THE LONG TERM INCENTIVE PLAN
OF
THE CONTINENTAL CORPORATI0N
Amended and Restated as of December 1, 1993
Table of Contents
Page
ARTICLE I Purpose.................................... 1
ARTICLE II Definitions................................ 1
ARTICLE III Eligibility................................ 5
ARTICLE IV Administration.............................. 5
4.1. Authority.............................. 5
4.2. Award Approval......................... 6
4.3. Records and Reports.................... 6
ARTICLE V Scope and Duration.......................... 6
ARTICLE VI Terms and Conditions of Options............. 7
6.1. Purchase Price......................... 7
6.2. Term of Options........................ 7
6.3. Exercisability......................... 7
6.4. Acceleration of Exercisability......... 7
6.5. Payment................................ 8
6.6. Termination of Employment.............. 8
6.7. Death.................................. 8
6.8. Special Stock Appreciation Right....... 8
ARTICLE VII Terms and Conditions of Performance Shares
and Performance Units...................... 9
7.1. Performance Goals...................... 9
7.2. Determination of Participants,
Target Awards and Incentive Awards... 9
7.3. Vesting of Awards...................... 10
7.4. Special Vesting........................ 10
7.5. Termination of Employment.............. 11
7.6. Payment Date........................... 11
7.7. Method of Payment...................... 12
7.8. Deferral of Payment.................... 13
ARTICLE VIII Capital Adjustments......................... 13
Page
ARTICLE IX Miscellaneous............................... 13
9.1. Effective Date......................... 13
9.2. Amendment or Termination............... 13
9.3. Inalienability of Interests............ 14
9.4. Facility of Payments................... 14
9.5. Excess Parachute Payments.............. 14
9.6. Written Agreements..................... 15
9.7. Withholding............................ 15
9.8. Limited Effect......................... 15
9.9. Number and Gender...................... 15
9.10.Captions............................... 15
9.11.Applicable Law......................... 15
THE LONG TERM INCENTIVE PLAN OF
THE CONTINENTAL CORPORATION
(Amended and Restated as of December 1, 1993)
ARTICLE I
Purpose
The Long Term Incentive Plan of The Continental Corporation (the
"Plan") is intended to foster a closer identity between the
interests of key employees of The Continental Corporation (the
"Corporation") and its subsidiaries and the interests of the
Corporation's shareholders by encouraging and facilitating
acquisition of common stock of the Corporation by key employees, to
enhance the Corporation's ability to attract and retain highly
competent employees essential to its future growth and success, and
to provide incentives to key employees to achieve superior
financial performance over the long term. In furtherance of these
goals, the Compensation Committee of the Board of Directors of the
Corporation (the "Committee") recommended, and the Board voted, on
February 18, 1993, to amend and restate the Plan, subject to
shareholder approval, in order to extend the date for making grants
thereunder, to increase the maximum number of shares of common
stock as to which performance shares and stock options may be
granted and which may be issued in payment of performance units, to
Participants (as defined below) and to make certain other changes.
ARTICLE II
Definitions
2.1. "Act" means the Securities Exchange Act of 1934, as amended.
2.2. "Award" means an award of Performance Units or Performance
Shares.
2.3. "Board" means the Board of Directors of The Continental
Corporation.
2.4. "Change of Control" means the occurrence of any of the
following events:
(i) any "person" or "group" of persons (as such terms are
used in sections 13 and 14 of the Act), other than any
employee benefit plan sponsored by the Corporation,
becomes the "beneficial owner" (as such term is used in
section 13 of the Act) of 30% or more of the
outstanding shares of the Corporation's capital stock
entitled to vote for the election of directors; or
(ii) any shares of any class of the Corporation's capital
stock are purchased pursuant to a tender or exchange
offer (other than an offer by the Corporation or a
Subsidiary); or
(iii) the approval by the requisite vote of the Corporation's
shareholders of any merger, consolidation, sale of
assets, liquidation or reorganization as a result of
which the Corporation will not survive as a publicly-
owned corporation; or
(iv) a change in the composition of the Board during any
period of two consecutive years such that individuals
who at the beginning of such period were members of the
Board cease for any reason to constitute at least a
majority thereof, unless the election, or the
nomination for election by the Corporation's
shareholders, of each new director was approved by a
vote of at least two-thirds of the directors then still
in office who were directors at the beginning of the
period.
2.5. "Code" means the Internal Revenue Code of 1986, as amended.
2.6. "Committee" means the Compensation Committee of the Board.
The Committee shall be comprised of at least three directors
all of whom shall be disinterested within the meaning of
Rule l6b-3 of the Securities and Exchange Commission.
2.7. "Common Stock" means common stock of the Corporation, par
value $1.00 per share.
2.8. "Corporation" means The Continental Corporation and its
successors and assigns and any corporation which shall
acquire substantially all of its assets.
2.9. "Completion of the Audit" means, with respect to any year,
the date of the report of the Corporation's independent
public accountants on the consolidated financial statements
of the Corporation and its Subsidiaries for such year.
2.10. "Disability" means a condition qualifying the Participant
for benefits under the Long-Term Disability Plan of The
Continental Corporation, whether or not such Participant
participates therein.
2.11. "Fair Market Value" of Common Stock on any date means the
average of the highest and lowest sales prices of the Common
Stock as reported on the New York Stock Exchange Composite
Tape for such date, or if there were no sales on such date,
on the next preceding date on which there were sales.
2.12. "Incentive Award" means, with respect to any Participant,
such Participant's Target Award for a Performance Cycle as
increased or decreased in accordance with section 7.2.
2.13. "Incentive Stock Option" means a stock option that is
intended to be an incentive stock option under section 422A
of the Code.
2.14. "Nonqualified Option" means a stock option that is not
intended to be an Incentive Stock Option.
2.15. "Option" means an Incentive Stock Option or a Nonqua1ified
Option.
2.16. "Participant" means any full-time or regular part-time key
employee (as determined from time to time by the Committee)
of the Corporation or its Subsidiaries.
2.17. "Performance Cycle" means a period of four consecutive
years, or such other number of years as the Committee or the
Board may determine.
2.18. "Performance Share" means a unit awarded under the
provisions of Article VII and the value of which is measured
by the Fair Market Value of a share of Common Stock.
2.19. "Performance Unit" means a unit awarded under the provisions
of Article VII and the value of which is fixed by the
Committee or the Board.
2.20. "Plan" means The Long Term Incentive Plan of The Continental
Corporation.
2.21. "Qualifying Termination" means a termination of a
Participant's employment with the Corporation or any
Subsidiary (under circumstances where such Participant is no
longer employed by the Corporation or any Subsidiary)
following a Change of Control for any reason other than
(i) death,
(ii) Disability,
(iii) willful misconduct in the performance of such
Participant's duties as an employee,
(iv) Retirement, or
(v) a termination by such Participant, other than for
one or more of the following reasons:
(x) the assignment to such Participant of any
duties inconsistent, in a way significantly
adverse to such Participant, with such
Participant's positions, duties,
responsibilities and status with the
Corporation and its Subsidiaries immediately
prior to such Change of Control, or a
significant reduction in the duties and
responsibilities held by such Participant
immediately prior to such Change of Control; a
change in such Participant's reporting
responsibilities, titles or offices as in
effect immediately prior to such Change of
Control; or any removal of such Participant
from or any failure to re-elect such
Participant to any position with the
Corporation or any Subsidiary that such
Participant held immediately prior to such
Change of Control except in connection with
such Participant's promotion or termination of
employment for any of the reasons specified in
paragraphs (i) through (iv) above; or
(y) a reduction by the Corporation in such
Participant's base salary as in effect
immediately prior to such Change of Control;
the failure by the Corporation to continue in
effect any employee benefit plan or
compensation plan in which such Participant was
participating immediately prior to such Change
of Control unless such Participant is permitted
to participate in other plans providing
substantially comparable benefits to such
Participant; or the taking of any action by the
Corporation that would adversely affect such
Participant's participation in or materially
reduce such Participant's benefits under any
such plan; or
(z) the Corporation's requiring such Participant to
be based anywhere other than such Participant's
present location; or the Corporation's
requiring such Participant to travel on the
Corporation's business to an extent
substantially more burdensome than such
Participant's travel obligations immediately
prior to such Change of Control.
2.22. "Retirement" means any retirement under the terms of The
Retirement Plan of The Continental Corporation other than a
retirement entitling the Participant to a Vested Retirement
Allowance as defined in such Plan.
2.23. "Stock Appreciation Right" means a right granted under
section 6.8.
2.24. "Subsidiary" means any corporation in which the Corporation
owns, directly or indirectly, stock possessing 50% or more
of the total combined voting power.
2.25. "Target Award" means, with respect to any Participant, the
amount to which such Participant will be entitled in respect
of an Award of Performance Units or Performance Shares if
the Committee determines that the Corporation has met the
performance goals established for a Performance Cycle.
ARTICLE III
Eligibility
Participation in the Plan is limited to Participants. The granting
of an Option or an Award to any person under the Plan shall neither
entitle such person to, nor disqualify such person from,
participation in any other incentive plan of the Corporation or any
Subsidiary. No director of the Corporation shall be eligible for
an Option or an Award unless such director is an employee of the
Corporation or any Subsidiary.
ARTICLE IV
Administration
4.1. Authority. The Committee shall have the authority, subject
to the terms of the Plan:
(i) to determine the purchase price per share of Common
Stock covered by each Option, the time or times at
which Options may be granted and exercised, and the
terms and provisions of stock option agreements; to
designate Options as Incentive Stock Options or
Nonqualified Options; with the consent of employees
to whom Options have been granted, to grant in
substitution for outstanding Options replacement
Options, which may be at a lower purchase price
(but, in the case of Incentive Stock Options, at a
purchase price not less than the Fair Market Value
of the Common Stock subject to the replacement
Option at the time of substitution and, in the case
of Nonqualified Options, not less than 75% of the
Fair Market Value of the Common Stock subject to the
replacement Option at the time of substitution), and
to cancel replaced Options;
(ii) to determine the time or times at which Awards shall
be made, the number of shares or units to be covered
by each Award, the Target Awards and Incentive
Awards of each Participant, the length of the
Performance Cycle and other conditions applicable to
Awards, and the terms and provisions of the
agreements by which Awards shall be evidenced;
(iii) to recommend to the Board the Award or Grant of the
Chief Executive Officer and to approve individual
Awards or Grants for all other Participants;
(iv) to interpret the Plan; to establish, amend and
rescind rules and guidelines for administering the
Plan; to determine the effect of all matters and
questions relating to termination of employment; and
to make all other determinations necessary or
advisable, in its sole discretion, for the
administration of the Plan.
The Plan shall be administered by the Committee, provided
that certain ministerial powers and functions of the
Committee under the Plan, except the authority to grant
Options or Awards, may be delegated to the Office of the
Chairman or the senior Human Resources officer as the
Committee considers appropriate, subject to the terms of the
Plan.
4.2. Award Approval. The Office of the Chairman may recommend
for approval by the Committee the grant of Options or Awards
to Participants based on guidelines and procedures approved
by the Board or Committee.
4.3. Records and Reports. The Committee or the Office of the
Chairman shall arrange for the maintenance of records
showing Options and Awards under the Plan and shall arrange
to keep in convenient form such data as may be necessary for
the effective operation of the Plan.
ARTICLE V
Scope and Duration
Subject to adjustment as provided in Article VIII, the maximum
aggregate number of shares of Common Stock (a) as to which Options
and Performance Shares may be granted under the Plan and (b) which
may be issued in payment of Performance Units granted under the
Plan is 9,000,000 shares, which shares in whole or in part, as the
Board shall from time to time determine, may be authorized but
unissued shares of Common Stock or shares of Common Stock held in
the treasury of the Corporation. If for any reason (other than by
reason of the exercise of Stock Appreciation Rights) any shares of
Common Stock as to which an Option has been granted cease to be
subject to purchase under such Option or any Performance Shares are
forfeited to the Corporation, then (unless the Plan shall have been
terminated) such shares shall become available for future grants
under the Plan to the same employee who received the original grant
or to a different employee or employees. No grants of Options or
Awards shall be made hereunder after December 31, 1998.
ARTICLE VI
Terms and Conditions of Options
6.1. Purchase Price. The purchase price of the Common Stock
covered by each Option shall be determined by the Board or
the Committee, provided that such purchase price shall be
not less than the Fair Market Value of a share of Common
Stock on the date of grant thereof. The date of grant of an
Option under the Plan will be the date on which the Board,
Committee or the Office of the Chairman acts to grant such
Option, unless a later date (consistent with the Code and
any rules or regulations thereunder) is specified by the
Board, Committee or the Office of the Chairman.
6.2. Term of Options. Each Option shall expire on the tenth
anniversary of the date of its grant, or on such earlier
date as may be specified in the stock option agreement.
6.3. Exercisability. Subject to section 6.4, section 6.6 and
section 6.7, each Option shall become exercisable in one or
more installments on the date or dates (no earlier than six
months after the date of its grant) and upon the
satisfaction of such conditions as may be specified in the
stock option agreement. Once an Option becomes exercisable
with respect to a portion of the shares subject thereto, it
shall remain exercisable with respect thereto until
expiration or termination of such Option. An Option may be
exercised from time to time, in whole or in part, up to the
total number of shares with respect to which it is then
exercisable. The aggregate Fair Market Value (determined at
the date of grant as provided in section 6.1) of the portion
of shares of Common Stock with respect to which any person
may be granted Incentive Stock Options that are first
exercisable in any one calendar year under the Plan (and any
other stock option plan of the Corporation or any Subsidiary
or a parent) shall not exceed $100,000 or such other amount
as may be provided in the Code.
6.4. Acceleration of Exercisability. Except as provided in
section 9.5, notwithstanding anything to the contrary in the
Plan or in the stock option agreement evidencing an Option,
in the event a Change of Control occurs, then each Option
shall become exercisable, to the extent not then
exercisable, during the period beginning on the date of the
occurrence of such Change of Control and ending on the
sixtieth day following such date, for the purchase of the
full number of shares still subject to such Option, provided
that no Option shall become exercisable, as a result of a
Change of Control, prior to the date six months after the
date of its grant. Upon the expiration of such sixty day
period, such Option shall thereafter remain or become
exercisable according to its original terms.
6.5. Payment. Upon exercise, the purchase price shall be paid in
cash or, in the discretion of the Committee, in shares of
Common Stock, or any other property acceptable to the
Committee, or any combination of cash, shares of Common
Stock and such property, in each case having an aggregate
fair market value (as defined in section 2.11 or otherwise
determined by the Committee) on the exercise date equal to
such purchase price.
6.6. Termination of Employment. If the holder of an Option
ceases, other than by reason of death, to be employed by the
Corporation or any Subsidiary, no further installments of
such Option shall become exercisable and such Option shall
terminate on the earlier of (a) such Option's specified
expiration date and (b) the date three months from the date
of termination of such employment or, in the case of
termination of employment by reason of Retirement or
Disability, the first anniversary of termination of
employment (or in either such case such earlier date as may
be specified in the option agreement). Notwithstanding the
foregoing, if an optionee's retirement date is the month
following the sale of the subsidiary for which he or she worked,
outstanding vested options shall remain exercisable at any time
prior to the earlier of such option's specified expiration date
and the first anniversary of such optionee's termination of
employment.
6.7. Death. If the holder of an Option dies, such Option may be
exercised, to the extent of the number of shares of Common
Stock with respect to which the optionee could have
exercised such Option on the date of death, by such
optionee's estate, personal representative or beneficiary
who acquires such Option by will or by the laws of descent
and distribution at any time prior to the earlier of such
Option's specified expiration date and the first anniversary
of such optionee's death. On the earlier of such dates, the
Option shall terminate.
6.8. Special Stock Appreciation Rights. In the event a Change of
Control occurs, then any optionee who is subject to the
provisions of section 16(b) of the Act shall have the right
to elect (subject to any limitations expressly made
applicable to rights under this section 6.8 and contained in
the stock option agreement) by written notice to the
Treasurer of the Corporation, during the period beginning on
the date of the occurrence of such Change of Control and
ending on the sixtieth day following such date, in lieu of
purchasing shares of Common Stock as to which such Option
shall become exercisable as a result of such Change of
Control, to surrender such Option with respect to any or all
of such shares and to receive a payment in cash from the
Corporation in an amount equal to the amount by which (a)
the Fair Market Value of a share of Common Stock on the date
of such election, multiplied by the number of shares of
Common Stock as to which the Optionee shall have made such
election, exceeds (b) the total purchase price for such
number of shares of Common Stock under such Option. Upon
election by the optionee to receive a payment under this
section 6.8, such Option shall thereafter remain
exercisable, according to its terms, only with respect to
the number of shares of Common Stock as to which it would
otherwise be exercisable less the number of shares of Common
Stock as to which such election shall have been made. Any
shares of Common Stock as to which an election pursuant to
this section 6.8 shall have been made shall not be available
for further grants under this Plan.
ARTICLE VII
Terms and Conditions of
Performance Shares and Performance Units
7.1. Performance Goals. The Committee shall prescribe, no later
than six months after the commencement of each Performance
Cycle, one or more financial performance measurement goals
to be attained by the Corporation during such Performance
Cycle. The performance goals may be based on such criteria
as the Committee shall deem appropriate and in the best
interests of the Corporation. The Committee may at any time
adjust the performance goals in order to reflect
significant, unexpected changes in circumstances.
7.2. Determination of Participants, Target Awards and Incentive
Awards. No later than six months after the commencement of
each Performance Cycle, the Committee shall determine those
employees who shall be Participants in such Performance
Cycle and the Target Award for each Participant for such
Performance Cycle. In the case of a Performance Unit award,
the Target Award shall be the product of the number of
Performance Units awarded to such Participant and the dollar
value of a Performance Unit if the performance goals for the
Performance Cycle are met as fixed by the Committee. In the
case of a Performance Share award, the Target Award shall be
the number of Performance Shares to which such Participant
will be entitled if the performance goals for the
Performance Cycle are met. The Committee may also provide
for an Incentive Award, which shall be a Participant's
Target Award for a Performance Cycle increased or decreased
to the extent considered appropriate by the Committee in
order to reflect the relative level of attainment by the
Corporation and the Participant of the performance goals
established for such Performance Cycle. In making any
increase or decrease, the Committee may take into account
the recommendation of the Office of the Chairman and such
other criteria as the Committee may consider pertinent. The
Committee, in its sole discretion, shall determine whether
to pay to Participants who have a vested Incentive Award
consisting of Performance Shares an amount equal to the
aggregate cash dividends which would have been paid on the
number of Performance Shares for which payment is due
(whether in cash or in shares of Common Stock) from the date
of the grant of the Award to the date of payment had such
Performance Shares been issued as shares of Common Stock on
the date of grant of such Award (sometimes referred to as a
"dividend equivalent").
7.3. Vesting of Awards. At the close of business on the last day
of the final year of each Performance Cycle, each
Participant who shall have been continuously employed by the
Corporation or a Subsidiary from the date such Participant's
Target Award for such Performance Cycle was initially
determined until the close of business on such day shall
become irrevocably vested with the right to receive such
Participant's Incentive Award for such Performance Cycle.
7.4. Special Vesting. If a Participant's employment is
terminated by reason of Retirement, Disability or death, or
if a Change of Control occurs, vesting will be as follows:
(i) Retirement or Disability. If a Participant's
employment is terminated by reason of Retirement or
disability after 25% of a Performance Cycle has
elapsed but before completion of that Performance
Cycle, such Participant on the date of such
termination of employment shall become irrevocably
vested with the right to receive an amount equal to
the product of (a) the Incentive Award of such
Participant for each Performance Cycle that was not
completed prior to termination of employment and (b)
a fraction, the numerator of which is the number of
full months of employment completed by such
Participant during such Performance Cycle to the
date of such termination and the denominator of
which is the total number of months in such
Performance Cycle.
(ii) Death. If a Participant's employment is terminated
by reason of his death after 25% of a Performance
Cycle has elapsed but before completion of that
Performance Cycle, such Participant's estate on the
date of such termination of employment shall become
irrevocably vested with the right to receive an
amount equal to the product of (a) the Target Award
of such Participant for each Performance Cycle that
was not completed prior to his death and (b) a
fraction, the numerator of which is the number of
full months of employment completed by such
Participant during such Performance Cycle to the
date of such termination and the denominator of
which is the total number of months in such
Performance Cycle.
(iii) Change of Control. In the event that any
Participant's employment with the Corporation or any
Subsidiary terminates by reason of a Qualifying
Termination within two years after a Change of
Control, such Participant shall become irrevocably
vested with the right to receive an amount equal to
the product of (a) the Target Award of such
Participant for each Performance Cycle that was not
completed prior to such Qualifying Termination and
(b) a fraction, the numerator of which is the number
of full months of employment completed by such
Participant during such Performance Cycle to the
date of such Qualifying Termination and the
denominator of which is the total number of months
in such Performance Cycle. In the event that a
Change of Control takes place and a Participant's
employment has not terminated as a result of a
Qualifying Termination within two years of such
Change of Control, the foregoing provision shall not
apply to such Participant's Awards and the rights of
such Participant in respect of such Awards shall be
determined in accordance with the other provisions
of the Plan.
7.5. Termination of Employment. Except as provided in section
7.4 or as may otherwise be determined by the Committee if a
Participant's employment terminates before the close of
business on the last day of the final year of a Performance
Cycle, he shall forfeit his Incentive Award for such cycle.
7.6. Payment Date.
(i) Normal Vesting, Retirement or Disability. Within
forty-five days after Completion of the Audit for
the final year of each Performance Cycle the
Corporation shall on the date selected by the
Committee pay to each Participant in such
Performance Cycle any amount not yet paid that has
theretofore vested in such Participant pursuant to
section 7.3 or clause (i) of section 7.4.
(ii) Change of Control. Within thirty days after a
Change of Control the Corporation shall pay to each
Participant the amount of such Participant's
Incentive Award not yet paid for any Performance
Cycle that was completed prior to the date of such
Change of Control, which amount may be reasonably
estimated by the Committee in the event payment is
due hereunder prior to Completion of the Audit for
the final year of such Performance Cycle. In the
event that a Participant receives a payment of an
estimated Incentive Award after a Change of Control
pursuant to the preceding sentence, within forty-
five days after Completion of the Audit for the
final year of the Performance Cycle with respect to
which such Incentive Award has then vested (x) the
Corporation shall pay to such Participant the
excess, if any, of such Participant's vested
Incentive Award over such estimated Incentive Award
payment or (y) such Participant shall pay to the
Corporation the excess, if any, of such estimated
Incentive Award payment over such Participant's
vested Incentive Award. Within thirty days after a
Qualifying Termination of a Participant's employment
as described in clause (iii) of section 7.4, the
Corporation shall pay to such Participant the amount
that such Participant has a vested right to receive
under such clause.
(iii) Death. Within thirty days after a termination of a
Participant's employment as described in clause (ii)
of section 7.4, the Corporation shall pay to such
Participant's estate in cash the amount that the
estate has a vested right to receive under such
clause.
7.7. Method of Payment. The Committee, in its sole discretion,
may elect to pay vested Incentive Awards in cash, Common
Stock or part in cash and part in Common Stock. If
Performance Units are paid in shares of Common Stock, the
number of such shares shall be equal to (a) the dollar value
of the portion of the Award to be paid in shares divided by
(b) the average Fair Market Value for a period of twenty
trading days ending ten calendar days, or such smaller
number of days selected by the Committee, before the date of
payment. If Performance Shares are paid in cash, the amount
of such cash payment shall be equal to (a) the number of
Performance Shares to be paid in cash multiplied by (b) the
average Fair Market Value for a period of twenty trading
days ending ten calendar days, or such smaller number of
days selected by the Committee, before the date of payment.
Any dividend equivalent amount provided for under section
7.2 shall be paid in cash.
7.8. Deferral of Payment. A Participant may elect to defer all
or any portion of a payment to which the Participant is
entitled pursuant to this Article VII under The Deferred
Compensation Plan of The Continental Corporation.
ARTICLE VIII
Capital Adjustments
Except as otherwise provided in any written agreement evidencing an
Option or Award, in the event of any change in the outstanding
shares of Common Stock by reason of any stock dividend, stock
split, combination or exchange of shares, recapitalization,
reclassification, merger, consolidation, spin-off, reorganization
or other similar transaction, the Board or Committee shall make
appropriate adjustments in the aggregate number and class of shares
that may be delivered under the Plan, the number and purchase price
of shares of Common Stock covered by each Option outstanding on the
date of such transaction (by means of a grant of a substitute
Option or an additional Option or otherwise) and to each Award of
Performance Shares outstanding on such date. Any fractional shares
resulting from such adjustments shall be eliminated.
ARTICLE IX
Miscellaneous
9.1. Effective Date. The amendment and restatement of the Plan
shall become effective as of May 20, 1993, subject to
shareholder approval.
9.2. Amendment or Termination. The Board or Committee may
terminate or amend the Plan in any respect at any time and
the Office of the Chairman (or, in the cases of clauses (i)
and (iii) below, the senior Human Resources officer) may
approve in writing any amendment of the Plan when it finds
that such amendment:
(i) is required to conform the Plan to applicable laws
or regulations;
(ii) will not significantly decrease the benefits to, or
rights of, any Participant in the Plan; or
(iii) is intended only to implement transactions approved
by the Board;
provided, that, no such amendment may be made without shareholder
approval if such approval is necessary to comply with any tax,
regulatory or listing requirement or other applicable law,
including for these purposes any approval requirement which is a
prerequisite for exemptive relief under Section 16(b) of the Act.
No action of the Board, the Committee, the Office of the Chairman
or senior Human Resources officer, or the shareholders of the
Corporation, without a Participant's consent, may (x) alter or
impair a Participant's rights under any Option previously granted
or to amounts in respect of Performance Units or Performance Shares
already vested in him, or (y) in connection with a Change of
Control, alter, impair or affect adversely the rights of any
Participant in respect of an Option (including without limitation
such Participant's acceleration rights under section 6.4) or in
respect of Performance Units or Performance Shares with respect to
any year or Performance Cycle that commenced prior to the date of
such Change of Control (including without limitation such
Participant's rights under section 7.4).
9.3. Inalienability of Interests. A Participant's interests
under the Plan shall not be subject to alienation,
assignment, garnishment, execution of levy of any kind, and
any attempt to cause benefits to be so subjected shall not
be recognized. Notwithstanding the foregoing, a
Participant's interests may be transferred by will or by the
laws of descent and distribution. During the lifetime of
any optionee, only the optionee may exercise his Option. At
the request of the holder of an Option, shares of Common
Stock purchased upon the exercise of such Option, or
received on exercise of stock appreciation rights, may be
issued in or transferred into the name of such holder and
another person, jointly with the right of survivorship.
9.4. Facility of Payments. In the event that the Office of the
Chairman or senior Human Resources officer shall find that
any person to whom any payment is due is unable to care for
his affairs because of illness or accident, or otherwise,
the Office of the Chairman or senior Human Resources officer
may direct that any such payment shall be paid to the duly
appointed legal representative of such person, or if there
be no duly appointed legal representative, to the spouse, a
child, a parent or other blood relative of the person or to
any person deemed by the Office of the Chairman or senior
Human Resources officer to have incurred expense for the
benefit of such person, and any such payments so made shall
be a complete discharge of the liabilities of this Plan
therefor.
9.5. Excess Parachute Payments. A Participant's entitlement to
payments under this Plan and the acceleration of the
exercisability of Options under section 6.4 of the Plan
shall be limited to the extent necessary so that no portion
of such payment (or the value of such acceleration, as the
case may be), when aggregated with payments or benefits
(including the value of acceleration of stock options) to
which the Participant is entitled under any other plan or
agreement, shall be subject to the excise tax imposed by
section 4999 of the Code. Any limitation under this section
9.5 of a Participant's entitlement to payments or on the
acceleration of exercisability of Options shall be made in
the manner and in the order directed by such Participant.
9.6. Written Agreements. Options and Awards shall be evidenced
by written agreements in such form or forms and containing
such restrictions, terms and conditions, not inconsistent
with the Plan, as the Board or Committee may from time to
time approve.
9.7. Withholding. The Corporation's obligation to deliver shares
of Common Stock or to make a payment upon the exercise of
any Option or Stock Appreciation Right or to make any
payment in respect of an Award shall be subject to
applicable federal, state and local tax withholding
requirements.
9.8. Limited Effect. The Plan shall not be construed as creating
any contract of employment or otherwise conferring upon any
Participant any legal right to continuation of employment,
nor as limiting or qualifying the right of the Corporation
or a Subsidiary to discharge any Participant without regard
to the effect that such discharge might have upon such
Participant's rights under the Plan.
9.9. Number and Gender. Where from the context it appears
appropriate, each term used in this Plan in either the
singular or the plural shall include the singular and the
plural, and pronouns stated in either the masculine,
feminine or neuter gender shall include the masculine,
feminine and neuter.
9.10. Captions. Captions of the Plan are inserted for
convenience of reference only, and the Plan is not to be
construed by interpretation thereof.
9.11. Applicable Law. This Plan shall be interpreted, construed
and administered in accordance with the laws of the State of
New York.