AMF BOWLING, INC.
1998 STOCK INCENTIVE PLAN
SECTION 1. Purpose; Definitions
The purpose of the Plan is to give the Company and its Affiliates (as
defined below) a competitive advantage in attracting, retaining and motivating
employees, and to provide the Company and its subsidiaries with a stock plan
providing incentives linked to the financial results of the Company and
increases in shareholder value.
For purposes of the Plan, the following terms are defined as set forth
below:
(a) "Affiliate" of a Person means a Person controlled by,
controlling or under common control with such Person.
(b) "Award" means a Stock Appreciation Right, Stock Option or
Restricted Stock.
(c) "Award Agreement" means a Restricted Stock Agreement or Option
Agreement. An Award Agreement may consist of provisions of an
employment agreement.
(d) "Board" means the Board of Directors of the Company.
(e) "Change in Control" shall mean (1) the acquisition by a Person
or a group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) of a majority of the outstanding voting
stock of the Company (but not including any acquisition by
GSCP or its Affiliates), or (2) the sale of or other
disposition (other than by way of merger or consolidation) of
all or substantially all of the assets of the Company and its
subsidiaries, taken as a whole, to any Person or group (as
defined above). For all purposes of the Plan, the sale of one
of the Company's two main businesses (i.e., (x) bowling
products and related activities and (y) operation of bowling
centers) is not a Change of Control.
(f) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(g) "Commission" means the Securities and Exchange Commission or
any successor agency.
(h) "Committee" means the Compensation Committee of the Board,
provided that, if any member of the Compensation Committee
does not or would not qualify as both an outside director for
purposes of Section 162(m) of the Code and a non-employee
director for purposes of Rule 16b-3, the Board shall designate
the remaining members of the Compensation Committee (but not
less than two members) as a subcommittee of the Compensation
Committee to act as the Committee for purposes of the Plan.
(i) "Common Stock" means common stock, par value $0.01 per share,
of the Company.
(j) "Company" means AMF Bowling, Inc., a Delaware corporation.
(k) "Disability" means, as to an Incentive Stock Option, a
disability within the meaning of Section 22(e)(3) of the Code.
As to all other Awards, "Disability" shall mean permanent and
total disability as determined under procedures established by
the Committee for purposes of the Plan, unless otherwise
defined in an applicable Restricted Stock Agreement or Option
Agreement.
(l) "Employment" means, unless otherwise defined in an applicable
Restricted Stock Agreement or Option Agreement, employment
with the Company or any of its Affiliates.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
(n) "Fair Market Value" of the Common Stock means, as of any given
date, the mean between the highest and lowest reported sales
prices of the Common Stock on the New York Stock Exchange or,
if not listed on such exchange, on any other national
securities exchange on which the Common Stock is listed or, if
not so listed, on NASDAQ. If such sales prices are not so
available, the Fair Market Value of the Common Stock shall be
determined by the Committee in good faith.
(o) "GSCP" means, collectively, GS Capital Partners II, L.P., The
Goldman Sachs Group and certain other partnerships and
entities, as defined in the Stockholders Agreement.
(p) "Incentive Stock Option" means any Stock Option designated as,
and qualified as, an "incentive stock option" within the
meaning of Section 422 of the Code.
(q) "Mature Shares" means shares of Common Stock for which the
holder thereof has good title, free and clear of all liens and
encumbrances and which such holder either (1) has held for at
least six months, or (2) has purchased on the open market.
(r) "Nonqualified Stock Option" means any Stock Option that is not
an Incentive Stock Option.
(s) "Option Agreement" means an agreement setting forth the terms
and conditions of an Award of Stock Options and, if
applicable, Stock Appreciation Rights.
(t) "Participant" means any employee of the Company or an
Affiliate who receives an Award under the Plan.
(u) "Person" means an individual, corporation, partnership, joint
venture, trust, unincorporated organization, government (or
any department or agency thereof) or other entity.
(v) "Plan" means the AMF Bowling, Inc. 1998 Stock Incentive Plan,
as set forth herein and as hereinafter amended from time to
time.
(w) "Restricted Stock" means an award granted under Section 7.
(x) "Restricted Stock Agreement" means an agreement setting forth
the terms and conditions of an Award of Restricted Stock.
(y) "Rule 16b-3" means Rule 16b-3, as promulgated by the
Commission under Section 16 of the Exchange Act, as amended
from time to time.
(z) "Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor thereto.
(aa) "Stock Appreciation Right" means a right granted under Section
6.
(bb) "Stock Option" means an option granted under Section 5.
(cc) "Stockholders Agreement" means the Stockholders Agreement,
dated as of April 30, 1996, among the Company and certain of
its stockholders, as amended from time to time.
(dd) "Taxable Year" means the fiscal year period used by the
Company for reporting taxes or income under the Code.
Certain other terms are defined elsewhere in this Plan.
SECTION 2. Administration
(a) The Plan shall be administered by the Committee. Among other
things, the Committee shall have the authority, subject to the terms of the
Plan, to:
(i) select, pursuant to Section 4, the employees to whom
Awards may from time to time be granted;
(ii) determine whether and to what extent Incentive Stock
Options, Nonqualified Stock Options, Stock
Appreciation Rights and Restricted Stock or any
combination thereof are to be granted hereunder;
(iii)determine the time or times when an Award shall be
granted, and the number of shares of Common Stock to
be covered by each Award granted hereunder;
(iv) determine the terms and conditions of any Award
granted hereunder (including, but not limited to, the
option price, any vesting conditions, restrictions or
limitations (which may be related to the performance
of the Participant, the Company or any of its
Affiliates)) and any acceleration of vesting or
waiver of forfeiture regarding any Award and the
shares of Common Stock relating thereto, based on
such factors as the Committee shall determine;
(v) modify, amend or adjust the terms and conditions of
any Award, at any time or from time to time;
(vi) determine to what extent and under what circumstances
Common Stock and other amounts payable with respect
to an Award shall be deferred;
(vii)determine under what circumstances an Award may be
settled in cash or Common Stock under Section 5(k);
(viii) adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it
shall from time to time deem advisable;
(ix) interpret the terms and provisions of the Plan and
any Award issued under the Plan (and any agreement
relating thereto);
(x) determine any additional requirements, conditions,
restrictions or limitations relating to Awards that
the Committee deems appropriate; and
(xi) otherwise supervise the administration of the Plan.
(b) The Committee may, in its discretion, delegate to the Chief
Executive Officer of the Company the authorities described in subparagraphs (i)
through (iv) of paragraph (a) above, except to the extent that such a delegation
would prevent compliance with Rule 16b-3, Section 162(m) or any other section of
the Code, or other applicable law or regulation. Actions taken by the Chief
Executive Officer pursuant to such a delegation of authority shall be subject to
ratification by the Committee.
(c) The Committee may act only by a majority of its members then in
office, except that the members thereof may authorize any one or more of their
number or any officer of the Company to execute and deliver documents on behalf
of the Committee. Any dispute or disagreement which may arise under, or as a
result of, or in any way relate to, the interpretation, construction or
application of the Plan or an Award (or related Award Agreement) granted
hereunder shall be determined by the Committee. Any determination made by the
Committee pursuant to the provisions of the Plan with respect to the Plan, any
Award or Award Agreement shall be made in the sole discretion of the Committee
and, with respect to an Award, at the time of the grant of the Award or, unless
in contravention of any express term of the Plan, at any time thereafter. All
decisions made by the Committee shall be final and binding on all persons,
including the Company and the Participants.
SECTION 3. Common Stock Subject to Plan
(a) The total number of shares of Common Stock reserved and available
for grant under the Plan shall be two million (2,000,000). Shares subject to an
Award under the Plan may be authorized and unissued shares or may be treasury
shares. Shares of Common Stock that have not been issued under the AMF Bowling,
Inc. 1996 Stock Incentive Plan (the "1996 Plan"), and shares which are subject
to awards under the 1996 Plan that expire or otherwise terminate, may be
allocated to Awards under this Plan. No more than two hundred thousand (200,000)
shares may be allocated to the Awards that are granted to any Participant during
any single Taxable Year.
(b) If any shares of Restricted Stock are forfeited, or if any Stock
Option (and related Stock Appreciation Right, if any) expires or otherwise
terminates without being exercised, or if any Stock Appreciation Right is
exercised for cash, the shares subject to such Awards shall again be available
for distribution in connection with Awards under the Plan.
(c) In the event of any merger, reorganization, consolidation,
recapitalization, spinoff, stock dividend, stock split, reverse stock split,
extraordinary distribution with respect to the Common Stock or other change in
corporate structure affecting the Common Stock, the Committee or Board may make
such substitution or adjustment in the aggregate number and kind of shares
reserved for issuance under the Plan, in the number, kind and Exercise Price (as
defined in Section 5) of shares subject to outstanding Stock Options and Stock
Appreciation Rights, in the number and kind of shares subject to Restricted
Stock Awards, and/or such other equitable substitution or adjustments as it may
determine to be fair and appropriate in its sole discretion; provided, however,
that the number of shares subject to any Award shall always be a whole number.
Any such adjusted Exercise Price shall also be used to determine the amount
payable by the Company upon the exercise of any Stock Appreciation Right
associated with any Stock Option. Notwithstanding anything in the Plan to the
contrary, the Committee may take the foregoing actions without the consent of
any Participant, and the Committee's determination shall be conclusive and
binding on all persons for all purposes.
SECTION 4. Eligibility
Employees of the Company and its Affiliates who the Committee
determines to have directly affected, or who are expected to directly affect,
the management, growth and profitability of the Company and its Affiliates shall
be eligible to be granted Awards under the Plan. The Committee shall have the
power and complete discretion to select eligible employees to receive Awards and
to determine for each eligible employee the nature of the Award and the terms
and conditions of the Award, unless delegated to the Chief Executive Officer of
the Company pursuant to Section 2(b).
SECTION 5. Stock Options
(a) The Committee shall have the authority to grant any eligible
employee Incentive Stock Options, Nonqualified Stock Options or both types of
Stock Options (in each case with or without Stock Appreciation Rights). To the
extent that any Stock Option is not designated as an Incentive Stock Option, or
even if so designated it does not qualify as an Incentive Stock Option, it shall
constitute a Nonqualified Stock Option.
(b) Stock Options shall be evidenced by Option Agreements, which shall
include such terms and provisions as the Committee may determine from time to
time. An Option Agreement shall expressly indicate whether it is intended to be
an agreement for an Incentive Stock Option or a Nonqualified Stock Option. The
grant of a Stock Option shall occur on the date the Committee by resolution
selects an employee to receive the grant of a Stock Option, determines the
number of shares of Common Stock to be subject to such Stock Option to be
granted to such employee and specifies the terms and provisions of the Stock
Option, or on such other date as the Committee may determine. The Company shall
notify a Participant of any grant of a Stock Option, and a written Option
Agreement shall be duly executed and delivered by the Company to the
Participant. Such agreement shall become effective upon execution by the Company
and the Participant.
(c) Anything in the Plan to the contrary notwithstanding, no term of
the Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any Incentive
Stock Option under such Section 422 of the Code.
(d) Stock Options shall be subject to the following terms and
conditions and shall contain such additional terms and conditions as the
Committee shall deem desirable:
(i) Exercise Price. The price per share of Common Stock
purchasable under a Stock Option shall be determined
by the Committee and set forth in the Option
Agreement (the "Exercise Price"). The Exercise Price
for Common Stock covered under a Nonqualified Stock
Option shall in no event be less than 90% of the Fair
Market Value of such Common Stock on the date of
grant. The Exercise Price for Common Stock covered
under an Incentive Stock Option shall in no event be
less than 100% of the Fair Market Value of such
Common Stock on the date of grant (or 110% of Fair
Market Value in the case of a grant to a 10%
shareholder (as defined in Section 422 of the Code)).
(ii) Option Term. The term of each Stock Option shall be
fixed by the Committee. Absent any such term being
fixed by the Committee, pursuant to an Option
Agreement or otherwise, such term shall be ten years.
Notwithstanding the foregoing, the term for an
Incentive Stock Option shall be no longer than ten
years (or five years in the case of a grant to a 10%
shareholder (as defined in Section 422 of the Code)).
(iii)Exercisability. Except as otherwise provided herein,
Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as
shall be determined by the Committee. If the
Committee provides that any Stock Option is
exercisable only in installments, the Committee may
at any time waive such installment exercise
provisions, in whole or in part, based on such
factors as the Committee may determine. In addition,
the Committee may at any time accelerate the
exercisability of any Stock Option.
(iv) Method of Exercise. Subject to the provisions of this
Section 5, vested Stock Options may be exercised, in
whole or in part, at any time during the option term
by giving written notice of exercise to the Company
specifying the number of shares of Common Stock
subject to the Stock Option to be purchased.
(e) Notice of exercise of a vested Stock Option shall be accompanied by
payment in full of the Exercise Price by certified or bank check or such other
instrument as the Company may accept. If authorized under the Participant's
Option Agreement or if otherwise approved by the Committee, payment in full or
in part may also be made in the form of Mature Shares already owned by the
Participant of the same class as the Common Stock subject to the Stock Option
(based on the Fair Market Value of the Common Stock on the date the Stock Option
is exercised). In the case of an Incentive Stock Option the right to make a
payment in the form of already owned Mature Shares of the same class as the
Common Stock subject to the Stock Option may be authorized only at the time the
Stock Option is granted.
(f) If authorized under the Participant's Award Agreement or if
otherwise approved by the Committee, payment for any shares subject to a Stock
Option may also be made by (i) delivering a properly executed exercise notice to
the Company, together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds to pay the
Exercise Price, and the amount of any federal, state, local or foreign
withholding taxes, or (ii) instructing the Committee to withhold a number of
such shares having a Fair Market Value on the date of exercise equal to
the aggregate Exercise Price of such Stock Option. The Company may enter
into agreements for coordinated procedures with one or more brokerage
firms to facilitate the method of exercise described in clause (i) above.
(g) No shares of Common Stock shall be issued until full payment
therefor has been made. Except as otherwise provided in the Stockholders
Agreement or the applicable Option Agreement, subject to a Participant's
compliance with Section 12(a) hereof, a Participant shall have all of the rights
of a stockholder of the Company holding the class or series of Common Stock that
is subject to such Stock Option (including, if applicable, the right to vote the
shares and the right to receive dividends and distributions), when the
Participant has given written notice of exercise, has paid in full for such
shares and, if requested, has given the representations referred to in Section
12(c).
(h) Stock Options shall not be transferable by Participants other than
(i) by will or by the laws of descent and distribution, or (ii) in the case of a
Nonqualified Stock Option, pursuant to a qualified domestic relations order (as
defined in the Employee Retirement Income Security Act of 1974, as amended). All
Stock Options shall be exercisable, subject to the terms of the Plan, during the
Participant's lifetime only by the Participant or by the legal representative of
the Participant or, in the case of a Nonqualified Stock Option, the
Participant's alternate payee pursuant to a qualified domestic relations order.
The term "Participant" includes the estate of the Participant or the legal
representative of the Participant named in the Option Agreement and any person
to whom a Stock Option is transferred by will or the laws of descent and
distribution or, in the case of a Nonqualified Stock Option, the alternate payee
under a qualified domestic relations order; provided, however, that references
herein to Employment of a Participant or termination of Employment of a
Participant shall continue to refer to the Employment or termination of
Employment of the applicable grantee of an Award hereunder. Notwithstanding the
foregoing, the Committee may in its discretion grant Nonqualified Stock Options
that are transferable by a Participant under circumstances in addition to those
specified above.
(i) Unless otherwise specified in the Participant's Option Agreement,
the Participant shall, upon the Participant's death or when the Participant's
Employment is terminated for any reason:
(i) forfeit all Stock Options that have not previously
vested;
(ii) have three months to exercise the Participant's
vested Stock Options that are vested on the date of
the Participant's termination of Employment if such
termination is for any reason other than the
Participant's death; and
(iii) have one year to exercise the Participant's vested
Stock Options that are vested on the date of death if
the Participant's termination of Employment is due to
the Participant's death.
Any vested Stock Options not exercised within the permissible period of time
shall be forfeited by the Participant.
(j) Notwithstanding any provisions of Section 5(i) to the contrary, the
exercise provisions for Incentive Stock Options shall in all events not be more
liberal than the following provisions:
(i) No Incentive Stock Option may be exercised after the
first to occur of (x) ten years from the date of
grant, (y) three months following the date of the
Participant's retirement or termination of Employment
for reasons other than Disability or death, or (z)
one year following the date of the Participant's
termination of Employment on account of Disability or
death.
(ii) An Incentive Stock Option, by its terms, shall be
exercisable in any calendar year only to the extent
that the aggregate Fair Market Value (determined at
the date of grant) of the Common Stock with respect
to which Incentive Stock Options are exercisable for
the first time during the calendar year does not
exceed $100,000 (the "Limitation Amount"). Incentive
Stock Options granted under the Plan and all other
plans of the Company and its Affiliates shall be
aggregated for purposes of determining whether the
Limitation Amount has been exceeded. The Committee
may impose, at the time the Incentive Stock Option is
granted, such conditions on the Incentive Stock
Option as it deems appropriate to ensure that the
foregoing requirement is met. If Incentive Stock
Options that first become exercisable in a calendar
year exceed the Limitation Amount, the excess Stock
Options will be treated as Nonstatutory Stock Options
to the extent permitted by law.
(k) On receipt of written notice of exercise, the Committee may in its
discretion elect to cash out all or any portion of the shares of Common Stock
for which a Stock Option is being exercised by paying the Participant an amount,
in cash or Common Stock, equal to the excess of the Fair Market Value of one
share of Common Stock over the Exercise Price per share times the number of
shares of Common Stock for which the Stock Option is being exercised on the
effective date of such cashout.
SECTION 6. Stock Appreciation Rights
(a) Stock Appreciation Rights may be granted in conjunction with all or
part of any Stock Option granted under the Plan. In the case of a Nonqualified
Stock Option, such rights may be granted either at or after the time of grant of
such Stock Option. In the case of an Incentive Stock Option, such rights may be
granted only at the time of grant of such Stock Option. A Stock Appreciation
Right shall terminate and no longer be exercisable upon the termination or
exercise of the related Stock Option. In either case, the terms and conditions
of a Stock Appreciation Right shall be set forth in the Option Agreement for the
related Stock Option or an amendment thereto.
(b) A Stock Appreciation Right may be exercised by a Participant in
accordance with Section 6(c) by surrendering the applicable portion of the
related Stock Option in accordance with procedures established by the Committee.
Upon such exercise and surrender, the Participant shall be entitled to receive
an amount determined in the manner prescribed in Section 6(c). Stock Options
which have been so surrendered shall no longer be exercisable to the extent the
related Stock Appreciation Rights have been exercised.
(c) Stock Appreciation Rights shall be subject to such terms and
conditions as shall be determined by the Committee, including the following:
(i) Stock Appreciation Rights shall be exercisable only
at such time or times and to the extent that the
Stock Options to which they relate are exercisable in
accordance with the provisions of Section 5 and this
Section 6; provided, however, that a Stock
Appreciation Right shall not be exercisable during
the first six months of its term by a Participant who
is actually or potentially subject to Section 16(b)
of the Exchange Act, except that this limitation
shall not apply in the event of death or Disability
of the Participant prior to the expiration of the
six-month period;
(ii) upon the exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive an amount
equal to the product of (x) the excess of the Fair
Market Value of one share of Common Stock over the
Exercise Price per share specified in the related
Stock Option times (y) the number of shares in
respect of which the Stock Appreciation Right shall
have been exercised, in cash, shares of Common Stock
or both, with the Committee having the right to
determine the form of payment;
(iii)Stock Appreciation Rights shall be transferable only
with the related Stock Option in accordance with
Section 5(h); and
(iv) upon the exercise of a Stock Appreciation Right, the
Stock Option or part thereof to which such Stock
Appreciation Right is related shall be deemed to have
been exercised for the purpose of the limitation set
forth in Section 3 on the number of shares of Common
Stock to be issued under the Plan, but only to the
extent of the number of shares covered by the Stock
Appreciation Right at the time of exercise.
SECTION 7. Restricted Stock
The Committee shall determine the employees to whom and the time or
times at which grants of Restricted Stock will be awarded, the number of shares
to be awarded to any employee, the conditions for vesting, the time or times
within which such Awards may be subject to forfeiture and restrictions on
transfer and any other terms and conditions of the Awards (including provisions
(i) relating to placing legends on certificates representing shares of
Restricted Stock, (ii) permitting the Company to require that shares of
Restricted Stock be held in custody by the Company with a stock power from the
owner thereof until restrictions lapse and (iii) relating to any rights to
purchase the Restricted Stock on the part of the Company and its Affiliates), in
addition to those contained in the Stockholders Agreement. The terms and
conditions of Restricted Stock Awards shall be set forth in a Restricted Stock
Agreement, which shall include such terms and provisions as the Committee may
determine from time to time. Except as provided in this Section 7, the
Restricted Stock Agreement, the Stockholders Agreement and any other relevant
agreements, the Participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a stockholder of the Company holding the class or
series of Common Stock that is the subject of the Restricted Stock Award,
including, if applicable, the right to vote the shares and the right to receive
any cash dividends or distributions (but, subject to the third paragraph of
Section 3, not the right to receive non-cash dividends or distributions). If so
determined by the Committee in the applicable Restricted Stock Agreement, cash
dividends and distributions on the class or series of Common Stock that is the
subject of the Restricted Stock Award shall be automatically deferred and
reinvested in additional Restricted Stock, held subject to the vesting of the
underlying Restricted Stock, or held subject to meeting conditions applicable
only to dividends and distributions. Each Participant shall agree at the time
his or her Restricted Stock is granted, and as a condition thereof, to pay to
the Company, or make arrangements
satisfactory to the Company regarding the payment to the Company of,
applicable withholding taxes. Until such amount has been paid or arrangements
satisfactory to the Company have been made, no stock certificate free of a
legend reflecting the restrictions set forth above shall be issued to such
Participant. As an alternative to making a cash payment to the Company to
satisfy applicable withholding taxes, if the grant so provides, the
Participant may elect to (i) deliver Mature Shares or (ii) have the Company
retain that number of shares of Common Stock that would satisfy all or a
specified portion of the applicable withholding taxes.
SECTION 8. Tax Offset Bonuses
At the time an Award is made hereunder or at any time thereafter, the
Committee may grant to the Participant receiving such Award the right to receive
a cash payment in an amount specified by the Committee, to be paid at such time
or times (if ever) as the Award results in compensation income to the
Participant, for the purpose of assisting the Participant to pay applicable
payroll taxes, all as determined by the Committee, and on such other terms and
conditions as the Committee shall determine.
SECTION 9. Change in Control Provisions
Notwithstanding any other provision of the Plan to the contrary, unless
otherwise provided in the applicable Award Agreement or the Stockholders
Agreement, in the event of a Change in Control:
(a) immediately prior to the occurrence of a Change in Control,
all Stock Options and Stock Appreciation Rights outstanding as
of such date, and which are not then exercisable and vested,
shall become fully exercisable and vested to the full extent
of the original grant; and
(b) the restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall
become free of all restrictions, fully vested and transferable
to the full extent of the not theretofore forfeited portion of
the original grant.
SECTION 10. Term, Amendment and Termination
(a) The Plan will terminate ten (10) years after the effective date of
the Plan. Awards outstanding as of such date shall not be affected or impaired
by the termination of the Plan.
(b) The Board may amend, alter, or discontinue the Plan, prospectively
or retroactively as it shall deem advisable; provided that, if and to the extent
required by the Code, no change shall be made that increases the total number of
shares of Common Stock reserved for issuance pursuant to Awards granted under
the Plan (except pursuant to Section 3(c)), materially modifies the requirements
as to eligibility for participation in the Plan, or materially increases the
benefits accruing to Participants under the Plan, unless such change is
authorized by the shareholders of the Company. No amendment, alteration or
discontinuation of the Plan shall be made which would impair the rights of any
Participant under an Award theretofore granted without the Participant's
consent. The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall be made which would
impair the rights of any Participant thereunder without the Participant's
consent. Notwithstanding the foregoing the Board may unilaterally amend the Plan
and any Award with respect to a Participant as it deems appropriate to ensure
compliance with Rule 16b-3 and to cause Incentive Stock Options to meet the
requirements of the Code and the regulations thereunder.
SECTION 11. Unfunded Status of Plan
It is presently intended that the Plan constitute an "unfunded" plan
for incentive and deferred compensation. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or make payments; provided, however, that
unless the Committee otherwise determines, the existence of such trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan.
SECTION 12. General Provisions
(a) Stockholders Agreement. Unless the Committee determines otherwise,
it shall be a condition to receiving any Award under the Plan that a Participant
become a party to the Stockholders Agreement, and such Participant shall become
a "Management Investor" thereunder.
(b) Awards and Certificates. Shares of Restricted Stock and shares of
Common Stock issuable upon the exercise of a Stock Option or Stock Appreciation
Right (together, "Plan Shares") shall be evidenced in such manner as the
Committee may deem appropriate, including book-entry registration or issuance of
one or more stock certificates. Any certificate issued
in respect of Plan Shares shall be registered in the name of such Participant
and shall bear appropriate legends referring to the terms, conditions, and
restrictions applicable to such Award, substantially in the following form:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms, conditions
and restrictions (including forfeiture) of the AMF Bowling,
Inc. 1998 Stock Incentive Plan and [a Restricted Stock
Agreement] [an Option Agreement] between the issuer and the
registered holder hereof. Copies of such Plan and Agreement
are on file at the offices of AMF Bowling, Inc. [address]."
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
under the securities laws of any state, and may not be sold or
otherwise disposed of except pursuant to an effective
registration statement under said Act and applicable state
securities laws or an applicable exemption to the registration
requirements of such Act and laws."
Such shares may bear other legends to the extent the Committee or the Board
determines it to be necessary or appropriate, including any required by the
Stockholders Agreement or pursuant to any applicable Restricted Stock Agreement
or Option Agreement. If and when all restrictions expire without a prior
forfeiture of the Plan Shares theretofore subject to such restrictions, new
certificates for such shares shall be delivered to the Participant without the
first legend listed above. The Committee may require that any certificates
evidencing Plan Shares be held in custody by the Company until the restrictions
thereon shall have lapsed and that the Participant deliver a stock power,
endorsed in blank, relating to the Plan Shares.
(c) Representations and Warranties. The Committee may require each
person purchasing or receiving Plan Shares to (i) represent to and agree with
the Company in writing that such person is acquiring the shares without a view
to the distribution thereof and (ii) make any other representations and
warranties that the Committee deems appropriate.
(d) Additional Compensation. Nothing contained in the Plan shall
prevent the Company or any of its Affiliate thereof from adopting other or
additional compensation arrangements for its employees.
(e) No Right of Employment. Adoption of the Plan or grant of any Award
shall not confer upon any employee any right to continued Employment, nor shall
it interfere in any way with the right of the Company or any of its Affiliates
thereof to terminate the Employment of any employee at any time.
(f) Withholding Taxes. No later than the date as of which an amount
first becomes includible in the gross income of a Participant for federal income
tax purposes with respect to any Award under the Plan, such Participant shall
pay to the Company or, if appropriate, any of its Affiliates, or make
arrangements satisfactory to the Committee regarding the payment of, any
federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. If approved by the Committee, withholding
obligations may 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 Company under the Plan shall be conditional on such payment
or arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the Participant. The Committee may establish such procedures as
it deems appropriate, including making irrevocable elections, for the settlement
of withholding obligations with Common Stock.
(g) Beneficiaries. The Committee shall establish such procedures as it
deems appropriate for a Participant to designate a beneficiary to whom any
amounts payable in the event of the Participant's death are to be paid or by
whom any rights of the Participant, after the Participant's death, may be
exercised.
(h) Pooling of Interests. Notwithstanding any other provision of this
Plan, if any right granted pursuant to this Plan would make a Change in Control
transaction ineligible for pooling-of-interests accounting under APB No. 16 that
but for the nature of such grant or grants would otherwise be eligible for such
accounting treatment, the Committee shall have the ability to substitute for the
cash payable pursuant to such grant or grants Common Stock with a Fair Market
Value equal to the cash that would otherwise be payable hereunder.
(i) Governing Law. The Plan and all Awards made and actions taken
thereunder shall be governed by and construed and enforced in accordance with
the laws of the State of New York without regard to the principles of conflicts
of law thereof.
(j) Compliance with Laws. If any law or any regulation of any
commission or agency having jurisdiction shall require the Company or a
Participant seeking to exercise Stock Options or Stock Appreciation Rights to
take any action with respect to the Plan Shares to be issued upon the exercise
of Stock Options or Stock Appreciation Rights then the date upon which the
Company shall issue or cause to be issued the certificate or certificates for
the Plan Shares shall be postponed until full
compliance has been made with all such requirements of law or regulation;
provided, that the Company shall use its reasonable efforts to take all
necessary action to comply with such requirements of law or regulation.
Moreover, in the event that the Company shall determine that, in compliance
with the Securities Act or other applicable statutes or regulations, it is
necessary to register any of the Plan Shares with respect to which an exercise
of a Stock Option or Stock Appreciation Right has been made, or to qualify any
such Plan Shares for exemption from any of the requirements of the Securities
Act or any other applicable statute or regulation, no Stock Options or Stock
Appreciation Rights may be exercised and no Plan Shares shall be issued to the
exercising Participant until the required action has been completed;
provided, that the Company shall use its reasonable efforts to take all
necessary action to comply with such requirements of law or regulation.
Notwithstanding anything to the contrary contained herein, neither the Board nor
the members of the Committee owes a fiduciary duty to any Participant in his or
her capacity as such.
SECTION 13. Effective Date of Plan
The Plan shall be effective as of the date it is approved by the Board.
The Plan shall be submitted to the shareholders of the Company for approval.
Until (i) the Plan has been approved by the Company's shareholders, and (ii) the
requirements of any applicable federal or state securities laws have been met,
no Award may be granted unless such Award is contingent on the occurrence of
those events.