Exhibit 10.01
EQUITABLE RESOURCES, INC.
KEY EMPLOYEE RESTRICTED STOCK OPTION AND STOCK APPRECIATION
RIGHTS INCENTIVE COMPENSATION PLAN
(As amended, effective March 17, 1989)
Purpose of the Plan
This Key Employee Restricted Stock Option and Stock
Appreciation Rights Incentive Compensation Plan (the "Plan")
has been established in order to further the success and
interests of Equitable Resources, Inc. and its Subsidiaries
(collectively the "Company"), and its shareholders by a long-
term incentive program offering to key employees of the
Company an opportunity to acquire a direct economic interest
in the growth and prosperity of the Company through common
stock ownership in the manner and under the terms and
conditions of the Plan.
Thus the Plan will enable the Company to retain key
employees who are presently in the employ of the Company and
to create incentive for persons of high managerial and
administrative skills to become attracted to the employment
opportunities of the Company, thereby enhancing the Company's
continued success and progress.
ARTICLE I
Eligibility
1.1 Participation in the Plan is limited to key employees
of the Company, including those who are officers and directors
who, in the judgment of the Committee hereinafter established,
contribute materially to the growth and prosperity of the
Company.
1.2 All benefits provided under the Plan to which a key
employee may become entitled will be conditioned upon the key
employee's remaining in the employ of the Company for a period
of three years from the date the benefit is provided (except
to the extent otherwise set forth in the Plan), except in the
case of retirement, death or disability as hereinafter
expressly provided.
ARTICLE II
Authorized Stock
2.1 The stock to be subject to the options, the related
Stock Appreciation Rights and the restricted stock grants
under the Plan shall be shares of the Common Stock, without
par value, of the Company (the "Common Stock") and may be
authorized but unissued shares or treasury shares held in
the treasury. The total amount of Common Stock which may be
issued or delivered under the Plan shall not exceed 1,025,496
shares, subject to adjustment as provided in Article VII.
ARTICLE III
Administration
3.1 The Board of Directors of the Company ("Board")
shall, by resolution, establish a Compensation Committee (the
"Committee"), comprised of those directors (exclusive of
directors who are or were officers or employees of the Company
on the effective date of the Plan) chosen by the Board as set
forth in the resolution. The members of the Committee shall
serve at the pleasure of the Board.
3.2 The duties of the Committee shall be to select those
employees of the Company whom it deems to have earned, by
their work performance during the previous year, the
opportunity to acquire the Common Stock and benefit from the
appreciation in Common Stock during the period set forth in
the Plan. In making such selection of key employees,
consideration shall be given to the position of the individual
and the performance of that individual as to the duties the
position entails and the effect that such position has on the
growth and prosperity of the Company.
3.3 The Committee shall have the sole right to interpret
the Plan and to establish rules for the Plan's operation.
In the performance of these duties, the Committee shall
establish rules and regulations for the conduct of its affairs
and where, in the Plan, the Committee is authorized or
directed to take action, the Committee shall establish such
forms, notices or procedures as it deems necessary.
3.4 In the administration of the Plan, the Committee
may appoint any agents or other persons for the purpose of
administration and may delegate such ministerial duties to
them as the Committee deems appropriate; provided, however,
the Committee may not delegate the determination and selection
of the key employees to whom options or restricted stock will
be granted, nor may the Committee delegate the establishment
of the number of shares of Common Stock to which each option
or restricted stock grant shall apply. In addition, the
Committee shall make the sole determination as to the exercise
price of any granted option.
3.5 The Company shall reimburse the Committee members
for all out-of-pocket expenses incurred in the performance of
their duties.
3.6 Any decision made or action taken by the Committee
arising out of, or in connection with, the construction,
interpretation and administration of the Plan and rules and
regulations adopted by the Committee pursuant hereto shall lie
within the absolute discretion of the Committee and shall be
conclusive and binding upon all parties, including the
Company, the shareholders, the key employees, and any and all
persons claiming under or through any key employee. No member
of the Board or of the Committee and no officer of the Company
shall be liable for any act or action hereunder, whether of
commission or omission, taken by any other member, or by any
officer, agent or employee; nor, except in circumstances
involving his bad faith and to the extent permitted by law,
for anything done or omitted to be done by himself.
ARTICLE IV
Options
4.1 Upon selection by the Committee, a key employee
may be granted an option to purchase such number of shares of
Common Stock as the Committee shall determine.
4.2 The Committee shall establish an exercise price
under each option granted of not less than 75 percent or more
than
100 percent of the fair market value on the shares on the date
the
option is granted, but in no event less than the par value of
the Common Stock. "Fair market value" shall mean the closing
sales price of shares of Common Stock as reported on the New
York Stock Exchange's consolidated transaction reporting
system on the date the option is granted.
4.3 The Committee shall not grant to any key employee
an option or options on Common Stock for an aggregate number
of shares (when added to the number of shares granted under
Article VI) in excess of 10 percent of the total number of
shares which may be issued under the Plan. For this purpose,
if shares have been issued under the Plan and the shares which
may yet be issued under the Plan are adjusted under Article
VIII, the shares already issued shall be deemed to have been
similarly adjusted and considered as having been issued under
the Plan.
4.4 Any unexercised option outstanding for a period
of 18 months or less at the time the key employee holding such
option retires shall be subject to forfeiture at the sole
discretion of the Committee and, for a period of 30 days after
such retirement, the Company shall have the right, exercisable
in the sole discretion of the Committee, to repurchase all or
any part of the shares of such key employee attributable to
the exercise of such option which are held in escrow, in
accordance with the repurchase provisions of Section 4.8.
4.5 Except as otherwise provided in Sections 4.8, 4.9
and 10.2, an option granted under the Plan shall expire five
years from the date of grant. Except as provided in Section
4.11, the key employee may exercise the option at any time
after the date of grant and prior to the expiration date as to
all or any part of the whole shares of Common Stock to which
the option applies by delivery to the Committee of an
appropriate notice of exercise and a payment in an amount
equal to the total option price for the number of shares for
which the exercise is to be effective. Payment may be made in
cash or shares of Common Stock (except for shares held in
escrow under the terms of the Plan) or any combination thereof
and if payment is made in shares of Common Stock, such Common
Stock shall be valued at the closing sales price of shares of
Common Stock as reported on the New York Stock Exchange's
consolidated transaction reporting system on the date of
exercise.
4.6 Upon the exercise of an option, the Committee
shall authorize the issue of the number of whole shares of
Common Stock for which full payment has been made. Except in
the case of the exercise of an option following retirement or
death as provided in Section 4.9, or the exercise of an option
occurring after the end of the escrow period applicable to
such option, the Committee shall further issue instructions
that such shares, when issued, shall bear the following
restriction:
"These shares are subject to the covenant that, should
the registered owner's employment be terminated with the
Company, including successors by reason of merger or
consolidation, prior to [Date three years from grant of
option to purchase applicable to such shares; five years
in the case of options granted prior to March 18, 1986],
these shares are subject to repurchase in accordance
with Section 4.8 of the Equitable Resources, Inc. Key
Employee Restricted Stock Option and Stock Appreciation
Rights Incentive Compensation Plan."
and that such shares shall be held by the Company in escrow.
4.7 Any restricted shares held in escrow shall be issued
in the name of the key employee and shall not be physically
transferred to the key employee until the third anniversary of
the date of grant of the option (the fifth anniversary date in
the case of options granted prior to March 18, 1986), except
as provided in Section 4.9. While shares are held by the
Company in escrow, the key employee shall be entitled to all
dividends (both cash and securities, except for dividends paid
in Common Stock which are charged to earned surplus) and
voting rights, but shall not have power to transfer in any
manner the legal or equitable ownership of such shares. Common
Stock distributed as a result of an adjustment under Section
8.2 shall be added to the shares held in escrow.
4.8 Upon the termination of the key employee's employment
for any reason other than retirement or death, all options
which have not been exercised will be forfeited. In addition,
for a period of 30 days after such termination of employment
for any reason other than retirement or death, the Company
shall have the option, exercisable in the sole discretion of
the Committee, to repurchase all or any part of the shares of
such key employee which are held in escrow.
The repurchase price for shares acquired through the
exercise of options granted prior to March 18, 1986 shall be
the exercise price which was paid by the key employee to
acquire such shares. In the case of options granted on or
after March 18, 1986, the Committee, in its sole discretion,
may reduce the repurchase price by the exercise value of any
SAR units (as set forth in Section 5.3 of the Plan) associated
with the shares being repurchased. If the exercise price was
paid in cash, the shares shall be repurchased by the Company
for cash. If the exercise price was paid in Common Stock, an
appropriate number of shares shall be returned to the key
employee from the escrow. If the exercise price was paid
partly in cash and partly in shares of Common Stock, the key
employee will receive a proportionate amount of cash and a
proportionate number of shares shall be returned to the key
employee from the escrow. In any case, no payment shall be
made to the key employee if the repurchase price is calculated
to be equal to, or less than, zero.
All shares of Common Stock under an unexercised option
forfeited by reason of this Section, together with all
repurchased shares of Common Stock, shall again be available
for the grant of future options under the Plan. In the event
the Company does not exercise the option to repurchase, the
shares held in escrow will be transferred to the key employee
free of further restrictions.
4.9 In the event of the termination of employment of the
key employee by reason of retirement or death, the key
employee or the person or persons entitled to do so under the
Will of the key employee, or, if the key employee shall fail
to make testamentary disposition of said option or shall die
intestate, the legal representative of the key employee may,
within 90 days after such termination, exercise the options
outstanding at the time of such termination regardless of
whether the five-year option period expires within the 90
days. In addition, in the event of death during the 90-day
period following termination of employment by reason of
retirement, the option may be exercised within 90 days after
such death regardless of whether the five-year option period
expires within the additional 90-day period. In any event, all
options remaining outstanding at the end of such periods shall
expire. In addition, all shares held in escrow shall be
transferred unrestricted as of the key employee's retirement
date or date of death, whichever is applicable. The Committee
may elect to treat the total and permanent disability of a key
employee as a retirement. "Total and permanent disability"
shall mean any physical or mental condition which is
determined by the Committee to have rendered the key employee
incapable of employment with the Company and has substantially
impaired and will continue to impair his or her earning
ability.
4.10 In lieu of exercising an option, any key employee or
other person entitled to exercise an option shall have the
right to cancel, in whole or in part, any option that has not
been exercised by filing with the Committee a notice of
cancellation containing the number of shares of Common Stock
that are affected by the option cancelled and the date such
option was granted.
4.11 Options may be exercised or cancelled only in
the order of date of grant except that this Section shall not
apply in the event of the exercise or cancellation of an
option following termination of employment of the key employee
by reason of retirement or death.
4.12 The Committee shall not grant any options in any
calendar year in which the Company does not pay a cash
dividend on the Common Stock.
ARTICLE V
Stock Appreciation Rights Units
5.1 The Committee may, in its discretion, establish or
cause to be established in the name of a key employee, on the
same date as such key employee is granted an option to acquire
Common Stock, an account to which will be credited the same
number of units of Stock Appreciation Rights as the number of
shares of Common Stock that are subject to the key employee's
granted option. The base price for each Stock Appreciation
Rights unit shall be the fair market value (as defined in
Section 4.2) of a share of Common Stock on the date of grant
of the related option.
5.2 Upon the termination of the key employee's employment
for any reason other than retirement or death, all Stock
Appreciation Rights units shall be forfeited.
5.3 Except as provided in Section 5.5, upon the exercise,
cancellation or expiration of an option granted under Article
IV, the value of related Stock Appreciation Rights units equal
in number to the number of shares of Common Stock affected by
such exercise, cancellation or expiration shall become due and
payable. The amount to be paid by reason of the exercise,
cancellation or expiration of an option shall be determined by
subtracting the Stock Appreciation Rights unit base price from
the closing sales price of the Common Stock as
reported on the New York Stock Exchange's consolidated
transaction reporting system for the date of the exercise,
cancellation or expiration of the option and multiplying this
amount, if positive, by the number of Stock Appreciation
Rights units that are equivalent to the number of shares of
Common Stock affected by the exercise, cancellation or
expiration of the option. Upon determination of the amount
payable or in the event the difference is negative, all Stock
Appreciation Rights units utilized in the calculation shall be
cancelled.
5.4 The amount determined to be payable under Section 5.3
shall be paid in shares of Common Stock, cash, or partly in
shares and partly in cash as the Committee in its sole
discretion may determine at the time of the exercise,
cancellation or expiration of the related option. In
determining the number of whole shares of Common Stock to be
issued, the closing sales price of shares of Common Stock as
reported on the New York Stock Exchange's consolidated
transaction reporting system on the date of exercise,
cancellation or expiration of the related option, as the case
may be, shall be used.
5.5 Upon the cancellation of an option during the
employment of a key employee, the value of related Stock
Appreciation Rights units equal in number to the number of
shares of Common Stock affected by such cancellation shall be
determined as set forth in Section 5.3 and the amount which
would otherwise be payable in shares of Common Stock, cash or
partly in shares and partly in cash shall be held by the
Company in escrow and not physically transferred to the key
employee until the earlier of the fifth anniversary of the
date of grant of the related option and the second anniversary
of the date of cancellation of the related option, except that
the escrow shall be forfeited upon the termination of the key
employee's employment during the escrow period for any reason
other than retirement or death and except that the escrow
shall be transferred unrestricted as of the key employee's
retirement date or date of death, whichever is applicable.
Shares of Common Stock held in escrow shall be issued in the
name of the key employee and shall bear the following
restriction:
"These shares are subject to the covenant that should
the registered owner's employment be terminated with the
Company, including successors by reason of merger or
consolidation, prior to [insert applicable date], these
shares are subject to forfeiture in accordance with
Section 5.5 of the Equitable Resources, Inc. Key
Employee Restricted Stock Option and Stock Appreciation
Rights Incentive Compensation Plan."
While shares are held by the Company in escrow the key
employee shall be entitled to the same dividend and voting
rights as set forth in Section 4.7 and any shares distributed
as a result of an adjustment under Section 8.2 shall be added
to the shares held in escrow. Cash held in escrow for a key
employee shall not bear interest. All shares of Common Stock
forfeited under this provision shall again be available for
the grant of future options under the Plan.
ARTICLE VI
Restricted Stock
6.1 Upon selection by the Committee, a key employee may be
granted an award of such number of shares of restricted Common
Stock as the Committee shall determine. The number of
restricted shares granted to any key employee shall not, when
added to the number of shares subject to options granted
pursuant to Article IV, exceed 10 percent of the total number
of shares which may be granted under the Plan. For this
purpose, if the shares have been issued under the Plan and the
shares which may yet be issued under the Plan are adjusted
under Article VIII, the shares already issued shall be deemed
to have been similarly adjusted and considered as having been
issued under the Plan.
6.2 All restricted stock shall be held by the Company
in escrow until such time as it becomes fully vested upon the
key employee's continued employment with the Company for the
period (not less than three, nor more than five, years)
established by the Committee at the time of grant.
6.3 Restricted stock held in escrow shall bear the
following instruction:
"These shares are subject to the covenant that, should
the registered owner's employment be terminated with the
Company, including successors, by reason of merger or
consolidation, prior to [date specified by the
Committee] these shares are subject to forfeiture at the
Committee's discretion."
6.4. Any restricted shares held in escrow shall be issued
in the name of the key employee and shall not be physically
transferred to the key employee until the date specified by
the Committee, except as provided in Section 6.7. While
shares are held by the Company in escrow, the key employee
shall be entitled to all dividends (both cash and securities,
except for dividends paid in Common Stock which are charged to
earned surplus) and voting rights, but shall not have power to
transfer in any manner the legal or equitable ownership of
such shares. Common Stock distributed as a result of an
adjustment under Section 8.2 shall be added to the shares held
in escrow.
6.5 Upon the termination of the key employee's employment
for any reason other than retirement or death, all restricted
shares held in escrow shall be subject to forfeiture at the
sole discretion of the Committee. All shares of Common Stock
forfeited by reason of this Section shall again be available
for the grant of future options under the Plan.
6.6 Any restricted stock held in escrow for a period
of 18 months or less at the time the key employee to whom such
restricted stock is granted retires shall be subject to
forfeiture at the sole discretion of the Committee.
6.7 In the event of the termination of employment of the
key employee by reason of retirement or death, all shares held
in escrow shall be transferred unrestricted as of the key
employee's retirement date or date of death whichever is
applicable. The Committee may elect to treat the total and
permanent disability of a key employee as a retirement. "Total
and permanent disability" shall mean any physical or mental
condition which is determined by the Committee to have
rendered the key employee incapable of employment with the
Company and has substantially impaired and will continue to
impair his or her earning ability.
6.8 The Committee shall not make any award of restricted
stock in any calendar year in which the Company does not pay a
cash dividend on the Common Stock.
ARTICLE VII
Key Employee Agreement
7.1 Upon the Committee's granting to a key employee any
option, Stock Appreciation Rights units or restricted stock
under the Plan, the Committee shall furnish to each such key
employee an agreement setting forth the basic terms of the
Plan which are applicable to him, together with a copy of the
Plan. The employee shall sign and return to the Committee,
within 10 days of receipt, a copy of the agreement. No
exercise or cancellation of any option will be accepted by the
Committee prior to the receipt by it of a signed agreement.
Should the key employee refuse to sign an agreement or fail to
return the agreement signed within such 10-day period, the
option or restricted stock that has been granted will be null
and void and deemed not to have been granted and any Stock
Appreciation Rights units credited as a result of an option
grant will be null and void and deemed not to have been
granted or credited.
7.2 The Committee, in its sole discretion, may waive the
requirements of this Article in the event of the death of the
key employee during such 10-day period or waive such
requirements or extend the period for return of the signed
agreement in the event of the death or illness of the key
employee during such 10-day period. Should the Committee
extend the 10-day period for acceptance of the signed
agreement, it shall notify the key employee and establish a
new return date. No more than one extension will be granted as
to any one option.
ARTICLE VIII
Adjustment of Common Stock
8.1 The Company will at all times during the term of the
Plan reserve and keep available the number of shares
sufficient to satisfy the requirements of the Plan.
8.2 The 1,025,496 shares of Common Stock authorized in
Article II, including any shares held in escrow and including
any number of shares of Common Stock which shall at any time
be subject to options which have been granted but which have
not been exercised and the exercise price thereof (and the
base price of Stock Appreciation Rights units), shall be
adjusted in the event that there occurs a capital adjustment.
[For the purposes of the Plan, a capital adjustment shall
include any stock dividend (except a dividend paid in Common
Stock which is charged to earned surplus), stock split,
combination or division, conversion or exchange of shares of
Common Stock pursuant to a merger or consolidation,
recapitalization, separation, reorganization, or other similar
change in the capital structure of the Company.] The
adjustment of the Common Stock to which this subsection
applies shall be in the same manner, number and amount as all
outstanding Common Stock is adjusted, as determined by the
Committee, except that all fractional shares which may result
from such adjustment shall be disregarded.
8.3 No cash or other form of dividends shall be paid
or reserved on any shares reserved for the purpose of the
Plan, nor on any shares which are subject to any outstanding
option unless and until such option is exercised and the
Common Stock issued in the name of the key employee, prior to
the record date for such dividend.
8.4 Should there occur a capital adjustment to the
Common Stock as provided in this Article, the Committee will
proportionately adjust all unpaid Stock Appreciation Rights
units and base price per unit to reflect such capital
adjustment.
8.5 All shares of Common Stock upon which an option
has expired or been terminated shall again be available for
the purposes of the Plan.
ARTICLE IX
Effective Date, Termination and Amendment
9.1 Upon the approval of the Plan by the holders of Common
Stock, the effective date shall be established thereafter by
the Board as soon as practical after all required approvals
and consents are obtained from those governmental agencies
having jurisdiction in these matters.
9.2 This program may be terminated at any time by the
action of the Board of Directors of Equitable Resources, Inc.,
but in no event shall options or Stock Appreciation Rights
units be granted fifteen years after the effective date of the
Plan.
9.3 The Plan may be amended from time to time by the
Board of Directors, provided, however, no amendment which
would increase the number of shares of Common Stock available
for the purposes of the Plan (exclusive of those due to
capital adjustment) shall be effective until approved by the
shareholders.
ARTICLE X
Spendthrift
10.1 No option granted pursuant to the Plan shall be
transferable except as hereinafter specifically authorized. No
option granted pursuant to the Plan shall be subject to
anticipation, alienation, sale, assignment, pledge,
encumbrance, charge, garnishment, execution, attachment, or
lien of any kind, either voluntary or involuntary, whether
arising at law or equity, including any claims arising in or
by reason of support or divorce proceedings or decrees.
10.2 Notwithstanding the provisions of Section 10.1 above,
a transfer by Will or through the operation of the laws of
descent and distribution shall be permitted. In addition, such
option may be exercised or cancelled by any personal
representative of the key employee who is declared incompetent
if the key employee was an employee within the 90 days
immediately preceding the exercise or cancellation in favor of
the personal representative, regardless of whether the
five-year option period expires within the 90 days.
ARTICLE XI
Miscellaneous
11.1 Neither the establishment of the Plan nor the
granting of any option or restricted stock hereunder shall
establish any right to be retained in the employ of the
Company nor in any way limit the rights of the Company to
terminate the employment of any key employee at any time. The
Plan shall not be deemed nor construed as a contract of
employment.
11.2 The Company shall have the right to withhold from any
payment to the key employee sufficient amounts to cover
withholding and employment tax resulting from the operation of
the Plan.
ARTICLE XII
Additional Rights in Certain Events
12.1 For purposes of this Article XII, the following
terms shall have the following meanings:
(a) The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(b) "Affiliate", "Associate" and "Parent" shall have the
respective meanings set forth in Rule 12b-2 under the
Exchange Act as in effect on the effective date of the
amendment adding Article XII to the Plan.
(c) The term "Person" shall be used as that term is used
in Sections 13(d) and 14(d) of the Exchange Act.
(d) "Beneficial Ownership" shall be determined as provided
in Rule 13d-3, or any successor rule, under the Exchange
Act.
(e) The term "Proxy Rules" shall mean regulation 14A, or
any successor rule or regulation, under the Exchange Act.
(f) "Voting Shares" shall mean all securities of a company
entitling the holders thereof to vote in an annual
election of directors (without consideration of the rights
of any class of stock other than Common Stock to elect
directors by a separate class vote); and a specified
percentage of "Voting Power" of a company shall mean such
number of the Voting Shares as shall enable the holders
thereof to cast such percentage of all the votes which
could be cast in an annual election of directors (without
consideration of the rights of any class of stock other
than Common Stock to elect directors by a separate class
vote).
(g) "Tender Offer" shall mean a tender offer or exchange
offer to acquire securities of the Company (other than
such an offer made by the Company or any Subsidiary),
whether or not such offer is approved or opposed by the
Board.
(h) "Article XII Event" shall mean the date upon which any
of the following events occurs:
(i) The Company acquires actual knowledge that any
Person [other than the Company, a Subsidiary, any
director of the Company on the effective date of the
amendment adding Article XII to the Plan, any Affiliate
or Associate of any such director, any member of the
family of any such director, any trust (including the
trustees thereof) established by or for the benefit of
any such Persons, any charitable foundation, whether a
trust or a corporation (including the trustees and
directors thereof) established by any such Persons or
any employee benefit plan(s) sponsored by the Company]
has acquired the Beneficial Ownership, directly or
indirectly, of securities of the Company entitling such
Person to 20 percent or more of the Voting Power of the
Company;
(ii) (A) A Tender Offer is made to acquire securities of
the Company entitling the holders thereof to 50 percent
or more of the Voting Power of the Company; or (B)
Voting Shares are first purchased pursuant to any other
Tender Offer;
(iii) At any time less than 51 percent of the members of
the Board of Directors shall be persons who were either
(A) directors on the effective date of the amendment
adding Article XII to the Plan; or (B) individuals whose
election, or nomination for election, was approved by a
vote of at least two-thirds of the directors then still
in office who were directors on the effective date of
the amendment adding Article XII to the Plan or who were
so approved;
(iv) The shareholders of the Company shall approve an
agreement or plan providing for the Company or all or
substantially all its assets or stock to be acquired by,
or merged, consolidated or otherwise combined with,
another corporation, as a consequence of which the
former shareholders of the Company will own, immediately
after such acquisition, merger, consolidation or
combination less than a majority of the Voting Power of
the surviving or acquiring corporation or the Parent
thereof; or
(v) The shareholders of the Company shall approve any
liquidation of all or substantially all of the assets of
the Company, or any distribution to security holders of
assets of the Company, having a value equal to 30
percent or more of the total value of all the assets of
the Company.
11.2 Notwithstanding anything to the contrary in the Plan
or in any stock option or restricted stock agreement in case
any Article XII Event occurs:
(a) All shares and cash held in escrow pursuant to
Sections 4.6 through 4.9, Section 5.5 and Article VI
shall be immediately transferred unrestricted to the
employee.
(b) Upon the exercise or cancellation of an option
within 60 days after the date of the Article XII Event,
the requirement that the shares issuable upon such
exercise be held in escrow pursuant to Sections 4.6
through 4.9 shall not be applicable, and the requirement
that the amount which would otherwise be payable with
respect to Stock Appreciation Rights units be held in
escrow pursuant to Section 5.5 upon such cancellation
shall not be applicable.
(c) The first two sentences of Section 4.8 and the first
sentence of Section 6.5 shall not be applicable to
options or shares held by an employee in the event of a
termination of such employee's employment within six
months after the date of the Article XII Event.
(d) Sections 4.11 and 5.2 shall not be applicable to
options and Stock Appreciation Rights units held by an
employee in the event of a termination of such
employee's employment within six months after the date
of the Article XII Event.
ARTICLE XIII
Tax Withholding
13.1 At the request of a key employee, the Company may, at
the Committee's discretion, reduce the number of shares to be
delivered to the key employee (from escrow or otherwise) in
connection with the exercise of a stock option, the payment of
a stock appreciation right or the release from escrow of
restricted stock by an amount sufficient to satisfy tax
withholding requirements.
13.2 If the key employee's tax liability is deferred
beyond the date shares are delivered to the key employee, upon
approval of the Committee the key employee shall be permitted
to tender back to the Company at the time such tax liability
is determined the number of shares necessary to satisfy tax
withholding requirements.
13.3 The fair market value of the shares withheld or
tendered back (calculated as of the date the tax liability is
determined) shall be transmitted by the Company to the
appropriate taxing authorities in satisfaction of tax
withholding requirements.