Exhibit 4.3
CITIZENS UTILITIES COMPANY
MANAGEMENT EQUITY INCENTIVE PLAN
SECTION 1. Purpose
The purpose of the Citizens Utilities Company Management Equity Incentive
Plan (the "Plan") is to provide additional compensation incentives for high
levels of performance and productivity by employees of the Company's operations.
The Plan is intended to strengthen the Company's existing operations and its
ability to attract and retain outstanding management and employees upon whose
judgment, initiative and efforts the continued success, growth and development
of the Company is dependent. The Plan would constitute the first incentive award
plan of its type adopted by the Company.
SECTION 2. Definitions
When used herein, the following terms have the following meanings:
(a) "Affiliate" means any company controlled by the Company, controlling
the Company or under common control with the Company.
(b) "Award" means an award granted to any Eligible Employee in accordance
with the provisions of the Plan.
(c) "Award Agreement" means the written agreement or certificate
evidencing the terms of the Award granted to an Eligible Employee
under the Plan.
(d) "Beneficiary" means the beneficiary or beneficiaries designated
pursuant to Section 11 to receive the amount, if any, payable under
the Plan upon the death of an Eligible Employee.
(e) "Board" means the Board of Directors of the Company.
(f) "Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. (All citations to Sections of the Code are to such
Sections as they are currently designated and reference to such
Sections shall include the provisions thereof as they may from time to
time be amended or renumbered as well as any successor provisions.)
(g) "Company" means Citizens Utilities Company, and its successors and
assigns.
(h) "Committee" means the Committee appointed by the Board pursuant to
Section 12.
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(i) "Deferred Stock" means Stock credited to an Eligible Employee under
the Plan subject to the requirements of Section 8 and such other terms
and restrictions as the Committee deems appropriate or desirable.
(j) "Effective Date" means June 22, 1990.
(k) "Eligible Employee" means an employee of any Participating Company
whose responsibilities and decisions in the judgment of the Committee,
directly affect the management, performance or profitability of any
Participating Company. Where required by the context, "Eligible
Employee" includes an individual who has been granted an Award but is
no longer an employee of any Participating Company.
(l) "Fair Market Value" means, unless another reasonable method for
determining fair market value is specified by the Committee, the
average of the high and low sales prices of a share of the appropriate
Series of Stock as reported by the NASDAQ National Market System (or
if such shares are listed on a national stock exchange or another
national quotation system, as reported or quoted by such exchange or
system) for the date in question or, if no such sales were reported
for such date, for the most recent date on which sales prices were
quoted.
(m) "Option" means an option to purchase Stock, including Restricted Stock
or Deferred Stock, if the Committee so determines, subject to the
applicable provisions of Section 5 and awarded in accordance with the
terms of the Plan and which may be an incentive stock option qualified
under Section 422 of the Code or a nonqualified stock option.
(n) "Participating Company" means the Company or any subsidiary or other
affiliate of the Company; provided, however, for incentive stock
options only, "Participating Company" means the Company, any
corporation which at the time such option is granted under the Plan
qualifies as a subsidiary of the Company under the definition of
"subsidiary corporation" contained in Section 425(f) of the Code.
(o) "Performance Share" means a performance share subject to the
requirements of Section 6 and awarded in accordance with the terms of
the Plan.
(p) "Plan" means the Citizens Utilities Company Management Equity
Incentive Plan, as the same may be amended, administered or
interpreted from time to time.
(q) "Restricted Stock" means Stock delivered under the Plan subject to the
requirements of Section 7 and such other terms and restrictions as the
Committee deems appropriate or desirable.
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(r) "SAR" means a stock appreciation right subject to the appropriate
requirements under Section 5 and awarded in accordance with the terms
of the Plan.
(s) "Stock" means the Series A or Series B Common Stock of the Company and
any successor Common Stock.
(t) "Total Disability" means the complete and permanent inability of an
Eligible Employee to perform all of his or her duties under the terms
of his or her employment with any Participating Company, as determined
by the Committee upon the basis of such evidence, including
independent medical reports and data, as the Company deems appropriate
or necessary.
SECTION 3. Shares Subject to the Plan
(a) The maximum number of shares of Stock which may be issued pursuant to
Awards under the Plan at any time is 5% of the issued and outstanding
shares of Stock as determined at that time; provided that no more than
2.2 million shares of Stock may be issued pursuant to incentive stock
options under the Plan. In the event that the number of shares of
Stock subject to Awards or issued at any one time is in excess of the
above-stated 5% limit, the number need not be reduced if such excess
has resulted solely from a reduction in the amount of issued and
outstanding shares of Stock subsequent to the time that such awards
were granted or such shares were issued. Such shares shall be made
available either from authorized or unissued shares, shares held by
the Company in its treasury or reacquired shares. The term "issued"
shall include all deliveries to an Eligible Employee of shares of
Stock pursuant to Awards under the Plan. The Committee may, in its
discretion, decide to award other shares issued by the Company that
are convertible into Stock or make such shares subject to purchase by
an Option, in which event the maximum number of shares of Stock into
which such shares may be converted shall be used in applying the
aggregate share limit under this Section 3 and all provisions of the
Plan relating to Stock shall apply with full force and effect with
respect to such convertible shares.
(b) If, for any reason, any shares of Stock awarded or subject to purchase
or issuance under the Plan are not delivered or are reacquired by the
Company for reasons including, but not limited to, a forfeiture of
Restricted Stock or Deferred Stock or termination, expiration or a
cancellation of an Option, SAR or a Performance Share, such shares of
Stock shall be deemed not to have been issued pursuant to Awards under
the Plan.
(c) Shares of Stock received by the Company in connection with the
exercise of Options by delivery of shares or in connection with the
payment of withholding taxes shall reduce the number of shares deemed
to have been issued pursuant to Awards under the Plan for the purpose
of the 5% limit, but not for the purpose of the 2.2 million share
limit, both discussed in Section 3(a) hereof.
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SECTION 4. Grant of Awards and Award Agreements
(a) Subject to the provisions of the Plan, the Committee shall (i)
determine and designate from time to time those Eligible Employees or
groups of Eligible Employees to whom Awards are to be granted; (ii)
grant Awards to Eligible Employee; (iii) determine the form or forms
of Award to be granted to any Eligible Employee; (iv) determine the
amount or number of shares of Stock, including Restricted Stock or
Deferred Stock if the Committee-so determines, subject to each Award;
(v) determine the terms and conditions (which need not be identical)
of each Award; (vi) establish and modify performance objectives; (vii)
determine whether and to what extent Eligible Employees shall be
allowed or required to defer receipt of any Awards or other amounts
payable under the Plan to the occurrence of a specified date or event;
(viii) determine the price at which shares of Stock may be offered
under each Award which price may, except in the case of Options, be
zero; (ix) interpret, construe and administer the Plan and any related
award agreement and define the terms employed therein; and (xi) make
all of the determinations necessary or advisable with respect to the
Plan or any Award granted thereunder.
(b) Each Award granted under the Plan shall be evidenced by a written
Award Agreement, in a form approved by the Committee. Such agreement
shall be subject to and incorporate the express terms and conditions,
if any, required under the Plan or as required by the: Committee for
the form of Award granted and such other terms and conditions as the
Committee may specify.
(c) The Committee may modify or amend any Awards (by cancellation and
regrant or substitution of Awards or otherwise and with terms and
conditions more or less favorable to Eligible Employees) or waive any
restrictions or, conditions applicable to any Awards or the exercise
or realization thereof (except that the Committee may not undertake
any such modifications, amendments or waivers if the effect thereof,
taken as a whole, adversely and materially affects the rights of any
recipient of previously granted Awards without his or her consent,
unless such modification, amendment or waiver is necessary or
desirable for the continued validity of the Plan or its compliance
with Rule 16b-3 or any successor rule under the Securities Exchange
Act of 1934 or any other rule or regulation.
(d) The Committee may permit the voluntary surrender of all or a portion
of any Award granted under the Plan to be conditioned upon the
granting of a new Award or may require such voluntary surrender as a
condition to a grant of a new Award. Any such new Award shall be
subject to such terms and conditions as are specified by the Committee
at the time the new Award is granted, determined in accordance with
the provisions of the Plan without regard to the terms of the
surrendered Award.
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SECTION 5. Stock Options and Stock Appreciation Rights
(a) With respect to the Options and SARs, the Committee shall (i)
authorize the granting of incentive stock options, nonqualified stock
options, SARs or a combination of incentive stock options,
nonqualified stock options and SARS; (ii) determine the number of
shares of Stock subject to each Option or the number of shares of
Stock that shall be used to determine the value of a SAR; (iii)
determine whether such Stock shall be Restricted Stock or, with
respect to nonqualified stock options, Deferred Stock; (iv) determine
the time or times when and the manner in which each Option shall be
exercisable and the duration of the exercise period; and (v) determine
whether or not all or part of each Option may be canceled by the
exercise of a SAR; provided, however, that the aggregate Fair Market
Value (determined as of the date of Option is granted) of the Stock
(disregarding any restrictions in the case of Restricted Stock) for
which incentive stock options granted to any Eligible Employee under
this Plan may first become exercisable in any calendar year shall not
exceed $100,000. Notwithstanding the foregoing, to the extent that
incentive stock options granted to an Eligible Employee under this
Plan for any reason exceed such limit on exercisability, the options
shall be treated as nonqualified stock options as provided under
Section 422(d) of the Code, but shall in all other respects remain
outstanding and exercisable in accordance with their terms.
(b) The exercise period for a nonqualified stock option or SAR shall be
ten years from the date of grant or such shorter period as may be
specified by the Committee at the time of grant. The exercise period
for an incentive stock option and any related SAR, including any
extension which the Committee may from time to time decide to grant,
shall not exceed ten years from the date of grant; provided, however,
that, in the case of an incentive stock option granted to an Eligible
Employee who, at the time of grant, owns stock possessing more than 10
percent of the total combined voting power of all classes of stock of
the Company (a "Ten Percent Stockholder"), such period, including
extensions, shall not exceed five years from the date of grant.
(c) The Option or SAR price per share shall be determined by the Committee
at the time any Option is granted and shall be not less than the Fair
Market Value, or, in the case of an incentive stock option granted to
a Ten Percent Stockholder and any related tandem SARS, 110 percent of
the Fair Market Value, disregarding any restrictions in the case of
Restricted Stock or Deferred Stock, on the date the Option is granted,
as determined by the Committee; provided, however, that such price
shall be at least equal to the par value of one share of Stock.
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(d) No part of any Option or SAR may be exercised until (i) the Eligible
Employee who has been granted the Award shall have remained in the
employ of a Participating Company for such period, if any, after the
date on which the Option or SAR is granted, and (ii) achievement of
such performance or other criteria, if any, by the Eligible Employee,
as the Committee may specify, and the Committee may further require
that an Option or SAR become exercisable in installments; provided,
however, the period during which a SAR or related Option is
exercisable shall commence no earlier than six months following the
date the Option or SAR is granted.
(e) Except as otherwise provided in the Plan, the purchase price of the
shares as to which an Option shall be exercised shall be paid to the
Company at the time of exercise either in cash or in such other
consideration as the Committee deems appropriate, including, Stock, or
with respect to nonqualified options, Restricted Stock or Deferred
Stock, already owned by the optionee (subject to any minimum holding
period specified by the Committee), having a total Fair Market Value,
as determined by the Committee, equal to the purchase price, or a
combination of cash and such other consideration having a total Fair
Market Value, as so determined, equal to the purchase price; provided,
however, that if payment of the exercise price is made in whole or in
part in the form of Restricted Stock or Deferred Stock, the Stock
received upon the exercise of the Option shall be Restricted Stock or
Deferred Stock, as the case may be, at least with respect to the same
number of shares and subject to the same restrictions or other
limitations as the Restricted Stock or Deferred Stock paid on the
exercise of the Option. The Committee may provide that an Eligible
Employee who pays the exercise price of an Option, or the withholding
taxes related to an Option Exercise, with shares of Stock, shall
receive a replacement Option to purchase a number of shares of Stock
equal to the number of shares so paid to the Company. The replacement
Option shall have an exercise price equal to the Fair Market Value on
the date of such payment and shall include such other terms and
conditions as the Committee may specify.
(f) (i) If an Eligible Employee who has been granted an Option or SAR dies
(A) while an employee of any Participating Company or (B) within three
months after termination of his or her employment with all
Participating Companies because of his or her Total Disability, his or
her Options or SARs may be exercised, to the extent that the Eligible
Employee shall have been entitled to do so on the date of his or her
death or such termination of employment, by the person or persons to
whom the Eligible Employee's rights under the Option or SAR pass by
will, or if no such person has such right, by his or her executors or
administrators, at any time, or from time to time, within twelve
months after the date of the Eligible Employee's death or within such
other period, and subject to such terms and conditions as the
Committee may specify, but not later than the expiration date
specified in Section 5(b) above.
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(ii) If the Eligible Employee's employment by any Participating
Company terminates because of his or her Total Disability and such
Eligible Employee has not died within the following three months, he
or she may exercise his or her Options and SARs, to the extent that he
or she shall have been entitled to do so at the date of the
termination or his or her employment, at any time, or from time to
time, within twelve months after the date of the termination of his or
her employment or within such other period, and subject to such terms
and ocnditions as the Committee may specify, but not later than the
expiration date specified in Section 5 (b) above.
(iii) If the Eligible Employee's employment terminates for any other
reason, he or she may exercise his or her Options or SARs to the
extent that eh or she shall have been entitled to do so at the date of
the termination of his or her employment or within such other period,
and subject to such terms and conditions as the Committee may specify,
but not later than the expiration date specified in Section 5(b)
above.
(g) No Option or SAR granted under the Plan shall be transferable other
than by will or by the laws of descent and distribution. During the
lifetime of the optionee, an Option shall be exercisable only by him
or her by his or her guardian or legal representative.
(h) With respect to an incentive stock option, the Committee shall specify
such terms and provisions as the Committee may determine to be
necessary or desirable in order to qualify such Option as an incentive
stock option within the meaning of Section 422 of the Code.
(i) Upon exercise of a SAR, the Participant shall be entitled, subject to
such terms and conditions as the Committee may specify at any time, to
receive upon exercise thereof all or a portion of the excess of (i)
the Fair Market Value of a specified number of shares of Stock at the
time of exercise, as determined by the Committee, over (ii) a
specified amount which shall not, subject to Section 5(j), be less
than the Fair Market Value of such specified number of shares of Stock
at the time the SAR is granted. Upon exercise of a SAR, payment of
such excess shall be made as the Committee shall specify (A) in cash,
(B) through the issuance or transfer to the Eligible Employee of whole
shares of Stock, including Restricted Stock or Deferred Stock, with a
Fair Market Value, disregarding any restrictions in the case of
Restricted Stock or Deferred Stock, at such time equal to any such
excess, or (C) a combination of cash and shares of Stock with a
combined fair market value at such time equal to such excess, all as
determined by the Committee; provided, however, a fractional share of
Stock shall be paid in cash equal to the Fair Market Value of the
fractional share of Stock, disregarding any restrictions in the case
of Restricted Stock or Deferred Stock, at such time.
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(j) If the Award granted to an Eligible Employee allows the Eligible
Employee to elect to cancel all or any portion of an unexercised
Option by exercising a related SAR, then the Option price per share of
Stock shall be used as the specified price in Section 5(i), to
determine the value of the SAR upon such exercise; and, in the event
of the exercise of such SAR, the Company's obligation in respect of
such Option or such portion thereof will be discharged by payment of
the SAR so exercised.
If authorized by the Committee in its sole discretion, the Company may
accept the surrender of the right to exercise any Option granted under the Plan
(whether or not granted with a related SAR) as to all or any of the shares of
Stock as to which the Option is then exercisable, in exchange for payment to the
optionee (in cash or shares of Stock valued at the then Fair Market Value) of an
amount not to exceed the difference between the option price and the then Fair
Market Value of the shares as to which such right to exercise is surrendered.
SECTION 6. Performance Shares
(a) The Committee shall determine a performance period (the "Performance
Period") of one ore more years and shall determine the performance
objectives for grants of Performance Shares. Performance objectives
may vary from Eligible Employee to Eligible Employee and between
groups of Eligible Employees, and shall be based upon such performance
criteria or combination of factors as the Committee may deem
appropriate: Performance objectives may be in respect to the
performance of the Company and its subsidiaries or a particular
subsidiary or division and may be expressed in absolute terms or in
relation to another company or companies or a division thereof.
Performance Periods may overlap and Eligible Employees may participate
simultaneously with respect to Performance Shares for which different
Performance Periods are prescribed.
(b) At the beginning of a Performance Period, the Committee shall
determine for each Eligible Employee Participant or group of Eligible
Employees with respect to that Performance Period the range of dollar
values, if any, which may be fixed or may vary in accordance with such
performance or other criteria specified by the Committee, which shall
be paid to an Eligible Employee as an Award if the relevant measure of
Company performance for the Performance Period is met.
(c) If during the course of a Performance Period there shall occur
significant events as determined by the Committee, including, but not
limited to, a reorganization of the Company, which the Committee
expects to have a substantial effect on a performance objective during
such period, the Committee may revise such objective.
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(d) If an Eligible Employee terminates service with all Participating
Companies during a Performance Period because of death, Total
Disability, or a significant event, as determined by the Committee,
that Eligible Employee shall be entitled to payment in settlement of
each Performance Share for which the Performance Period was prescribed
(i) based upon the performance objectives satisfied at the end of such
period and (ii) prorated for the portion of the Performance Period
during which the Eligible Employee was employed by any Participating
Company; provided, however, the Committee may provide for an earlier
payment in settlement of such Performance Share in such amount and
under such terms and conditions as the Committee deems appropriate or
desirable with the consent of the Eligible Employee. If an Eligible
Employee terminates service with all Participating Companies during a
Performance Period for any other reason, then such Eligible Employee
shall not be entitled to any payment with respect to that Performance
Period unless the Committee shall otherwise determine.
(e) Each Performance Share may be paid in whole shares of Stock, including
Restricted Stock or Deferred Stock (together with any cash
representing fractional shares of Stock), or cash, or a combination of
Stock and cash either as a lump sum payment or in annual installments,
all as the Committee shall determine, at the time of grant of the
Performance Share or otherwise, commencing as soon as practicable
after the end of the relevant Performance Period.
SECTION 7. Restricted Stock
(a) Restricted Stock may be received by an Eligible Employee either as an
Award or as the result of an exercise of an Option or SAR or as
payment for a Performance Share. Restricted Stock shall be subject to
a restriction period (after which restrictions shall lapse)which shall
mean a period commencing on the date the Award is granted and ending
on such date or upon the achievement of such performance or other
criteria as the Committee shall determine (the "Restriction Period").
The Committee may provide for the lapse of restrictions in
installments where deemed appropriate.
(b) Except as otherwise provided in this Section 7, no shares of
Restricted Stock received by an Eligible Employee shall be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of
during the Restriction Period; provided, however, the Restriction
Period for any Eligible Employee shall expire and all restrictions on
shares of Restricted Stock shall lapse upon the Eligible Employee's
death, Total Disability or retirement on or after age 65 or an earlier
age with the consent of the Company, or upon some significant event,
as determined by the Committee, including, but not limited to, a
reorganization of the Company.
(c) If an Eligible Employee terminates employment with all Participating
Companies for any reason before the expiration of the Restriction
Period, all shares of Restricted Stock still subject to restriction
shall, unless the Committee otherwise determines, be forfeited by the
Eligible Employee and shall be reacquired by the Company, and, in the
case of Restricted Stock purchased through the exercise of an Option,
the Company shall refund the purchase price paid on the exercise of
the Option.
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(d) The Committee may require under such terms and conditions as it deems
appropriate or desirable that the certificates for Restricted Stock
delivered under the Plan may be held in custody by a bank or other
institution, or that the Company may itself hold such shares in
custody until the Restriction Period expires or until restrictions
thereon otherwise lapse, and may require as a condition of any receipt
of Restricted Stock that the Eligible Employee shall have delivered a
stock power endorsed in blank relating to the Restricted Stock.
(e) Nothing in this Section 7 shall preclude an Eligible Employee from
exchanging any shares of Restricted Stock subject to the restrictions
contained herein for any other shares of Stock that are similarly
restricted.
SECTION 8. Deferred Stock
(a) Deferred Stock may be credited to an Eligible Employee either as an
Award or as the result of an exercise of an Option or SAR or as
payment for a -Performance Share. Deferred Stock shall be subject to a
deferral period which shall mean a period commencing on the date the
Award is granted and ending on such date or upon the achievement of
such performance or criteria as the Committee shall determine (the
"Deferral Period"). The Committee may provide for the expiration of
the Deferral Period in installments where deemed appropriate.
(b) Except as otherwise provided in this Section 8, no Deferred Stock
credited to an Eligible Employee shall be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of during the
Deferral; provided, however, the Deferral Period for any Eligible
Employee shall expire upon the Eligible Employee's death, Total
Disability or retirement on or after age 65 or an earlier age with the
consent of the Company, or upon some significant event, as determined
by the Committee, including, but not limited to, a reorganization of
the Company.
(c) At the expiration of the Deferral Period, the Eligible Employee shall
be entitled to receive a certificate pursuant to Section 10 for the
number of shares of Stock equal to the number of shares of Deferred
Stock credited on his or her behalf. Amounts equal to any dividends
declared during the Deferral Period with respect to the number of
shares of Deferred Stock credited to an Eligible Employee shall be
paid to such Eligible Employee within 30 days after each dividend was
declared unless, at the time of the Award the Committee determined
that such dividends should be reinvested in additional shares of
Deferred Stock, in which case additional shares of Deferred Stock
shall be credited to the Eligible Employee based on the Stock's Fair
Market at the time of each such dividend.
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(d) If an Eligible Employee terminates employment with all Participating
Companies for any reason other before the expiration of the Deferral
Period, all shares of Deferred Stock shall, unless the Committee
otherwise determines, be forfeited by the Eligible Employee, and, in
the case of Deferred Stock purchased through the exercise of an
Option, the Company shall refund the purchase price paid on the
exercise of the Option.
SECTION 9. Other Stock-Based Awards
The Committee may grant other Awards under the Plan which are denominated
in stock units or pursuant to which shares of Stock may be acquired, including
Awards valued using measures other than market value, if deemed by the Committee
in its discretion to be consistent with the purposes of the Plan. Subject to the
terms of the Plan, the Committee shall determine the form of such Awards, the
number of shares of Stock to be granted or covered pursuant to such Awards and
all other terms and conditions of such Awards.
SECTION 10. Certificates for Awards of Stock
(a) Subject to Section 7(d), each Eligible Employee entitled to receive
shares of Stock under the Plan shall be issued a certificate for such
shares. Such certificate shall be registered in the name of the
Eligible Employee, and shall bear an appropriate legend reciting the
terms, conditions and restrictions, if any, applicable to such shares
and shall be subject to appropriate stop-transfer orders.
(b) The Company shall not be required to issue or deliver any shares or
certificates for shares of Stock prior to (i) the listing of such
shares on any stock exchange or quotation system on which the Stock
may then be listed or quoted, and (ii) the completion of any
registration, qualification, approval or authorization of such shares
under any federal or state law, or any ruling or regulation or
approval or authorization of such shares under any governmental body
which the Company shall, in its sole discretion, determine to be
necessary or advisable.
(c) All shares and certificates for shares of Stock delivered under the
Plan shall also be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed and
any applicable federal or state securities laws, and the Committee may
cause a legend or legends to be placed on any such certificates to
make appropriate reference to such restrictions. The foregoing
provisions of this Section 10(c) shall not be effective if and to the
extent that the shares of Stock delivered under the Plan are covered
by an effective and current registration statement under the
Securities Act of 1933, or if and so long as the Committee determines
that application of such provisions is no longer required or
desirable. In making such determination, the Committee may rely upon
an opinion of counsel for the Company.
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(d) Except for the restrictions on Restricted Stock or Deferred Stock
under Sections 7 and 8, each Eligible Employee who receives an award
of Stock shall have all of the rights of a shareholder with respect to
such shares, including the right to vote the shares and receive
dividends and other distributions. No Eligible Employee awarded an
Option, a SAR, or Performance Share or Deferred Stock shall have any
right as a shareholder with respect to any shares subject to such
Award prior to the date of issuance to him or her of certificate or
certificates for such shares.
SECTION 11. Beneficiary
(a) Each Eligible Employee shall file with the Committee a written
designation of one or more persons as the Beneficiary who shall be
entitled to receive the Award, if any, payable under the Plan upon his
or her death. An Eligible Employee may from time to time revoke or
change his or her Beneficiary designation without the consent of any
prior Beneficiary by filing a new designation with the Committee. The
last such designation received by the Committee shall be controlling;
provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to
the Eligible Employee's death, and in no event shall it be effective
as of a date prior to such receipt.
(b) If no such Beneficiary designation is in effect at the time of an
Employee's death, or if no designated Beneficiary survives the
Eligible Employee or if such designation conflicts with law, the
Eligible Employee's estate shall be entitled to receive the Award, if
any, payable under the Plan upon his or her death. If the Committee is
in doubt as to the right of any person to receive such Award, the
Company may retain such Award, without liability for any interest
thereon, until the Committee determines the right thereto, or the
Company may pay such Award into any court of appropriate jurisdiction
and such payment shall be a complete discharge of the liability of the
Company therefor.
SECTION 12. Administration of the Plan
(a) The Plan shall be administered by the Committee, as appointed by the
Board and serving at the Board's pleasure. Each member of the
Committee shall be both a, member of the Board and a "disinterested
person" within the meaning of Rule 16b-3 under the Securities Exchange
Act of 1934 or any successor rule or regulation.
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(b) All decisions, determinations or actions of the Committee made or
taken pursuant to grants of authority under the Plan shall be made or
taken in the sole discretion of the Committee and shall be final,
conclusive and binding on all persons for all purposes.
(c) The Committee shall have full power, discretion and authority to
interpret, construe and administer the Plan and any part thereof and
any related Award agreement and define the terms employed in the Plan
or any agreement, and its interpretations and constructions thereof
and actions taken thereunder shall be, except as otherwise determined
by the Board, final, conclusive and binding on all persons for all
purposes.
(d) The Committee shall have full power, discretion and authority to
prescribe and rescind rules, regulations and policies for the
administration of the Plan.
(e) The Committee's decisions and determinations under the Plan and with
respect to any Award granted thereunder need not be uniform and may be
made selectively among Eligible Employees, whether or not such
Eligible Employees are similarly situated.
(f) The Committee shall keep minutes of its actions under the Plan. The
act of a majority of the members present at a meeting duly called and
held shall be the act of the Committee. Any decision or determination
reduced to writing and signed by all members of the Committee shall be
fully as effective as if made by unanimous vote at a meeting duly
called and held.
(g) The Committee may employ such legal counsel, including without
limitation independent legal counsel and counsel regularly employed by
the Company, consultants and agents as the Committee may deem
appropriate for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any
computations received from any such consultant or agent. All expenses
incurred by the Committee in interpreting and administering the Plan,
including without limitation, meeting fees and expenses and
professional fees, shall be paid by the Company.
(h) No member or former member of the Committee or the Board shall be
liable for any action or determination made in good faith with respect
to the Plan or any Award granted under it. Each member or former
member of the Committee or the Board shall be indemnified and held
harmless by the Company against all cost or expense (including counsel
fees and expenses) or liability (including any sum paid in settlement
of a claim with the approval of the Board) arising out of any act or
omission to act in connection with the Plan unless arising out of such
member's or former member's own fraud or bad faith. Such
indemnification shall be in addition to any rights to indemnification
or insurance the members or former member may have as directors or
under the by-laws of the Company or otherwise.
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SECTION 13. Amendment or Discontinuance
The Board may, at any time, amend or terminate the Plan. The Plan may also
be amended by the Committee, provided that all such amendments shall be reported
to the Board. No amendments shall become effective unless approved by
affirmative vote of the Company's stockholders if such approval is necessary or
desirable for the continued validity of the Plan or if the failure to obtain
such approval would adversely affect the compliance of the Plan with Rule 16b-3
or any successor rule under the Securities Exchange Act of 1934 or any other
rule or regulation. No amendment or termination shall, when taken as a whole,
adversely and materially affect the rights of any recipient of a previously
granted award without his or her consent unless the amendment or termination is
necessary or desirable for the continued validity of the Plan or its compliance
with Rule 16b-3 or any successor rule under the Securities Exchange Act of 1934
or any other rule or regulation.
SECTION 14. Adjustments in Event of Change in Common Stock
In the event of any recapitalization, reclassification, split-up or
consolidation of shares of Stock, merger or consolidation of the Company or sale
by the Company of all or a portion of its assets, or other event which could
distort the implementation of the Plan or the realization of its objectives, the
Committee may make such appropriate adjustments in the number and kind of
securities which may be issued pursuant to Awards under the Plan, including
Awards then outstanding, or the terms, conditions ore restrictions on securities
or Awards as the Committee deems equitable.
SECTION 15. Miscellaneous
(a) Nothing in this Plan or any Award granted hereunder shall confer upon
any employee any right to continue in the employ of any Participating
Company or interfere in any way with the right of any Participating
Company to terminate his or her employment at any time.
(b) No Award payable under the Plan shall be deemed salary or compensation
for the purpose of computing benefits under any employee benefit plan
or other arrangement of any Participating Company for the benefit of
its employees unless the Company shall determine otherwise.
(c) No Eligible Employee shall have any claim to an Award until it is
actually granted under the Plan. To the extent that any person
acquires a right to receive payments from the Company under this Plan,
such right shall be no greater than the right of an unsecured general
creditor of the Company. All payments of Awards provided for under the
Plan shall be paid by the Company either by issuing shares of Stock or
by delivering cash from the general funds of the Company or other
property of the Company; provided, however, that such payments shall
be reduced by the amount of any payments made to the participant or
his or her dependents, beneficiaries or estate from any trust or
special or separate fund established in connection with this Plan. The
Company shall not be required to establish a special or separate fund
or other segregation of assets to assure such payments, and, if the
Company shall make any investments to aid it in meeting its
obligations hereunder, the participant shall have no right, title, or
interest whatever in or to any such investments except as may
otherwise be expressly provided in a separate written instrument
relating to such investments.
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(d) Absence on leave approved by a duly constituted officer of the Company
shall not be considered interruption or termination of employment for
any purposes of the Plan; provided, however, that no Award may be
granted to an employee while he or she is absent on leave.
(e) If the Committee shall find that any person to whom any Award, or
portion thereof, is payable under the Plan is unable to care for his
or her affairs because of illness or accident, or is a minor, then any
payment due him or her (unless a prior claim therefor has been made by
a duly appointed legal representative) may, if the Committee so
directs the Company, be paid to his or her spouse, a child, a
relative, an institution maintaining or having custody of such person,
or any other person deemed by the Committee to be a proper recipient
on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Company
therefor.
(f) The right of any Eligible Employee or other person to any Award
payable under the Plan may not be assigned, transferred, pledged or
encumbered, either voluntarily or by operation of law, except as
provided in Section 11 with respect to the designation of a
Beneficiary or as may otherwise be required by law. If, by reason of
any attempted assignment, transfer, pledge, or encumbrance or any
bankruptcy or other event happening at any time, any amount payable
under the Plan would be made subject to the debts or liabilities of
the Eligible Employee or his or her Beneficiary or would otherwise
devolve upon anyone else and not be enjoyed by the Eligible Employee
or his or her Beneficiary, then the Committee may terminate such
person's interest in any such payment and direct that the same be held
and applied to or for the benefit of the Eligible Employee, his or her
Beneficiary or any other persons deemed to be the natural objects of
his or her bounty, taking into account the expressed wishes of the
Eligible Employee (or, in the event of his or her death, those of his
or her Beneficiary) in such manner as the Committee may deem proper.
(g) Copies of the Plan and all amendments, administrative rules and
procedures and interpretations shall be made available for review to
all Eligible Employees at all reasonable times at the Company's
administrative offices.
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(h) The Committee may cause to be made, as a condition precedent to the
payment of any Award, or otherwise, appropriate arrangements with the
Eligible Employee or his or her Beneficiary, for the withholding of
any federal, state, local or foreign taxes. The Committee may in its
discretion permit the payment of such withholding taxes by authorizing
the Company to withhold shares of Stock to be issued, or by delivering
to the Company shares of Stock owned by the Eligible Employee or
Beneficiary, in either case having a Fair Market Value equal to the
amount of such taxes.
(i) The Plan and the grant of Awards shall be subject to all applicable
federal and state laws, rules, and regulations and to such approvals
by any governmental or regulatory agency as may be required.
(j) All elections, designations, requests, notices, instructions and other
communications from an Eligible Employee, Participant, Beneficiary or
other person to the Committee, required or permitted under the Plan,
shall be in such form as is prescribed from time to time by the
Committee and shall be mailed by first class mail or delivered to such
location as shall be specified by the Committee.
(k) The terms of the Plan shall be binding upon the Company and its
successors and assigns.
(l) Captions preceding the sections hereof are inserted solely as a matter
of convenience and in no way define or limit the scope or intent of
any provision hereof.
SECTION 17. Effective Date and Stockholder Approval
The Effective Date of the Plan shall be June 22, 1990, subject to approval
by the holders of a majority of the Company's common stock at the 1990 Annual
Meeting. No Awards will be granted under the Plan after the expiration of ten
years from the Effective Date.
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