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EXHIBIT 10.7
GREYHOUND LINES, INC.
1998 NON-OFFICER LONG TERM STOCK INCENTIVE PLAN
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JANUARY 21, 1998
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P R E A M B L E:
1. Greyhound Lines, Inc., a Delaware corporation ("Greyhound" or the
"Company":), by means of this 1998 Non-Officer Long Term Stock Incentive Plan
(the "Plan") desires to afford certain of its and its Parent's and Subsidiaries'
employees, an opportunity to acquire a proprietary interest in the Company and
thus to create in such persons an increased interest in and a greater concern
for the welfare of the Company.
2. The Company has determined that the foregoing objectives will be
promoted by granting Awards (as hereinafter defined) under this Plan to certain
non-Officer employees of the Company and of its Parent and Subsidiaries, if any,
pursuant to this Plan.
T E R M S:
ARTICLE 1. DEFINITIONS.
Section 1.1 General. Certain words and phrases used in this Plan shall
have the meanings given to them below in this section:
"Award" means a grant of Options or Unrestricted Stock.
"Board of Directors" means the board of directors of Greyhound.
"Change in Control" means (a) the acquisition by any person (defined
for the purposes of this definition to mean any person within the meaning of
Section 13(d) of the Exchange Act), other than Greyhound or an employee benefit
plan created by the Board of Directors for the benefit of its Employees, either
directly or indirectly, of the beneficial ownership (determined under Rule 13d-3
of the Regulations promulgated by the SEC under Section 13(d) of the Exchange
Act) of securities issued by Greyhound having 30% or more of the voting power of
all the voting securities issued by Greyhound in the election of Directors at
the next meeting of the holders of voting
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securities to be held for such purpose; (b) the election of a majority of the
Directors elected at any meeting of the holders of voting securities of
Greyhound who are persons who were not nominated for such election by the Board
of Directors or a duly constituted committee of the Board of Directors having
authority in such matters; (c) the approval by the stockholders of Greyhound of
a merger or consolidation with another person, other than a merger or
consolidation in which the holders of Greyhound's voting securities issued and
outstanding immediately before such merger or consolidation continue to hold
voting securities in the surviving or resulting corporation (in the same
relative proportions to each other as existed before such event) comprising 80%
or more of the voting power for all purposes of the surviving or resulting
corporation; or (d) the approval by the stockholders of Greyhound of a transfer
of substantially all of the assets of Greyhound to another person other than a
transfer to a transferee, 80% or more of the voting power of which is owned or
controlled by Greyhound or by the holders of Greyhound's voting securities
issued and outstanding immediately before such transfer in the same relative
proportions to each other as existed before such event.
"Code" means the Internal Revenue Code of 1986 and the regulations
thereunder, as now in effect or hereafter amended.
"Committee" means the Committee of the Board of Directors that
administers the Plan under Section 2.1 below.
"Common Stock" means the common stock, par value $.01 per share, of the
Company.
"Date of Grant" means the date an Award is first granted.
"Director" means a member of the Board of Directors.
"Effective Date" means the date this Plan is first adopted by the Board
of Directors.
"Employee" means any common-law employee of Greyhound or any Parent or
Subsidiary of Greyhound pursuant to the Bylaws or comparable governing document
of such company.
"Exchange Act" means the Securities Exchange Act of 1934 and the
regulations thereunder, as now in effect or hereafter amended.
"Exercise Price" means, with respect to an Option, the amount of
consideration that must be delivered to the Company in order to purchase a
single Share thereunder.
"Fair Market Value of a Share" means the arithmetic mean between the
high and low per Share prices on the principal national securities exchange or
the NASDAQ - National Market System on which the Shares are listed or admitted
to trading, on the date of determination or, if such price cannot be determined
for the date of determination, the most recent date for which such prices can
reasonably be ascertained.
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"Grantee" means any person to whom an Award has been granted and any
heir or legal representative to whom an Award has been transferred by will or
the laws of descent and distribution.
"Nonqualified Option" means a Stock Option other than an Incentive
Stock Option. An "Incentive Stock Option" or "ISO" means an Option intended to
comply with the terms and conditions set forth in Section 422 of the Code.
"Officer" means an officer of the Company as defined in 17 C.F.R.ss.
240.16a-1(f) as now in effect or hereafter amended.
"Option" or "Stock Option" means a right granted under Article 5 of the
Plan to a Participant to purchase a stated number of Shares.
"Option Agreement" means an agreement evidencing an Option Grant.
"Parent" means a parent of a given corporation as such term is defined
in Section 424(e) of the Code.
"Participant" means a person who is eligible to receive and has
received an Award under the Plan.
"Plan" means this Plan as it may be amended or restated from time to
time.
"SEC" means the Securities and Exchange Commission.
"Shares" means shares of Common Stock.
"Subsidiary" means a subsidiary of a given corporation as such term is
defined in Section 424(f) of the Code.
"Termination without cause" means a termination by the Company or any
Parent or Subsidiary of the Company of the employment of a Grantee with the
Company or any such Parent or Subsidiary that is not for cause and is not
occasioned by the resignation, death or disability of the Grantee.
"Unrestricted Stock" means Shares granted to a Participant under
Article 6 of the Plan.
Section 1.2 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles.
Section 1.3. Effect of Definitions. The definitions set forth in
Section 1.1 above shall apply equally to the singular, plural, adjectival,
adverbial and other forms of any of the words and phrases defined regardless of
whether they are capitalized.
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ARTICLE 2. ADMINISTRATION.
Section 2.1 Committee. The Plan shall be administered by a committee of
the Board of Directors consisting or two or more Directors, each of whom is a
"Non-Employee Director" as defined in Rule 16b-3. Unless the Board of Directors
designates another of its committees to administer the Plan, the Plan shall be
administered by a committee consisting of those members of the Compensation and
Organization Committee of the Board of Directors who are Non-Employee Directors
but, if the Compensation and Organization Committee is abolished or its
membership does not contain two persons who comply with the requirements of the
first sentence of this Section 2.1, the Board of Directors shall either
reconstitute the Compensation and Organization Committee in compliance with or
create another Committee that complies with the requirements of the first
sentence of this Section 2.1 to administer the Plan. The Committee may be
referred to as the Stock Option Committee.
Section 2.2 Authority. Subject to the express provisions of the Plan
and in addition to the powers granted by other sections of the Plan, the
Committee has the authority, in its discretion, to: (a) determine the
Participants, grant Awards and determine their timing, pricing and amount; (b)
define, prescribe, amend and rescind rules, regulations, procedures, terms and
conditions relating to the Plan; (c) make all other determinations necessary or
advisable for administering the Plan, including, but not limited to,
interpreting the Plan, correcting defects, reconciling inconsistencies and
resolving ambiguities; and (d) review and resolve all claims of Employees,
Grantees and Participants. The actions and determinations of the committee on
matters related to the Plan shall be conclusive and binding upon the Company and
all Employees, Grantees and Participants.
ARTICLE 3. SHARES.
Section 3.1. Number. The aggregate number of Shares in respect of which
Awards may be granted under the Plan shall be determined by the Board of
Directors on an annual basis.
Section 3.2. Cancellations. Except as otherwise provided in the next
sentence, if any Awards granted under the Plan are canceled, terminate or expire
for any reason without having been exercised or matured in full, the shares
related to the unexercised portion of an Award shall be available again for the
purposes of the Plan. If any Shares acquired under the Plan are forfeited for
any reason, the Shares shall be available again for the purposes of the Plan.
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Section 3.3 Anti-Dilution.
(a) If the shares are split or if a dividend of Shares is paid on the
Shares, the number of Shares on which each then-outstanding Award is based and
the number of Shares as to which Awards may be granted under this Plan shall be
automatically increased by the ratio between the number of Shares outstanding
immediately after such event and the number of Shares outstanding immediately
before such event and the Exercise Price thereof shall be automatically
decreased by the same ratio, and if the shares are combined into a lessor number
of Shares, the number of Shares for which each then-outstanding Award is based
and the number of Shares as to which Awards may be granted under the Plan shall
be automatically decreased by such Ratio and the Exercise Price thereof shall be
automatically increased by such ratio.
(b) In the event of any other change in the Shares, through
recapitalization, merger, consolidation or exchange of shares or otherwise,
there shall automatically be substituted for each Share subject to an
unexercised Award and each Share available for additional grants of Awards, the
number and kind of shares or other securities into which each outstanding Share
was changed, and the Exercise Price shall be increased or decreased
proportionately so that the aggregate Exercise Price for the securities subject
to each Award shall remain the same as immediately before such event; and the
Committee may make such further equitable adjustments in the Plan and the then
outstanding Awards as deemed necessary and appropriate by the Committee
including, but not limited to, changing the number of Shares reserved under the
Plan or covered by outstanding Awards, the Exercise Price of outstanding Awards
and the vesting conditions of outstanding Awards.
Section 3.4. Source. Except as otherwise determined by the Board of
Directors, the Shares issued under the Plan shall be authorized but unissued
Shares. However, Shares which are to be delivered under the Plan may be obtained
by the Company from its treasury, by purchases on the open market or from
private sources, or by issuing authorized but unissued Shares. The proceeds of
the exercise of any Award shall be general corporate funds of the Company. No
Shares may be sold under any Option Agreement for less than the par value
thereof. No fractional Shares shall be issued or sold under the Plan nor will
any cash payment be made in lieu of fractional Shares.
Section 3.5. Rights of a Stockholder. No Grantee or other person
claiming under or through any Grantee shall have any right, title or interest in
or to any Shares allocated or reserved under the Plan or subject to any Award
except as to such Shares, if any, for which certificates representing such
Shares have been issued to such Grantee.
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Section 3.6. Securities Laws. No Award shall be exercised nor shall any
Shares or other securities be issued or transferred pursuant to an Award unless
and until all applicable requirements imposed by federal and state securities
laws and by any stock exchanges upon which the Shares may be listed, have been
fully complied with. As a condition precedent to the exercise of an Award or the
issuance of Shares pursuant to the grant or exercise of an Award, the company
may require the Grantee to take any reasonable action to meet such requirements
including providing undertakings as to the investment intent of the Grantee,
accepting transfer restrictions on the Shares issuable thereunder and providing
opinions of counsel, in form and substance acceptable to the Company, as to the
availability of exemptions from such requirements.
ARTICLE 4. ELIGIBILITY.
Section 4.1. Article 5. Only Employees who are not members of the
Committee and who are not Officers shall be eligible to receive Options under
Article 5 below.
Section 4.2. Article 6. Only Employees who are not members of the
Committee and who are not Officers shall be eligible to receive Unrestricted
Stock under Article 6 below.
ARTICLE 5. EMPLOYEES' STOCK OPTIONS.
Section 5.1. Determinations. The Committee shall determine which
eligible Employees shall be granted Options, the number of Shares for which the
Options may be exercised, the times when they shall receive them and the terms
and conditions of individual Option grants (which need not be identical). All
Options shall be Nonqualified Options.
Section 5.2. Exercise Price. The Committee shall determine the Exercise
Price of each Option at the time that it is granted, but in no event shall the
Exercise Price of an Option be less than the Fair Market Value of a Share on the
Date of Grant. If no express determination of the Exercise Price of an Option is
made by the Committee, the Exercise Price thereof is equal to the Fair Market
Value of a Share on the Date of Grant.
Section 5.3. Term. Subject to the rule set forth in the next sentence,
the Committee shall determine the times when an Option vests and the term during
which an Option is exercisable at the time that it is granted. No Option shall
be exercisable after the expiration of ten years from the Date of Grant. If no
express determination of the times when Options are exercisable is made by the
Committee:
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(a) each Option shall vest and first become exercisable as to 25% of
the Shares subject to such Option on each of the first four anniversaries of the
Date of Grant provided the Participant has been an Employee continuously during
the time beginning on the Date of Grant and ending on the date when such portion
vests and first becomes exercisable; and
(b) each Option shall lapse and cease to be exercisable upon the
earliest of:
(i) the expiration of ten years from the Date of Grant;
(ii) six months after the Participant ceases to be an Employee
because of death or disability;
(iii) 30 days after the termination without cause of
Participant's employment with the Company or any Parent or Subsidiary of the
Company by the Company or any such Parent or Subsidiary of the Company; or
(iv) immediately, upon termination of the Participant's
employment with the Company or any Parent or Subsidiary by the Company or any
such Parent or Subsidiary of the Company for cause or by the Participant's
resignation.
Section 5.4. Exercise. Notwithstanding the terms of any Option and
Section 5.3, all Options that have not previously been exercised nor lapsed and
ceased to be exercisable, shall vest fully and become exercisable upon the
occurrence of any change in control. An Option shall be exercised by the
delivery of the Option Agreement therefor (if requested by the Company) with the
notice of exercise attached thereto properly completed and duly executed by the
Grantee named therein to the Treasurer of the Company or his or her designee,
together with the aggregate Exercise Price for the number of Shares as to which
the Option is being exercised, after the Option has become exercisable and
before it has ceased to be exercisable. An Option may be exercised as to less
than all of the Shares purchasable thereunder, but not for a fractional share.
No Option may be exercised as to less than 50 Shares unless it is exercised as
to all of the Shares then available thereunder. The Committee may, in its sole
discretion, and upon such terms and conditions as it shall determine at or after
the Date of Grant, permit the Exercise Price to be paid in cash, by the tender
to the Company of Shares owned by the Grantee or by a combination thereof. If
the Committee does not make such determination, the Exercise Price shall be paid
in cash. If any portion of the Exercise Price of an Option is payable in cash,
it may be paid by (a) delivery of a certified or cashier's check payable to the
order of the Company in such amount; or (b) wire transfer of
immediately-available funds to a bank account designated by the Company. If any
portion of the Exercise Price of an Option is payable in Shares it may be paid
by delivery of certificates representing a number of Shares having a total fair
market value on the date of exercise equal to or greater than the required
amount, duly endorsed for transfer with all signatures guaranteed by a medallion
signature guarantee. If more Shares than are necessary to pay such Exercise
Price based on their fair market value on
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on the date of exercise are delivered to the Company, it shall return to the
Grantee a certificate for the balance of the whole number of Shares and a check
payable to the order of the Grantee for any fraction of a Share. Shares may not
be delivered to the Company as payment for the exercise of an Option if such
Shares have been owned by the Grantee (together with his or her decedent or
testator) for less than six months. Promptly after an Option is properly
exercised, the Company shall issue to the Grantee a certificate representing the
Shares purchased thereunder.
Section 5.5. Option Agreement.Promptly after the Date of Grant,
Greyhound shall duly execute and deliver to the Grantee an Option Agreement
setting forth the terms of the Option. Option Agreements are not negotiable
instruments or securities (as such term is defined in Article 8 of the Uniform
Commercial Code). Lost and destroyed Option Agreements may be replaced without
bond.
Section 5.6. New Hires. A person to whom the Company is offering
employment may be granted a Nonqualified Option under this Article 5, but any
such grant shall lapse if the person does not subsequently become an Employee
pursuant to such offer.
ARTICLE 6. UNRESTRICTED STOCK
The Committee shall determine which eligible Employees will receive
Unrestricted Stock, the number of shares of Unrestricted Stock each eligible
Employee will receive, the times when each eligible Employee shall receive
Unrestricted Stock, and the terms and conditions of individual Unrestricted
Stock Awards (which need not be identical). Promptly after the grant of an Award
of Unrestricted Stock, the Company shall issue to the Grantee a certificate
representing the Shares received thereunder. The Committee shall grant Awards of
Unrestricted Stock in consideration for services rendered by the Participant
which are deemed by the Committee to have a value to the Company in excess of
the par value of the Shares so awarded.
ARTICLE 7. PROVISIONS APPLICABLE TO AWARDS.
Section 7.1. Corporate Mergers and Acquisitions.The Committee may grant
Awards having terms and conditions which vary from those specified in the Plan
if such Awards are granted in substitution for, or in connection with the
assumption of, existing options granted by another business entity and assumed
or otherwise agreed to be provided for by Greyhound pursuant to or by reason of
a transaction involving a merger or consolidation of or acquisition of
substantially all of the assets or stock of another business entity that is not
a Subsidiary of Greyhound prior to such acquisition, with or by Greyhound or its
Subsidiaries.
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Section 7.2. Withholding. The Company shall have the right to withhold
from any payments due under any Award or due to any Grantee from the Company as
compensation or otherwise the amounts of any federal, state or local withholding
taxes not paid by the Grantee at the time of the exercise or vesting of any
Award. If cash payments sufficient to allow for withholding of taxes are not
made at the time of exercise or vesting of an Award, the Grantee exercising such
Award shall pay to Greyhound an amount equal to the withholding required to be
made less the withholding otherwise made in cash or, if allowed by the Committee
in its discretion and pursuant to rules adopted by the Committee consistent with
Section 5.4 above, Shares previously owned by the Grantee. The Company may make
such other provisions as it deems appropriate to withhold any taxes the Company
determines are required to be withheld in connection with the exercise of any
Award, including, but not limited to, the withholding of Shares from an Award
upon such terms and conditions as the Committee may provide. The Company may
require the Participant to satisfy any relevant withholding requirements before
issuing Shares or delivering any Award to the Participant.
Section 7.3. Disability. If a Grantee who is an Employee with the
Company is absent from work with the Company because of a physical or mental
disability, for purposes of the Plan, such Grantee will not be considered to
have ended his or her employment with the Company while such Grantee has that
disability, unless he or she resigns or the Committee decides otherwise.
ARTICLE 8. GENERAL PROVISIONS.
Section 8.1. No Right to Employment. Nothing in the Plan or any Award
or any instrument executed pursuant to the Plan will confer upon any participant
any right to continue to be employed by or provide services to the Company or
affect the right of the Company to terminate the employment of any Participant
or its other relationship with any Participant.
Section 8.2. Limited Liability. The liability of the Company under this
Plan or in connection with any exercise of any Award is limited to the
obligations expressly set forth in the Plan and in the grant of any Award, and
no term or provision of this Plan nor of any Award shall be construed to impose
any duty, obligation or liability on the Company not expressly set forth in the
Plan or any grant of any Award.
Section 8.3. Assumption of Awards. Upon the dissolution or liquidation
of the Company, or upon a reorganization, merger or consolidation of the Company
with one or more other entities as a result of which the Company is not the
surviving entity, or upon a sale of substantially all the assets of the Company
to another entity, any Awards outstanding theretofore granted or sold hereunder
must be assumed by the surviving or purchasing entity, with appropriate
adjustments as to the number and kind of shares and price. Nothing in this
Section 8.3 shall be deemed to alter or supersede any provision of the Plan
relating to the vesting or maturity of Awards upon a Change in Control.
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Section 8.4. No Transfer. No Award or other benefit under the plan may
be sold, pledged or otherwise transferred other than by will or the laws of
descent and distribution; and no Award may be exercised during the life of the
Participant to whom it was granted except by such Participant.
Section 8.5. Expenses. All costs and expenses incurred in connection
with the administration of the Plan including any excise tax imposed upon the
transfer of Shares pursuant to the exercise of an Award shall be borne by the
Company.
Section 8.6. Notices. Notices and other communications required or
permitted to be made under the Plan shall be in writing and shall be deemed to
have been duly given if personally delivered or if sent by first class mail
addressed (a) if to a Grantee, at his or her residence address set forth in the
records of the Company or (b) if to the Company, to its President at its
principal executive office.
Section 8.7. Third Parties. Nothing herein expressed or implied is
intended or shall be construed to give any person other than the Grantees any
rights or remedies under this Plan.
Section 8.8. Saturdays, Sundays and Holidays. Where this Plan
authorizes or requires a payment or performance on a Saturday, Sunday or public
holiday, such payment or performance shall be deemed to be timely if made on the
next succeeding business day; provided, however, that this Section 8.8 shall not
be construed to extend the ten year period referred to in Section 5.3 above.
Section 8.9. Rules of Construction. The captions and section numbers
appearing in this Plan are inserted only as a matter of convenience. They do not
define, limit or describe the scope or intent of the provisions of this Plan. In
this Plan, words in the singular number include the plural, and in the plural
include the singular; and words of the masculine gender include the feminine and
the neuter, and when the sense so indicates words of the neuter gender may refer
to any gender.
Section 8.10. GOVERNING LAW. THE VALIDITY, TERMS, PERFORMANCE AND
ENFORCEMENT OF THIS PLAN SHALL BE GOVERNED BY LAWS OF THE STATE OF DELAWARE THAT
ARE APPLICABLE TO AGREEMENTS NEGOTIATED, EXECUTED, DELIVERED AND PERFORMED
SOLELY IN THE STATE OF DELAWARE.
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Section 8.11. Effective Date of the Plan. The Plan shall become
effective as of January 21, 1998, the date upon which the Plan was approved by
the affirmative vote of the Board of Directors of Greyhound Lines, Inc.
Section 8.12. Amendment and Termination.No Award shall be granted under
the Plan more than ten years after the Effective Date. The Board of Directors
may at any time terminate the Plan, or make such amendment of the Plan as it may
deem advisable; provided, however, that no amendment or termination of the Plan
shall be effective to materially alter or impair the rights of a Grantee under
any Award made before the adoption of such amendment or termination by the Board
of Directors, without the written consent of such Grantee. No termination or
amendment of this Plan or any Award nor waiver of any right or requirement under
this Plan or any Award shall be binding on the Company unless it is in a writing
duly entered into its records and executed by a duly authorized Officer.
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