FRANKLIN RESOURCES, INC.
AMENDED AND RESTATED 1998 UNIVERSAL STOCK INCENTIVE PLAN
1. GENERAL
1.1 PURPOSE. The Franklin Resources, Inc. Amended and Restated 1998
Universal Stock Incentive Plan (the "Amended Plan") has been established by
Franklin Resources, Inc., a Delaware corporation (the "Company") to (i) attract
and retain persons eligible to participate in the Amended Plan; (ii) motivate
Employees, by means of appropriate incentives, to achieve long-range performance
goals; (iii) provide incentive compensation opportunities that are competitive
with those of other similar companies; and (iv) further identify Employees'
interests with those of the Company's other stockholders through compensation
that is based on the Company's common stock; and thereby promote the long-term
financial interest of the Company and the Subsidiaries.
1.2 PARTICIPATION. Subject to the terms and conditions of the Amended Plan,
the Committee shall determine and designate, from time to time, from among the
Eligible Employees, those persons who will be granted one or more Awards under
the Amended Plan. An Eligible Employee who receives an Award shall be a
"Participant" under the Amended Plan. In the discretion of the Committee, an
Employee may be granted any Award permitted under the provisions of the Amended
Plan, and more than one Award may be granted to a Participant. Awards may be
granted as alternatives to or replacement of awards outstanding under the
Amended Plan, or any other plan or arrangement of the Company or a Subsidiary
(including a plan or arrangement of a business or entity, all or a portion of
which is acquired by the Company or a Subsidiary).
1.3 OPERATION, ADMINISTRATION, AND DEFINITIONS. The operation and
administration of the Amended Plan, including the Awards made under the Amended
Plan, shall be subject to the provisions of Section 4 (relating to operation and
administration). Capitalized terms in the Amended Plan shall be defined as set
forth in the Amended Plan (including the definition provisions of Section 8 of
the Amended Plan).
1.4 STOCK SUBJECT TO AMENDED PLAN; SHARE COUNTING. Subject to the
provisions of this Section 1.4 and Section 6.1 of the Amended Plan, the maximum
aggregate number of shares which may be delivered pursuant to Options granted
under the Plan is 20,000,000. The shares may be authorized, but unissued, or
reacquired Common Stock.
(a) To the extent any Shares covered by an Award are not delivered to
a Participant or beneficiary because the Award is forfeited or canceled, or
the Shares are not delivered because the Award is settled in cash, such
Shares shall not be deemed to have been delivered for purposes of
determining the maximum number of Shares available for delivery pursuant to
Awards granted under the Amended Plan.
(b) If the exercise price of any Option granted under the Plan is
satisfied by tendering Shares to the Company (by either actual delivery or
by attestation), only the number of Shares issued net of the Shares
tendered shall be deemed delivered for purposes of determining the maximum
number of Shares available for delivery pursuant to Awards (other than
Options) granted under the Plan.
(c) Subject to adjustment under Section 6.1, (i) the maximum number of
shares that may be granted to any one individual pursuant to Section 2
(relating to Options and SARs) shall be 250,000 Shares during any
one-calendar-year period and (ii) the maximum number of Shares that may be
granted to any one individual subject to Section 3 (relating to Stock Unit
Awards, Restricted Stock Awards, Restricted Stock Unit Awards and
Performance Share Awards) shall be 1,000,000 Shares during any
one-calendar-year period (regardless of when such Shares are deliverable).
2. OPTIONS AND SARS
2.1 OPTIONS.
(a) An Option is a grant of rights to purchase Shares at an Exercise
Price established by the Committee. Options granted under this Section 2
may be either Incentive Stock Options ("ISO") or Nonstatutory Stock Options
("NSO"), as determined in the discretion of the Committee.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be automatically
treated as Nonstatutory Stock Options. For purposes of this paragraph
2.1(b), Incentive Stock Options shall be taken into account in the order in
which they were granted, and the Fair Market Value of the Shares shall be
determined as of the original date the Option with respect to such Shares
is granted.
(c) The term of each Option shall be the term stated in the Option
Agreement; provided, however, that in the case of any Incentive Stock
Option, the term shall be no more than ten (10) years from the date of
grant thereof or such shorter term as may be provided in the Option
Agreement. However, in the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the term of the Option shall be
five (5) years from the date of grant thereof or such shorter term as may
be provided in the Option Agreement.
(d) The date of grant of an Option shall, for all purposes, be the
date on which the Committee makes the determination granting such Option,
or such other date as is determined by the Board. Notice of the
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determination shall be given to each Employee to whom an Option is so
granted within a reasonable time after the date of such grant.
2.2 STOCK APPRECIATION RIGHTS. A "Stock Appreciation Right" ("SAR") is a
grant of rights to receive, in cash or Stock (as determined by the Committee),
value equal to (or otherwise based on) the excess of: (a) the Fair Market Value
of a specified number of Shares at the time of exercise; over (b) an Exercise
Price established by the Committee.
2.3 EXERCISE PRICE. The Exercise Price of each Option and SAR shall be
established by the Committee or shall be determined by a method established by
the Committee at the time the Option or SAR is granted; provided that:
(a) In the case of an ISO,
(i) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the per Share exercise
price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.
(ii) granted to any Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
2.4 TIME AND MANNER OF EXERCISE. Options and SARs shall be exercisable in
accordance with such terms and conditions and during such periods as may be
established by the Committee; subject to the following terms regarding Options:
(a) TERMINATION OF EMPLOYMENT. In the event of termination of an
Optionee's Continuous Status as an Employee with the Company, such Optionee
may, but only within ninety (90) days after the date of such termination
(or such other period as is set out by the Committee in the Option
Agreement, but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), exercise the Option to
the extent that Optionee was entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise the
Option at the date of such termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate.
(b) DISABILITY OF OPTIONEE. Notwithstanding the provisions of
paragraph 2.4(a) above, in the event of termination of an Optionee's
Continuous Status as an Employee as a result of disability (as determined
by the Board in accordance with the policies of the Company), Optionee may,
but only within six (6) months from the date of such termination (or such
other period as is set out by the Committee in the Option Agreement, but in
no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise the Option to the extent otherwise
entitled to exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of
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termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(c) DEATH OF OPTIONEE. In the event of the death of an Optionee, the
Option may be exercised, at any time within twelve (12) months following
the date of death (or such other period as is set out by the Committee in
the Option Agreement, but in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), by the
Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent the Optionee was
entitled to exercise the Option at the date of death. To the extent that
Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
2.5 PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price of an Option
shall be subject to the following:
(a) The full Exercise Price for Shares purchased upon the exercise of
any Option shall be paid at the time of such exercise (except that, in the
case of an exercise arrangement approved by the Committee and described in
paragraph 2.5(b), payment may be made as soon as practicable after the
exercise).
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined
by the Committee (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (i) cash, (ii)
check, (iii) other Shares (by delivery of certificates or attestation)
which (x) either have been owned by the Optionee for more than six months
on the date of surrender or were not acquired, directly or indirectly, from
the Company, and (y) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised, (iv) delivery of authorization for the Company to
retain from the total number of Shares as to which the Option is exercised
that number of Shares having a Fair Market Value on the date of exercise
equal to the exercise price for the total number of Shares as to which the
Option is exercised, (v) delivery of a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to
the Company the amount of sale or loan proceeds required to pay the
exercise price, (vi) irrevocably authorizing a third party to sell Shares
(or a sufficient portion of the shares) acquired upon exercise of the
Option and remit to the Company a sufficient portion of the sale proceeds
to pay the entire Exercise Price and any tax withholding resulting from
such exercise, (vii) any combination of the foregoing methods of payment,
(viii) or such other consideration and method of payment for the issuance
of Shares to the extent permitted under Applicable Laws.
2.6 SETTLEMENT OF AWARD. Shares delivered pursuant to the exercise of an
Option or SAR shall be subject to such conditions, restrictions and
contingencies as the Committee may establish in the applicable Award Agreement
at the time of grant. Settlement of SARs may be made in Shares (valued at their
Fair Market Value at the time of exercise), in cash, or in a combination
thereof, as determined in the discretion of the Committee. The Committee, in its
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discretion, may impose such conditions, restrictions and contingencies with
respect to Shares acquired pursuant to the exercise of an Option or an SAR as
the Committee determines to be desirable.
3. OTHER STOCK AWARDS
3.1 DEFINITIONS.
(a) A "Stock Unit" Award is the grant of a right to receive Shares in
the future.
(b) A "Performance Share" Award is a grant of a right to receive
Shares or Stock Units which is contingent on the achievement of performance
or other objectives during a specified period.
(c) A "Restricted Stock" Award is a grant of Shares, and a "Restricted
Stock Unit" Award is the grant of a right to receive Shares in the future,
with such Shares or right to future delivery of such Shares subject to a
risk of forfeiture or other restrictions that will lapse upon the
achievement of one or more goals relating to completion of service by the
Employee, or achievement of performance or other objectives, as determined
by the Committee.
3.2 RESTRICTIONS ON STOCK AWARDS. Each Stock Unit Award, Restricted Stock
Award, Restricted Stock Unit Award and Performance Share Award shall be subject
to the following:
(a) Any such Award shall be subject to such conditions, restrictions
and contingencies as the Committee shall determine.
(b) The Committee may designate whether any such Award being granted
to any Employee are intended to be "performance-based compensation" as that
term is used in Section 162(m) of the Code. Any such Awards designated as
intended to be "performance-based compensation" shall be conditioned on the
achievement of one or more Performance Measures. The Performance Measures
that may be used by the Committee for such Awards shall be based on any one
or more of the criteria attached hereto on Attachment I, as selected by the
Committee. For Awards intended to be "performance-based compensation," the
grant of the Awards and the establishment of the Performance Measures shall
be made during the period required under Section 162(m) of the Code and
shall be subject to the individual share limit set out in Section 1.4(c)
above.
4. OPERATION AND ADMINISTRATION
4.1 EFFECTIVE DATE. Subject to the approval of the stockholders of the
Company at the Company's 2000 annual meeting of its stockholders, the Amended
Plan shall be effective as of October 28, 2000 (the "Effective Date"); provided,
however, that to the extent that Awards are granted under the Amended Plan prior
to its approval by stockholders, the Awards shall be contingent on approval of
the Amended Plan by the stockholders of the Company at such annual meeting. The
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Amended Plan shall be unlimited in duration and, in the event of Amended Plan
termination, shall remain in effect as long as any Awards under it are
outstanding; provided, however, that, to the extent required by the Code, no ISO
may be granted under the Amended Plan on a date that is more than ten years from
the date the Amended Plan is adopted or, if earlier, the date the Amended Plan
is approved by stockholders.
4.2 GENERAL RESTRICTIONS. Delivery of Shares or other amounts under the
Amended Plan shall be subject to the following:
(a) Notwithstanding any other provision of the Amended Plan, the
Company shall have no liability to deliver any Shares under the Amended
Plan or make any other distribution of benefits under the Amended Plan
unless such delivery or distribution would comply with all applicable laws
(including, without limitation, the requirements of the Securities Act of
1933), and the applicable requirements of any securities exchange or
similar entity.
(b) To the extent that the Amended Plan provides for issuance of stock
certificates to reflect the issuance of Shares, the issuance may be
effected on a non-certificated basis, to the extent not prohibited by
applicable law or the applicable rules of any stock exchange.
4.3 TAX WITHHOLDING. All distributions under the Amended Plan are subject
to withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Amended Plan on satisfaction
of the applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the occurrence
of such withholding, may permit such withholding obligations to be satisfied
through cash payment by the Employee, through the surrender of Shares which the
Employee already owns, or through the surrender of Shares to which the Employee
is otherwise entitled under the Amended Plan, provided; however, that in either
case only the number of Shares sufficient to satisfy the Company's minimum
required tax withholding obligations may be surrendered to the Company.
4.4 USE OF SHARES. Subject to the overall limitation on the number of
Shares that may be delivered under the Amended Plan, the Committee may use
available Shares as the form of payment for compensation, grants or rights
earned or due under any other compensation plans or arrangements of the Company
or a Subsidiary, including the plans and arrangements of the Company or a
Subsidiary assumed in business combinations.
4.5 DIVIDENDS AND DIVIDEND EQUIVALENTS. An Award (including without
limitation an Option or SAR Award) may provide the Employee with the right to
receive dividend payments or dividend equivalent payments with respect to Stock
subject to the Award (both before and after the Stock subject to the Award is
earned, vested, or acquired), which payments may be either made currently or
credited to an account for the Employee, and may be settled in cash or Stock as
determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in Shares, may be subject to
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such conditions, restrictions and contingencies as the Committee shall
establish, including the reinvestment of such credited amounts in Stock
equivalents.
4.6 PAYMENTS. Awards may be settled through cash payments, the delivery of
Shares, the granting of replacement Awards, or combination thereof as the
Committee shall determine. Any Award settlement, including payment deferrals,
may be subject to such conditions, restrictions and contingencies as the
Committee shall determine. The Committee may permit or require the deferral of
any Award payment, subject to such rules and procedures as it may establish,
which may include provisions for the payment or crediting of interest, or
dividend equivalents, including converting such credits into deferred Stock
equivalents. Each Subsidiary shall be liable for payment of cash due under the
Amended Plan with respect to any Employee to the extent that such benefits are
attributable to the services rendered for that Subsidiary by the Employee. Any
disputes relating to liability of a Subsidiary for cash payments shall be
resolved by the Committee.
4.7 TRANSFERABILITY. Unless specifically provided by the Committee in the
Award Agreement, Awards under the Amended Plan are nontransferable except as
designated by the Employee by will or by the laws of descent and distribution.
4.8 FORM AND TIME OF ELECTIONS. Unless otherwise specified herein, each
election required or permitted to be made by any Employee or other person
entitled to benefits under the Amended Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Amended Plan, as the Committee shall require.
4.9 AGREEMENT WITH COMPANY. An Award under the Amended Plan shall be
subject to such terms and conditions, not inconsistent with the Amended Plan, as
the Committee shall, in its sole discretion, prescribe. The terms and conditions
of any Award to any Employee shall be reflected in such form of written document
as is determined by the Committee. A copy of such document shall be provided to
the Employee, and the Committee may, but need not require that the Employee
shall sign a copy of such document. Such document is referred to in the Amended
Plan as an "Award Agreement" regardless of whether any Employee signature is
required.
4.10 ACTION BY COMPANY OR SUBSIDIARY. Any action required or permitted to
be taken by the Company or any Parent or Subsidiary shall be by resolution of
its board of directors, or by action of one or more members of the board
(including a committee of the board) who are duly authorized to act for the
board, or (except to the extent prohibited by applicable law or applicable rules
of any stock exchange) by a duly authorized officer of such company.
4.11 GENDER AND NUMBER. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.
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4.12 LIMITATION OF IMPLIED RIGHTS.
(a) Neither a Participant nor any other person shall, by reason of
participation in the Amended Plan, acquire any right in or title to any
assets, funds or property of the Company or any Parent or Subsidiary
whatsoever, including, without limitation, any specific funds, assets, or
other property which the Company or any Parent or Subsidiary, in their sole
discretion, may set aside in anticipation of a liability under the Amended
Plan. A Participant shall have only a contractual right to the Stock or
amounts, if any, payable under the Amended Plan, unsecured by any assets of
the Company or any Parent or Subsidiary, and nothing contained in the
Amended Plan shall constitute a guarantee that the assets of the Company or
any Parent or Subsidiary shall be sufficient to pay any benefits to any
person.
(b) The Amended Plan does not constitute a contract of employment, and
selection as a Participant will not give any participating employee the
right to be retained in the employ of the Company or any Subsidiary, nor
any right or claim to any benefit under the Amended Plan, unless such right
or claim has specifically accrued under the terms of the Amended Plan.
Except as otherwise provided in the Amended Plan, no Award under the
Amended Plan shall confer upon the holder thereof any rights as a
stockholder of the Company prior to the date on which the individual
fulfills all conditions for receipt of such rights.
5. COMMITTEE
5.1 COMMITTEE. The authority to control and manage the operation and
administration of the Amended Plan shall be vested in a committee (the
"Committee") in accordance with this Section 5. The Committee shall be selected
by the Board, and shall be comprised unless otherwise determined by the Board,
solely of not less than two members who shall be "outside" directors within the
meaning of Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of
the Code, of the Board and, with respect to Awards granted subject to Section
162(m) of the Code, the Committee shall be composed of two or more members of
the Board who are not employees of the Company. If the Committee does not exist,
or for any other reason determined by the Board, the Board may take any action
under the Amended Plan that would otherwise be the responsibility of the
Committee.
5.2 POWERS OF COMMITTEE. The Committee's administration of the Amended Plan
shall be subject to the following:
(a) Subject to the provisions of the Amended Plan, the Committee will
have the authority and discretion to select from among the Eligible
Employees those persons who shall receive Awards, to determine the time or
times of receipt, to determine the types of Awards and the number of shares
covered by the Awards, to establish the terms, conditions, performance
criteria (except that for purposes of Section 162(m) of the Code,
performance measures shall be based on one or more of the criteria set out
on Attachment I hereto) , restrictions, and other provisions of such
Awards, and (subject to the restrictions imposed by Section 8 hereof) to
cancel or suspend Awards.
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(b) To the extent that the Committee determines that the restrictions
imposed by the Amended Plan preclude the achievement of the material
purposes of the Awards in jurisdictions outside the United States, the
Committee will have the authority and discretion to modify those
restrictions as the Committee determines to be necessary or appropriate to
conform to applicable requirements or practices of jurisdictions outside of
the United States.
(c) The Committee will have the authority and discretion to interpret
the Amended Plan, to establish, amend, and rescind any rules and
regulations relating to the Amended Plan, to determine the terms and
provisions of any Award Agreement made pursuant to the Amended Plan, and to
make all other determinations that may be necessary or advisable for the
administration of the Amended Plan.
(d) Any interpretation of the Amended Plan by the Committee and any
decision made by it under the Amended Plan is final and binding on all
persons.
(e) In controlling and managing the operation and administration of
the Amended Plan, the Committee shall take action in a manner that conforms
to the articles and by-laws of the Company, and applicable state corporate
law.
5.3 DELEGATION BY COMMITTEE. Except to the extent prohibited by Applicable
Law or the applicable rules of a stock exchange, the Committee may allocate all
or any portion of its responsibilities and powers to any one or more of its
members and may delegate all or any part of its administrative duties to any
person or persons selected by it. Any such allocation or delegation may be
revoked by the Committee at any time.
5.4 INFORMATION TO BE FURNISHED TO COMMITTEE. The Company and its Parent
and Subsidiaries shall furnish the Committee with such data and information as
it determines may be required for it to discharge its duties. The records of the
Company and its Parent and Subsidiaries as to an Employee's employment,
termination of employment, leave of absence, reemployment and compensation shall
be conclusive on all persons unless determined to be incorrect. Employees and
other persons entitled to benefits under the Amended Plan must furnish the
Committee such evidence, data or information as the Committee considers
desirable to carry out the terms of the Amended Plan.
6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR CORPORATE TRANSACTION
6.1 CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Award, the price per share of Common Stock covered by each such
outstanding Award, the number of shares of Common Stock which have been
authorized for issuance under the Amended Plan but as to which no Awards have
yet been granted or which have been returned to the Amended Plan upon
cancellation or expiration of an Award, and the maximum number of Options, SARs,
Stock Unit Awards, Restricted Stock Awards, Restricted Stock Units Awards and
Performance Share Awards which may be granted to any Employee in any
one-calendar-year period shall be proportionately adjusted for any increase or
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decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of Shares of any class, or securities convertible into
Shares of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common Stock subject to
an Award.
6.2 TRANSACTIONS. In the event of the proposed dissolution or liquidation
of the Company or of a merger or corporate combination (a "Transaction") in
which the successor corporation does not agree to assume the Award or substitute
an equivalent Award, the Committee shall make a determination (subject to
Section 7 below) as to the equitable treatment of outstanding Awards under the
Amended Plan and shall notify Participants of such treatment no later than ten
(10) days prior to such proposed Transaction. To the extent it has not been
previously exercised, an Award will terminate immediately prior to the
consummation of such proposed Transaction.
7. AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Amended Plan, provided that
no amendment or termination may, in the absence of written consent to the change
by the affected Employee (or, if the Employee is not then living, the affected
beneficiary), adversely affect the rights of any Employee or beneficiary under
any Award granted under the Amended Plan prior to the date such amendment is
adopted by the Board; provided that adjustments pursuant to subject to Section
6.2 shall in no event be deemed to have an adverse affect on any Award.
8. DEFINED TERMS
In addition to the other definitions contained herein, the following
definitions shall apply:
(a) APPLICABLE LAW means the corporate, securities and tax laws
(including, without limitation, the Delaware corporate law, the Exchange
Act, the Securities Act of 1933 and the Code) applicable to the
establishment and administration of an employee stock incentive plans.
(b) AWARD. The term "Award" shall mean any award or benefit granted
under the Amended Plan, including, without limitation, the grant of
Options, SARs, Stock Unit Awards, Restricted Stock Awards, Restricted Stock
Unit Awards and Performance Share Awards.
(c) BOARD. The term "Board" shall mean the Board of Directors of the
Company.
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(d) CODE. The term "Code" means the Internal Revenue Code of 1986, as
amended. A reference to any provision of the Code shall include reference
to any successor provision of the Code.
(e) COMMON STOCK shall mean the common stock, par value, $.10 per
share, of the Company.
(f) CONTINUOUS STATUS AS AN EMPLOYEE means the absence of any
interruption or termination of the employment relationship by the Company
or any Subsidiary. Continuous Status as an Employee shall not be considered
interrupted in the case of: (i) sick leave, military leave or any other
leave of absence approved by the Board, provided that such leave is for a
period of not more than ninety (90) days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or
(ii) in the case of transfers between locations of the Company or between
the Company, its Subsidiaries or its successor.
(g) ELIGIBLE EMPLOYEE. The term "Eligible Employee" shall mean any key
executive or other employee of the Company, its Parent or Subsidiary. An
Award may be granted to an employee, in connection with hiring, retention
or otherwise, prior to the date the employee first performs services for
the Company or its Parent or Subsidiaries, provided that such Awards shall
not become vested prior to the date the employee first performs such
services.
(h) EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
(i) FAIR MARKET VALUE. For purposes of determining the "Fair Market
Value" of a share of Stock granted pursuant to Section 2 as of any date,
the following rules shall apply:
(i) If the principal market for the Stock is the New York
Stock Exchange ("NYSE"), then the "Fair Market Value" as of that
date shall be the closing price of the stock on the NYSE
composite tape on that date as reported in the Wall Street
Journal for such date;
(ii) If the principal market for the Stock is the another
national securities exchange or the NASDAQ stock market, then the
"Fair Market Value" as of that date shall be the mean between the
lowest and highest reported composite sale prices of the Stock on
that date on such exchange for such date;
(iii) If sale prices are not available or if the principal
market for the Stock is not the NYSE or another national
securities exchange and the Stock is not quoted on the NASDAQ
stock market, the average between the highest bid and lowest
asked prices for the Stock on such day as reported on the NASDAQ
OTC Bulletin Board Service or by the National Quotation Bureau,
Incorporated or a comparable service.
(iv) If the day is not a business day, and as a result,
paragraphs (i), (ii) and (iii) next above are inapplicable, the
Fair Market Value of the Stock shall be determined as of the last
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preceding business day. If paragraphs (i), (ii) and (iii) next
above are otherwise inapplicable, then the Fair Market Value of
the Stock shall be determined in good faith by the Committee.
(j) INCENTIVE STOCK OPTION means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(k) NONSTATUTORY STOCK OPTION means an Option not intended to qualify
as an Incentive Stock Option.
(l) OPTIONEE means an Employee who receives an Option.
(m) PARENT means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(n) SHARE means a share of the Common Stock, as adjusted in accordance
with Section 6 of the Amended Plan.
(o) STOCK. The term "Stock" shall mean shares of Common Stock of the
Company.
(p) SUBSIDIARIES. The term "Subsidiary" means any company during any
period in which it is a "subsidiary corporation" (as that term is defined
in Code section 424(f)) with respect to the Company.
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ATTACHMENT I
PERFORMANCE CRITERIA
The Committee shall grant performance-based compensation Awards tied to
one or more of the following business criteria:
1. Changes in earnings per share
2. Changes in pre-tax operating income
3. Changes in value of stock (i.e., stock price)
13