CBRL GROUP, INC.
2002 OMNIBUS INCENTIVE COMPENSATION PLAN
1. PURPOSE.
The purpose of the CBRL Group, Inc. 2002 Omnibus Incentive Compensation
Plan (the "Plan") is to provide motivation to Employees of the Company and its
Subsidiaries and Affiliates to put forth maximum efforts toward the continued
growth, profitability, and success of the Company and its Subsidiaries and
Affiliates by providing incentives to such Employees through the ownership and
performance of Common Stock of the Company. Toward this objective, the Committee
may grant stock options, SAR, Stock Awards, performance shares, cash bonuses and
other incentive awards to Employees of the Company and its Subsidiaries and
Affiliates on the terms and subject to the conditions set forth in the Plan. In
addition, this Plan is intended to enable the Company to effectively attract,
retain and reward Outside Directors by providing for grants of Outside Director
Options to Outside Directors.
2. DEFINITIONS.
2.1 "Affiliate" means any entity (other than the Company and any
Subsidiary) that is designated by the Board as a participating employer under
the Plan, provided that the Company directly or indirectly owns at least 20% of
the combined voting power of all classes of stock of that entity or at least 20%
of the ownership interests in that entity.
2.2 "Award" means any form of stock option, SAR, Stock Award,
performance shares, cash bonus or other incentive award granted under the Plan,
whether singly, in combination, or in tandem, to a Participant by the Committee
pursuant to terms, conditions, restrictions and limitations, if any, as the
Committee may establish by the Award Notice or otherwise.
2.3 "Award Notice" means a written notice from the Company to a
Participant that establishes the terms, conditions, restrictions, and
limitations applicable to an Award in addition to those established by the Plan
and by the Committee's exercise of its administrative powers.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means matters which, in the judgment of the Committee,
constitute any one or more of the following: (i) intoxication while on the job;
(ii) theft or dishonesty in the conduct of the Company's business; (iii) willful
neglect or negligence in the management of the Company's business, or violation
of Company race or gender anti-harassment policies; (iv) violence that results
in personal injury; or (v) conviction of a crime involving moral turpitude.
2.6 "Change In Control" means the happening of any of the following:
a. any person or entity, including a "group" as defined in
Section 13(d)(3) of the Exchange Act, other than the Company or a
wholly-owned Subsidiary, or any employee benefit plan of the Company or
any Subsidiary, becomes the beneficial owner of the Company's
securities having 50% or more of the combined voting power of the then
outstanding securities of the Company that may be cast for the election
of directors of the Company (other than as a result of an issuance of
securities initiated by the Company in the ordinary course of
business); or
b. as the result of, or in connection with, any cash tender or
exchange offer, merger or other business combination, sales of assets
or contested election, or any combination of the foregoing
transactions, after the transaction less than a majority of the
combined voting power of the then outstanding securities of the
Company, or any successor corporation or cooperative or entity,
entitled to vote generally in the election of the directors of the
Company, or other successor corporation or other entity, are held in
the aggregate by the holders of the Company's securities who
immediately prior to the transaction had been entitled to vote
generally in the election of directors of the Company; or
c. during any period of 2 consecutive years, individuals who
at the beginning of the period constitute the Board cease for any
reason to constitute at least a majority of the Board, unless the
election, or the nomination for election by the Company's shareholders,
of each director of the Company first elected during the relevant
2-year period was approved by a vote of at least 2/3 of the directors
of the Company then still in office who were directors of the Company
at the beginning of that period.
2.7 "Change In Control Price" means the highest closing price (or, if
the shares are not traded on an exchange, the highest last sale price or closing
"asked" price) per share paid for the purchase of Common Stock in a national
securities market during the 60-day period ending on the date the Change In
Control occurs (or, where applicable, the occurrence of the Potential Change in
Control event), as determined by the Committee.
2.8 "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
2.9 "Committee" means the Compensation and Stock Option Committee of
the Board, or any other committee designated by the Board, authorized to
administer the Plan under Section 3 of this Plan. The Committee shall consist of
not less than 2 members who shall be appointed by, and shall serve at the
pleasure of, the Board. It is intended that the directors appointed to serve on
the Committee shall be "independent" as defined by the Company from time to
time, and that they shall be "non-employee directors" (within the meaning of
Rule 16b-3 under the Exchange Act) and "outside directors" (within the meaning
of Code Section 162(m) and its related regulations). However, the mere fact that
a Committee member fails to qualify under any of the foregoing requirements
shall not invalidate any Award made by the Committee if the Award is otherwise
validly made under the Plan.
2.10 "Common Stock" means the $0.01 par value common stock of the
Company.
2.11 "Company" means CBRL Group, Inc. or any successor.
2.12 "Covered Employee" means an individual who is, with respect to the
Company, an individual defined in Code Section 162(m)(3).
2.13 "Disability" has the same meaning as provided in the long-term
disability plan or policy maintained by the Company or if applicable, most
recently maintained, by the Company or if applicable, a Subsidiary or Affiliate,
for the Participant, whether or not that Participant actually receives
disability benefits under the plan or policy. If no long-term disability plan or
policy was ever maintained on behalf of Participant or if the determination of
Disability relates to an incentive stock option (within the meaning of Section 8
of this Plan), Disability means Permanent and Total Disability as defined in
Section 22(e)(3) of the Code. In a dispute, the determination whether a
Participant has suffered a Disability will be made by the Committee and may be
supported by the advice of a physician competent in the area to which that
Disability relates.
2.14 "Effective Date" is defined in Section 6.
2.15 "Employee" means an employee of the Company, a Subsidiary or an
Affiliate.
2.16 "Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time.
2.17 "Fair Market Value" with respect to the Common Stock, as of any
given date, unless otherwise determined by the Committee in good faith, means
the reported closing sale price of a share of Common Stock on the automated
quotation system or other market or exchange that is the principal trading
market for the Common Stock, or if no sale of a share of Common Stock is so
reported on that date, the fair market value of a share of Common Stock as
determined by the Committee in good faith.
2.18 "Immediate Family" means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and includes
adoptive relationships.
2.19 "Outside Director" means a member of the Board who is not an
officer or employee of the Company or any Subsidiary or Affiliate of the
Company.
2.20 "Outside Director Option" means a stock option award to an Outside
Director under Section 27.
2.21 "Participant" means any individual to whom an Award has been
granted by the Committee under this Plan.
2.22 "Potential Change in Control" means the happening of any one of
the following:
a. the approval by shareholders of an agreement by the Company
which would result in a Change in Control of the Company whe
n consummated; or
b. the acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than the Company or a
Subsidiary or any Company or Subsidiary employee benefit plan,
including any trustee of the plan acting as trustee) of securities of
the Company representing 25% or more of the combined voting power of
the then outstanding securities of the Company (without being
accompanied by a formal statement or public filing disclaiming any
intention to obtain or exercise control of the Company) and the
adoption by the Committee of a resolution to the effect that a
Potential Change in Control of the Company has occurred for purposes of
this Plan.
2.23 "Qualified Performance-Based Award" means (i) any stock option or
SAR granted under the Plan, or (ii) any other Award that is intended to qualify
for the Section 162(m) Exemption and is made subject to performance goals based
on Qualified Performance Measures as set forth in Section 13.
2.24 "Qualified Performance Measures" means 1 or more of the
performance measures listed in Section 13.2 upon which performance goals for
certain Qualified Performance-Based Awards may be established by the Committee.
2.25 "SAR" is an Award that shall entitle the recipient to receive a
payment equal to the appreciation in value of a stated number of shares of
Common Stock from the price established in the Award to the market value of that
number of shares of Common Stock on the date of exercise.
2.26 "Section 162(m) Exemption" means the exemption from the limitation
on deductibility imposed by Section 162(m) of the Code that is set forth in
Section 162(m)(4)(C) of the Code or any successor provision thereto.
2.27 "Section 162(m) Cash Maximum" means $1,000,000.
2.28 "Section 16 Insider" means a Participant who is subject to the
reporting requirements of Section 16 of the Exchange Act with respect to the
Company.
2.29 "Stock Award" means an Award granted pursuant to Section 10 in the
form of shares of Common Stock, restricted shares of Common Stock or Units of
Common Stock.
2.30 "Subsidiary" means a corporation or other business entity in which
the Company directly or indirectly has an ownership interest of 50% or more.
2.31 "Unit" means a bookkeeping entry used by the Company to record and
account for the grant of the following Awards until the Award is paid, canceled,
forfeited or terminated, as the case may be: shares of Common Stock, SARs and
performance shares may be expressed in terms of Units of Common Stock.
3. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee shall
have the discretionary authority to: (a) interpret the Plan; (b) establish any
rules and regulations it deems necessary for the proper operation and
administration of the Plan; (c) select Employees to become Participants and
receive Awards under the Plan; (d) determine the form of an Award, whether a
stock option, SAR, Stock Award, performance share, cash bonus, or other
incentive award established by the Committee, the number of shares or Units
subject to the Award, all the terms, conditions, restrictions and limitations,
if any, of an Award, including the time and conditions of exercise or vesting,
and the terms of any Award Notice; (e) determine whether Awards should be
granted singly, in combination or in tandem; (f) grant waivers of Plan terms,
conditions, restrictions and limitations; (g) accelerate the vesting, exercise
or payment of an Award or the performance period of an Award in the event of a
Participant's termination of employment or when that action or actions would be
in the best interests of the Company; (h) establish such other types of Awards,
besides those specifically enumerated in Section 2.2, which the Committee
determines are consistent with the Plan's purpose; and (i) take all other action
it deems necessary or advisable for the proper operation or administration of
the Plan. Subject to Section 24, the Committee also shall have the authority to
grant Awards in replacement of Awards previously granted under the Plan or any
other executive compensation plan of the Company or a Subsidiary. All
determinations of the Committee shall be made by a majority of its members, and
its determinations shall be final, binding and conclusive on all persons,
including the Company and Participants.
The Committee, in its discretion, may delegate its authority and duties
under the Plan to the Chief Executive Officer or to other senior officers of the
Company under conditions and limitations the Committee may establish; however,
only the Committee may select, grant, and establish the terms of Awards to
Section 16 Insiders or Covered Employees.
Notwithstanding the general authority granted in this Section 3, the
Committee (and any delegate of the Committee) has no authority to determine
terms or conditions of awards to Outside Directors, which shall be governed
solely by Section 27 of this Plan.
4. ELIGIBILITY.
Any Employee is eligible to become a Participant in the Plan. Outside
Directors are eligible to receive awards only pursuant to Section 27 and not
pursuant to any other provisions of this Plan.
5. NUMBER OF SHARES AVAILABLE.
The maximum number of shares of Common Stock that shall be available
for grant of Awards under the Plan (including incentive stock options) during
its term shall not exceed 2.5 million shares, subject to adjustment as provided
in Section 19. Any shares of Common Stock related to Awards that are settled in
cash in lieu of Common Stock shall be available again for grant under the Plan.
Similarly, any shares of Common Stock related to Awards that terminate by
expiration, forfeiture, cancellation or otherwise without the issuance of the
related shares or are exchanged with the Committee's permission for Awards not
involving Common Stock, shall be available again for grant under the Plan.
Further, any shares of Common Stock that are used by a Participant for the full
or partial payment to the Company of the purchase price of Common Stock upon
exercise of a stock option, or for withholding taxes due as a result of that
exercise, shall again be available for Awards under the Plan. Notwithstanding
any provision in the Plan to the contrary, the maximum number of shares of
Common Stock with respect to 1 or more options and/or SARs that may be granted
during any 1 calendar year under the Plan to any 1 Participant shall be 300,000.
For purposes of this limitation, forfeited, canceled or repriced shares granted
to a Participant in any given calendar year shall continue to be counted against
the maximum number of shares that may be granted to that Participant in that
calendar year. The maximum fair market value of any Awards (other than options,
SARs and cash bonuses) that may be received by a Participant (less any
consideration paid by the Participant for that Award) during any 1 calendar year
under the Plan shall be the equivalent value of 300,000 shares of Common Stock
as of the first business day of such calendar year. The shares of Common Stock
available for issuance under the Plan may be authorized and unissued shares.
6. EFFECTIVE DATE; TERM.
The Plan shall become effective as of the date upon which it is
approved by the shareholders of the Company (the "Effective Date"). No Awards or
Outside Director Options shall be exercisable or payable before the Plan becomes
effective. This Plan shall remain in effect until terminated by action of the
Board.
7. PARTICIPATION.
The Committee shall select, from time to time, Participants from those
Employees who, in the opinion of the Committee, can further the Plan's purposes.
Once a Participant is selected, the Committee shall determine the type or types
of Awards to be made to the Participant and shall establish in the related Award
Notices the terms, conditions, restrictions and 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.
8. STOCK OPTIONS.
8.1 Grants. Awards may be granted in the form of stock options. These
stock options may be incentive stock options within the meaning of Section 422
of the Code, other tax-qualified stock options, or non-qualified stock options
(i.e., stock options that are not incentive or other tax-qualified stock
options), or a combination of any of those.
8.2 Terms and Conditions of Options. An option shall be exercisable in
whole or in such installments and at the times determined by the Committee. The
Committee also shall determine the performance or other conditions, if any,
which must be satisfied before all or part of an option may be exercised. The
price at which Common Stock may be purchased upon exercise of a stock option
shall be established by the Committee, but such price shall not be less than
100% (or, in the case of any employee who owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of any
of its Subsidiaries, not less than 110%) in the case of incentive stock options,
and not less than 85% (or, in the case of a Covered Employee, not less than
100%) in the case of other stock options, of the Fair Market Value of the Common
Stock on the date of the stock option grant. Each stock option shall expire not
later than 10 years (or, in the case of an Employee who owns stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, not later than 5 years) from its date of
grant.
8.3 Restrictions Relating to Incentive Stock Options. Stock options
issued in the form of incentive stock options shall, in addition to being
subject to all applicable terms, conditions, restrictions and limitations
established by the Committee, comply with Section 422 of the Code. Accordingly,
incentive stock options may only be granted to Employees who are employees of
the Company or a Subsidiary, and the aggregate market value (determined at the
time the option was granted) 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 the Plan or any other plan of the Company or any of its
Subsidiaries) shall not exceed $100,000 (or other limit required by the Code).
Each incentive stock option shall expire not later than 10 years from its date
of grant.
8.4 Additional Terms and Conditions. The Committee may, by way of the
Award Notice or otherwise, establish other terms, conditions, restrictions and
limitations, if any, on any stock option Award, provided they are not
inconsistent with the Plan. Without limiting the generality of the foregoing,
options may provide for the automatic granting of new options at the time of
exercise.
8.5 Exercise. The Committee shall determine the methods by which the
exercise price of an option may be paid, the form of payment, including, without
limitation, cash, shares of Common Stock, or other property (including "cashless
exercise" arrangements, so long as they do not in any way conflict with the
requirements of applicable law), and the methods by which shares of Common Stock
shall be delivered or deemed to be delivered by Participants; however, if shares
of Common Stock are used to pay the exercise price of a stock option, those
shares must have been held by the Participant for at least 6 months (or any
shorter or longer period necessary to avoid a charge to the Company's earnings
for financial reporting purposes).
9. STOCK APPRECIATION RIGHTS.
9.1 Grants. Awards may be granted in the form of SARs. The SAR may be
granted in tandem with all or a portion of a related stock option under the Plan
("Tandem SARs"), or may be granted separately ("Freestanding SARs"). A Tandem
SAR may be granted either at the time of the grant of the related stock option
or at any time thereafter during the term of the stock option. In the case of
SARs granted in tandem with stock options granted prior to the grant of the
SARs, the appreciation in value is the difference between the option price of
the related stock option and the Fair Market Value of the Common Stock on the
date of exercise. The number of SARs granted may never exceed the lesser of the
number of shares of Common Stock still available under the Plan at the time of
the SAR grant or 625,000.
9.2 Terms and Conditions of Tandem SARs. A Tandem SAR shall be
exercisable to the extent, and only to the extent, that the related stock option
is exercisable, and the "exercise price" of that SAR (the base from which the
value of the SAR is measured at its exercise) shall be the option price under
the related stock option. If a related stock option is exercised as to some or
all of the shares covered by the Award, the related Tandem SAR, if any, shall be
canceled automatically to the extent of the number of shares covered by the
stock option exercise. Upon exercise of a Tandem SAR as to some or all of the
shares covered by the Award, the related stock option shall be canceled
automatically to the extent of the number of shares covered by the exercise.
9.3 Terms and Conditions of Freestanding SARs. Freestanding SARs shall
be exercisable in whole or in the installments and at the times determined by
the Committee. Freestanding SARs shall have a term specified by the Committee,
in no event to exceed 10 years. The exercise price of a Freestanding SAR shall
also be determined by the Committee; however, that price shall not be less than
100% of the Fair Market Value of the Common Stock on the date of the
Freestanding SAR grant. The Committee also shall determine the performance or
other conditions, if any, that must be satisfied before all or part of a
Freestanding SAR may be exercised.
9.4 Deemed Exercise. The Committee may provide that an SAR shall be
deemed to be exercised at the close of business on the scheduled expiration date
of the affected SAR if at that time the SAR by its terms remains exercisable
and, if so exercised, would result in a payment to the holder of the SAR.
9.5 Additional Terms and Conditions. The Committee may, by way of the
Award Notice or otherwise, determine such other terms, conditions, restrictions
and limitations, if any, of any SAR Award, provided they are not inconsistent
with the Plan.
10. STOCK AWARDS.
10.1 Grants. Awards may be granted in the form of Stock Awards. Stock
Awards shall be awarded in such numbers and at such times during the term of the
Plan as the Committee shall determine. Stock Awards may be actual shares of
Common Stock or the economic equivalent thereof ("Stock Award Units"). The total
number of Stock Award Units granted at any time may not exceed the lesser of the
number of shares of Common Stock available for grant at the time of the Stock
Award Unit grant or 625,000.
10.2 Award Restrictions. Stock Awards shall be subject to terms,
conditions, restrictions, and limitations, if any, the Committee deems
appropriate including, without limitation, restrictions on transferability and
continued employment of the Participant. The Committee also shall determine the
performance or other conditions, if any, that must be satisfied before all or
part of the applicable restrictions lapse.
10.3 Rights as Shareholder. During the period in which any restricted
shares of Common Stock are subject to restrictions imposed pursuant to Section
10.2, the Committee may, in its discretion, grant to the Participant to whom
restricted shares have been awarded all or any of the rights of a shareholder
with respect to those shares, including, without limitation, the right to vote
those shares and to receive dividends.
10.4 Evidence of Award. Any Stock Award granted under the Plan may be
evidenced in any manner the Committee deems appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate or
certificates.
11. PERFORMANCE SHARES.
11.1 Grants. Awards may be granted in the form of performance shares.
"Performance shares" in this Plan mean shares of Common Stock or Units which are
expressed in terms of Common Stock and which are subject to performance criteria
as discussed in Section 11.2.
11.2 Performance Criteria. The award of performance shares shall be
contingent upon the attainment during a performance period of certain
performance objectives. The length of the performance period, the performance
objectives to be achieved during the performance period, and the measure of
whether and to what degree the objectives have been attained shall be
conclusively determined by the Committee in the exercise of its absolute
discretion. Performance objectives may be revised by the Committee, at times it
deems appropriate during the performance period, in order to take into
consideration any unforeseen events or changes in circumstances.
11.3 Additional Terms and Conditions. The Committee may, by way of the
Award Notice or otherwise, determine other terms, conditions, restrictions and
limitations, if any, of any Award of performance shares, provided they are not
inconsistent with the Plan.
12. PLAN CASH BONUSES.
While cash bonuses may be granted at any time outside this Plan, cash
awards may also be granted in addition to other Awards granted under the Plan
and to cash awards made outside of the Plan. Subject to the provisions of the
Plan, the Committee shall have authority to determine the persons to whom cash
bonuses shall be granted and the amount, terms and conditions of those cash
bonuses. Notwithstanding anything to the contrary in this Plan, no Covered
Employee shall be eligible to receive a cash bonus in excess of the Section
162(m) Cash Maximum in any fiscal year; and no cash bonus shall be granted
pursuant to this Plan to any Covered Employee unless the cash bonus constitutes
a Qualified Performance-Based Award in accordance with the provisions of Section
13.
13. PERFORMANCE GOALS FOR CERTAIN SECTION 162(m) AWARDS.
13.1 162(m) Exemption. This Plan shall be operated to ensure that all
stock options and SARs granted hereunder to any Covered Employee qualify for the
Section 162(m) Exemption.
13.2 Qualified Performance-Based Awards. When granting any Award
other than stock options or SARs, the Committee may designate
the Award as a Qualified Performance-Based Award, based upon a
determination that the recipient is or may be a Covered
Employee with respect to that Award, and the Committee wishes
the Award to qualify for the Section 162(m) Exemption. If an
Award is so designated, the Committee shall establish
performance goals for the Award within the time period
prescribed by Section 162(m) of the Code based on one or more
of the following Qualified Performance Measures, which may be
expressed in terms of Company-wide objectives or in terms of
objectives that relate to the performance of a Subsidiary or a
division, region, department or function within the Company or
a Subsidiary:
(1) return on capital, equity, or assets (including economic value
created),
(2) productivity,
(3) cost improvements,
(4) cash flow,
(5) sales revenue growth,
(6) net income, earnings per share, or earnings from operations,
(7) quality,
(8) customer satisfaction,
(9) comparable store sales, or
(10) stock price or total shareholder return.
Measurement of the Company's performance against the goals
established by the Committee shall be objectively determinable,
and to the extent goals are expressed in standard accounting
terms, performance shall be measured according to generally
accepted accounting principles as in existence on the date on
which the performance goals are established and without regard to
any changes in those principles after that date.
13.3 Performance Goal Conditions. Each Qualified Performance-Based
Award (other than a stock option or SAR) shall be earned, vested and payable (as
applicable) only upon the achievement of performance goals established by the
Committee based upon one or more of the Qualified Performance Measures, together
with the satisfaction of any other conditions, such as continued employment, the
Committee may determine to be appropriate; however, (i) the Committee may
provide, either in connection with the grant of an Award or by later amendment,
that achievement of the performance goals will be waived upon the death or
Disability of the Participant, and (ii) the provisions of Section 26 shall apply
notwithstanding this sentence.
13.4 Certification of Goal Achievement. Any payment of a Qualified
Performance-Based Award granted with performance goals shall be conditioned on
the written certification of the Committee in each case that the performance
goals and any other material conditions were satisfied. Except as specifically
provided in Section 13.3, no Qualified Performance-Based Award may be amended,
nor may the Committee exercise any discretionary authority it may otherwise have
under the Plan with respect to a Qualified Performance-Based Award, in any
manner to waive the achievement of the applicable performance goal based on
Qualified Performance Measures or to increase the amount payable under, or the
value of, the Award, or otherwise in a manner that would cause the Qualified
Performance-Based Award to cease to qualify for the Section 162(m) Exemption.
14. PAYMENT OF AWARDS.
At the discretion of the Committee, payment of Awards may be made in
cash, Common Stock, a combination of cash and Common Stock, or any other form of
property the Committee shall determine. In addition, payment of Awards may
include terms, conditions, restrictions and limitations, if any, the Committee
deems appropriate, including, in the case of Awards paid in the form of Common
Stock, restrictions on transfer and forfeiture provisions. Payment of Awards may
be made in a lump sum, or in installments, as determined by the Committee.
15. DIVIDEND AND DIVIDEND EQUIVALENTS.
If an Award is granted in the form of a Stock Award, stock option, or
performance share, or in the form of any other stock-based grant, the Committee
may choose, at the time of the grant of the Award or any time thereafter up to
the time of the Award's payment, subject to Section 13.1 of this Plan, to
include as part of the Award in those forms an entitlement to receive dividends
or dividend equivalents with respect to Stock Awards, performance shares, or
options which are vested, subject to terms, conditions, restrictions and
limitations, if any, the Committee may establish. Dividends and dividend
equivalents shall be paid in a form and manner (i.e., lump sum or installments),
and at a time or times the Committee shall determine. All dividends or dividend
equivalents that are not paid currently may, at the Committee's discretion,
accrue interest, be reinvested in additional shares of Common Stock or, in the
case of dividends or dividend equivalents credited in connection with
performance shares, be credited as additional performance shares and paid to the
Participant if and when, and to the extent that, payment is made pursuant to
that Award.
16. DEFERRAL OF AWARDS.
At the discretion of the Committee, payment of a Stock Award,
performance share, dividend, dividend equivalent, or any portion thereof may be
deferred by a Participant until a time the Committee may establish. All
deferrals shall be accomplished by the delivery of a written, irrevocable
request by the Participant prior to the time payment would otherwise be made, on
a form provided by the Company. Further, all deferrals shall be made in
accordance with administrative guidelines established by the Committee to ensure
that deferrals comply with all applicable requirements of the Code and its
regulations. Deferred payments shall be paid in a lump sum or installments, as
determined by the Committee. The Committee also may credit interest, at rates to
be determined by the Committee, on cash payments that are deferred and credit
dividends or dividend equivalents on deferred payments denominated in the form
of Common Stock. The Committee also may, in its discretion, require deferral of
payment of any Award or portion of it, if payment of the Award would, or could
in the reasonable estimation of the Committee, result in the Participant
receiving compensation in excess of the maximum amount deductible by the Company
under the provisions of Code Section 162(m), as amended.
17. TERMINATION OF EMPLOYMENT.
If a Participant's employment with the Company or a Subsidiary or
Affiliate terminates for Cause or for a reason other than death, Disability,
retirement, or any other approved reason, all unexercised, unearned, and unpaid
Awards, including without limitation, Awards earned but not yet paid, all unpaid
dividends and dividend equivalents, and all interest accrued on the foregoing
shall be canceled or forfeited, as the case may be, unless the Participant's
Award Notice provides otherwise. The Committee shall have the authority to
promulgate rules and regulations to (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 a Participant's death, Disability, retirement or termination for an
approved reason.
18. NO ASSIGNMENT.
No Awards (other than unrestricted Stock Awards) or any other payment
under the Plan shall be subject in any manner to alienation, anticipation, sale,
transfer (except by will or the laws of descent and distribution), assignment,
pledge, or encumbrance; however, the Committee may (but need not) permit other
transfers where the Committee concludes that transferability (i) does not result
in accelerated taxation, (ii) does not cause any option intended to be an
incentive stock option to fail to be described in Code Section 422(b), and (iii)
is otherwise appropriate and desirable, taking into account any state or federal
securities laws applicable to transferable Awards. During the lifetime of the
Participant no Award shall be payable to or exercisable by anyone other than the
Participant to whom it was granted, other than (a) the duly appointed
conservator or other lawfully designated representative of the Participant in
the case of a permanent Disability involving a mental incapacity or (b) the
transferee in the case of an Award transferred in accordance with the preceding
sentence.
19. ADJUSTMENT OF NUMBER OF SHARES AVAILABLE.
If there is a change in the number of outstanding shares of Common
Stock through the declaration of stock dividends or stock splits, the number of
shares available for Awards, the shares subject to any Award, the shares
underlying any Outside Director Option, and the option prices or exercise prices
of Awards and Outside Director Options shall be automatically adjusted such that
the value of the Awards held by the Participants immediately following the
change is the same as that value immediately prior to the change. If there is a
change in the number of outstanding shares of Common Stock or any change in the
outstanding stock of the Company (or any successor to the Company), or any other
transaction described in Section 424(a) of the Code, the Committee shall make
appropriate adjustments in the number and kind of shares of stock that may be
issued under the Plan, including in connection with Outside Director Options,
and any adjustments and modifications to outstanding Awards and Outside Director
Options as it deems appropriate. In the event of any other change in the capital
structure or in the Common Stock of the Company, the Committee shall also be
authorized to make appropriate adjustments in the shares of stock available for
issuance under the Plan, including in connection with Outside Director Options,
and any adjustments and/or modifications to outstanding Awards and Outside
Director Options as it deems appropriate.
20. WITHHOLDING TAXES.
The Company shall have the power and the right to deduct or withhold,
or require a Participant to remit to the Company, an amount sufficient to
satisfy Federal, state, and local taxes (including the Participant's FICA
obligation) required by law to be withheld with respect to any taxable event
arising as a result of this Plan. With respect to withholding required upon any
taxable event, the Company may elect in its discretion, and Participants may
elect, subject to the approval of the Committee, to satisfy the withholding
requirement, in whole or in part, by withholding or having the Company withhold
shares of Common Stock having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All elections by Participants shall be irrevocable, made in
writing, and signed by the Participant.
21. NONCOMPETITION; CONFIDENTIALITY.
For purposes of this Section 21, "Company" shall include any Subsidiary
or Affiliate employing the Participant. A Participant will not, without the
written consent of the Company, either during or after his or her employment by
the Company, disclose to anyone or make use of any confidential information
which he or she has acquired during his or her employment relating to any of the
business of the Company, except as such disclosure or use may be required in
connection with his or her work as an employee of Company, or as demanded by a
subpoena issued by a court of competent jurisdiction, if the Participant gives
notice of the demand to the Company as soon as reasonably possible after receipt
of the subpoena. The confidential information of the Company includes, but is
not limited to, all technology, recipes, business systems and styles, customer
lists and all other Company proprietary information not generally known to the
public. During Participant's employment by the Company, he or she will not,
either as principal, agent, consultant, employee or otherwise, engage in any
work or other activity in competition with the Company in the field or fields in
which he or she has worked for the Company. Unless the Award Notice specifies
otherwise, a Participant shall forfeit all rights under this Plan to any
unexercised or unpaid Awards or to the deferral of any Award, dividend, or
dividend equivalent, if, in the determination of the Committee, the Participant
has violated the Agreement set forth in this Section 21, and in that event any
further payment, deferral of payment, or other action with respect to any Award,
dividend, or dividend equivalent shall be made or taken, if at all, in the sole
discretion of the Committee.
22. REGULATORY APPROVALS AND LISTINGS.
Notwithstanding anything contained in the Plan to the contrary, the
Company shall have no obligation to issue or deliver certificates of Common
Stock evidencing Stock Awards or any other Award resulting in the payment of
Common Stock prior to (a) the obtaining of any approval from any governmental
agency which the Company shall, in its sole discretion, determine to be
necessary or advisable, (b) the admission of the shares to quotation or listing
on the automated quotation system or stock exchange on which the Common Stock
may be listed, and (c) the completion of any registration or other qualification
of the shares under any State or Federal law or ruling of any governmental body
that the Company shall, in its sole discretion, determine to be necessary or
advisable.
23. PLAN AMENDMENT.
Except as provided in Section 26, the Board or the Committee may, at
any time and from time to time, suspend, amend, modify, or terminate the Plan
without shareholder approval; however, if an amendment to the Plan would, in the
reasonable opinion of the Board or the Committee, either (i) result in repricing
stock options or otherwise increase the benefits accruing to Participants or
Outside Directors, (ii) increase the number of shares of Common Stock issuable
under the Plan, or (iii) modify the requirements for eligibility, then that
amendment shall be subject to shareholder approval; and, the Board or Committee
may condition any amendment or modification on the approval of shareholders of
the Company if that approval is necessary or deemed advisable to (i) permit
Awards to be exempt from liability under Section 16(b) of the Exchange Act, (ii)
to comply with the listing or other requirements of an automated quotation
system or stock exchange, or (iii) to satisfy any other tax, securities or other
applicable laws, policies or regulations.
24. AWARD AMENDMENTS.
Except as provided in Section 26, the Committee may amend, modify or
terminate any outstanding Award or Outside Director Option without approval of
the Participant or Outside Director, as applicable; however:
a. except as otherwise provided in Section 21, subject to the
terms of the applicable Award Notice, an amendment, modification or
termination shall not, without the Participant's or Outside Director's
consent, as applicable, reduce or diminish the value of the Award or
Outside Director Option determined as if the Award or Outside Director
Option had been exercised, vested, cashed in (at the spread value in
the case of stock options or SARs) or otherwise settled on the date of
that amendment or termination;
b. the original term of any stock option or SAR may not be
extended without the prior approval of the shareholders of the Company;
c. except as otherwise provided in Section 19, the exercise
price of any stock option or SAR may not be reduced, directly or
indirectly, without the prior approval of the shareholders of the
Company; and
d. no termination, amendment, or modification of the Plan
shall adversely affect any Award or Outside Director Options previously
granted under the Plan, without the written consent of the affected
Participant or Outside Director.
25. GOVERNING LAW.
This Plan shall be governed by and construed in accordance with the
laws of the State of Tennessee, except as superseded by applicable Federal law.
26. CHANGE IN CONTROL.
Subject to the limitations set forth in this Section 26, but only if
and to the extent determined by the Committee or the Board at or after the
affected award or grant and subject to any right of approval expressly reserved
by the Committee or the Board at the time of the determination, in case of a
Change in Control or a Potential Change in Control, the following provisions
shall apply to any Award which has not previously terminated or expired:
a. any SAR and any stock option or Outside Director Option
awarded under this Plan that is not previously vested and exercisable
shall become fully vested and exercisable;
b. the restrictions applicable to any Award which are not
already vested under the Plan shall lapse, and those existing shares
and awards shall be deemed fully vested;
c. unless otherwise determined by the Board or by the
Committee in its sole discretion prior to any Change in Control, the
value of all vested outstanding stock options, SARs, Outside Director
Options and other Awards, shall be cashed out on the basis of the
Change in Control Price as of the date the Change in Control or
Potential Change in Control is determined to have occurred (or other
date determined by the Board or Committee prior to the Change in
Control);
d. the Board or the Committee may impose additional conditions
on the acceleration or valuation of any Award in the applicable Award
Notice; and
e. for purposes of making payment to Participants in
connection with performance shares, each performance period for which
the Committee has granted performance shares (a "current performance
period") shall be treated as terminating upon the date the Change in
Control or Potential Change in Control is determined to have occurred
(or other date determined by the Board or Committee prior to the Change
in Control), and for each current performance period and each completed
performance period for which the Committee has not on or before that
date made a determination as to whether and what degree the performance
objectives for the period have been attained (a "completed performance
period"), it shall be assumed that the performance objectives have been
attained at a level of 100% or the equivalent. If the Participant is
participating in one or more current performance periods, he or she
shall be considered to have earned and, therefore, be entitled to
receive that prorated portion of the Awards previously granted for each
of those performance periods. The prorated portion shall be determined
by multiplying the number of performance shares granted to the
Participant by a fraction, the numerator of which is the total number
of whole and partial years (with each partial year being treated as a
whole year) that have elapsed since the beginning of the performance
period, and the denominator of which is the total number of years in
the performance period. A Participant in one or more completed
performance periods shall be considered to have earned and, therefore,
be entitled to receive all the performance shares previously granted
during each performance period.
27. AWARDS TO OUTSIDE DIRECTORS.
27.1 Application. The provisions of this Section 27 apply only to
awards to Outside Directors made in accordance with this Section. The Committee
shall have no authority to determine the timing of or the terms or conditions of
any award under this Section 27.
27.2 Awards, Restrictions and Conditions.
-----------------------------------
a. At the Effective Date, each person elected to serve as an
Outside Director on that date will receive a non-qualified stock option
(within the meaning of Section 8.1) to purchase 5,000 shares of Common
Stock. The date on which the election occurs is the date of this grant.
The exercise price per share of each option granted pursuant to this
Section 27.2a. shall equal the Fair Market Value per share of Common
Stock on the last business day immediately prior to the date of this
grant. These options shall vest and become exercisable in 3 equal
annual installments, with the first 1/3 vesting on the first
anniversary of the date of this grant.
b. On the date of each Annual Meeting of Shareholders of the
Company following the Annual Meeting of Shareholders in 2002, unless
this Plan has been previously terminated, each Outside Director who
will continue as a director following the meeting will receive a
non-qualified stock option (within the meaning of Section 8.1) to
purchase 5,000 shares of Common Stock. The date on which the Annual
Meeting of Shareholders occurs is the date of this grant. The exercise
price per share of each option granted pursuant to this Section 27.2.b.
shall equal the Fair Market Value per share of Common Stock on the last
business day immediately prior to the date of the grant. These options
shall vest and become exercisable in 3 equal annual installments with
the first 1/3 vesting on the first anniversary of the date of the
grant.
c. If any person who was not previously a member of the Board
is elected or appointed an Outside Director following the Effective
Date, but prior to the July 31 immediately preceding the first annual
meeting of shareholders following his or her election of appointment,
that Outside Director will receive a non-qualified stock option (within
the meaning of Section 8.1) to purchase 5,000 shares of Common Stock.
The date prior to July 31 on which the election or appointment occurs
is the date of this grant. The exercise price per share of each option
granted pursuant to this Section 27.2.c. shall equal the Fair Market
Value per share of Common Stock on the last business day immediately
prior to the date of this grant. These options shall vest and become
exercisable in 3 equal annual installments, with the first 1/3 vesting
on the first anniversary of the date of this grant.
d. No Outside Director Option shall be exercisable prior to
vesting. Each unexercised Outside Director Option shall expire on the
10th anniversary of the date of grant.
e. The exercise price may be paid in cash or in shares of
Common Stock which have been owned for at least 6 months (or any
shorter or longer period necessary to avoid a charge to the Company's
earnings for financial reporting purposes), and including shares of
Common Stock subject to an Outside Director Option.
f. Outside Director Options shall not be transferable without
the prior written consent of the Board other than transfers by the
Outside Director (i) to a member of his or her Immediate Family or a to
trust for the benefit of the Outside Director or a member of his or her
Immediate Family, directly or by will or by the laws of descent and
distribution, or (ii) to a fund affiliated with him or her.
g. Grantees of Outside Director Options shall enter into a
stock option agreement with the Company setting forth the exercise
price and other terms and restrictions as provided in this Plan.
h. Upon termination of an Outside Director's service as a
Company director, (i) all Outside Director Options that are vested and
exercisable and held by that Outside Director will remain vested and
exercisable through their expiration dates and (ii) all remaining
Outside Director Options held by that Outside Director will become
exercisable and vested to the extent of any shares that would have
become exercisable and vested within a 12-month period ending on the
anniversary date of termination of service. The options which vest
under this provision must be exercised, if at all, within that same
12-month period, until a director qualifies for retirement from the
Board after reaching at least 50 years of age and 7 years of Board
service as a director. After reaching retirement status, a director
whose Board service ends will be permitted to exercise all options
vested pursuant to these provisions until the stated expiration date of
the options. Any unvested Outside Director Options held by the Outside
Director on the date of termination of service will be forfeited to the
extent of any shares that would not have become vested and exercisable
on or before that same anniversary date. The Board may, in its sole
discretion, elect to accelerate the vesting of any Outside Director
Options in connection with the termination of service of any individual
Outside Director.
i. Outside Director Options shall be subject to Section 26.
The number of shares and the exercise price per share of each existing
Outside Director Option shall be adjusted automatically when, and in
the same manner as, the number of shares and the exercise price of
Stock Options under Section 19 are adjusted pursuant to Section 19. The
number of shares underlying potential future Outside Director Options
shall be adjusted automatically when, and in the same manner as, the
number of shares underlying outstanding Stock Options are adjusted
pursuant to Section 19.
j. The Board, in its sole discretion (and absent other express
action, without affecting the size of future option grants), may reduce
the size of any Outside Director Option prior to grant or to postpone
the vesting and exercisability of any Outside Director Option prior to
grant.
28. NO RIGHT TO EMPLOYMENT OR PARTICIPATION.
Participation in the Plan shall not give any Participant any right to
remain in the employ, or to serve as a director, of the Company or any
Subsidiary or Affiliate. The Company or, in the case of employment with a
Subsidiary or Affiliate, the Subsidiary or Affiliate, reserves the right to
terminate the employment of any Participant at any time. Further, the adoption
of this Plan shall not be deemed to give any Employee or any other individual
any right to be selected as a Participant or to be granted an Award.
29. NO RIGHT, TITLE OR INTEREST IN COMPANY ASSETS.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. No Participant shall have any rights as a shareholder as
a result of participation in the Plan until the date of issuance of a stock
certificate in the Participant's name, and, in the case of restricted shares of
Common Stock, such rights are granted to the Participant under Section 10.3
hereof. To the extent any person acquires a right to receive payments from the
Company under the Plan, those rights shall be no greater than the rights of an
unsecured creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Common Stock or to make payments in lieu of,
or with respect to, Plan awards. However, unless the Committee determines
otherwise with the express consent of the affected Participant, the existence of
any such trusts or other arrangements is consistent with this "unfunded" status
of the Plan.
30. SECURITIES LAWS.
With respect to Section 16 Insiders, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of the Plan or
action by the Committee fails so to comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Committee.
31. REQUIRED WRITTEN REPRESENTATIONS.
The Committee may require each person purchasing shares pursuant to a
stock option or other award under the Plan to represent to and agree with the
Company in writing that the optionee or Participant is acquiring any shares of
Common Stock without a view to their distribution. The certificates for shares
may include any legend which the Committee deems appropriate to reflect any
restrictions on transfer. All certificates for shares of Common Stock or other
securities delivered under the Plan shall be subject to stop transfer orders and
other restrictions the Committee deems advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable Federal
or state securities laws, and the Committee may cause a legend or legends to be
put on any certificates to make appropriate reference to the applicable
restrictions. Each Participant is responsible for fully complying with all
applicable state and federal securities laws and rules and the Company assumes
no responsibility for compliance with any such laws or rules pertaining to a
Participant's resale of any shares of Common Stock acquired pursuant to this
Plan.
32. NON-EXCLUSIVE ARRANGEMENT.
Nothing contained in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to shareholder approval
if required; and those arrangements may be either generally applicable or
applicable only in specific cases.
33. LIMITS ON LIABILITY AND INDEMNIFICATION.
The members of the Committee and the Board shall not be liable to any
employee or other person with respect to any determination made under the Plan
in a manner that is not inconsistent with their legal obligations as members of
the Board. In addition to all other rights of indemnification they may have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against reasonable expenses, including attorneys'
fees actually and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party because of any action taken or failure to act
under or in connection with the Plan or any Award granted under it, and against
all amounts paid by them in settlement (provided the settlement is approved by
independent legal counsel selected by the Company) or paid to them in
satisfaction of a judgment in that action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in the action, suit or
proceeding that the Committee member is liable for negligence or misconduct in
the performance of his or her duties. Within 60 days after institution of any
action, suit or proceeding covered by this Section, the Committee member must
inform the Company in writing of the claim and offer the Company the
opportunity, at its own expense, to handle and defend the matter.