KAMAN CORPORATION
1993 STOCK INCENTIVE PLAN
1. PURPOSE. This Plan includes a continuation and extension
of the incentive stock program of the Corporation set forth in the
First Predecessor Plan and the Second Predecessor Plan and is
designed to give directors, officers and key employees of the
Corporation and other persons an expanded opportunity to acquire
stock in the Corporation or receive other long-term incentive
remuneration in order that they may better participate in the
Corporation's growth and be motivated to remain with the Corporation
and promote its further development and success.
2. DEFINITIONS. The following terms shall have the meanings
given below unless the context otherwise requires:
(a) "Act" means the Securities Exchange Act of 1934, as
amended.
(b) "Award" or "Awards" except where referring to a
particular category of grant under the Plan shall include Incentive
Stock Options, Non-Statutory Stock Options, Stock Appreciation
Rights and Restricted Stock Awards.
(c) "Board" means the Board of Directors of the
Corporation.
(d) "Code" means the Internal Revenue Code of 1986, as
amended, and any successor Code, and related rules, regulations and
interpretations.
(e) "Committee" means the committee of the Board
established under Section 9 hereof.
(f) "Corporation" means the committee of the Board
established as defined by the Code.
(g) "Disability" or "disabled" means disability or
disabled as defined by the Code.
(h) "Eligible Person" means any person, including a
person who is not an employee of the Corporation or a Subsidiary,
or entity who satisfies all the eligibility requirements set forth
in either Section 3(a) or 3(b) hereof, excluding, however, any
member of the Committee and any alternate member of the Committee.
(i) "Fair Market Value" of the Stock on any given date
shall be the closing price of the Stock in the NASDAQ National
Market System on such date, or, if no sales of the Stock occurred
on that day, the then most recent prior day on which sales were
reported.
(j) "First Predecessor Plan" means the Kaman Corporation
1973 Stock Option Plan.
(k) "Incentive Stock Option" means a stock option
qualifying under the provisions of Section 422A of the Code.
(l) "Non-Employee Director" shall have the meaning set
forth in Rule 16b-3(b)(3)(i) promulgated under the Act, and any
successor to such rule.
(m) "Non-Employee Director Participant" means an
Eligible Person, who at the time of grant of an Award is a director
of the Corporation but not an employee of the Corporation or a
Subsidiary.
(n) "Non-Statutory Option" means a stock option not
qualifying for incentive stock option treatment under the pro-
visions of Section 422A of the Code.
(o) "Optionee" means the holder of any option granted
under the Plan.
(p) "Participant" means the holder of any Award granted
under the Plan.
(q) "Plan" means the Kaman Corporation 1993 Stock
Incentive Plan.
(r) "Principal Shareholder" means any individual owning
stock possessing more than ten percent (10%) of the total combined
voting power of all classes of capital stock of the Corporation.
(s) "Restricted Stock" means Stock received pursuant to
a Restricted Stock Award.
(t) "Restricted Stock Award" is defined in Section 8(a).
(u) "Second Predecessor Plan" means the Kaman
Corporation 1983 Stock Incentive Plan.
(v) "Stock" or "shares" means shares of Class A Common
Stock of the Corporation.
(w) "Stock Appreciation Right" or "Right" means a right
described in Section 7.
(x) "Subsidiary" means any corporation in which the
Corporation owns, directly or indirectly, a majority of the out-
standing voting stock.
3. ELIGIBILITY.
(a) Incentive Stock Options. Incentive Stock Options
may be granted to any Eligible Persons who are full-time, salaried
employees of the Corporation or a Subsidiary and who in the sole
opinion of the Committee are, from time to time, responsible for
the management and/or growth of all or part of the business of the
Corporation.
(b) Awards Other than Incentive Stock Options. Awards,
other than Incentive Stock Options, may be granted to any Eligible
Persons who in the sole opinion of the Committee are, from time to
time, responsible for the growth and/or the management of all or a
part of the business of the Corporation.
(c) Substitute Awards. The Committee, in its dis-
cretion, may also grant Awards in substitution for any stock
incentive awards previously granted by companies acquired by the
Corporation or one of its Subsidiaries. Such substitute awards may
be granted on such terms and conditions as the Committee deems
appropriate in the circumstances, provided, however, that
substitute Incentive Stock Options shall be granted only in
accordance with the Code.
4. TERM OF PLAN. The Plan shall take effect on November 1,
1993 and shall remain effective for ten (10) years thereafter,
expiring on October 31, 2003.
5. STOCK SUBJECT TO THE PLAN. The aggregate number of
shares of Stock which may be issued pursuant to all Awards granted
under the Plan shall not exceed 960,000 shares of Stock, subject to
adjustment as hereinafter provided in Section 10, which shall be in
addition to all shares of Stock issued or reserved for issuance
pursuant to options granted under the First Predecessor Plan and
the Second Predecessor Plan, and which may be treasury shares or
authorized but unissued shares. In the event that any Award under
the Plan for any reason expires, is terminated, forfeited,
reacquired by the Corporation, or satisfied without the issuance of
Stock (except in the cases of (i) the Stock otherwise issuable
under an Award but retained by the Corporation for payment of
withholding taxes under Section 14(b) hereof; and (ii) stock
otherwise issuable under a stock option but for which the
Corporation has made a discretionary payment under Section 7(d)
hereof) the shares allocable to the unexercised portion of such
Award may again be made subject to an Award under the Plan. Any
award of a Stock Appreciation Right, to the extent that such Stock
Appreciation Right may be settled only for cash, shall not be
deemed to reduce the aggregate number of shares of Stock authorized
to be issued pursuant to Awards granted under the Plan.
6. STOCK OPTIONS. The following terms and conditions shall
apply to each option granted under the Plan and shall be set forth
in a stock option agreement between the Corporation and the
Optionee together with such other term and conditions not
inconsistent herewith as the Committee may deem appropriate in the
case of each Optionee:
(a) Option Price. The purchase price under each
Incentive Stock Option shall be as determined by the Committee but
not less than 100% of the Fair Market Value of the shares subject
to such option on the date of grant, provided that such option
price shall not be less than 110% of such Fair Market Value in the
case of any Incentive Stock Option granted to a Principal
Shareholder. The purchase price per share of Stock deliverable
upon the exercise of a Non-Statutory Option shall be determined by
the Committee, but shall not be less than 85% of the Fair Market
Value of such Stock on the date of grant and in no event less than
the par value per share of such Stock.
(b) Type of Option. All options granted under the Plan
shall be either Incentive Stock Options or Non-Statutory Options.
All provisions of the Plan applicable to Incentive Stock Options
shall be interpreted in a manner consistent with the provisions of,
and regulations under, Section 422A of the Internal Revenue Code.
(c) Period of Incentive Stock Option. Each Incentive
Stock Option shall have a term not in excess of ten (10) years from
the date on which it is granted, except in the case of any
Incentive Stock Option granted to a Principal Shareholder which
shall have a term not in excess of five (5) years from the date on
which it is granted; provided that any Incentive Stock Option
granted or the unexercised portion thereof, to the extent
exercisable at the time of termination of employment, shall
terminate at the close of business on the day three (3) months
following the date on which the Optionee ceases to be employed by
the Corporation or a Subsidiary unless sooner expired or unless a
longer period is provided under Subsection (g) of this Section in
the event of the death or disability of such an Optionee.
(d) Period of Non-Statutory Option. Each Non-Statutory
Option granted under the Plan shall have a term not in excess of
ten (10) years and one (1) day from the date on which it is
granted; provided that any Non-Statutory Option granted to an
employee of the Corporation or a Subsidiary or to a Non-Employee
Director Participant, or the unexercised portion thereof shall
terminate not later than the close of business on the day three (3)
months following the date on which such employee ceases to be
employed by the Corporation or a Subsidiary or the date on which
such Non-Employee Director ceases to be a director of the
Corporation, as the case may be, unless a longer period is provided
under Subsection (g) of this Section in the event of the death or
disability of such an Optionee. Such an Optionee's Non-Statutory
Option shall be exercisable, if at all, during such three (3) month
period only to the extent exercisable on the date such Optionee's
employment terminates or the date on which such Optionee ceases to
be a director, as the case may be.
(e) Exercise of Option.
(i) Each option granted under the Plan shall become
exercisable on such date or dates and in such amount or
amounts as the Committee shall determine. In the absence of
any other provision by the Committee, each option granted
under the Plan shall be exercisable with respect to not more
than twenty percent (20%) of such shares subject thereto after
the expiration of one (1) year following the date of its
grant, and shall be exercisable as to an additional twenty
percent (20%) of such shares after the expiration of each of
the succeeding four (4) years, on a cumulative basis, so that
such option, or any unexercised portion thereof, shall be
fully exercisable after a period of five (5) years following
the date of its grant; provided, however, that in the absence
of any other provision by the Committee, each Incentive Stock
Option granted to a Principal Shareholder shall be exercisable
with respect to not more than twenty-five percent (25%) of the
shares subject thereto after the expiration of one (1) year
following the date of its grant, and shall be exercisable as
to an additional twenty-five percent (25%) after the
expiration of each of the succeeding three (3) years, on a
cumulative basis, so that such option, or any unexercised
portion thereof, shall be fully exercisable after a period of
four (4) years following the date of its grant.
(ii) The Committee, in its sole discretion, may,
from time to time and at any time, accelerate the vesting
provisions of any outstanding option, subject, in the case of
Incentive Stock Options, to the provisions of Subsection (6)(i)
relating to "Limit on Incentive Options".
(iii) Notwithstanding anything herein to the
contrary, except as provided in subsection (g) of this
Section, no Optionee who was, at the time of the grant of
an option, an employee of the Corporation or a
Subsidiary, may exercise such option or any part thereof
unless at the time of such exercise he shall be employed
by the Corporation or a Subsidiary and shall have been so
employed continuously since the date of grant of such
option, excepting leaves of absence approved by the
Committee; provided that the option agreement may provide
that such an Optionee may exercise his option, to the
extent exercisable on the date of termination of such
continuous employment, during the three (3) month period,
ending at the close of business on the day three (3)
months following the termination of such continuous
employment unless such option shall have already expired
by its term.
(iv) An option shall be exercised in accordance
with the related stock option agreement by serving
written notice of exercise on the Corporation accompanied
by full payment of the purchase price in cash. As
determined by the Committee, in its discretion, at (or,
in the case of Non-Statutory Options, at or after) the
time of grant, payment in full or in part may also be
made by delivery of (i) irrevocable instructions to a
broker to deliver promptly to the Corporation the amount
of sale or loan proceeds to pay the exercise price, or
(ii) previously owned shares of Stock not then subject to
restrictions under any Corporation plan (but which may
include shares the disposition of which constitutes a
disqualifying disposition for purposes of obtaining
incentive stock option treatment for federal tax
purposes), or (iii) shares of Stock otherwise receivable
upon the exercise of such option; provided, however, that
in the event the Committee shall determine in any given
instance that the exercise of such option by withholding
shares otherwise receivable would be unlawful, unduly
burdensome or otherwise inappropriate, the Committee may
require that such exercise be accomplished in another
acceptable manner. For purposes of subsections (ii) and
(iii) above, such surrendered shares shall be valued at
Fair Market Value on the date of exercise.
(f) Nontransferability. No option granted under the
Plan shall be transferable by the Optionee otherwise than by
will or by the laws of descent and distribution, and such
option shall be exercisable, during his lifetime, only by him.
(g) Death or Disability of Optionee. In the event of
the death or disability of an Optionee while in the employ of
the Corporation or a Subsidiary or while serving as a director
of the Corporation, his stock option or the unexercised
portion thereof may be exercised within the period of one (1)
year succeeding his death or disability, but in no event later
than (i) ten (10) years (five (5) years in the case of a
Principal Shareholder) from the date the option was granted in
the case of an Incentive Stock Option, and (ii) ten (10) years
and one (1) day in the case of a Non-Statutory Option, by the
person or persons designated in the Optionee's will for that
purpose or in the absence of any such designation, by the
legal representative of his estate, or by the legal
representative of the Optionee, as the case may be.
Notwithstanding anything herein to the contrary and in the
absence of any contrary provision by the Committee, during the
one-year period following termination of employment or
cessation as a director by reason of death or disability, an
Optionee's stock option shall continue to vest in accordance
with its terms and be and become exercisable as if employment
or service as a director had not ceased.
(h) Shareholder Rights. No Optionee shall be entitled
to any rights as a shareholder with respect to any shares
subject to his option prior to the date of issuance to him of
a stock certificate representing such shares.
(i) Limit on Incentive Stock Options. The aggregate
Fair Market Value (determined at the time an option is
granted) of shares with respect to which Incentive Stock
Options granted to an employee are exercisable for the first
time by such employee during any calendar year (under all
incentive stock option plans of the Corporation and its
Subsidiaries to the extent required under the Code) shall not
exceed $100,000.
(j) Notification of Disqualifying Disposition. Partici-
pants granted Incentive Stock Options shall undertake, in the
Incentive Stock Option agreements, as a precondition to the
granting of such option by the Corporation, to promptly notify
the Corporation in the event of a disqualifying disposition
(within the meaning of the Code) of any shares acquired
pursuant to such Incentive Stock Option agreement and provide
the Corporation with all relevant information related thereto.
7. STOCK APPRECIATION RIGHTS; DISCRETIONARY PAYMENTS.
(a) Nature of Stock Appreciation Right. A Stock
Appreciation Right is an Award entitling the Participant to receive
an amount in cash or shares of Stock (or forms of payment permitted
under Section 7(d) hereof) or a combination thereof, as determined
by the Committee at the time of grant, having a value equal to (or
if the Committee shall so determine at time of grant, less than)
the excess of the Fair Market Value of a share of Stock on the date
of exercise over the Fair Market Value of a share of Stock on the
date of grant (or over the option exercise price, if the Stock
Appreciation Right was granted in tandem with a stock option)
multiplied by the number of shares with respect to which the Stock
Appreciation Right shall have been exercised.
(b) Grant and Exercise of Stock Appreciation Rights.
(i) Stock Appreciation Rights may be granted in
tandem with, or independently of, any stock option granted
under the Plan. In the case of a Stock Appreciation Right
granted in tandem with a Non-Statutory Option, such Right may
be granted either at or after the time of grant of such
option. In the case of a Stock Appreciation Right granted in
tandem with an Incentive Stock Option such Right may be
granted only at the time of the grant of such option. A Stock
Appreciation Right or applicable portion thereof granted in
tandem with a given stock option shall terminate and no longer
be exercisable upon the termination or exercise of the related
stock option, except that a Stock Appreciation Right granted
with respect to less than the full number of shares covered by
a related stock option shall not be reduced until the exercise
or termination of the related stock option exceeds the number
of shares not covered by the Stock Appreciation Right.
(ii) Each Stock Appreciation Right granted under
the Plan shall become exercisable on such date or dates and in
such amount or amounts as the Committee shall determine;
provided, however, that any Stock Appreciation Right granted
in tandem with a stock option shall be exercisable in relative
proportion to and to the extent that such related stock option
is exercisable; provided further, however, that, not-
withstanding anything herein to the contrary, any Stock
Appreciation Right granted in tandem with a Non-Statutory
Option which has a purchase price at the date of grant of less
than Fair Market Value shall not be exercisable at all until
at least one (1) year after the date of grant of such option.
Except as provided in the immediately preceding sentence, in
the absence of any other provision by the Committee, each
Stock Appreciation Right granted under the Plan shall be exer-
cisable with respect to not more than twenty percent (20%) of
such shares subject thereto after the expiration of one (1)
year following the date of its grant, and shall be exercisable
as to an additional twenty percent (20%) of such shares after
the expiration of each of the succeeding four (4) years, on a
cumulative basis, so that such Right, or any unexercised
portion thereof, shall be fully exercisable after a period of
five (5) years following the date of its grant. The
Committee, in its sole discretion, may, from time to time and
at any time, accelerate the vesting provisions of any
outstanding Stock Appreciation Right.
(iii) Notwithstanding anything herein to the con-
trary, except as provided in subsections (c)(v) and (c)(vi) of
this Section, no Participant who was, at the time of the grant
of a Stock Appreciation Right, an employee of the Corporation
or a Subsidiary, may exercise such Right or any part thereof
unless at the time of such exercise, he shall be employed by
the Corporation or a Subsidiary and shall have been so
employed continuously since the date of grant of such Right,
excepting leaves of absence approved by the Committee;
provided that the Stock Appreciation Right agreement may
provide that such a Participant may exercise his Stock
Appreciation Right, to the extent exercisable on the date of
termination of such continuous employment unless such Right
shall have already expired by its terms.
(iv) Notwithstanding anything herein to the con-
trary, except as provided in subsections (c)(v) and (c)(vi) of
this Section, no Non-Employee Director Participant may
exercise a Stock Appreciation Right or part thereof unless at
the time of such exercise he shall be a director of the
Corporation and shall have been a director of the Corporation
continuously since the date of grant of such Right excepting
leaves of absence approved by the Committee; provided that the
Stock Appreciation Right agreement may provide that such
Participant may exercise his Stock Appreciation Right, to the
extent exercisable on the date he ceased to be a director of
the Corporation, during the three (3) month period ending at
the close of business on the day three (3) months following
the cessation of such continuous service as a director unless
such Right shall already have expired by its terms.
(v) A Stock Appreciation Right shall be exercised
in accordance with the related Stock Appreciation Right
Agreement by serving written notice of exercise on the
Corporation.
(c) Terms and Conditions of Stock Appreciation Rights.
Stock Appreciation Rights shall be subject to such terms and
conditions as shall be determined from time to time by the
Committee, subject to the following:
(i) Stock Appreciation Rights granted in tandem
with stock options shall be exercisable only at such time or
times and to the extent that the related stock options shall
be exercisable;
(ii) Upon the exercise of a Stock Appreciation
Right, the applicable portion of any related stock option
shall be surrendered.
(iii) Stock Appreciation Rights granted in tandem
with a stock option shall be transferable only with such
option. Stock Appreciation Rights shall not be transferable
otherwise than by will or the laws of descent and distribu-
tion. All Stock Appreciation Rights shall be exercisable
during the Participant's lifetime only by the Participant or
the Participant's legal representative.
(iv) A Stock Appreciation Right granted in tandem
with a stock option may be exercised only when the then Fair
Market Value of the Stock subject to the stock option exceeds
the exercise price of such option. A Stock Appreciation Right
not granted in tandem with a stock option may be exercised
only when the then Fair Market Value of the Stock exceeds the
Fair Market Value of the Stock on the date of grant of such
Right.
(v) Each Stock Appreciation Right shall have a term
not in excess of ten (10) years from the date on which it is
granted (ten (10) years and one (1) day in the case of a Stock
Appreciation Right granted in tandem with a Non-Statutory
Option); provided that any Stock Appreciation Right granted to
(aa) an employee of the Corporation or a Subsidiary shall
terminate not later than the close of business on the day
three (3) months following the date such Participant ceases to
be employed by the Corporation or a Subsidiary, excepting
leaves of absences approved by the Committee, and (bb) a
Non-Employee Director Participant shall terminate not later
than the close of business on the day three (3) months following
the date such Participant ceases to be a director of the
Corporation, unless a longer period is provided under
subsection (c)(vi) below in the event of death or disability
of a Participant. Such a Participant's Stock Appreciation
Right shall be exercisable, if at all, during such three (3)
month period only to the extent exercisable on the date his
employment terminates or the date he ceases to be a director,
as the case may be.
(vi) In the event of the death or disability of a
Participant while in the employ of the Corporation or a Sub-
sidiary or while serving as a director of the Corporation, his
Stock Appreciation Right or the unexercised portion thereof
may be exercised within the period of one (1) year succeeding
his death or disability, but in no event later than (i) ten
(10) years from the date on which it was granted (ten (10)
years and one (1) day in the case of a Non-Statutory Option),
by the person or persons designated in the Participant's will
for that purpose or in the absence of any such designation, by
the legal representative of his estate, or by the legal
representative of the Participant, as the case may be.
Notwithstanding anything herein to the contrary and in the
absence of any contrary provision by the Committee, during the
one-year period following termination of employment or
cessation as a director by reason of death or disability, a
Participant's Stock Appreciation Right shall continue to vest
in accordance with its terms and be and become exercisable as
if employment or service as a director had not ceased.
(d) Discretionary Payments. Upon the written request of
an Optionee whose stock option is not accompanied by a Stock
Appreciation Right, the Committee may, in its discretion, cancel
such option if the Fair Market Value of the shares subject to the
option at the exercise date exceeds the exercise price thereof; in
that event, the Corporation shall pay to the Optionee an amount
equal to the difference between the Fair Market Value of the shares
subject to the cancelled option (determined as of the date the
option is cancelled) and the exercise price. Such payment shall be
by check or in Stock having a Fair Market Value (determined on the
date the payment is to be made) equal to the amount of such
payments or any combination thereof, as determined by the
Committee.
8. RESTRICTED STOCK.
(a) Nature of Restricted Stock Award. A Restricted
Stock Award is an Award entitling the Participant to receive shares
of Stock, subject to such conditions, including a Corporation right
during a specified period or periods to require forfeiture of such
shares upon the Participant's termination of employment with the
Corporation or a Subsidiary or cessation as a director of the
Corporation, as the case may be, as the Committee may determine at
the time of grant. The Committee, in its sole discretion, may,
from time to time and at any time, waive any or all restrictions
and/or conditions contained in the Restricted Stock Award
agreement. Notwithstanding anything herein to the contrary, the
Committee, in its discretion, may grant Restricted Stock without
any restrictions or conditions whatsoever. Restricted Stock shall
be granted in respect of past services or other valid
consideration.
(b) Award Agreement. A Participant who is granted a
Restricted Stock Award shall have no rights with respect to such
Award unless the Participant shall have accepted the Award within
60 days (or such shorter date as the Committee may specify)
following the Award date by executing and delivering to the
Corporation a Restricted Stock Award Agreement in such form as the
Committee shall determine.
(c) Rights as a Shareholder. Upon complying with para-
graph (b) above, a Participant shall have all the rights of a
shareholder with respect to the Restricted Stock including voting
and dividend rights, subject to nontransferability and Corporation
forfeiture rights described in this Section 8 and subject to any
other conditions contained in the Award agreement. Unless the
Committee shall otherwise determine, certificates evidencing shares
of Restricted Stock shall remain in the possession of the
Corporation until such shares are free of any restrictions under
the Plan. The Committee in its discretion may, as a precondition
of the Corporation's obligation to issue a Restricted Stock Award,
require the Participant to execute a stock power or powers or other
agreement or instruments necessary or advisable in connection with
the Corporation's forfeiture rights with respect to such shares.
(d) Restrictions. Shares of Restricted Stock may not be
sold, assigned, transferred or otherwise disposed of or pledged or
otherwise encumbered. In the event of termination of employment of
the Participant with the Corporation or a Subsidiary for any
reason, or cessation as a director of the Corporation in the case
of a Non-Employee Director Participant, such shares shall be
forfeited to the Corporation, except as set forth below:
(i) The Committee at the time of grant shall
specify the date or dates (which may depend upon or be related
to the attainment of performance goals and other conditions)
on which the nontransferability of the Restricted Stock and
the Corporation's forfeiture rights with respect thereto shall
lapse. The Committee at any time may accelerate such date or
dates and otherwise waive or, subject to Section 13, amend any
conditions of the Award.
(ii) Except as may otherwise be provided in the
Award agreement, in the event of termination of a Participant
with the Corporation or a Subsidiary for any reason or
cessation as a director of the Corporation for any reason, all
of the Participant's Restricted Stock shall be forfeited to
the Corporation without the necessity of any further act by
the Corporation, the Participant or the Participant's legal
representative; provided, however, that in the event of
termination of employment or cessation of service as a
director of the Corporation by reason of death or disability,
all conditions and restrictions relating to a Restricted Stock
Award held by such a Participant shall thereupon be waived and
shall lapse.
(iii) In the absence of any other provision by the
Committee, each Restricted Stock Award granted to (A) an
employee of the Corporation or a Subsidiary shall be subject
to forfeiture to the Corporation conditioned on the
Participant's continued employment and (B) Non-Employee
Director Participants shall be subject to forfeiture to the
Corporation conditioned on the Participant's continued service
as a director of the Corporation, and in the case of clause
(A) or (B), such forfeiture rights shall lapse as follows:
with respect to twenty percent (20%) of the shares subject to
the Restricted Stock Award on the date one year following the
date of grant, and with respect to an additional twenty
percent (20%) of such shares after the expiration of each of
the succeeding four (4) years thereafter, on a cumulative
basis, so that such Restricted Stock shall be free of such
risk of forfeiture on the date five (5) years following the
date of its grant.
(e) Waiver, Deferral, and Investment of Dividends. The
Restricted Stock Award agreement may require or permit the
immediate payment, waiver, deferral or investment of dividends paid
with respect to the Restricted Stock.
9. THE COMMITTEE.
(a) Administration. The Committee shall be a committee
of not less than three (3) members of the Board who are Non-Employee
Directors, appointed by the Board. Vacancies occurring in
membership of the Committee shall be filled by the Board. The
Committee shall keep minutes of its meetings. One or more members
of the Committee may participate in a meeting of the Committee by
means of conference telephone or similar communications equipment
provided all persons participating in the meeting can hear one
another. A majority of the entire Committee shall constitute a
quorum, and the acts of a majority of the members present at or so
participating in any meeting at which a quorum is constituted shall
be the acts of the Committee. The Committee may act without
meeting by unanimous written consent. Absent some other provision
by the Board, the power and responsibilities of the Committee shall
be vested in and assumed by the Personnel and Compensation
Committee of the Board.
(b) Authority of Committee. Subject to the provisions
of the Plan, the Committee shall have full and final authority to
determine the persons to whom Awards shall be granted, the number
of shares to be subject to each Award, the term of the Award, the
vesting provisions of the Award, if any, restrictions on the Award,
if any, and the price at which the shares subject thereto may be
purchased. The Committee is empowered, in its discretion, to
modify, extend or renew any Award theretofore granted and adopt
such rules and regulations and take such other action as it shall
deem necessary or proper for the administration of the Plan. The
Committee shall have full power and authority to construe, inter-
pret and administer the Plan, and the decisions of the Committee
shall be final and binding upon all interested parties.
10. ADJUSTMENTS. Any limitations, restrictions or other
provisions of this Plan to the contrary notwithstanding, each Award
agreement shall make such provision, if any, as the Committee may
deem appropriate for the adjustment of the terms and provisions
thereof (including, without limitation, terms and provisions
relating to the exercise price and the number and class of shares
subject to the Award) in the event of any merger, consolidation,
reorganization, recapitalization, stock dividend, divisive
reorganization, issuance of rights, combination or split-up or
exchange of shares, or the like. In the event of any merger,
consolidation, reorganization, recapitalization, stock dividend,
divisive reorganization, issuance of rights, combination or split-up
or exchange of shares, or the like, the Committee shall make an
appropriate adjustment in the number of shares authorized to be
issued pursuant to the Plan.
11. OPTIONS UNDER FIRST PREDECESSOR PLAN AND SECOND
PREDECESSOR PLAN. Options presently outstanding which have been
granted under either the First Predecessor Plan or the Second
Predecessor Plan shall continue to be governed and interpreted
under the terms of such plans, respectively, and not by the terms
hereof.
12. AMENDMENT TO AND TERMINATION OF THE PLAN. The Board may
from time to time amend the Plan in such way as it shall deem
advisable provided the Board may not extend the expiration date of
the Plan, change the class of Eligible Persons, increase the
maximum Award term, decrease the minimum exercise price or increase
the total number of authorized shares (except in accordance with
Section 10 hereof) for which Awards may be granted. The Board, in
its discretion, may at any time terminate the Plan prior to its
expiration in accordance with Section 4 hereof. No amendment to or
termination of the Plan shall in any way adversely affect Awards
then outstanding hereunder.
13. STATUS OF PLAN. Until shares pursuant to an Award or
exercise thereof are actually delivered to a Participant, a Par-
ticipant shall have no rights to or with respect to such shares
greater than those of a general creditor of the Corporation unless
the Committee shall otherwise expressly determine in connection
with any Award or Awards.
14. GENERAL PROVISIONS.
(a) Other Compensation Arrangements; No Right to Receive
Awards; No Employment or Other Rights. Nothing contained in this
Plan shall prevent the Board from adopting other or additional
capital stock based compensation arrangements, subject to
stockholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only
in specific cases. No Eligible Person shall have any right to
receive Awards except as the Committee may determine. The Plan
does not confer upon any employee any right to continued employment
with the Corporation or a Subsidiary or upon any director or
officer of the Corporation any right to continued service as a
director or officer of the Corporation, nor does it interfere in
any way with the right of the Corporation or a Subsidiary to
terminate the employment of any of its employees or for the
Corporation to remove a director or officer with or without cause
at any time.
(b) Tax Withholding, Etc. Any obligation of the
Corporation to issue shares pursuant to the grant or exercise of
any Award shall be conditioned on the Participant having paid or
made provision for payment of all applicable tax withholding
obligations, if any, satisfactory to the Committee. The
Corporation and its Subsidiaries shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the Participant. In the case of
Non-Statutory Options, and Stock Appreciation Rights exercisable only
for Stock, the Committee in its discretion, but only upon the
written request of a Participant exercising such an Award, may
permit such Participant to satisfy federal income tax withholding
requirements occasioned by the exercise thereof by the surrender of
shares otherwise to be received on the exercise of such Award.
Such shares shall be valued at the Fair Market Value thereof on the
date of exercise.
(c) Section 83(b) of the Code. Participants may not
make, and each Award agreement shall prohibit, an election under
Section 83(b) of the Code, with respect to any Award.
(d) Restrictions on Transfers of Shares. Although the
Corporation presently intends to register under applicable securi-
ties laws all shares acquired or received by Participants under the
Plan, the Corporation is not required to cause such shares to be
registered under the Securities Act of 1933 or the securities laws
of any State. Accordingly, the shares acquired or received may be
"restricted securities" as defined in Rule 144 under said
Securities Act of 1933 or other rule or regulation of the
Securities and Exchange Commission. Any certificate evidencing any
such shares may bear a legend restricting the transfer of such
shares, and the recipient may be required to assert that the shares
are being acquired for his own account and not with a view to the
distribution thereof as a condition to the granting or exercise of
an Award.
(e) Issuance of Shares. Any obligation of the
Corporation to issue shares pursuant to the grant or exercise of
any Award shall be conditioned on the Corporation's ability at
nominal expense to issue such shares in compliance with all
applicable statutes, rules or regulations of any governmental
authority. The Participant shall provide the Corporation with any
assurances or agreements which the Committee, in its sole
discretion, shall deem necessary or advisable in order that the
issuance of such shares shall comply with any such statutes, rules
or regulations.
(f) Date of Grant. The date on which each Award under
the Plan shall be considered as having been granted shall be the
date on which the award is authorized by the Committee, unless a
later date is specified by the Committee; provided, however, in the
case of options intended to qualify as Incentive Stock Options, the
date of grant shall be determined in accordance with the Code.