Exhibit 10(a)
WESTERN RESOURCES, INC.
_______________________________________________________
LONG TERM INCENTIVE AND SHARE AWARD PLAN
(Effective January 1, 1996)
______________________________________________________
1. Purposes. The purposes of the 1996 Long Term Incentive and Share
Award Plan are to advance the interests of Western Resources, Inc. and its
shareholders by providing a means to attract, retain, and motivate employees
and directors of the Company and certain of its Subsidiaries and affiliates
upon whose judgment, initiative and efforts the continued success, growth and
development of the Company is dependent.
2. Definitions. For purposes of the Plan, the following terms shall
be defined as set forth below unless a different meaning is plainly required
by the context:
(a) "Affiliate" means any entity other than the Company and
its Subsidiaries that is designated by the Board or the Committee as a
participating employer under the Plan, provided that the Company directly or
indirectly owns at least 50% of the combined voting power of all classes of
stock of such entity or at least 50% of the ownership interests in such
entity.
(b) "Award" means any Option, SAR, Restricted Share,
Restricted Share Unit, Performance Share, Performance Unit, Dividend
Equivalent, or Other Share-Based Award granted to an Eligible Employee under
the Plan.
(c) "Award Agreement" means any written agreement, contract, or
other instrument or document evidencing an Award.
(d) "Beneficiary" means the person, persons, trust or trusts
which have been designated by such Participant in his or her most recent
written beneficiary designation filed with the Company to receive the benefits
specified under this Plan upon the death of the Participant, or, if there is
no designated Beneficiary or surviving designated Beneficiary, then the
person, persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.
(e) "Board" means the Board of Directors of the Company.
(f) "Code" means the Internal Revenue Code of 1986, as
amended from time to time. References to any provision of the Code shall be
deemed to include successor provisions thereto and regulations thereunder.
(g) "Committee" means the Human Resources Committee of the
Board, or such other Board committee as may be designated by the Board to
administer the Plan; provided, however, that the Committee shall consist of
two or more directors of the Company, each of whom is a "disinterested person"
within the meaning of Rule 16b-3 under the Exchange Act and an "outside
director" within the meaning of Section 162(m)(4)(c) of the Code.
(h) "Company" means Western Resources, Inc., a corporation
organized under the laws of the state of Kansas, or any successor
corporation.
( I ) "Director" means a non-employee member of the Board.
( j ) "Director's Share" means a share granted to a Director
under
Section 7.
(k) "Dividend Equivalent" means a right, granted under
Section 5(g), to receive cash, Shares, or other property equal in value to
dividends paid with respect to a specified number of Shares. Dividend
Equivalents may be awarded on a free-standing basis or in connection with
another Award, and may be paid currently or on a deferred basis.
(l) "Eligible Employee" means an employee of the Company or its
Subsidiaries and Affiliates, including any director who is an employee, who is
responsible for or contributes to the management, growth and/or profitability
of the business of the Company, its Subsidiaries or Affiliates.
(m) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time. References to any provision of the Exchange Act
shall be deemed to include successor provisions thereto and regulations
thereunder.
(n) "Fair Market Value" means, with respect to Shares or
other property, the fair market value of such Shares or other property
determined by such methods or procedures as shall be established from time to
time by the Committee. If the shares are listed on any established stock
exchange or on a national market system, unless otherwise determined by the
Committee in good faith, the Fair Market Value of Shares shall mean the mean
between the high and low selling prices per Share on the immediately
preceding date (or, if the Shares were not traded on that day, the next
preceding day that the Shares were traded) on the principal exchange on which
the Shares are traded, as such prices are officially quoted on such exchange.
(o) "ISO" means any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.
(p) "NQSO" means any Option that is not an ISO.
(q) "Option" means a right, granted under Section 5(b), to
purchase Shares.
(r) "Other Share-Based Award" means a right, granted under
Section 5(h), that relates to or is valued by reference to Shares.
(s) "Participant" means an Eligible Employee or Director who
has been granted an Award or Director's Shares under the Plan.
(t) "Performance Share" means a performance share granted under
Section 5(f).
(u) "Performance Unit" means a performance unit granted under
Section 5(f).
(v) "Plan" means this 1996 Long Term Incentive and Share Award
Plan.
(w) "Restricted Shares" means an Award of Shares under Section
5(d) that may be subject to certain restrictions and to a risk of forfeiture.
(x) "Restricted Share Unit" means a right, granted under
Section 5(e), to receive Shares or cash at the end of a specified deferral
period.
(y) "Rule 16b-3" means Rule 16b-3, as from time to time in
effect and applicable to the Plan and Participants, promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange Act.
(z) "SAR" or "Share Appreciation Right" means the right,
granted under Section 5(c), to be paid an amount measured by the difference
between the exercise price of the right and the Fair Market Value of Shares
on the date of exercise of the right, with payment to be made in cash,
Shares, or property as specified in the Award or determined by the Committee.
(aa) "Shares" means common stock, $5.00 par value per
share, of the Company.
(bb) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if
each of the corporations (other than the last corporation in the unbroken
chain) owns shares possessing 100% or more of the total combined voting power
of all classes of stock in one of the other corporations in the chain.
3. Administration.
(a) Authority of the Committee. Except as provided in
subsection (e) of this Section 3, the Plan shall be administered by the
Committee, and the Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions
of the Plan:
i) to select Eligible Employees to whom Awards may
be granted;
(ii) to designate Affiliates;
(iii) to determine the type or types of Awards to be
granted to each Eligible Employee;
(iv) to determine the type and number of Awards to be
granted, the number of Shares to which an Award may relate, the terms and
conditions of any Award granted under the Plan (including, but not limited to,
any exercise price, grant price, or purchase price, and any bases for
adjusting such exercise, grant or purchase price, any restriction or
condition, any schedule for lapse of restrictions or conditions relating to
transferability or forfeiture, exercisability, or settlement of an Award, and
waiver or accelerations thereof, and waivers of performance conditions
relating to an Award, based in each case on such considerations as the
Committee shall determine), and all other matters to be determined in
connection with an Award;
(v) to determine whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award may
be paid, in cash, Shares, other Awards, or other property, or an Award may be
canceled, forfeited, exchanged, or surrendered;
(vi) to determine whether, to what extent, and under
what circumstances cash, Shares, other Awards, or other property payable with
respect to an Award will be deferred either automatically, at the election of
the Committee, or at the election of the Participant;
(vii) to prescribe the form of each Award Agreement, which
need not be identical for each Participant;
(viii) to adopt, amend, suspend, waive, and rescind
such rules and regulations and appoint such agents as the Committee may deem
necessary or advisable to administer the Plan;
(ix) to correct any defect or supply any omission or
reconcile any inconsistency in the Plan and to construe and interpret the
Plan and any Award, rules and regulations, Award Agreement, or other
instrument hereunder,
(x) to accelerate the exercisability or vesting of all or
any portion of any Award or to extend the period during which an Award is
exercisable; and
(xi) to make all other decisions and determinations
as may be required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.
(b) Manner of Exercise of Committee Authority. The Committee
shall have sole discretion in exercising its authority under the Plan. Any
action of the Committee with respect to the Plan shall be final, conclusive,
and binding on all persons, including the Company, Subsidiaries, Affiliates,
Eligible Employees, any person claiming any rights under the Plan from or
through any Eligible Employee, and shareholders. The express grant of any
specific power to the Committee, and the taking of any action by the
Committee, shall not be construed as limiting any power or authority of the
Committee. The Committee may delegate to officers or managers of the Company
or any Subsidiary or Affiliate the authority, subject to such terms as the
Committee shall determine, to perform administrative functions and, with
respect to Awards granted to persons not subject to Section 16 of the Exchange
Act, to perform such other functions as the Committee may determine, to the
extent permitted under Rule 16b-3 (if applicable) and applicable law.
(c) Limitation of Liability. Each member of the Committee shall
be entitled to, in good faith, rely or act upon any report or other
information furnished to him or her by any officer or other employee of the
Company or any Subsidiary or Affiliate, the Company's independent certified
public accountants, or other professional retained by the Company to assist
in the administration of the Plan. No member of the Committee, nor any
officer or employee of the Company acting on behalf of the Committee, shall be
personally liable for any action, determination, or interpretation taken or
made in good faith with respect to the Plan, and all members of the Committee
and any officer or employee of the Company acting on their behalf shall, to
the extent permitted by law, be fully indemnified and protected by the Company
with respect to any such action, determination, or interpretation.
(d) Limitation on Committee's Discretion. Anything in this Plan to
the contrary notwithstanding, in the case of any Award which is intended to
qualify as "performance-based compensation" within the meaning of Section
162(m)(4)(C) of the Code, the Committee shall have no discretion to increase
the amount of compensation payable under the Award to the extent such an
increase would cause the Award to lose its qualification as such
performance-based compensation.
(e) Administration of Directors' Portion. Anything in this Plan to
the contrary notwithstanding, the portion of this Plan relating to Directors
shall be administrated by the full board. Since grants to Directors are
either automatic or based on the elections of Directors, this function will be
limited to interpretation and general administrative oversight.
4. Shares Subject to the Plan.
(a) Subject to adjustment as provided in Section 4(c) hereof,
the total number of Shares reserved for issuance in connection with Awards and
Director's Shares under the Plan shall be 3,000,000 . No Award or Director's
Shares may be granted if the number of Shares to which such Award or
Director's Share relates, when added to the number of Shares previously issued
under the Plan, exceeds the number of Shares reserved under the preceding
sentence. If any Awards or Director's Shares are forfeited, canceled,
terminated, exchanged or surrendered or such Award or Director's Shares is
settled in cash or otherwise terminates without a distribution of Shares to
the Participant, any Shares counted against the number of Shares reserved and
available under the Plan with respect to such Award or Director's Shares
shall, to the extent of any such forfeiture, settlement, termination,
cancellation, exchange or surrender, again be available for Awards or
Director's Shares under the Plan. Upon the exercise of any Award granted in
tandem with any other Awards, such related Awards shall be canceled to the
extent of the number of Shares as to which the Award is exercised. Subject
to adjustment as provided in Section 4(c) hereof, the maximum number of Shares
with respect to which Options or SARs may be granted during a calendar year
to any Eligible Employee under this Plan shall be 75,000 (seventy-five
thousand) Shares or with respect to Restricted Shares and Performance Shares
the equivalent of 15,000 shares during a calendar year.
(b) Any Shares distributed pursuant to an Award or Director's
Shares may consist, in whole or in part, of authorized and unissued Shares,
treasury Shares or Shares acquired by purchase in the open market or in
private transactions.
(c) In the event that the Committee shall determine that any
dividend in Shares, recapitalization, Share split, reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, affects the
Shares such that an adjustment is appropriate ln order to prevent dilution or
enlargement of the rlghts of Eligible Employees under the Plan, then the
Committee shall make such equitable changes or adjustments as it deems
appropriate and, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares which may thereafter be issued under the
Plan, (ii) the number and kind of shares, other securities or other
consideration issued or issuable in respect of outstanding Awards, and (iii)
the exercise price, grant price, or purchase price relating to any Award;
provided, however, in each case that, with respect to ISOs, such adjustment
shall be made in accordance with Section 424(h) of the Code, unless the
Committee determines otherwise. In addition, the Committee is authorized to
make adjustments in the terms and conditions of, and the criteria and
performance objectives included in, Awards in recognition of unusual or
non-recurring events (including, without limitation, events described in the
preceding sentence) affecting the Company or any Subsidiary or Affiliate or
the financial statements of the Company or any Subsidiary or Affiliate, or in
response to changes in applicable laws, regulations, or accounting principles;
provided, however, that, if an Award Agreement specifically so provides, the
Committee shall not have discretion to increase the amount of compensation
payable under the Award to the extent such an increase would cause the Award
to lose its qualification as performance-based compensation for purposes of
Section 162(m)(4)(C) of the Code and the regulations thereunder.
5. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and conditions
set forth in this Section 5. In addition, the Committee may impose on any
Award or the exercise thereof, at the date of grant or thereafter (subject to
Section 9(d)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
regarding forfeiture of Awards or continued exercisability of Awards in the
event of termination of employment by the Eligible Employee.
(b) Options. The Committee is authorized to grant Options,
which may be NQSOs or ISOs, to Eligible Employees on the following terms and
conditions:
(i) Exercise Price. The exercise price per Share
purchasable under an Option shall be determined by the Committee, and the
Committee may, without limitation, set an exercise price that is based upon
achievement of performance criteria if deemed appropriate by the Committee.
(ii) Time and Method of Exercise. The Committee shall
determine at the date of grant or thereafter the time or times at which an
Option may be exercised in whole or in part (including, without limitation,
upon achievement of performance criteria if deemed appropriate by the
Committee), the methods by which such exercise price may be paid or deemed to
be paid (including, without limitation, broker-assisted exercise
arrangements), the form of such payment (including, without limitation, cash,
Shares, notes or other property), and the methods by which Shares will be
delivered or deemed to be delivered to Eligible Employees.
(iii) ISOs. The terms of any ISO granted under the Plan
shall comply in all respects with the provisions of Section 422 of the Code,
including but not limited to the requirement that the ISO shall be granted
within ten years from the earlier of the date of adoption or shareholder
approval of the Plan.
(c) SARs. The Committee is authorized to grant SARs (Share
Appreciation Rights) to Eligible Employees on the following terms and
conditions:
(I) Right to Payment. An SAR shall confer on the
Eligible Employee to whom it is granted a right to receive with respect to
each Share subject thereto, upon exercise thereof, the excess of (1) the Fair
Market value of one Share on the date of exercise (or if the Committee shall
so determine in the case of any such right, the Fair Market Value of one Share
at any time during a specified period before or after the date of exercise)
over (2) the exercise price of the SAR as determined by the Committee as of
the date of grant of the SAR (which, in the case of an SAR granted in tandem
with an Option, shall be equal to the exercise price of the underlying
Option).
(ii) Other Terms. The Committee shall determine, at the
time of grant or thereafter, the time or times at which an SAR may be
exercised in whole or in part, the method of exercise, method of settlement,
form of consideration payable in settlement, method by which Shares will be
delivered or deemed to be delivered to Eligible Employees, whether or not an
SAR shall be in tandem with any other Award, and any other terms and
conditions of any SAR. Unless the Committee determines otherwise, a SAR (1)
granted in tandem with an NQSO may be granted at the time of grant of the
related NQSO or at any time thereafter, and (2) granted in tandem with an ISO
may only be granted at the time of grant of the related ISO.
(d) Restricted Shares. The Committee is authorized to grant
Restricted Shares to Eligible Employees on the following terms and conditions:
(i) Issuance and Restrictions. Restricted Shares shall be
subject to such restrictions on transferability and other restrictions, if
any, as the Committee may impose at the date of grant or thereafter, which
restrictions may lapse separately or in combination at such times, under such
circumstances (including, without limitation, upon achievement of performance
criteria if deemed appropriate by the Committee), in such installments, or
otherwise, as the Committee may determine. Except to the extent restricted
under the Award Agreement relating to the Restricted Shares, an Eligible
Employee granted Restricted Shares shall have all of the rights of a
shareholder including, without limitation, the right to vote Restricted Shares
and the right to receive dividends thereon. The Committee must certify in
writing prior to the lapse of restrictions conditioned on achievement of
performance criteria that such performance criteria were in fact satisfied.
(ii) Forfeiture. Except as otherwise determined by the
Committee, at the date of grant or thereafter, upon termination of employment
during the applicable restriction period, Restricted Shares and any accrued
but unpaid dividends or Dividend Equivalents that are at that time subject to
restrictions shall be forfeited; provided, however, that the Committee may
provide, by rule or regulation or in any Award Agreement, or may determine in
any individual case, that restrictions or forfeiture conditions relating to
Restricted Shares will be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part the forfeiture of Restricted Shares.
(iii) Certificates for Shares. Restricted Shares granted
under the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Shares are registered in
the name of the Eligible Employee, such certificates shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to such
Restricted Shares, and the Company shall retain physical possession of the
certificate.
(iv) Dividends. Dividends paid on Restricted Shares shall
be either paid at the dividend payment date or deferred for payment to such
date as determined by the Committee, in cash or in unrestricted Shares having
a Fair Market Value equal to the amount of such dividends. Shares distributed
in connection with a Share split or dividend in Shares, and other property
distributed as a dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Shares with respect to which
such Shares or other property has been distributed.
(e) Restricted Share Units. The Committee is authorized to
grant Restricted Share Units to Eligible Employees, subject to the following
terms and conditions:
(i) Award and Restrictions. Delivery of Shares or cash,
as the case may be, will occur upon expiration of the deferral period
specified for Restricted Share Units by the Committee (or, if permitted by the
Committee, as elected by the Eligible Employee). In addition, Restricted
Share Units shall be subject to such restrictions as the Committee may impose,
if any (including, without limitation, the achievement of performance criteria
if deemed appropriate by the Committee), at the date of grant or thereafter,
which restrictions may lapse at the expiration of the deferral period or at
earlier or later specified times, separately or in combination, in
installments or otherwise, as the Committee may determine. The Committee must
certify in writing prior to the lapse of restrictions conditioned on the
achievement of performance criteria that such criteria were in fact satisfied.
(ii) Forfeiture. Except as otherwise
determined by the Committee, at the date of grant or thereafter, upon
termination of employment (as determined under criteria established by the
Committee) during the applicable deferral period or portion thereof to which
forfeiture conditions apply (as provided in the Award Agreement evidencing the
Restricted Share Units), or upon failure to satisfy any other conditions
precedent to the delivery of Shares or cash to which such Restricted Share
Units relate, all Restricted Share Units that are at that time subject to
deferral or restriction shall be forfeited; provided, however, that the
Committee may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or forfeiture conditions
relating to Restricted Share Units will be waived in whole or in part in the
event of termination resulting from specified causes, and the Committee may in
other cases waive in whole or in part the forfeiture of Restricted Share
Units.
(f) Performance Shares and Performance Units. The Committee is
authorized to grant Performance Shares or Performance Units or both to
Eligible Employees on the following terms and conditions:
(i) Performance Period. The Committee shall determine a
performance period (the "Performance Period") of one or more years and shall
determine the performance objectives for grants of Performance Shares and
Performance Units. Performance objectives may vary from Eligible Employee to
Eligible Employee and shall be based upon such performance criteria as the
Committee may deem appropriate. Performance Periods may overlap and Eligible
Employees may participate simultaneously with respect to Performance Shares
and Performance Units for which different Performance Periods are prescribed.
(ii) Award Value. At the beginning of a Performance
Period, the Committee shall determine for each Eligible Employee or group of
Eligible Employees with respect to that Performance Period the range of number
of Shares, if any, in the case of Performance Shares, and the range of dollar
values, if any, in the case of Performance Units, which may be fixed or may
vary in accordance with such performance or other criteria specified by the
Committee, which shall be paid to an Eligible Employee as an Award if the
relevant measure of Company performance for the Performance Period is met.
(iii) Significant Events. If during the course of a
Performance Period there shall occur significant events as determined by the
Committee which the Committee expects to have a substantial effect on a
performance objective during such period, the Committee may revise such
objective; provided, however, that, if an Award Agreement so provides, the
Committee shall not have any discretion to increase the amount of compensation
payable under the Award to the extent such an increase would cause the Award
to lose its qualification as performance-based compensation for purposes of
Section 162(m)(4)(C) of the Code and the regulations thereunder.
(iv) Forfeiture. Except as otherwise determined by the
Committee, at the date of grant or thereafter, upon termination of employment
during the applicable Performance Period, Performance Shares and Performance
Units for which the Performance Period was prescribed shall be forfeited;
provided, however, that the Committee may provide, by rule or regulation or in
any Award Agreement, or may determine in an individual case, that restrictions
or forfeiture conditions relating to Performance Shares and Performance Units
will be waived in whole or in part in the event of terminations resulting from
specified causes, and the Committee may in other cases waive in whole or in
part the forfeiture of Performance Shares and Performance Units.
(v) Payment. Each Performance Share or Performance Unit
may be paid in whole Shares, or cash, or a combination of Shares and cash
either as a lump sum payment or in installments, all as the Committee shall
determine, at the time of grant of the Performance Share or Performance Unit
or otherwise, commencing as soon as practicable after the end of the relevant
Performance Period. The Committee must certify in writing prior to payment of
any Performance Share or Performance Unit that the performance objectives and
any other material items were in fact satisfied.
(g) Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to Eligible Employees. The Committee may provide, at the
date of grant or thereafter, that Dividend Equivalents shall be paid or
distributed when accrued or shall be deemed to have been reinvested in
additional Shares, or other investment vehicles as the Committee may
specify, provided that Dividend Equivalents (other than freestanding Dividend
Equivalents) shall be subject to all conditions and restrictions of the
underlying Awards to which they relate.
(h) Other Share-Based Awards. The Committee is authorized,
subject to limitations under applicable law, to grant to Eligible Employees
such other Awards that may be denominated or payable in, valued in whole or in
part by reference to, or otherwise based on, or related to, Shares, as deemed
by the Committee to be consistent with the purposes of the Plan, including,
without limitation, unrestricted shares awarded purely as a "bonus" and not
subject to any restrictions or conditions, other rights convertible or
exchangeable into Shares, purchase rights for Shares, Awards with value and
payment contingent upon performance of the Company or any other factors
designated by the Committee, and Awards valued by reference to the performance
of specified Subsidiaries or Affiliates. The Committee shall determine the
terms and conditions of such Awards at date of grant or thereafter. Shares
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 5(h) shall be purchased for such consideration, paid for at such
times, by such methods, and in such forms, including, without limitation,
cash, Shares, notes or other property, as the Committee shall determine. Cash
awards, as an element of or supplement to any other Award under the Plan,
shall also be authorized pursuant to this Section 5(h).
6. Certain Provisions Applicable to Awards.
(a) Stand-Alone, Additional, Tandem and Substitute Awards.
Awards granted under the Plan may, in the discretion of the Committee, be
granted to Eligible Employees either alone or in addition to, in tandem with,
or in exchange or substitution for, any other Award granted under the Plan or
any award granted under any other plan or agreement of the Company, any
Subsidiary or Affiliate, or any business entity to be acquired by the Company
or a Subsidiary or Affiliate, or any other right of an Eligible Employee to
receive payment from the Company or any Subsidiary or Affiliate. Awards may
be granted in addition to or in tandem with such other Awards or awards, and
may be granted either at the same time as or a different time from the grant
of such other Awards or awards. The per Share exercise price of any Option,
grant price of any SAR, or purchase price of any other Award conferring a
right to purchase Shares which is granted, in connection with the substitution
of awards granted under any other plan or agreement of the Company or any
Subsidiary or Affiliate or any business entity to be acquired by the Company
or any Subsidiary or Affiliate, shall be determined by the Committee, in its
discretion.
(b) Terms of Awards. The term of each Award granted to an
Eligible Employee shall be for such period as may be determined by the
Committee; provided, however, that in no event shall the term of any ISO or
an SAR granted in tandem therewith exceed a period of ten years from the date
of its grant (or such shorter period as may be applicable under Section 422 of
the Code).
(c) Form of Payment Under Awards. Subject to the terms of the
Plan and any applicable Award Agreement, payments to be made by the Company or
a Subsidiary or Affiliate upon the grant, maturation, or exercise of an Award
may be made in such forms as the Committee shall determine at the date of
grant or thereafter, including, without limitation, cash, Shares, or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The Committee may make rules relating to installment or
deferred payments with respect to Awards, including the rate of interest to be
credited with respect to such payments.
(d) Nontransferability. Unless otherwise set forth by the
Committee in an Award Agreement, Awards (except for vested shares) shall not
be transferable by an Eligible Employee except by will or the laws of descent
and distribution (except pursuant to a Beneficiary designation) and shall be
exercisable during the lifetime of an Eligible Employee only by such Eligible
Employee or his guardian or legal representative. An Eligible Employee's
rights under the Plan may not be pledged, mortgaged, hypothecated, or
otherwise encumbered, and shall not be subject to claims of the Eligible
Employees creditors.
7. Directors' Fees
(a) Stock Grant. Each Director Participant shall receive such portion
of his/her Director fees in Shares as shall be established from time to time
by the Board, with the remainder of such Director fees to be payable, in cash
or in Shares as elected by the Director Participant in accordance with Section
7(b) below.
(b) Election to Determine Percentage or Amount of Compensation to be
Paid in Stock. Each Director Participant shall have an opportunity to elect
to have the remaining portion of his/her Director fees paid in cash or shares,
or a combination thereof. Except for the initial election following adoption
of the plan or the Director's election to the Board, any such election shall
be made in writing and must be made at least six months before the services
are rendered giving rise to such compensation, and may not be changed
thereafter except as to compensation for services rendered at least six months
after any such election to change is made in writing. In the absence of such
an election, such remaining portion of the Director's fees shall be paid
entirely in cash. Nothing contained in this Section 7(b) shall be interpreted
in such a manner as would disqualify the Plan from treatment as a "formula
plan" under Rule 16b-3.
(c) Amount and Date of Payment for Stock Compensation.
(1) For any Plan Year in which a Director is a Participant for the
full Plan Year, any Stock compensation due a Director Participant pursuant to
Sections 7(a) shall be payable at the beginning of such plan year, and with
respect to Section 7(b) above shall be payable on a quarterly basis, with the
first such quarterly distribution being made on April 1 and succeeding
quarterly distributions being made on July 1, October 1, and January 1. The
amount of stock to be distributed to a Director Participant shall be
determined by dividing the Director Participant's required and elected dollar
amount of stock compensation by the Fair Market Value of the Shares.
(2) Notwithstanding the foregoing, for purposes of the 1996 Plan Year,
no stock distributions shall be made prior to receipt of all requisite
approvals; provided, however, that once the requisite approvals of the Plan
are received, the stock distributions shall be made as soon as practicable
thereafter and shall include any stock distributions which would have been
made had the requisite approvals been obtained on the Effective Date. The
stock distributions to be made in accordance with this Section 7(c)(2) shall
be valued in accordance with the provisions of Section 7(c)(1).
8. Change of Control Provisions.
(a) Acceleration of Exercisability and Lapse of Restrictions;
Cash-Out of Awards. In the event of a Change of Control, the following
acceleration and cash-out provisions shall apply unless otherwise provided by
the Committee at the time of the Award grant.
(i) All outstanding Awards pursuant to which the
Participant may have rights the exercise of which is restricted or limited,
shall become fully exercisable; unless the right to lapse of restrictions or
limitations is waived or deferred by a Participant prior to such lapse, all
restrictions or limitations (including risks of forfeiture and deferrals) on
outstanding Awards subject to restrictions or limitations under the Plan shall
lapse; and all performance criteria and other conditions to payment of Awards
under which payments of cash, Shares or other property are subject to
conditions shall be deemed to be achieved or fulfilled and shall be waived by
the Company.
(ii) For a period of up to 60 days following a Change in
Control, the Participant may elect to surrender any outstanding Award and to
receive, in full satisfaction therefor, a cash payment equal to the value of
such Award calculated on the basis of the Change of Control Price of any
Shares or the Fair Market Value of any property other than Shares relating to
such Award; provided, however, that in the case of an Incentive Stock Option,
or a Stock Appreciation Right granted in tandem therewith, the cash payment
shall be based upon the Fair Market Value of Shares on the date of exercise.
In the event that an Award is granted in tandem with another Award such that
the Participant's right to payment for such Award is an alternative to payment
of another Award, the Participant electing to surrender any such tandem Award
shall surrender all alternative Awards related thereto and receive payment for
the Award which produces the highest payment to the Participant. Except as
provided in Section 8(a)(iii), in no event will an Award be surrendered or a
Participant have the right to receive cash under this Section 8(a)(ii) with
respect to an Award if the Participant is subject to Section 16 of the
Exchange Act and at least six months shall not have elapsed from the date on
which the Participant was granted the Award before the date of the Change of
Control (unless this restriction is not at such time required under Rule
16b-3).
(iii) In the event that any Award is subject to limitations
under Section 8(a)(ii) at the time of a Change of Control, then, solely for
the purpose of determining the rights of the Participant with respect to such
Award, a Change of Control shall be deemed to occur at the close of business
on the first business day following the date on which the Award could be sold
without liability under Section 16 of the Exchange Act.
(b) Definitions of Certain Terms. For purposes of this Section
8, the following definitions, in addition to those set forth in Section 2,
shall apply:
(i) "Change of Control" means and shall be deemed to have
occurred if (a) any person (within the meaning of the Exchange Act), other
than the Company or a Related Party, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
Voting Securities representing 30 percent or more of the total voting power of
all the then-outstanding Voting Securities, (b) the individuals who, as of
the effective date of the Plan, constitute the Board of Directors of the
Company together with those who first become directors subsequent to such date
and whose recommendation, election or nomination for election to the Board was
approved by a vote of at least a majority of the directors then still in
office who either were directors as of the effective date of the Plan or whose
recommendation, election or nomination for election was previously so approved
(the "Continuing Directors"), cease for any reason to constitute a majority of
the members of the Board, (c) the shareholders of the Company approve a
merger, consolidation, recapitalization or reorganization of the Company,
reverse split of any class of Voting Securities, or an acquisition of
securities or assets by the Company, or consummation of any such transaction
if shareholder approval is not obtained, other than (i) any such transaction
which would result in more than 75 percent of the total voting power
represented by the voting securities of the surviving entity outstanding
immediately after such transaction being beneficially owned by more than 75
percent of the holders of outstanding Voting Securities immediately prior to
the transaction, with the voting power of each such continuing holder relative
to other such continuing holders not substantially altered in the transaction,
or (ii) any such transaction which would result in a Related Party
beneficially owning more than 50 percent of the voting securities of the
surviving entity outstanding immediately after such transaction, (d) the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets other than any such transaction
which would result in a Related Party owning or acquiring more than 50 percent
of the assets owned by the Company immediately prior to the transaction.
(ii) "Change of Control Price" means, with respect to a
Share, the higher of (a) the highest reported sales price of Shares on the New
York Stock Exchange during the 30 calender days preceding a Change of Control,
or (b) the highest price paid or offered in a transaction which either (i)
results in a Change of Control, or (ii) would be consummated but for another
transaction which results in a Change of Control and, if it were consummated,
would result in a Change of Control. With respect to clause (b) in the
preceding sentence, the "price paid or offered" will be equal to the sum of
(i) the face amount of any portion of the consideration consisting of cash or
cash equivalents and (ii) the fair market value of any portion of the
consideration consisting of real or personal property other than cash or cash
equivalents, as established by an independent appraiser selected by the
Committee.
(iii) "Related Party" means (a) a wholly-owned subsidiary
of the Company; or (b) an employee or group of employees of the Company or any
wholly-owned subsidiary of the Company; or (c) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
wholly-owned subsidiary of the Company; or (d) a corporation owned directly or
indirectly by the shareholders of the Company in substantially the same
proportion as their ownership of Voting Securities.
(iv) "Voting Securities or Security" means any securities
of the Company which carry the right to vote generally in the election of
directors.
9. General Provisions.
(a) Compliance with Legal and Trading Requirements. The Plan,
the granting and exercising of Awards or Director's Shares thereunder, and the
other obligations of the Company under the Plan and any Award Agreement, shall
be subject to all applicable federal and state laws, rules and regulations,
and to such approvals by any regulatory or governmental agency as may be
required. The Company, in its discretion, may postpone the issuance or
delivery of Shares under any Award or Director's Share until completion of
such stock exchange or market system listing or registration or qualification
of such Shares or other required action under any state or federal law, rule
or regulation as the Company may consider appropriate, and may require any
Participant to make such representations and furnish such information as it
may consider appropriate in connection with the issuance or delivery of Shares
in compliance with applicable laws, rules and regulations. No provisions of
the Plan shall be interpreted or construed to obligate the Company to register
any Shares under federal or state law.
(b) No Right to Continued Employment or Service. Neither the
Plan nor any action taken thereunder shall be construed as giving any employee
or director the right to be retained in the employ or service of the Company
or any of its Subsidiaries or Affiliates, nor shall it interfere in any way
with the right of the Company or any of its Subsidiaries or Affiliates to
terminate any employee's or director's employment or service at any time.
(c) Taxes. The Company or any Subsidiary or Affiliate is
authorized to withhold from any Award granted, any payment relating to an
Award under the Plan, including from a distribution of Shares, or any payroll
or other payment to an Eligible Employee, amounts of withholding and other
taxes due in connection with any transaction involving an Award, and to take
such other action as the Committee may deem advisable to enable the Company
and Eligible Employees to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Shares or other property and to make
cash payments in respect thereof in satisfaction of an Eligible Employee's tax
obligations.
(d) Chanqes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or the Committee's authority to
grant Awards under the Plan without the consent of shareholders of the Company
or Participants, except that any such amendment, alteration, suspension,
discontinuation, or termination shall be subject to the approval of the
Company's shareholders to the extent such shareholder approval is required (i)
in order to insure that Awards granted under the Plan are exempt under Rule
16b-3 or (ii) under Section 422 of the Code; provided, however, that, without
the consent of an affected Participant, no amendment, alteration, suspension,
discontinuation, or termination of the Plan may impair the rights or, in any
other manner, adversely affect the rights of such Participant under any Award
or Director's Shares theretofore granted to him or her. Notwithstanding the
other provisions of this paragraph, Section 7 and the other provisions of this
Plan applicable to Director's Shares may not be amended more than once every
six months other than to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder.
(e) No Riqhts to Awards; No Shareholder Riqhts. No Eligible
Employee or employee shall have any claim to be granted any Award under the
Plan, and there is no obligation for uniformity of treatment of Eligible
Employees and employees. No Award shall confer on any Eligible Employee any
of the rights of a shareholder of the Company unless and until Shares are duly
issued or transferred to the Eligible Employee in accordance with the terms
of the Award.
(f) Unfunded Status of Awards. The Plan is intended to
constitute an "unfunded" plan for incentive compensation. With respect to any
payments not yet made to a Participant pursuant to an Award or Director's
Shares, nothing contained in the Plan or any Award or Director's Share shall
give any such Participant any rights that are greater than those of a general
creditor of the Company; provided, however, that the Committee may authorize
the creation of trusts or make other arrangements to meet the Company's
obligations under the Plan to deliver cash, Shares, other Awards, or other
property pursuant to any Award, which trusts or other arrangements shall be
consistent with the "unfunded" status of the Plan unless the Committee
otherwise determines with the consent of each affected Participant.
(g) Nonexclusivity of the Plan. Neither the adoption of the
Plan by the Board nor its submission to the shareholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of options and other awards
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.
(h) Not Compensation for Benefit Plans. No Award payable under
this Plan shall be deemed salary or compensation for the purpose of computing
benefits under any benefit plan or other arrangement of the Company for the
benefit of its employees or directors unless the Company shall determine
otherwise.
(i) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award or Director's Option. Cash
shall be paid in lieu of such fractional shares.
(j) Governing Law. The validity, construction, and effect of
the Plan, any rules and regulations relating to the Plan, and any Award
Agreement shall be determined in accordance with the laws of Kansas without
giving effect to principles of conflict of laws.
(k) Effective Date; Plan Termination. The Plan shall become
effective as of January 1, 1996, (the "Effective Date") upon approval by the
affirmative votes of the holders of a majority of voting securities of the
Company voting upon the adoption of the plan. The Plan shall terminate as to
future awards on the date which is ten (10) years after the Effective Date.
(l) Titles and Headings. The titles and headings of the
sections in the Plan are for convenience of reference only. In the event of
any conflict, the text of the Plan, rather than such titles or headings, shall
control.