Exhibit 10(c)
THE BLACK & DECKER 1992 STOCK OPTION PLAN
The proper execution of the duties and responsibilities of the
executive and other key employees of The Black & Decker Corporation and its
subsidiaries is a vital factor in the continued growth and success of the
Corporation. Toward this end, it is necessary to attract and retain effective
and capable employees to assume positions that contribute materially to the
successful operation of the business of the Corporation. It will benefit the
Corporation, therefore, to bind the interests of these persons more closely to
its own interests by offering them an attractive opportunity to acquire a
proprietary interest in the Corporation and thereby provide them with added
incentive to remain in its employ and to increase the prosperity, growth, and
earnings of the Corporation. This stock option plan will serve these purposes.
ARTICLE 1:00
Definitions
The following terms wherever used herein shall have the meanings set
forth below.
1:01 The term "Board of Directors" shall mean the Board of
Directors of the Corporation.
1:02 The term "Cash Appreciation Right" shall mean a right to
receive cash pursuant to Article 11:00 of the Plan.
1:03 The term "Change in Control" shall have the meaning provided
in Section 10:02 of the Plan.
1:04 The term "Code" shall mean the Internal Revenue Code of 1986,
as amended, and any regulations promulgated thereunder.
1:05 The term "Committee" shall mean a committee to be appointed by
the Board of Directors to consist of two or more of those
members of the Board of Directors who are Non-Employee
Directors within the meaning of Rule 16b-3 promulgated under
the Exchange Act and are outside directors within the meaning
of the Section 162(m) Regulations as each may be amended from
time to time.
1:06 The term "Common Stock" shall mean the shares of common stock,
par value $.50 per share, of the Corporation.
1:07 The term "Corporation" shall mean The Black & Decker
Corporation.
1:08 The term "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
1:09 The term "Fair Market Value of a share of Common Stock" shall
mean the average of the high and low sale price per share of
Common Stock as finally reported in the New York Stock
Exchange Composite Transactions for the New York Stock
Exchange, or if shares of Common Stock are not sold on such
date, the average of the high and low sale price per share of
Common Stock as finally reported in the New York Stock
Exchange Composite Transactions for the New York Stock
Exchange for the most recent prior date on which shares of
Common Stock were sold.
1:10 The term "Immediate Family Member" shall mean each of the (i)
children, step children or grandchildren of the Initial
Holder, (ii) the spouse or any parent of the Initial Holder,
(iii) any trust solely for the benefit of any such family
members, and (iv) any partnership or other entity in which
such family members are the only partners or other equity
holders.
1:11 The term "Incentive Stock Option" shall mean any Option
granted pursuant to the Plan that is
designated as an Incentive Stock Option and which satisfies
the requirements of Section 422(b) of the Code.
1:12 The term "Initial Holder," with respect to an Option or Right
granted under the Plan, shall mean the executive or other key
employee of the Corporation granted the Option or Right.
1:13 The term "Limited Stock Appreciation Right" shall mean a
limited tandem stock appreciation right that entitles the
holder to receive cash upon a Change in Control pursuant to
Article 10:00 of the Plan.
1:14 The term "Nonqualified Stock Option" shall mean any Option
granted pursuant to the Plan that is not an Incentive Stock
Option.
1:15 The term "Option" or "Stock Option" shall mean a right granted
pursuant to the Plan to purchase shares of Common Stock, and
shall include the terms Incentive Stock Option and
Nonqualified Stock Option.
1:16 The term "Option Agreement" shall mean the written agreement
representing Options granted pursuant to the Plan as
contemplated by Article 6:00 of the Plan.
1:17 The term "Option Holder" shall mean the Initial Holder so long
as he or she holds an Option initially granted to the Initial
Holder, and thereafter shall mean the beneficiary or the
Immediate Family Member to whom the Option has been
transferred in accordance with the terms and conditions
provided in Section 6:05.
1:18 The term "Plan" shall mean The Black & Decker 1992 Stock
Option Plan as approved by the Board of Directors on February
20, 1992, and adopted by the stockholders of the Corporation
at the 1992 Annual Meeting of Stockholders, as the same may be
amended from time to time.
1:19 The term "Rights" shall include Stock Appreciation Rights,
Limited Stock Appreciation Rights and Cash Appreciation
Rights.
1:20 The term "Section 162(m) Regulations" shall mean the
regulations adopted pursuant to Section 162(m) of the Code.
1:21 The term "Stock Appreciation Right" shall mean a right to
receive cash or shares of Common Stock pursuant to Article
8:00 of the Plan.
1:22 The term "Stock Appreciation Right Agreement" shall mean the
written agreement representing Stock Appreciation Rights
granted pursuant to the Plan as contemplated by Article 8:00
of the Plan.
1:23 The term "Stock Appreciation Right Base Price" shall mean the
base price for determining the value of a Stock Appreciation
Right under Section 8:02, which Stock Appreciation Right Base
Price shall be established by the Committee at the time of the
grant of Stock Appreciation Rights pursuant to the Plan and
shall not be less than 90% of the Fair Market Value of a share
of Common Stock on the date of grant. If the Committee does
not establish a specific Stock Appreciation Right Base Price
at the time of grant, the Stock Appreciation Right Base Price
shall be equal to the Fair Market Value of a share of Common
Stock on the date of grant of the Stock Appreciation Right.
1:24 The term "Stock Appreciation Right Holder" shall mean the
Initial Holder so long as he or she holds a Stock Appreciation
Right initially granted to the Initial Holder, and thereafter
shall mean the beneficiary or the Immediate Family Member to
whom the Stock Appreciation Right has been
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transferred in accordance with the terms and conditions
provided in Section 8:05.
1:25 The term "subsidiary" or "subsidiaries" shall mean a
corporation of which capital stock possessing 50% or more of
the total combined voting power of all classes of its capital
stock entitled to vote generally in the election of directors
is owned in the aggregate by the Corporation directly or
indirectly through one or more subsidiaries.
ARTICLE 2:00
Effective Date of the Plan
2:01 The Plan shall become effective upon stockholder approval,
provided that such approval is received on or before May 31,
1992, and provided further that the Committee may grant
Options or Rights pursuant to the Plan prior to stockholder
approval if such Options or Rights by their terms are
contingent upon subsequent stockholder approval of the Plan.
ARTICLE 3:00
Administration
3:01 The Plan shall be administered by the Committee.
3:02 The Committee may establish, from time to time and at any
time, subject to the limitations of the Plan as set forth
herein, such rules and regulations and amendments and
supplements thereto, as it deems necessary to comply with
applicable law and regulation and for the proper
administration of the Plan. A majority of the members of the
Committee shall constitute a quorum. The vote of a majority of
a quorum shall constitute action by the Committee.
3:03 The Committee shall from time to time determine the names of
those executives and other key employees who, in its opinion,
should receive Options or Rights, and shall determine the
numbers of shares on which Options should be granted or upon
which Rights should be based to each such person and the
nature of the Options or Rights to be granted, including
without limitation whether the Options or Rights shall be
transferable in accordance with the terms and conditions
provided in Section 6:12 or Section 8:11.
3:04 Options and Rights shall be granted by the Corporation only
upon prior approval of the Committee, and upon the execution
of an Option Agreement or Stock Appreciation Right Agreement
between the Corporation and the Initial Holder.
3:05 The Committee's interpretation and construction of the
provisions of the Plan and the rules and regulations adopted
by the Committee shall be final. No member of the Committee or
the Board of Directors shall be liable for any action taken or
determination made, in respect of the Plan, in good faith.
ARTICLE 4:00
Participation in the Plan
4:01 Participation in the Plan shall be limited to such executives
and other key employees of the Corporation and its
subsidiaries who at the date of grant of an Option or Right
are regular, full-time employees of the Corporation or any of
its subsidiaries and who shall be designated by the
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Committee together with any permitted transferees in
accordance with the terms and conditions of the Plan.
4:02 No member of the Board of Directors who is not also an
employee shall be eligible to participate in the Plan. No
employee who owns beneficially more than 10% of the total
combined voting power of all classes of stock of the
Corporation shall be eligible to participate in the Plan.
ARTICLE 5:00
Stock Subject to the Plan
5:01 There shall be reserved for the granting of Options or Stock
Appreciation Rights pursuant to the Plan and for issuance and
sale pursuant to such Options or Stock Appreciation Rights
2,400,000 shares of Common Stock. To determine the number of
shares of Common Stock available at any time for the granting
of Options or Stock Appreciation Rights, there shall be
deducted from the total number of reserved shares of Common
Stock, the number of shares of Common Stock in respect of
which Options have been granted pursuant to the Plan that are
still outstanding or have been exercised. The shares of Common
Stock to be issued upon the exercise of Options or Stock
Appreciation Rights granted pursuant to the Plan shall be made
available from the authorized and unissued shares of Common
Stock. If for any reason shares of Common Stock as to which an
Option has been granted cease to be subject to purchase
thereunder, then such shares of Common Stock again shall be
available for issuance pursuant to the exercise of Options or
Stock Appreciation Rights pursuant to the Plan. Except as
provided in Section 5:03, however, the aggregate number of
shares of Common Stock that may be issued upon the exercise of
Options and Stock Appreciation Rights pursuant to the Plan
shall not exceed 2,400,000 shares and no more than 2,400,000
Stock Appreciation Rights shall be granted pursuant to the
Plan.
5:02 Proceeds from the purchase of shares of Common Stock upon the
exercise of Options granted pursuant to the Plan shall be used
for the general business purposes of the Corporation.
5:03 Subject to the provisions of Section 10:02, in the event of
reorganization, recapitalization, stock split, stock dividend,
combination of shares of Common Stock, merger, consolidation,
share exchange, acquisition of property or stock, or any
change in the capital structure of the Corporation, the
Committee shall make such adjustments as may be appropriate in
the number and kind of shares reserved for purchase by
executives or other key employees, in the number, kind and
price of shares covered by Options and Stock Appreciation
Rights granted pursuant to the Plan but not then exercised,
and in the number of Rights, if any, granted pursuant to the
Plan but not then exercised.
ARTICLE 6:00
Terms and Conditions of Options
6:01 Each Option granted pursuant to the Plan shall be evidenced by
an Option Agreement in such form and with such terms and
conditions (including, without limitation, noncompete,
confidentiality or other similar provisions or provisions
relating to transfer) as the Committee from time to time may
determine. The right of an Option Holder to exercise his, her
or its Option shall at all times be subject to the terms and
conditions set forth in the respective Option Agreement.
6:02 The exercise price per share for Options shall be established
by the Committee at the time of the grant of Options pursuant
to the Plan and shall not be less than 90% of the Fair Market
Value of a share of Common Stock on the date on which the
Option is granted. If the Committee does not
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establish a specific exercise price per share at the time of
grant, the exercise price per share shall be equal to the Fair
Market Value of a share of Common Stock on the date of grant
of the Options.
6:03 Each Option, subject to the other limitations set forth in the
Plan, may extend for a period of up to 10 years from the date
on which it is granted. The term of each Option shall be
determined by the Committee at the time of grant of the
Option, provided that if no term is established by the
Committee the term of the Option shall be 10 years from the
date on which it is granted.
6:04 Unless otherwise provided by the Committee, the number of
shares of Common Stock subject to each Option shall be divided
into four installments of 25% each. The first installment
shall be exercisable 12 months after the date the Option was
granted, and each succeeding installment shall be exercisable
12 months after the date the immediately preceding installment
became exercisable. If an Option Holder does not purchase the
full number of shares of Common Stock that he, she or it at
any time has become entitled to purchase, the Option Holder
may purchase all or any part of those shares of Common Stock
at any subsequent time during the term of the Option.
6:05 Options shall be nontransferable and nonassignable, except
that (i) Options may be transferred by testamentary instrument
or by the laws of descent and distribution, and (ii) subject
to the terms and conditions of the Option Agreement or any
other terms and conditions imposed by the Committee from time
to time, Options may be transferred in accordance with the
terms and conditions provided in Section 6:12 if the
applicable Option Agreement or other action of the Committee
expressly provides that the Options are transferable.
6:06 Upon voluntary or involuntary termination of an Initial
Holder's employment, his or her Option (including any Option
transferred in accordance with the terms and conditions
provided in Section 6.12) and all rights thereunder shall
terminate effective at the close of business on the date the
Initial Holder ceases to be a regular, full-time employee of
the Corporation or any of its subsidiaries, except (i) to the
extent previously exercised, (ii) as provided in Sections
6:07, 6:08, and 6:09, and (iii) in the case of involuntary
termination of employment, for a period of 30 days thereafter
the Option Holder shall be entitled to exercise that portion
of the Option which was exercisable at the close of business
on the date the Initial Holder ceased to be a regular,
full-time employee of the Corporation or any of its
subsidiaries.
6:07 In the event an Initial Holder (i) ceases to be an executive
or other key employee of the Corporation or any of its
subsidiaries due to involuntary termination, (ii) takes a
leave of absence from the Corporation or any of its
subsidiaries for personal reasons or as a result of entry into
the armed forces of the United States, or any of the
departments or agencies of the United States government, or
(iii) terminates employment by reason of illness, disability,
or other special circumstance, the Committee may consider
his or her case and may take such action in respect of the
related Option Agreement as it may deem appropriate under the
circumstances, including accelerating the time previously
granted Options may be exercised and extending the time
following the Initial Holder's termination of employment
during which the Option Holder is entitled to purchase the
shares of Common Stock subject to such Options, provided that
in no event may any Option be exercised after the expiration
of the term of the Option.
6:08 If an Initial Holder dies during the term of his or her Option
without the Option having been exercised in full, (i) the
executor or administrator of his or her estate or the person
who inherits the right to exercise the Option by bequest or
inheritance in the event the Initial Holder was the Option
Holder at the date of death or (ii) the Option Holder in the
event the Option had been transferred in accordance with the
terms and conditions provided in Section 6:12, shall have the
right within three years of the Initial Holder's death to
purchase the number of shares of Common Stock that the
deceased Initial Holder (or Option Holder, as the case may be)
was entitled to purchase at the date of death, after which the
Option shall lapse, provided that in no event may any Option
be exercised after the expiration of the term of the Option.
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6:09 If an Initial Holder's employment is terminated without the
Option having been exercised in full the Option and (i) the
Initial Holder is 62 years of age or older, or (ii) the
Initial Holder has been employed by the Corporation or any of
its subsidiaries for at least 10 years and the Initial
Holder's age plus years of such employment total not less than
55 years, then such Initial Holder (or the Option Holder in
the event the Option had been transferred in accordance with
the terms and conditions provided in Section 6:12) shall have
the right within three years of the Initial Holder's
termination of employment to purchase the number of shares of
Common Stock that the Initial Holder (or Option Holder, as the
case may be) was entitled to purchase at the date of
termination, after which the Option shall lapse, provided that
in no event may any Option be exercised after the expiration
of the term of the Option.
6:10 The granting of an Option pursuant to the Plan shall not
constitute or be evidence of any agreement or understanding,
express or implied, on the part of the Corporation or any of
its subsidiaries to employ the Initial Holder for any
specified period.
6:11 In addition to the general terms and conditions set forth in
this Article 6:00 in respect of Options granted pursuant to
the Plan, Incentive Stock Options granted pursuant to the Plan
shall be subject to the following additional terms and
conditions:
(a) The aggregate fair market value (determined at the
time the Incentive Stock Option is granted) of the
shares of Common Stock in respect of which "incentive
stock options" are exercisable for the first time by
the Option Holder during any calendar year (under all
such plans of the Corporation and its subsidiaries)
shall not exceed $100,000;
(b) The Option Agreement in respect of an Incentive Stock
Option may contain any other terms and conditions
specified by the Committee that are not inconsistent
with the Plan, except that such terms and conditions
must be consistent with the requirements for
"incentive stock options" under Section 422 of the
Code; and
(c) Incentive Stock Options shall not be transferable in
accordance with the terms and conditions provided in
Section 6:12.
6:12 The Committee may provide, in the original grant of a
Nonqualified Stock Option or in an amendment or supplement to
a previous grant, that some or all of the Nonqualified Stock
Options granted under the Plan are transferable by the Initial
Holder to an Immediate Family Member of the Initial Holder,
provided that (i) the Option Agreement, as it may be amended
from time to time, expressly so provides or the Committee
otherwise designates the Option as transferable, (ii) the
transfer by the Initial Holder is a bona fide gift without
consideration, (iii) the transfer is irrevocable, (iv) the
Initial Holder and any such transferee provides such
documentation or other information concerning the transfer or
the transferee as the Committee or any employee of the
Corporation acting on behalf of the Committee may from time to
time request, and (v) the Initial Holder or the Option Holder
complies with all of the terms and conditions (including,
without limitation, any further restrictions or limitations)
included in the Option Agreement. Any Nonqualified Stock
Option transferred in accordance with the terms and conditions
provided in this Section 6:12 shall continue to be subject to
the same terms and conditions that were applicable to such
Nonqualified Stock Option prior to the transfer.
Notwithstanding any other provisions of the Plan, the
Corporation shall not be required to honor any exercise of an
Option by an Immediate Family Member of an Option transferred
in accordance with the terms and conditions provided in this
Section 6:12 unless and until payment or provision for payment
of any applicable withholding taxes has been made.
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ARTICLE 7:00
Methods of Exercise of Options
7:01 An Option Holder (or other person or persons, if any, entitled
to exercise an Option hereunder) desiring to exercise an
Option granted pursuant to the Plan as to all or part of the
shares of Common Stock covered by the Option shall (i) notify
the Corporation in writing at its principal office at 701 East
Joppa Road, Towson, Maryland 21286, to that effect, specifying
the number of shares of Common Stock to be purchased and the
method of payment therefor, and (ii) make payment or provision
for payment for the shares of Common Stock so purchased in
accordance with this Article 7:00. Such written notice may be
given by means of a facsimile transmission. If a facsimile
transmission is used, the Option Holder should mail the
original executed copy of the written notice to the
Corporation promptly thereafter.
7:02 Payment or provision for payment shall be made as follows:
(a) The Option Holder shall deliver to the Corporation at
the address set forth in Section 7:01 United States
currency in an amount equal to the aggregate purchase
price of the shares of Common Stock as to which such
exercise relates; or
(b) The Option Holder shall tender to the Corporation
shares of Common Stock already owned by the Option
Holder that, together with any cash tendered
therewith, have an aggregate fair market value
(determined based on the Fair Market Value of a share
of Common Stock on the date the notice set forth in
Section 7:01 is received by the Corporation) equal to
the aggregate purchase price of the shares of Common
Stock as to which such exercise relates; or
(c) The Option Holder shall deliver to the Corporation an
exercise notice together with irrevocable
instructions to a broker to deliver promptly to the
Corporation the amount of sale or loan proceeds
necessary to pay the aggregate purchase price of the
shares of Common Stock as to which such exercise
relates and to sell the shares of Common Stock to be
issued upon exercise of the Option and deliver the
cash proceeds less commissions and brokerage fees to
the Option Holder or to deliver the remaining shares
of Common Stock to the Option Holder.
Notwithstanding the foregoing provisions, the Committee, in
granting Options pursuant to the Plan, may limit the methods
in which an Option may be exercised by any person and, in
processing any purported exercise of an Option granted
pursuant to the Plan, may refuse to recognize the method of
exercise selected by the Option Holder (other than the method
of exercise set forth in Section 7:02(a)) if, in the opinion
of counsel to the Corporation, (i) the Initial Holder or the
Option Holder is or within the six months preceding such
exercise was subject to reporting under Section 16(a) of the
Exchange Act and (ii) there is a substantial likelihood that
the method of exercise selected by the Option Holder would
subject the Initial Holder or the Option Holder to a
substantial risk of liability under Section 16 of the Exchange
Act.
7:03 In addition to the alternative methods of exercise set forth
in Section 7:02, holders of Nonqualified Stock Options shall
be entitled, at or prior to the time the written notice
provided for in Section 7:01 is delivered to the Corporation,
to elect to have the Corporation withhold from the shares of
Common Stock to be delivered upon exercise of the Nonqualified
Stock Option that number of shares of Common Stock (determined
based on the Fair Market Value of a share of Common Stock on
the date the notice set forth in Section 7:01 is received by
the Corporation) necessary to satisfy any withholding taxes
attributable to the exercise of the Nonqualified Stock Option.
Alternatively, such holder of a Nonqualified Stock Option may
elect to deliver previously owned shares of Common Stock upon
exercise of the Nonqualified Stock Option to satisfy any
withholding taxes
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attributable to the exercise of the Nonqualified Stock Option.
The maximum amount that an Option Holder may elect to have
withheld from the shares of Common Stock otherwise deliverable
upon exercise or the maximum number of previously owned shares
an Option Holder may deliver shall be based on the maximum
federal, state and local taxes payable by the Option Holder.
Notwithstanding the foregoing provisions, the Committee may
include in the Option Agreement relating to any such
Nonqualified Stock Option provisions limiting or eliminating
the Option Holder's ability to pay his or her withholding tax
obligation with shares of Common Stock or, if no such
provisions are included in the Option Agreement but in the
opinion of the Committee such withholding would have an
adverse tax or accounting effect to the Corporation, at or
prior to exercise of the Nonqualified Stock Option the
Committee may so limit or eliminate the Option Holder's
ability to pay his or her withholding tax obligation with
shares of Common Stock. Notwithstanding the foregoing
provisions, a holder of a Nonqualified Stock Option may not
elect any of the methods of satisfying his or her withholding
tax obligation in respect of any exercise if, in the opinion
of counsel to the Corporation, (i) the Initial Holder or the
holder of the Nonqualified Stock Option is or within the six
months preceding such exercise was subject to reporting under
Section 16(a) of the Exchange Act and (ii) there is a
substantial likelihood that the election or timing of the
election would subject the Initial Holder or the holder of the
Nonqualified Stock Option to a substantial risk of liability
under Section 16 of the Exchange Act.
7:04 An Option Holder at any time may elect in writing to abandon
an Option in respect of all or part of the number of shares of
Common Stock as to which the Option shall not have been
exercised.
7:05 An Option Holder shall have none of the rights of a
stockholder of the Corporation until the shares of Common
Stock covered by the Option are issued upon exercise of the
Option.
ARTICLE 8:00
Terms and Conditions of Stock Appreciation Rights
8:01 Each Stock Appreciation Right granted pursuant to the Plan
shall be evidenced by a Stock Appreciation Right Agreement in
such form and with such terms and conditions (including,
without limitation, noncompete, confidentiality or other
similar provisions or provisions relating to transfer) as the
Committee from time to time may determine. Notwithstanding the
foregoing provision, Stock Appreciation Rights granted in
tandem with a related Option shall be evidenced by the Option
Agreement in respect of the related Option. The right of a
Stock Appreciation Right Holder to exercise his, her or its
Stock Appreciation Right shall at all times be subject to the
terms and conditions set forth in the respective Stock
Appreciation Right Agreement.
8:02 Each Stock Appreciation Right shall entitle the holder,
subject to the terms and conditions of the Plan, to receive
upon exercise of the Stock Appreciation Right an amount,
payable in cash or shares of Common Stock (determined based on
the Fair Market Value of a share of Common Stock on the date
the notice set forth in Section 9:01 is received by the
Corporation), equal to the Fair Market Value of a share of
Common Stock on the date of receipt by the Corporation of the
notice required by Section 9:01 less the Stock Appreciation
Right Base Price. Notwithstanding the foregoing provision,
each Stock Appreciation Right that is granted in tandem with a
related Option shall entitle the holder, subject to the terms
and conditions of the Plan, to surrender to the Corporation
for cancellation all or a portion of the related Option, but
only to the extent such Stock Appreciation Right and related
Option then are exercisable, and to be paid therefor an
amount, payable in cash or shares of Common Stock (determined
based on the Fair Market Value of a share of Common Stock on
the date the notice set forth in Section 9:01 is received by
the Corporation), equal to the Fair Market Value of a share of
Common Stock on the date of receipt by the Corporation of the
notice required by Section 9:01 less the Stock Appreciation
Right Base Price.
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8:03 Each Stock Appreciation Right, subject to the other
limitations set forth in the Plan, may extend for a period of
up to 10 years from the date on which it is granted. The term
of each Stock Appreciation Right shall be determined by the
Committee at the time of grant of the Stock Appreciation
Right, provided that if no term is established by the
Committee the term of the Stock Appreciation Right shall be 10
years from the date on which it is granted.
8:04 Unless otherwise provided by the Committee, the number of
Stock Appreciation Rights granted pursuant to each Stock
Appreciation Right Agreement shall be divided into four
installments of 25% each. The first installment shall be
exercisable 12 months after the date the Stock Appreciation
Right was granted, and each succeeding installment shall be
exercisable 12 months after the date the immediately preceding
installment became exercisable. If a Stock Appreciation Right
Holder does not exercise the Stock Appreciation Right to the
extent that he, she or it at any time has become entitled to
exercise, the Stock Appreciation Right Holder may exercise all
or any part of the Stock Appreciation Right at any subsequent
time during the term of the Stock Appreciation Right.
8:05 Stock Appreciation Rights shall be nontransferable and
nonassignable, except that (i) Stock Appreciation Rights may
be transferred by testamentary instrument or by the laws of
descent and distribution, and (ii) subject to the terms and
conditions of the Stock Appreciation Right Agreement or any
other terms and conditions imposed by the Committee from time
to time, Stock Appreciation Rights may be transferred in
accordance with the terms and conditions provided in Section
8:11 if the applicable Stock Appreciation Right Agreement or
other action of the Committee expressly provides that the
Stock Appreciation Rights are transferable.
8:06 Upon voluntary or involuntary termination of an Initial
Holder's employment, his or her Stock Appreciation Right
(including any Stock Appreciation Right transferred in
accordance with the terms and conditions provided in Section
8:11) and all rights thereunder shall terminate effective as
of the close of business on the date the Initial Holder ceases
to be a regular, full-time employee of the Corporation or any
of its subsidiaries, except (i) to the extent previously
exercised, (ii) except as provided in Sections 8:07, 8:08, and
8:09, and (iii) in the case of involuntary termination of
employment, for a period of 30 days thereafter the Stock
Appreciation Right Holder shall be entitled to exercise that
portion of the Stock Appreciation Right which was exercisable
at the close of business on the date the Initial Holder ceased
to be a regular, full-time employee of the Corporation or any
of its subsidiaries.
8:07 In the event an Initial Holder (i) ceases to be an executive
or other key employee of the Corporation or any of its
subsidiaries due to involuntary termination, (ii) takes a
leave of absence from the Corporation or any of its
subsidiaries for personal reasons or as a result of entry into
the armed forces of the United States, or any of the
departments or agencies of the United States government, or
(iii) terminates employment by reason of illness, disability,
or other special circumstance, the Committee may consider his
or her case and may take such action in respect of the related
Stock Appreciation Right Agreement as it may deem appropriate
under the circumstances, including accelerating the time
previously granted Stock Appreciation Rights may be exercised
and extending the time following the Initial Holder's
termination of employment during which the Stock Appreciation
Right Holder is entitled to exercise the Stock Appreciation
Rights, provided that in no event may any Stock Appreciation
Right be exercised after the expiration of the term of the
Stock Appreciation Right.
8:08 If an Initial Holder dies during the term of his or her Stock
Appreciation Right without the Stock Appreciation Right having
been exercised in full, (i) the executor or administrator of
the Stock Appreciation Right Holder's estate or the person who
inherits the right to exercise the Stock Appreciation Right by
bequest or inheritance in the event the Initial Holder was the
Stock Appreciation Right Holder at the date of death or (ii)
the Stock Appreciation Right Holder in the event the Stock
Appreciation Right had been transferred in accordance with the
terms and conditions provided in
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Section 8:11, shall have the right within three years of the
Initial Holder's death to exercise the Stock Appreciation
Rights that the deceased Initial Holder (or the Stock
Appreciation Right Holder, as the case may be) was entitled to
purchase at the date of death, after which the Stock
Appreciation Right shall lapse, provided that in no event may
any Stock Appreciation Right be exercised after the expiration
of the term of the Stock Appreciation Right.
8:09 If an Initial Holder's employment is terminated without his or
her Stock Appreciation Rights having been exercised in full
and (i) the Initial Holder is 62 years of age or older, or
(ii) the Initial Holder has been employed by the Corporation
or any of its subsidiaries for at least 10 years and the
Initial Holder's age plus years of such employment total not
less than 55 years, then such Initial Holder (or the Stock
Appreciation Right Holder in the event the Stock Appreciation
Right had been transferred in accordance with the terms and
conditions provided in Section 8:11) shall have the right
within three years of the Initial Holder's termination of
employment to exercise the Stock Appreciation Rights that the
Initial Holder (or Stock Appreciation Right Holder, as the
case may be) was entitled to exercise at the date of
termination, after which the Stock Appreciation Right shall
lapse, provided that in no event may any Stock Appreciation
Right be exercised after the expiration of the term of the
Stock Appreciation Right.
8:10 The granting of a Stock Appreciation Right pursuant to the
Plan shall not constitute or be evidence of any agreement or
understanding, expressed or implied, on the part of the
Corporation or any of its subsidiaries to employ the Initial
Holder for any specified period.
8:11 The Committee may provide, in the original grant of a Stock
Appreciation Right or in an amendment or supplement to a
previous grant, that some or all of the Stock Appreciation
Rights granted under the Plan are transferable by the Initial
Holder to an Immediate Family Member of the Initial Holder,
provided that (i) the Stock Appreciation Right Agreement, as
it may be amended from time to time, expressly so provides or
the Committee otherwise designates the Stock Appreciation
Right as transferable, (ii) the transfer by the Initial Holder
is a bona fide gift without consideration, (iii) the transfer
is irrevocable, (iv) the Initial Holder and any such
transferee provides such documentation or other information
concerning the transfer or the transferee as the Committee or
any employee of the Corporation acting on behalf of the
Committee may from time to time request, and (v) the Initial
Holder or the Stock Appreciation Right Holder complies with
all of the terms and conditions (including, without
limitation, any further restrictions or limitations) included
in the Stock Appreciation Right Agreement. Any Stock
Appreciation Right transferred in accordance with the terms
and conditions provided in this Section 8:11 shall continue to
be subject to the same terms and conditions that were
applicable to such Stock Appreciation Right prior to the
transfer. Notwithstanding any other provisions of the Plan,
the Corporation shall not be required to honor any exercise of
a Stock Appreciation Right by an Immediate Family Member of a
Stock Appreciation Right transferred in accordance with the
terms and conditions provided in this Section 8:11 unless and
until payment or provision for payment of any applicable
withholding taxes has been made.
ARTICLE 9:00
Methods of Exercise of Stock Appreciation Rights
9:01 A Stock Appreciation Right Holder (or other person or persons,
if any, entitled to exercise a Stock Appreciation Right
hereunder) desiring to exercise a Stock Appreciation Right
granted pursuant to the Plan shall notify the Corporation in
writing at its principal office at 701 East Joppa Road,
Towson, Maryland 21286, to that effect, specifying the number
of Stock Appreciation Rights to be exercised. Such written
notice may be given by means of a facsimile transmission. If a
facsimile transmission is used, the Stock Appreciation Right
Holder should mail the original executed copy of the written
notice to the Corporation promptly thereafter.
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9:02 The Committee in its sole and absolute discretion shall
determine whether a Stock Appreciation Right shall be settled
upon exercise in cash or in shares of Common Stock. The
Committee, in making such a determination, may from time to
time adopt general guidelines or determinations as to whether
Stock Appreciation Rights shall be settled in cash or in
shares of Common Stock.
ARTICLE 10:00
Limited Stock Appreciation Rights
10:01 Notwithstanding any other provision of the Plan, the
Committee, in their sole and absolute discretion, may grant
Limited Stock Appreciation Rights entitling Option Holders to
receive, in connection with a Change in Control (as defined in
Section 10:02), a cash payment in cancellation of all of their
Options which are outstanding on the date the Change in
Control occurs (whether or not such Options are then presently
exercisable), which payment shall be equal to the number of
shares covered by the cancelled Options multiplied by the
excess over the exercise price of the Options of the higher of
the (i) Fair Market Value of a share of Common Stock on the
date of the Change in Control or (ii) the highest per share
price paid for the shares of Common Stock in connection with
the Change in Control (with the value of any noncash
consideration paid in connection with the Change in Control to
be determined by the Committee in its sole and absolute
discretion). For purposes of this Section 10:01 as well as the
other provisions of this Plan, once an Option or portion of an
Option has terminated, lapsed or expired, or has been
abandoned, in accordance with the provisions of the Plan, the
Option (or the portion of the Option) that has terminated,
lapsed or expired, or has been abandoned, shall cease to be
outstanding. Limited Stock Appreciation Rights shall not be
exercisable at the discretion of the Option Holder but shall
automatically be exercised upon a Change in Control.
10:02 For purposes of Section 10:01 of the Plan, a "Change in
Control" shall mean a change in control of the Corporation of
a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under
the Exchange Act, whether or not the Corporation is in fact
required to comply therewith, provided that, without
limitation, such a Change in Control shall be deemed to have
occurred if (A) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than a trustee or
other fiduciary holding securities under an employee benefit
plan of the Corporation or any of its subsidiaries, or a
corporation owned, directly or indirectly, by the stockholders
of the Corporation in substantially the same proportions as
their ownership of stock of the Corporation, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Corporation representing 20% or more of the combined voting
power of the Corporation's then outstanding securities; or (B)
during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors
and any new director (other than a director designated by a
person who has entered into an agreement with the Corporation
to effect a transaction described in clauses (A) or (C) of
this Section 10.02) whose election by the Board of Directors
or nomination for election by the Corporation's stockholders
was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof; or (C) the stockholders of the
Corporation approve a merger, share exchange or consolidation
of the Corporation with any other corporation, other than a
merger, share exchange or consolidation which would result in
the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) at least 60% of the
combined voting power of the voting securities of the
Corporation or such surviving entity outstanding immediately
after such merger, share exchange or consolidation, or the
stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all the
Corporation's assets.
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10:03 Limited Stock Appreciation Rights shall be nontransferable and
nonassignable, except that Limited Stock Appreciation Rights
shall automatically be transferred and assigned in tandem with
a transfer of the related Options in accordance with Section
6:05.
ARTICLE 11:00
Terms and Conditions of Cash Appreciation Rights
11:01 Cash Appreciation Rights may be granted concurrently with
Options or Stock Appreciation Rights granted pursuant to the
Plan in the sole and absolute discretion of the Committee. If
Cash Appreciation Rights are granted to an Initial Holder, the
number of Cash Appreciation Rights granted to the Initial
Holder shall equal the number of shares of Common Stock that
may be purchased upon exercise of the related Option or the
number of Stock Appreciation Rights granted, as the case may
be.
11:02 Cash Appreciation Rights shall entitle the Initial Holder or
the Option Holder, as the case may be, subject to the terms
and conditions of the Plan including but not limited to the
limitations set forth in Section 11:03, to receive from the
Corporation or the subsidiary employing the Initial Holder
upon exercise of all or part of the related Option or Stock
Appreciation Right, as the case may be, or in the case of
Options granted in tandem with Stock Appreciation Rights upon
the surrender of all or part of the related Option granted in
exchange for the exercise of Stock Appreciation Rights granted
to the Initial Holder pursuant to the Plan, whether or not
such exercise or surrender was by the Initial Holder or a
permitted transferee, a payment in cash equal to the sum of
(i) the increase in income taxes, if any, incurred by the
Initial Holder or the Option Holder, as the case may be, as a
result of the full or partial exercise of the related Option
or Stock Appreciation Right, as the case may be, and (ii) the
increase in income taxes, if any, incurred by the Initial
Holder or the Option Holder, as the case may be, as a result
of receipt of this cash payment.
11:03 In no event shall the payment in respect of a Cash
Appreciation Right exceed the increase, if any, of the Fair
Market Value of a share of Common Stock on the date of
exercise of the related Option or Stock Appreciation Right, as
the case may be, over the exercise price per share of the
related Option or the Stock Appreciation Right Base Price of
the related Stock Appreciation Right, as the case may be.
11:04 Except as otherwise contemplated in this Article 11:00, Cash
Appreciation Rights shall be nontransferable and
nonassignable.
ARTICLE 12:00
Amendments and Discontinuance of the Plan
12:01 The Board of Directors shall have the right at any time and
from time to time to amend, modify, or discontinue the Plan
provided that, except as provided in Section 5:03, no such
amendment, modification, or discontinuance of the Plan shall
(i) revoke or alter the terms of any valid Option, Stock
Appreciation Right, Limited Stock Appreciation Right, or Cash
Appreciation Right previously granted pursuant to the Plan,
(ii) increase the number of shares of Common Stock to be
reserved for issuance and sale pursuant to Options or Stock
Appreciation Rights granted pursuant to the Plan, (iii)
decrease the price determined pursuant to the provisions of
Section 6:02 or increase the amount of cash or shares of
Common Stock that a Stock Appreciation Right Holder is
entitled to receive upon exercise of a Stock Appreciation
Right, (iv) change the class of employee to whom Options or
Stock Appreciation Rights may be granted pursuant to the Plan,
or (v) provide for Options or Stock Appreciation Rights
exercisable more than 10 years after the date
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granted.
ARTICLE 13:00
Plan Subject to Governmental Laws and Regulations
13:01 The Plan and the grant and exercise of Options, Stock
Appreciation Rights, Limited Stock Appreciation Rights, and
Cash Appreciation Rights pursuant to the Plan shall be subject
to all applicable governmental laws and regulations.
Notwithstanding any other provision of the Plan to the
contrary, the Board of Directors may in its sole and absolute
discretion make such changes in the Plan as may be required to
conform the Plan to such laws and regulations.
ARTICLE 14:00
Duration of the Plan
14:01 No Option or Stock Appreciation Right shall be granted
pursuant to the Plan after the close of business on February
19, 2002.
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