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EXHIBIT 10.10
LIBERTE INVESTORS
1995 EQUITY INCENTIVE PLAN
ARTICLE I
NAME AND PURPOSE
1.1 Name. The name of this Plan is the "Liberte Investors 1995
Equity Incentive Plan."
1.2 Purpose. The purpose of the Plan is to enhance the
profitability and value of the Company for the benefit of its shareholders by
providing equity ownership opportunities and performance based incentives to
better align the interests of Trustees, officers and key employees with those
of shareholders. The Plan is also designed to enhance the profitability and
value of the Company for the benefit of its shareholders by providing equity
and cash awards to attract, retain and motivate Trustees, officers and other
key employees who make important contributions to the success of the Company.
ARTICLE II
DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
2.1 General Definitions. The following words and phrases, when
used in the Plan, unless otherwise specifically defined or unless the context
clearly otherwise requires, shall have the following respective meanings:
(a) Affiliate. A Parent, or Subsidiary of the Company or
any other entity designated by the Committee in which the Company owns
at least a 50% interest (including, but not limited to, partnerships
and joint ventures).
(b) Agreement. The document which evidences the grant of
any Benefit under the Plan and which sets forth the Benefit and the
terms, conditions and provisions of, and restrictions relating to,
such Benefit.
(c) Benefit. Any benefit granted to a Participant under
the Plan.
(d) Board. The Board of Trustees of the Company.
(e) Change of Control. (i) The acquisition at any time
by a "person" or "group" (as that term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) (excluding, for this purpose, the
Company or any Subsidiary or any employee benefit plan of the Company
or any Subsidiary) of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly, of securities
representing 25% or more of the combined voting power in the election
of trustees of the then-outstanding securities of the Company or any
successor of the Company; (ii) the termination of service as trustees,
for any reason other than death, disability or retirement from the
Board during any period of two consecutive years or less, of
individuals who at the beginning of such period constituted a majority
of the Board, unless the election of or nomination for election of
each new trustee during such period was approved by a vote of at least
a majority of the trustees still in office who were trustees at the
beginning of the period; (iii) approval by the shareholders of the
Company of any merger or consolidation or statutory share exchange as
a result of which the Shares of Beneficial Interest shall be changed,
converted or exchanged (other
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than a merger or share exchange with a wholly-owned Subsidiary of the
Company) or liquidation of the Company or any sale or disposition of
50% or more of the assets or earning power of the Company; or (iv)
approval by the shareholders of the Company of any merger or
consolidation or statutory share exchange to which the Company is a
party as a result of which the persons who were shareholders of the
Company immediately prior to the effective date of the merger or
consolidation or statutory share exchange shall have beneficial
ownership of less than 50% of the combined voting power in the
election of directors or trustees of the surviving entity following
the effective date of such merger or consolidation or statutory share
exchange; 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 deems otherwise. A
"Change in Control" shall not include any reduction in ownership of an
Affiliate so long as the entity continues to meet the definition of an
Affiliate as contained in this Section 2.1.
(f) Code. The Internal Revenue Code of 1986, as amended.
Any reference to the Code includes the regulations promulgated
pursuant to the Code.
(g) Company. Liberte Investors, a Massachusetts business
trust.
(h) Committee. The Company's Compensation Committee,
initially consisting of Gene H. Bishop and Edward W. Rose III, or its
successor.
(i) Effective Date. The date that the Plan is approved
by the Board, provided that it is also approved by the shareholders of
the Company within one year after approval by the Board. Any grants of
Benefits prior to the approval by the shareholders of the Company
shall be contingent on such subsequent approval, and shall be
retroactively null and void if such approval is not obtained.
(j) Employee. Any employee, director, general partner,
trustee (of a business trust), officer, consultant or advisor of the
Employer, provided that bona fide services are rendered by such
consultants and advisors and such services rendered by consultants and
advisors are not in connection with the offer or sale of securities in
a capital-raising transaction.
(k) Employer. The Company and all Affiliates.
(l) Exchange Act. The Securities Exchange Act of 1934,
as amended.
(m) Fair Market Value. The closing price of a Share on
the New York Stock Exchange on a given date, or, in the absence of
sales on a given date, the closing price on the New York Stock
Exchange on the last day on which a sale occurred prior to such date.
(n) Fiscal Year. The fiscal year of the Company ending
each June 30.
(o) ISO. An Incentive Stock Option as defined in Section
422 of the Code.
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(p) NQSO. Non-Qualified Stock Option, which is an Option
that does not meet the statutory requirements of an ISO.
(q) Option. An option to purchase Shares granted under
the Plan.
(r) Other Share Based Award. An award under ARTICLE XVII
that is valued in whole or in part by reference to, or is otherwise
based on, Shares.
(s) Parent. Any corporation (other than the Company or a
Subsidiary) in an unbroken chain of corporations ending with the
Company, if, at the time of the grant of an Option or other Benefit,
each of the corporations (other than the Company or a Subsidiary) owns
stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(t) Participant. An Employee who is granted a Benefit
under the Plan. Benefits may be granted only to Employees.
(u) Performance Share. A Share awarded to a Participant
under ARTICLE XVI of the Plan.
(v) Plan. The Liberte Investors 1995 Equity Incentive
Plan, as amended, modified or supplemented from time to time.
(w) Restricted Shares. Shares issued under ARTICLE XV of
the Plan.
(x) Rule 16b-3. Rule 16b-3 promulgated by the SEC under
the Exchange Act or any successor rule in effect from time to time.
(y) SEC. The Securities and Exchange Commission.
(z) Share. A Share of Beneficial Interest in the Company.
(aa) Share of Beneficial Interest. The Company's Shares
of Beneficial Interest, no par value, or any other interest into which
such shares may be reconstituted.
(bb) SAR. A Stock Appreciation Right, which is the right
to receive an amount equal to the appreciation, if any, in the Fair
Market Value of a Share from the date of the grant of the right to the
date of its payment.
(cc) Subsidiary. Any corporation, other than the Company,
in an unbroken chain of corporations beginning with the Company if, at
the time of grant of an Option or other Benefit, each of the
corporations, other than the last corporation in the unbroken chain,
owns stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other corporations in such
chain.
(dd) Trustee. A Trustee of the Company or, if
reconstituted as, or if the successor to the Company is, a
corporation, a director of the Company or such successor.
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2.2 Other Definitions. In addition to the above definitions,
certain words and phrases used in the Plan and any Agreement may be defined in
other portions of the Plan or in such Agreement.
2.3 Conflicts in Plan. In the case of any conflict in the terms of
the Plan, or between the Plan and an Agreement, relating to a Benefit, the
provisions in the ARTICLE of the Plan which specifically grants such Benefit
shall control those in a different ARTICLE or in such Agreement.
ARTICLE III
SHARES OF BENEFICIAL INTEREST
3.1 Number of Shares. The number of Shares which may be issued or
sold or for which Options, SARs, Performance Shares or Other Share Based Awards
may be granted under the Plan shall be 1,500,000. Such Shares may be
authorized but unissued Shares, reacquired Shares, Shares acquired on the open
market specifically for distribution under this Plan, or any combination
thereof.
3.2 Reusage. If an Option or SAR expires or is terminated,
surrendered or canceled without having been fully exercised, if Restricted
Shares or Performance Shares are forfeited, or if any other grant ultimately
results in any Shares not being issued, the unused Shares covered by any such
Benefit shall again be available for grant under the Plan to any Participant.
3.3 Adjustments. If there is any change in the Shares of
Beneficial Interest of the Company by reason of any stock split, stock
dividend, spinoff, split-up, spin-out, recapitalization, merger, consolidation,
reorganization, combination or exchange of shares, or any other similar
transaction, the number of shares available for grant under the Plan or subject
to or granted pursuant to a Benefit and the price thereof, as applicable, shall
be appropriately adjusted by the Committee.
ARTICLE IV
ELIGIBILITY
4.1 Determination By Committee. The Participants and the Benefits
they receive under the Plan shall be determined by the Committee in its sole
discretion. In making its determinations, the Committee shall consider past,
present and expected future contributions of Participants and potential
Participants to the Employer. Members of the Committee and any other persons
whose participation in the Plan (i) would cause disqualification of this or any
other benefit plan intended to be qualified under Rule 16b-3 or (ii) would
result in the Company being unable to take advantage of Code Section 162(m) are
ineligible to participate in the Plan. No person shall have any right to
participate in the Plan. Any person selected by the Committee for
participation during any one period will not by virtue of such participation
have the right to be selected as a Participant for any other period. No
Participant shall be granted Benefits under the Plan with respect to more than
1,500,000 Shares in any calendar year (subject to adjustment as provided in
Section 3.3 hereof).
ARTICLE V
ADMINISTRATION
5.1 Committee. The Plan shall be administered by the Committee.
The Committee shall consist of two or more members of the Board who are
"disinterested persons" as defined in Rule 16b-3 and are "outside directors" as
defined in Code
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Section 162(m) and the regulations thereunder. The Committee shall initially
consist of Mr. Gene H. Bishop and Mr. Edward W. Rose III.
5.2 Authority. Subject to the terms of the Plan, the Committee
shall have sole discretionary authority to:
(a) determine the individuals to whom Benefits are
granted, the type and amounts of Benefits to be granted and the date
of issuance and duration of all such grants;
(b) determine the terms, conditions and provisions of,
and restrictions relating to, each Benefit granted;
(c) interpret and construe the Plan and all Agreements;
(d) prescribe, amend and rescind rules and regulations
relating to the Plan;
(e) determine the content and form of all Agreements;
(f) determine all questions relating to Benefits under
the Plan;
(g) maintain accounts, records and ledgers relating to
Benefits;
(h) maintain records concerning its decisions and
proceedings; and
(i) do and perform all acts which it may deem necessary
or appropriate for the administration of the Plan and carry out the
purposes of the Plan.
5.3 Decisions of Committee. All decisions made by the Committee
pursuant to the provisions hereof shall be final and binding on all persons.
ARTICLE VI
AMENDMENT OF PLAN
6.1 Power of Committee. Subject to Article VIII hereof, the
Committee shall have the sole right and power to amend the Plan at any time and
from time to time; provided, however, that the Committee may not amend the
Plan, without approval of the shareholders of the Company, in a manner which
would:
(a) cause Options which are intended to qualify as ISOs
to fail to qualify;
(b) cause the Plan to fail to meet the requirements of
Rule 16b-3;
(c) violate any applicable rule, regulation, or procedure
of any national securities exchange or securities association upon
which any securities of the Company are listed (or any listing
agreement with any such securities exchange or securities
association); or
(d) violate applicable law.
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ARTICLE VII
TERM AND TERMINATION OF PLAN
7.1 Term. The Plan shall commence as of the Effective Date. No
Benefit shall be granted pursuant to the Plan on or after the tenth anniversary
date of the Effective Date, but Benefits granted prior to such tenth
anniversary may extend beyond that date to the date(s) specified in the
Agreement(s) covering such Benefits.
7.2 Termination. Subject to ARTICLE VIII, the Plan may be
terminated at any time by the Committee.
ARTICLE VIII
MODIFICATION OR TERMINATION OF BENEFITS
8.1 General. Except as may be provided in an Agreement, any
Benefit granted may be converted, modified, forfeited or canceled,
prospectively or retroactively, in whole or in part, by the Committee in its
sole discretion, but no such action may impair the rights of any Participant
without his or her consent. Except as may be provided in an Agreement, the
Committee may, in its sole discretion, in whole or in part, waive any
restrictions or conditions applicable to, or accelerate the vesting of, any
Benefit.
ARTICLE IX
CHANGE OF CONTROL
9.1 Right of Committee. The occurrence of a Change of Control
shall not limit the Committee's authority to take any action, in its sole
discretion, permitted hereunder. The Committee, in its sole discretion, may
specify in any Agreement the effect a Change of Control will have on such
Agreement.
ARTICLE IX
AGREEMENTS AND CERTAIN BENEFITS
10.1 Grant Evidenced by Agreement. The granting of any Benefit
shall be subject to, and conditioned upon, the recipient's execution of an
Agreement, which shall describe the specific Benefit granted and the terms and
conditions of such Benefit. Except as otherwise provided in an Agreement, all
capitalized terms used in an Agreement shall have the same meaning as in the
Plan, and any Agreement shall be subject to all of the terms of the Plan.
10.2 Provisions of Agreement. Each Agreement shall contain such
provisions as the Committee shall determine in its sole discretion to be
necessary, desirable and appropriate for the Benefit granted which may include,
but not necessarily be limited to, the following: description of the type of
Benefit; the Benefit's duration; its transferability; if an Option, the
exercise price, the exercise period and the person or persons who may exercise
the Option; the effect upon such Benefit of the Participant's death,
disability, change of duties or termination of employment; the Benefit's
conditions; when, if, and how any Benefit may be forfeited, converted into
another Benefit, modified, exchanged for another Benefit, or replaced; and the
restrictions on any Shares purchased or granted under the Plan.
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ARTICLE XI
TANDEM AWARDS
11.1 Tandem Awards. Benefits may be granted by the Committee in
its sole discretion individually or in tandem, provided, however, that no
Benefit except SARs may be granted in tandem with an ISO.
ARTICLE XII
PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING
12.1 Payment. Upon the exercise of an Option or in the case of any
other Benefit that requires a payment by a Participant to the Company, the
amount due the Company is to be paid:
(a) in cash;
(b) by the surrender of all or part of a Benefit
(including the Benefit being exercised);
(c) by the tender to the Company of Shares owned by the
Participant and registered in his or her name having a Fair Market
Value equal to the amount due to the Company;
(d) in other property, rights and credits, deemed
acceptable by the Committee including the Participant's promissory
note; or
(e) by any combination of the payment methods specified
in (a) through (d) above.
Notwithstanding the foregoing, any method of payment other than in
cash may be used only with the consent of the Committee or if and to the extent
so provided in an Agreement.
12.2 Dividend Equivalents. Grants of Benefits may include dividend
or dividend equivalent payments or dividend credit rights, to the extent so
provided in an Agreement.
12.3 Optional Deferral. The right to receive any Benefit under the
Plan may, at the request of the Participant made before any Benefit is
otherwise due or payable, be deferred for such period and upon such terms as
the Committee shall determine, which may include crediting of interest on
deferrals of cash and crediting of dividends on deferrals denominated in
Shares.
12.4 Code Sections 162(m) and 280G. The Committee, in its sole
discretion, may require that one or more Agreements contain provisions which
provide that, in the event Sections 162(m) or 280G of the Code, or any
successor provision relating to employee remuneration, would operate to
disallow a deduction by the Company for all or part of any Benefit under the
Plan, a Participant's receipt of the portion of such Benefit that would not be
deductible by the Company shall be either (a) deferred until the next
succeeding year or years in which the Participant's remuneration does not
exceed the limit set forth in such provision of the Code, or (b) if necessary,
canceled, forfeited, restricted, or limited.
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12.5 Withholding. The Company may, at the time any distribution is
made under the Plan, whether in cash or in Shares, or at the time any Option is
exercised, withhold from such distribution or Shares issuable upon the exercise
of an Option, any amount necessary to satisfy federal, state and local
withholding requirements with respect to such distribution or exercise of such
Option. Such withholding may be satisfied, at the Committee's option, either
by cash, transfer of previously owned Shares or other property acceptable to
the Committee, or the Company's withholding of Shares.
ARTICLE XIII
OPTIONS
13.1 Types of Options. It is intended that both ISOs and NQSOs may
be granted by the Committee under the Plan.
13.2 Option Price. The purchase price for Shares under any ISO
shall be no less than the Fair Market Value of the Shares at the time the
Option is granted. For the purposes of this provision, Fair Market Value shall
be determined without regard to any restriction, other than a restriction which
by its terms will never lapse.
13.3 Other Requirements for ISOs. ISOs may be issued only to bona
fide employees of the Employer, and the terms of each Option which is intended
to qualify as an ISO shall meet all requirements of Section 422 of the Code or
any successor statute in effect from time to time.
13.4 NQSOs. The terms of each NQSO shall provide that such Option
will not be treated as an ISO.
13.5 Determination by Committee. Except as otherwise provided in
Section 13.2 through Section 13.4, the terms of all Options shall be determined
by the Committee.
ARTICLE XIV
SARS
14.1 Grant and Payment. The Committee may grant SARs. Upon
electing to receive payment of an SAR, a Participant shall receive payment in
cash, in Shares, or in any combination of cash and Shares, as the Committee
shall determine.
14.2 Grant of Tandem Award. If SARs are granted in tandem with an
Option, the exercise of the Option shall cause a proportional reduction in SARs
standing to a Participant's credit which were granted in tandem with the
Option, and the payment of SARs shall cause a proportional reduction of the
Shares under such Option. If SARs are granted in tandem with an ISO, the SARs
shall have such terms and conditions as shall be required for the ISO to
qualify as an ISO.
ARTICLE XV
RESTRICTED SHARES
15.1 Description. The Committee may grant Benefits in Shares as
Restricted Shares with such terms and conditions as may be determined in the
sole discretion of the Committee. Restricted Shares shall be issued and
delivered at the time of the grant or as otherwise determined by the Committee,
but shall be subject to forfeiture until provided otherwise in the applicable
Agreement or the Plan. Each certificate
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representing Restricted Shares shall bear a legend referring to the Plan and
the risk of forfeiture of the Restricted Shares and stating that such
Restricted Shares are nontransferable until all restrictions have been
satisfied and the legend has been removed. At the discretion of the Committee,
the grantee may or may not be entitled to full voting and dividend rights with
respect to all Restricted Shares from the date of grant. The Committee may
(but is not obligated to) require that any dividends on such shares shall be
automatically deferred and reinvested in additional Restricted Shares subject
to the same restrictions as the underlying Benefit.
15.2 Cost of Restricted Shares. Grants of Restricted Shares shall
be made at such cost as the Committee shall determine and may be issued for no
monetary consideration, subject to applicable state law.
15.3 Nontransferability. Restricted Shares shall not be
transferable until after the removal of the legend with respect to such Shares.
ARTICLE XVI
PERFORMANCE SHARES
16.1 Description. Performance Shares represent the right of a
Participant to receive Shares at a future date in accordance with the terms and
conditions of a grant. The terms and conditions shall be determined by the
Committee, in its sole discretion, but generally are expected to be based
substantially upon the attainment of targeted financial performance objectives.
16.2 Grant. The Committee may grant an award of Performance Shares
at such times, in such amounts and under such terms and conditions as it deems
appropriate.
ARTICLE XVII
OTHER SHARE BASED AWARDS AND OTHER BENEFITS
17.1 Other Share Based Awards. The Committee shall have the right
to grant Other Share Based Awards which may include, without limitation, the
grant of Shares based on certain conditions, the payment of cash based on the
market performance of the Shares (such as phantom share awards), and the grant
of securities convertible into Shares.
17.2 Other Benefits. The Committee shall have the right to provide
other types of Benefits under the Plan in addition to those specifically
listed, if the Committee believes that such Benefits would further the purposes
for which the Plan has been established.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
18.1 Termination of Employment. If the employment of a Participant
by the Employer terminates for any reason, all unexercised, deferred, and
unpaid Benefits may be exercisable or paid only in accordance with rules
established by the Committee or pursuant to an Agreement. These rules may
provide, as the Committee in its sole discretion may deem appropriate, for the
expiration, forfeiture, or continuation of the Benefit, or for the acceleration
of the vesting thereunder, except as may be provided in an Agreement, of all or
part of the Benefits.
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18.2 Unfunded Status of the Plan. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation.
18.3 Designation of Beneficiary. A Participant may file with the
Committee a written designation of a beneficiary or beneficiaries (subject to
such limitations as to the classes and number of beneficiaries and contingent
beneficiaries as the Committee may from time to time prescribe) to exercise, in
the event of the death of the Participant, to the extent otherwise available
under an Agreement, an Option, or to receive, in such event, any Benefits. The
Committee reserves the right to review and approve beneficiary designations. A
Participant may from time to time revoke or change any such designation of
beneficiary and any designation of beneficiary under the Plan shall be
controlling over any other disposition, testamentary or otherwise; provided,
however, that if the Committee shall be in doubt as to the right of any such
beneficiary to exercise any Option or to receive any Benefit, the Committee may
determine to recognize only an exercise by the legal representative of the
recipient, in which case the Company, the Committee and the members thereof
shall not be under any further liability to anyone in connection therewith.
18.4 Nontransferability. For Participants subject to Section 16 of
the Exchange Act, and for all other Participants, unless otherwise determined
for such other Participants by the Committee or as specified in an Agreement,
(i) no Benefit granted under this Plan may be transferred or assigned by the
Participant to whom it is granted other than by beneficiary designation, will,
pursuant to the laws of descent and distribution, or pursuant to a qualified
domestic relations order (as defined in the Employee Retirement Income Security
Act or the Code), and (ii) a Benefit granted under this Plan may be exercised,
during the Participant's lifetime, only by the Participant or Participant's
guardian or legal representative; except that, no ISO may be transferred or
assigned pursuant to a qualified domestic relations order or exercised, during
the Participant's lifetime, by the Participant's guardian or legal
representative, unless such exercise is permitted by the Internal Revenue
Service pursuant to the Code or otherwise without such ISO losing its status as
an ISO. In the event that the provisions of Rule 16b-3 are amended to allow
transfer of a Benefit to a trust or limited partnership established by a
Participant for estate planning purposes, a Benefit other than an ISO granted
under this Plan may be transferred to such trust or limited partnership, but,
for Participants subject to Section 16 of the Exchange Act (unless otherwise so
provided in an Agreement), only to the extent and on the terms and conditions
of Rule 16b-3 as so amended.
18.5 Rule 16b-3. With respect to Participants subject to Section
16 of the Exchange Act, transactions under this Plan are intended to comply
with all applicable provisions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the Plan
administrators fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
18.6 References. The underscored references contained in the Plan
and in any Agreement are included only for convenience, and they shall not be
construed as a part of the Plan or Agreement or in any respect affecting or
modifying its provisions. Unless otherwise indicated, Article and Section
references herein are references to Articles and Sections of this Plan.
18.7 Number and Gender. The masculine, feminine and neuter,
wherever used in the Plan or in any Agreement, shall refer to either the
masculine, feminine or
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neuter; and, unless the context otherwise requires, the singular shall include
the plural and the plural the singular.
18.8 GOVERNING LAW. THIS PLAN AND EACH AGREEMENT SHALL BE
CONSTRUED, INTERPRETED AND ADMINISTERED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS, WITHOUT GIVING EFFECT TO PRINCIPLES RELATING TO
CONFLICT OF LAWS.
18.9 Purchase for Investment. The Committee may require each
person purchasing or receiving Shares pursuant to a Benefit to represent to and
agree with the Company in writing that such person is acquiring the Shares for
investment and without a view to distribution or resale. The certificates for
such Shares may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer. All certificates for Shares delivered
under the Plan shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under all applicable laws,
rules and regulations, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate references to such
restrictions.
18.10 No Employment Contract. Neither the adoption of the Plan nor
any Benefit granted hereunder shall confer upon any Employee any right to
continued employment or engagement nor shall the Plan or any Benefit interfere
in any way with the right of the Employer to terminate the employment or
engagement of any of its Employees at any time.
18.11 No Effect on Other Benefits. The receipt of Benefits under
the Plan shall have no effect on any benefits to which a Participant may be
entitled from the Employer, under another plan or otherwise, or preclude a
Participant from receiving any such benefits.
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