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EXHIBIT 10(ii)
EGL, INC.
LONG-TERM INCENTIVE PLAN
(As Amended and Restated Effective July 26, 2000
and as further amended on September 18, 2000)
1. OBJECTIVES. The EGL, Inc. Long-Term Incentive Plan (the "Plan") is
designed to retain selected employees of EGL, Inc. (the "Company") and its
Subsidiaries and reward them for making significant contributions to the success
of the Company and its Subsidiaries. These objectives are to be accomplished by
making awards under the Plan and thereby providing Participants with a
proprietary interest in the growth and performance of the Company and its
Subsidiaries.
2. DEFINITIONS. As used herein, the terms set forth below shall have
the following respective meanings:
"AWARD" means the grant of any form of stock option, stock
appreciation right, stock award or cash award, whether granted singly,
in combination or in tandem, to a Participant pursuant to any
applicable terms, conditions and limitations as the Committee may
establish in order to fulfill the objectives of the Plan.
"AWARD AGREEMENT" means a written agreement between the
Company and a Participant that sets forth the terms, conditions and
limitations applicable to an Award.
"BOARD" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COMMITTEE" means such committee of two or more members of the
Board as is designated by the Board to administer the Plan.
"COMMON STOCK" means the Common Stock, par value $.001 per
share, of the Company.
"DIRECTOR" means an individual serving as a member of the
Board.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time.
"FAIR MARKET VALUE" means, as of a particular date, (a) if the
shares of Common Stock are listed on a national securities exchange,
the mean between the
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highest and lowest sales price per share of Common Stock on the
consolidated transaction reporting system for the principal such
national securities exchange on that date, or, if there shall have been
no such sale so reported on that date, on the last preceding date on
which such a sale was so reported, (b) if the shares of Common Stock
are not so listed but are quoted on the Nasdaq National Market, the
mean between the highest and lowest sales price per share of Common
Stock on the Nasdaq National Market on that date, or, if there shall
have been no such sale so reported on that date, on the last preceding
date on which such a sale was so reported, (c) if the Common Stock is
not so listed or quoted, the mean between the closing bid and asked
price on that date, or, if there are no quotations available for such
date, on the last preceding date on which such quotations shall be
available, as reported by Nasdaq, or, if not reported by Nasdaq, by the
National Quotation Bureau, Inc. or (d) if none of the above is
applicable, such amount as may be determined by the Board (or an
Independent Third Party, should the Board elect in its sole discretion
to instead utilize an Independent Third Party for this purpose), in
good faith, to be the fair market value per share of Common Stock.
"INDEPENDENT THIRD PARTY" means an individual or entity
independent of the Company (and any transferor or transferee of Common
Stock acquired upon the exercise of an option under the Plan, if
applicable) with experience in providing investment banking appraisal
or valuation services and with expertise generally in the valuation of
securities or other property of the type at issue, that is chosen by
the Board, in its sole discretion, to value securities or other
property for purposes of this Plan. The Company's independent
accountants shall be deemed to satisfy the criteria for an Independent
Third Party if selected by the Board for that purpose. The Board may
utilize one or more Independent Third Parties.
"PARTICIPANT" means an employee of the Company or any of its
Subsidiaries to whom an Award has been made under this Plan.
"RESTRICTED STOCK" means Common Stock that is restricted or
subject to forfeiture provisions.
"SUBSIDIARY" means (i) with respect to any Awards other than
incentive stock options within the meaning of Code Section 422, any
corporation, limited liability company, general or limited partnership,
or similar entity of which the Company directly or indirectly owns
shares representing more than 50% of the voting power of all classes or
series of equity securities of such entity, which have the right to
vote generally on matters submitted to a vote of the holders of equity
interests in such entity, and (ii) with respect to Awards of incentive
stock options, any subsidiary within the meaning of Section 424(f) of
the Code or any successor provision.
3. ELIGIBILITY. All employees consultants and independent contractors
of the Company and its Subsidiaries are eligible for Awards under this Plan. The
Committee
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shall select the Participants in the Plan from time to time by the grant of
Awards under the Plan.
4. COMMON STOCK AVAILABLE FOR AWARDS. There shall be available for
Awards granted wholly or partly in Common Stock (including rights or options
which may be exercised for or settled in Common Stock) during the term of this
Plan an aggregate of 12,150,000 shares of Common Stock, subject to adjustment as
provided in Paragraph 14. The Board and the appropriate officers of the Company
shall from time to time take whatever actions are necessary to file required
documents with governmental authorities and stock exchanges and transaction
reporting systems to make shares of Common Stock available for issuance pursuant
to Awards. Common Stock related to Awards that are forfeited or terminated,
expire unexercised, are settled in cash in lieu of Common Stock or in a manner
such that all or some of the shares covered by an Award are not issued to a
Participant, or are exchanged for Awards that do not involve Common Stock, shall
immediately become available for Awards hereunder. The Committee may from time
to time adopt and observe such procedures concerning the counting of shares
against the Plan maximum as it may deem appropriate.
5. ADMINISTRATION. This Plan shall be administered by the Committee,
which shall have full and exclusive power to interpret this Plan and to adopt
such rules, regulations and guidelines for carrying out this Plan as it may deem
necessary or proper, all of which powers shall be exercised in the best
interests of the Company and in keeping with the objectives of this Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Award in the manner and to the extent the
Committee deems necessary or desirable to carry it into effect. Any decision of
the Committee in the interpretation and administration of this Plan shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned. No member of the Committee or officer of the
Company to whom it has delegated authority in accordance with the provisions of
Paragraph 6 of this Plan shall be liable for anything done or omitted to be done
by him or her, by any member of the Committee or by any officer of the Company
in connection with the performance of any duties under this Plan, except for his
or her own willful misconduct or as expressly provided by statute.
6. DELEGATION OF AUTHORITY. The Committee may delegate to the President
and to other senior officers of the Company its duties under this Plan pursuant
to such conditions or limitations as the Committee may establish, except that
the Committee may not delegate to any person the authority to grant Awards to,
or take other action with respect to, Participants who are subject to Section 16
of the Exchange Act.
7. AWARDS. The Committee shall determine the type or types of Awards to
be made to each Participant under this Plan. Each Award made hereunder shall be
embodied in an Award Agreement, which shall contain such terms, conditions and
limitations as shall be determined by the Committee in its sole discretion and
shall be signed by the Participant and by the President or any Vice President of
the Company for and on behalf of the Company. An Award Agreement may include
provisions for the
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repurchase by the Company of Common Stock acquired pursuant to the Plan and the
repurchase of a Participant's option rights under the Plan. Awards may consist
of those listed in this Paragraph 7 and may be granted singly, in combination or
in tandem. Awards may also be made in combination or in tandem with, in
replacement of, or as alternatives to grants or rights (a) under this Plan or
any other employee plan of the Company or any of its Subsidiaries, including the
plan of any acquired entity, or (b) made to any Company or Subsidiary employee
by the Company or any Subsidiary. An Award may provide for the granting or
issuance of additional, replacement or alternative Awards upon the occurrence of
specified events, including the exercise of the original Award. Notwithstanding
anything herein to the contrary, no Participant may be granted Awards consisting
of stock options or stock appreciation rights exercisable for more than 620,000
shares of Common Stock, subject to adjustment as provided in Paragraph 14 (i.e.,
20% of the shares of Common Stock originally authorized for Awards under this
Plan, as previously adjusted pursuant to Paragraph 14). In the event of an
increase in the number of shares authorized under the Plan, the 20% limitation
will apply to the number of shares authorized.
(i) STOCK OPTION. An Award may consist of a right to purchase
a specified number of shares of Common Stock at a price specified by
the Committee in the Award Agreement or otherwise. A stock option may
be in the form of an incentive stock option ("ISO") which, in addition
to being subject to applicable terms, conditions and limitations
established by the Committee, complies with Section 422 of the Code.
Notwithstanding the foregoing, no ISO can be granted under the Plan
more than ten years following the February 23, 1998 amendment and
restatement of the Plan.
(ii) STOCK APPRECIATION RIGHT. An Award may consist of a right
to receive a payment, in cash or Common Stock, equal to the excess of
the Fair Market Value or other specified valuation of a specified
number of shares of Common Stock on the date the stock appreciation
right ("SAR") is exercised over a specified strike price as set forth
in the applicable Award Agreement.
(iii) STOCK AWARD. An Award may consist of Common Stock or may
be denominated in units of Common Stock. All or part of any stock Award
may be subject to conditions established by the Committee and set forth
in the Award Agreement, which conditions may include, but are not
limited to, continuous service with the Company and its Subsidiaries,
achievement of specific business objectives, increases in specified
indices, attaining specified growth rates and other comparable
measurements of performance. Such Awards may be based on Fair Market
Value or other specified valuations. The certificates evidencing shares
of Common Stock issued in connection with a stock Award shall contain
appropriate legends and restrictions describing the terms and
conditions of the restrictions applicable thereto.
(iv) CASH AWARD. An Award may be denominated in cash with the
amount of the eventual payment subject to future service and such other
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restrictions and conditions as may be established by the Committee and
set forth in the Award Agreement, including, but not limited to,
continuous service with the Company and its Subsidiaries, achievement
of specific business objectives, increases in specified indices,
attaining specified growth rates and other comparable measurements of
performance.
8. PAYMENT OF AWARDS.
(a) GENERAL. Payment of Awards may be made in the form of cash or
Common Stock or combinations thereof and may include such restrictions as the
Committee shall determine including, in the case of Common Stock, restrictions
on transfer and forfeiture provisions.
(b) DEFERRAL. The Committee may, in its discretion, (i) permit selected
Participants to elect to defer payments of some or all types of Awards in
accordance with procedures established by the Committee or (ii) provide for the
deferral of an Award in an Award Agreement or otherwise. Any such deferral may
be in the form of installment payments or a future lump sum payment. Any
deferred payment, whether elected by the Participant or specified by the Award
Agreement or by the Committee, may be forfeited if and to the extent that the
Award Agreement so provides.
(c) DIVIDENDS AND INTEREST. Dividends or dividend equivalent rights may
be extended to and made part of any Award denominated in Common Stock or units
of Common Stock, subject to such terms, conditions and restrictions as the
Committee may establish. The Committee may also establish rules and procedures
for the crediting of interest on deferred cash payments and dividend equivalents
for deferred payment denominated in Common Stock or units of Common Stock.
(d) SUBSTITUTION OF AWARDS. At the discretion of the Committee, a
Participant may be offered an election to substitute an Award for another Award
or Awards of the same or different type.
9. STOCK OPTION EXERCISE. The price at which shares of Common Stock may
be purchased under a stock option shall be paid in full at the time of exercise
in cash or, if permitted by the Committee, by means of tendering Common Stock,
including Restricted Stock, that has been held by the Participant for at least
six months and that is valued at Fair Market Value on the date of exercise, or
any combination thereof. The Committee shall determine acceptable methods for
tendering Common Stock to exercise a stock option as it deems appropriate. The
Committee may provide for procedures to permit the exercise or purchase of
Awards by (a) loans from the Company or (b) use of the proceeds to be received
from the sale by a third party of Common Stock issuable pursuant to an Award in
a broker-assisted transaction. Unless otherwise provided in the applicable Award
Agreement, in the event shares of Restricted Stock are tendered as consideration
for the exercise of a stock option, a number of the shares issued upon the
exercise of the stock option, equal to the number of shares of Restricted Stock
used as consideration
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therefor, shall be subject to the same restrictions as the Restricted Stock so
submitted as well as any additional restrictions that may be imposed by the
Committee.
10. TAX WITHHOLDING. The Company shall have the right to deduct
applicable taxes from any Award payment and withhold, at the time of delivery or
vesting of cash or shares of Common Stock under this Plan, an appropriate amount
of cash or number of shares of Common Stock or a combination thereof for payment
of taxes required by law or to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for withholding of such taxes.
The Committee may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the Award
with respect to which withholding is required. If shares of Common Stock are
used to satisfy tax withholding, such shares shall be valued based on the Fair
Market Value when the tax withholding is required to be made.
11. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION. The Board may
amend, modify, suspend or terminate this Plan for the purpose of meeting or
addressing any changes in legal requirements or for any other purpose permitted
by law except that (a) no amendment or alteration that would impair the rights
of any Participant under any Award previously granted to such Participant shall
be made without such Participant's consent and (b) no amendment or alteration
shall be effective prior to approval by the Company's shareholders to the extent
such approval is required by applicable laws, regulations, stock exchange or
quotation system requirements.
12. TERMINATION OF EMPLOYMENT. Upon the termination of employment by a
Participant, any unexercised, deferred or unpaid Awards shall be treated as
provided in the specific Award Agreement evidencing the Award. Each Award
granted pursuant to this Plan which is a stock option shall provide that if the
Participant ceases to be employed by the Company or its affiliates for any
reason whatsoever, the option shall immediately terminate to the extent the
option is not vested (or does not become vested as a result of such termination
of employment) on the date the Participant terminates employment.
13. ASSIGNABILITY. Unless otherwise determined by the Committee and
provided in the Award Agreement, no Award or any other benefit under this Plan
constituting a derivative security within the meaning of Rule 16a-1(c) under the
Exchange Act shall be assignable or otherwise transferable except by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act, or the rules thereunder. The Committee may prescribe and include
in applicable Award Agreements other restrictions on transfer. Any attempted
assignment of an Award or any other benefit under this Plan in violation of this
Paragraph 13 shall be null and void.
14. ADJUSTMENTS.
(a) The existence of outstanding Awards shall not affect in any manner
the right or power of the Company or its shareholders to make or authorize any
or all
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adjustments, recapitalizations, reorganizations or other changes in the capital
stock of the Company or its business or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior preference stock
(whether or not such issue is prior to, on a parity with or junior to the Common
Stock) or the dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate act or
proceeding of any kind, whether or not of a character similar to that of the
acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of outstanding
shares of Common Stock or declaration of a dividend payable in shares of Common
Stock or capital reorganization or reclassification or other transaction
involving an increase or reduction in the number of outstanding shares of Common
Stock, the Committee may adjust proportionally (i) the number of shares of
Common Stock reserved under this Plan and covered by outstanding Awards
denominated in Common Stock or units of Common Stock; (ii) the exercise or other
price in respect of such Awards; and (iii) the appropriate Fair Market Value and
other price determinations for such Awards. Notwithstanding the foregoing, no
adjustment is required for the stock split effected or to be effected shortly
before the initial grant of Options under this Plan. In the event of any
consolidation or merger of the Company with another corporation or entity or the
adoption by the Company of a plan of exchange affecting the Common Stock or any
distribution to holders of Common Stock of securities or property (other than
normal cash dividends or dividends payable in Common Stock), the Committee shall
make such adjustments or other provisions as it may deem equitable, including
adjustments to avoid fractional shares, to give proper effect to such event.
Additionally, and without limiting the generality of the foregoing, there shall
be no adjustment for any dividend or distribution of cash, debt or other
property in respect of the Company's earnings or its accumulated adjustments
account as defined in Section 1368(e)(1) of the Code (including any estimated
amount of such account) in respect of the period in which the Company is an "S"
corporation within the meaning of Section 1361 of the Code. In the event of a
corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Committee shall be authorized, in its
discretion, (i) to issue or assume stock options, regardless of whether in a
transaction to which Section 424(a) of the Code applies, by means of
substitution of new options for previously issued options or an assumption of
previously issued options, (ii) to make provision, prior to the transaction, for
the acceleration of the vesting and exercisability of, or lapse of restrictions
with respect to, Awards and the termination of options that remain unexercised
at the time of such transaction or (iii) to provide for the acceleration of the
vesting and exercisability of the options and the cancellation thereof in
exchange for such payment as shall be mutually agreeable to the Participant and
the Committee.
15. RESTRICTIONS. No Common Stock or other form of payment shall be
issued with respect to any Award unless the Company shall be satisfied based on
the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. It is the intent of the Company
that this Plan comply with Rule 16b-3 with respect to persons subject to Section
16 of the Exchange Act unless otherwise provided herein or in an Award
Agreement, that any ambiguities or inconsistencies in the
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construction of this Plan be interpreted to give effect to such intention and
that, if any provision of this Plan is found not to be in compliance with Rule
16b-3, such provision shall be null and void to the extent required to permit
this Plan to comply with Rule 16b-3. Certificates evidencing shares of Common
Stock delivered under this Plan may be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any securities exchange or transaction reporting system upon which the Common
Stock is then listed and any applicable federal and state securities law. The
Committee may cause a legend or legends to be placed upon any such certificates
to make appropriate reference to such restrictions.
16. UNFUNDED PLAN. Insofar as it provides for Awards of cash, Common
Stock or rights thereto, this Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants who are entitled to
cash, Common Stock or rights thereto under this Plan, any such accounts shall be
used merely as a bookkeeping convenience. The Company shall not be required to
segregate any assets that may at any time be represented by cash, Common Stock
or rights thereto, nor shall this Plan be construed as providing for such
segregation, nor shall the Company, the Board or the Committee be deemed to be a
trustee of any cash, Common Stock or rights thereto to be granted under this
Plan. Any liability or obligation of the Company to any Participant with respect
to a grant of cash, Common Stock or rights thereto under this Plan shall be
based solely upon any contractual obligations that may be created by this Plan
and any Award Agreement, and no such liability or obligation of the Company
shall be deemed to be secured by any pledge or other encumbrance on any property
of the Company. None of the Company, the Board or the Committee shall be
required to give any security or bond for the performance of any obligation that
may be created by this Plan.
17. GOVERNING LAW. This Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Texas.
18. EFFECTIVE DATE OF PLAN. This Plan was originally adopted by the
Board of Directors and Shareholders in 1994. The Plan was subsequently amended
and restated effective February 23, 1998 and thereafter amended and restated
effective July 26, 2000. The Plan was subsequently amended by the Shareholders
on September 18, 2000.
Attested to by the Secretary of EGL, Inc. as
adopted by the Board of Directors of EGL,
Inc. effective as of the 18th day of
September, 2000.
/s/ MICHAEL D. SLAUGHTER
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Michael D. Slaughter
Secretary
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