KANSAS CITY SOUTHERN INDUSTRIES, INC.
1991 AMENDED AND RESTATED STOCK OPTION AND
PERFORMANCE AWARD PLAN
(as amended and restated September 26, 1996)
Section 1. Purpose.
The purposes of the Kansas City Southern Industries, Inc. 1991 Stock
Option and Performance Award Plan (the "Plan") are to generate an increased
incentive for Employees of the Company to contribute to the Company's future
success, to secure for the Company and its stockholders the benefits inherent
in equity ownership by Employees of the Company and to enhance the ability of
the Company and its Affiliates to attract and retain exceptionally qualified
Employees upon whom, in large measure, the sustained progress, growth and
profitability of the Company depend. By encouraging Employees of the Company
and its Affiliates to acquire a proprietary interest in the Company's growth
and performance, the Company intends to more closely align the interests of
the Company's Employees, management and stockholders and motivate Employees to
enhance the value of the Company for the benefit of all stockholders.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set
forth below:
(a) "Affiliate" means (i) any Person that directly, or through one (1)
or more intermediaries, controls, or is controlled by, or is under
common control with, the Company, (ii) any entity in which the Company
has an equity interest of at least fifty percent (50%), and (iii) any
entity in which the Company has any other significant equity interest,
as determined by the Committee.
(b) "Award" means any Option, Stock Appreciation Right, Limited Right,
Performance Share, Performance Unit, Dividend Equivalent, or any other
right, interest, or option relating to Shares granted pursuant to the
provisions of the Plan.
(c) "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing any Award granted hereunder and signed
by both the Company and the Participant or by both the Company and an
Outside Director.
(d) "Board" means the Board of Directors of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(f) "Committee" means the Compensation and Organization Committee of
the Board, or such other committee designated by the Board, authorized
to administer the Plan under Section 3 hereof. The Committee shall
consist of at least that number of directors required by Rule 16b-3
and/or Code Section 162(m), each of whom is a non-employee director
within the meaning of Rule 16b-3 and an outside director within the
meaning of Code Section 162(m).
(g) "Company" means Kansas City Southern Industries, Inc., a Delaware
corporation.
(h) "Dividend Equivalent" means any right granted pursuant to Section
13(f) hereof.
(i) "Employee" means any non-union employee of the Company or of any
Affiliate, as determined by the Committee, regularly employed for more
than twenty (20) hours per week and more than five (5) months per year.
(j) "Exchange Act" means the Securities Exchange Act of 1934, or any
successors thereto, and the rules and regulations promulgated
thereunder, all as shall be amended from time to time.
(k) "Fair Market Value" means, with respect to any property, the market
value of such property determined by such methods or procedures as shall
be established from time to time by the Committee.
(l) "Incentive Stock Option" means an Option granted under Section 6
hereof that is intended to meet the requirements of Section 422 of the
Code or any successor provision thereto.
(m) "Limited Right" means any right granted to a Participant pursuant
to Section 7(b) hereof.
(n) "Non-Qualified Stock Option" means an Option granted under Section
6 hereof that is not intended to be an Incentive Stock Option, and an
Option granted to an Outside Director pursuant to Section 9 hereof.
(o) "Option" means an Incentive Stock Option or Non-Qualified Stock
Option.
(p) "Outside Director" means a member of the Board who is not an
Employee of the Company or of any Affiliate.
(q) "Participant" means an Employee who is selected to receive an Award
under the Plan.
(r) "Performance Award" means any Award of Performance Shares or
Performance Units pursuant to Section 8 hereof.
(s) "Performance Period" means that period established by the Committee
at the time any Performance Award is granted or at any time thereafter
during which any performance goals specified by the Committee with
respect to such Award are to be measured.
(t) "Performance Share" means any grant pursuant to Section 8 hereof of
Shares or any unit valued by reference to a designated number of Shares.
(u) "Performance Unit" means any grant pursuant to Section 8 hereof of
a unit valued by reference to a designated amount of property other than
Shares.
(v) "Person" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
(w) "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act or any successor rule or
regulation thereto.
(x) "Shares" means shares of the common stock of the Company, one cent
($.01) par value.
(y) "Stock Appreciation Right" means any right granted to a Participant
pursuant to Section 7(a) hereof.
(z) "Stockholders Meeting" means the annual meeting of stockholders of
the Company in each year.
Section 3. Administration.
The Plan shall be administered by the Committee. Subject to applicable
law and the terms of the Plan, the Committee shall have full power and
authority to: (i) designate Participants; (ii) determine the type or types of
Awards to be granted to each Participant hereunder; (iii) determine the number
of Shares to be covered by (or with respect to which payments, rights, or
other matters are to be calculated in connection with) each Award; (iv)
determine the terms and conditions of any Award and to amend, waive or
otherwise change such terms and conditions; (v) determine whether, to what
extent, and under what circumstances Awards may be settled or exercised in
cash, Shares, other securities, other Awards, or other property, or canceled,
forfeited, or suspended, and the method or methods by which Awards may be
settled, exercised, canceled, forfeited, or suspended; (vi) determine whether,
to what extent and under what circumstances cash, Shares, other securities,
other Awards, other property and other amounts payable with respect to an
Award under this Plan shall be deferred either automatically or at the
election of the Participant or the Committee; (vii) interpret and administer
the Plan and any instrument or agreement relating to, or Award made under, the
Plan; (viii) establish, amend, suspend or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (ix) make any other determination and take any other action
that the Committee deems necessary or desirable for administration of the
Plan. Subject to the terms of the Plan (including without limitation Section
11 hereof), the Committee shall also have the authority to grant Awards in
replacement of Awards previously granted under this Plan or any other
compensation plan of the Company or an Affiliate. Unless otherwise
expressly provided in the Plan, all determinations, designations,
interpretations, and other decisions of the Committee shall be final,
conclusive and binding upon all Persons, including the Company, any
Participant, any stockholder, and any Employee of the Company or of any
Affiliate. All determinations of the Committee shall be made by a majority of
its members. The Committee, in its discretion, may delegate its authority and
duties under the Plan to the Chief Executive Officer and/or to other officers
of the Company under such conditions and/or limitations as the Committee may
establish; provided, however, that only the Committee may select and grant
Awards, or otherwise take any action with respect to Awards, to Participants
who are (i) officers or directors of the Company for purposes of Section 16 of
the Exchange Act; or (ii) Participants who are "covered employees" under
Section 162(m) of the Code. Notwithstanding the above, the Committee shall
not have any discretion with respect to the Options granted to Outside
Directors pursuant to Section 9 hereof.
Section 4. Shares Subject to the Plan.
(a) Subject to adjustment as provided in Section 4(c), a total of Eight
Million Four Hundred Thousand (8,400,000) Shares shall be available for
the grant of Awards under the Plan. Any Shares issued hereunder may
consist, in whole or in part, of authorized and unissued shares or
treasury shares. If any Shares subject to any Award granted hereunder
are forfeited or such Award otherwise terminates without the issuance of
such Shares or of other consideration in lieu of such Shares, the Shares
subject to such Award, to the extent of any such forfeiture or
termination, shall again be available for grant under the Plan. In
addition, to the extent permitted by Section 422 of the Code, any Shares
issued by, and any Awards granted by or that become obligations of, the
Company through or as the result of the assumption of outstanding grants
or the substitution of Shares under outstanding grants of an acquired
company shall not reduce the Shares available for grants under the Plan
(except in the case of Awards granted to Participants who are officers
or directors of the Company to the extent required by Section 16 of the
Exchange Act).
(b) For purposes of this Section 4,
(i) If an Award (other than a Dividend Equivalent)
is denominated in Shares, the number of Shares covered by
such Award, or to which such Award relates, shall be counted
on the date of grant of such Award against the aggregate
number of Shares available for granting Awards under the
Plan;
(ii) Dividend Equivalents and Awards not denominated
in Shares shall be counted against the aggregate number of
Shares available for granting Awards under the Plan in such
amount and at such time as the Committee shall determine
under procedures adopted by the Committee consistent with
the purposes of the Plan; and
(iii) Awards that operate in tandem with (whether
granted simultaneously with or at a different time from),
or that are substituted for, other Awards or awards under
other Company plans may be counted or not counted under
procedures adopted by the Committee in order to avoid
double counting.
(c) In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash,
Shares, or other securities or property), stock split, reverse
stock split, merger, reorganization, consolidation,
recapitalization, split-up, spin-off, repurchase, exchange of
shares, issuance of warrants or other rights to purchase Shares or
other securities of the Company, or other transaction or event
affects the Shares such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee may: (i) make
adjustments in the aggregate number and class of shares or
property which may be delivered under the Plan and may substitute
other shares or property for delivery under the Plan, including
shares of another entity which is a party to any such merger,
reorganization, consolidation or exchange of shares; and (ii)
make adjustments in the number, class and option price of shares
or property subject to outstanding Awards and Options granted
under the Plan, and may substitute other shares or property for
delivery under outstanding Awards and Options, including shares of
another entity which is a party to any such merger,
reorganization, consolidation or exchange of shares, as may be
determined to be appropriate by the Committee in its sole
discretion, provided that the number of Shares subject to any
Award or Option shall always be a whole number. The preceding
sentence shall not limit the actions which may be taken by the
Committee under Section 10 of the Plan. No adjustment shall be
made with respect to Awards of Incentive Stock Options that would
cause the Plan to violate Section 422 of the Code, and the number
and price of shares subject to outstanding Options granted to
Outside Directors pursuant to Section 9 hereof shall be subject to
adjustment only as set forth in Section 9.
Section 5. Eligibility.
Any Employee shall be eligible to be selected as a Participant.
Notwithstanding any other provision of the Plan to the contrary, no
Participant may be granted an Option, Limited Right or Stock Appreciation
Right in any one (1) calendar year, which, when added to any other Option,
Limited Right or Stock Appreciation Right granted hereunder in the same year,
shall exceed Five Hundred Thousand (500,000) Shares. If an Option, Limited
Right or Stock Appreciation Right is canceled, the canceled Option, Limited
Right or Stock Appreciation Right continues to count against the maximum
number of Shares for which an Option, Limited Right or Stock Appreciation
Right may be granted to a Participant in any year. All Shares specified in
this Section 5 shall be adjusted to the extent necessary to reflect
adjustments to Shares required by Section 4(c) hereof.
Section 6. Stock Options.
Options may be granted hereunder to Participants either alone or in
addition to other Awards granted under the Plan. Options may be Incentive
Stock Options within the meaning of Section 422 of the Code or Non-Qualified
Stock Options (i.e., stock options which are not Incentive Stock Options), or
a combination thereof. Any Option granted to a Participant under the Plan
shall be evidenced by an Award Agreement in such form as the Committee may
from time to time approve. Any such Option shall be subject to the following
terms and conditions and to such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall deem
desirable:
(a) Option Price. The purchase price per Share purchasable
under an Option shall be determined by the Committee; provided,
however, that such purchase price shall not be less than one
hundred percent (100%) of the Fair Market Value of the Share on
the effective date of the grant of the Option (or, if the
Committee so determines, in the case of any Option retroactively
granted in tandem with or in substitution for another Award or any
outstanding Award granted under any other plan of the Company, on
the effective date of grant of such other Award or award under
another Company plan).
(b) Option Term. The term of each Option shall be fixed by
the Committee in its sole discretion, except as provided below for
Incentive Stock Options.
(c) Exercisability. Except as otherwise provided in Section
10(a), Options shall be exercisable at such time or times as
determined by the Committee at or subsequent to grant.
(d) Method of Exercise. Subject to the other provisions of
the Plan and any applicable Award Agreement, any Option may be
exercised by the Participant in whole or in part at such time or
times, and the Participant may make payment of the option price in
such form or forms as the Committee shall determine, including,
without limitation, payment by delivery of cash, Shares or other
consideration (including, where permitted by law and the
Committee, Awards) having a Fair Market Value on the exercise date
equal to the total option price, or by any combination of cash,
Shares and other consideration as the Committee may specify in the
applicable Award Agreement.
(e) Incentive Stock Options. In accordance with rules and
procedures established by the Committee, the aggregate Fair
Market Value (determined as of the time of grant) of the Shares with
respect to which Incentive Stock Options held by any Participant
are exercisable for the first time by such Participant during any
calendar year under the Plan (and under any other benefit plans of
the Company or of any parent or subsidiary corporation of the
Company as defined in Section 424 of the Code) shall not exceed
One Hundred Thousand Dollars ($100,000) or, if different, the
maximum limitation in effect at the time of grant under Section
422 of the Code, or any successor provision, and any regulations
promulgated thereunder. The option price per Share purchasable
under an Incentive Stock Option shall not be less than one hundred
percent (100%) of the Fair Market Value of the Share on the date
of grant of the Option. No incentive stock option may be granted
after ten (10) years from the date of adoption of this plan, and
each Incentive Stock Option shall expire not later than ten (10)
years from its date of grant. No Incentive Stock Option shall be
granted to any Participant if at the time the Option is granted
such Participant owns stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the
Company, its parent or its subsidiaries unless (i) the option
price per Share is at least one hundred and ten percent (110%) of
the Fair Market Value of the Share on the date of grant, and (ii)
such Option by its terms is not exercisable after the expiration
of five (5) years from the date such Option is granted. The terms
of any Incentive Stock Option granted hereunder shall comply in
all respects with the provisions of Section 422 of the Code, or
any successor provision, and any regulations promulgated thereunder.
(f) Form of Settlement. In its sole discretion, the Committee
may provide at the time of grant that the Shares to be issued upon
an Option's exercise shall be in the form of Shares subject to
restrictions as the Committee may determine, or other similar
securities, or may reserve the right so to provide after the time
of grant.
Section 7. Stock Appreciation and Limited Rights.
(a) Stock Appreciation Rights may be granted hereunder to
Participants either alone or in addition to other Awards granted
under the Plan and may, but need not, relate to a specific Option
granted under Section 6. The provisions of Stock Appreciation
Rights need not be the same with respect to each recipient. Any
Stock Appreciation Right related to a Non-Qualified Stock Option
may be granted at the same time such Option is granted or at any
time thereafter before exercise or expiration of such Option. Any
Stock Appreciation Right related to an Incentive Stock Option must
be granted at the same time such Option is granted and must have a
grant price equal to the option price of such Option. In the case
of any Stock Appreciation Right related to any Option, the Stock
Appreciation Right or applicable portion thereof shall terminate
and no longer be exercisable upon the termination or exercise of
the related Option, except that a Stock Appreciation Right granted
with respect to less than the full number of Shares covered by a
related Option shall not be reduced until the exercise or
termination of the related Option exceeds the number of Shares not
covered by the Stock Appreciation Right. Any Option related to
any Stock Appreciation Right shall no longer be exercisable to the
extent the related Stock Appreciation Right has been exercised.
Any Stock Appreciation Right related to an Option shall be
exercisable to the extent, and only to the extent, that the
related Option is exercisable. The Committee may impose such
other conditions or restrictions on the exercise of any Stock
Appreciation Right as it shall deem appropriate. Subject to the
terms of the Plan and any applicable Award Agreement, a Stock
Appreciation Right granted under the Plan shall confer on the
holder thereof a right to receive, upon exercise thereof, the
excess of (i) the Fair Market Value of one (1) Share on the date of
exercise or with respect to any right related to an Option other
than an Incentive Stock Option, at any time during a specified
period before or after the date of exercise as determined by the
Committee over (ii) the grant price of the right as specified by
the Committee, which shall not be less than the Fair Market Value
of one (1) Share on the date of grant of the Stock Appreciation
Right (or, if the Committee so determines, in the case of any Stock
Appreciation Right retroactively granted in
tandem with or in substitution for another Award or any
outstanding award granted under any other plan of the Company, on
the date of grant of such other Award or award), multiplied by the
number of Shares as to which the holder is exercising the Stock
Appreciation Right. Subject to the terms of the Plan and any
applicable Award Agreement, the terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee.
The Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it may deem
appropriate.
(b) Limited Rights may be granted hereunder to Participants
only with respect to an Option granted under Section 6 hereof or a
stock option granted under another plan of the Company. The
provisions of Limited Rights need not be the same with respect to
each recipient. Any Limited Right related to a Non-Qualified
Stock Option may be granted at the same time such Option is
granted or at any time thereafter before exercise or expiration of
such Option. Any Limited Right related to an Incentive Stock
Option must be granted at the same time such Option is granted. A
Limited Right shall terminate and no longer be exercisable upon
termination or exercise of the related Option, except that a
Limited Right granted with respect to less than the full number of
Shares covered by a related Option shall not be reduced until the
exercise or termination of the related Option exceeds the number
of Shares not covered by the Limited Right. Any Option related to
any Limited Right shall no longer be exercisable to the extent the
related Limited Right has been exercised. Any Limited Right shall
be exercisable to the extent, and only to the extent, the related
Option is exercisable and only during the three (3) month period
immediately following a Change in Control of the Company (as
defined in Section 10 hereof). The Committee may impose such
other conditions or restrictions on the exercise of any Limited
Right as it shall deem appropriate. Subject to the terms of the
Plan and any applicable Award Agreement, a Limited Right granted
under the Plan shall confer on the holder thereof a right to
receive, upon exercise thereof, an amount equal to the excess of
(i) the Fair Market Value of one (1) Share on the date of exercise
or if greater and only with respect to any Limited Right related
to an Option other than an Incentive Stock Option, the highest
price per Share paid in connection with any Change in Control of
the Company, over (ii) the option price of the related Option,
multiplied by the number of Shares as to which the holder is
exercising the Limited Right. The amount payable to the holder
shall be paid by the Company in cash. Subject to the terms of the
Plan and any applicable Award Agreement, the terms and conditions
of any Limited Right shall be as determined by the Committee. The
Committee may impose such conditions or restrictions on the
exercise of any Limited Right as it may deem appropriate.
Section 8. Performance Awards.
Performance Awards may be issued hereunder to Participants in the form of
Performance Shares or Performance Units, for no cash consideration or for such
minimum consideration as may be required by applicable law, either alone or in
addition to other Awards granted under the Plan. The value represented by a
Performance Share or Unit shall be payable to, or upon the exercise by, the
Participant holding such Award, in whole or in part, following achievement of
such performance goals during such Performance Period as determined by the
Committee. Except as provided in Section 10, Performance Awards will be paid
only after the end of the relevant Performance Period. Performance Awards may
be paid in cash, Shares, other property or any combination thereof, in the
sole discretion of the Committee at the time of payment. The length of the
Performance Period, the performance criteria or levels to be achieved for each
Performance Period, and the amount of the Award to be distributed shall be
conclusively determined by the Committee. Performance Awards may be paid in a
lump sum or in installments following the close of the Performance Period or,
in accordance with procedures established by the Committee, on a deferred
basis. An Award of Performance Shares may consist of or include a grant of
Shares which may be subject to such restrictions, conditions and contingencies
as determined by the Committee. As to any such grant of Shares, the value
represented by the Award and the payment of the Award may consist solely of
the value of any right to the Shares or such other form of value and payment
as determined by the Committee. To the greatest extent possible when making
Performance Awards the Committee shall adopt performance goals, certify
completion of such goals and comply with any other Code requirements necessary
to be in compliance with the performance-based compensation requirements of
Code Section 162(m).
Section 9. Outside Directors' Options.
(a) Grant of Options. At the time an outside Director first
becomes a member of the Board after February 26, 1996, the Outside
Director shall automatically be granted an option to purchase
6,000 Shares. On the date each Stockholders Meeting is actually
held in each of the years beginning with 1996 and through 2005,
each Outside Director shall automatically be granted an Option to
purchase 3,000 Shares; provided, however, that an Outside Director
shall not be entitled to receive and shall not be granted any such
Option on the date of any particular Stockholders Meeting if he
will not continue to serve as an Outside Director immediately
following such Stockholders Meeting. An Outside Director who
first takes a position on the Board at the Annual Stockholders
Meeting, shall be entitled to receive the 6,000 Share initial
service option plus the 3,000 Share Option granted at that
Stockholders Meeting to each Outside Director. All such Options
shall be Non-Qualified Stock Options. The price at which each
Share covered by such Options may be purchased shall be one
hundred percent (100%) of the fair market value of a share on the
date the Option is granted. Fair market value for the purposes of
this Section 9 shall be deemed to be the average of the high and
low prices of the Shares as reported on the New York Stock
Exchange Composite Transactions tape for the date the Option is
granted or, if no sale of Shares shall have been made on that
date, the next preceding date on which there was a sale of Shares.
(b) Exercise of Options. Except as set forth in this Section
9, an Option granted to an Outside Director shall become
exercisable only after one year from the date of grant of the
Option. No Option shall be exercisable more than ten (10) years
after the date of grant. Options may be exercised by an Outside
Director during the period he remains an Outside Director and for
a period of five (5) years after ceasing to be a member of the
Board by reason of death or retirement, or for a period of one (1)
year after ceasing to be a member of the Board for reasons other
than retirement or death; however, only those Options exercisable
at the date the Outside Director ceases to be a member of the
Board shall remain exercisable and in no event shall the Options
be exercisable more than ten (10) years after the date of grant.
For purposes of this Section 9, "retirement" shall mean
discontinuance of service as a director after the director has
reached age fifty-five (55) and has at least five (5) years or
more of service on the Board. All Options shall immediately
become exercisable in the event of a Change in Control, as
hereinafter defined, except that Options shall not be exercisable
earlier than six (6) months from the date of grant to the extent
required by Section 16 of the Exchange Act.
If a former Outside Director shall die holding an Option
that has not expired and has not been fully exercised, the Option
shall remain exercisable until the later of one (1) year after the
date of death or the end of the period in which the former Outside
Director could have exercised the Option had he not died, but in
no event shall the Option be exercisable more than ten (10) years
after the date of grant. In the event of the death of an Outside
Director or former Outside Director, his Options shall be
exercisable only to the extent that they were exercisable at his
date of death and only by the executor or administrator of the
Outside Director's estate, by the person or persons to whom the
Outside Director's rights under the Option shall pass under the
Outside Director's will or the laws of descent and distribution,
or by a beneficiary designated in writing in accordance with
Section 13(a) hereof.
(c) Payment. An Option granted to an Outside Director shall
be exercisable upon payment to the Company of the full purchase
price of the Shares with respect to which the Option is being
exercised. Payment for the Shares shall be in United States
dollars, payable in cash or by check, or by delivery of Shares
having a Fair Market Value on the exercise date equal to the total
Option price, or by any combination of cash and Shares.
(d) Adjustment of Options. In the event there shall be a
merger, reorganization, consolidation, recapitalization, stock
split, reverse stock split, stock dividend or other change in
corporate structure such that the Shares of the Company are
changed into or become exchangeable for a larger or smaller number
of Shares or shares of a different class of stock, thereafter the
number of Shares subject to outstanding Options and the number of
Shares available for the grant of Options under this Plan shall be
increased or decreased, as the case may be, in direct proportion
to the increase or decrease in the number of Shares of the Company
by reason of such change in corporate structure; and the shares of
any such other class of stock shall be treated as Shares for
purposes of this Plan; provided, that the number of Shares shall
always be a whole number, and the purchase price per share of any
outstanding Options shall, in the case of an increase in the
number of Shares, be proportionately reduced, and in the case of a
decrease in the number of Shares, shall be proportionately
increased.
(e) No Obligation. Nothing in this Plan shall be deemed to
create an obligation on the part of the Board or a committee
thereof to nominate any Outside Director for reelection by the
Company's Stockholders, nor confer upon any Outside Director the
right to remain a member of the Board for any period of time, or
at any particular rate of compensation.
Section 10. Change in Control.
(a) In order to maintain the Participants' rights in the event
of any Change in Control of the Company, as hereinafter defined,
the Committee, as constituted before such Change in Control, may,
in its sole discretion, as to any Award (except Options granted
pursuant to Section 9), either at the time an Award is made
hereunder or any time thereafter, take any one (1) or more of the
following actions: (i) provide for the purchase by the Company of
any such Award, upon the Participant's request, for an amount of
cash equal to the amount that could have been attained upon the
exercise of such Award or realization of the Participant's rights
had such Award been currently exercisable or payable; (ii) make
such adjustment to any such Award then outstanding as the
Committee deems appropriate to reflect such Change in Control; or
(iii) cause any such Award then outstanding to be assumed, or new
rights substituted therefor, by the acquiring or surviving
corporation after such Change in Control. In the event a Change
of Control, there shall be an automatic acceleration of any time
periods relating to the exercise or realization of any such Award
and all performance award standards shall be deemed satisfactorily
completed without any action required by the Committee so that
such Award may be exercised or realized in full on or before
a date fixed by the Committee, except no Award shall be
exercisable earlier than six (6) months after the date of grant to
the extent required by Section 16 of the Exchange Act. The
Committee may, in its discretion, include such further provisions
and limitations in any agreement documenting such Awards as it may
deem equitable and in the best interests of the Company.
(b) For purposes of this Plan, a "Change in Control"
shall be deemed to have occurred if (i) for any reason at any time
less than seventy-five percent (75%) of the members of the Board
shall be individuals who fall into any of the following
categories: (A) individuals who were members of such Board on
February 26, 1996; or (B) individuals whose election, or
nomination for election by the Company's stockholders, was
approved by a vote of at least seventy-five percent (75%) of the
members of the Board then still in office who were members of such
Board on February 26, 1996; or (c) individuals whose election, or
nomination for election by the Company's stockholders, was
approved by a vote of at least seventy-five percent (75%) of the
members of the Board then still in office who were elected in the
manner described in (A) or (B) above, or (ii) any "person" (as
such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) shall have become, according to a public announcement or
filing, without the prior approval of the Board of Directors of
the Company, the "beneficial owner" (as defined in Rule 13(d)-3
under the Exchange Act) directly or indirectly, of securities of
the Company representing forty percent (40%) or more (calculated
in accordance with Rule 13(d)-3) of the combined voting power of
the Company's then outstanding voting securities (such "person"
hereafter referred to as a "Major Stockholder"); or (iii) the
stockholders of the Company shall have approved a merger,
consolidation or dissolution of the Company or a sale, lease,
exchange or disposition of all or substantially all of the
Company's assets, or a Major Stockholder shall have proposed any
such transaction, unless such merger, consolidation, dissolution,
sale, lease, exchange or disposition shall have been approved by
at least seventy-five percent (75%) of the members of the Board of
Directors of the Company who are individuals falling into any
combination of the following categories:
(A) individuals who were members of such Board of Directors on
February 26, 1996, or (B) individuals whose election or
nomination for election by the Company's stockholders was
approved by at least seventy-five percent (75%) of the members of
the Board of Directors then still in office who are members of
the Board of Directors on February 26, 1996, or (C) individuals
whose election, or nomination for election by the Company's
stockholders was approved by a vote of at least seventy-five
percent (75%) of the members of the Board then still in office
who were elected in manner described in (A) or (B) above.
Section 11. Amendments and Termination.
The Board or the committee may amend, alter, suspend, discontinue, or
terminate the Plan, but no amendment, alteration, suspension, discontinuation,
or termination shall be made that would impair the rights of an Optionee or
Participant under an Award theretofore granted, without the Optionee's or
Participant's consent. In addition, no amendment shall be effective without
the approval of stockholders as may be required by Section 16 of the Exchange
Act or Section 162(m) of the Code as the case may be, including to:
(a) materially increase the total number of Shares available
for Awards under the Plan, except as is provided in Section 4(c)
of the Plan;
(b) materially increase benefits accruing to Participants
under the Plan;
(c) materially modify the requirements as to eligibility for
participation in the Plan;
(d) change in any way the Options provided for in Section 9 of
the Plan (other than reduce the number of shares for which an
Option that is to be automatically granted is exercisable); or
(e) cause the Plan not to comply with Section 162(m) of the
Code.
However, in no event, shall the provisions relating to the timing,
amount, exercise price or designated recipients of Options provided for in
Section 9 of the Plan be amended more than once every six (6) months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
The Committee may amend the terms of any Award theretofore granted
(except Options granted pursuant to Section 9 hereof), prospectively or
retroactively, and may also substitute new Awards for Awards previously
granted under this Plan or for awards granted under any other compensation
plan of the Company or an Affiliate to Participants, including without
limitation previously granted Options having higher option prices, but no such
amendment or substitution shall impair the rights of any Participant without
his consent.
The Committee shall be authorized, without the Participant's consent, to
make adjustments in Performance Award criteria or in the terms and conditions
of other Awards in recognition of events that it deems in its sole discretion
to be unusual or nonrecurring that affect the Company or any Affiliate or the
financial statements of the Company or any Affiliate, or in recognition of
changes in applicable laws, regulations or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
the dilution or enlargement of benefits or potential benefits under the Plan.
The Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it
shall deem desirable to carry it into effect. In the event the Company shall
assume outstanding employee benefit awards or the right or obligation to make
future such awards in connection with the acquisition of another corporation
or business entity, the Committee may, in its discretion, make such
adjustments in the terms of Awards under the Plan as it shall deem
appropriate. Notwithstanding the above, the Committee shall not have the
right to make any adjustments in the terms or conditions of outstanding
Options granted pursuant to Section 9.
Section 12. Termination of Employment and Noncompetition.
The Committee shall have full power and authority to determine whether,
to what extent and under what circumstances any Award (other than an Option
granted pursuant to Section 9) shall be canceled or suspended and shall
promulgate rules and regulations to (i) determine what events constitute
disability, retirement, termination for an approved reason and termination for
cause for purposes of the Plan, and (ii) determine the treatment of a
Participant under the Plan in the event of his death, disability, retirement,
or termination for an approved reason. If a Participant's employment with the
Company or an Affiliate is terminated for cause, all unexercised, unearned,
and/or unpaid Awards, including, but not by way of limitation, Awards earned,
but not yet paid, all unpaid dividends and dividend equivalents, and all
interest accrued on the foregoing shall be canceled or forfeited, as the case
may be, unless the Participant's Award Agreement provides otherwise. In
addition, but without limitation, all outstanding Awards to any Participant
shall be canceled if the Participant, without the consent of the Committee,
while employed by the Company or after termination of such employment, becomes
associated with, employed by, renders services to, or owns any interest in
(other than any nonsubstantial interest, as determined by the Committee), any
business that is in competition with the Company or any Affiliate, or with any
business in which the Company or any Affiliate has a substantial interest as
determined by the Committee or such officers or committee of senior officers
to whom the authority to make such determination is delegated by the
Committee.
Section 13. General Provisions.
(a) Nonassignability. No Award shall be assignable or
transferable by a Participant or an Outside Director otherwise
than by will or by the laws of descent and distribution; provided,
however, that a Participant or Outside Director may, pursuant to a
written designation of beneficiary filed with the Committee prior
to his death, designate a beneficiary to exercise the rights of
the Participant with respect to any Award upon the death of the
Participant or Outside Director. Each Award shall be exercisable
during the lifetime of the Participant or the Outside Director,
only by the Participant or the Outside Director or, if permissible
under applicable law, by the guardian or legal representative of
the Participant or Outside Director.
(b) Terms. Except for Options granted pursuant to Section 9,
the term of each Award shall be for such period of months or years
from the date of its grant as may be determined by the Committee;
provided, however, that in no event shall the term of any
Incentive Stock Option or any Stock Appreciation or Limited Right
related to any Incentive Stock Option exceed a period of ten (10)
years from the date of its grant.
(c) Rights to Awards. No Employee, Participant or other
Person shall have any claim to be granted any Award under the
Plan, and there is no obligation for uniformity of treatment of
Employees, Participants, or holders or beneficiaries of Awards
under the Plan.
(d) No Cash Consideration for Awards. Awards shall be granted
for no cash consideration or for such minimal cash consideration
as may be required by applicable law.
(e) Restrictions. All certificates for Shares delivered under
the Plan pursuant to any Award shall be subject to such
stock-transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock
exchange upon which the Shares are then listed, and any applicable
Federal or state securities law, and the Committee may cause a
legend or legends to be placed on any such certificates to make
appropriate reference to such restrictions.
(f) Dividend Equivalents. Subject to the provisions of this
Plan and any Award Agreement, the recipient of an Award
(including, without limitation, any deferred Award, but excluding
Options granted pursuant to Section 9) may, if so determined by
the Committee, be entitled to receive, currently or on a deferred
basis, interest or dividends, or interest or dividend equivalents,
with respect to the number of Shares covered by the Award, as
determined by the Committee, in its sole discretion, and the
Committee may provide that such amounts (if any) shall be deemed
to have been reinvested in additional Shares or otherwise
reinvested.
(g) Withholding. The Company shall be authorized to withhold
from any Award granted, payment due or shares or other property
transferred under the Plan the amount of income, withholding and
payroll taxes due and payable in respect of an Award, payment or
shares or other property transferred hereunder and to take such
other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes. The
Company may require the Participant or Outside Director to pay to
it such tax prior to and as a condition of the making of such
payment or transfer of Shares or property under the Plan. In
accordance with any applicable administrative guidelines it
establishes, the Committee may allow or may require participants
to pay the amount of taxes due or payable in respect of an Award
by withholding from any payment of Shares due as a result of such
Award, or by permitting the Participant to deliver to the Company,
Shares having a fair market value, as determined by the Committee,
equal to the amount of such taxes.
(h) Deferral of Awards. At the discretion of the Committee,
payment of a Performance Dividend Equivalent or any portion
thereof may be deferred by a Participant until such time as the
Committee may establish. All such deferrals shall be accomplished
by the delivery on a form provided by the Company of a written,
irrevocable election by the Participant prior to such time payment
would otherwise be made. Further, all deferrals shall be made in
accordance with administrative guidelines established by the
Committee to ensure that such deferrals comply with all applicable
requirements of the Code and its regulations. Deferred payments
shall be paid in a lump sum or installments, as determined by the
Committee. The Committee may also credit interest, at such rates
to be determined by the Committee, on cash payments that are
deferred and credit Dividend Equivalents on deferred payments
denominated in the form of Shares.
(i) No Limit on Other Compensation Arrangements. Nothing
contained in this Plan shall prevent the Company or any Affiliate
from adopting other or additional 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.
(j) Governing Law. The validity, construction, and effect of
the Plan and any rules and regulations relating to the Plan shall
be determined in accordance with the laws of the State of Delaware
and applicable federal law.
(k) Severability. If any provision of this Plan or any Award
is or becomes or is deemed to be invalid, illegal or unenforceable
in any jurisdiction, or as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the
Award, it shall be stricken and the remainder of the Plan and any
such Award shall remain in full force and effect.
(l) No Right to Employment. The grant of an Award shall not
be construed as giving a Participant the right to be retained in the
employ of the Company or any Affiliate. Further, the Company or an
Affiliate may at any time terminate the employment of a Participant,
free from any liability, or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement.
(m) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of
any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent
that any Person acquires a right to receive payments from the
Company or any Affiliate pursuant to an Award, such right shall be
no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(n) No Fractional Shares. No fractional Shares shall be
issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash, other securities, or other
property shall be paid or transferred in lieu of any fractional
Shares, or whether such fractional Shares or any rights thereto
shall be canceled, terminated, or otherwise eliminated.
(o) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material
or relevant to the construction or interpretation of the Plan or
any provision thereof.
(p) With respect to persons subject to Section 16 of the
Exchange Act, transactions under this Plan are intended to comply
with all applicable conditions of Rule 16b-3. To the extent any
provision of this Plan or action by the Committee fails to so
comply, the Committee may deem, for such persons, such provision
or action null and void to the extent permitted by law. Should
any provision of this Plan be unnecessary to comply with the
requirements of Section 16 of the Exchange Act, the Committee may
waive such provision.
Section 14. Effective Date of Plan.
The Plan shall be effective as of May 7, 1991, subject to approval of the
Plan by the Company's stockholders.
Section 15. Term of Plan.
No Award shall be granted pursuant to the Plan after February 25, 2006,
but any Award theretofore granted may extend beyond that date.