan.
(o) Incentive Stock Option. A stock option which is intended to qualify
as an Incentive Stock Option under Section 422 of the Code and which shall be
granted by the Committee to a Grantee under the Plan.
(p) Involuntary Termination. The termination of Grantee's employment by
FIRSTPLUS other than for death, Disability, Retirement, Terminated for Cause or
Termination for Good Reason.
(q) Non-Qualified Stock Option. A stock option granted by the Committee
to a Grantee under the Plan, which shall not qualify as an Incentive Stock
Option.
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(r) Option. A Non-Qualified Stock Option or Incentive Stock Option
granted by the Committee to a Grantee under the Plan.
(s) Parent Corporation. FIRSTPLUS Financial Group, Inc.
(t) Performance Period. A period of time determined by the Committee
over which performance is measured for the purpose of determining a Grantee's
right to and the payment value of any Performance Units or Performance Shares.
(u) Performance Share or Performance Unit. An Incentive Award
representing a contingent right to receive cash or shares of Common Stock (which
may be Restricted Stock) at the end of a Performance Period and which, in the
case of Performance Shares, is denominated in Common Stock, and, in the case of
Performance Units, is denominated in cash values.
(v) Plan. Amended and Restated FIRSTPLUS Financial Group, Inc. 1998
Long Term Incentive Plan, as may be amended from time to time.
(w) Restricted Stock. Shares of Common Stock issued or transferred to a
Grantee subject to the Restrictions set forth in Section 3.2 hereof.
(x) Restricted Stock Award. An authorization by the Committee to issue
or transfer Restricted Stock to a Grantee.
(y) Restriction Period. The period of time determined by the Committee
during which Restricted Stock is subject to the restrictions under the Plan.
(z) Retirement. The termination of employment by the Company or any
parent or Subsidiary constituting retirement, as determined by the Committee.
(aa) Subsidiary. Any corporation (whether now or hereafter existing)
which constitutes a "subsidiary" of the Company, as defined in Section 424(f) of
the Code.
(bb) Supplemental Payment. Any amounts described in Sections 2.5, 3.5
and/or 4.2 dedicated to payment of any federal income taxes that are payable
with respect to an Incentive Award as determined by the Committee.
(cc) Tandem Stock Appreciation Right (or "Tandem SAR"). A Stock
Appreciation Right described in Section 2.4 granted by the Committee to a
Grantee under the Plan.
(dd) Terminated for Cause. An Employee shall be deemed Terminated for
Cause if he or she is terminated as a result of a breach of his or her written
employment agreement (or consulting or advisory contract), in the event one
exists, or if the Committee determines that such Employee is being terminated as
a result of intentional misapplication of funds, conviction of a crime involving
moral turpitude, drug use or alcohol abuse, nonperformance of Employee's duties,
commission of an act that negatively affects the Commpany's business or reputa-
tion or any other action involving willful and deliberate malfeasance or gross
negligence in the performance of Employee's duties.
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(ee) Termination for Good Reason. The resignation of an Employee shall
be deemed to be a Termination for Good Reason if Employee's resignation is
within two years after a Change in Control as defined in Section 5.7, caused by
and within ninety (90) days after the following: (i) without the express written
consent of Employee, any duties are assigned that are materially inconsistent
with Employee's position, duties and status with FIRSTPLUS at the time of the
Change in Control; (ii) any action by FIRSTPLUS that results in a material
diminution in the position, duties or status of Employee with FIRSTPLUS at the
time of the Change in Control or any transfer or proposed transfer of Employee
for any extended period to a location outside his principal place of employment
at the time of the Change in Control without his consent, except for a transfer
or proposed transfer for strategic reallocations of the personnel reporting to
Employee; (iii) the base annual salary of Employee, as the same may hereafter be
increased from time to time, is reduced; or (iv) without limiting the generality
or effect of the foregoing, FIRSTPLUS fails to comply with any of its material
obligations hereunder.
1.3 Administration
(a) Committee Powers. The Plan shall be administered by the Committee,
which shall have full power and authority to: (i) designate Grantees; (ii)
determine the Incentive Awards to be granted to Grantees; (iii) subject to
Section 1.4 of the Plan, determine the Common Stock (or securities convertible
into Common Stock) to be granted pursuant to Incentive Awards and in connection
therewith, to reserve shares of Common Stock as needed in order to grant
Incentive Awards; (iv) determine the terms and conditions of any Incentive
Award; (v) determine whether, to what extent, and under what circumstances
Incentive Awards may be settled or exercised in cash, Common Stock, other
securities, or other property, or canceled, substituted, forfeited or suspended,
and the method or methods by which Incentive Awards may be settled, exercised,
canceled, substituted, forfeited or suspended; (vi) interpret and administer the
Plan and any instrument or agreement relating to, or Incentive Award made under,
the Plan; (vii) establish, amend, suspend or waive such rules and guidelines as
the Committee shall deem necessary or appropriate for administration of the
Plan; (viii) appoint such agents as it shall deem appropriate for the
administration of the Plan; provided, however, that the Committee shall not
delegate any of the power or authority set forth in (i) through (vii) above; and
(ix) make any other determination and take any other action that it deems
necessary or desirable for such administration. No member of the Committee shall
vote or act upon any matter relating solely to himself. All designations,
determinations, interpretations and other decisions with respect to the Plan or
any Incentive Award shall be within the sole discretion of the Committee and
shall be final, conclusive and binding upon all persons, including the Company
or any parent or Subsidiary, any Grantee, any holder or beneficiary of any
Incentive Award, any owner of an equity interest in the Company and any
Employee.
(b) No Liability. No member of the Committee shall be liable for any
action or determination made in good faith by the Committee with respect to this
Plan or any Incentive Award under this Plan, and, to the fullest extent permit-
ted by the Company's Articles of Incorporation and Bylaws, the Company shall in-
demnify each member of the Committee with respect thereto.
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(c) Meetings. The Committee shall designate a chairman from among its
members, who shall preside at all of its meetings, and shall designate a
secretary, without regard to whether that person is a member of the Committee,
who shall keep the minutes of the proceedings and all records, documents, and
data pertaining to its administration of the Plan. Meetings shall be held at
such times and places as shall be determined by the Committee. The Committee may
take any action otherwise proper under the Plan by the affirmative vote, taken
with or without a meeting, of a majority of its members.
1.4 Shares of Common Stock Subject to the Plan
(a) Common Stock Authorized. Subject to adjustment under Section 5.5,
the aggregate number of shares of Common Stock available for granting Incentive
Awards under the Plan shall be equal to Two Million (2,000,000) shares of
FIRSTPLUS Common Stock. If any Incentive Award shall expire or terminate for any
reason, without being exercised or paid, shares of Common Stock subject to such
Incentive Award shall again be available for grant in connection with grants of
subsequent Incentive Awards.
(b) Common Stock Available. The FIRSTPLUS Common Stock available for
issuance or transfer under the Plan shall be made available from such shares
reserved under the Amended and Restated FIRSTPLUS Financial Group, Inc. 1998
Long Term Incentive Plan, from such shares now or hereafter held by the Company
or from such shares to be purchased or acquired by the Company. The Common Stock
available for issuance or transfer under the Plan, if applicable, shall be made
available from shares now or hereafter held by the Company or from such shares
to be purchased or acquired by the Company. No fractional shares shall be issued
under the Plan; payment for fractional shares shall be made in cash.
(c) Incentive Award Adjustments. Subject to the limitations set forth
in Sections 5.8 and 6.8, the Committee may make any adjustment in the exercise
price or the number of shares subject to any Incentive Award, or any other terms
of any Incentive Award. Such adjustment shall be made by amending, substituting
or canceling and re-granting such Incentive Award with the inclusion of terms
and conditions that may differ from the terms and conditions of the original
Incentive Award. If such action is effected by amendment, the effective date of
such amendment shall be the date of the original grant.
1.5 Participation
(a) Eligibility. The Committee shall from time to time designate those
Employees, if any, to be granted Incentive Awards under the Plan, the type of
awards granted, the number of shares, options, rights or units, as the case may
be, which shall be granted to each such Employee and any other terms or
conditions relating to the awards as it may deem appropriate, consistent with
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the provisions of the Plan. An Employee who has been granted an Incentive Award
may, if otherwise eligible, be granted additional Incentive Awards at any time.
(b) No Non-Employee Board Participation. In no event may any member of
the Board who is not an employee of the Company be granted an Incentive Award
under the Plan.
1.6 Incentive Awards
The forms of Incentive Awards under this Plan are Options, Tandem Stock
Appreciation Rights and Supplemental Payments as described in Section 2,
Restricted Stock and Supplemental Payments as described in Section 3, and
Performance Units or Performance Shares and Supplemental Payments as described
in Section 4.
SECTION 2. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
2.1 Grant Of Options
The Committee is authorized to grant Options (Non-Qualified Stock
Options or Incentive Stock Options) to Grantees in accordance with the terms and
conditions of this Plan and with such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall determine.
2.2 Option Terms
(a) Exercise Price. The exercise price per share of Common Stock under
each Option shall be determined by the Committee; provided, however, that, in
the case of an Incentive Stock Option, such exercise price shall not be less
than 100% of the Fair Market Value per share of such stock on the date the
Option is granted, as determined by the Committee (110% in the case of an
Incentive Stock Option granted to a ten-percent stockholder) and, provided
further, that, in the case of Non-Qualified Stock Options, no more than 10% of
the aggregate number of shares of Common Stock authorized for grant as Incentive
Awards under the Plan may be granted at an exercise price less than 100% of the
Fair Market Value per share of such stock on the date the Option is granted, and
in no event shall such Options shall be granted at an exercise price less than
85% of such Fair Market Value.
(b) Term. The Committee shall fix the term of each Option which, in the
case of an Incentive Stock Option, shall be not more than ten years from the
date of grant. In the event no term is fixed, such term shall be ten years from
the date of grant. The term shall be five years in the case of an Incentive
Stock Option granted to a ten-percent stockholder.
(c) Exercise. The Committee shall determine the time or times at which
an Option may be exercised in whole or in part. The Committee may accelerate the
exercisability of any Option in portion thereof at any time. Notwithstanding the
foregoing, the Committee may, in its sole discretion, provide that all or part
of the shares of Common Stock received by a Grantee upon the exercise of a Non-
Qualified Stock Option shall be Restricted Stock subject to any or all of the
restrictions or conditions set forth in Section 3.2
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(d) Incentive Stock Options. In the case of Incentive Stock Options,
the terms and conditions of such grants shall be subject to and comply with
Section 422 of the Code and any rules or regulations promulgated thereunder,
including the requirement that the aggregate Fair Market Value (determined as of
date the date of grant) of the Common Stock with respect to which Incentive
Stock Options granted under this Plan and all other option plans of the Company,
the parent and subsidiary become exercisable by a Grantee during any calendar
year shall not exceed $100,000. To the extent that the limitation set forth in
the preceding sentence is exceeded for any reason (including the acceleration of
the time for exercise of an Option), the Option with respect to such excess
amount shall be treated as Non-Qualified Stock Options.
2.3 Option Exercises
(a) Method of Exercise. To purchase shares under any Option granted
under the Plan, Grantees must give notice in writing to the Company of their
intention to purchase and specify the number of shares of Common Stock as to
which they intend to exercise their Option. Upon the date or dates specified for
the completion of the purchase of the shares, the purchase price will be payable
in full. The purchase price may be paid in cash or an equivalent acceptable to
the Committee. At the discretion of the Committee, the exercise price per share
of Common Stock may be paid by the assignment and delivery to the Company of
shares of Common Stock owned by the Grantee or a combination of cash and such
shares equal in value to the exercise price. However, if the Grantee acquired
the stock to be surrendered directly or indirectly from the Company, he must
have owned the stock to be surrendered for at least six months prior to
tendering such stock for the exercise of an Option. Any shares so assigned and
delivered to the Company in payment or partial payment of the purchase price
shall be valued at the Fair Market Value on the exercise date. In addition, at
the request of the Grantee and to the extent permitted by applicable law, the
Company in its discretion may selectively approve a "cashless exercise"
arrangement with a brokerage firm under which such brokerage firm, on behalf of
the Grantee, shall pay to the Company the exercise price of the Options being
exercised, and the Company, pursuant to an irrevocable notice from the Grantee,
shall promptly deliver the shares being purchased to such firm.
(b) Proceeds. The proceeds received by the Company from the sale of
shares of Common Stock pursuant to Options exercised under the Plan will be used
for general purposes of the Company.
2.4 Stock Appreciation Rights in Tandem with Options
(a) General Provisions. The Committee may, at the time of grant of an
Option, grant Tandem SARs with respect to all or any portion of the shares of
Common Stock covered by such Option. The exercise price per share of Common
Stock of a Tandem SAR shall be fixed in the Incentive Award Agreement and shall
not be less than one hundred percent (100%) of the Fair Market Value of a share
of Common Stock on the date of the grant of the Option to which it relates.
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A Tandem SAR may be exercised at any time the Option to which it relates is then
exercisable, but only to the extent the Option to which it relates is
exercisable, and shall be subject to the conditions applicable to such Option.
When a Tandem SAR is exercised, the Option to which it relates shall terminate
to the extent of the number of shares with respect to which the Tandem SAR is
exercised. Similarly, when an Option is exercised, the Tandem SARs relating to
the shares covered by such Option exercise shall terminate. Any Tandem SAR that
is outstanding on the last day of the term of the related Option shall be
automatically exercised on such date for cash without any action by the Grantee.
(b) Exercise. Upon exercise of a Tandem SAR, the holder shall receive,
for each share with respect to which the Tandem SAR is exercised, an amount
equal to the Appreciation. The Appreciation shall be payable in cash, Common
Stock, or a combination of both, at the option of the Committee, and shall be
paid within 30 calendar days of the exercise of the Tandem SAR.
2.5 Supplemental Payment on Exercise of Non-Qualified Stock Options or
Tandem Stock Appreciation Rights
The Committee, either at the time of grant or at the time of exercise
of any Non-Qualified Stock Option or Tandem Stock Appreciation Right, may
provide for a supplemental payment (the "Supplemental Payment") by the Company
to the Grantee with respect to the exercise of any NonQualified Stock Option or
Tandem SAR. The Supplemental Payment shall be in the amount specified by the
Committee, which shall not exceed the amount necessary to pay the federal income
tax payable with respect to both the exercise of the Non-Qualified Stock Option
and/or Tandem Stock Appreciation Right and the receipt of the Supplemental
Payment, assuming the holder is taxed at the maximum effective federal income
tax rate applicable thereto. The Committee shall have the discretion to grant
Supplemental Payments that are payable solely in cash or Supplemental Payments
that are payable in cash, Common Stock, or a combination of both, as determined
by the Committee at the time of payment. The Supplemental Payment shall be paid
within 30 calendar days of the date of exercise of a Non-Qualified Stock Option
or Tandem Stock Appreciation Right (or within 30 calendar days of the date on
which income is recognized for federal income tax purposes with respect to such
exercise, whichever is later).
SECTION 3. RESTRICTED STOCK
3.1 Award of Restricted Stock
(a) Grant. In consideration of the performance of services by the
Grantee, shares of Restricted Stock may be awarded under this Plan by the
Committee on such terms and conditions and with such restrictions as the
Committee may from time to time approve, all of which may differ with respect to
each Grantee. Such Restricted Stock shall be awarded for no additional
consideration or such additional consideration as the Committee shall determine.
(b) Immediate Transfer Without Immediate Delivery of Restricted Stock.
Each Restricted Stock Award will constitute an immediate transfer of the record
and beneficial ownership of the shares of Restricted Stock to the Grantee in
8
consideration of the performance of services, entitling such Grantee to all
voting and other ownership rights, but subject to the restrictions hereinafter
referred to. Each Restricted Stock Award may limit the Grantee's dividend rights
during the Restriction Period in which the shares of Restricted Stock are
subject to a substantial risk of forfeiture and restrictions on transfer. Shares
of Common Stock awarded pursuant to a grant of Restricted Stock will be held by
the Company, or in trust or in escrow pursuant to an agreement satisfactory to
the Committee, as determined by the Committee, until such time as the
restrictions on transfer have expired. Any such trust or escrow shall not be
insulated from the claims of the general creditors of the Company in the event
of bankruptcy or insolvency of the Company.
3.2 Restrictions
(a) Restrictive Conditions. Restricted Stock awarded to a Grantee shall
be subject to the following restrictions until the expiration of the Restriction
Period: (i) the shares of Common Stock of the Company included in the Restricted
Stock Award shall be subject to one or more restrictions, including without
limitation, a restriction that constitutes a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code and regulations promulgated
thereunder, and to the restrictions on transferability set forth in Section 5.2;
(ii) unless otherwise approved by the Committee, the shares of Common Stock
included in the Restricted Stock Award that are subject to restrictions that are
not satisfied at such time the Grantee ceases to be employed by the Company
shall be forfeited and all rights of the Grantee to such shares shall terminate
without further obligation on the part of the Company when an Employee leaves
the employ of the Company; and (iii) any other restrictions that the Committee
may determine in advance are necessary or appropriate.
(b) Forfeiture of Restricted Stock. If for any reason, the restrictions
imposed by the Committee upon Restricted Stock are not satisfied at the end of
the Restriction Period, any Restricted Stock remaining subject to such
restrictions shall thereupon be forfeited by the Grantee and reacquired by the
Company.
(c) Removal of Restrictions. The Committee shall have the authority to
remove any or all of the restrictions on the Restricted Stock, including the
restrictions under the Restriction Period, whenever it may determine that such
action is appropriate by reason of changes in applicable laws or other changes
in circumstances resulting from disability, death, Change in Control or other
unusual circumstances arising after the date of the Restricted Stock Award.
3.3 Restriction Period
The Restriction Period of Restricted Stock shall commence on the date
of grant and shall be established by the Committee in the Incentive Award
Agreement setting forth the terms of the award of Restricted Stock. The
Restriction Period shall be at least three years; provided, however, that such
Restriction Period may be as short as one year if the restrictions under the
Restriction Period relate to specific financial or non-financial performance
measures and objectives established by the Committee.
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3.4 Delivery of Shares of Common Stock
Subject to Section 6.3, at the expiration of the Restriction Period, a
stock certificate evidencing the Restricted Stock (to the nearest full share)
with respect to which the Restriction Period has expired with all restrictions
thereon having been satisfied shall be delivered without charge to the Grantee,
or his personal representative, free of all restrictions under the Plan.
3.5 Supplemental Payment on Vesting of Restricted Stock
The Committee, either at the time of grant or at the time of vesting of
Restricted Stock, may provide for a Supplemental Payment by the Company to the
holder in an amount specified by the Committee, which shall not exceed the
amount necessary to pay the federal income tax payable with respect to both the
vesting of the Restricted Stock and receipt of the Supplemental Payment,
assuming the Grantee is taxed at the maximum effective federal income tax rate
applicable thereto. The Supplemental Payment shall be paid within 30 calendar
days of each date that Restricted Stock vests. The Committee shall have the
discretion to grant Supplemental Payments that are payable solely in cash or
Supplemental Payments that are payable in cash, Common Stock, or a combination
of both, as determined by the Committee at the time of payment.
SECTION 4. PERFORMANCE UNITS AND PERFORMANCE SHARES
4.1 Performance Based Awards
(a) Grant. The Committee is authorized to grant Performance Units and
Performance Shares to Grantees. The Committee may make grants of Performance
Units or Performance Shares in such a manner that more than one Performance
Period is in progress concurrently. For each Performance Period, the Committee
shall establish the number of Performance Units or Performance Shares and the
contingent value of any Performance Units or Performance Shares, which may vary
depending on the degree to which performance objectives established by the
Committee are met.
(b) Performance Criteria. At the beginning of each Performance Period,
the Committee shall (i) establish for such Performance Period specific financial
or nonfinancial performance measures or objectives as the Committee believes are
relevant to the Company's overall business objectives; (ii) determine the value
of a Performance Unit or the number of shares under a Performance Share grant
relative to performance objectives; and (iii) notify each Grantee in writing of
the established performance objectives and minimum, target, and maximum
Performance Unit or Share value for such Performance Period.
(c) Modification. If the Committee determines in its sole discretion
that the established performance measures or objectives are no longer suitable
to Company objectives because of a change in the Company's business operations,
corporate structure, capital structure, or other conditions the Committee deems
to be appropriate, the Committee may modify the performance measures and
objectives as considered appropriate.
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(d) Payment. The basis for payment of Performance Units or Performance
Shares for a given Performance Period shall be the achievement of those
financial and nonfinancial performance objectives determined by the Committee at
the beginning of the Performance Period. If minimum performance is not achieved
for a Performance Period, no payment shall be made and all contingent rights
shall cease. If minimum performance is achieved or exceeded, the value of a
Performance Unit or Performance Share shall be based on the degree to which
actual performance exceeded the pre-established minimum performance standards,
as determined by the Committee. The amount of payment shall be determined by
multiplying the number of Performance Units or Performance Shares granted at the
beginning of the Performance Period times the final Performance Unit or
Performance Share value. Payments shall be made, in the discretion of the
Committee, solely in cash or Common Stock, or a combination of cash and Common
Stock, following the close of the applicable Performance Period.
4.2 Supplemental Payment on Vesting of Performance Units or Performance
Shares
The Committee, either at the time of grant or at the time of vesting of
Performance Units or Performance Shares (other than Restricted Stock), may
provide for a Supplemental Payment by the Company to the holder in an amount
specified by the Committee, which shall not exceed the amount necessary to pay
the federal income tax payable with respect to both the vesting of such
Performance Units or Performance Shares and receipt of the Supplemental Payment,
assuming the Grantee is taxed at the maximum effective federal income tax rate
applicable thereto. The Supplemental Payment shall be paid within 30 days of
each date that such Performance Units or Performance Shares vest. The Committee
shall have the discretion to grant Supplemental Payments that are payable in
cash, Common Stock, or a combination of both, as determined by the Committee at
the time of payment.
SECTION 5. PROVISIONS RELATING TO PLAN PARTICIPATION
5.1 Plan Conditions
(a) Incentive Award Agreement. Each Grantee to whom an Incentive Award
is granted under the Plan shall be required to enter into an Incentive Award
Agreement with the Company in a form provided by the Committee, which shall
contain certain specific terms, as determined by the Committee, with respect to
the Incentive Award and shall include provisions that the Grantee (i) shall not
disclose any trade or secret data or any other confidential information of the
Company acquired during employment by the Company or a Subsidiary, or after the
termination of employment or Retirement, (ii) shall abide by all the terms and
conditions of the Plan and such other terms and conditions as may be imposed by
the Committee, and (iii) shall not interfere with the employment of any other
Company employee. An Incentive Award may include a noncompetition agreement with
respect to the Grantee and/or such other terms and conditions, including,
without limitation, rights of repurchase or first refusal, not inconsistent with
the Plan, as shall be determined from time to time by the Committee.
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(b) No Right to Employment. Nothing in the Plan, Incentive Award
Agreement or any instrument executed pursuant to the Plan shall create any
employment rights (including without limitation, rights to continued employment)
in any Grantee or affect the right of the Company to terminate the employment of
any Grantee at any time for any reason, whether before the exercise date of any
Option or during the Restriction Period of any Restricted Stock or during the
Performance Period of any Performance Unit or Performance Share.
(c) Securities Requirements. No shares of Common Stock will be issued
or transferred pursuant to an Incentive Award unless and until all
then-applicable requirements imposed by federal and state securities and other
laws, rules and regulations and by any regulatory agencies having jurisdiction
and by any stock market or exchange upon which the Common Stock may be listed
have been fully met. As a condition precedent to the issuance of shares pursuant
to the grant or exercise of an Incentive Award, the Company may require the
Grantee to take any reasonable action to meet such requirements. The Company
shall not be obligated to take any affirmative action in order to cause the
issuance or transfer of shares pursuant to an Incentive Award to comply with any
law or regulation described in the second preceding sentence.
5.2 Transferability
(a) Non-Transferable Award. Unless otherwise provided in an Incentive
Award Agreement, no Incentive Award and no right under the Plan, contingent or
otherwise, other than Restricted Stock as to which restrictions have lapsed,
shall be (i) assignable, saleable, or otherwise transferable by a Grantee except
by will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order, or (ii) subject to any encumbrance, pledge or charge
of any nature. No transfer by will or by the laws of descent and distribution
shall be effective to bind the Company unless the Committee shall have been
furnished with a copy of the deceased Grantee's will or such other evidence as
the Committee may deem necessary to establish the validity of the transfer. Any
attempted transfer in violation of this Section 5.2 shall be void and
ineffective for all purposes.
(b) Ability to Exercise Rights. Only the Grantee or his guardian (if
the Grantee becomes Disabled), or in the event of his death, his legal
representative or beneficiary, may exercise Options, receive cash payments and
deliveries of shares, or otherwise exercise rights under the Plan. The executor
or administrator of the Grantee's estate, or the person or persons to whom the
Grantee's rights under any Incentive Award will pass by will or the laws of
descent and distribution, shall be deemed to be the Grantee's beneficiary or
beneficiaries of the rights of the Grantee hereunder and shall be entitled to
exercise such rights as are provided hereunder.
5.3 Rights as a Stockholder
Except as otherwise provided in any Incentive Award Agreement, a
Grantee of an Incentive Award or a transferee of such Grantee shall have no
rights as a stockholder with respect to any shares of Common Stock until such
person becomes a holder of record of such Common Stock. Except as otherwise
provided in Section 5.5, no adjustment shall be made for dividends (ordinary or
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extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued.
5.4 Listing and Registration of Shares of Common Stock
Prior to issuance and/or delivery of shares of Common Stock, the
Company shall consult with representatives of the Company, as appropriate,
regarding compliance with laws, rules and regulations that apply to such shares.
If necessary, the Company shall postpone the issuance and/or delivery of the
affected shares of Common Stock upon any exercise of an Incentive Award until
completion of such stock exchange listing, registration, or other qualification
of such shares under any state and/or federal law, rule or regulation as the
Company may consider appropriate, and may require any Grantee to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of the shares in compliance with
applicable laws, rules and regulations. The Company shall not be obligated to
take any affirmative action in order to cause the issuance or transfer of shares
pursuant to an Incentive Award to comply with any law, rule or regulation
described in the immediately preceding sentence.
5.5 Change in Stock and Adjustments
(a) Changes in Capitalization. In the event the outstanding shares of
the Common Stock, as constituted from time to time, shall be changed as a result
of a change in capitalization of FIRSTPLUS or a combination, merger or
reorganization of FIRSTPLUS into or with any other corporation or any other
transaction with similar effects, then, for all purposes, references herein to
Common Stock or Restricted Stock shall mean and include all securities or other
property (other than cash) that holders of Common Stock are entitled to receive
in respect of Common Stock by reason of each successive aforementioned event,
which securities or other property (other than cash) shall be treated in the
same manner and shall be subject to the same restrictions as the underlying
Common Stock or Restricted Stock.
(b) Changes in Law or Circumstances. In the event of any change in
applicable laws or any change in circumstances that results in or would result
in any dilution of the rights granted under the Plan, or that otherwise warrants
equitable adjustment because it interferes with the intended operation of the
Plan, then if the Committee shall, in its sole discretion, determine that such
change equitably requires an adjustment in the number or kind of shares of stock
or other securities or property theretofore subject, or which may become
subject, to issuance or transfer under the Plan or in the terms and conditions
of outstanding Incentive Awards, such adjustment shall be made in accordance
with such determination. Such adjustments may include without limitation changes
with respect to (i) the aggregate number of shares that may be issued under the
Plan, (ii) the number of shares subject to Incentive Awards and (iii) the price
per share for outstanding Incentive Awards. The Committee shall give notice to
each Grantee, and upon notice such adjustment shall be effective and binding for
all purposes of the Plan.
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5.6 Termination of Employment, Death, Disability and Retirement
(a) Termination of Employment. Subject to Section 3.2, if an Employee's
employment by the Company and any parent or Subsidiary is terminated for any
reason whatsoever other than death, Disability, Retirement, Involuntary
Termination or Termination for Good Reason, any Incentive Award granted pursuant
to the Plan outstanding at the time and all rights thereunder shall wholly and
completely terminate, and unless otherwise established by the Committee, no
further vesting shall occur and the Employee shall be entitled to exercise his
or her rights with respect to the portion of the Incentive Award vested as of
the date of termination for a period of thirty (30) calendar days after such
termination date; provided, however, that if an Employee is Terminated for
Cause, such Employee's right to exercise the vested portion of his or her
Incentive Award shall terminate as of the date of termination of employment. In
the event of termination for death, Disability, Retirement, or Change in
Control, an Incentive Award may be exercised only as determined by the Committee
and provided in the Incentive Award Agreement. However, the following shall be
used as a general guideline.
(b) Retirement. Subject to Section 3.2, unless otherwise approved by
the Committee, upon the Retirement of an Employee:
(i) any nonvested portion of any outstanding Incentive Award
shall continue to vest after Retirement; and
(ii) any vested Incentive Award shall expire on the earlier of
(A) the expiration date set forth in the Incentive Award Agreement with respect
to such Incentive Awards; or (B) the expiration of six (6) months after the date
of Retirement.
(c) Disability or Death. Subject to Section 3.2, unless otherwise
approved by the Committee, upon termination of employment from the Company and
any parent or Subsidiary as a result of Disability or death:
(i) any nonvested portion of any outstanding Incentive Award
shall continue to vest after Disability or death; and
(ii) any vested Incentive Award shall expire upon the earlier
of (A) the expiration date set forth in the Incentive Award Agreement with
respect to such Incentive Awards or (B) the first anniversary of such
termination of such employment as a result of Disability or death.
(d) Involuntary Termination. Subject to Section 3.2, unless otherwise
approved by the Committee, upon termination of employment from the Company and
any parent or Subsidiary as a result of Involuntary Termination:
(i) any nonvested portion of any outstanding Incentive Award
shall vest on a prorated basis based upon the number of months the terminated
Employee has been employed within the applicable Performance Period or term; and
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(ii) any vested Incentive Award shall expire upon the earlier
of (A) the expiration date set forth in the Incentive Award Agreement with
respect to such Incentive Awards or (B) the expiration of thirty (30) days after
the date of termination.
(e) Continuation. Subject to the express provisions of the Plan and the
terms of any applicable Incentive Award Agreement, the Committee, in its
discretion, may provide for the continuation of any Incentive Award for such
period and upon such terms and conditions as are determined by the Committee in
the event that a Grantee ceases to be an employee.
5.7 Changes in Control
(a) On the date thirty (30) days prior to any occurrence described in
Section 5.7(a)(i), (ii) or (iii) (each occurrence a "Change in Control"), but
only where such anticipated occurrence actually takes place, notwithstanding the
vesting schedule in an Incentive Award, each Option shall immediately become
exercisable in full, all restrictions and conditions of all Restricted Stock
then outstanding shall be deemed satisfied, and all Performance Shares and
Performance Units shall become vested, deemed earned in full and promptly paid
where there:
(i) is any transaction (which shall include a series of
transactions occurring within 60 days or occurring pursuant to a plan) that has
the result that shareholders of the Company immediately before such transaction
cease to own at least 51% of (x) the voting stock of the Company or (y) any
entity that results from the participation of the Company in a reorganization,
consolidation, merger, liquidation or any other form of corporate transaction;
(ii) is a merger, consolidation, reorganization, liquidation
or dissolution in which the Company does not survive; or
(iii) is a sale, lease, exchange or other disposition of all
or substantially all of the property and assets of the Company;
provided, however, that no Change in Control shall be deemed to have occurred
if, prior to such time as a Change in Control would otherwise be deemed to have
occurred, the Board determines otherwise.
(b) Right of Cash-Out. If approved by the Board prior to or within
thirty (30) days after such time as a Change in Control shall be deemed to have
occurred, the Board shall have the right for a forty-five (45) day period from
and after the date that the Change in Control is deemed to have occurred to
require all, but not less than all, Grantees to transfer and deliver to the
Company for cancellation all Incentive Awards previously granted to Grantees in
exchange for an amount equal to the "spread value" (defined below) of the
Incentive Awards. Such right shall be exercised by written notice to all
Grantees. For purposes of this Section 5.7(b), the spread value of an Incentive
Award shall equal the sum of (i) all cash to which the Grantee would be entitled
upon settlement or exercise of such Incentive Award and (ii) the excess of the
"market value" (defined below) per share over the option price, if any,
multiplied by the number of shares subject to such Incentive Award.
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For purposes of the preceding sentence, "market value" per share shall mean the
higher of (i) the average of the Fair Market Value per share on each of the five
trading days immediately following the date a Change in Control is deemed to
have occurred or (ii) the highest price or the fair market value of the
equivalent consideration, if any, offered in connection with the Change in
Control. The amount payable to each Grantee by the Company (or the acquiror, as
the case may be) pursuant to this Section 5.7(b) shall be (x) in cash or by
certified check or (y) in the form of the consideration offered in connection
with the Change in Control, and in each case shall be reduced by any applicable
taxes required to be withheld.
5.8 Amendments to Incentive Awards
Subject to Section 5.9, the Committee may waive any conditions or
rights with respect to, or amend, alter, suspend, discontinue, or terminate, any
unexercised Incentive Award theretofore granted, prospectively or retroactively,
with the consent of any relevant Grantee.
5.9 Exchange of Incentive Awards; Repricing
(a) Provided the Committee is comprised entirely of nonemployee
directors, the Committee may, to fulfill a legitimate corporate purpose (such as
retention of key employees), permit Grantees under the Plan to surrender
outstanding Incentive Awards in order to exercise or realize the rights under
other Incentive Awards or in exchange for the grant of new Incentive Awards or
require holders of Incentive Awards to surrender outstanding Incentive Awards as
a condition precedent to the grant of new Incentive Awards.
(b) Any surrender or exchange of Incentive Awards for the grant of new
Incentive Awards at an exercise price below the exercise price of the
surrendered or exchanged Incentive Awards shall be limited to 10% of the
aggregate number of shares of Common Stock authorized for grant as Incentive
Awards under the Plan and shall be used only to maintain option value in extreme
circumstances that are beyond management's control.
5.10 Financing
The Company may extend and maintain, or arrange for the extension and
maintenance of, financing to any Grantee (including a Grantee who is a Director
of the Company) to purchase shares pursuant to exercise of an Incentive Award on
such terms as may be approved by the Committee in its sole discretion. In
considering the terms for extension or maintenance of credit by the Company, the
Committee shall, among other factors, consider the cost to the Company of any
financing extended by the Company.
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SECTION 6. MISCELLANEOUS
6.1 Effective Date and Grant Period
This Plan shall become effective as of the date of Board approval (the
"Effective Date"). Unless sooner terminated by the Board, the Plan shall
terminate on December 31, 2008, unless extended. After the termination of the
Plan, no Incentive Awards may be granted under the Plan, but previously granted
awards shall remain outstanding in accordance with their applicable terms and
conditions.
6.2 Funding
Except as provided under Section 3, no provision of the Plan shall
require the Company, for the purpose of satisfying any obligations under the
Plan, to purchase assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets in a manner that
would provide any Grantee any rights that are greater than those of a general
creditor of the Company, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund if such action would provide any Grantee with
any rights that are greater than those of a general creditor of the Company.
Grantees shall have no rights under the Plan other than as unsecured general
creditors of the Company except that insofar as they may have become entitled to
payment of additional compensation by performance of services, they shall have
the same rights as other employees under applicable law. However, the Company
may establish a "Rabbi Trust" for purposes of securing the payment pursuant to a
Change in Control.
6.3 Withholding Taxes
The Company shall have the right to (i) make deductions from any
settlement of an Incentive Award made under the Plan, including the delivery of
shares, or require shares or cash or both be withheld from any Incentive Award,
in each case in an amount sufficient to satisfy withholding of any federal,
state or local taxes required by law, or (ii) take such other action as may be
necessary or appropriate to satisfy any such withholding obligations. The
Committee may determine the manner in which such tax withholding may be
satisfied, and may permit shares of Common Stock (rounded up to the next whole
number) to be used to satisfy required tax withholding based on the Fair Market
Value of any such shares of Common Stock as of the delivery of shares or payment
of cash in satisfaction of the applicable Incentive Award.
6.4 Conflicts with Plan
In the event of any inconsistency or conflict between the terms of the
Plan and an Incentive Award Agreement, the terms of the Plan shall govern.
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6.5 No Guarantee of Tax Consequences
Neither the Company nor the Committee makes any commitment or guarantee
that any federal, state or local tax treatment will apply or be available to any
person participating or eligible to participate hereunder.
6.6 Severability
In the event that any provision of this Plan shall be held illegal,
invalid or unenforceable for any reason, such provision shall be fully
severable, but shall not affect the remaining provision of the Plan, and the
Plan shall be construed and enforced as if the illegal, invalid, or
unenforceable provision had never been included herein.
6.7 Gender, Tense and Headings
Whenever the context requires such, words of the masculine gender used
herein shall include the feminine and neuter, and words used in the singular
shall include the plural. Section headings as used herein are inserted solely
for convenience and reference and constitute no part of the Plan.
6.8 Amendment and Termination
The Plan may be amended or terminated at any time by the Board by the
affirmative vote of a majority of the members in office. The Plan, however,
shall not be amended without prior written consent of each affected Grantee if
such amendment or termination of the Plan would adversely affect any material
vested benefits or rights of such person.
6.9 Section 280G Payments
In the event that the aggregate present value of the payments to a
Grantee under the Plan, and any other plan, program, or arrangement maintained
by the Company, constitutes an "excess parachute payment" (within the meaning of
Section 280G(b)(1) of the Code) and the excise tax on such payment would cause
the net parachute payments (after taking into account federal, state and local
income and excise taxes) to which the Grantee otherwise would be entitled to be
less than what the Grantee would have netted (after taking into account federal,
state and local income taxes) had the present value of his total parachute
payments equaled $1.00 less than three times his "base amount" (within the
meaning of Code Section 280G(b)(3)(A)), the Grantee's total "parachute payments"
(within the meaning of Code Section 280G(b)(2)(A)) shall be reduced (by the
minimum possible amount) so that their aggregate present value equals $1.00 less
than three times such base amount. For purposes of this calculation, it shall be
assumed that the Grantee's tax rate will be the maximum marginal federal, state
and local income tax rate on earned income, with such maximum federal rate to be
computed with regard to Code Section 1(g), if applicable. In the event that the
Grantee and the Company are unable to agree as to the amount of the reduction
described above, if any, the Grantee shall select a law firm or accounting firm
from among those regularly consulted (during the twelve-month period immediately
prior to the change in control that resulted in the characterization of the
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payments as parachute payments) by the Company regarding federal income tax or
employee benefit matters and such law firm or accounting firm shall determine
the amount of such reduction and such determination shall be final and binding
upon the Grantee and the Company.
6.10 Governing Law
The Plan shall be construed in accordance with the laws of the State of
Texas, except as superseded by federal law, and in accordance with applicable
provisions of the Code and regulations or other authority issued thereunder by
the appropriate governmental authority.
IN WITNESS WHEREOF, this Amended and Restated FIRSTPLUS Financial
Group, Inc. 1998 Long Term Incentive Plan has been executed this 19th day of
June, 1998.
FIRSTPLUS FINANCIAL GROUP, INC.
By:
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Print Name:
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Title:
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