Exhibit 10.10
UNIVERSAL CORPORATION
1989 EXECUTIVE STOCK PLAN
(As Amended on December 1, 1994)
Article 1
DEFINITIONS
1.01 Affiliate means any "subsidiary" or "parent corporation"
(within the meaning of Section 424 of the Code) of the Company.
1.02 Agreement means a written agreement (including any
amendment or supplement thereto) between the Company and a
Participant specifying the terms and conditions of a Grant or an
Award issued to such Participant.
1.03 Award means an award of Common Stock and/or Restricted
Stock.
1.04 Board means the Board of Directors of the Company.
1.05 Change of Control means and shall be deemed to have taken
place if: (i) a third person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, becomes
the beneficial owner of shares of the Company having 20 percent
or more of the total number of votes that may be cast for the
election of Directors of the Company; or, (ii) as the result of,
or in connection with, any cash tender or exchange offer, merger
or other business combination, sale of assets or contested
election, or any combination of the foregoing transactions (a
"Transaction"), the persons who were Directors of the Company
before the Transaction shall cease to constitute a majority of
the Board of the Company or any successor to the Company.
1.06 Change of Control Date is the date on which an event
described in (i) or (ii) of Section 1.05 occurs.
1.07 Code means the Internal Revenue Code of 1986, and any
amendments thereto.
1.08 Committee means the Executive Compensation Committee of
the Board.
1.09 Common Stock means the Common Stock of the Company.
1.10 Company means Universal Corporation.
1.11 Fair Market Value means, on any given date, the closing
price of a share of Common Stock as reported on the New York
Stock Exchange composite tape on such day or, if the Common
Stock was not traded on the New York Stock Exchange on such day,
then on the next preceding day that the Common Stock was traded
on such exchange, all as reported by such source as the
Committee may select.
1.12 Grant means the grant of an Option.
1.13 Incentive Stock Option means an Option that is intended to
qualify as an "incentive stock option" under Section 422 of the
Code.
1.14 Non-Qualified Stock Option means an option other than an
Incentive Stock Option.
1.15 Option means a stock option that entitles the holder to
purchase from the Company a stated number of shares of Common
Stock at the price set forth in an Agreement.
1.16 Option Price means the price per share for Common Stock
purchased on the exercise of an Option as provided in Article VI.
1.17 Participant means an employee of the Company or of a
Subsidiary, including an employee who is a member of the Board,
who satisfies the requirements of Article IV and is selected by
the Committee to receive a Grant or an Award.
1.18 Plan means the Universal Corporation 1989 Executive Stock
Plan, as amended.
1.19 Restricted Stock means shares of Common Stock awarded to a
Participant under Article IX. Shares of Common Stock shall
cease to be Restricted Stock when, in accordance with the terms
of the applicable Agreement, they become transferable and free
of substantial risks of forfeiture.
1.20 Rule 16b-3 means Rule 16b-3, as promulgated by the
Securities and Exchange Commission under Section 16(b) of the
Securities Exchange Act of 1934, as amended from time to time.
1.21 Securities Broker means the registered securities broker
acceptable to the Company who agrees to effect the cashless
exercise of an Option pursuant to Section 8.04 hereof.
1.22 Subsidiary means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company
if each of the corporations in the chain (other than the last
corporation) owns stock possessing at least 50 percent of the
total combined voting power of all classes of stock in one of
the other corporations in such chain.
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Article II
PURPOSES
The Plan is intended to assist the Company in recruiting and
retaining key employees with ability and initiative by enabling
employees who contribute significantly to the Company or an
Affiliate to participate in its future success and to associate
their interests with those of the Company and its shareholders.
The Plan is intended to permit the award of Common Stock and
Restricted Stock, and the issuance of Options qualifying as
Incentive Stock Options or Non-Qualified Stock Options as
designated by the Committee at time of grant. No Option that is
intended to be an Incentive Stock Option, however, shall be
invalid for failure to qualify as an Incentive Stock Option
under Section 422 of the Code but shall be treated as a
Non-Qualified Stock Option.
Article III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee
shall have authority to issue Grants and Awards upon such terms
(not inconsistent with the provisions of this Plan) as the
Committee may consider appropriate. The terms of such Grants
and Awards may include conditions (in addition to those
contained in this Plan) on (i) the exercisability of all or any
part of an Option and (ii) the transferability or forfeitability
of Restricted Stock. In addition, the Committee shall have
complete authority to interpret all provisions of this Plan; to
prescribe the form of Agreements; to adopt, amend, and rescind
rules and regulations pertaining to the administration of the
Plan; and to make all other determinations necessary or
advisable for the administration of this Plan. To fulfill the
purposes of the Plan without amending the Plan, the Committee
may also modify any Grants or Awards issued to Participants who
are nonresident aliens or employed outside of the United States
to recognize differences in local law, tax policy or custom.
The express grant in the Plan of any specific power to the
Committee shall not be construed as limiting any power or
authority of the Committee. Any decision made, or action taken,
by the Committee or in connection with the administration of
this Plan shall be final and conclusive. All expenses of
administering this Plan shall be borne by the Company.
Article IV
ELIGIBILITY
4.01 General. Any employee of the Company or of any
Subsidiary (including any corporation that becomes a Subsidiary after
the adoption of this Plan) who, in the judgment of
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the Committee, has contributed significantly or can be expected to
contribute significantly to the profits or growth of the Company or a
Subsidiary may receive one or more Awards or Grants, or any combination
or type thereof. Directors of the Company who are employees are
eligible to participate in this Plan. A person who is a member of the
Committee may not be issued Awards or Grants while he is a member of the
Committee.
4.02 Grants and Awards. The Committee will designate
individuals to whom Grants and/or Awards are to be issued and
will specify the number of shares of Common Stock subject to
each such Grant or Award. All Grants or Awards issued under
this Plan shall be evidenced by Agreements which shall be
subject to applicable provisions of this Plan and to such other
provisions as the Committee may adopt. No Participant may be
granted Options that are Incentive Stock Options (under all
Incentive Stock Option Plans of the Company and Affiliates)
which are first exercisable in any calendar year for stock
having an aggregate Fair Market Value (determined as of the date
an Option is granted) exceeding $100,000. A Participant may not
receive Grants and Awards under this Plan with respect to more
than 200,000 shares of Common Stock during any calendar year.
4.03 Reload Options. The Committee shall have the authority to
specify at the time of Grant that an optionee shall be granted
the right to a further Non-Qualified Stock Option (a "Reload
Option") in the event such optionee exercises all or a part of
an Option, including a Reload Option (an "Original Option"), by
surrendering in accordance with Section 8.02 hereof already
owned shares of Common Stock in full or partial payment of the
Option Price under such Original Option. Each Reload Option
shall be granted on the date of exercise of the Original Option,
shall cover a number of shares of Common Stock not exceeding the
whole number of shares of Common Stock surrendered in payment of
the Option Price under such Original Option, shall have an
Option Price equal to the Fair Market Value on the date of Grant
of such Reload Option, shall expire on the stated expiration
date of the Original Option and shall be subject to such other
terms and conditions as the Committee may determine.
4.04 Designation of Option as an Incentive Stock Option or a
Non-Qualified Stock Option. The Committee will designate at the
time an Option is granted whether the Option is to be treated as
an Incentive Stock Option or a Non-Qualified Stock Option. In
the absence, however, of any such designation, such Option shall
be treated as a Non-Qualified Stock Option.
Article V
STOCK SUBJECT TO PLAN
The maximum number of shares of Common Stock available for
Grants (other than Grants of Reload Options) and Awards under the Plan
shall be 2,000,000. The maximum number of shares of Common Stock
available for Grants of Reload Options under the Plan shall be 500,000,
which amount, beginning on July 1, 1993 and ending on June 30, 1998,
shall be increased in each fiscal year of the Company by an amount equal
to two percent (2%) of the
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total number of shares of Common Stock outstanding as of the
first day of each such fiscal year. Each such maximum number of
shares of Common Stock is subject to adjustment (after taking
into account the preceding annual increase in the maximum number
of shares of Common Stock available for Grants of Reload
Options) as provided in Article X. Shares of Common Stock
subject to Grants and Awards under the Plan may be authorized
but previously unissued shares of Common Stock or previously
issued shares of Common Stock reacquired by the Company. The
grant of a Reload Option under the Plan, by restoring an option
opportunity on the number of shares of Common Stock surrendered
to exercise an Original Option, will encourage a Participant to
maximize his ownership interest in the Company without reducing
the percentage interests of shareholders.
If any shares of Restricted Stock are forfeited for which the
Participant did not receive any benefits of ownership (other
than voting rights), or if any Option (other than a Reload
Option) terminates without being exercised, shares of Common
Stock subject to such Grants or Awards shall be available for
distribution in connection with Grants (other than Grants of
Reload Options) or Awards under the Plan. If any Reload Option
terminates without being exercised, the shares of Common Stock
subject to such terminated Reload Option shall be available for
distribution in connection with Grants of Reload Options under
the Plan.
Article VI
OPTION PRICE
The price per share for Common Stock purchased on the exercise
of an Option shall be fixed by the Committee, but shall not be
less than the Fair Market Value on the date of grant.
Article VII
EXERCISE OF OPTIONS
7.01 Maximum Option Period. The period in which an Option may
be exercised shall be determined by the Committee on the date of
grant; provided, however that an Incentive Stock Option shall
not be exercisable after the expiration of 10 years from the
date the Incentive Stock Option was granted.
7.02 Non-Transferability.
(a) Except as specifically provided in an Option
Agreement pursuant to subsection (b) below, any Option granted under
this Plan shall be non-transferable except by will or by the laws of
descent and distribution. During the lifetime of a Participant to whom
an Incentive Stock Option is granted, the Incentive Stock Option may be
exercised only by the Participant. No right or interest of a
Participant in any Option shall be liable for, or subject to, any lien,
obligation or liability of such Participant.
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(b) In addition to non-transferable Options, the
Committee may grant Non-Qualified Stock Options that are transferable,
without payment of consideration, to immediate family members of the
optionee, to a trust for the benefit of such family members or to a
partnership whose only partners are such family members. The Committee
may also amend outstanding Non-Qualified Stock Options to provide for
such transferability. The transferee of an Option shall be subject to
all conditions applicable to the Option prior to its transfer. The
Agreement granting the Option shall set forth the transfer conditions
and restrictions. The Committee may impose on any transferable Option
and on stock issued upon the exercise of an Option such limitations and
conditions as the Committee deems appropriate. Except to the extent
otherwise permitted by Rule 16b-3, Options that are intended to be
exempt from Section 16(b) of the Securities Exchange Act of 1934, as
amended, pursuant to Rule 16b-3 may not be transferable except by will
or by the laws of descent and distribution.
7.03 Employee Status. For purposes of determining the
applicability of Section 422 of the Code (relating to incentive
stock options), or in the event that the terms of any Grant
provide that it may be exercised only during employment or
within a specified period of time after termination of
employment, the Committee may decide to what extent leaves of
absence for governmental or military service, illness, temporary
disability, or other reasons shall not be deemed interruptions
of continuous employment.
Article VIII
METHOD OF EXERCISE
8.01 Exercise. Subject to the provisions of Articles VII and
XI, an Option may be exercised in whole at any time or in part
from time to time at such times and in compliance with such
requirements as the Committee shall determine. An Option
granted under this Plan may be exercised with respect to any
number of whole shares less than the full number for which the
Option could be exercised. Such partial exercise of an Option
shall not affect the right to exercise the Option from time to
time in accordance with this Plan with respect to remaining
shares subject to the Option.
8.02 Payment. Unless otherwise provided by the Agreement,
payment of the Option Price shall be made in cash. If the
Agreement provides, payment of all or part of the Option Price
may be made by surrendering already owned shares of Common Stock
to the Company, provided the shares surrendered have a Fair
Market Value (determined as of the day preceding the date of
exercise) that is not less than such price or part thereof. In
addition, the Committee may establish such payment or other
terms as it may deem to be appropriate and consistent with these
purposes.
8.03 Shareholder Rights. No participant shall have any
rights as a shareholder with respect to shares subject to his Option
until the date he exercises such Option.
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8.04 Cashless Exercise. To the extent permitted under the
applicable laws and regulations, at the request of the Participant and
with the consent of the Committee, the Company agrees to cooperate in a
"cashless exercise" of the Option. The cashless exercise shall be
effected by the Participant delivering to the Securities Broker
instructions to exercise all or part of the Option, including
instructions to sell a sufficient number of shares of Common Stock to
cover the costs and expenses associated therewith.
Article IX
COMMON STOCK AND RESTRICTED STOCK
9.01 Award. In accordance with the provisions of Article IV,
the Committee will designate employees to whom an award of Common Stock
and/or Restricted Stock is to be made and will specify the number of
shares of Common Stock covered by such award or awards.
9.02 Vesting. In the case of Restricted Stock, on the date
of the award, the Committee may prescribe that the Participant's rights
in the Restricted Stock shall be forfeitable or otherwise restricted for
a period of time set forth in the Agreement and/or until certain
financial performance objectives are satisfied as determined by the
Committee in its sole discretion. Subject to the provisions of Article
XI hereof, the Committee may award Common Stock to a Participant which
is not forfeitable and is free of any restrictions or transferability.
9.03 Shareholder Rights. Prior to their forfeiture in
accordance with the terms of the Agreement and while the shares
are Restricted Stock, a Participant will have all rights of a
shareholder with respect to Restricted Stock, including the
right to receive dividends and vote the shares; provided,
however, that (i) a Participant may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of Restricted Stock,
(ii) the Company shall retain custody of the certificates
evidencing shares of Restricted Stock, and (iii) the Participant
will deliver to the Company a stock power, endorsed in blank,
with respect to each award of Restricted Stock.
Article X
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Should the Company effect one or more (x) stock dividends, stock
split-ups, subdivisions or consolidations of shares or other similar
changes in capitalization; (y) spin-offs, spin-outs, split-ups,
split-offs, or other such distribution of assets to shareholders; or (z)
direct or indirect assumptions and/or conversions of outstanding Options
due to an acquisition of the Company, then the maximum number of shares
as to which Grants and Awards may be issued under this Plan shall be
proportionately adjusted and their terms shall be adjusted as the
Committee shall determine to be equitably required, provided that the
number of shares subject to any Grant or Award shall always be a whole
number. Any determination made under this Article X by the Committee
shall be final and conclusive.
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The issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or
property or for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion
of shares or obligations of the Company convertible into such shares or
other securities, shall not affect, and no adjustment by reason thereof
shall be made with respect to any Grant or Award.
Article XI
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Grant shall be exercisable, no Common Stock shall be issued,
no certificates for shares of Common Stock shall be delivered, and no
payment shall be made under this Plan except in compliance with all
applicable Federal and state laws and regulations (including, without
limitation, withholding tax requirements) and the rules of all domestic
stock exchanges on which the Company's shares may be listed. The
Company may rely on an opinion of its counsel as to such compliance.
Any share certificate issued to evidence Common Stock for which a Grant
is exercised or an Award is issued may bear such legends and statements
as the Committee may deem advisable to assure compliance with Federal
and state laws and regulations. No Grant shall be exercisable, no
Common Stock shall be issued, no certificate for shares shall be
delivered, and no payment shall be made under this Plan until the
Company has obtained such consent or approval as the Committee may deem
advisable from regulatory bodies having jurisdiction over such matters.
Article XII
GENERAL PROVISIONS
12.01 Effect on Employment. Neither the adoption of this
Plan, its operation, nor any documents describing or referring to this
Plan (or any part thereof) shall confer upon any employee any right to
continue in the employ of the Company or a Subsidiary or in any way
affect any right and power of the Company or a Subsidiary to terminate
the employment of any employee at any time with or without assigning a
reason therefor.
12.02 Unfunded Plan. The Plan, insofar as it provides for a
Grant, is not required to be funded, and the Company shall not be
required to segregate any assets that may at any time be represented by
a Grant under this Plan.
12.03 Change of Control. At the discretion of the Committee,
a Participant's interest in Restricted Stock may be made nonforfeitable
and transferable as of a Change of Control Date. The Committee may also
provide in an Agreement that a Participant may elect, by written notice
to the Company within 60 days after a Change of Control Date, to
receive, in exchange for shares that were Restricted Stock immediately
before the Change of Control Date, a cash
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payment equal to the Fair Market Value of the shares surrendered on the
last business day the Common Stock is traded on the New York Stock
Exchange prior to receipt by the Company of such written notice.
Notwithstanding any other provision in this Plan to the contrary, unless
the Committee provides otherwise in an Agreement, a Grant may be
exercised immediately in full upon a Change of Control.
12.04 Rules of Construction. Headings are given to the
articles and sections of this Plan for ease of reference. The
reference to any statute, regulation, or other provision of law
shall be construed to refer to any amendment to or successor of
such provision of law.
12.05 Amendment. The Board may amend or terminate this Plan
from time to time; provided, however, that no amendment may become
effective until shareholder approval is obtained if the amendment (i)
materially increases the aggregate number of shares that may be issued
pursuant to Options and Common Stock and Restricted Stock awards, (ii)
materially increases the benefits to Participants under the Plan, or
(iii) materially changes the class of employees eligible to become
Participants. No amendment shall, without a Participant's consent,
adversely affect any rights of such Participant under any Grant or Award
outstanding at the time such amendment is made, except such an amendment
made to cause the Plan to qualify for the Rule 16b-3 exemption. No
amendment shall be made if it would disqualify the Plan from the
exemption provided by Rule 16b-3. The Committee may amend the terms of
any Grant or Award theretofore issued under this Plan, prospectively or
retrospectively, and include in such amendment the right of the
Committee to pay a Participant cash in lieu of shares of Common Stock
upon the termination (by exercise or otherwise) of an Option, but no
such amendment shall impair the rights of any Participant without the
Participant's consent except such an amendment made to cause the Plan,
or Grant or Award, to qualify for the exemption provided by Rule 16b-3.
12.06 Duration of Plan. No Grant or Award may be issued under
this Plan before July 1, 1989, or after June 30, 1998; provided,
however, a Grant of a Reload Option may be issued after June 30, 1998,
upon the exercise of an Original Option as provided in Section 4.03
hereof. Grants and Awards issued on or after July 1, 1989, but on or
before June 30, 1998, and Grants of Reload Options issued after June 30,
1998 upon the exercise of an Original Option as provided in Section 4.03
hereof, shall remain valid in accordance with their terms.
12.07 Shareholder Approval. This Plan was initially approved
by the Board of Directors of the Company, effective as of July 1, 1989,
and was approved by the shareholders of the Company entitled to vote at
the 1989 Annual Meeting of Shareholders. Amendments to the Plan were
approved by the Board of Directors of the Company, effective as of
October 27, 1992, and by the shareholders of the Company entitled to
vote at the 1992 Annual Meeting of Shareholders. Amendments to the Plan
were approved by the Board of Directors of the Company, effective as of
October 25, 1994, and by the shareholders of the Company entitled to
vote at the 1994 Annual Meeting of Shareholders. Amendments to the Plan
were approved by the Board of Directors of the Company effective as of
December 1, 1994.
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