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Exhibit 10.2
SHONEY'S, INC.
1998 STOCK PLAN
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the Shoney's, Inc. 1998 Stock Plan (the "Plan") is to
enable Shoney's, Inc. (the "Company") to attract, retain, and reward key
employees of the Company and its Subsidiaries and Affiliates, and directors who
are not also employees of the Company, and to strengthen the mutuality of
interests between such key employees and directors and the shareholders of the
Company by awarding such key employees and directors stock incentives and/or
other equity interests or equity-based incentives in the Company. The provisions
of the Plan are intended to satisfy the requirements of Section 16(b) of the
Exchange Act, and shall be interpreted in a manner consistent with the
requirements thereof, as now or hereafter construed, interpreted, and applied by
regulations, rulings, and cases. The Plan is also designed so that awards
granted hereunder intended to comply with the requirements for "performance
based" compensation under Section 162(m) of the Code may comply with such
requirements. 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 Company and its
Subsidiaries that is designated by the Board as a participating employer under
the Plan, provided that the Company 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 Company.
C. "Change in Control" has the meaning provided in Section 7(b) of the
Plan.
D. "Change in Control Price" has the meaning provided in Section 7(d)
of the Plan.
E. "Common Stock" means the Company's common stock, par value $1.00
per share.
F. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
G. "Committee" means the Committee referred to in Section 2 of the
Plan.
H. "Company" means Shoney's, Inc., a corporation organized under the
laws of the State of Tennessee, or any successor corporation.
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I. "Disability" means disability as determined under the Company's
Group Long-Term Disability Insurance Plan.
J. "Early Retirement" means retirement, for purposes of this Plan with
the express consent of the Company at or before the time of such retirement,
from active employment with the Company and any Subsidiary or Affiliate prior to
age 65, in accordance with any applicable early retirement policy of the Company
then in effect or as may be approved by the Committee.
K. "Effective Date" has the meaning provided in Section 11 of the Plan.
L. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
M. "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 New York
Stock Exchange (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.
N. "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.
O. "Normal Retirement" means retirement from active employment with the
Company and any Subsidiary or Affiliate on or after age 65.
P. "Other Stock-Based Award" means an award under Section 6 below that
is valued in whole or in part by reference to, or is otherwise based on, the
Common Stock.
Q. "Outside Director" means a member of the Board who is not an officer
or employee of the Company or any Subsidiary or Affiliate of the Company.
R. "Plan" means this Shoney's, Inc. 1998 Stock Plan, as amended from
time to time.
S. "Performance Goals" means performance goals based on one or more of
the following criteria: (i) pre-tax income or after-tax income; (ii) operating
cash flow; (iii) operating profit; (iv) return on equity, assets, capital, or
investment; (v) earnings or book value per share; (vi) sales or revenues; (vii)
operating expenses; (viii) Common Stock price appreciation; and (ix)
implementation, management, or completion of critical projects or processes.
Where applicable, the Performance Goals may be expressed in terms of attaining a
specified level of the particular criteria or the attainment of a percentage
increase or decrease in the particular criteria, and may be applied to one
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or more of the Company or any Subsidiary, or a division or strategic business
unit of the Company, or may be applied to the performance of the Company
relative to a market index, a group of other companies, or a combination
thereof, all as determined by the Committee. The Performance Goals may include a
threshold level of performance below which no payment will be made (or no
vesting will occur), levels of performance at which specified payments will be
made (or specified vesting will occur), and a maximum level of performance above
which no additional payment will be made (or at which full vesting will occur).
Each of the foregoing Performance Goals shall be determined, to the extent
applicable, in accordance with generally accepted accounting principles and
shall be subject to certification by the Committee; provided, that the Committee
or the Board, as applicable, shall have the authority to make equitable
adjustments to the Performance Goals in recognition of unusual or non-recurring
events affecting the Company or any Subsidiary or the financial statements of
the Company or any Subsidiary, in response to changes in applicable laws or
regulations, or to account for items of gain, loss, or expense determined to be
extraordinary or unusual in nature or infrequent in occurrence or related to the
disposal of a segment of business or related to a change in accounting
principles.
T. "Restricted Stock" means an award of shares of Common Stock that is
subject to restrictions under Section 5 of the Plan.
U. "Restriction Period" has the meaning provided in Section 5 of the
Plan.
V. "Retirement" means Normal or Early Retirement.
W. "Section 162(m) Maximum" has the meaning provided in Section 3(a)
hereof.
X. "Subsidiary" means any company (other than the Company) in an
unbroken chain of companies beginning with the Company if each of the companies
(other than the last company 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 companies in the chain.
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 Human Resources
and 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.
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The Committee shall have authority to grant, pursuant to the terms of
the Plan, to officers, other employees, and Outside Directors eligible under
Section 4: (i) Restricted Stock and/or (ii) Other Stock-Based Awards; provided,
however, that the power to grant and establish the terms and conditions of
awards to Outside Directors under the Plan shall be reserved to the Board.
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, and Outside
Directors of the Company and its Subsidiaries and Affiliates to whom
Restricted Stock and/or Other Stock-Based Awards may from time to time
be granted hereunder;
(b) to determine whether and to what extent 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 award and/or the shares of Common Stock relating thereto,
based in each case on such factors as the Committee or the Board, as
applicable, shall determine, in its sole discretion); and to amend or
waive any such terms and conditions to the extent permitted by Section
8 hereof;
(e) 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);
(f) to determine the terms, conditions, and restrictions of
any Performance Goals and the number of shares of Restricted Stock or
other awards subject thereto;
(g) to determine whether to require payment of tax withholding
requirements in shares of Common Stock subject to the award; and
(h) to impose any holding period required to satisfy Section
16 under the Exchange Act.
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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; and, except as expressly set
forth herein or otherwise required by law, 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 Company
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 2,000,000 shares. 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 Company 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 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, 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 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.
SECTION 4. ELIGIBILITY.
Officers and other key employees of the Company and its Subsidiaries
and Affiliates who are responsible for or contribute to the management, growth
and/or profitability of the business of the Company and/or its Subsidiaries and
Affiliates and Outside Directors are eligible to be granted awards under the
Plan.
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SECTION 5. 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
or the Board, as the case may be, 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 5(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 5(c). The Committee or the Board may condition the
grant of Restricted Stock upon the attainment of specified Performance
Goals or such other factors as the Committee or the Board 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 Company, 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 or the Board, as
applicable, 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 or the Board 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
5(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 10(h) hereof), and shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such award.
(iv) The Committee or the Board, as the case may be,
may require that the stock certificates evidencing such shares
be held in custody by the Company 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 5 shall be subject to the
following restrictions and conditions:
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(i) In accordance with the provisions of this Plan
and the award agreement, during a period set by the Committee
or the Board, as the case may be, 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 or the Board, as
applicable, 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, the attainment of Performance Goals, or such other
factors or criteria as the Committee or the Board may
determine in its sole discretion.
(ii) Except as provided in this paragraph (ii) and
Section 5(c)(i), the participant shall have, with respect to
the shares of Restricted Stock, all of the rights of a
shareholder of the Company, including the right to vote the
shares, and the right to receive any cash dividends. The
Committee or the Board, as applicable, 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
or the Board so determines, reinvested, subject to Section
10(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
or the Board, as the case may be, 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 5, upon termination of a
participant's employment with the Company 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 10(h)
hereof) promptly.
(d) Minimum Value Provisions. In order to better ensure that
award payments actually reflect the performance of the Company and
service of the participant, the Committee or the Board, as applicable,
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 or the Board.
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SECTION 6. OTHER STOCK-BASED AWARDS.
(a) Administration. Other Stock-Based Awards, including,
without limitation, performance shares and Common Stock awards valued
by reference to earnings per share or Subsidiary performance, may be
granted either alone, in addition to, or in tandem with Restricted
Stock granted under the Plan and cash awards made outside of the Plan.
Subject to the provisions of the Plan, the Committee or the Board, as
the case may be, 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 or the Board 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 6 shall be subject to the following terms and
conditions:
(i) Shares subject to awards under this Section 6 and
the award agreement referred to in Section 6(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 or the Board at grant, the recipient of an award
under this Section 6 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 or the Board, as the case may be, in its sole
discretion, and the Committee or the Board may provide that
such amounts (if any) shall be deemed to have been reinvested
in additional shares of Common Stock or otherwise reinvested.
(iii) Any award under Section 6 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 or the Board, as applicable, 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 6.
(v) Each award under this Section 6 shall be
confirmed by, and subject to the terms of, an agreement or
other instrument by the Company and the participant.
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(vi) Common Stock (including securities convertible
into Common Stock) issued on a bonus basis under this Section
6 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 6
shall be priced at least 85% of the Fair Market Value of the
Common Stock on the date of grant.
SECTION 7. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. In the event of:
(1) a "Change in Control" as defined in Section
7(b); or
(2) a "Potential Change in Control" as defined in
Section 7(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 7(a), 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 7(a), the value of all outstanding Restricted
Stock and Other Stock-Based Awards, in each case to the extent
vested, shall, unless otherwise determined by the 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 7(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
7(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 Company or a wholly-owned subsidiary thereof or any
employee benefit plan of the Company or any of its
Subsidiaries, becomes the beneficial owner of the Company's
securities having 50% or more of the combined voting power of
the then outstanding securities of the Company that may be
cast for
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the election of directors of the Company (other than as a
result of an issuance of securities initiated by the Company
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 Company or any successor Company or entity
entitled to vote generally in the election of the directors of
the Company or such other company or entity after such
transaction are held in the aggregate by the holders of the
Company's securities entitled to vote generally in the
election of directors of the Company immediately prior to such
transaction; or
(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 Company's shareholders, of each director of
the Company first elected during such period was approved by a
vote of at least two-thirds of the directors of the Company
then still in office who were directors of the Company at the
beginning of any such period.
(c) Definition of Potential Change in Control. For purposes of
Section 7(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 Company, the consummation of which would result in a
Change in Control of the Company as defined in Section 7(b);
or
(ii) the acquisition of beneficial ownership,
directly or indirectly, by any entity, person or group (other
than the Company or a Subsidiary or any Company employee
benefit plan (including any trustee of such plan acting as
such trustee)) of securities of the Company representing 50%
or more of the combined voting power of the Company's
outstanding securities and the adoption by the Committee or
the Board of a resolution to the effect that a Potential
Change in Control of the Company has occurred for purposes of
this Plan.
(d) Change in Control Price. For purposes of this Section 7,
"Change in Control Price" means the highest price per share of Common
Stock 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 Company 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 or the
Board.
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SECTION 8. AMENDMENTS AND TERMINATION.
The Board may at any time amend, alter, or discontinue the Plan without
shareholder approval to the fullest extent permitted by the Exchange Act and the
Code; provided, however, that no amendment, alteration, or discontinuation shall
be made which would impair the rights of a participant under a Restricted Stock
or Other Stock-Based Award theretofore granted, without the participant's
consent.
The Committee or the Board, as the case may be, may amend the terms of
any 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. Solely for purposes of computing the Section 162(m)
Maximum, if any awards previously granted to a participant are canceled and new
awards having a lower exercise price or other more favorable terms for the
participant are substituted in their place, both the initial awards and the
replacement awards will be deemed to be outstanding (although the canceled
awards will not be exercisable or deemed outstanding for any other purposes).
SECTION 9. 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 by the Company, nothing contained herein shall give any such
participant any rights that are greater than those of a general creditor of the
Company. 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 10. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares
pursuant to an award under the Plan to represent to and agree with the
Company in writing that the 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
stop-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.
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(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 Company or any Subsidiary or Affiliate any right to
continued employment with the Company or a Subsidiary or Affiliate, as
the case may be, nor shall it interfere in any way with the right of
the Company 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 Company, 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
Company under the Plan shall be conditional on such payment or
arrangements and the Company 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 other awards then outstanding
under the Plan).
(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.
(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 Company 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 therefrom, 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, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal
counsel selected by the Company) 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
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such Committee member is liable for negligence or misconduct in the
performance of his or her duties; provided that within 60 days after
institution of any such action, suit, or proceeding, the Committee
member shall in writing offer the Company 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 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 other than 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 11. EFFECTIVE DATE OF PLAN.
The Plan shall be effective as of the date of approval of the Plan by a
majority of the votes cast by the holders of the Company's Common Stock.
SECTION 12. TERM OF PLAN.
No Restricted Stock award or Other Stock-Based 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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