FLEMING COMPANIES, INC.
1990 STOCK INCENTIVE PLAN (*)
FLEMING COMPANIES, INC., an Oklahoma corporation, hereby adopts the
Fleming Companies, Inc. 1990 Stock Incentive Plan upon the following terms and
conditions:
ARTICLE I
NAME AND PURPOSE OF PLAN
1.1 NAME OF PLAN. This Plan shall be hereafter known as the
FLEMING COMPANIES, INC. 1990 STOCK INCENTIVE PLAN.
1.2 PURPOSE. The purpose of the Plan is to provide the Key
Associates who are selected to be Participants under the Plan an incentive to
motivate and financially reward such individuals who contribute to the long term
growth and profitability of the Company with such reward to be based on the
financial performance of the Company, including its Subsidiaries, during
Performances Cycles and on such other criteria including service with the
Company over time as the Committee in its sole discretion shall determine. Key
Associates will have the opportunity to earn their Award with payment to be made
either in cash or in shares of Common Stock which have been subject to certain
restrictions as provided in this Plan.
1.3 TYPE OF PLAN. This Plan shall be considered as a "nonqualified
deferred compensation plan" which is to be sponsored by the Company solely for
the purpose of providing a supplemental income for certain Key Associates who
contribute materially to the continued growth, development and future business
success of the Company. It is the intention of the Company that this Plan and
any Agreements entered into pursuant to the Plan be administered as an unfunded
welfare benefit plan established and maintained for a select group of Key
Associates.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 DEFINITIONS. Where the following capitalized words and phrases
appear in this instrument, they shall have the respective meanings set forth
below unless a different context is clearly expressed herein.
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(*) As amended November 1, 1997 and August 18, 1998.
(a) AGREEMENT: The word "Agreement" shall mean that certain
agreement which will be entered into by and between the Company and
the Participant which represents the Participant's Award for a
particular Performance Cycle as provided in Section 3.3 hereof.
(b) ANNIVERSARY DATE: The words "Anniversary Date" shall
mean the last Saturday of December which is end of the fiscal year of
the Company.
(c) AWARD: The word "Award" shall mean, with respect to any
Participant, the number of Phantom Stock Units or shares of Restricted
Stock granted to the Participant at the beginning of each Performance
Cycle.
(d) BENEFICIARY: The words "Beneficiary" shall mean that
person designated by the Participant pursuant to Section 6.2 hereof
who may be entitled to receive such Participant's Award in the event
of the death of the Participant.
(e) BOARD: The word "Board" shall mean the Board of
Directors of the Company.
(f) CHANGE OF CONTROL: The words "Change of Control" shall
mean the change in the control of the Company as described in Section
9.1 hereof.
(g) CODE: The word "Code" shall mean the Internal Revenue
Code of 1986, as amended.
(h) COMMITTEE: The word "Committee" shall mean the committee
appointed by the Board which in accordance with Article X herein will
administer the Plan and which shall be constituted such that the Plan
complies with Rule 16b-3, or any successor rule, as may be amended
from time to time under the Securities Exchange Act of 1934.
(i) COMMON STOCK: The words "Common Stock" shall mean the
shares of common stock, par value $2.50 per share of the Company.
(j) COMPANY: The word "Company" shall mean Fleming
Companies, Inc., or its successor.
(k) CURRENT MARKET VALUE: The words "Current Market Value"
shall mean the closing price of the Common Stock of the Company as
reported on the New York Stock Exchange as
of the trading day immediately preceding the date the Award is made.
(l) DISABILITY: The word "Disability" shall mean a physical
or mental condition arising during employment with the Employer
whereby a Participant has become totally and permanently disabled as
defined under the Fleming Companies, Inc. Long-Term Disability Plan.
(m) EFFECTIVE DATE: The words "Effective Date" shall mean
the 1st day of January, 1990 which is the date that this Plan shall be
effective for all purposes.
(n) ELIGIBLE SPOUSE: The words "Eligible Spouse" shall mean
the spouse to whom the Participant is married on his date of death.
(o) EMPLOYER: The word "Employer" shall mean either the
Company or any Subsidiary.
(p) ESCROW: The word "Escrow" shall mean that separate
arrangement under which Restricted Stock will be held pending
distribution to the Participant on the Vesting Date or as otherwise
provided in the Plan.
(q) ESCROW AGENT: The words "Escrow Agent" shall mean the
person or entity who shall administer the Escrow.
(r) KEY ASSOCIATE: The words "Key Associate" shall mean any
full time employee of the Company or a Subsidiary who holds the
position of Chairman, Chief Executive Officer, President, Executive
Vice President, Senior Vice President or Vice President or any other
associate of the Company or a Subsidiary who is selected for
participation in the Plan.
(s) PARTICIPANT: The word "Participant" shall mean a Key
Associate who has been selected by the Committee.
(t) PERFORMANCE CYCLE: The words "Performance Cycle" shall
mean a fixed period of time determined by the Committee over which
Awards may be earned by the Participant.
(u) PERFORMANCE GOALS: The words "Performance Goals" shall
mean those factors, goals and criteria selected by the Committee which
must be met by the Participant during the Performance Cycle in order
for a Partici-
pant to earn his Award under the Performance Vesting Schedule.
(v) PERFORMANCE VESTING SCHEDULE: The words "Performance
Vesting Schedule" shall mean that schedule selected by the Committee
which shall contain the Performance Goals which must be met during the
applicable Performance Cycle in order for a Participant to become
vested in his Award under the Performance Vesting Schedule.
(w) PHANTOM STOCK UNITS: The words "Phantom Stock Units"
shall mean those monetary units which represent shares of Common Stock
which a Participant may earn as provided in Article V hereof.
(x) PLAN: The word "Plan" shall mean the "Fleming Companies,
Inc. 1990 Stock Incentive Plan," as set forth in this instrument, and
as hereafter amended from time to time.
(y) RESTRICTED STOCK: The words "Restricted Stock" shall mean
those shares of Common Stock which a Participant may earn as provided
in Article V hereof.
(z) RETIREMENT: The word "Retirement" shall mean a
Participant's termination of employment with the Company or a
Subsidiary after attaining the age of 65 years or later or, at the
discretion of the Committee, after attaining the age of 55 years or
later.
(aa) SERVICE VESTING SCHEDULE. The words "Service Vesting
Schedule" shall mean the period of employment service with the
Employer established by the Committee which must be met in order for a
Participant to become vested in his Award under the Service Vesting
Schedule.
(bb) SUBSIDIARY: The word "Subsidiary" shall mean any
corporation with 80% or more of its voting common stock being owned,
directly or indirectly, by the Company.
(cc) VESTING DATE: The words "Vesting Date" shall mean the
date on which a Participant becomes vested in his Award after
satisfying the requirements, if any, of any Performance Vesting
Schedule and/or Service Vesting Schedule; provided, however, that no
Participant may become vested in his Award within six months from date
the Award is granted.
(dd) YEAR: The word "Year" shall mean the fiscal Year of the
Company.
2.2 CONSTRUCTION: The masculine gender, wherever appearing in the
Plan, shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. Any word appearing herein in the plural shall
include the singular, where appropriate, and likewise the singular shall include
the plural, unless the context clearly indicates to the contrary.
ARTICLE III
PARTICIPATION
3.1 SELECTION FOR PARTICIPATION. In order to be eligible for
participation in the Plan, a Key Associate of the Company must be selected by
the Committee. Selection for participation in the Plan shall be in the sole and
absolute discretion of the Committee.
3.2 PARTICIPATION IN CONSIDERATION FOR FUTURE SERVICES. Selection
of a Key Associate by the Committee for participation in the Plan and the
granting of any Award will be deemed to be for all purposes in consideration of
future services to be rendered by the Key Associate to the Company or its
Subsidiaries.
3.3 AWARD AGREEMENTS. Any Key Associate selected by the Committee
as a Participant, shall, as a condition of participation, execute and return to
the Committee an Agreement evidencing the Key Associate's participation in the
Plan, the amount of his Award and his agreement to the terms and conditions of
the Plan and the Agreement. A separate Agreement will be entered into by the
Company and the Participant for each Performance Cycle.
ARTICLE IV
RESTRICTED STOCK SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES OF RESTRICTED STOCK. Shares of Common Stock
subject to Award under this Plan in the form of Restricted Stock rather than
Phantom Stock Units shall not exceed in the aggregate Four Hundred Thousand
(400,000) shares of the Common Stock of the Company. Either authorized and
unissued shares or treasury shares may be subject to Award and delivered
pursuant to the Plan. If any Restricted Stock issued to a Participant is
forfeited as provided in this Plan, the Committee may reissue such Restricted
Stock to Participants.
4.2 NUMBER OF PHANTOM STOCK UNITS. The number of Phantom Stock
Units which may be awarded under the Plan is subject to the sole discretion of
the Committee. Awards of Phantom Stock Units shall not reduce the number of
Shares of Restricted Stock which may be issued hereunder; and, correspondingly,
the shares of Restricted Stock shall not reduce the number of Phantom Stock
Units which may be awarded hereunder since there is no limitation on the maximum
number of shares of Phantom Stock Units. For all purposes under the Plan, the
value of the shares of Restricted Stock and the Phantom Stock Units will be
based upon the Current Market Value of the Common Stock at the time the Award is
made.
ARTICLE V
THE AWARDS
5.1 AMOUNT OF AWARDS, NUMBER OF UNITS. The Award granted to each
Participant for each Performance Cycle, expressed as a number of Phantom Stock
Units (or shares of Restricted Stock), is determined solely in the discretion of
the Committee. Awards of Restricted Stock will be paid in Common Stock of the
Company; and Awards of Phantom Stock Units will be paid in cash. Each Award of
Restricted Stock shall be calculated in the same manner as Awards of Phantom
Stock Units and shall contain such terms, restrictions and conditions as the
Committee may determine, which terms, restrictions and conditions may or may not
be the same in each case.
5.2 SPECIAL RULES FOR PHANTOM STOCK UNITS. Phantom Stock Units are
granted in the form of Units equivalent to shares of Common Stock. No
certificates shall be issued with respect to such units, but the Company shall
maintain a bookkeeping account in the name of the Participant to which such
units shall relate and such units shall otherwise be treated in a comparable
manner as if the Participant had been awarded shares of Common Stock (except
that no voting rights or other stock ownership rights shall apply to such
units). Each such unit shall represent the right to receive a cash payment of
equivalent value at one time, in the manner and subject to the restrictions set
forth in this Plan. If, during the Performance Cycle, cash dividends or other
cash distributions are paid with respect to shares of Common Stock, the Company
may pay to the Participant in cash an amount equal to the cash dividends or cash
distributions that he would have received if the Phantom Stock Units had been
granted in the form of shares of Common Stock rather than units equivalent
thereto. If, during the Performance Cycle, shares of Common Stock or other
securities or property are distributed with respect to the Common Stock,
additional units equivalent to such shares, securities or property shall be
added to
the Participant's bookkeeping account as additional units and shall be subject
to forfeiture and all other limitations and restrictions imposed upon the
related units. Upon the expiration of the Performance Cycle or the
occurrence of any other event which may give rise to forfeiture under the Plan,
the Company may defer payment of dividend equivalents on Phantom Stock Units
until a determination is made as to the number of such units, if any, to be
forfeited, and no further dividend equivalents shall be paid with respect to
forfeited units after the date of the forfeiture (regardless of whether the
record date of the dividend is before or after the date of the forfeiture). In
the event of the death of a Participant, the Beneficiary shall have the same
right to receive cash payments equivalent to cash dividends and other cash
distributions with respect to the Phantom Stock Units which are not forfeited as
the Participant would have had if he had survived until payment of the Phantom
Stock Units is made to the Beneficiary pursuant to Subsection 6.2 hereof.
5.3 RESTRICTED STOCK HELD IN ESCROW. The Committee shall cause a
certificate to be delivered to the Escrow Agent (appointed pursuant to Section
5.4 below) registered in the name of the Participant representing the total
number of shares of Restricted Stock represented by his Award and a copy of the
Agreement relating to such Award in accordance with the following:
(a) Any such certificate shall be legended to indicate that
the shares of Restricted Stock represented thereby are subject to the terms and
conditions of the Award and the Plan.
(b) All Restricted Stock held by the Escrow Agent in the
Escrow shall constitute issued and outstanding shares of Common Stock of the
Company for all corporate purposes, and the Participant may, at the discretion
of the Committee, receive all dividends thereon and shall have the right to vote
such shares provided that the right to receive such dividends and to vote such
shares shall forthwith terminate with respect to unvested shares of Restricted
Stock of any Participant whose Award has been forfeited as provided in this
Plan.
(c) While such Restricted Stock is held in Escrow and until
such Restricted Stock has become fully vested on the Vesting Date, it shall be
subject to the restrictions set forth in Section 7.1 of the Plan.
(d) As such Restricted Stock shall vest from time to time in
the Participant in accordance with his Award, the Escrow Agent shall deliver to
such Participant or his respective Beneficiary (in the case of the Participant's
death) certificates
representing such vested shares of Restricted Stock. As a condition precedent
to delivering a certificate representing shares of Restricted Stock covered by
an Award to the Escrow Agent, the Committee may require the Participant to
deliver to the Escrow Agent a duly executed irrevocable stock power or powers
(in blank) covering the Restricted Stock represented by such certificate.
(e) Certificates representing unvested shares of Restricted
Stock held by the Escrow Agent for the benefit of any Participant whose Award
(to the extent then unvested) has been forfeited shall be returned (together
with the related stock power) by the Escrow Agent to the Company.
(f) The Company shall have no liability to issue any
Restricted Stock hereunder unless such Restricted Stock and issuance thereof
comply with any applicable federal or state securities laws or any other
applicable laws.
(g) Participants may be granted more than one Award. The
granting of an Award shall not affect any outstanding Award previously made to a
Participant under the Plan.
5.4 ESCROW AGENT. An Escrow Agent for the Escrow shall be
appointed by the Committee for such period and upon such terms and conditions as
the Committee deems appropriate. The Committee shall have the power to remove
any person from the position of Escrow Agent and to appoint a substitute or
successor Escrow Agent. The fees and expenses of the Escrow Agent shall be paid
by the Company. The Escrow Agent shall not incur liability for any action taken
pursuant to the Plan or any Award made thereunder so long as the Escrow Agent
acts in good faith in accordance with the instructions of the Committee.
ARTICLE VI
PAYMENT OF AWARD
6.1 PAYMENT OF AWARD.
(a) GENERAL. With respect to each applicable Performance
Cycle, after satisfaction of any Performance Vesting Schedule and/or Service
Vesting Schedule prescribed by the Committee, payment of Awards shall be made as
soon as practicable following the Vesting Date which relates to the Award.
(b) SPECIAL TIME FOR PAYMENT. Notwithstanding the provisions
of Section 6.1(a), in the event of a Change of Control or termination of a
Participant's employment due to death, Retirement or Disability, then, the
Committee may, in its sole
discretion, accelerate vesting and payment of any Award or take such other
actions as the Committee deems appropriate.
6.2 BENEFICIARY DESIGNATION. In the event of the death of a
Participant during a Performance Cycle, then, the Participant's Award, if any,
shall be paid to the then surviving Beneficiary designated by the Participant on
a form provided by the Committee, and, if there is no Beneficiary then
surviving, such benefits will automatically be paid to the surviving Eligible
Spouse of such Participant, otherwise to the estate of such Participant.
ARTICLE VII
GENERAL BENEFIT PROVISIONS
7.1 RESTRICTIONS ON ALIENATION OF BENEFITS. No right or benefit
under this Plan or the Agreement shall be subject in any manner to garnishment,
attachment, anticipation, alienation, sale, transfer, assignment, gift, pledge,
encumbrance, disposition, hypothecation, levy, execution or the claims of
creditors, either voluntarily or involuntarily, and any attempt to so garnish,
attach, anticipate, alienate, sell, transfer, assign, gift, pledge, encumber,
dispose, hypothecate, levy or execute on the same shall be null and void, and
neither shall such benefits or beneficial interests be liable for or subject to
the debts, contracts, liabilities, engagements or torts of any person to whom
such benefits or funds are payable.
7.2 NO TRUST. Other than as specifically provided in this Plan, no
action under this Plan by the Company, its Board or the Committee shall be
construed as creating a trust, escrow or other secured or segregated fund in
favor of the Participant, his Beneficiary, or any other persons otherwise
entitled to his Award. The status of the Participant and his Beneficiary with
respect to any liabilities assumed by the Company hereunder shall be solely
those of unsecured creditors of the Company who employs such Participant. Any
asset acquired or held by the Company in connection with liabilities assumed by
it hereunder, shall not be deemed to be held under any trust, escrow or other
secured or segregated fund for the benefit of the Participant or his
Beneficiaries or to be security for the performance of the obligations of the
Company or any Subsidiary, but shall be, and remain a general, unpledged,
unrestricted asset of the Company at all times subject to the claims of general
creditors of the Company.
7.3 WITHHOLDING FOR INCOME AND EMPLOYMENT TAXES. Since all amounts
to be paid under the Plan and the related Agreement to a Participant are to be
considered as supplemental compensation paid for services rendered by the
Participant, the Company shall
comply with all federal and state laws and regulations respecting the
withholding, deposit and payment of any income, employment or other taxes
relating to any payments made under this Plan, and accordingly, all amounts of
Awards shall be subject to and reduced by the amount of such taxes. In the
event a Participant receives payment of Award in the form of Restricted Stock,
then, in such event, with the consent of the Committee, a Participant may elect
to pay any employment or withholding taxes by directing the Company to withhold
a number of shares of Restricted Stock equal to the withholding deposit which is
otherwise required with respect to such income or other employment taxes.
Notwithstanding the withholding of such Restricted Stock, such shares shall
still be considered to be subject to withholding taxes. The additional amount
of tax which is due may be likewise paid either in cash or by the withholding of
additional shares.
7.4 NO INTEREST ON AWARDS. All Awards to be paid hereunder will be
paid without interest or investment earnings of any kind whatsoever except as
otherwise specifically provided in the Plan.
7.5 PAYMENTS BY THE COMPANY OR SUBSIDIARY. The payments required
to fund the cost of the Awards provided by the Plan shall be made solely by the
Company or any Subsidiary whose Key Associates are participating in the Plan.
7.6 ADJUSTMENT ON RECAPITALIZATION. In case of a recapitalization,
stock split, merger, stock dividend, reorganization, combination, liquidation,
or other change in the Common Stock of the Company, the Committee shall make
such adjustment, if any, as it deems appropriate in the number or kind of shares
of Common Stock which remain available under the Plan for further Awards as well
as adjustment to the number of Phantom Stock Units which represent shares of
Common Stock. Unvested shares of Restricted Stock held by the Escrow Agent for
the benefit of a Participant shall participate in any of such events to the same
extent as any other issued and outstanding shares of Common Stock of the
Company, but appropriate adjustments, if required, shall be made by the
Committee, so that after giving effect to the occurrence of any of such events,
the Escrow Agent shall continue to hold such unvested shares and/or any other
securities delivered in respect thereof for the benefit of such Participant to
the extent practicable upon the same terms and conditions of this Plan and of
his Award.
ARTICLE VIII
PROVISIONS RELATING TO PARTICIPANTS
8.1 INFORMATION REQUIRED OF PARTICIPANTS. Payment of Awards shall
be made as provided in this Plan and no formal claim shall be required therefor;
provided, in the interests of orderly administration of the Plan, the Committee
may make reasonable requests of Participants and Beneficiaries to furnish
information which is reasonably necessary and appropriate to the orderly
administration of the Plan, and, to that limited extent, payments under the Plan
are conditioned upon the Participants and Beneficiaries promptly furnishing
true, full and complete information as the Committee may reasonably request.
8.2 BENEFITS PAYABLE TO INCOMPETENTS. Any benefits payable
hereunder to a minor or other person under legal disability may be made, at the
discretion of the Committee, (i) directly to the said person, or (ii) to a
parent, spouse, relative by blood or marriage, or the legal representative of
the said person. The Committee shall not be required to see to the application
of any such payment, and the payee's receipt shall be a full and final discharge
of the Committee's responsibility hereunder.
8.3 CONDITIONS OF EMPLOYMENT NOT AFFECTED BY PLAN. The
establishment and maintenance of the Plan shall not be construed as conferring
any legal rights upon any Participant to the continuation of employment with the
Employer, nor shall the Plan interfere with the rights of the Employer to
discharge any Participant with or without cause.
ARTICLE IX
ACCELERATION OF AWARDS ON CHANGE OF CONTROL
9.1 CHANGE OF CONTROL. In the event that there has been a Change
of Control (as defined hereafter), the Committee, in its sole discretion, may
accelerate the vesting and payment of any Award or may determine that a payment
in lieu of any Award shall be made. For the purpose of this Plan, a "Change of
Control" shall mean:
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more (the "Triggering Percentage") of either (i) the then outstanding
shares of common stock of the Company (the "Outstanding Company Common
Stock") or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, in
the event the "Incumbent Board" (as such term is hereinafter defined) pursuant
to authority granted in any rights agreement to which the Company is a party
(the "Rights Agreement") lowers the acquisition threshold percentages set forth
in such Rights Agreement, the Triggering Percentage shall be automatically
reduced to equal the threshold percentages set pursuant to authority granted to
the board in the Rights Agreement; and provided, further, however, that the
following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company, or
(iv) any acquisition by any corporation pursuant to a transaction which complies
with clauses (x), (y), and (z) of subsection (c) of this Section 9.1; or
(b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, appointment or nomination
for election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for purposes of this definition, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(c) Approval by the shareholders of the Company of a
reorganization, share exchange, merger or consolidation or acquisition of assets
of another corporation (a "Business Combination"), in each case, unless,
following such Business Combination, (x) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination will beneficially own, directly
or indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction will own
the Company through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (y) no Person
(excluding any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) will beneficially own,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (z) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination will have been members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or
(d) Approval by the shareholders of the Company of (x) a complete
liquidation or dissolution of the Company or, (y) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
corporation, with respect to which following such sale or other disposition, (A)
more than 50% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors will be beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) less than 20% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors will be
beneficially owned, directly or indirectly, by any Person (excluding any
employee benefit plan (or related trust) of the Company or such corporation),
except to the extent that such Person owned 20% or more of the Outstanding
Company Common Stock or Outstanding Company Voting Securities prior to the sale
or disposition, and (C) at least a majority of the members of the board of
directors of such corporation will have been members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such sale or other disposition of assets of the Company.
9.2 CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Plan to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the Company
to or for the benefit of the Participant (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by the Participant with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then,
the Committee may, in its sole discretion, authorize an additional payment (a
"Gross-Up Payment") to the Participant in an amount such that after payment by
the Participant of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Participant retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. In the event the Committee
determines that Gross-Up Payments shall be made to the Participants, the
procedures set forth in Section 9.2(b) through 9.2(d) shall apply.
(b) Subject to the provisions of Subsection 9.2(c) below, all
determinations required to be made under this Section 9.2, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Deloitte & Touche, Oklahoma City, Oklahoma or such other certified public
accounting firm as may be designated by the Participant (the "Accounting Firm")
which shall provide detailed supporting calculations both to the Company and the
Participant within 15 business days of the receipt of notice from the
Participant that there has been a Payment, or such earlier time as is requested
by the Company. In the event that the Accounting Firm is serving as accountant
or auditor for the individual, entity or group effecting the Change of Control,
the Participant shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 9.2, shall be paid by the Company to the
Participant within five days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Participant, it shall furnish the Participant with a written opinion that
failure to report the Excise Tax on the Participant's applicable federal
income tax return would not result in the imposition of a negligence or similar
penalty. Any determination by the Accounting Firm shall be binding upon the
Company and the Participant. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Subsection 9.2(c) and the Participant
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Participant.
(c) The Participant shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten business days after the Participant is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Participant shall not pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Participant in writing prior to the
expiration of such period that it desires to contest such claim, the Participant
shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Participant harmless, on an
after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Subsection 9.2(c), the
Company shall control all proceedings taken in connection with such contest and,
at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Participant to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and the Participant agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however, that
if the Company directs the Participant to pay such claim and sue for a refund,
the Company shall advance the amount of such payment to the Participant, on an
interest-free basis and shall indemnify and hold the Participant harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Participant with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Participant shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Participant of an amount
advanced by the Company pursuant to Subsection 9.2(c), the Participant becomes
entitled to receive any refund with respect to such claim, the Participant shall
(subject to the Company's complying with the requirements of Subsection 9.2(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Participant of an amount advanced by the Company pursuant to
Subsection 9.2(c), a determination is made that the Participant shall not be
entitled to any refund with respect to such claim and the Company does not
notify the Participant in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
ARTICLE X
ADMINISTRATION AND COMMITTEE
10.1 ALLOCATION OF RESPONSIBILITY FOR PLAN ADMINISTRATION. The members
of the Committee shall serve at the pleasure of the Board and shall be the same
as the Compensation and Organization Committee appointed by the Board. Any
member may serve concurrently as a member of any other administrative committee
of any other plan of the Company or any of its affiliates entitling participants
therein to acquire stock, stock options or deferred compensation rights
(including stock appreciation rights). No member of the Board may serve on the
Committee if such member has been eligible, during the year preceding his
appointment, to participate under the Plan or any other plan of the Company or
any of its affiliates entitling participants therein to acquire stock, stock
options or deferred compensation rights (including stock appreciation rights).
A member of the Committee may not be eligible to become a Participant in the
Plan. The Committee shall have the power where consistent with the general
purpose and intent of the Plan to (i) modify the requirements of the Plan to
conform with the law or to meet in special circumstances not anticipated or
covered in the Plan, (ii) suspend or discontinue the Plan, (iii) establish
policies and (iv) adopt rules and regulations and prescribe forms for carrying
out the purposes and provisions of the Plan including the form of any
Agreements. Unless otherwise provided in the Plan, the Committee shall have the
authority to interpret and construe the Plan, and determine all questions
arising under the Plan and any Agreement made pursuant to the Plan. Any
interpretation, decision or determination made by the Committee shall be final,
binding and conclusive. A majority of the Committee shall constitute a quorum,
and an act of the majority of the members present at any meeting at which a
quorum is present shall be the act of the Committee.
10.2 APPOINTMENT OF COMMITTEE. The Plan shall be administered by the
Committee. All usual and reasonable expenses of the Committee incurred in
administering the Plan may be paid in whole or in part by the Company.
10.3 CLAIMS PROCEDURE. The Committee shall make all determinations as to
the right of any Participant or his Beneficiary to an Award. If any request for
a payment is wholly or partially denied, the Committee shall notify the person
requesting the payments, in writing, of such denial, including in such
notification the following information:
(a) the specific reason or reasons for such denial;
(b) the specific references to the pertinent Plan provisions upon
which the denial is based;
(c) a description of any additional material and information which
may be needed to clarify the request, including an explanation of why such
information is required; and
(d) an examination of this Plan's review procedure with respect to
denial of benefits.
Provided, that any such notice to be delivered to any Participant or Beneficiary
shall be mailed by certified or registered mail and shall be written to the best
of the Committee's ability in a manner that may be understood without legal
counsel.
10.4 REVIEW PROCEDURE. Any Participant or Beneficiary whose claim has
been denied in accordance with Section 10.3 herein may appeal to the Committee
for review of such denial by making a written request therefor within 60 days of
receipt of the notification of such denial, and such Participant or Beneficiary
may examine documents pertinent to the review and may submit to the Committee
written issues and comments. Within 60 days after receipt of the request for
review, the Committee shall communicate to the claimant, in writing, its
decision, and the communication shall set forth the reason or reasons for the
decision and specific reference to those Plan provisions upon which the decision
is based.
10.5 RECORDS AND REPORTS. The Committee shall exercise such authority
and responsibility as it deems appropriate in order to comply with governmental
laws and regulations.
10.6 OTHER COMMITTEE POWERS AND DUTIES. The Committee shall have such
duties and powers as may be necessary to discharge its duties hereunder,
including, but not by way of limitation, the following:
(a) to construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of any
Awards hereunder;
(b) to establish the Performance Goals and any other factors
relating to the Performance Vesting Schedule and the Service Vesting
Schedule as such relate to the Awards;
(c) to prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(d) to receive from the Company and from Participants and
Beneficiaries such information as shall be necessary for the proper
administration of the Plan;
(e) to furnish the Company upon request, such reports with respect
to the administration of the Plan as are reasonable and appropriate; and
(f) to appoint and employ individuals and any other agents it
deems advisable, including legal counsel, to assist in the administration
of the Plan and to render advice with respect to any responsibility of the
Committee, or any of its individual members, under the Plan.
10.7 RULES AND DECISIONS. The Committee may adopt such rules as it deems
necessary, desirable, or appropriate. When making a determination or
calculation, the Committee shall be entitled to rely upon information furnished
by a Participant or Beneficiary, the Employer, the accountants of the Company or
the legal counsel of the Company.
ARTICLE XI
AMENDMENT AND TERMINATION
11.1 RIGHT TO AMEND OR ALTER PLAN. The Plan may be amended by the
Company from time to time in any respect whatever by resolution of the Board
adopting such amendment and, if required by applicable law or the rules of any
exchange on which the Common Stock is listed, by the affirmative vote of the
holders of a majority of the shares of Common Stock. Any amendments may be
made, which in the judgment of the Committee are necessary or advisable,
provided that such amendments do not deprive a Participant, without his consent,
of a right to receive his Award hereunder which has been previously vested by
such Participant at the applicable point in time.
11.2 RIGHT TO TERMINATE PLAN. This Plan shall continue until terminated
as provided in this Section 11.2. The Company expressly reserves the right to
terminate this Plan in whole or in part at any time. Unless sooner terminated,
this Plan shall terminate on December 31, 1999 (the "Termination Date").
Provided, if the Company elects to terminate the Plan prior to the Termination
Date, the Company shall determine a proposed date of termination, and the
Committee shall notify the Participants. Provided further, the termination of
the Plan shall not cause a termination of any previously vested Award.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 ARTICLES AND SECTION TITLES AND HEADINGS. The titles and headings
at the beginning of each Article and Section shall not be considered in
construing the meaning of any provisions in this Plan.
12.2 LAWS OF OKLAHOMA TO GOVERN. The provisions of this Plan shall be
construed, administered and enforced according to the laws of the State of
Oklahoma.
12.3 EFFECTIVE DATE OF PLAN. This Plan shall be effective as of the
Effective Date; provided, however, that it shall be cancelled and of no force
and effect if it has not been approved by the holders of a majority of the
Common Stock of the Company present, or represented, and entitled to vote at a
meeting called for such purposes within six months from the Effective Date.