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EXHIBIT 10.1
AMERICAN RETIREMENT CORPORATION
1997 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the American Retirement Corporation 1997 Stock
Incentive Plan (the "Plan") is to enable American Retirement Corporation (the
"Corporation") to attract, retain and reward key employees of and consultants
to the Corporation and its Subsidiaries and Affiliates, and directors who are
not also employees of the Corporation, and to strengthen the mutuality of
interests between such key employees, consultants, and directors by awarding
such key employees, consultants, and directors performance-based stock
incentives and/or other equity interests or equity-based incentives in the
Corporation, as well as performance-based incentives payable in cash. The
creation of the Plan shall not diminish or prejudice other compensation
programs approved from time to time by the Board.
For purposes of the Plan, the following terms shall be defined as set
forth below:
A. "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.
B. "Board" means the Board of Directors of the Corporation.
C. "Cause" has the meaning provided in Section 5(j) of the Plan.
D. "Change in Control" has the meaning provided in Section 10(b)
of the Plan.
E. "Change in Control Price" has the meaning provided in Section
10(d) of the Plan.
F. "Common Stock" means the Corporation's Common Stock, par value
$.01 per share.
G. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
H. "Committee" means the Committee referred to in Section 2 of
the Plan.
I. "Corporation" means American Retirement Corporation, a
corporation organized under the laws of the State of Tennessee or any successor
corporation.
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J. "Disability" means disability as determined under the
Corporation's Group Long Term Disability Insurance Plan.
K. "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 or as may be approved by the
Committee.
L. "Effective Date" has the meaning provided in Section 14 of the
Plan.
M. "Equity Issuance" means an issuance of Common Stock by the
Corporation following the Effective Date of this Plan in connection with a
public or private offering, including in connection with an acquisition, merger
or similar transaction, but excluding issuances of Common Stock under this Plan
or in any other compensatory transaction with an officer or employee of, or
consultant to, the Corporation or its Subsidiaries or Affiliates.
N. "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
O. "Fair Market Value" means with respect to the Common Stock, as
of any given date or dates, unless otherwise determined by the Committee in
good faith, the reported closing price of a share of Common Stock on the NYSE
or such other market or exchange as is the principal trading market for the
Common Stock, or, if no such sale of a share of Common Stock is reported on the
NYSE or other exchange or principal trading market on such date, the fair
market value of a share of Common Stock as determined by the Committee in good
faith.
P. "Incentive Stock Option" means any Stock Option intended to be
and designated as an "Incentive Stock Option" within the meaning of Section 422
of the Code.
Q. "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall
include adoptive relationships.
R. "Non-Employee Director" means a member of the Board who is a
Non-Employee Director within the meaning of Rule 16b-3(b)(3) promulgated under
the Exchange Act and an outside director within the meaning of Treasury
Regulation Sec. 162-27(e)(3) promulgated under the Code.
S. "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
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T. "NYSE" means The New York Stock Exchange.
U. "Normal Retirement" means retirement from active employment
with the Corporation and any Subsidiary or Affiliate on or after age 65.
V. "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,
the Common Stock.
W. "Outside Director" means a member of the Board who is not an
officer or employee of the Corporation or any Subsidiary or Affiliate of the
Corporation.
X. "Outside Director Option" means an award to an Outside
Director under Section 9 below.
Y. "Plan" means this American Retirement Corporation 1997 Stock
Incentive Plan, as amended from time to time.
Z. "Restricted Stock" means an award of shares of Common Stock
that is subject to restrictions under Section 7 of the Plan.
AA. "Restriction Period" has the meaning provided in Section 7 of
the Plan.
BB. "Retirement" means Normal or Early Retirement.
CC. "Section 162(m) Maximum" has the meaning provided in Section
3(a) hereof.
DD. "Stock Appreciation Right" means the right pursuant to an
award granted under Section 6 below to surrender to the Corporation all (or a
portion) of a Stock Option in exchange for an amount equal to the difference
between (i) the Fair Market Value, as of the date such Stock Option (or such
portion thereof) is surrendered, of the shares of Common Stock covered by such
Stock Option (or such portion thereof), subject, where applicable, to the
pricing provisions in Section 6(b)(ii), and (ii) the aggregate exercise price
of such Stock Option (or such portion thereof).
EE. "Stock Option" or "Option" means any option to purchase shares
of Common Stock (including Restricted Stock, if the Committee so determines)
granted pursuant to Section 5 below.
FF. "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.
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SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Committee of not less than two
Non-Employee Directors, 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 Non-Employee Directors. The initial Committee shall be the
Compensation Committee of the Board. In the event there are not at least two
Non- Employee Directors on the Board, the Plan shall be administered by the
Board and all references herein to the Committee shall refer to the Board.
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: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted
Stock, and/or (iv) Other Stock-Based Awards.
In particular, the Committee, or the Board, as the case may be, shall
have the authority, consistent with the terms of the Plan:
(a) to select the officers, key employees of and consultants
to the Corporation and its Subsidiaries and Affiliates to whom Stock
Options, Stock Appreciation Rights, Restricted Stock, and/or Other
Stock-Based Awards may from time to time be granted hereunder;
(b) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock, and/or Other Stock-Based Awards, or any combination
thereof, are to be granted hereunder to one or more eligible persons;
(c) to determine the number of shares to be covered by each
such award granted hereunder;
(d) 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 or waiver of forfeiture restrictions
regarding any Stock Option or other award and/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
11 hereof;
(e) to determine whether and under what circumstances a Stock
Option may be settled in cash or Restricted Stock under Section 5(m)
or (n), as applicable, instead of Common Stock;
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(f) to determine whether, to what extent, and under what
circumstances Option grants and/or other awards under the Plan are to
be made, and operate, on a tandem basis vis-a-vis other awards under
the Plan and/or cash awards made outside of the Plan;
(g) 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);
(h) to determine whether to require payment of tax
withholding requirements in shares of Common Stock subject to the
award; and
(i) to impose any holding period required to satisfy Section
16 under the Exchange Act.
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; provided, however, that, to
the extent that this Plan otherwise requires the approval of the Board or the
shareholders of the Corporation, all decisions of the Committee shall be
subject to such Board or shareholder approval Subject to the foregoing, 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.
SECTION 3. SHARES OF COMMON STOCK SUBJECT TO PLAN.
(a) As of the Effective Date, the aggregate number of shares of
Common Stock that may be issued under the Plan shall be 1,093,750 shares. Such
number shall, upon the consummation of any Equity Issuance, increase
automatically by ten percent (10%) of the number of shares of Common Stock
issued in such Equity Issuance; provided, however, that Incentive Stock Options
may not be issued after 1,093,750 shares of Common Stock have been issued under
the Plan. The shares of Common Stock issuable under the Plan may consist, in
whole or in part, of authorized and unissued shares or treasury shares. No
officer of the Corporation or other person whose compensation may be subject to
the limitations on deductibility under Section 162(m) of the Code shall be
eligible to receive awards pursuant to this Plan relating to in excess of
200,000 shares of Common Stock in any fiscal year (the "Section 162(m)
Maximum").
(b) If any shares of Common Stock that have been optioned cease to
be subject to a Stock Option, or if any shares of Common Stock that are subject
to any Restricted Stock or Other
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Stock-Based Award granted hereunder are forfeited prior to the payment of any
dividends, if applicable, with respect to such shares of Common Stock, or any
such award otherwise terminates without a payment being made to the participant
in the form of Common Stock, such shares shall again be available for
distribution in connection with future awards under the Plan.
(c) 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, an appropriate
substitution or adjustment shall be made in the maximum number of shares that
may be awarded under the Plan, in the number and option price of shares
subject to outstanding Options granted under the Plan, in the number of shares
underlying Outside Director Options to be granted under Section 9 hereof, the
Section 162(m) Maximum and in the number of shares subject to other outstanding
awards granted under the Plan as may be determined to be appropriate by the
Committee, in its sole discretion, provided that the number of shares subject
to any award shall always be a whole number. An adjusted option price shall
also be used to determine the amount payable by the Corporation upon the
exercise of any Stock Appreciation Right associated with any Stock Option.
SECTION 4. ELIGIBILITY.
Officers, other key employees and Outside Directors of and consultants
to the Corporation and its Subsidiaries and Affiliates who are responsible for
or contribute to the management, growth and/or profitability of the business of
the Corporation and/or its Subsidiaries and Affiliates are eligible to be
granted awards under the Plan. Outside Directors are eligible to receive
awards pursuant to Section 9 and not pursuant to any other provisions of the
Plan.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone, in addition to, or in tandem with
other awards granted under the Plan and/or cash awards made outside of the
Plan. Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock 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
Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock
Options (in each case with or without Stock Appreciation Rights).
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Options granted to officers, key employees, Outside Directors and
consultants 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.
(a) Option Price. The option price per share of
Common Stock purchasable under a Stock 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 Subsidiaries, 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.
(b) Option Term. The term of each Stock 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 Subsidiaries
or parent corporations, more than five years) after the date the
Option is granted.
(c) Exercisability. Stock 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(g) and (h) and
Section 10, unless otherwise determined by the Committee at or after
grant, no Stock Option shall be exercisable prior to the first
anniversary date of the granting of the Option. The Committee may
provide that a Stock Option shall vest over a period of future service
at a rate specified at the time of grant, or that the Stock Option is
exercisable only in installments. If the Committee provides, in its
sole discretion, that any Stock 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.
(d) Method of Exercise. Subject to whatever
installment exercise restrictions apply under Section 5(c),Stock
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 shares of Common Stock already
owned by the optionee or, in the case of a Non-Qualified Stock Option,
shares of Restricted Stock or shares subject to such Option or another
award hereunder (in each case valued at the Fair Market Value of the
Common Stock on the date the Option is exercised). If payment of the
exercise price is made in part or in full with Common Stock, the
Committee may
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award to the employee a new Stock Option to replace the Common Stock
which was 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, such Restricted Stock (and any replacement shares
relating thereto) shall remain (or be) restricted in accordance with
the original terms of the Restricted Stock award in question, and any
additional 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 13(a).
(e) Transferability of Options. No Non-Qualified
Stock Option shall be transferable by the optionee without the prior
written consent of the Committee other than (i) transfers by the
Optionee to a member of his or her Immediate Family or a trust for the
benefit of the optionee or a member of his or her Immediate Family, or
(ii) transfers by will or by the laws of descent and distribution. No
Incentive Stock Option shall be transferable by the optionee otherwise
than by will or by the laws of descent and distribution and all
Incentive Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee.
(f) Bonus for Taxes. In the case of a Non-Qualified
Stock Option or an optionee who elects to make a disqualifying
disposition (as defined in Section 422(a)(1) of the Code) of Common
Stock acquired pursuant to the exercise of an Incentive Stock Option,
the Committee in its discretion may award at the time of grant or
thereafter the right to receive upon exercise of such Stock 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.
(g) Termination by Death. Subject to Section 5(k),
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 Stock 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 other period as the Committee may specify at or after grant) from
the date of such death or until the expiration of the stated term of
such Stock Option, whichever period is the shorter.
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(h) Termination by Reason of Disability. Subject to
Section 5(k), 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 Stock 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 (i) three
years (or such other period as the Committee may specify at or after
grant) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period
is the shorter, in the case of a Non-Qualified Stock Option and (ii)
one year from the date of termination of employment or until the
expiration of the stated term of such Stock 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 (i)
above (or other such period as the committee shall specify at or after
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 Stock Option, whichever period is 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 were a Non-Qualified
Stock Option, such Stock Option will thereafter be treated as a
Non-Qualified Stock Option.
(i) Termination by Reason of Retirement. Subject to
Section 5(k), 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
Stock 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 (i) three years (or such other period as
the Committee may specify at or after grant) from the date of such
termination of employment or the expiration of the stated term of such
Stock Option, whichever period is the shorter, in the case of a
Non-Qualified Stock Option and (ii) three months from the date of such
termination of employment or the expiration of the stated term of such
Stock 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 (i) above (or other such period as the
Committee shall specify at or after 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
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Stock Option, whichever period is 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.
(j) Other Termination. Subject to Section 5(k),
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
Stock Option shall thereupon terminate, except that such Stock Option
may be exercised, to the extent otherwise then exercisable, for the
lesser of three months or the balance of such Stock Option's term if
the involuntary termination is without Cause. For purposes of this
Plan, "Cause" means (i) a felony conviction of a participant or the
failure of a participant to contest prosecution for a felony, or (ii)
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
Stock Option shall thereupon terminate; provided, however, that the
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 Stock Option's
term.
(k) 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 Common Stock with respect to
which all Incentive Stock Options are exercisable for the first time
by such participant during any calendar year (under all such plans of
the Company 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:
(i) if (x) a participant's employment is
terminated by reason of death, Disability, or Retirement and
(y) the portion of any Incentive Stock Option that is
otherwise exercisable during the post-termination period
specified under Section 5(g), (h) or (i), applied without
regard to the $100,000 limitation contained
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in Section 422(d) of the Code, is greater than the portion of
such Option that is immediately exercisable as an "Incentive
Stock Option" during such post-termination period under
Section 422, such excess shall be treated as a Non-Qualified
Stock Option; and
(ii) 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 by reason of the $100,000 limitation contained in
Section 422(d) of the Code shall be treated as a Non-Qualified
Stock Option.
(l) Buyout Provisions. The Committee may at any time
offer to buy out for a payment in cash, 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.
(m) 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.
(n) 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 six
months prior to its expiration if the conditions to exercise have not
theretofore been satisfied.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights
may be granted in conjunction with all or part of any Stock 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 Stock Option. In the case of an Incentive Stock Option, such
rights may be granted only at the time of the grant of such Stock
Option. A Stock Appreciation Right or applicable portion thereof
granted with respect to a given Stock Option shall terminate and no
longer be exercisable upon the termination or exercise of the related
Stock 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 Stock Option.
A Stock Appreciation Right may be exercised by an optionee, subject to
Section 6(b), in accordance with the procedures established by the
Committee
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for such purpose. Upon such exercise, the optionee shall be entitled
to receive an amount determined in the manner prescribed in Section
6(b). Stock 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) Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that
the Stock Options to which they relate shall be exercisable in
accordance with the provisions of Section 5 and this Section 6
of the Plan.
(ii) Upon the exercise of a Stock Appreciation
Right, an optionee shall be entitled to receive an amount in
cash and/or shares of Common Stock equal in value to the
excess of the Fair Market Value of one share of Common Stock
over the option price per share specified in the related Stock
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. When payment is to be made in shares, the number of
shares to be paid shall be calculated on the basis of the Fair
Market Value of the shares on the date of exercise. When
payment is to be made in cash, such amount shall be calculated
on the basis of the Fair Market Value of the Common Stock on
the date of exercise.
(iii) Stock Appreciation Rights shall be
transferable only when and to the extent that the underlying
Stock Option would be transferable under Section 5(e) of the
Plan.
(iv) Upon the exercise of a Stock Appreciation
Right, the Stock Option or part thereof to which such Stock
Appreciation Right is related shall be deemed to have been
exercised 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.
(v) The Committee, in its sole discretion, may also
provide that, in the event of a Change in Control and/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.
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(vi) 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.
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 and/or cash awards made outside 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)), 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). The Committee may condition the grant of Restricted Stock upon
the attainment of specified performance goals or such other factors as
the Committee may determine, in its sole discretion. The provisions
of Restricted Stock awards need not be the same with respect to each
recipient.
(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) The purchase price for shares of Restricted
Stock shall be established by the Committee and may be zero.
(ii) 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).
(iii) 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 (or a transferee
permitted by Section 13(h) hereof), and shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such award.
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(iv) 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:
(i) In accordance with 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, such other factors or
criteria as the Committee may determine in its sole
discretion.
(ii) Except as provided in this paragraph (ii) and
Section 7(c)(i), 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 14(e), in additional Restricted
Stock to the extent shares are available under Section 3, or
otherwise reinvested. Pursuant to Section 3 above, 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 with respect to which such
dividends are issued. If the Committee so determines, the
award agreement may also impose restrictions on the right to
vote and the right to receive dividends.
(iii) 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) 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 (or a transferee permitted by Section 13(h)
hereof) promptly.
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(d) Minimum Value Provisions. In order to better ensure
that award payments actually reflect the performance of the
Corporation and service of the participant, the Committee may provide,
in its sole discretion, for a tandem performance-based or other award
designed to guarantee a minimum value, payable in cash or Common Stock
to the recipient of a restricted stock award, subject to such
performance, future service, deferral, and other terms and conditions
as may be specified by the Committee.
SECTION 8. OTHER STOCK-BASED AWARDS.
(a) Administration. Other Stock-Based Awards, including,
without limitation, performance shares, convertible preferred stock,
convertible debentures, exchangeable securities and Common Stock
awards or options valued by reference to earnings per share or
Subsidiary performance, may be granted either alone, in addition to,
or in tandem with Stock Options, Stock Appreciation Rights, or
Restricted Stock granted under the Plan and cash awards made outside
of the Plan; provided that no such Other Stock-Based Awards may be
granted in tandem with Incentive Stock Options if that would cause
such Stock Options not to qualify as Incentive Stock Options pursuant
to Section 422 of the Code. 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 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) Shares subject to awards under this Section 8
and the award agreement referred to in Section 8(b)(v) below,
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) 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.
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(iii) Any award under 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) 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) Each award under this Section 8 shall be
confirmed by, and subject to the terms of, an agreement or
other instrument by the Corporation and the participant.
(vi) Common Stock (including securities
convertible into Common Stock) issued on a bonus basis under
this Section 8 may be issued for no cash consideration.
Common Stock (including securities convertible into Common
Stock) purchased pursuant to a purchase right awarded under
this Section 8 shall be priced at least 85% of the Fair Market
Value of the Common Stock on the date of grant.
SECTION 9. AWARDS TO OUTSIDE DIRECTORS.
(a) The provisions of this Section 9 shall apply only to
awards to Outside Directors in accordance with this Section 9. The
Committee shall have no authority to determine the timing of or the
terms or conditions of any award under this Section 9.
(b) At the date of the Corporation's initial public
offering, each person serving as an Outside Director on such date will
receive a non-qualified stock option to purchase 9,000 shares of
Common Stock at a per share exercise price equal to the initial public
offering price. Such option shall vest and become exercisable with
respect to the following numbers of shares on the following Annual
Meeting dates, if the grantee has been a member of the Board until
such date (whether or not the grantee will remain a director following
such meeting): (i) 5,000 shares on the date of the Annual Meeting of
Shareholders in 1998, (ii) 2,000 shares on the date of the Annual
Meeting of Shareholders in 1999 and (iii) 2,000 shares on the date of
the Annual Meeting of Shareholders in 2000.
(c) If any person who was not previously a member of the
Board is elected or appointed an Outside Director following the
initial public offering but prior to the date of the Annual Meeting of
Shareholders of the Corporation in the year 2000, such Outside
Director will receive a non-qualified stock option to purchase 7,000
shares of Common Stock if such Outside Director's service begins prior
to the second anniversary of the
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initial public offering and 5,000 shares of Common Stock if such
Outside Director's service begins after the second anniversary of the
initial public offering but prior to the date of the Annual Meeting of
Shareholders in the year 2000. It is intended that such grant may be
increased or decreased to extent deemed appropriate by the Board, in
its sole discretion, to reflect the extent to which director's
expected service prior to the Annual Meeting of Shareholders in 2000
may exceed two years or may be less than one full year. The exercise
price per share of each option granted pursuant to this Section 9(c)
shall equal the Fair Market Value per share of Common Stock on the
date of grant. Options granted under this Section 9(c) shall vest and
become exercisable with respect to the following numbers of shares on
the following Annual Meeting dates, if the grantee has been a member
of the Board until such date (whether or not such grantee will remain
a director following such meeting): (i) 5,000 shares (or any smaller
number constituting the entire grant) on the date of the first Annual
Meeting of Shareholders following the date of grant, (ii) 2,000 shares
(or any smaller remaining number of shares) on the date of the second
Annual Meeting of Shareholders following the date of grant and (iii)
any remaining shares on the date of the third Annual Meeting of
Shareholders following the date of grant.
(d) On the date of each Annual Meeting of Shareholders of
the Corporation beginning with the Annual Meeting of Shareholders in
2000, unless this Plan has been previously terminated, each Outside
Director who will continue as a director following such meeting will
receive a non-qualified stock option to purchase 3,000 shares of
Common Stock. The exercise price per share of each option granted
pursuant to this Section 9(d) shall equal the Fair Market Value per
share of Common Stock on the date of grant. Such option shall vest
and become exercisable with respect to all 3,000 shares on the date of
the next Annual Meeting of Shareholders of the Corporation if the
grantee has been a member of the Board until such date (whether or not
such grantee will remain a director following such meeting).
(e) No Outside Director Option shall be exercisable prior
to vesting. Each Outside Director Option shall expire, if unexercised,
on the tenth anniversary of the date of grant. The exercise price may
be paid in cash or in shares of Common Stock, including shares of
Common Stock subject to the Outside Director Option.
(f) Outside Director Options shall not be transferable
without the prior written consent of the Board other than (i)
transfers by the optionee to a member of his or her Immediate Family
or a trust for the benefit of optionee or a member of his or her
Immediate Family, or (ii) transfers by will or by the laws of descent
and distribution.
(g) Grantees of Outside Director Options shall enter into
a stock option agreement with the Corporation setting forth the
exercise price and other terms as provided herein.
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(h) Upon termination of an Outside Director's service as
a director of the Corporation, (i) all Outside Director Options
theretofore exercisable and held by such Outside Director will remain
vested and exercisable through the expiration date and (ii) all
remaining Outside Director Options held by such Outside Director will
become exercisable and vested and remain so through the expiration
date to the extent of any shares that would have become exercisable
and vested within a period of less than twelve months following the
date of termination of service. Any unvested Outside Director Options
held by the Outside Director on the date of termination of service
will be forfeited to the extent of any shares that would not have
become vested and exercisable until at least twelve months from the
date of termination of service. The Board may, in its sole
discretion, elect to accelerate the vesting of any Outside Director
Options in connection with the termination of service of any
individual Outside Director.
(i) Outside Director Options shall be subject to Section
10. The number of shares and the exercise price per share of each
Outside Director Option theretofore awarded shall be adjusted
automatically in the same manner as the number of shares and the
exercise price for Stock Options under Section 3(c) hereof at any time
that Stock Options are adjusted as provided in Section 3(c). The
number of shares underlying Outside Director Options to be awarded in
the future shall be adjusted automatically in the same manner as the
number of shares underlying outstanding Stock Options are adjusted
under Section 3(c) hereof at any time that Stock Options are adjusted
under Section 3(c) hereof.
(j) The Board, in its sole discretion, may determine to
reduce the size of any Outside Director Option prior to grant or to
postpone the vesting and exercisability of any Outside Director Option
prior to grant.
SECTION 10. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. In the event of:
(1) a "Change in Control" as defined in Section
10(b); or
(2) a "Potential Change in Control" as defined in
Section 10(c), but only if and to the extent so determined by
the Committee or the Board at or after grant (subject to any
right of approval expressly reserved by the Committee or the
Board at the time of such determination),
(i) Subject to the limitations set forth below in
this Section 10(a), the following acceleration provisions
shall apply:
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(a) Any Stock Appreciation Rights, any Stock
Option or Outside Director Option awarded under the
Plan not previously exercisable and vested shall
become fully exercisable and vested.
(b) The restrictions 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.
(ii) Subject to the limitations set forth below in
this Section 10(a), the value of all outstanding Stock
Options, Stock Appreciation Rights, Restricted Stock, Outside
Director Options and Other Stock-Based Awards, in each case to
the extent vested, shall, unless otherwise determined Board or
by the Committee in its sole discretion prior to any Change in
Control, be cashed out on the basis of the "Change in Control
Price" as defined in Section 10(d) 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 Board or Committee
may determine prior to the Change in Control.
(iii) The Board or the Committee may impose
additional conditions on the acceleration or valuation of any
award in the award agreement.
(b) Definition of Change in Control. For purposes of
Section 10(a), 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 35% 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, sales 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
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(iii) during any period of two consecutive years,
individuals who at the beginning of any 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 any such period.
(c) Definition of Potential Change in Control. For
purposes of Section 10(a), 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 as defined in Section
10(b); 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 securities of the Corporation
representing 5% 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. For purposes of this
Section 10, "Change in Control Price" means the highest price per
share paid in any transaction reported on the NYSE 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
Potential or actual 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 Stock Appreciation Rights or, where
applicable, the date on which a cash out occurs under Section
10(a)(ii).
SECTION 11. AMENDMENTS AND TERMINATION.
The Board may at any time amend, alter or discontinue the Plan;
provided, however, that, without the approval of the Corporation's
shareholders, no amendment or alteration may be made which would (a) except as
a result of the provisions of Section 3(c) of the Plan, increase the maximum
number of shares that may be issued under the Plan or increase the Section
162(m)
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Maximum, (b) change the provisions governing Incentive Stock Options except as
required or permitted under the provisions governing incentive stock options
under the Code, (c) amend Section 9 hereof so as to increase the size of any
award (other than as contemplated by Section 3(c) and Section 9(i) hereof) or
otherwise materially increase the benefits to Outside Directors under Section 9
hereof, or (d) make any change for which applicable law or regulatory authority
(including the regulatory authority of the NYSE or any other market or exchange
on which the Common Stock is traded) would require shareholder approval or for
which shareholder approval would be required to secure full deductibility of
compensation received under the Plan under Section 162(m) of the Code. No
amendment, alteration, or discontinuation shall be made which would impair the
rights of an optionee or participant under a Stock Option, Stock Appreciation
Right, Restricted Stock, Other Stock-Based Award or Outside Director Option
theretofore granted, without the participant's consent.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Stock Options for
previously granted Stock Options (on a one for one or other basis), including
previously granted Stock Options having higher option exercise prices. Solely
for purposes of computing the Section 162(m) Maximum, if any Stock Options or
other awards previously granted to a participant are canceled and new Stock
Options or other awards having a lower exercise price or other more favorable
terms for the participant are substituted in their place, both the initial
Stock Options or other awards and the replacement Stock Options or other awards
will be deemed to be outstanding (although the canceled Stock Options or other
awards will not be exercisable or deemed outstanding for any other purposes).
SECTION 12. 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 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 13. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing
shares pursuant to a Stock Option or other award under the Plan to
represent to and agree with the Corporation
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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) 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) 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.
(d) 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 Common Stock, including Common Stock
that is 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) 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 for such reinvestment (taking into account then outstanding
Stock Options and other Plan awards).
(f) 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.
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(g) The members of the Committee and the Board shall not
be liable to any employee or other person 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 as 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.
(h) In addition to any other restrictions on transfer
that may be applicable under the terms of this Plan or the applicable
award agreement, no Stock Option, Stock Appreciation Right, Restricted
Stock award, or Other Stock-Based Award or other right issued under
this Plan is transferable by the participant without the prior written
consent of the Committee, or, in the case of an Outside Director, the
Board, other than (i) transfers by an optionee to a member of his or
her Immediate Family or a trust for the benefit of the optionee or a
member of his or her Immediate Family or (ii) transfers by will or by
the laws of descent and distribution. The designation of a
beneficiary will not constitute a transfer.
(i) The Committee may, at or after grant, condition the
receipt of any payment in respect of any award or the transfer of any
shares subject to an award on the satisfaction of a six-month holding
period, if such holding period is required for compliance with Section
16 under the Exchange Act.
SECTION 14. EFFECTIVE DATE OF PLAN.
The Plan shall be effective upon the date of the closing of the
Corporation's initial public offering (the "Effective Date"), provided that it
has been approved by the Board of the Corporation and by a majority of the
votes cast by the holders of the Corporation's Common Stock.
SECTION 15. TERM OF PLAN.
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No Stock Option, Stock Appreciation Right, Restricted Stock award,
Other Stock-Based Award or Outside Director Option award shall be granted
pursuant to the Plan on or after the tenth anniversary of the Effective Date of
the Plan, but awards granted prior to such tenth anniversary may be extended
beyond that date.
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