Exhibit 10.38
FLEMING COMPANIES, INC.
1999 STOCK INCENTIVE PLAN
FLEMING COMPANIES, INC.
1999 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
PAGE
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ARTICLE I PURPOSE......................................................................................1
Section 1.1 PURPOSE................................................................................1
Section 1.2 ESTABLISHMENT..........................................................................1
Section 1.3 SHARES SUBJECT TO THE PLAN.............................................................1
ARTICLE II DEFINITIONS..................................................................................1
ARTICLE III ADMINISTRATION...............................................................................5
Section 3.1 ADMINISTRATION OF THE PLAN; THE COMMITTEE.................................................5
Section 3.2 COMMITTEE TO MAKE RULES AND INTERPRET PLAN................................................6
ARTICLE IV GRANT OF AWARDS; DIRECTORS' RESTRICTED STOCK AWARDS;
SHARES SUBJECT TO THE PLAN...................................................................6
Section 4.1 COMMITTEE TO GRANT AWARDS TO ELIGIBLE ASSOCIATES..........................................6
Section 4.2 DIRECTORS' RESTRICTED STOCK AWARDS........................................................7
ARTICLE V ELIGIBILITY..................................................................................7
ARTICLE VI STOCK OPTIONS................................................................................8
Section 6.1 GRANT OF OPTIONS..........................................................................8
Section 6.2 CONDITIONS OF OPTIONS.....................................................................8
ARTICLE VII RESTRICTED STOCK AWARDS......................................................................9
Section 7.1 GRANT OF RESTRICTED STOCK AWARDS..........................................................9
Section 7.2 CONDITIONS OF RESTRICTED STOCK AWARDS.....................................................9
ARTICLE VIII ISSUANCE OF DIRECTORS' RESTRICTED STOCK.....................................................10
Section 8.1 ISSUANCE AND NUMBER OF SHARES OF RESTRICTED STOCK........................................10
Section 8.2 RESTRICTED STOCK HELD IN ESCROW; VESTING; FORFEITURE.....................................10
(a) CERTIFICATES.............................................................................10
(b) DIVIDENDS AND VOTING.....................................................................10
(c) VESTING..................................................................................10
(d) THE ACCOUNTANT...........................................................................11
(e) OTHER RESTRICTIONS.......................................................................11
(f) FORFEITURE...............................................................................11
(g) SECURITIES LAWS..........................................................................11
Section 8.3 ESCROW AGENT.............................................................................11
Section 8.4 RESTRICTIONS ON ALIENATION OF BENEFITS. ................................................11
ARTICLE IX SETTLEMENT OF DIRECTORS' RESTRICTED STOCK ACCOUNTS..........................................11
Section 9.1 SETTLEMENT OF RESTRICTED STOCK ACCOUNTS..................................................11
Section 9.2 DISTRIBUTION OF DIRECTORS' RESTRICTED STOCK..............................................11
Section 9.3 BENEFICIARIES............................................................................12
ARTICLE X STOCK ADJUSTMENTS...........................................................................12
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ARTICLE XI GENERAL.....................................................................................13
Section 11.1 AMENDMENT OR TERMINATION OF PLAN.......................................................13
Section 11.2 TERMINATION OF EMPLOYMENT; TERMINATION OF SERVICE......................................13
Section 11.3 LIMITED TRANSFERABILITY - OPTIONS......................................................13
Section 11.4 WITHHOLDING TAXES......................................................................14
Section 11.5 DIVIDENDS AND DIVIDEND EQUIVALENTS - AWARDS............................................14
Section 11.6 CHANGE OF CONTROL......................................................................14
Section 11.7 AMENDMENTS TO AWARDS...................................................................14
Section 11.8 REGULATORY APPROVAL AND LISTINGS.......................................................14
Section 11.9 RIGHT TO CONTINUED EMPLOYMENT..........................................................15
Section 11.10 NO RIGHT TO CONTINUE AS A DIRECTOR.....................................................15
Section 11.11 RELIANCE ON REPORTS....................................................................15
Section 11.12 CONSTRUCTION...........................................................................15
Section 11.13 GOVERNING LAW..........................................................................15
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ARTICLE I
PURPOSE
SECTION 1.1 PURPOSE. This 1999 Stock Incentive Plan (the "Plan") is
established by Fleming Companies, Inc. (the "Company") to create incentives
which are designed to motivate participants ("Eligible Associates" and "Eligible
Directors") to put forth maximum effort toward the success and growth of the
Company and to enable the Company to attract and retain experienced individuals
who by their position, ability and diligence are able to make important
contributions to the Company's success. Toward these objectives, the Plan
provides for the granting of Options and Restricted Stock Awards to Eligible
Associates (the "Stock Incentive Feature") and the issuance of Directors'
Restricted Stock to Eligible Directors in lieu of his Base Compensation (the
"Directors' Stock Feature") subject to the conditions set forth in the Plan.
SECTION 1.2 ESTABLISHMENT. The Stock Incentive Feature is effective
as of November 30, 1998 and for a period of ten years thereafter. The
Directors' Stock Feature shall be effective July 1, 1999 and for a period of
five and one-half years thereafter. The Plan shall continue in effect until
all matters relating to the payment of Awards and the issuance of Directors'
Restricted Stock and administration of the Plan have been settled.
The Plan shall be approved by the holders of a majority of the
outstanding shares of Common Stock, present, or represented, and entitled to
vote at a meeting called for such purpose, which approval must occur within the
period ending twelve months after the date the Plan is adopted by the Board.
Pending such approval by the shareholders, Awards of Options under the Stock
Incentive Feature may be granted to Eligible Associates, but no such Awards may
be exercised prior to receipt of shareholder approval. In the event shareholder
approval is not obtained within such twelve-month period, all such Awards shall
be void. No Directors' Restricted Stock Awards will be made and no Eligible
Director shall receive shares of Directors' Restricted Stock in lieu of his Base
Compensation until after the shareholders shall have approved the Plan.
SECTION 1.3 SHARES SUBJECT TO THE PLAN. Subject to the limitations set
forth in the Plan, Awards may be made under this Plan for a total of Two Million
Five Hundred Thousand (2,500,000) shares of Common Stock to Eligible Associates
and grants of Two Hundred Thousand (200,000) shares of Directors' Restricted
Stock to Eligible Directors.
ARTICLE II
DEFINITIONS
SECTION 2.1 "Accountant" means the office of the Company's
independent certified public accountant located in the city where the Company's
principal executive offices are located.
SECTION 2.2 "Award" means, individually or collectively, any Option
or Restricted Stock Award granted under the Stock Incentive Feature to an
Eligible Associate by the Committee pursuant to such terms, conditions,
restrictions, and/or limitations, if any, as the Committee may establish by the
Award Agreement or otherwise.
SECTION 2.3 "Award Agreement" means any written instrument that
establishes the terms, conditions, restrictions, and/or limitations applicable
to an Award in addition to those established by this Plan and by the Committee's
exercise of its administrative powers.
SECTION 2.4 "Base Compensation" means the annual retainer paid to
Eligible Directors under the Directors' Plan.
SECTION 2.5 "Beneficiary" shall mean that person or persons
designated by an Eligible Director in accordance with Section 9.3 who may be
entitled to receive such Eligible Director's Directors' Restricted Stock in the
event of the death of the Eligible Director.
SECTION 2.6 "Board" means the Board of Directors of the Company.
SECTION 2.7 "Change of Control Event" means each of the following:
(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 2.7; 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
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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.
SECTION 2.8 "Code" means the Internal Revenue Code of 1986, as
amended. References in the Plan to any section of the Code shall be deemed to
include any amendments or successor provisions to such section and any
regulations under such section.
SECTION 2.9 "Committee" shall have the meaning set forth in Section
3.1.
SECTION 2.10 "Common Stock" means the common stock, par value $2.50
per share, of the Company, and after substitution, such other stock as shall be
substituted therefor as provided in Article X.
SECTION 2.11 "Company" means Fleming Companies, Inc., an Oklahoma
corporation.
SECTION 2.12 "Compensation Committee" means the Compensation and
Organization Committee of the Board.
SECTION 2.13 "Controller" means the controller of the Company duly
elected by the Board.
SECTION 2.14 "Date of Grant" means the date on which the granting of
an Award to an Eligible Associate is authorized by the Committee or such later
date as may be specified by the Committee in such authorization.
SECTION 2.15 "Directors' Plan" means the Amended and Restated
Directors' Compensation and Stock Equivalent Unit Plan adopted by the Board in
February 1997.
SECTION 2.16 "Directors' Restricted Stock" means shares of Common
Stock which an Eligible Director has earned as provided in Article VIII of the
Plan.
SECTION 2.17 "Directors' Restricted Stock Account" shall mean the
account of an Eligible Director established with the Escrow Agent under the
Escrow.
SECTION 2.18 "Directors' Restricted Stock Award" shall mean the
issuance of Directors' Restricted Stock under Article VIII of the Plan.
SECTION 2.19 "Directors' Stock Feature" shall have the meaning set
forth in Section 1.1.
SECTION 2.20 "Eligible Associate" means any key associate of the
Company or a Subsidiary.
SECTION 2.21 "Eligible Director" means any member of the Board who is
also not an associate of the
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Company.
SECTION 2.22 "Escrow" means that separate arrangement under which
Directors' Restricted Stock will be held pending distribution to the Eligible
Director on Vesting or as otherwise provided in the Plan.
SECTION 2.23 "Escrow Agent" means the Secretary.
SECTION 2.24 "Exchange Act" means the Securities Exchange Act of
1934, as amended.
SECTION 2.25 "Executive Officer Participants" means Participants who
are subject to the provisions of Section 16 of the Exchange Act.
SECTION 2.26 "Fair Market Value" means (A) during such time as the
Common Stock is listed upon the New York Stock Exchange or other exchanges or
the NASDAQ/National Market System, the average of the highest and lowest sales
prices of the Common Stock as reported by such stock exchange or exchanges or
the NASDAQ/National Market System on the day for which such value is to be
determined, or if no sale of the Common Stock shall have been made on any such
stock exchange or the NASDAQ/National Market System that day, on the next
preceding day on which there was a sale of such Common Stock or (B) during any
such time as the Common Stock is not listed upon an established stock exchange
or the NASDAQ/National Market System, the mean between dealer "bid" and "ask"
prices of the Common Stock in the over-the-counter market on the day for which
such value is to be determined, as reported by the National Association of
Securities Dealers, Inc.
SECTION 2.27 "Fiscal Year" means a year comprised of 13 Periods
ending on the last Saturday in December in each such year.
SECTION 2.28 "GAAP" means Generally Accepted Accounting Principles.
SECTION 2.29 "Incentive Stock Option" means an Option within the
meaning of Section 422 of the Code.
SECTION 2.30 "Net Earnings From Operations" means the net sales of
the Company for the period or duration of the determination, calculated in
accordance with GAAP, as applied by the Company on a consistent basis, MINUS the
total costs and expenses for such period determined in accordance with GAAP, as
applied by the Company on a consistent basis, excluding extraordinary items of
revenue and expense and excluding revenue and expense items related to strategic
plan implementation.
SECTION 2.31 "Non-Executive Officer Participants" means Participants
who are not subject to the provisions of Section 16 of the Exchange Act.
SECTION 2.32 "Nonqualified Stock Option" means an Option which is not
an Incentive Stock Option.
SECTION 2.33 "Option" means an Award granted under Article VI of the
Plan and includes both Nonqualified Stock Options and Incentive Stock Options to
purchase shares of Common Stock.
SECTION 2.34 "Participant" means an Eligible Associate of the Company
or a Subsidiary to whom an Award has been granted by the Committee under the
Stock Incentive Feature or an Eligible Director who is entitled to receive
Directors' Restricted Stock under the Directors' Stock Feature.
SECTION 2.35 "Period" means any of 13 periods in any Fiscal Year,
each containing four weeks, as established by the Company for accounting
purposes.
SECTION 2.36 "Plan" means Fleming Companies, Inc. 1999 Stock
Incentive Plan.
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SECTION 2.37 "Regular Award Committee" means a committee comprised of
the Company's chief executive officer and the Company's senior executive officer
for human resources.
SECTION 2.38 "Restricted Stock Award" means an Award granted to an
Eligible Associate under Article VII of the Plan.
SECTION 2.39 "Secretary" means the corporate secretary of the Company
duly elected by the Board.
SECTION 2.40 "Stock Incentive Feature" shall have the meaning set
forth in Section 1.1.
SECTION 2.41 "Subsidiary" shall have the same meaning set forth in
Section 424 of the Code.
SECTION 2.42 "Termination of Service" means termination of service as
a Director under any of the following circumstances:
(1) Where the Eligible Director voluntarily resigns or
retires;
(2) Where the Eligible Director is not re-elected (or
elected in the case of an appointed director) to the
Board by the shareholders; or
(3) Where the Eligible Director dies or is unable to
serve as a Director by reason of disability.
SECTION 2.43 "Vest" or "Vesting" or "Vested" shall have the meaning
set forth in Section 8.2(c).
ARTICLE III
ADMINISTRATION
SECTION 3.1 ADMINISTRATION OF THE PLAN; THE COMMITTEE. For purposes
of administration, the Stock Incentive Feature shall be deemed to consist of two
separate stock incentive plans, a "Non-Executive Officer Participant Plan" which
is limited to Non-Executive Officer Participants and an "Executive Officer
Participant Plan" which is limited to Executive Officer Participants. Except for
administration and the category of Eligible Associates eligible to receive
Awards under the Stock Incentive Feature, the terms of the Non-Executive Officer
Participant Plan and the Executive Officer Participant Plan are identical.
The Non-Executive Officer Participant Plan shall be administered by
both the Regular Award Committee and the Compensation Committee. The Regular
Award Committee may only act within guidelines established by the Compensation
Committee. The Executive Officer Participant Plan and the Directors' Stock
Feature shall be administered by the Compensation Committee. With respect to the
Non-Executive Officer Participant Plan and to decisions relating to
Non-Executive Officer Participants, including the grant of Awards, the term
"Committee" shall mean both the Regular Award Committee and the Compensation
Committee; and with respect to the Executive Officer Participant Plan and to
decisions relating to the Executive Officer Participants, including the granting
of Awards, and with respect to any decisions relating to the administration of
the Directors' Stock Feature, the term "Committee" shall mean only the
Compensation Committee.
Unless otherwise provided in the by-laws of the Company or the
resolutions adopted from time to time by the Board establishing the Committee,
the Board may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, however caused, shall be filled by the
Board. The Committee shall hold
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meetings at such times and places as it may determine. A majority of the members
of the Committee shall constitute a quorum, and the acts of a majority of the
members present at any meeting at which a quorum is present or acts reduced to
or approved in writing by a majority of the members of the Committee shall be
the valid acts of the Committee.
Subject to the provisions of the Plan, the Committee shall have
exclusive power to:
(a) Select the Eligible Associates to participate in the Stock
Incentive Feature and determine the eligibility of Directors to be Eligible
Directors and to participate in the Directors' Stock Feature.
(b) Determine the time or times when Awards will be made.
(c) Determine the form of an Award, whether an Option or a
Restricted Stock Award, the number of shares of Common Stock subject to the
Award, all the terms, conditions (including performance requirements),
restrictions and/or limitations, if any, of an Award, including the time and
conditions of exercise or vesting, and the terms of any Award Agreement, which
may include the waiver or amendment of prior terms and conditions or
acceleration or early vesting or payment of an Award under certain circumstances
determined by the Committee.
(d) Determine whether Awards will be granted singly or in
combination.
(e) Accelerate the vesting, exercise or payment of an Award and
the award of Directors' Restricted Stock or the performance period of an Award
when such action or actions would be in the best interest of the Company.
(f) Take any and all other action it deems necessary or advisable
for the proper operation or administration of the Plan.
SECTION 3.2 COMMITTEE TO MAKE RULES AND INTERPRET PLAN. The Committee
in its sole discretion shall have the authority, subject to the provisions of
the Plan, to establish, adopt, or revise such rules and regulations and to make
all such determinations relating to the Plan as it may deem necessary or
advisable for the administration of the Plan. The Committee's interpretation of
the Plan or any Awards or the issuance of Directors' Restricted Stock and all
decisions and determinations by the Committee with respect to the Plan shall be
final, binding, and conclusive on all parties.
ARTICLE IV
GRANT OF AWARDS; DIRECTORS' RESTRICTED STOCK AWARDS;
SHARES SUBJECT TO THE PLAN
SECTION 4.1 COMMITTEE TO GRANT AWARDS TO ELIGIBLE ASSOCIATES. The
Committee may, from time to time, grant Awards to one or more Eligible
Associates, provided, however, that:
(a) Subject to Article X, the aggregate number of shares of
Common Stock made subject to the Award of Options to any Eligible Associate in
any Fiscal Year of the Company may not exceed 275,000.
(b) Subject to Article X, in no event shall more than 300,000
shares of Common Stock subject to the Plan be awarded to Eligible Associates as
Restricted Stock Awards (the "Restricted Stock Award Limit").
(c) Any shares of Common Stock related to Awards which terminate
by expiration, forfeiture, cancellation or otherwise without the issuance of
shares of Common Stock or are exchanged in the Committee's
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discretion for Awards not involving Common Stock, shall be available again for
grant under the Plan and shall not be counted against the Restricted Stock Award
Limit.
(d) Common Stock delivered by the Company in payment of any Award
under the Plan may be authorized and unissued Common Stock or Common Stock held
in the treasury of the Company.
(e) The Committee shall, in its sole discretion, determine the
manner in which fractional shares arising under this Plan shall be treated.
(f) The Compensation Committee shall from time to time establish
guidelines for the Regular Award Committee regarding the grant of Awards to
Eligible Associates.
(g) Separate certificates representing Common Stock to be
delivered to an Eligible Associate Participant upon the exercise of any Option
will be issued to such Participant.
SECTION 4.2 DIRECTORS' RESTRICTED STOCK AWARDS. The issuance of
Director's Restricted Stock to Eligible Directors under Article VIII shall be
automatic, provided, however, that:
(a) Subject to Article X, in no event shall more than 200,000
shares of Common Stock subject to the Plan be issued to Eligible Director
Participants as Directors' Restricted Stock.
(b) Any Directors' Restricted Stock Award which is forfeited for
any reason including failure to Vest shall be available again for grant under
the Plan as Directors' Restricted Stock.
(c) Common Stock delivered by the Company as Directors'
Restricted Stock may be authorized and unissued Common Stock or Common Stock
held in the treasury of the Company.
(d) Separate certificates representing Directors' Restricted
Stock shall be delivered to the Eligible Directors upon Vesting.
ARTICLE V
ELIGIBILITY
Subject to the provisions of the Plan, the Committee shall, from time
to time, select from the Eligible Associates those to whom Awards shall be
granted and shall determine the type or types of Awards to be made and shall
establish in the related Award Agreements the terms, conditions, restrictions
and/or limitations, if any, applicable to the Awards in addition to those set
forth in the Plan and the administrative rules and regulations issued by the
Committee.
Each Eligible Director shall be entitled to receive Directors'
Restricted Stock under Article VIII of the Plan. If an Eligible Director
subsequently becomes an associate (employee) of the Company (or any Subsidiary),
but does not incur a Termination of Service, such Director shall (a) continue to
be a Participant for Directors' Restricted Stock previously issued and (b) cease
eligibility with respect to all future issuance of Directors' Restricted Stock.
ARTICLE VI
STOCK OPTIONS
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SECTION 6.1 GRANT OF OPTIONS. The Committee may, from time to time,
subject to the provisions of the Plan and such other terms and conditions as it
may determine, grant Options to Eligible Associates. These Options may be
Incentive Stock Options or Nonqualified Stock Options, or a combination of both.
Each grant of an Option shall be evidenced by an Award Agreement executed by the
Company and the Eligible Associate Participant, and shall contain such terms and
conditions and be in such form as the Committee may from time to time approve,
subject to the requirements of Section 6.2.
SECTION 6.2 CONDITIONS OF OPTIONS. Each Option so granted shall be
subject to the following conditions:
(a) EXERCISE PRICE. As limited by Section 6.2(e) below, each
Option shall state the exercise price which shall be set by the Committee at the
Date of Grant; provided, however, no Option shall be granted at an exercise
price which is less than the Fair Market Value of the Common Stock on the Date
of Grant.
(b) FORM OF PAYMENT. The exercise price of an Option may be paid
(i) in cash or by check, bank draft or money order payable to the order of the
Company; (ii) by delivering shares of Common Stock having a Fair Market Value on
the date of payment equal to the amount of the exercise price; or (iii) a
combination of the foregoing. In addition to the foregoing, any Option granted
under the Plan may be exercised by a broker-dealer acting on behalf of an
Eligible Associate Participant if (A) the broker-dealer has received from the
Eligible Associate Participant or the Company a notice evidencing the exercise
of such Option and instructions signed by the Eligible Associate Participant
requesting the Company to deliver the shares of Common Stock subject to such
Option to the broker-dealer on behalf of the Eligible Associate Participant and
specifying the account into which such shares should be deposited, (B) adequate
provision has been made with respect to the payment of any withholding taxes due
upon such exercise or, in the case of an Incentive Stock Option, upon the
disposition of such shares and (C) the broker-dealer and the Eligible Associate
Participant have otherwise complied with Section 220.3(e)(4) of Regulation T, 12
CFR, Part 220 and any successor rules and regulations applicable to such
exercise.
(c) EXERCISE OF OPTIONS. Options granted under the Plan shall be
exercisable, in whole or in such installments and at such times, and shall
expire at such time, as shall be provided by the Committee in the Award
Agreement. Exercise of an Option shall be by written notice to the Secretary two
business days in advance of such exercise stating the election to exercise in
the form and manner determined by the Committee. Every share of Common Stock
acquired through the exercise of an Option shall be deemed to be fully paid at
the time of exercise and payment of the exercise price.
(d) OTHER TERMS AND CONDITIONS. Among other conditions that may
be imposed by the Committee, if deemed appropriate, are those relating to (i)
the period or periods and the conditions of exercisability of any Option; (ii)
the minimum periods during which Participants must be employed by the Company or
its Subsidiaries, or must hold Options before they may be exercised; (iii) the
minimum periods during which shares acquired upon exercise must be held before
sale or transfer shall be permitted; (iv) conditions under which such Options or
shares may be subject to forfeiture; (v) the frequency of exercise or the
minimum or maximum number of shares that may be acquired at any one time and
(vi) the achievement by the Company of specified performance criteria.
(e) SPECIAL RESTRICTIONS RELATING TO INCENTIVE STOCK OPTIONS.
Options issued in the form of Incentive Stock Options shall, in addition to
being subject to all applicable terms, conditions, restrictions and/or
limitations established by the Committee, comply with the requirements of
Section 422 of the Code, including, without limitation, the requirement that the
exercise price of an Incentive Stock Option not be less than 100% of the Fair
Market Value of the Common Stock on the Date of Grant, the requirement that each
Incentive Stock Option, unless sooner exercised, terminated or cancelled, expire
no later than 10 years from its Date of Grant, and the requirement that the
aggregate Fair Market Value (determined on the Date of Grant) of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under this Plan or any
other plan of the Company or any Subsidiary) not exceed $100,000.
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(f) APPLICATION OF FUNDS. The proceeds received by the Company
from the sale of Common Stock pursuant to Options will be used for general
corporate purposes.
(g) SHAREHOLDER RIGHTS. No Participant shall have a right as a
shareholder with respect to any share of Common Stock subject to an Option prior
to purchase of such shares of Common Stock by exercise of the Option.
ARTICLE VII
RESTRICTED STOCK AWARDS
SECTION 7.1 GRANT OF RESTRICTED STOCK AWARDS. The Committee may,
from time to time, subject to the provisions of the Plan and such other terms
and conditions as it may determine, grant a Restricted Stock Award to any
Eligible Associate. Restricted Stock Awards shall be awarded in such number and
at such times during the term of the Plan as the Committee shall determine. Each
Restricted Stock Award may be evidenced in such manner as the Committee deems
appropriate, including, without limitation, a book-entry registration or
issuance of a stock certificate or certificates, and by an Award Agreement
setting forth the terms of such Restricted Stock Award.
SECTION 7.2 CONDITIONS OF RESTRICTED STOCK AWARDS. The grant of a
Restricted Stock Award shall be subject to the following:
(a) RESTRICTION PERIOD. In addition to any vesting conditions
determined by the Committee, including, but not by way of limitation, the
achievement by the Company of specified performance criteria, vesting of each
Restricted Stock Award shall require the holder to remain in the employment of
the Company or a Subsidiary for a prescribed period (a "Restriction Period").
The Committee shall determine the Restriction Period or Periods which shall
apply to the shares of Common Stock covered by each Restricted Stock Award or
portion thereof; provided, however, all Restricted Stock Awards shall have a
minimum Restriction Period of at least one year from the Date of Grant. At the
end of the Restriction Period, assuming the fulfillment of any other specified
vesting conditions, the restrictions imposed by the Committee shall lapse with
respect to the shares of Common Stock covered by the Restricted Stock Award or
portion thereof. The Committee may, in its sole discretion, modify or accelerate
the vesting of a Restricted Stock Award under such circumstances as it deems
appropriate.
(b) RESTRICTIONS. The holder of a Restricted Stock Award may not
sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of the
shares of Common Stock represented by the Restricted Stock Award during the
applicable Restriction Period. The Committee shall impose such other
restrictions and conditions on any shares of Common Stock covered by a
Restricted Stock Award as it may deem advisable including, without limitation,
restrictions under applicable Federal or state securities laws, and may legend
the certificates representing Restricted Stock to give appropriate notice of
such restrictions.
(c) RIGHTS AS SHAREHOLDERS. During any Restriction Period, the
Committee may, in its discretion, grant to the holder of a Restricted Stock
Award all or any of the rights of a shareholder with respect to the shares,
including, but not by way of limitation, the right to vote such shares and to
receive dividends. If any dividends or other distributions are paid in shares of
Common Stock, all such shares shall be subject to the same restrictions on
transferability as the shares of Restricted Stock with respect to which they
were paid.
ARTICLE VIII
ISSUANCE OF DIRECTORS' RESTRICTED STOCK
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SECTION 8.1 ISSUANCE AND NUMBER OF SHARES OF RESTRICTED STOCK. Each
Eligible Director shall receive annually, in lieu of the cash annual retainer
and the stock equivalent units payable for services to be rendered by him as
a Director of the Company under the Directors' Plan, an award of shares of
Company Common Stock with the attributes and restrictions as provided in the
Plan (the "Directors' Restricted Stock"). There shall be credited to the
Directors' Restricted Stock Account (i) on or about July 1, 1999 1,750 shares
of Directors' Restricted Stock for the year 1999 and (ii) 3,500 shares of
Directors' Restricted Stock on or about the 15th day of March of each
calendar year for a period of 5 years thereafter. Persons who become Eligible
Directors during the term of the Directors' Stock Feature by appointment of
the Board or election by the shareholders shall receive an award of their pro
rata share of Directors' Restricted Stock on or about the 15th day of March
next succeeding such appointment or election, determined by multiplying 3,500
by a fraction the numerator of which is the number of days remaining in the
year of appointment or election and the denominator of which is 365 except
for the year 1999. For the year 1999, persons who become Eligible Directors
prior to July 1, 1999 shall be an Eligible Director for all purposes under
the Directors Stock Feature. Persons who become Eligible Directors on or
after July 1, 1999 and prior to January 1, 2000 shall receive an award of
their pro rata share of Directors' Restricted Stock determined by multiplying
1,750 by a fraction the numerator of which is the number of days remaining in
the year 1999 from such appointment or election, and the denominator of which
is 182. Each award of Directors' Restricted Stock shall contain such terms,
restrictions, attributes and conditions as set forth in Section 8.2.
SECTION 8.2 RESTRICTED STOCK HELD IN ESCROW; VESTING; FORFEITURE.
The Committee shall cause a certificate to be delivered to the Escrow Agent
(appointed pursuant to Section 8.3 below) registered in the name of the
Eligible Director for the total number of shares of Directors' Restricted
Stock represented by his award in accordance with the following terms,
attributes and conditions:
(a) CERTIFICATES. Any such certificate shall be legended to
indicate that the shares of Directors' Restricted Stock represented by such
certificate are subject to the terms and conditions of the Plan.
(b) DIVIDENDS AND VOTING. All Directors' Restricted Stock held by
the Escrow Agent shall constitute issued and outstanding shares of Common Stock
of the Company for all corporate purposes, and the Eligible Director shall
receive all cash 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 Directors' Restricted
Stock of any Eligible Director whose grant has been forfeited as provided in
this Plan.
(c) VESTING. With respect to each Eligible Director, shares of
Directors' Restricted Stock held by the Escrow Agent shall fully vest and be
nonforfeitable on the date which is five years from the date of the award if
the Company's Net Earnings From Operations for the 13 full Periods preceding
the date of such determination exceed the Company's Net Earnings From
Operations for Fiscal Year 1998 by at least 10%, such date being herein
sometimes referred to as the date the shares of Directors' Restricted Stock
"Vest" or "Vesting" occurs or shares of Directors' Restricted Stock become
"Vested." Provided, however, with the consent of the Committee following
request by an Eligible Director, the Vesting of shares of Directors'
Restricted Stock may be accelerated in whole or in part to the date of an
Eligible Director's Termination of Service if the Company's Net Earnings
From Operations for the 13 full Periods preceding his Termination of Service
exceed the Company's Net Earnings From Operations for Fiscal Year 1998 by at
least 10%. As such Directors' Restricted Stock shall Vest in accordance with
this Plan, the Escrow Agent shall deliver to such Participant or his
respective Beneficiary (in the case of the Eligible Director's death)
certificates representing such Vested shares of Directors' Restricted Stock
as provided in Section 9.2. As a condition precedent to delivering a
certificate representing shares of Directors' Restricted Stock to the Escrow
Agent, the Committee may require each Eligible Director to deliver to the
Escrow Agent a duly executed irrevocable stock power or powers (in blank)
covering the Directors' Restricted Stock represented by such certificate.
(d) THE ACCOUNTANT. The Controller of the Company shall determine
the Net Earnings From Operations whenever the occasion for such determination is
required. Any Eligible Director, however, may request the Committee to engage
the Accountant to verify the Controller's determination whose verification or
independent
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determination, as the case may be, shall be conclusive and binding on the
Company, the Committee and the Eligible Directors.
(e) OTHER RESTRICTIONS. In addition to Vesting, while Directors'
Restricted Stock is held in Escrow and until such Directors' Restricted Stock
has become fully Vested, it shall also be subject to the restrictions set forth
in Section 8.4 of the Plan.
(f) FORFEITURE. Shares of Directors' Restricted Stock which
are not Vested in accordance with Section 8.2(c) shall be forfeited and will
again become subject to the terms of the Directors' Stock Feature.
Certificates representing unvested shares of Directors' Restricted Stock held
by the Escrow Agent for the benefit of any Eligible Directors whose grant (to
the extent then unvested) has been forfeited shall be returned (together with
the related stock power) by the Escrow Agent to the Company.
(g) SECURITIES LAWS. The Company shall have no liability to
issue any Directors' Restricted Stock hereunder unless such Directors'
Restricted Stock and issuance thereof comply with all applicable federal or
state securities laws and all other applicable laws.
SECTION 8.3 ESCROW AGENT. The Secretary is hereby designated as the
Escrow Agent for the Escrow. The Committee shall have the power to remove the
Secretary from the position of Escrow Agent and to appoint a substitute or
successor Escrow Agent. The out-of-pocket expenses of the Escrow Agent shall be
paid by the Company subject to approval of the Committee. The Escrow Agent shall
not be entitled to any fees or commission for such services. The Escrow Agent
shall not incur liability for any action taken pursuant to the Plan or any
issuance of Directors' Restricted Stock made thereunder so long as the Escrow
Agent acts in good faith in accordance with the instructions of the Committee.
The Escrow Agent shall disburse all cash dividends he receives to the Eligible
Directors and shall hold the Directors' Restricted Stock until the stock has
Vested and he is directed by the Committee to deliver such certificates to the
Eligible Director.
SECTION 8.4 RESTRICTIONS ON ALIENATION OF BENEFITS. Directors'
Restricted Stock Awards shall not 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, as long as such award has not
vested. Any attempt to so garnish, attach, anticipate, alienate, sell, transfer,
assign, gift, pledge, encumber, dispose, hypothecate, levy or execute on the
same such Directors' Restricted Stock 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.
ARTICLE IX
SETTLEMENT OF DIRECTORS' RESTRICTED STOCK ACCOUNTS
SECTION 9.1 SETTLEMENT OF RESTRICTED STOCK ACCOUNTS. When an Eligible
Director's Directors' Restricted Stock is Vested, the Company will settle an
Eligible Directors' Restricted Stock Account in the manner described in Section
9.2 as soon as administratively feasible.
SECTION 9.2 DISTRIBUTION OF DIRECTORS' RESTRICTED STOCK. Each
Eligible Director shall specify at the time he becomes an Eligible Director
(or in the case of the current Eligible Directors on or prior to July 1,
1999) the name and address of his Beneficiary as required by Section 9.3,
which may be changed by the Eligible Directors upon notice to the Committee.
Upon Vesting of any shares of Directors' Restricted Stock and upon direction
from the Committee, the Escrow Agent shall cause any restrictive legend to be
removed from the certificates of Vested Directors' Restricted Stock and new
certificates issued in accordance with federal and state securities laws to
the Eligible Director (or his Beneficiary).
SECTION 9.3 BENEFICIARIES. Each Eligible Director may designate, on a
form provided by the Committee,
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one or more Beneficiaries to receive his shares of Directors' Restricted Stock
described in Section 8.1 in the event of such Eligible Director's death. The
Company may rely upon the beneficiary designation last filed with the Committee,
provided that such form was executed by the Eligible Director or his legal
representative and filed with the Committee prior to the Eligible Director's
death.
ARTICLE X
STOCK ADJUSTMENTS
In the event that the shares of Common Stock, as presently
constituted, shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Company or of another corporation
(whether by reason of merger, consolidation, recapitalization, reclassification,
stock split, combination of shares or otherwise), or if the number of such
shares of Common Stock shall be increased through the payment of a stock
dividend, or a dividend on the shares of Common Stock or rights or warrants to
purchase securities of the Company shall be made, then there shall be
substituted for or added to each share available under and subject to the Plan,
and each share theretofore appropriated or thereafter subject or which may
become subject to any Award or any Directors' Restricted Stock Award under the
Plan, the number and kind of shares of stock or other securities into which each
outstanding share of Common Stock shall be so changed or for which each such
share shall be exchanged or to which each such share shall be entitled, as the
case may be, on a fair and equivalent basis in accordance with the applicable
provisions of Section 424 of the Code; provided, however, with respect to
Options, in no such event will such adjustment result in a modification of any
Option as defined in Section 424(h) of the Code. In the event there shall be any
other change in the number or kind of the outstanding shares of Common Stock, or
any stock or other securities into which the Common Stock shall have been
changed or for which it shall have been exchanged, then if the Committee shall,
in its sole discretion, determine that such change equitably requires an
adjustment in the shares available under and subject to the Plan, or in any
Award, or any Directors' Restricted Stock Award theretofore granted or which may
be granted under the Plan, such adjustments shall be made in accordance with
such determination, except that no adjustment of the number of shares of Common
Stock available under the Plan or to which any Award or any Directors'
Restricted Stock Award relates that would otherwise be required shall be made
unless and until such adjustment either by itself or with other adjustments not
previously made would require an increase or decrease of at least 1% in the
number of shares of Common Stock available under the Plan or to which any Award
or any Directors' Restricted Stock Award relates immediately prior to the making
of such adjustment (the "Minimum Adjustment"). Any adjustment representing a
change of less than such minimum amount shall be carried forward and made as
soon as such adjustment together with other adjustments required by this Article
X and not previously made would result in a Minimum Adjustment. Notwithstanding
the foregoing, any adjustment required by this Article X which otherwise would
not result in a Minimum Adjustment shall be made with respect to shares of
Common Stock relating to any Award or any Directors' Restricted Stock Award
immediately prior to exercise, payment or settlement of such Award.
No fractional shares of Common Stock or units of other securities
shall be issued pursuant to any such adjustment, and any fractions resulting
from any such adjustment shall be eliminated in each case by rounding downward
to the nearest whole share.
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ARTICLE XI
GENERAL
SECTION 11.1 AMENDMENT OR TERMINATION OF PLAN. The Board may alter,
suspend or terminate the Plan at any time. In addition, the Board may, from time
to time, amend the Plan in any manner, but may not without shareholder approval
adopt any amendment which would increase the aggregate number of shares of
Common Stock available under the Plan (except by operation of Article X) or
materially modify the requirements as to eligibility of Eligible Associates or
Eligible Directors for participation in the Plan.
SECTION 11.2 TERMINATION OF EMPLOYMENT; TERMINATION OF SERVICE. If an
Eligible Associate's employment with the Company or a Subsidiary terminates for
a reason other than death, disability, retirement, or any approved reason, all
unexercised, unearned, and/or unpaid Awards, including, but not by way of
limitation, Awards earned, but not yet paid, all unpaid dividends and dividend
equivalents, and all interest, if any, accrued on the foregoing shall be
cancelled or forfeited, as the case may be, unless the Eligible Associate's
Award Agreement provides otherwise. The Committee shall (i) determine what
events constitute disability, retirement, or termination for an approved reason
for purposes of the Plan, and (ii) determine the treatment of a Participant
under the Plan in the event of his or her death, disability, retirement, or
termination for an approved reason. The Committee shall also determine the
method, if any, for accelerating the vesting or exercisability of any Options,
or providing for the exercise of any unexercised Options in the event of an
Eligible Associate's death, disability, retirement, or termination for an
approved reason. In the event an Eligible Associate's employment is terminated
due to retirement in accordance with the Company's retirement policies, unless
the Eligible Associate's Award Agreement provides otherwise, the Eligible
Associate shall have a period of three years following his date of retirement to
exercise any Nonqualified Stock Options which are otherwise exercisable on his
date of retirement.
In the event of a Termination of Service by an Eligible Director,
the provisions of Section 8.2 of the Plan shall control. The Committee shall
determine in its sole discretion when an Eligible Director has voluntarily
resigned or retired or is unable to serve as a Director by reason of disability.
SECTION 11.3 LIMITED TRANSFERABILITY - OPTIONS. The Committee may, in
its discretion, authorize all or a portion of the Nonqualified Stock Options to
be granted under this Plan to be on terms which permit transfer by the
Participant to (i) the ex-spouse of the Participant pursuant to the terms of a
domestic relations order, (ii) the spouse, children or grandchildren of the
Participant ("Immediate Family Members"), (iii) a trust or trusts for the
exclusive benefit of such immediate Family Members, or (iv) a partnership in
which such Immediate Family Members are the only partners. In addition (x) there
may be no consideration for any such transfer, (y) the stock option agreement
pursuant to which such Nonqualified Stock Options are granted must be approved
by the Committee, and must expressly provide for transferability in a manner
consistent with this paragraph, and (z) subsequent transfers of transferred
Nonqualified Stock Options shall be prohibited except as set forth below in this
Section 11.3. Following transfer, any such Nonqualified Stock Options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of Section 11.2 hereof
the term "Participant" shall be deemed to refer to the transferee. The events of
termination of employment of Section 11.2 hereof shall continue to be applied
with respect to the original Participant, following which the Nonqualified Stock
Options shall be exercisable by the transferee only to the extent, and for the
periods specified in Section 11.2 hereof. No transfer pursuant to this Section
11.3 shall be effective to bind the Company unless the Company shall have been
furnished with written notice of such transfer together with such other
documents regarding the transfer as the Committee shall request. In addition,
subject to the foregoing provisions of this Section 11.3, Awards shall be
transferable only by will or the laws of descent and distribution; however, no
such transfer of an Award by the Participant shall be effective to bind the
Company unless the Company shall have been furnished with written notice of such
transfer and an authenticated copy of the will and/or such other evidence as the
Committee may deem necessary to establish the validity of the transfer and the
acceptance by the transferee of the terms and conditions of such Award.
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SECTION 11.4 WITHHOLDING TAXES. Unless otherwise paid by the
Participant, the Company shall be entitled to deduct from any payment under the
Plan, regardless of the form of such payment, the amount of all applicable
income and employment taxes required by law to be withheld with respect to such
payment or may require the Participant to pay to it such tax prior to and as a
condition of the making of such payment. In accordance with any applicable
administrative guidelines it establishes, the Committee may allow a Participant
or an Eligible Director to pay the amount of taxes required by law to be
withheld from an Award or Directors' Restricted Stock Award by (i) directing the
Company to withhold from any payment of the Award or Directors' Restricted Stock
Award a number of shares of Common Stock having a Fair Market Value on the date
of payment equal to the amount of the required withholding taxes or (ii)
delivering to the Company previously owned shares of Common Stock having a Fair
Market Value on the date of payment equal to the amount of the required
withholding taxes.
SECTION 11.5 DIVIDENDS AND DIVIDEND EQUIVALENTS - AWARDS. The
Committee may choose, at the time of the grant of any Award or any time
thereafter up to the time of payment of such Award, to include as part of such
Award an entitlement to receive dividends or dividend equivalents subject to
such terms, conditions, restrictions, and/or limitations, if any, as the
Committee may establish. Dividends and dividend equivalents granted hereunder
shall be paid in such form and manner (i.e., lump sum or installments), and at
such time as the Committee shall determine. All dividends or dividend
equivalents which are not paid currently may, at the Committee's discretion,
accrue interest.
SECTION 11.6 CHANGE OF CONTROL. Awards granted under the Plan to any
Eligible Associate may, in the discretion of the Committee, provide that such
Awards shall be immediately vested, fully earned and exercisable upon the
occurrence of a Change of Control Event. Directors' Restricted Stock Awards
shall immediately vest upon the occurrence of a Change of Control Event without
the action or intervention of the Committee.
SECTION 11.7 AMENDMENTS TO AWARDS. The Committee may at any time
unilaterally amend the terms of any Award Agreement, whether or not presently
exercisable or vested, to the extent it deems appropriate; provided, however,
that any such amendment which is adverse to the Participant shall require the
Participant's consent.
SECTION 11.8 REGULATORY APPROVAL AND LISTINGS. The Company shall use
its best efforts to file with the Securities and Exchange Commission as soon as
practicable following approval by the shareholders of the Company of the Plan as
provided in Section 1.2 of the Plan, and keep continuously effectively, a
Registration Statement on Form S-8 with respect to shares of Common Stock
subject to Awards and Directors' Restricted Stock Awards hereunder.
Notwithstanding anything contained in this Plan to the contrary, the Company
shall have no obligation to issue or deliver certificates representing shares of
Common Stock under this Plan prior to:
(a) the obtaining of any approval from, or satisfaction of any
waiting period or other condition imposed by, any governmental agency which the
Committee shall, in its sole discretion, determine to be necessary or advisable;
(b) the admission of such shares to listing on the stock exchange
on which the Common Stock may be listed; and
(c) the completion of any registration or other qualification of
such shares under any state or Federal law or ruling of any governmental body
which the Committee shall, in its sole discretion, determine to be necessary or
advisable.
SECTION 11.9 RIGHT TO CONTINUED EMPLOYMENT. Participation in the Plan
shall not give any Eligible Associate any right to remain in the employ of the
Company or any Subsidiary. The Company or, in the case of employment with a
Subsidiary, the Subsidiary reserves the right to terminate any Eligible
Associate at any time. Further, the adoption of this Plan shall not be deemed to
give any Eligible Associate or any other individual any right to be selected as
a Participant or to be granted an Award.
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SECTION 11.10 NO RIGHT TO CONTINUE AS A DIRECTOR. Nothing contained in
this Plan will confer upon an Eligible Director any right to continue to serve
as a Director.
SECTION 11.11 RELIANCE ON REPORTS. Each member of the Committee and
each member of the Board shall be fully justified in relying or acting in good
faith upon any report made by the independent public accountants of the Company
and its Subsidiaries and upon any other information furnished in connection with
the Plan by any person or persons other than himself. In no event shall any
person who is or shall have been a member of the Committee or of the Board be
liable for any determination made or other action taken or any omission to act
in reliance upon any such report or information or for any action taken,
including the furnishing of information, or failure to act, if in good faith.
SECTION 11.12 CONSTRUCTION. Masculine pronouns and other words of
masculine gender shall refer to both men and women. The titles and headings of
the sections in the Plan are for the convenience of reference only, and in the
event of any conflict, the text of the Plan, rather than such titles or
headings, shall control.
SECTION 11.13 GOVERNING LAW. The Plan shall be governed by and
construed in accordance with the laws of the State of Oklahoma except as
superseded by applicable Federal law.
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