KANSAS CITY SOUTHERN INDUSTRIES, INC.
1991 AMENDED AND RESTATED STOCK OPTION AND
PERFORMANCE AWARD PLAN
(as amended and restated September 18, 1997)
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 administra-
tion 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
Tewnty-five Million Two Hundred Thousand (25,200,000) 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. Notwith-
standing 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 rant) 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, re-
organization, 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 in-
crease 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 of 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
twenty-five percent (25%) 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 participa-
tion 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 treat-
ment 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 Agree-
ment 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 obliga-
tion 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 be-
comes 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.