BRISTOL-MYERS SQUIBB COMPANY
1983 STOCK OPTION PLAN
(as amended effective as of November 3, 1998)
1. Purpose: The purpose of the 1983 Stock Option Plan (as amended effective
as of November 3, 1998) (the "Plan") is to secure for the Company and its
stockholders the benefits of the incentive inherent in common stock ownership
by the officers and key employees of the Company and its Subsidiaries and
Affiliates who will be largely responsible for the Company's future growth
and continued financial success and by providing long-term incentives in
addition to current compensation to certain key executives of the Company and
its Subsidiaries and Affiliates who contribute significantly to the long-term
performance and growth of the Company and such Subsidiaries and Affiliates.
It is intended that the former purpose will be effected through the grant of
stock options and stock appreciation rights under the Plan and that the latter
purpose will be effected through an award conditionally granting performance
units under the Plan, either independently or in conjunction with and related
to a nonqualified stock option grant under the Plan. The Bristol-Myers
Squibb Company Long-Term Performance Award Plan (as amended to January 17,
1983 and in effect as of December 31, 1992) ("LTPAP") has been merged into
and consolidated with the Plan as of January 1, 1993. As used herein, the
term "Prior Plan" shall mean the Bristol-Myers Squibb Company 1983 Stock
Option Plan (as amended through May 1, 1991 and in effect as of December 31,
1992) prior to its amendment and restatement as of January 1, 1993.
2. Definitions: For purposes of this Plan:
(a) "Affiliate" shall mean any entity in which the Company has an
ownership interest of at least 20%.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Company's common stock (par value $.10
per share).
(d) "Company" shall mean Bristol-Myers Squibb Company.
(e) "Disability" or "Disabled" shall mean qualifying for and receiving
payments under a disability pay plan of the Company or any Subsidiary
or Affiliate.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "Fair Market Value" shall mean the average of the high and low sale
prices of a share of Common Stock on the New York Stock Exchange, Inc.
composite tape on the date of measurement or on any date as determined
by the Committee and if there were no trades on such date, on the day
on which a trade occurred next preceding such date.
(h) "Retirement" shall mean termination of the employment of an employee
with the Company or a Subsidiary or Affiliate on or after (i) the
employee's 65th birthday or (ii) the employee's 55th birthday if the
employee has completed 10 years of service with the Company, its
Subsidiaries and/or its Affiliates. For purposes of this Section 2(h)
and all other purposes of this Plan, Retirement shall also mean
termination of employment of an employee with the Company or a
Subsidiary or Affiliate for any reason (other than the employee's
death, disability, resignation, willful misconduct or activity deemed
detrimental to the interests of the Company) where, on termination,
the employee's age plus years of service (rounded up to the next
higher whole number) equals at least 70 and the employee has completed
10 years of service with the Company, its Subsidiaries and/or its
Affiliates.
Furthermore, an employee who makes an election to retire under Article 19
of the Bristol-Myers Squibb Company Retirement Income Plan (the "Retirement
Income Plan") shall have any additional years of age and service which are
credited under Article 19 of the Retirement Income Plan taken into account
when determining such employee's age and service under this Section 2(h).
Such election shall be deemed a Retirement for purposes of this Section 2(h)
and all other purposes of this Plan.
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(i) "Subsidiary" shall mean any corporation which at the time qualifies
as a subsidiary of the Company under the definition of "subsidiary
corporation" in Section 424 of the Code.
3. Amount of Stock: The amount of stock which may be made subject to grants
of options or awards of performance units under the Plan in calendar year 1993
shall not exceed an amount equal to (i) 0.9% of the outstanding shares of the
Company's Common Stock on January 1, 1993, plus (ii) the amount of shares
available for, and not made subject to, grants of options under the Prior Plan
as of January 1, 1993, less (iii) the number of shares subject to options
granted in 1993 under the Prior Plan and (iv) the number of shares
corresponding to awards of performance units outstanding under the LTPAP on
the date the Plan is approved by the stockholders of the Company. With
respect to each succeeding year, the amount of stock which may be made subject
to grants of options or awards of performance units under the Plan shall not
exceed an amount equal to (i) 0.9% of the outstanding shares of the Company's
Common Stock on January 1 of such year plus, subject to this Section 3, (ii)
in any year the number of shares equal to the amount of shares that were
available for grants and awards in the prior year but were not made subject
to a grant or award in such prior year and (iii) the number of shares that
were subject to options or awards granted hereunder or under the Prior Plan,
which options or awards terminated or expired in the prior year without being
exercised. Common Stock issued hereunder may be authorized and reissued shares
or issued shares acquired by the Company or its Subsidiaries on the market or
otherwise.
4. Administration: The Plan shall be administered under the supervision of
the Board of Directors of the Company which shall exercise its powers, to the
extent herein provided, through the agency of a Compensation and Management
Development Committee (the "Committee") which shall be appointed by the Board
of Directors of the Company and shall consist of not less than three directors
who shall serve at the pleasure of the Board. No member of the Committee
shall have been within one year prior to appointment to, or while serving
on, the Committee granted or awarded equity securities of the Company pursuant
to this or any other plan of the Company or its Subsidiaries or Affiliates
except to the extent that participation in any such plan or receipt of any
such grant or award would not adversely affect the Committee member's status
as a non-employee director for purposes of Rule 16b-3 under the Exchange Act.
The Committee, from time to time, may adopt rules and regulations for
carrying out the provisions and purposes of the Plan and make such other
determinations, not inconsistent with the terms of the Plan, as the Committee
shall deem appropriate. The interpretation and construction of any provision
of the Plan by the Committee shall, unless otherwise determined by the Board
of Directors, be final and conclusive.
The Committee shall maintain a written record of its proceedings. A
majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present,
or acts unanimously approved in writing, shall be the acts of the Committee.
5. Eligibility: Options and awards may be granted only to present or future
officers and key employees of the Company and its Subsidiaries and Affiliates,
including Subsidiaries and Affiliates which become such after the adoption of
the Plan. Any officer or key employee of the Company or of any such
Subsidiary or Affiliate shall be eligible to receive one or more options
or awards under the Plan. Any director who is not an officer or employee
of the Company or one of its Subsidiaries or Affiliates and any member of
the Committee, during the time of the member's service as such or thereafter,
shall be ineligible to receive an option or award under the Plan. The
adoption of this Plan shall not be deemed to give any officer or employee
any right to an award or to be granted an option to purchase Common Stock
of the Company, except to the extent and upon such terms and conditions as
may be determined by the Committee.
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6. Stock Options: Stock options under the Plan shall consist of incentive
stock options under Section 422 of the Code or nonqualified stock options
(options not intended to qualify as incentive stock options), as the Committee
shall determine. In addition, the Committee may grant stock appreciation
rights in conjunction with an option, as set forth in Section 6(b)(11), or
may grant awards in conjunction with an option, as set forth in Section
6(b)(10) (an "Associated Option").
Each option shall be subject to the following terms and conditions:
(a) Grant of Options. The Committee shall (1) select the officers and
key employees of the Company and its Subsidiaries and Affiliates to whom
options may from time to time be granted, (2) determine whether
incentive stock options or nonqualified stock options, are to be
granted, (3) determine the number of shares to be covered by each
option so granted, (4) determine the terms and conditions (not
inconsistent with the Plan) of any option granted hereunder (including
but not limited to restrictions upon the options, conditions of their
exercise, or on the shares of Common Stock issuable upon exercise
thereof), (5) determine whether nonqualified stock options or incentive
stock options granted under the Plan shall include stock appreciation
rights and, if so, shall determine the terms and conditions thereof in
accordance with Section 6(b)(11) hereof, (6) determine whether any
nonqualified stock options granted under the Plan shall be Associated
Options, and (7) prescribe the form of the instruments necessary or
advisable in the administration of options.
(b) Terms and Conditions of Option. Any option granted under the Plan
shall be evidenced by a Stock Option Agreement executed by the Company
and the optionee, in such form as the Committee shall approve, which
agreement shall be subject to the following terms and conditions and
shall contain such additional terms and conditions not inconsistent
with the Plan, and in the case of an incentive stock option not
inconsistent with the provisions of the Code applicable to incentive
stock options, as the Committee shall prescribe:
(1) Number of Shares Subject to an Option. The Stock Option Agreement
shall specify the number of shares of Common Stock subject to the
Agreement. If the option is an Associated Option, the number of
shares of Common Stock subject to such Associated Option shall
initially be equal to the number of performance units subject to the
award, but one share of Common Stock shall be canceled for each
performance unit paid out under the award.
(2) Option Price. The purchase price per share of Common Stock
purchasable under an option will be determined by the Committee
but will be not less than the Fair Market Value of a share of
Common Stock on the date of the grant of such option.
(3) Option Period. The period of each option shall be fixed by
the Committee, but no option shall be exercisable after the
expiration of ten years from the date the option is granted.
(4) Consideration. Each optionee, as consideration for the grant of
an option, shall remain in the continuous employ of the Company or
of one of its Subsidiaries or Affiliates for at least one year
from the date of the granting of such option, and no option shall
be exercisable until after the completion of such one year period
of employment by the optionee.
(5) Exercise of Option. An option may be exercised in whole or in part
from time to time during the option period (or, if determined by
the Committee, in specified installments during the option period)
by giving written notice of exercise to the Company specifying the
number of shares to be purchased, such notice to be accompanied by
payment in full of the purchase price and Withholding Taxes (as
defined in Section 10 hereof) due either by certified or bank
check, or in shares of Common Stock of the Company owned by the
optionee having a Fair Market Value at the date of exercise equal
to such purchase price and Withholding Taxes due, or in a
combination of the foregoing; provided, however, that payment in
shares of Common Stock of the Company will not be permitted unless
at least 100 shares of Common Stock are required and delivered for
such purpose. No shares shall be issued until full payment
therefor has been made. An optionee shall have the rights of a
stockholder only with respect to shares of stock for which
certificates have been issued to the optionee.
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(6) Nontransferability of Options. No option or stock appreciation
right granted under the Plan shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution,
and such option or stock appreciation right shall be exercisable,
during the optionee's lifetime, only by the optionee.
Notwithstanding the foregoing, the Committee may set forth in a
Stock Option Agreement at the time of grant or thereafter, that the
options may be transferred to members of the optionee's immediate
family, to trusts solely for the benefit of such immediate family
members and to partnerships in which such family members and/or
trusts are the only partners. For this purpose, immediate family
members means the optionee's spouse, parents, children,
stepchildren, grandchildren and legal dependents. Any transfer
of options made under this provision will not be effective until
notice of such transfer is delivered to the Company.
(7) Retirement and Termination of Employment Other than by Death or
Disability. If an optionee shall cease to be employed by the
Company or any of its Subsidiaries or Affiliates for any reason
(other than termination of employment by reason of death or
Disability) after the optionee shall have been continuously so
employed for one year after the granting of the option, the option
shall be exercisable only to the extent that the optionee was
otherwise entitled to exercise it at the time of such cessation
of employment with the Company, Subsidiary or Affiliate, but in
no event after the expiration of the option period set forth
therein except that in the case of cessation of employment other
than by reason of Retirement or death, the option shall in no
event be exercisable after the date three months next succeeding
such cessation of employment. The Plan does not confer upon
any optionee any right with respect to continuation of employment
by the Company or any of its Subsidiaries or Affiliates.
(8) Disability of Optionee. An optionee who ceases to be employed
by reason of Disability shall be treated as though the optionee
remained in the employ of the Company or a Subsidiary or Affiliate
until the earlier of (i) cessation of payments under a disability
pay plan of the Company, Subsidiary or Affiliate, (ii) the
optionee's death, or (iii) the optionee's 65th birthday.
(9) Death of Optionee. Except as otherwise provided in subsection (13),
in the event of the optionee's death (i) while in the employ of the
Company or any of its Subsidiaries or Affiliates, (ii) while
Disabled as described in subsection (8) or (iii) after cessation
of employment due to Retirement, the option shall be fully
exercisable by the executors, administrators, legatees or
distributees of the optionee's estate, as the case may be, at any
time following such death. In the event of the optionee's death
after cessation of employment for any reason other than Disability
or Retirement, the option shall be exercisable by the executors,
administrators, legatees or distributees of the optionee's estate,
as the case may be, at any time during the twelve month period
following such death. Notwithstanding the foregoing, in no event
shall an option be exercisable unless the optionee shall have
been continuously employed by the Company or any of its Subsidiaries
or Affiliates for a period of at least one year after the option
grant, and no option shall be exercisable after the expiration of
the option period set forth in the Stock Option Agreement. In the
event any option is exercised by the executors, administrators,
legatees or distributees of the estate of a deceased optionee,
the Company shall be under no obligation to issue stock thereunder
unless and until the Company is satisfied that the person or
persons exercising the option are the duly appointed legal
representatives of the deceased optionee's estate or the proper
legatees or distributees thereof.
(10) Long Term Performance Awards. The Committee may from time to time
grant nonqualified stock options under the Plan in conjunction with
and related to an award of performance units made under a Long Term
Performance Award as set forth in Section 7(b)(11). In such event,
notwithstanding any other provision hereof, (i) the number of
shares to which the Associated Option applies shall initially be
equal to the number of performance units granted by the award, but
such number of shares shall be reduced on a one share-for-one unit
basis to the extent that the Committee determines pursuant to the
terms of the award, to pay to the optionee or the optionee's
beneficiary the performance units granted pursuant to such award;
and (ii) such Associated Option shall be cancelable in the
discretion of the Committee, without the consent of the optionee,
under the conditions and to the extent specified in the award.
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(11) Stock Appreciation Rights. In the case of any option granted
under the Plan, either at the time of grant or by amendment of such
option at any time after such grant there may be included a stock
appreciation right which shall be subject to such terms and
conditions, not inconsistent with the Plan, as the Committee
shall impose, including the following:
(A) A stock appreciation right shall be exercisable to the extent,
and only to the extent, that the option in which it is included
is at the time exercisable, and may be exercised within such
period only at such time or times as may be determined by
the Committee;
(B) A stock appreciation right shall entitle the optionee (or any
person entitled to act under the provisions of subsection (9)
hereof) to surrender unexercised the option in which the stock
appreciation right is included (or any portion of such option)
to the Company and to receive from the Company in exchange
therefor that number of shares having an aggregate value equal
to (or, in the discretion of the Committee, less than) the
excess of the value of one share (provided such value does not
exceed such multiple of the option price per share as may be
specified by the Committee) over the option price per share
specified in such option times the number of shares called for
by the option, or portion thereof, which is so surrendered. The
Committee shall be entitled to cause the Company to settle its
obligation, arising out of the exercise of a stock appreciation
right, by the payment of cash equal to the aggregate value of
the shares the Company would otherwise be obligated to deliver
or partly by the payment of cash and partly by the delivery
of shares. Any such election shall be made within 30 business
days after the receipt by the Committee of written notice of
the exercise of the stock appreciation right. The value of a
share for this purpose shall be the Fair Market Value thereof
on the last business day preceding the date of the election to
exercise the stock appreciation right;
(C) No fractional shares shall be delivered under this subsection
(11) but in lieu thereof a cash adjustment shall be made;
(D) If a stock appreciation right included in an option is
exercised, such option shall be deemed to have been exercised
to the extent of the number of shares called for by the option
or portion thereof which is surrendered on exercise of the
stock appreciation right and no new option may be granted
covering such shares under this Plan; and
(E) If an option which includes a stock appreciation right is
exercised, such stock appreciation right shall be deemed to
have been canceled to the extent of the number of shares called
for by the option or portion thereof is exercised and no new
stock appreciation rights may be granted covering such shares
under this Plan.
(12) Incentive Stock Options. In the case of any incentive stock
option granted under the Plan, the aggregate Fair Market Value of
the shares of Common Stock of the Company (determined at the time
of grant of each option) with respect to which incentive stock
options granted under the Plan and any other plan of the Company
or its parent or a Subsidiary which are exercisable for the first
time by an employee during any calendar year shall not exceed
$100,000 or such other amount as may be required by the Code.
In any year, the maximum number of shares with respect to which
incentive stock options may be granted shall not exceed 4,000,000
shares.
(13) Rights of Transferee. Notwithstanding anything to the contrary
herein, if an option has been transferred in accordance with
Section 6(b)(6), the option shall be exercisable solely by the
transferee. The option shall remain subject to the provisions of
the Plan, including that it will be exercisable only to the extent
that the optionee or optionee's estate would have been entitled
to exercise it if the optionee had not transferred the option.
In the event of the death of the optionee prior to the expiration
of the right to exercise the transferred option, the period during
which the option shall be exercisable will terminate on the date
one year following the date of the optionee's death. In the event
of the death of the transferee prior to the expiration of the right
to exercise the option, the period during which the option shall
be exercisable by the executors, administrators, legatees and
distributees of the transferee's estate, as the case may be, will
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terminate on the date one year following the date of the
transferee's death. In no event will the option be exercisable
after the expiration of the option period set forth in the Stock
Option Agreement. The option shall be subject to such other rules
as the Committee shall determine.
7. Long-term Performance Awards: Awards under the Plan shall consist of the
conditional grant to the participants of a specified number of performance
units. The conditional grant of a performance unit to a participant will
entitle the participant to receive a specified dollar value, variable under
conditions specified in the award, if the performance objectives specified
in the award are achieved and the other terms and conditions thereof are
satisfied.
Each award will be subject to the following terms and conditions:
(a) Grant of Awards. The Committee shall (1) select the officers and key
executives of the Company and its Subsidiaries and Affiliates to whom
awards may from time to time be granted, (2) determine the number of
performance units covered by each award, (3) determine the terms and
conditions of each performance unit awarded and the award period and
performance objectives with respect to each award, (4) determine the
periods during which a participant may request the Committee to approve
deferred payment of a percentage (50% or 100%) of an award (the
"Deferred Portion") and the interest or rate of return thereon or the
basis on which such interest or rate of return thereon is to be
determined, (5) determine whether payment with respect to the portion
of an award which has not been deferred (the "Current Portion") and the
payment with respect to the Deferred Portion of an award shall be made
entirely in cash, entirely in Common Stock or partially in cash and
partially in Common Stock, (6) determine whether the award is to be
made independently of or in conjunction with a nonqualified stock
option granted under the Plan, and (7) prescribe the form of the
instruments necessary or advisable in the administration of the awards.
(b) Terms and Conditions of Award. Any award conditionally granting
performance units to a participant shall be evidenced by a Performance
Unit Agreement executed by the Company and the participant, in such
form as the Committee shall approve, which Agreement shall contain
in substance the following terms and conditions and such additional
terms and conditions as the Committee shall prescribe:
(1) Number of Performance Units. The Performance Unit Agreement shall
specify the number of performance units conditionally granted to
the participant. If the award has been made in conjunction with
the grant of an Associated Option, the number of performance units
granted shall initially be equal to the number of shares which the
participant is granted the right to purchase pursuant to the
Associated Option, but one performance unit shall be canceled for
each share of the Company's Common Stock purchased upon exercise of
the Associated Option or for each stock appreciation right included
in such option that has been exercised.
(2) Value of Performance Units. The Performance Unit Agreement shall
specify the threshold, target and maximum dollar values of each
performance unit and corresponding performance objectives as
provided under Section 7(b)(5).
(3) Award Periods. For each award, the Committee shall designate an
award period with a duration to be determined by the Committee
in its discretion but in no event less than three calendar years
within which specified performance objectives are to be attained.
There may be several award periods in existence at any one time
and the duration of performance objectives may differ from each
other.
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(4) Consideration. Each participant, as consideration for the award
of performance units, shall remain in the continuous employ of the
Company or of one of its Subsidiaries or Affiliates for at least
one year after the date of the making of such award, and no award
shall be payable until after the completion of such one year of
employment by the participant.
(5) Performance Objectives. The Committee shall establish performance
objectives with respect to the Company for each award period on the
basis of such criteria and to accomplish such objectives as the
Committee may from time to time determine. Performance objectives
may include objective and subjective criteria. During any award
period, the Committee may adjust the performance objectives for
such award period as it deems equitable in recognition of unusual
or nonrecurring events affecting the Company, changes in applicable
tax laws or accounting principles, or such other factors as the
Committee may determine.
(6) Determination and Payment of Performance Units Earned. As soon as
practicable after the end of an award period, the Committee shall
determine the extent to which awards have been earned on the basis
of the Company's actual performance in relation to the established
performance objectives as set forth in the Performance Unit
Agreement. The Performance Unit Agreement shall specify that as
soon as practicable after the end of each award period, the
Committee shall determine whether the conditions of Sections 7(b)(4)
and 7(b)(5) hereof have been met and, if so, shall ascertain the
amount payable to the participant in respect of the performance
units. As promptly as practicable after it has determined that an
amount is payable in respect of an award, the Committee shall cause
the Current Portion of such award to be paid to the participant or
the participant's beneficiaries, as the case may be, in the
Committee's discretion, either entirely in cash, entirely in Common
Stock or partially in cash and partially in Common Stock. The
Deferred Portion of an award shall be contingently credited and
payable to the participant over a deferred period and shall be
credited with interest or a rate of return, as determined by the
Committee. The Committee, in its discretion, shall determine the
conditions upon, and method of, payment of such deferred portions
and whether such payment will be made entirely in cash, entirely in
Common Stock or partially in cash and partially in Common Stock.
In making the payment of an award in Common Stock hereunder, the cash
equivalent of such Common Stock shall be determined by the Fair Market
Value of the Common Stock on the day the Committee designates the
performance units shall be paid.
(7) Nontransferability of Awards and Designation of Beneficiaries. No
award under the Plan shall be transferable by the participant other
than by will or by the laws of descent and distribution, except
that a participant may designate a beneficiary pursuant to the
provisions hereof.
If any participant or the participant's beneficiary shall attempt to
assign the participant's rights under the Plan in violation of the
provisions thereof, the Company's obligation to make any further
payments to such participant or the participant's beneficiaries shall
forthwith terminate.
A participant may name one or more beneficiaries to receive any payment
of an award to which the participant may be entitled under the Plan
in the event of the participant's death, on a form to be provided by
the Committee. A participant may change the participant's beneficiary
designation from time to time in the same manner.
If no designated beneficiary is living on the date on which any payment
becomes payable to a participant's beneficiary, such payment will be
payable to the person or persons in the first of the following classes
of successive preference:
(i) Widow or widower, if then living,
(ii) Surviving children, equally,
(iii) Surviving parents, equally,
(iv) Surviving brothers and sisters, equally,
(v) Executors or administrators
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and the term "beneficiary" as used in the Plan shall include such
person or persons.
(8) Retirement and Termination of Employment Other Than by Death or
Disability. In the event of the Retirement prior to the end of
an award period of a participant who has satisfied the one year
employment requirement of Section 7(b)(4) with respect to an
award prior to Retirement, the participant, or his estate, shall
be entitled to a payment of such award at the end of the award
period, pursuant to the terms of the Plan and the participant's
Performance Unit Agreement, provided, however, that the participant
shall be deemed to have earned that proportion (to the nearest
whole unit) of the value of the performance units granted to the
participant under such award as the number of months of the award
period which have elapsed since the first day of the calendar year
in which the award was made to the end of the month in which the
participant's Retirement occurs, bears to the total number of
months in the award period. The participant's rights in any
remaining performance units shall be canceled and forfeited.
Subject to Section 7(b)(6) hereof, the Performance Unit Agreement
shall specify that the rights of the participant in the performance
units granted to such participant shall be conditional and shall be
canceled, forfeited and surrendered if the participant's continuous
employment with the Company and its Subsidiaries and Affiliates shall
terminate for any reason, other than the participant's death,
Disability or Retirement prior to the end of the award period.
The Committee may, in its discretion, waive, in whole or in part,
the cancellation, forfeiture and surrender of any performance units.
(9) Disability of Participant. For the purposes of any award a
participant who becomes Disabled shall be deemed to have suspended
active employment by reason of Disability commencing on the date
the participant becomes entitled to receive payments under a
disability pay plan of the Company or any Subsidiary or Affiliate
and continuing until the date the participant is no longer entitled
to receive such payments. In the event a participant becomes
Disabled during an award period but only if the participant has
satisfied the one year employment requirement of Section 7(b)(4)
with respect to an award prior to becoming Disabled, upon the
determination by the Committee of the extent to which an award has
been earned pursuant to Section 7(b)(6) the participant shall be
deemed to have earned that proportion (to the nearest whole unit)
of the value of the performance units granted to the participants
under such award as the number of months of the award period in
which the participant was not Disabled bears to the total number of
months of the award period. The participant's rights in any
remaining performance units shall be canceled and forfeited.
The Committee may, in its discretion, waive, in whole or in part, such
cancellation and forfeiture of any performance units.
(10) Death of Participant. In the event of the death prior to the end
of an award period of a participant who has satisfied the one year
employment requirement with respect to an award prior to the date
of death, the participant's beneficiaries or estate, as the case
may be, shall be entitled to a payment of such award upon the end
of the award period, pursuant to the terms of the Plan and the
participant's Performance Unit Agreement, provided, however, that
the participant shall be deemed to have earned that proportion
(to the nearest whole unit) of the value of the performance units
granted to the participant under such award as the number of months
of the award period which have elapsed since the first day of the
calendar year in which the award was made to the end of the month
in which the participant's death occurs, bears to the total number
of months in the award period. The participant's rights in any
remaining performance units shall be canceled and forfeited.
The Committee may, in its discretion, waive, in whole or in part, such
cancellation and forfeiture of any performance units.
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(11) Grant of Associated Option. If the Committee determines that the
conditional grant of performance units under the Plan is to be made
to a participant in conjunction with the grant of a nonqualified
stock option under the Plan, the Committee shall grant the
participant an Associated Option under the Plan subject to the
terms and conditions of this subsection (11). In such event,
such award under the Plan shall be contingent upon the
participant's being granted such an Associated Option pursuant
to which: (i) the number of shares the optionee may purchase
shall initially be equal to the number of performance units
conditionally granted by the award, (ii) such number of shares
shall be reduced on a one share-for-one unit basis to the extent
that the Committee determines, pursuant to Section 7(b)(6) hereof,
to pay to the participant or the participant's beneficiaries the
performance units conditionally granted pursuant to the award, and
(iii) the Associated Option shall be cancelable in the discretion
of the Committee, without the consent of the participant, under
the conditions and to the extent specified herein and in
Section 7(b)(6) hereof.
If no amount is payable in respect of the conditionally granted
performance units, the award and such performance units shall be deemed
to have been canceled, forfeited and surrendered, and the Associated
Option, if any, shall continue in effect in accordance with its terms.
If any amount is payable in respect of the performance units and such
units were granted in conjunction with an Associated Option, the
Committee shall, within 30 days after the determination of the
Committee referred to in the first sentence of Section 7(b)(6),
determine, in its sole discretion, either:
(A) to cancel in full the Associated Option, in which event the
value of the performance units payable pursuant to Sections
7(b)(5) and (6) shall be paid;
(B) to cancel in full the performance units, in which event no
amount shall be paid to the participant in respect thereof but
the Associated Option shall continue in effect in accordance
with its terms; or
(C) to cancel some, but not all, of the performance units, in which
event the value of the performance units payable pursuant to
Sections 7(b)(5) and (6) which have not been canceled shall be
paid and the Associated Option shall be canceled with respect
to that number of shares equal to the number of conditionally
granted performance units that remain payable.
Any action taken by the Committee pursuant to the preceding
sentence shall be uniform with respect to all awards having the
same award period. If the Committee takes no such action, it
shall be deemed to have determined to cancel in full the award
in accordance with clause (B) above.
8. Determination of Breach of Conditions: The determination of the Committee
as to whether an event has occurred resulting in a forfeiture or a termination
or reduction of the Company's obligations in accordance with the provisions of
the Plan shall be conclusive.
9. Adjustment in the Event of Change in Stock: In the event of changes in
the outstanding Common Stock of the Company by reason of stock dividends,
recapitalization, mergers, consolidations, split-ups, combinations or
exchanges of shares and the like, the aggregate number and class of shares
available under the Plan, and the number, class and the price of shares
subject to outstanding options and/or awards and the number of performance
units and/or the dollar value of each unit shall be appropriately adjusted
by the Committee, whose determination shall be conclusive.
10. Taxes: In connection with the transfer of shares of Common Stock to an
optionee, subject to Section 16 of the Exchange Act, as the result of the
exercise of a nonqualified stock option or a stock appreciation right, or
to a participant subject to Section 16 of the Exchange Act, upon payment of
an award, the Company shall have the right to retain or sell without notice,
or to demand surrender of, shares of Common Stock having a Fair Market Value
(taking into account any commissions or other expenses the Company may incur
upon the sale of such shares) on the date that the amount required by any
governmental entity to be withheld or otherwise deducted and paid with respect
to such transfer ("Withholding Tax") is to be determined (the "Tax Date")
sufficient to cover the amount of any Applicable Tax (the amount of W
ithholding Tax plus the incremental amount determined on the basis of the
highest marginal tax rate applicable to such optionee or participant, Federal
Insurance Contribution Act taxes or other governmental impost or levy), and
to make payment (or to reimburse itself for payment made) to the appropriate
taxing authority of an amount in cash equal to the amount of such Applicable
Tax, remitting any balance to the optionee or participant. Notwithstanding
the foregoing, if the stock options have been transferred, the optionee shall
provide the Company with funds sufficient to pay such Withholding or
Applicable Tax. Furthermore, if such optionee does not satisfy his
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withholding obligation, the transferee may provide the funds sufficient to
enable the Company to pay such Withholding Tax or Applicable Tax. However,
if the stock options have been transferred, the Company shall have no right
to retain or sell without notice, or to demand surrender from the transferee
of, shares of Common Stock in order to pay such Withholding Tax or Applicable
Tax.
An optionee or participant who is not an executive officer of the Company
subject to Section 16 of the Exchange Act shall be entitled to satisfy the
obligation to pay any Withholding Tax or Applicable Tax, by providing the
Company with funds sufficient to enable the Company to pay such Withholding
Tax or Applicable Tax or by requiring the Company to retain or to accept upon
delivery thereof by the optionee or participant shares of Common Stock
sufficient in value (determined in accordance with the last sentence of the
preceding paragraph), to cover the amount of such Withholding Tax or
Applicable Tax. Each election by an optionee or participant to have shares
retained or to deliver shares for this purpose shall be subject to the
following restrictions: (i) the election must be in writing and be made
on or prior to the Tax Date; (ii) the election must be irrevocable; (iii)
the election shall be subject to the disapproval of the Committee.
11. Amendment of the Plan: The Board of Directors may amend or suspend the
Plan at any time and from time to time. No such amendment of the Plan may,
however, increase the maximum number of shares to be offered under options or
awards, or change the manner of determining the option price, or change the
designation of employees or class of employees eligible to receive options
or awards, or permit the transfer or issue of stock before payment therefor
in full, or, without the written consent of the optionee or participant,
alter or impair any option or award previously granted under the Plan, Prior
Plan or LTPAP. Notwithstanding the foregoing, if an option has been
transferred in accordance with Section 6(b)(6), written consent of the
transferee (and not the optionee) shall be necessary to alter or impair any
option or award previously granted under the Plan.
12. Amendment of Options Outstanding Under the Prior Plan: The Prior Plan and
certain nonqualified options granted and outstanding thereunder are hereby
amended to provide that any nonqualified option which is outstanding on the
date this Plan is adopted by a vote of the holders of a majority of the shares
of the Company's Common Stock and $2.00 Convertible Preferred Stock present in
person or by proxy at a duly held shareholders meeting at which a quorum
representing a majority of all outstanding voting stock is present shall be
exercisable in accordance with Sections 6(b)(7) and 6(b)(9), except that for
the purpose of such options "Retirement" shall additionally mean termination
of the employment of an employee after completing 35 years of service with
the Company or its Subsidiaries.
Furthermore, an employee who makes an election to retire under Article 19
of the Retirement Income Plan shall have any additional years of age and
service which are credited under Article 19 of the Retirement Income Plan
taken into account when determining such employee's age and years of service
with the Company or its Subsidiaries under this Section 12. Such election
shall be deemed a Retirement for purposes of this Section 12 and all other
purposes of this Plan.
13. Miscellaneous: By accepting any benefits under the Plan, each optionee
or participant and each person claiming under or through such optionee or
participant shall be conclusively deemed to have indicated acceptance and
ratification of, and consent to, any action taken or made to be taken or made
under the Plan by the Company, the Board, the Committee or any other Committee
appointed by the Board. No participant or any person claiming under or
through him shall have any right or interest, whether vested or otherwise,
in the Plan or in any option, or stock appreciation right or award thereunder,
contingent or otherwise, unless and until all of the terms, conditions and
provisions of the Plan and the Agreement that affect such participant or such
other person shall have been complied with. Nothing contained in the Plan or
in any Agreement shall require the Company to segregate or earmark any cash or
other property. Neither the adoption of the Plan nor its operation shall in
any way affect the rights and powers of the Company or any of its Subsidiaries
or Affiliates to dismiss and/or discharge any employee at any time.
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14. Term of the Plan: The Plan shall become effective as of January 1, 1993
by action of the Board of Directors conditioned on and subject to approval of
the Plan, by a vote of the holders of a majority of the shares of Common Stock
and $2.00 Convertible Preferred Stock of the Company present in person or by
proxy at a duly held shareholders meeting at which a quorum representing a
majority of all outstanding voting stock is present. The Plan shall terminate
on December 31, 2002, or at such earlier date as may be determined by the
Board of Directors. Termination of the Plan, however, shall not affect the
rights of optionees under options theretofore granted to them or the rights
of participants under awards theretofore granted to them, and all unexpired
options and awards shall continue in force and operation after termination
of the Plan except as they may lapse or be terminated by their own terms
and conditions.