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EXHIBIT 10.16
DATE: FEBRUARY 21, 1997
AMENDED AND RESTATED ENVOY CORPORATION
1995 EMPLOYEE STOCK INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS.
(a) PURPOSE. The purpose of the Plan is to enable the Corporation to
attract, retain and reward officers and key employees of and consultants to the
Corporation and its Subsidiaries and Affiliates, and strengthen the mutuality of
interests between such individuals and the Corporation's shareholders, by
offering such officers, key employees and consultants Options or other rights
with respect to shares of Common Stock of the Corporation. The creation of the
Plan shall not diminish or prejudice other compensation programs approved from
time to time by the Board.
(b) DEFINITIONS. For purposes of the Plan, the following terms are
defined as set forth below:
(i) "Affiliate" means any entity other than the Corporation and its
Subsidiaries that is designated by the Board as a participating employer under
the Plan, provided that the Corporation directly or indirectly owns at least 20%
of the combined voting power of all classes of stock of such entity or at least
20% of the ownership interests in such entity.
(ii) "Board" means the Board of Directors of the Corporation.
(iii) "Capital Transaction" has the meaning provided in Section 3(b) of
the Plan.
(iv) "Cause" has the meaning provided in Section 5(b)(x) of the Plan.
(v) "Change in Control" has the meaning provided in Section 9(b) of the
Plan.
(vi) "Change in Control Price" has the meaning provided in Section 9(d)
of the Plan.
(vii) "Common Stock" means the Corporation's Common Stock, without par
value, together with the associated rights under the Corporation's Shareholders'
Rights Plan.
(viii) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(ix) "Commission" means the Securities and Exchange Commission.
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(x) "Committee" means the Committee referred to in Section 2 of the
Plan.
(xi) "Corporation" means Envoy Corporation, a corporation organized
under the laws of the State of Tennessee, or any successor corporation.
(xii) "Disability" means disability as determined under the
Corporation's long-term disability insurance policy or, if there is no such
definition, as reasonably determined by the Committee.
(xiii) "Disinterested Person" has the meaning set forth in Rule
16b-3(c)(2)(i) as promulgated by the Commission under the Exchange Act, or any
successor definition adopted by the Commission.
(xiv) "Early Retirement" means retirement, for purposes of this Plan
with the express consent of the Corporation at or before the time of such
retirement, from active employment with the Corporation and any Subsidiary or
Affiliate prior to age 65, in accordance with any applicable early retirement
policy of the Corporation then in effect.
(xv) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
(xvi) "Fair Market Value" means the reported closing price of the
Common Stock on The Nasdaq Stock Market's National Market on the relevant date
or, if no shares of Common Stock are traded on that date, the reported closing
price on the next preceding date on which shares were traded. In the event that
trading in the shares of Common Stock is no longer reported on The Nasdaq Stock
Market's National Market, Fair Market Value shall be determined by such other
method as the Committee in good faith deems appropriate without regard to any
restriction other than a restriction which, by its terms, will never lapse.
(xvii) "Incentive Stock Option" means any Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422 of
the Code.
(xviii) "Non-Qualified Stock Option" means any Option that is not an
Incentive Stock Option.
(xix) "Normal Retirement" means retirement from active employment with
the Corporation and any Subsidiary or Affiliate on or after age 65.
(xx) "Option" means any option to purchase shares of Common Stock
granted pursuant to Section 5 below.
(xxi) "Other Stock-Based Award" means an award under Section 8 below
that is valued in whole or in part by reference to, or is otherwise based on,
Common Stock.
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(xxii) "Plan" means this Envoy Corporation 1995 Employee Stock
Incentive Plan, as amended from time to time in accordance herewith.
(xxiii) "Restriction Period" has the meaning provided in Section
7(c)(i) of the Plan.
(xxiv) "Restricted Stock" means an award of shares of Common Stock that
is subject to restrictions under Section 7 of the Plan.
(xxv) "Retirement" means Normal Retirement or Early Retirement.
(xxvi) "Stock Appreciation Right" means the right granted under Section
6 of the Plan.
(xxvii) "Subsidiary" means any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation if 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 the chain.
SECTION 2. ADMINISTRATION.
(a) THE COMMITTEE. The Plan shall be administered by a Committee of not
less than two Disinterested Persons, who shall be appointed by the Board and who
shall serve at the pleasure of the Board. The functions of the Committee
specified in the Plan may be exercised by an existing Committee of the Board
composed exclusively of Disinterested Persons. The initial Committee shall be
the Compensation Committee of the Board.
(b) AUTHORITY OF THE COMMITTEE. The Committee shall have authority to
grant, pursuant to the terms of the Plan, to officers, other key employees and
consultants eligible under Section 4 hereof: Options, Stock Appreciation Rights,
Restricted Stock and Other Stock-Based Awards.
In particular, the Committee shall have the authority, consistent with
the terms of the Plan:
(i) to select the officers and other key employees of and
consultants to the Corporation and its Subsidiaries and Affiliates to
whom Options, Stock Appreciation Rights, Restricted Stock or Other
Stock-Based Awards may from time to time be granted hereunder;
(ii) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock or Other
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Stock-Based Awards, or any combination thereof, are to be granted
hereunder to one or more eligible employees;
(iii) to determine the number of shares to be covered by each
such award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including,
but not limited to, the share price and any restriction or limitation,
or any vesting, acceleration of vesting or waiver of forfeiture
restrictions regarding any Option or other award or the shares of
Common Stock relating thereto, based in each case on such factors as
the Committee shall determine, in its sole discretion) and to amend or
waive any such terms and conditions to the extent permitted by Section
10 hereof;
(v) to determine whether and under what circumstances an
Option or Stock Appreciation Right may be settled in cash or Restricted
Stock under Section 5(b)(xiii) hereof, instead of shares of Common
Stock;
(vi) to determine whether, to what extent and under what
circumstances Option grants or other awards under the Plan are to be
made, and operate, on a tandem basis vis-a-vis other awards under the
Plan, or on an additive basis;
(vii) to determine whether, to what extent and under what
circumstances shares of Common Stock and other amounts payable with
respect to an award under this Plan shall be deferred either
automatically or at the election of the participant (including
providing for and determining the amount (if any) of any deemed
earnings on any deferred amount during any deferral period); and
(viii) to determine whether to require payment of any
withholding requirements in shares of Common Stock.
The Committee shall have the authority to adopt, alter and repeal such
rules, guidelines and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan and any
award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be made in the Committee's sole discretion and shall be final and
binding on all persons, including the Corporation and Plan participants.
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SECTION 3. SHARES OF COMMON STOCK SUBJECT TO PLAN.
(a) SHARES OF COMMON STOCK RESERVED UNDER PLAN. The aggregate number of
shares of Common Stock reserved and available for distribution under the Plan
shall be 3,000,000 shares. Such shares of Common Stock may consist, in whole or
in part, of authorized and unissued shares or treasury shares. The aggregate
number of shares of Common Stock that may be granted to any individual pursuant
to any award under the Plan or with respect to which any awards are made shall
be 500,000, or up to 500,000 in any one year.
If any Option or Stock Appreciation Right expires or is forfeited
without exercise, or if any shares of Common Stock that are subject to any
Restricted Stock or Other Stock-Based Award granted hereunder are forfeited
prior to the payment of any dividends, if applicable, with respect to such
shares of Common Stock, such shares shall again be available for distribution in
connection with future awards under the Plan. If dividends have been paid to the
grantee with respect to the shares of Common Stock subject to such forfeited
award, such shares shall not be available for distribution in connection with
future awards under the Plan.
(b) ADJUSTMENT IN CERTAIN EVENTS. In the event of any merger,
reorganization, consolidation, recapitalization, extraordinary cash dividend,
stock dividend, stock split or other change in corporate structure affecting the
Common Stock (a "Capital Transaction"), a substitution or adjustment will be
made in the aggregate number of shares reserved for issuance under the Plan, the
number that may be granted to any individual in any year or over the life of the
Plan and the number and price (if applicable) of shares subject to outstanding
awards granted under the Plan, so as to provide each holder of an award under
this Plan with the same rights on exercise or distribution of the benefits of
such award that such holder would have received if such holder had exercised or
received a distribution of the benefits of such award immediately prior to the
occurrence of such Capital Transaction; provided, however, that the number of
shares subject to any award shall always be a whole number. In the event of any
dispute as to any substitution or adjustment made under this Section 3(b), the
decision of the Committee shall be final and binding on all persons, including
the Corporation and Plan participants.
SECTION 4. ELIGIBILITY.
Officers and other key employees of and consultants to the Corporation
and its Subsidiaries and Affiliates (but excluding members of the Committee and
any person who serves only as a director) who are responsible for or contribute
to the management, growth or profitability of the business of the Corporation
and its Subsidiaries and Affiliates are eligible to be granted awards under the
Plan. Incentive Stock Options may only be granted to persons who are employees
of the Corporation or a Subsidiary of the Corporation.
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SECTION 5. OPTIONS.
(a) ADMINISTRATION. Options may be granted alone, in addition to or in
tandem with other awards granted under the Plan. Any Option granted under the
Plan shall be in such form as the Committee may from time to time approve.
Options granted under the Plan may be of two types: (i) Incentive Stock
Options and (ii) Non-Qualified Stock Options. Incentive Stock Options may be
granted only to individuals who are employees of the Corporation or any
Subsidiary of the Corporation.
The Committee shall have the authority to grant to any optionee
(subject to the limitation set forth in the paragraph above) Incentive Stock
Options, Non-Qualified Stock Options, or both types of Options (in each case
with or without Stock Appreciation Rights).
(b) TERMS AND CONDITIONS. Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable.
(i) Option Price. The option price per share of Common Stock
purchasable under an Option shall be determined by the Committee at the
time of grant but shall be not less than 100% (or, in the case of any
employee who owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation or of any of
its subsidiary or parent corporations, not less than 110%) of the Fair
Market Value of the Common Stock at grant, in the case of Incentive
Stock Options, and not less than 50% of the Fair Market Value of the
Common Stock at grant, in the case of Non-Qualified Stock Options.
(ii) Option Term. The term of each Option shall be fixed by
the Committee, but no Incentive Stock Option shall be exercisable more
than ten years (or, in the case of an employee who owns stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation or any of its subsidiary or parent
corporations, more than five years) after the date the Option is
granted.
(iii) Exercisability. Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant; provided, however, that
except as provided in Section 5(b)(vii), (viii) and (ix) hereof and
Section 9 hereof, unless otherwise determined by the Committee at or
after grant, no Option shall be exercisable prior to the first
anniversary date of the granting of the Option. The Committee may
provide that an Option shall vest over a period of future service at a
rate specified at the time of grant, or that the Option is
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exercisable only in installments. If the Committee provides, in its
sole discretion, that any Option is exercisable only in installments,
the Committee may waive such installment exercise provisions at any
time at or after grant in whole or in part, based on such factors as
the Committee shall determine, in its sole discretion. The Committee
may establish performance conditions or other conditions to the
exercisability of any Options, as determined by the Committee in its
sole discretion, which conditions may be waived by the Committee in its
sole discretion.
(iv) Method of Exercise. Subject to whatever installment or
other exercise restrictions apply under Section 5(b)(iii) hereof,
Options may be exercised in whole or in part at any time during the
option period, by giving written notice of exercise to the Corporation
specifying the number of shares to be purchased.
Such notice shall be accompanied by payment in full of the
purchase price, either by check, note or such other instrument as the
Committee may accept. As determined by the Committee, in its sole
discretion, at or (except in the case of an Incentive Stock Option)
after grant, payment in full or in part may also be made in the form of
unrestricted shares of Common Stock already owned by the optionee or,
in the case of the exercise of a Non-Qualified Stock Option, Common
Stock or Restricted Stock subject to an award hereunder (based in each
case, on the Fair Market Value of the Common Stock on the date the
option is exercised, as determined by the Committee). If payment of the
exercise price is made in part or in full with shares of Common Stock,
the Committee may (subject to the availability of additional shares
reserved for issuance under Section 3 above) award to the optionee a
new Option to replace the shares of Common Stock which were
surrendered.
If payment of the option exercise price of a Non-Qualified
Stock Option is made in whole or in part in the form of Restricted
Stock, the Common Stock received upon exercise shall be restricted in
accordance with the original terms of the Restricted Stock award in
question, and any additional shares of Common Stock received upon the
exercise shall be subject to the same forfeiture restrictions, unless
otherwise determined by the Committee, in its sole discretion, at or
after grant.
No shares of Common Stock shall be issued until full payment
therefor has been made. An optionee shall generally have the rights to
dividends or other rights of a shareholder with respect to shares
subject to the Option when the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has
given the representation described in Section 12(a) hereof.
(v) Non-Transferability of Incentive Stock Options.
Notwithstanding any other provision of this Plan, no Incentive Stock
Option shall be transferable by the optionee otherwise than by will or
by the laws of descent and distribution, and all
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Incentive Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee.
(vi) Bonus for Taxes. In the case of a Non-Qualified Stock
Option, the Committee in its discretion may award at the time of grant
or thereafter the right to receive upon exercise of such Option a cash
bonus calculated to pay part or all of the federal and state, if any,
income tax incurred by the optionee upon such exercise.
(vii) Termination by Death. Subject to Section 5(b)(xi)
hereof, if an optionee's employment by the Corporation and any
Subsidiary or (except in the case of an Incentive Stock Option)
Affiliate terminates by reason of death, any Option held by such
optionee may thereafter be exercised, to the extent such Option was
exercisable at the time of death or (except in the case of an Incentive
Stock Option) on such accelerated basis as the Committee may determine
at or after grant (or except in the case of an Incentive Stock Option,
as may be determined in accordance with procedures established by the
Committee) by the legal representative of the estate or by the legatee
of the optionee under the will of the optionee, for a period of one
year (or such shorter period as the Committee may specify at grant)
from the date of such death or until the expiration of the stated term
of such Option, whichever period is the shorter.
(viii) Termination by Reason of Disability. Subject to Section
5(b)(xi) hereof, if an optionee's employment by the Corporation and any
Subsidiary or (except in the case of an Incentive Stock Option)
Affiliate terminates by reason of Disability, any Option held by such
optionee may thereafter be exercised by the optionee, to the extent it
was exercisable at the time of termination or (except in the case of an
Incentive Stock Option) on such accelerated basis as the Committee may
determine at or after grant (or, except in the case of an Incentive
Stock Option, as may be determined in accordance with procedures
established by the Committee), for a period of (A) three years (or such
shorter period as the Committee may specify at grant) from the date of
such termination of employment or until the expiration of the stated
term of such Option, whichever period is the shorter, in the case of a
Non-Qualified Stock Option and (B) one year from the date of
termination of employment or until the expiration of the stated term of
such Option, whichever period is shorter, in the case of an Incentive
Stock Option; provided, however, that, if the optionee dies within the
period specified in clause (A) above (or such other period as the
Committee shall specify at grant), any unexercised Non-Qualified Stock
Option held by such optionee shall thereafter be exercisable to the
extent to which it was exercisable at the time of death for a period of
twelve months from the date of such death or until the expiration of
the stated term of such Option, whichever period is the shorter. In the
event of termination of employment by reason of Disability, if an
Incentive Stock Option is exercised after the expiration of the
exercise period applicable to Incentive Stock Options, but before the
expiration of any period that would apply if such Stock Option
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were a Non-Qualified Stock Option, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
(ix) Termination by Reason of Retirement. Subject to Section
5(b)(xi) hereof, if an optionee's employment by the Corporation and any
Subsidiary or (except in the case of an Incentive Stock Option)
Affiliate terminates by reason of Normal or Early Retirement, any
Option held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of such
Retirement or (except in the case of an Incentive Stock Option) on such
accelerated basis as the Committee may determine at or after grant (or,
except in the case of an Incentive Stock Option, as may be determined
in accordance with procedures established by the Committee), for a
period of (A) three years (or such shorter period as the Committee may
specify at grant) from the date of such termination of employment or
the expiration of the stated term of such Option, whichever period is
the shorter, in the case of a Non-Qualified Stock Option and (B) three
months from the date of such termination of employment or the
expiration of the stated term of such Option, whichever period is the
shorter, in the event of an Incentive Stock Option; provided, however,
that, if the optionee dies within the period specified in clause (A)
above (or such shorter period as the Committee may specify at grant),
any unexercised Non-Qualified Stock Option held by such optionee shall
thereafter be exercisable, to the extent to which it was exercisable at
the time of death, for a period of 12 months from the date of such
death or until the expiration of the stated term of such Option,
whichever period is the shorter. In the event of termination of
employment by reason of Retirement, if an Incentive Stock Option is
exercised after the expiration of the exercise period applicable to
Incentive Stock Options, but before the expiration of the period that
would apply if such Stock Option were a Non-Qualified Stock Option, the
option will thereafter be treated as a Non-Qualified Stock Option.
(x) Other Termination. Unless otherwise determined by the
Committee (or pursuant to procedures established by the Committee) at
or (except in the case of an Incentive Stock Option) after grant, if an
optionee's employment by the Corporation and any Subsidiary or (except
in the case of an Incentive Stock Option) Affiliate is involuntarily
terminated for any reason other than death, Disability or Normal or
Early Retirement, the Option shall thereupon terminate, except that
such Option may be exercised, to the extent otherwise then exercisable,
for the lesser of three months or the balance of such Option's term if
the involuntary termination is without Cause. For purposes of this
Plan, "Cause" means (A) a felony conviction of a participant or the
failure of a participant to contest prosecution for a felony, or (B) a
participant's willful misconduct or dishonesty, which is directly and
materially harmful to the business or reputation of the Corporation or
any Subsidiary or Affiliate. If an optionee voluntarily terminates
employment with the Corporation and any Subsidiary or (except in the
case of an Incentive Stock Option) Affiliate (except for Disability,
Normal or Early Retirement), the Option shall thereupon terminate;
provided, however, that the
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Committee at grant or (except in the case of an Incentive Stock Option)
thereafter may extend the exercise period in this situation for the
lesser of three months or the balance of such Option's term.
(xi) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term of this Plan relating to Incentive
Stock Options shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be so exercised, so as
to disqualify the Plan under Section 422 of the Code, or, without the
consent of the optionee(s) affected, to disqualify any Incentive Stock
Option under such Section 422.
No Incentive Stock Option shall be granted to any participant
under the Plan if such grant would cause the aggregate Fair Market
Value (as of the date the Incentive Stock Option is granted) of the
shares of Common Stock with respect to which all Incentive Stock
Options are exercisable for the first time by such optionee during any
calendar year (under all such plans of the Corporation and any
Subsidiary) to exceed $100,000.
To the extent permitted under Section 422 of the Code or the
applicable regulations thereunder or any applicable Internal Revenue
Service pronouncement:
a. if the exercise of an Incentive Stock Option
is accelerated by reason of a Change in Control, any portion
of such option that is not exercisable as an "incentive stock
option" under Section 422 of the Code by reason of the
$100,000 limitation contained in Section 422(d) of the Code
shall be treated as a Non-Qualified Stock Option;
b. if for any other reason the portion of any
Incentive Stock Option that is otherwise exercisable without
regard to the $100,000 limitation contained in Section 422(d)
of the Code, is greater than the portion of such option that
is immediately exercisable as an "incentive stock option"
under Section 422 of the Code, such excess shall be treated as
a Non-Qualified Stock Option; and
c. the Committee shall have the right, with the
consent of the optionee, to treat an Incentive Stock Option
that cannot be exercised, for any other reason, as an
"incentive stock option" under Section 422 of the Code as a
Non-Qualified Stock Option.
(xii) Performance and Other Conditions. The Committee may
condition the exercise of any Option upon the attainment of specified
performance goals or other factors as the Committee may determine, in
its sole discretion. Unless specifically provided in the option
agreement, any such conditional Option shall vest immediately
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prior to its expiration if the conditions to exercise have not
theretofore been satisfied. The shares of Common Stock acquired
pursuant to any conditional Option shall not be transferable by an
optionee subject to Section 16(a) of the Exchange Act within six months
of the date such Option first becomes exercisable.
(xiii) Settlement Provisions. If the option agreement so
provides at grant or (except in the case of an Incentive Stock Option)
is amended after grant and prior to exercise to so provide (with the
optionee's consent), the Committee may require that all or part of the
shares to be issued with respect to the spread value of an exercised
Option take the form of Restricted Stock, which shall be valued on the
date of exercise on the basis of the Fair Market Value (as determined
by the Committee) of such Restricted Stock determined without regards
to the forfeiture restrictions involved.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) GRANT AND EXERCISE. Stock Appreciation Rights may be granted alone
or in conjunction with all or part of any Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of the grant of such Option.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Option, subject to such provisions as the
Committee may specify at grant where a Stock Appreciation Right is granted with
respect to less than the full number of shares covered by a related Option.
A Stock Appreciation Right may be exercised by the grantee, subject to
Section 6(b) hereof, in accordance with the procedures established by the
Committee for such purpose. Upon such exercise, the grantee shall be entitled to
receive an amount determined in the manner prescribed in Section 6(b) hereof.
Options relating to exercised Stock Appreciation Rights shall no longer be
exercisable to the extent that the related Stock Appreciation Rights have been
exercised.
(b) TERMS AND CONDITIONS. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:
(i) Exercise Provisions for Tandem Grants. A Stock
Appreciation Right granted in conjunction with all or part of any
Option shall be exercisable only at such time or times and to the
extent that the Option to which it relates shall be exercisable in
accordance with the provisions of Section 5 and this Section 6 of the
Plan; provided,
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however, that any Stock Appreciation Right granted to a grantee subject
to Section 16(a) of the Exchange Act shall be subject to the further
limitations set forth in Section 6(b)(v) and, if applicable, Section
6(b)(vi) below.
(ii) Payment on Exercise. Upon the exercise of a Stock
Appreciation Right, a grantee shall be entitled to receive an amount in
cash or shares of Common Stock (or a combination of cash and shares of
Common Stock) equal in value to the excess of the Fair Market Value of
one share of Common Stock over the price per share specified in the
Stock Appreciation Right or related Option multiplied by the number of
shares in respect of which the Stock Appreciation Right shall have been
exercised, with the Committee having the right to determine the form of
payment.
(iii) Use of Authorized Shares. Upon the exercise of a Stock
Appreciation Right, any shares of Common Stock issued thereunder or
with respect to which a cash payment was made shall be deemed to have
been issued for the purpose of the limitation set forth in Section 3 of
the Plan on the number of shares of Common Stock to be issued under the
Plan.
(iv) Payment based on Change in Control Price. Unless
otherwise determined by the Committee at grant, in the event of a
Change in Control or a Potential Change in Control, the amount to be
paid upon the exercise of a Stock Appreciation Right shall be based on
the Change in Control Price, subject to such terms and conditions as
the Committee may specify at grant.
(v) Restrictions on Exercise by Persons Subject to Section
16(a). The exercise of Stock Appreciation Rights held by grantees who
are subject to Section 16(a) of the Exchange Act shall comply with Rule
16b-3(e) thereunder. In particular, such Stock Appreciation Rights
shall be exercisable only pursuant an irrevocable election made at
least six months prior to the date of exercise or within the applicable
ten business day "window" periods specified in Rule 16b-3(e)(3). Stock
Appreciation Rights held by grantees who are subject to Section 16(a)
of the Exchange Act shall not be exercisable for the first six months
after the date of grant.
(vi) Performance and Other Conditions. The Committee may
condition the exercise of any Stock Appreciation Right upon the
attainment of specified performance goals or other factors as the
Committee may determine, in its sole discretion. Unless specifically
provided in the applicable award agreement, any such conditional Stock
Appreciation Right shall vest immediately prior to its expiration, if
the conditions to exercise have not theretofore been satisfied. A
conditional Stock Appreciation Right held by a grantee subject to
Section 16(a) of the Exchange Act shall not be exercisable until the
expiration of six months following the satisfaction of the condition
giving rise to such Stock Appreciation Right.
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SECTION 7. RESTRICTED STOCK.
(a) ADMINISTRATION. Shares of Restricted Stock may be issued either
alone, in addition to or in tandem with other awards granted under the Plan. The
Committee shall determine the eligible persons to whom, and the time or times at
which, grants of Restricted Stock will be made, the number of shares of
Restricted Stock to be awarded to any person, the price (if any) to be paid by
the recipient of Restricted Stock (subject to Section 7(b) hereof), the time or
times within which such awards may be subject to forfeiture, and the other
terms, restrictions and conditions of the awards in addition to those set forth
in Section 7(c) hereof.
The Committee may condition the grant or vesting of Restricted Stock
upon the attainment of specified performance goals or other factors as the
Committee may determine, in its sole discretion.
(b) AWARDS AND CERTIFICATES. The prospective recipient of a Restricted
Stock award shall not have any rights with respect to such award, unless and
until such recipient has executed an agreement evidencing the award and has
delivered a fully executed copy thereof to the Corporation, and has otherwise
complied with the applicable terms and conditions of such award.
(i) Purchase Price. The purchase price for shares of
Restricted Stock shall be established by the Committee and may be zero.
(ii) Acceptance of Awards. Awards of Restricted Stock must be
accepted within a period of 60 days (or such shorter period as the
Committee may specify at grant) after the award date, by executing a
Restricted Stock award agreement and paying whatever price (if any) is
required under Section 7(b)(i) hereof.
(iii) Stock Certificates. Each participant receiving a
Restricted Stock award shall be issued a stock certificate in respect
of such shares of Restricted Stock. Such certificate shall be
registered in the name of such participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such award.
(iv) Custody of Stock Certificates. The Committee shall
require that the stock certificates evidencing such shares be held in
custody by the Corporation until the restrictions thereon shall have
lapsed, and that, as a condition of any Restricted Stock award, the
participant shall have delivered a stock power, endorsed in blank,
relating to the shares of Common Stock covered by such award.
(c) RESTRICTIONS AND CONDITIONS. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following restrictions and
conditions:
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(i) Restriction Period. Subject to the provisions of this Plan
and the award agreement, during a period set by the Committee
commencing with the date of such award (the "Restriction Period"), the
participant shall not be permitted to sell, transfer, pledge, assign or
otherwise encumber shares of Restricted Stock awarded under the Plan.
Within these limits, the Committee, in its sole discretion, may provide
for the lapse of such restrictions in installments and may accelerate
or waive such restrictions in whole or in part, based on service,
performance or other factors or criteria as the Committee may
determine, in its sole discretion.
(ii) Dividends. Except as provided in this paragraph (ii),
Section 7(c)(i) hereof and the award agreement, the participant shall
have, with respect to the shares of Restricted Stock, all of the rights
of a shareholder of the Corporation, including the right to vote the
shares, and the right to receive any cash dividends. The Committee, in
its sole discretion, as determined at the time of award, may permit or
require the payment of cash dividends to be deferred and, if the
Committee so determines, reinvested, subject to Section 12(e) hereof,
in additional Restricted Stock to the extent shares are available under
Section 3 hereof, or otherwise reinvested. Pursuant to Section 3
hereof, stock dividends issued with respect to Restricted Stock shall
be treated as additional shares of Restricted Stock that are subject to
the same restrictions and other terms and conditions that apply to the
shares of Restricted Stock with respect to which such dividends are
issued.
(iii) Vesting and Forfeiture. Subject to the applicable
provisions of the award agreement and this Section 7, upon termination
of a participant's employment with the Corporation and any Subsidiary
or Affiliate for any reason during the Restriction Period, all shares
still subject to restriction will vest, or be forfeited, in accordance
with the terms and conditions established by the Committee at or after
grant.
(iv) Delivery of Shares on Termination of Restriction Period.
If and when the Restriction Period expires without a prior forfeiture
of the Restricted Stock subject to such Restriction Period,
certificates for an appropriate number of unrestricted shares shall be
delivered to the participant promptly.
SECTION 8. OTHER STOCK-BASED AWARDS.
(a) ADMINISTRATION. Other Stock-Based Awards valued by reference to
shares of Common Stock may be granted either alone or in addition to or in
tandem with Options, Stock Appreciation Rights or Restricted Stock granted under
the Plan; provided that no such Other Stock-Based Awards may be granted in
tandem with Incentive Stock Options if that would cause such Incentive Stock
Options not to qualify as "incentive stock options" pursuant to Section 422 of
the Code.
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Subject to the provisions of the Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which such
awards shall be made, the number of shares of Common Stock to be awarded
pursuant to such awards, and all other conditions of the awards. The Committee
may also provide for the grant of shares of Common Stock upon the completion of
a specified performance period.
The provisions of Other Stock-Based Awards need not be the same with
respect to each recipient.
(b) TERMS AND CONDITIONS. Other Stock-Based Awards made pursuant to
this Section 8 shall be subject to the following terms and conditions:
(i) Restriction on Transfer. Subject to the provisions of this
Plan and the award agreement referred to in Section 8(b)(v) below,
shares subject to awards under this Section 8 may not be sold,
assigned, transferred, pledged or otherwise encumbered prior to the
date on which the shares are issued, or, if later, the date on which
any applicable restriction, performance or deferral period lapses.
(ii) Dividends and Interest. Subject to the provisions of this
Plan and the award agreement and unless otherwise determined by the
Committee at grant, the recipient of an award under this Section 8
shall be entitled to receive, currently or on a deferred basis,
interest or dividends or interest or dividend equivalents with respect
to the number of shares covered by the award, as determined at the time
of the award by the Committee, in its sole discretion, and the
Committee may provide that such amounts (if any) shall be deemed to
have been reinvested in additional shares of Common Stock or otherwise
reinvested.
(iii) Vesting and Forfeiture. Any award under this Section 8
and any shares of Common Stock covered by any such award shall vest or
be forfeited to the extent so provided in the award agreement, as
determined by the Committee, in its sole discretion.
(iv) Waiver of Vesting or Forfeiture Provisions. In the event
of the participant's Retirement, Disability or death, or in cases of
special circumstances, the Committee may, in its sole discretion, waive
in whole or in part any or all of the remaining limitations imposed
hereunder (if any) with respect to any or all of an award under this
Section 8.
(v) Awards Agreements. Each award under this Section 8 shall
be confirmed by, and subject to the terms of, an agreement between the
Corporation and the participant.
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(vi) Purchase Price. Shares of Common Stock (including
securities convertible into shares of Common Stock) issued on a bonus
basis under this Section 8 may be issued for no cash consideration. The
purchase price of shares of Common Stock (including securities
convertible into shares of Common Stock) purchased pursuant to a
purchase right awarded under this Section 8 shall be determined by the
Committee in its sole discretion on the date of grant.
SECTION 9. CHANGE IN CONTROL PROVISIONS.
(a) IMPACT OF EVENT. In the event of a Change in Control or Potential
Change in Control, the following acceleration and valuation provisions shall
apply if so determined by the Committee in its sole discretion:
(i) Acceleration of Vesting. Any Stock Appreciation Rights and
any Option awarded under the Plan not previously exercisable and vested
shall become fully exercisable and vested; provided, however, that
Stock Appreciation Rights held by persons subject to Section 16(a)
under the Exchange Act shall not become exercisable until six months
after the date of grant.
(ii) Lapse of Other Restrictions. The restrictions and
deferral limitations applicable to any Restricted Stock and Other
Stock-Based Awards, in each case to the extent not already vested under
the Plan, shall lapse and such shares and awards shall be deemed fully
vested.
(iii) Cash-Out Provisions. Except as otherwise provided in
Section 9(a)(iv) below, the value of all outstanding Options, Stock
Appreciation Rights, Restricted Stock and Other Stock-Based Awards
shall, unless otherwise determined by the Committee in its sole
discretion at or (except in the case of an Incentive Stock Option)
after grant but prior to any Change in Control, be cashed out on the
basis of the Change in Control Price as of the date such Change in
Control or such Potential Change in Control is determined to have
occurred or such other date as the Committee may determine prior to the
Change in Control.
(iv) Cash-Out Provisions for Statutory Insiders. In the case
of any Options, Stock Appreciation Rights, Restricted Stock and Other
Stock-Based Awards held by any person subject to Section 16(a) of the
Exchange Act, the value of all such Options, Stock Appreciation Rights,
Restricted Stock or Other Stock-Based Awards, in each case to the
extent that they have been held for at least six months, shall be
cashed out on the basis of the Change in Control Price as of the date
of such Change in Control or such Potential Change in Control is
determined to have occurred. The Committee shall have the right (A) to
cause any right to receive the Change in Control Price to be canceled
with respect to all or any grantee(s) who are subject to Section 16(a)
of the
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Exchange Act if payment of the Change in Control Price to such
grantee(s) would cause liability under Section 16 of the Exchange Act,
and (B) to determine whether the change in Control Price shall be paid
in cash or in shares of capital stock (including the capital stock of
any acquiring corporation) to grantees who are subject to Section 16(a)
of the Exchange Act.
(b) DEFINITION OF CHANGE IN CONTROL. A "Change in Control" means the
happening of any of the following:
(i) any person or entity, including a "group" as defined in
Section 13(d)(3) of the Exchange Act, other than the Corporation or a
wholly-owned subsidiary thereof or any employee benefit plan of the
Corporation or any of its Subsidiaries, becomes the beneficial owner of
the Corporation's securities having 20% or more of the combined voting
power of the then outstanding securities of the Corporation that may be
cast for the election of directors of the Corporation (other than as a
result of an issuance of securities initiated by the Corporation in the
ordinary course of business); or
(ii) as the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing
transactions, less than a majority of the combined voting power of the
then outstanding securities of the Corporation or any successor
corporation or entity entitled to vote generally in the election of the
directors of the Corporation or such other corporation or entity after
such transaction are held in the aggregate by the holders of the
Corporation's securities entitled to vote generally in the election of
directors of the Corporation immediately prior to such transaction; or
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the election,
or the nomination for election by the Corporation's shareholders, of
each director of the Corporation first elected during such period was
approved by a vote of at least two-thirds of the directors of the
Corporation then still in office who were directors of the Corporation
at the beginning of such period.
(c) DEFINITION OF POTENTIAL CHANGE IN CONTROL. A "Potential Change in
Control" means the happening of any one of the following:
(i) The approval by shareholders of an agreement by the
Corporation, the consummation of which would result in a Change in
Control of the Corporation; or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than the Corporation
or a Subsidiary or any Corporation employee benefit plan (including any
trustee of such plan acting as such trustee)) of
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securities of the Corporation representing 10% or more of the combined
voting power of the Corporation's outstanding securities and the
adoption by the Committee of a resolution to the effect that a
Potential Change in Control of the Corporation has occurred for
purposes of this Plan.
(d) CHANGE IN CONTROL PRICE. The "Change in Control Price" means the
highest price per share paid in any transaction reported on The Nasdaq Stock
Market's National Market or such other exchange or market as is the principal
trading market for the Common Stock, or paid or offered in any bona fide
transaction related to a Change in Control or Potential Change in Control of the
Corporation at any time during the 60 day period immediately preceding the
occurrence of the Change in Control (or, where applicable, the occurrence of the
Potential Change in Control event), in each case as determined by the Committee
except that, in the case of Incentive Stock Options and Stock Appreciation
Rights relating to Incentive Stock Options, such price shall be based only on
transactions reported for the date on which the optionee exercises such
Incentive Stock Option or Stock Appreciation Rights or, where applicable, the
date on which a cash out occurs under Section 9(a)(iii) or (iv) hereof.
SECTION 10. AMENDMENTS AND TERMINATION.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of an
optionee or participant under an Option, Stock Appreciation Right, Restricted
Stock award or Other Stock-Based Award theretofore granted, without the
optionee's or participant's consent. In addition, no amendment or alteration
shall be made without the approval of the Corporation's shareholders, if such
amendment or alteration would:
(a) except as provided in Section 3(b) of the Plan, increase
the total number of shares of Common Stock reserved for the purpose of
the Plan;
(b) materially increase the benefits accruing to participants
under the Plan; or
(c) materially modify the requirements as to eligibility for
participation in the Plan.
The Committee may amend the terms of any Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section
3(b) above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Options for previously
granted Options (on a one for one or other basis), including previously granted
Options having higher option exercise prices.
Subject to the above provisions, the Board shall have broad authority
to amend the Plan to take into account changes in applicable securities and tax
laws and accounting rules, as well as other developments.
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SECTION 11. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Corporation, nothing contained herein shall give
any such participant or optionee any rights that are greater than those of a
general creditor of the Corporation. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver shares of Common Stock or payments in lieu of
or with respect to awards hereunder; provided, however, that, unless the
Committee otherwise determines with the consent of the affected participant, the
existence of such trusts or other arrangements is consistent with the "unfunded"
status of the Plan.
SECTION 12. GENERAL PROVISIONS.
(a) SECURITIES LAW RESTRICTIONS. The Committee may require each person
purchasing shares of Common Stock pursuant to an Option or other award under the
Plan to represent to and agree with the Corporation in writing that the optionee
or participant is acquiring the shares without a view to distribution thereof.
The certificates for such shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Common Stock or other securities
delivered under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable Federal or state
securities law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(b) OTHER COMPENSATION ARRANGEMENTS. Nothing contained in this Plan
shall prevent the Board from adopting other or additional compensation
arrangements, subject to shareholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable only in
specific cases.
(c) NO RIGHT TO CONTINUED EMPLOYMENT. The adoption of the Plan shall
not confer upon any employee of the Corporation or any Subsidiary or Affiliate
any right to continued employment with the Corporation or a Subsidiary or
Affiliate, as the case may be, nor shall it interfere in any way with the right
of the Corporation or a Subsidiary or Affiliate to terminate the employment of
any of its employees at any time.
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(d) WITHHOLDING. No later than the date as of which an amount first
becomes includible in the gross income of the participant for Federal income tax
purposes with respect to any award under the Plan, the participant shall pay to
the Corporation, or make arrangements satisfactory to the Committee regarding
the payment of, any Federal, state, or local taxes of any kind required by law
to be withheld with respect to such amount. The Committee may require
withholding obligations to be settled with shares of Common Stock, including
shares of Common Stock that are part of the award that gives rise to the
withholding requirement. The obligations of the Corporation under the Plan shall
be conditional on such payment or arrangements and the Corporation and its
Subsidiaries or Affiliates shall, to the extent permitted by law, have the right
to deduct any such taxes from any payment of any kind otherwise due to the
participant.
(e) DIVIDENDS. The actual or deemed reinvestment of dividends or
dividend equivalents in additional Restricted Stock (or other types of Plan
awards) at the time of any dividend payment shall only be permissible if
sufficient shares of Common Stock are available under Section 3 hereof for such
reinvestment (taking into account then outstanding Options and other Plan
awards).
(f) RESTRICTIONS ON TRANSFER. Unless determined otherwise by the
Committee, in addition to any other restrictions on transfer that may be
applicable under the terms of this Plan or the applicable award agreement, no
Option, Stock Appreciation Right, Restricted Stock award, or Other Stock-Based
Award or other right issued under this Plan is transferable by the participant
other than by will or the laws of descent and distribution or pursuant to a
domestic relations order as defined under the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended. The designation of a
beneficiary will not constitute a transfer. If the Committee makes a
Non-Qualified Stock Option (including any currently outstanding Non-Qualified
Stock Option) transferable, such Non-Qualified Stock Option shall contain such
additional terms and conditions as the Committee deems appropriate.
(g) GOVERNING LAW. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Tennessee, without regard to the principles of conflicts of law
thereof.
(h) BUYOUT PROVISIONS. The Committee may at any time offer to buy out
for a payment in cash, shares of Common Stock, or Restricted Stock an Option
previously granted, based on such terms and conditions as the Committee shall
establish and communicate to the optionee at the time that such offer is made.
(i) AWARD PROVISIONS MAY DIFFER. The provisions of awards need not be
the same with respect to each recipient.
(j) LIABILITY AND INDEMNIFICATION OF BOARD AND COMMITTEE MEMBERS. The
members of the Committee and the Board shall not be liable to any employee or
other person
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with respect to any determination made hereunder in a manner that is not
inconsistent with their legal obligations as members of the Board. In addition
to such other rights of indemnification a they may have as directors or as
members of the Committee, the members of the Committee shall be indemnified by
the Corporation against the reasonable expenses, including attorneys' fees
actually and necessarily incurred in connection with the defense of any action,
suit or proceeding, or in connection with any appeal therein, to which they or
any of them may be a party by reason of any action taken or failure to act under
or in connection with the Plan or any option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Corporation) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee member is liable for negligence or misconduct in
the performance of his duties; provided that within 60 days after institution of
any such action, suit or proceeding, the Committee member shall in writing offer
the Corporation the opportunity, at its own expense, to handle and defend the
same.
SECTION 13. EFFECTIVE DATE OF PLAN.
The Plan was adopted by the Board and approved by the sole shareholder
of the Corporation on February 2, 1995. The Plan was subsequently amended as of
March 6, 1996 by the Company's shareholders and by the Board of Directors on
February 21, 1997. The Plan became effective June 7, 1995.
SECTION 14. TERM OF PLAN.
No Stock Option, Stock Appreciation Right, Restricted Stock award or
Other Stock-Based Award shall be granted pursuant to the Plan on or after the
tenth anniversary of the date of adoption of the Plan by the Board, but awards
granted prior to such tenth anniversary may be extended beyond that date.
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