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EXHIBIT 10.19(b)
WYNDHAM HOTEL CORPORATION
1996 LONG TERM INCENTIVE PLAN
1. Purpose
The WYNDHAM HOTEL CORPORATION 1996 LONG TERM INCENTIVE PLAN
(the "1996 Plan") has been established by WYNDHAM HOTEL CORPORATION (the
"Corporation") to:
(a) Attract and retain key executives and other key
employees;
(b) Motivate participating employees, by means of
appropriate incentives, to achieve long-range goals;
(c) Provide incentive compensation opportunities that are
competitive with those of other corporations; and
(d) Further identify the interests of eligible employees
with those of the Corporation's other Stockholders through compensation
alternatives based on the Corporation's Common Stock;
and thereby promote the long-term financial interest of the Corporation,
including the growth in value of the Corporation's equity and enhancement of
long-term Stockholder return.
2. Scope
Awards under the 1996 Plan may be granted in the form of (i)
incentive stock options ("incentive stock options") as provided in Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), (ii)
non-qualified stock options ("non-qualified options") (unless otherwise
indicated, references in the 1996 Plan to "options" include incentive stock
options and non-qualified options), (iii) shares of the Common Stock, $.01 par
value per share, of the Corporation (the "Common Stock") that are restricted as
provided in paragraph 12 hereof ("restricted shares") or (iv) units valued
based upon the long-term performance of the Corporation as determined pursuant
to paragraph 13 hereof ("performance units"). Options may be accompanied by
stock appreciation rights ("rights"). Rights may also be granted without
accompanying options. The maximum aggregate number of performance units,
shares of Common Stock with respect to which options and restricted shares are
granted, and rights granted without accompanying options, which may be awarded
from time to time under the 1996 Plan shall be 2,133,811 (subject to adjustment
as described in paragraph 16 hereof). The maximum number of shares of Common
Stock with respect to which incentive stock options, non-qualified options,
restricted shares and performance units
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may be granted in any one year to any employee shall not exceed 500,000.
Shares of Common Stock with respect to which awards are granted may be, in
whole or in part, authorized and unissued shares, authorized and issued shares
held in the treasury of the Corporation, or issued shares reacquired by the
Corporation, as the Board of Directors of the Corporation (the "Board of
Directors") shall from time to time determine. If for any reason (other than
surrender of options or Deemed Options (as herein defined) upon exercise of
rights as provided in paragraph 9 hereof) any shares as to which an option has
been granted cease to be subject to purchase thereunder, or any restricted
shares are forfeited to the Corporation, or any right issued without
accompanying options terminates or expires without being exercised, then the
shares in respect of which such option or right was granted, or such restricted
shares, shall become available for subsequent awards under the 1996 Plan to the
extent permitted by the Code and other applicable law.
3. Effective Date
The 1996 Plan shall become effective on April 18, 1996 and,
unless sooner terminated pursuant to the terms hereof, the Plan shall terminate
on December 31, 2005. The 1996 Plan (and each award granted under the 1996
Plan) will become null and void unless the 1996 Plan is approved no later than
April 17, 1997 by the affirmative vote of the holders of a majority of the
shares of voting stock of all classes of the Corporation present, or
represented, and entitled to vote at a meeting of Stockholders of the
Corporation at which a majority of the outstanding shares of the Corporation's
voting stock is voted on the proposal to approve the 1996 Plan. The agreement
relating to each award granted under the 1996 Plan prior to approval of the
Plan by Stockholders as aforesaid shall expressly provide that such award will
not be exercisable or payable prior to such approval and that such award will
become null and void unless the 1996 Plan is approved by the Stockholders as
aforesaid no later than April 17, 1997.
4. Administration
(a) The 1996 Plan shall be administered, construed and
interpreted by the Board of Directors of the Corporation; provided, that the
Board of Directors, in its discretion, may delegate any or all of its
authority, powers and discretion under the 1996 Plan to the Compensation
Committee of the Board of Directors. (All references herein to the "Committee"
shall be deemed to refer exclusively to the Compensation Committee or any
successor thereto of the Board of Directors of the Corporation.)
Notwithstanding anything in this paragraph 4 to the contrary, upon the date of
the first registration of an equity security of the Corporation under Section
12 of the Securities Exchange Act of 1934, as amended (the "1934 Act"), or any
successor statute, all authority to exercise discretion with respect to
participation in the 1996 Plan by persons who are (i) "officers" within the
meaning of the applicable Securities and Exchange Commission rules and
regulations relating to Section 16 of the 1934 Act, or any successor statute,
(ii) directors of the
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Corporation, and/or (iii) beneficial owners of more than ten percent (10%) of
any class of equity securities of the Corporation who are otherwise eligible to
participate in the 1996 Plan, and the timing, pricing, amounts and other terms
and conditions of awards granted under the 1996 Plan to such officers,
directors and beneficial owners, shall be vested in (i) the Board of Directors
of the Corporation if all of the members of the Board are disinterested persons
within the meaning ascribed to such term in Rule 16b-3 promulgated under the
1934 Act, or within any successor definition or under any successor rule
("disinterested persons"), or (ii) the Committee, if consisting of two (2) or
more directors each of whom is a disinterested person.
(b) With respect to persons subject to Section 16 of the
1934 Act, transactions under the 1996 Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the 1934 Act. To
the extent any provision of the 1996 Plan or action by the Board of Directors
or the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Board of Directors or the
Committee, as applicable.
(c) The Board of Directors shall have plenary authority
in its sole discretion and subject to the express provisions of the 1996 Plan,
to grant options, to determine the purchase price of the Common Stock covered
by each option (the "exercise price"), the term of each option and to change
the same, the class or classes of shares of Common Stock to be covered by each
option, the Employees (as defined in paragraph 5 hereof) to whom, and the time
or times at which, options shall be granted and the number of shares to be
covered by each option; to designate options as incentive stock options or
non-qualified options and to determine which options shall be accompanied by
rights; to grant rights without accompanying options; to determine the
Employees to whom and the time or times at which such rights shall be granted
and the exercise price, term, and number of shares of Common Stock covered by
any Deemed Option (as defined in paragraph 9 hereof) corresponding thereto; to
grant restricted shares and performance units and to determine the term of the
restricted period and appropriate long-term objectives and other conditions
applicable to such restricted shares or performance units, the Employees to
whom and the time or times at which restricted shares or performance units
shall be granted and the number of restricted shares or performance units to be
covered by each grant; to interpret the 1996 Plan; to prescribe, amend and
rescind rules and regulations relating to the 1996 Plan; to determine the terms
and provisions of the option agreements, and the right, restricted share and
performance unit agreements entered into in connection with awards under the
1996 Plan; to prepare and distribute in such manner as the Board of Directors
determines to be appropriate information concerning the 1996 Plan, and to make
all other determinations deemed necessary or advisable for the administration
of the 1996 Plan. The Board of Directors may delegate to one or more of its
members or to one or more agents such administrative duties as it may deem
advisable, and the Board of Directors or any person to whom it has delegated
duties as aforesaid may employ one or more persons to render
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advice with respect to any responsibility the Board of Directors or such person
may have under the 1996 Plan; provided, however, that except as authorized in
paragraph 4(a) above, the Board of Directors shall not delegate its authority
to construe and interpret the 1996 Plan, to determine which Employees may
participate in the 1996 Plan, or its authority to make grants of options,
restricted shares, performance units and rights.
(d) If appointed, the Committee shall function as
follows. The Committee may adopt such rules as it deems necessary, desirable
or appropriate. The Committee may act at a meeting or in writing without a
meeting. The Committee shall elect one of its members as chairman, appoint a
secretary (who may or may not be a Committee member, as the case may be) and
advise the Board of Directors of such actions. The secretary shall keep a
record of all minutes and forward all necessary communications to the
Corporation. A majority of the Committee shall constitute a quorum. All
decisions of the Committee shall be made by a vote of not less than a majority
of the Committee members present at a meeting of the Committee at which a
quorum is present or by a written consent signed by all of the members of the
Committee. A dissenting Committee member who, within a reasonable time after
he has knowledge of any action or failure to act in accordance with the
preceding sentence, registers his dissent in writing delivered to the other
Committee members and to the Board of Directors, shall not be responsible for
any such action or failure to act.
(e) All usual and reasonable expenses of the Committee
shall be paid by the Corporation, and no member shall receive compensation with
respect to his services for the Committee except as may be authorized by the
Board of Directors. The Board of Directors and the Committee may employ
attorneys, consultants, accountants or other persons, and the Board of
Directors, the Committee, the Corporation and its officers and directors shall
be entitled to rely upon the advice, opinions or valuations of any such
persons. All actions taken and all interpretations and determinations made by
the Board of Directors or the Committee in good faith shall be final and
binding upon all Employees who have received awards, the Corporation and all
other interested persons. No member of Board of Directors or the Committee
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the 1996 Plan or awards made
thereunder, and the Corporation shall indemnify and hold harmless each member
of the Board of Directors or the Committee against all loss, cost, expenses or
damages, occasioned by any act or omission to act in connection with any such
action, determination or interpretation under or of the 1996 Plan, consistent
with the Corporation's certificate of incorporation and bylaws.
(f) Subject to such limitations or restrictions as may be
imposed by the Code or other applicable law, the Board of Directors may grant
to an Employee who has been granted an award under the 1996 Plan or any other
benefit plan maintained by the Corporation or any of its subsidiaries, or any
predecessor or successor thereto, in exchange
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for the surrender and cancellation of such prior award, a new award with such
terms and conditions as the Board of Directors may deem appropriate consistent
with the provisions of the 1996 Plan.
5. Eligibility; Factors To Be Considered in Granting Awards
(a) Awards shall be granted only to persons who are
employees of the Corporation or one or more of its subsidiaries (as defined
below) and either are officers of, or in the opinion of the Board of Directors
hold key positions in or for, the Corporation or any subsidiary ("Employees").
In determining the Employees to whom awards shall be granted, the number of
shares and class or classes of Common Stock with respect to which each award
shall be granted, the number of performance units granted by each award, and
the terms and conditions of each award, the Board of Directors shall take into
account the nature of the Employee's duties, his or her present and potential
contributions to the growth and success of the Corporation, and such other
factors as the Board of Directors shall deem relevant in connection with
accomplishing the purposes of the 1996 Plan. The chief executive officer of
the Corporation shall assist the Board of Directors in this determination by
making recommendations. An Employee who has been granted an award or awards
under the 1996 Plan may be granted an additional award or awards, subject to
such limitations as may be imposed by the Code on the grant of incentive stock
options or other applicable law.
(b) For purposes of this 1996 Plan, the term "subsidiary"
means any corporation (other than the Corporation) during any period of which
fifty percent (50%) or more of the total combined voting power of all classes
of stock is owned, directly or indirectly, by the Corporation. For purposes of
this 1996 Plan, the term "affiliate" shall have the same meaning as in Rule
12b-2 promulgated under the 1934 Act.
6. Option Price; Fair Market Value
The per share exercise price of each option for shares of
Common Stock shall be determined by the Board of Directors, but shall be one
hundred percent (100%) of the Fair Market Value on the date the option is
granted unless the Board of Directors expressly determines otherwise, subject
to the requirements for incentive stock options set forth in paragraph 10
hereof. For purposes of this 1996 Plan, the term "Fair Market Value per Share"
as of any date shall mean, except as provided in paragraph 9(d) hereof, for
shares of Common Stock with respect to which restricted shares, options and
rights shall be granted, the closing price of such Common Stock on such date
(or if there are no sales on such date, on the next preceding date on which
there were sales), as reported on the New York Stock Exchange Composite Tape,
or if such Common Stock is not listed or admitted to trading on the New York
Stock Exchange, as reported on the principal consolidated transaction reporting
system for the principal national securities exchange on which the
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Common Stock is listed or admitted to trading, or if such Common Stock is not
listed or admitted to trading on any national securities exchange, the closing
price of such Common Stock as reported on the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), or if such Common Stock is not listed or admitted to trading on the
NASDAQ National Market System, the last quoted sales price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the NASDAQ System or such other system
as may then be in use, or if such Common Stock is not reported on any such
system and is not listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such Common Stock selected by the
Board of Directors, or if no such market maker is making a market in such
Common Stock, the fair value of such Common Stock as determined in good faith
by the Board of Directors by applying generally recognized principles of
valuing closely-held securities; provided, however, that in any event the Fair
Market Value per Share shall be appropriately adjusted to reflect events
described in paragraph 16 hereof. The Board of Directors shall determine the
date on which an option is granted, provided that such date is consistent with
the Code and any applicable rules or regulations thereunder; in the absence of
such determination, the date on which the Board of Directors adopts a
resolution granting an option shall be considered the date on which such option
is granted, provided the Employee to whom the option is granted is promptly
notified of the grant and a written option agreement is duly executed as of the
date of the resolution. The exercise price so determined shall also be
applicable in connection with the exercise of any related right.
7. Term of Options
The term of each option granted under the 1996 Plan shall be
as the Board of Directors shall determine, but in no event shall any option
have a term of more than ten (10) years from the date of grant, subject to
earlier termination as provided in paragraphs 14 and 15 hereof. If the holder
of an incentive stock option owns Common Stock possessing more than ten percent
(10%) of the combined voting power of all classes of stock of the Corporation
or any subsidiary, the term of such incentive stock option shall not exceed
five (5) years from the date of grant.
8. Exercise of Options
(a) Subject to the provisions of this 1996 Plan and
unless otherwise provided in the option agreement, an option granted under the
1996 Plan shall become one hundred percent (100%) vested at the earliest of the
Employee's retirement from active employment at or after Retirement Age (as
defined in paragraph 14 hereof) or the Employee's death or total and permanent
disability (as defined in paragraph 15 hereof). Prior to becoming one hundred
percent (100%) vested, each option shall become exercisable in such cumulative
installments and upon such events as the Board of Directors may
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determine in its sole discretion. Subject to the foregoing, the unvested
portion of any option or right granted under the 1996 Plan shall be forfeited
on the date the Employee ceases to be an Employee of the Corporation. The
Board of Directors may also, in its sole discretion, accelerate the
exercisability of any option or installment thereof at any time.
(b) An option may be exercised at any time or from time
to time (subject, in the case of an incentive stock option, to such
restrictions as may be imposed by the Code), as to any or all full shares of
Common Stock as to which the option has become exercisable; provided, however,
that an option shall not be exercised at any time as to less than fifty (50)
shares (or less than the number of shares of Common Stock as to which the
option is then exercisable, if that number is less than fifty (50) shares).
(c) At the time of exercise of any option, the per share
exercise price of such option shall be paid in full for each share of Common
Stock with respect to which such option is exercised. Payment may be made in
cash or, with the approval of the Board of Directors, in shares of the Common
Stock, valued at the Fair Market Value per Share on the date of exercise. If
the Corporation shall have a class of its Common Stock registered pursuant to
Section 12 of the 1934 Act, an option holder may also make payment at the time
of exercise of an option for such class of Common Stock by delivering to the
Corporation a properly executed exercise notice together with irrevocable
instructions to a broker approved by the Corporation that upon such broker's
sale of shares with respect to which such option is exercised, it is to deliver
promptly to the Corporation the amount of sale proceeds necessary to satisfy
the option exercise price and any required withholding taxes (subject to the
provisions of paragraph 19 hereof).
(d) Notwithstanding any other provision in the 1996 Plan
to the contrary, no option may be exercised prior to the expiration of six (6)
months from the date of the award thereof.
(e) Upon the exercise of an option or portion thereof in
accordance with the 1996 Plan, the option agreement and such rules and
regulations as may be established by the Board of Directors, the holder thereof
shall have the rights of a Stockholder with respect to the Common Stock issued
as a result of such exercise.
9. Award and Exercise of Rights
(a) The Board of Directors may grant a right as a primary
right or an additional right (each as defined in this paragraph) in the manner
set forth in this paragraph 9. A right granted in connection with an option
may be granted either at the time the option is granted or, in the case of an
option that is not an incentive stock option, thereafter at any time prior to
the exercise, termination or expiration of such option. Each right shall be
subject to the same terms and conditions as the related option or Deemed Option
(as
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defined in paragraph 9(b)) and shall be exercisable only to the extent the
option or Deemed Option is exercisable. Notwithstanding any other provision in
the 1996 Plan to the contrary, no right, with or without an underlying option,
shall be exercisable for cash by an Employee who is subject to the provisions
of Section 16(b) of the 1934 Act (an "Insider") prior to the expiration of six
(6) months from the date the right is awarded.
(b) A primary right may be awarded by the Board of
Directors either alone or in connection with any option granted under the 1996
Plan. Each primary right granted without a corresponding option shall
nevertheless be deemed for certain purposes described in this paragraph 9 to
have been accompanied by an option (a "Deemed Option"). A Deemed Option shall
have no value, and no shares of Common Stock (or other consideration) shall be
delivered upon exercise thereof, but such Deemed Option shall serve solely to
establish the terms and conditions of the corresponding primary right. At the
time of grant of a primary right not granted in connection with an option, the
Board of Directors shall set forth the terms and conditions of the
corresponding Deemed Option. The terms and conditions of such Deemed Option
shall include all terms and conditions that at the time of grant are required,
and, in the discretion of the Board of Directors, may include any additional
terms and conditions that at such time are permitted, to be included in options
granted under this 1996 Plan. A primary right shall entitle the Employee to
surrender unexercised the related option or Deemed Option (or any portion or
portions thereof that the Employee determines to surrender) and to receive in
exchange, subject to the provisions of the 1996 Plan and such rules and
regulations as from time to time may be established by the Board of Directors,
a payment having an aggregate value equal to (i) the excess of (A) the Fair
Market Value per Share on the exercise date over (B) the per share exercise
price of the option or Deemed Option, multiplied by (ii) the number of shares
of Common Stock subject to the option, Deemed Option or portion thereof that is
surrendered. Surrender of an option or Deemed Option or portion thereof in
exchange for a payment as described in this paragraph is referred to as the
"exercise of a primary right." Upon exercise of a primary right, payment shall
be made in the form of cash, shares of Common Stock, or a combination thereof,
as elected by the Employee, provided that the Board of Directors shall have
sole discretion to approve or disapprove the election of an Insider to receive
all or part of a payment in cash (which approval or disapproval may be given at
any time after the election to which it relates); and, provided, further, that
the election by an Insider to receive cash in whole or in part upon exercise of
a primary right shall be made only during a "window period" (as defined in
paragraph 9(d) hereof). Shares of Common Stock paid upon exercise of a primary
right will be valued at the Fair Market Value per Share on the exercise date.
Cash will be paid in lieu of any fractional share of Common Stock based upon
the Fair Market Value per Share on the exercise date. Subject to paragraph 19
hereof, no payment will be required from the Employee upon exercise of a
primary right.
(c) An additional right may be awarded by the Board of
Directors in connection with any option granted under the 1996 Plan. An
additional right shall entitle
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the Employee to receive, upon the exercise of a related option, a cash payment
equal to (i) the product determined by multiplying (A) the excess of (x) the
Fair Market Value per Share on the date of exercise of the related option over
(y) the option price per share at which such option is exercisable by (B) the
number of shares of Common Stock with respect to which the related option is
being exercised, multiplied by (ii) a percentage factor (which may be any
percentage factor equal to or greater than ten percent (10%) and equal to or
less than one hundred percent (100%)) as determined by the Board of Directors
at the time of the grant of such additional right or as determined in
accordance with a formula for determination of such percentage factor
established by the Board of Directors at the time of the grant of such
additional right. If no percentage factor or formula is otherwise specified by
the Board of Directors at the time of grant of such additional right, the
percentage factor shall be deemed to be one hundred percent (100%). The Board
of Directors at any time, or from time to time, after the time of grant may in
its discretion increase such percentage factor (or amend such formula so as to
increase such factor) to not more than one hundred percent (100%).
(d) Solely for purposes of paragraphs 9(b) and 9(c), with
respect to exercises of rights (other than rights that relate to an incentive
stock option) by an Insider, during any period commencing on the third business
day following the date of release for publication of any annual or quarterly
summary statements of the Corporation's sales and earnings and ending on the
twelfth business day following such date (a "window period"), the Board of
Directors may prescribe, by rule of general application, such other measure of
Fair Market Value per Share as the Board of Directors may, in its sole
discretion, determine, but not in excess of the highest sale price of the
Common Stock during such window period as reported on the New York Stock
Exchange Composite Tape, or as further determined as set forth in paragraph 6
hereof; provided, however, that the Fair Market Value per Share shall be
appropriately adjusted to reflect events described in paragraph 16 hereof. In
the case of rights that relate to an incentive stock option, the Board of
Directors may prescribe a similar measure of Fair Market Value per Share;
provided, however, that such measure shall not exceed the maximum amount that
would be permissible under Code Section 422 without disqualifying such option
as an incentive stock option under Code Section 422 or causing such option not
to be considered fully exercised within the meaning of Code Section 422.
(e) Upon exercise of a primary right, the number of
shares of Common Stock subject to exercise under the related option or Deemed
Option shall automatically be reduced by the number of shares of Common Stock
represented by the option, Deemed Option or portion thereof surrendered.
Shares of Common Stock subject to options, Deemed Options or portions thereof
surrendered upon the exercise of rights shall not be available for subsequent
awards under the 1996 Plan.
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(f) A right related to an incentive stock option may only
be exercised if the Fair Market Value per Share on the exercise date (as
determined pursuant to paragraph 6 and without regard to paragraph 9(d) hereof)
exceeds the exercise price of the option per share of Common Stock.
(g) If neither the right nor, in the case of a right
(whether primary or additional) with a related option, the related option, is
exercised before the end of the day on which the right ceases to be
exercisable, such right shall be deemed exercised as of such date and, subject
to paragraph 19 hereof, a payment in the amount prescribed by paragraph 9(b) or
paragraph 9(c), as the case may be, shall be paid to the Employee in cash.
10. Incentive Stock Options
(a) The Board of Directors shall designate the Employees
to whom incentive stock options, as described in Section 422 of the Code or any
successor section thereto, are to be awarded under the 1996 Plan and shall
determine the class or classes and the number of shares of Common Stock to be
covered by each incentive stock option. Incentive stock options shall be
awarded only to Employees of the Corporation. In no event shall the aggregate
Fair Market Value of all Common Stock (determined at the time the option is
awarded) with respect to which incentive stock options are exercisable for the
first time by an individual during any calendar year (under all plans of the
Corporation and its subsidiaries) exceed $100,000.
(b) The purchase price of a share of Common Stock under
each incentive stock option shall be determined by the Board of Directors;
provided, however, that in no event shall such price be less than one hundred
percent 100% of the Fair Market Value Per Share as of the date of grant or one
hundred ten percent (110%) of such Fair Market Value Per Share if the holder of
the incentive stock option owns Common Stock possessing more than ten percent
(10%) of the combined voting power of all classes of stock of the Corporation
or any subsidiary.
(c) Except as provided in paragraphs 14 and 15 hereof, no
incentive stock option shall be exercised at any time unless the holder thereof
is then an Employee of the Corporation or one of its subsidiaries. For this
purpose, "subsidiary" shall include, as under Treasury Regulations Section
1.421-7(h)(3)-(4), example (3), any corporation that is a subsidiary of the
Corporation during the entire portion of the requisite period of employment
during which it is the employer of the holder.
(d) In the event of amendments to the Code or applicable
rules or regulations relating to incentive stock options subsequent to the date
hereof, the Corporation may amend the provisions of the 1996 Plan, and the
Corporation and the Employees holding
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such incentive stock options may agree to amend outstanding option agreements
to conform to such amendments.
11. Non-Transferability of Options and Rights
Options and rights granted under the 1996 Plan shall not be
transferable otherwise than 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 of 1974, as amended, or
the rules thereunder, and options and rights shall be exercisable during the
lifetime of the Employee only by the Employee or by the Employee's guardian or
legal representative (unless such exercise would disqualify an option as an
incentive stock option).
12. Award and Delivery of Restricted Shares
(a) At the time an award of restricted shares is made,
the Board of Directors shall establish a period or periods of time (each a
"Restricted Period") applicable to such award that shall not be more than ten
(10) years. Each award of restricted shares may have a different Restricted
Period or Restricted Periods. The Board of Directors may, in its sole
discretion, at the time an award is made, provide for the incremental lapse of
Restricted Periods with respect to a portion or portions of the restricted
shares awarded, and for the lapse or termination of restrictions upon all or
any portion of the restricted shares upon the satisfaction of other conditions
in addition to or other than the expiration of the applicable Restricted
Period. The Board of Directors may also, in its sole discretion, shorten or
terminate a Restricted Period or waive any conditions for the lapse or
termination of restrictions with respect to all or any portion of the
restricted shares. Notwithstanding the foregoing, all restrictions shall lapse
or terminate with respect to all restricted shares upon the Employee's death,
total and permanent disability (as defined in paragraph 15 hereof), or
retirement from active employment at or after the Retirement Age (as defined in
paragraph 14 hereof).
(b) At the time a grant of restricted shares is made to
an Employee, a stock certificate representing a number of shares of Common
Stock equal to the number of such restricted shares shall be registered in the
Employee's name but shall be held in custody by the Corporation for such
Employee's account. The Employee shall generally have the rights and
privileges of a Stockholder as to such restricted shares, including, without
limitation, the right to vote such restricted shares, except that, subject to
the earlier lapse or termination of restrictions as herein provided, the
following restrictions shall apply: (i) the Employee shall not be entitled to
delivery of the stock certificate evidencing restricted shares until the
expiration or termination of the Restricted Period applicable to such shares
and the satisfaction of any other conditions prescribed by the Board of
Directors; (ii) none of the shares then subject to a Restricted Period shall be
sold, transferred, assigned, pledged, or
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otherwise encumbered or disposed of during the Restricted Period applicable to
such shares and until the satisfaction of any other conditions prescribed by
the Board of Directors; and (iii) all of the shares then subject to a
Restricted Period shall be forfeited and all rights of the Employee to such
restricted shares shall terminate without further obligation on the part of the
Corporation if the Employee ceases to be an Employee of the Corporation or any
of its subsidiaries before the expiration or termination of such Restricted
Period and the satisfaction of any other conditions prescribed by the Board of
Directors applicable to such restricted shares. Dividends in respect of
restricted shares shall be currently paid; provided, however, that in lieu of
paying currently a dividend of shares of Common Stock in respect of restricted
shares, the Board of Directors may, in its sole discretion, register in the
name of an Employee a stock certificate representing such shares of Common
Stock issued as a dividend in respect of restricted shares, and may cause the
Corporation to hold such certificate in custody for the Employee's account
subject to the same terms and conditions as such restricted shares. Upon the
forfeiture of any restricted shares, such forfeited restricted shares shall be
transferred to the Corporation without further action by the Employee. The
Employee shall have the same rights and privileges, and be subject to the same
restrictions, with respect to any shares received pursuant to paragraph 16
hereof.
(c) Upon the expiration or termination of the Restricted
Period applicable to such shares and the satisfaction of any other conditions
prescribed by the Board of Directors or at such earlier time as provided for
herein, the restrictions applicable to the shares subject to such Restricted
Period shall lapse and a certificate for a number of shares of Common Stock
equal to the number of restricted shares with respect to which the restrictions
have expired or terminated shall be delivered, free of all such restrictions,
except any that may be imposed by law, to the Employee or the Employee's
Beneficiary (as defined in paragraph 14(b)). The Corporation shall not be
required to deliver any fractional share of Common Stock but shall pay to the
Employee or the Employee's Beneficiary, in lieu thereof, the product of (i) the
Fair Market Value per Share (determined as of the date the restrictions expire
or terminate) and (ii) the fraction of a share to which such Employee would
otherwise be entitled. Subject to paragraph 19 hereof, no payment will be
required from the Employee upon the issuance or delivery of any Common Stock
upon the expiration or termination of a Restricted Period with respect to
restricted shares.
13. Award of Performance Units
(a) At the time an award of performance units is made,
the Board of Directors shall prescribe a range of long-term financial or other
performance objectives, including minimum, maximum and target objectives of the
Corporation ("long-term objectives") during the Incentive Period (as defined in
paragraph 13(c) hereof) applicable to such performance units, and shall
determine a range of dollar values of each performance unit associated with
such range of long-term earnings objectives. If the minimum long-term
objective prescribed by the Board of Directors for any performance unit is not
achieved or
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exceeded, then such performance unit shall have no value and no amount shall be
payable with respect thereto. If such minimum long-term objective is achieved
or exceeded, then the dollar value of all performance units to be paid with
respect thereto shall be based upon the level of long-term objective achieved,
subject to any maximum performance unit value imposed by the Board of
Directors. If during the course of an Incentive Period there shall occur
significant events that were not foreseen in establishing the minimum long-term
objective for such Incentive Period and which the Board of Directors expects to
have a substantial effect on such objective during such Incentive Period, in
its discretion, the Board of Directors may revise such objective.
(b) Any Employee who is an Employee of the Corporation or
a subsidiary as of the Valuation Date (as defined in paragraph 13(c)) with
respect to performance units that have been previously awarded to him, shall,
if the minimum long-term objective specified in paragraph 13(a) is met, be
eligible to receive a cash award equal to the value of such performance units
determined pursuant to such paragraph 13(a) as of the Valuation Date applicable
thereto. Payment of such cash award shall be made as soon as practicable
following the Valuation Date of such performance units. Except as otherwise
provided in paragraph 14 hereof, any performance units awarded to an Employee
during his employment period for which the Incentive Period has not ended shall
be forfeited upon the date such employment terminates, and he shall not be
entitled to any payment in respect thereof.
(c) For purposes of the 1996 Plan,
(i) the "Incentive Period" with respect to a
performance unit shall be a period beginning on the date such performance unit
is granted and lasting for such period, not shorter than two (2) years nor
longer than ten (10) years, as the Board of Directors shall designate; and
(ii) the "Valuation Date" means the last day of
the Incentive Period for a performance unit.
14. Termination of Employment; Termination for Cause
(a) In the event that the employment of an Employee to
whom an option or right has been granted under the 1996 Plan terminates for any
reason (except pursuant to an authorized leave of absence for military or
government service as determined by the Board of Directors or as set forth in
paragraph 15 hereof), such Employee shall have a period of ninety (90) days
following termination of employment in which to exercise any then vested
options or rights under the 1996 Plan, and at the end of the 90-day period, all
rights of such Employee under any then outstanding option or right shall
terminate and shall be forfeited immediately as to any unexercised portion
thereof.
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(b) Unless otherwise determined by the Board of
Directors, if an Employee to whom performance units have been granted ceases to
be an Employee of the Corporation or of a subsidiary prior to the end of the
Incentive Period with respect to such performance units for any reason other
than death, total and permanent disability or retirement from active employment
at or after the Retirement Age, the Employee shall immediately forfeit all such
performance units. If an Employee to whom performance units have been granted
terminates employment by reason of retirement on or after the Retirement Age,
total and permanent disability or death, he shall, if the minimum long-term
objectives specified in paragraph 13(a) hereof are met, be eligible to receive
a cash award equal to the value of such performance units, determined pursuant
to such paragraph 13(a) and payable as soon as practicable following the
Valuation Date of such performance units. If the Employee terminates
employment due to his death or if an Employee who retires from active
employment on or after his Retirement Age or terminated employment due to total
and permanent disability dies prior to receipt of any such payment, then his
designated Beneficiary (as defined below) shall, if the minimum long-term
objectives specified in paragraph 13(a) are met, be entitled to receive a cash
award equal to the value of such performance units, determined pursuant to such
paragraph 13(a), and payable as soon as practicable following the Valuation
Date of such performance units. In the event that the person designated by the
Employee as his Beneficiary shall not be living at the time, or if no
designation has been made, then the payment of such cash award shall be made to
the estate of the Employee. An Employee's Retirement Age ("Retirement Age")
hereunder is sixty (60). An Employee's "Beneficiary" is a person or persons
(natural or otherwise) designated by such Employee, pursuant to a written
instrument executed by such Employee and filed with the Board of Directors, to
receive any benefits payable hereunder in the event of such Employee's death.
(c) Awards granted under the 1996 Plan shall not be
affected by any change of duties or position so long as the holder continues to
be an Employee of the Corporation or any subsidiary thereof. Any option or
right, restricted share or performance unit agreement, and any rules and
regulations relating to the 1996 Plan, may contain such provisions as the Board
of Directors shall approve with reference to the determination of the date
employment terminates and the effect of leaves of absence. Any such rules and
regulations with reference to any option agreement shall be consistent with the
provisions of the Code and any applicable rules and regulations thereunder.
Nothing in the 1996 Plan or in any award granted pursuant to the 1996 Plan
shall confer upon any Employee any right to continue in the employ of the
Corporation or any subsidiary or interfere in any way with the right of the
Corporation or any subsidiary to terminate such employment at any time.
(d) Notwithstanding the foregoing provisions of this
paragraph 14, the Committee may provide in the terms of any agreement or award
granted under the 1996 Plan that, if an Employee's employment terminates for
"cause," as defined in such
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agreement or award, that all options, restricted stock or awards will be
forfeited immediately upon such termination.
15. Death or Total and Permanent Disability of Employee
If an Employee to whom an option or right has been granted
under the 1996 Plan shall die or suffer a total and permanent disability while
employed by the Corporation or a subsidiary, such option or right may be
exercised, to the extent that the Employee was entitled to do so at the
termination of employment (including by reason of death or total and permanent
disability), as set forth herein (subject to any restrictions set forth in
paragraph 9 with respect to Insiders) by the Employee, legal guardian of the
Employee (unless such exercise would disqualify an option as an incentive stock
option), a legatee or legatees of the Employee under the Employee's last will,
or by the Employee's personal representatives or distributees, whichever is
applicable, at any time within twelve (12) months after the date of the
Employee's death or total and permanent disability, but in no event later than
the date on which the option or right terminates. Notwithstanding the above,
if an Employee who terminates employment by reason of total and permanent
disability shall die, a legatee or legatees of such Employee under the
Employee's last will, or the executor of such Employee's estate, shall only
have the right to exercise such option or right, to the extent that the
Employee was entitled to do so at the termination of employment, during the
period ending twelve (12) months after the date of the Employee's termination
of employment by reason of total and permanent disability. For purposes
hereof, "total and permanent disability" shall have the meaning set forth in
Code Section 22(e)(3) or any successor provision thereto.
16. Adjustments upon Changes in Capitalization, etc.
Notwithstanding any other provision of the 1996 Plan, the
Board of Directors shall make or provide for such adjustments to the 1996 Plan,
to the number and classes of shares available thereunder, to the terms and
number of shares of Common Stock or other securities available, and/or to the
purchase price of a share of Common Stock or other securities available under,
any outstanding options, rights, restricted shares or performance units as it
shall deem appropriate to prevent dilution or enlargement, including
adjustments in the event of changes in the outstanding Common Stock by reason
of stock dividends, split-ups, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, separations, reorganizations, liquidations
and the like. In the event of any offer to holders of Common Stock generally
relating to the acquisition of their shares, the Board of Directors shall make
such adjustment as it deems equitable in respect to outstanding options,
rights, restricted shares and performance units, including revision of
outstanding options, rights, restricted shares and performance units so that
they may be exercisable or redeemable for or payable in the consideration
payable in the acquisition transaction. Any such
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determination by the Board of Directors shall be conclusive. Any fractional
shares resulting from such adjustments to options, rights, or restricted shares
shall be eliminated.
17. Business Combinations.
The following provisions shall apply unless an Employee's
written agreement evidencing an award of options, rights, restricted shares or
performance units under the 1996 Plan provides otherwise. In the event that,
while any options, rights, restricted shares or performance units are
outstanding under the 1996 Plan, there shall occur (a) a merger or
consolidation of the Corporation with or into another corporation in which the
Corporation shall not be the surviving corporation, (b) a dissolution of the
Corporation, (c) a transfer of all or substantially all of the assets of the
Corporation in one transaction or a series of related transactions to one or
more other persons or entities, (d) any "person" or "group" (as those terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Act")), other than Excluded Persons and any Excluded Group, becomes the
"beneficial owner" (as defined in Rule 13d-3 of the Act), directly or
indirectly, of securities of the Corporation representing 45% or more of the
combined voting power of the Corporation's then outstanding securities, or (e)
during any period of two consecutive years commencing on or after June 1, 1996,
individuals who at the beginning of the period constituted the Board (together
with any new directors whose election by such Board or whose nomination for
election by the Stockholders of the Corporation was approved by a majority of
the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute at least a majority of the Board
of Directors then in office, then, with respect to each option, right,
restricted share and performance unit outstanding immediately prior to the
consummation of such transaction, if provision is not otherwise made in writing
in connection with such transaction and without the necessity of any action by
the Board of Directors, each such option, right, restricted share or
performance unit shall terminate, but (A) the holder of any outstanding option
shall be entitled, immediately prior to the effective date of such transaction,
to exercise such option to purchase the number of shares of Common Stock that
are then vested and exercisable; (B) the holder of any right shall be entitled,
immediately prior to the effective date of such transaction, to exercise such
right to the extent that the related option or Deemed Option is exercisable at
such time in accordance with its terms; (C) the holder of any additional rights
shall be entitled to receive, to the extent that the related option is
exercised immediately prior to the effective date of such transaction, the full
amount of cash he would have been entitled to receive if the related option had
been exercised to such extent, to the extent that such additional rights are
then vested; (D) the holder of any restricted shares shall be entitled to
receive a stock certificate representing a number of shares of Common Stock
equal to the number of restricted shares with respect to which the applicable
restrictions have previously lapsed or terminated; provided, however, that for
purposes of this provision, a portion of the applicable Restricted Period for
each award of restricted shares, equal to (i) the number of
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completed years during the Restricted Period, divided by (ii) the Restricted
Period, shall be deemed to have lapsed immediately prior to the effective date
of such transaction; and (E) the recipient of any performance unit shall be
entitled, immediately prior to the effective date of such transaction, to
receive the then vested value under such unit. The unexercised portion of any
option, right, Deemed Option or any additional right relating to the
unexercised portion of a related option shall be deemed cancelled and
terminated as of the effective date of such transaction. Any restricted shares
that remain suspect to restrictions as of the effective date of such
transaction shall be forfeited. Notwithstanding the foregoing, the Board of
Directors may provide that upon the occurrence of such events as the Board of
Directors shall deem appropriate, any or all outstanding options, rights,
restricted shares and performance units shall become fully vested and
exercisable or that they shall remain outstanding subject to any adjustments
contemplated by paragraph 16. The term "Excluded Persons" means each of (i)
Trammell or Margaret Crow, or any lineal descendant of Trammell and Margaret
Crow, or any trust of which not less than 75% of the beneficial interests are
held by Trammell or Margaret Crow or such lineal descendants, or any
partnership, corporation or other entity of which not less than 75% of the
outstanding equity interests are owned directly or indirectly by Trammell or
Margaret Crow or such descendants, (ii) Wynopt Investment Partnership Level II,
a Delaware limited partnership ("Wynopt II"), or Wynopt Investment Partnership,
a Delaware limited partnership ("Wynopt"), or an "affiliate" (as such term is
defined in Rule 12b-2 under the Act) of Wynopt II or Wynopt (x) of which not
less than 75% of the outstanding equity interests are owned directly or
indirectly by the direct or indirect owners of the outstanding equity interests
of Wynopt II and Wynopt as of the effective date of the Plan and (y) the
business and affairs of which are controlled by Donald J. McNamara, Robert A.
Whitman and Daniel A. Decker or any of them, or (iii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation.
The term "Excluded Group" means a "group" (as defined above) that includes one
or more Excluded Persons, provided that the voting power of the Corporation's
outstanding voting securities "beneficially owned" (as defined above) by such
Excluded Persons (without attribution to such Excluded Persons of the ownership
by other members of the "group") represents not less than 75% of the voting
power of the securities "beneficially owned" by such "group."
18. Termination and Amendment
The Board of Directors of the Corporation shall have the right
to amend, suspend or terminate the 1996 Plan at any time; provided, however,
that an amendment shall be subject to Stockholder approval if such approval is
required by Rule 16b-3 promulgated under the 1934 Act or under any successor
rule, the Code or the rules of any securities exchange or market system on
which securities of the Corporation are listed or admitted to trading at the
time such amendment is adopted. The Board of Directors may delegate to the
Committee all or any portion of its authority under this paragraph 18. If the
1996 Plan is terminated, the terms of the 1996 Plan shall, notwithstanding such
termination,
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continue to apply to awards granted prior to such termination. In addition, no
suspension, termination, modification or amendment of the 1996 Plan may,
without the consent of the Employee to whom an award shall theretofore have
been granted, adversely affect the rights of such Employee under such award.
19. Withholding Tax
(a) The Corporation shall have the right to deduct from
all amounts paid in cash in consequence of the exercise of an option or right,
or the settlement of a performance unit, under the 1996 Plan any taxes required
by law to be withheld with respect to such cash payments. Subject to paragraph
19(c) below, where an Employee or other person is entitled to receive shares of
Common Stock pursuant to the exercise of an option or a right pursuant to the
1996 Plan, the Corporation shall have the right to require the Employee or such
other person to pay to the Corporation the amount of any taxes that the
Corporation is required to withhold with respect to such shares, or, in lieu
thereof, to retain, or sell without notice, a sufficient number of such shares
to cover the amount required to be withheld. Upon the disposition (within the
meaning of Code Section 424(c)) of shares of Common Stock acquired pursuant to
the exercise of an incentive stock option prior to the expiration of the
holding period requirements of Code Section 422(a)(1), the Employee shall be
required to give notice to the Corporation of such disposition and the
Corporation shall have the right to require the Employee to pay to the
Corporation the amount of any taxes that are required by law to be withheld
with respect to such disposition.
(b) Upon termination of the Restricted Period with
respect to any restricted shares (or such earlier time, if any, as an election
is made by the Employee under Code Section 83(b), or any successor provisions
thereto, to include the value of such shares in taxable income), the
Corporation shall have the right to require the Employee or other person
receiving shares of Common Stock in respect of such restricted shares to pay to
the Corporation the amount of taxes that the Corporation is required to
withhold with respect to such shares of Common Stock or, in lieu thereof, to
retain or sell without notice a sufficient number of shares of Common Stock
held by it to cover the amount required to be withheld. The Corporation shall
have the right to deduct from all dividends paid with respect to restricted
shares the amount of taxes that the Corporation is required to withhold with
respect to such dividend payments.
(c) In the case of an Employee or other person who is
subject to Section 16 of the 1934 Act, all tax withholding obligations shall be
satisfied through the withholding or surrender of shares of Common Stock as
necessary to comply with Section 16 of the 1934 Act and the rules and
regulations thereunder or to obtain any exemption therefrom.
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20. Written Agreements; Stock Legends
Each award of options, rights, restricted shares or
performance units shall be evidenced by a written agreement, executed by the
Employee and the Corporation, which shall contain such restrictions, terms and
conditions as the Board of Directors may require, and certificates evidencing
shares of Common Stock issued under the 1996 Plan shall have conspicuously
noted thereon such restrictions on transferability as the Corporation may
require in order to ensure compliance with applicable federal and state
securities laws and regulations.
21. Effect on Other Stock Plans
The adoption of the 1996 Plan shall have no effect on awards
made or to be made pursuant to other plans covering Employees of the
Corporation or its subsidiaries, or any predecessors or successors thereto.
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