EXHIBIT 10.8
Kennametal Inc.
STOCK OPTION AND INCENTIVE PLAN OF 1992
(as amended effective July 1, 1995)
SECTION 1. ESTABLISHMENT. There is hereby established the Kennametal
Inc. Stock Option and Incentive Plan of 1992 (hereinafter called the "Plan")
pursuant to which officers and employees of Kennametal Inc. (hereinafter
called the "Company") and its subsidiaries who are mainly responsible for its
continued growth and development and future financial success may be granted
options to purchase shares of Capital Stock of the Company (as defined in
Section 5 below) and/or may receive awards of shares of Capital Stock in order
to secure to the Company the advantages of the incentive and sense of
proprietorship inherent in stock ownership by such persons, to award such
persons for services previously performed and/or as an added inducement to
continue in the employ of the Company.
SECTION 2. DURATION. Options and share awards under this Plan may be
granted only within the ten-year period beginning on the date on which the
Plan is adopted by the stockholders. Any options or share awards outstanding
after the expiration of such ten-year period may be exercised within the
periods prescribed by Section 7.
SECTION 3. ADMINISTRATION. The Plan shall be administered by a
committee (hereinafter called the "Committee") constituted so as to permit the
Plan to comply with Rule 16b-3 (or any successor rule) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Committee shall be appointed by and serve at the pleasure of the Board of
Directors. A majority of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the Committee, shall be
deemed the acts of the Committee. Subject to the provisions of the Plan, the
Committee is authorized to adopt such rules and regulations and to take such
action in the administration of the Plan as it shall deem proper.
SECTION 4. ELIGIBILITY. Officers and employees of the Company and its
subsidiaries (including officers and employees who are directors of the
Company) who, in the opinion of the Committee, are mainly responsible for the
continued growth and development and future financial success of the business
shall be eligible to participate in the Plan. The Committee shall, in its
sole discretion, from time to time, select from such eligible persons those to
whom options shall be granted or shares awarded and determine the number of
shares to be included in such option or award; provided, however, that no
option may be granted in substitution for an outstanding option except as
provided in Section 12(d). No officer or employee shall have any right to
receive an option or share award, except as the Committee in its discretion
shall determine. The term "subsidiary," where used in the Plan or in any
stock option agreement entered into under the Plan, means a "subsidiary
corporation" as defined in Section 425 of the Internal Revenue Code of 1986,
as it may be amended from time to time (the "Code").
SECTION 5. SHARES SUBJECT TO THE PLAN. The total number of shares of
stock which may be issued pursuant to the Plan shall be the lesser of 550,000
shares of capital stock, par value $1.25 per share, of the Company (the
"Capital Stock") using the Net Counting Method (as hereinafter defined) or
825,000 shares of Capital Stock using the Gross Counting Method (as
hereinafter defined); provided, however, that (under both the Net Counting
Method and the Gross Counting Method): (i) the number of shares of Capital
Stock to be issued pursuant to the Plan is subject to adjustment as provided
in Section 12; and (ii) to the extent that options granted under the Plan
shall expire or terminate without being exercised or shares awarded under the
Plan shall be forfeited, such shares shall remain available for purposes of
the Plan, except to the extent that a participant subject to Section 16(b) of
the Exchange Act ("Section 16(b)") shall have received any benefits (such as
dividends) of the ownership of shares pursuant to a share award prior to
forfeiture of such share award (other than voting rights or accumulated but
unpaid dividends), in which case such shares shall not be available for
purposes of the Plan for reissuance. Capital Stock to be issued under the
Plan may be either authorized and unissued shares or shares held in treasury
by the Company. For purposes of the Plan, the "Net Counting Method" shall
mean a method of calculation pursuant to which shares of Capital Stock
delivered to the Company in payment of the exercise price of an option or for
tax payment obligations or shares of Capital Stock withheld by the Company for
payment of tax withholding obligations or the exercise price of an option
shall not be counted against the Plan limitation and shall remain available
for future awards under the Plan. For purposes of the Plan, the "Gross
Counting Method" shall mean a method of calculation pursuant to which shares
of Capital Stock delivered to the Company in payment of the exercise price of
an option or for tax payment obligations or shares of Capital Stock withheld
by the Company for payment of tax withholding obligations or the exercise
price of an option shall be counted against the Plan limitation and shall not
remain available for future awards under the Plan.
SECTION 6. TYPES OF OPTIONS. Options granted pursuant to the Plan may
be either options which are incentive stock options under Section 422 of the
Code (hereinafter called "Incentive Stock Options") or other options
(hereinafter called "Nonstatutory Stock Options"). Incentive Stock Options
and Nonstatutory Stock Options shall be granted separately hereunder. The
Committee, in its discretion, shall determine whether and to what extent
options granted under the Plan shall be Incentive Stock Options or
Nonstatutory Stock Options. The provisions of the Plan and any stock option
agreement pursuant to which Incentive Stock Options shall be issued shall be
construed in a manner consistent with Section 422 of the Code and rules and
regulations promulgated or proposed thereunder.
SECTION 7. TERMS OF OPTIONS. Each option granted under the Plan shall
be evidenced by a stock option agreement between the Company and the person to
whom such option is granted and shall be subject to the following terms and
conditions:
(a) Subject to adjustment as provided in Section 12 of this Plan,
the price at which each share covered by an option may be purchased shall
be determined in each case by the Committee but, in the case of Incentive
Stock Options, shall not be less than the fair market value thereof at
the time the option is granted and, in the case of Nonstatutory Stock
Options, shall not be less than seventy-five percent (75%) of the fair
market value thereof at the time the option is granted. If an optionee
owns (or is deemed to own under applicable provisions of the Code and
rules and regulations promulgated thereunder) more than ten percent (10%)
of the combined voting power of all classes of the stock of the Company
(or any parent or subsidiary corporation of the Company) and an option
granted to such optionee is intended to qualify as an Incentive Stock
Option, the option price shall be no less than 110% of the fair market
value of the shares covered by the option on the date the option is
granted.
(b) The aggregate fair market value of shares of Capital Stock
with respect to which Incentive Stock Options are first exercisable by
the optionee in any calendar year (under all Plans of the Company and its
subsidiaries) shall not exceed the limitations, if any, imposed by
Section 422(d) of the Code (or any successor provision). If any option
designated as an Incentive Stock Option, either alone or in conjunction
with any other option or options, exceeds the foregoing limitation, the
portion of such option in excess of such limitation shall automatically
be reclassified (in whole share increments and without fractional share
portions) as a Nonstatutory Stock Option, with later granted options
being so reclassified first.
(c) During the lifetime of the optionee the option may be
exercised only by the optionee. The option shall not be transferable by
the optionee otherwise than by will or by the laws of descent and
distribution or, if in compliance with Rule 16b-3 (or any successor
rule), pursuant to a domestic relations order. After the death of the
optionee, the option may be transferred to the Company upon such terms
and conditions, if any, as the Committee and the personal representative
or other person entitled to the option may agree within the period
specified in subsection 7(d) (ii) hereof.
(d) An option may be exercised in whole at anytime, or in part
from time to time, within such period or periods (not to exceed ten years
from the granting of the option in the case of an Incentive Stock Option)
as may be determined by the Committee and set forth in the stock option
agreement (such period or periods being hereinafter referred to as the
"option period"), provided that:
(i) If the optionee shall cease to be employed by the
Company or any of its subsidiaries, the option may be exercised
only within three months after the termination of employment and
within the option period or, if such termination was due to
disability, within one year after termination of employment and
within the option period, unless such termination of employment
shall be for cause or in violation of an agreement by the optionee
to remain in the employ of the Company or one of its subsidiaries,
in which case the option shall forthwith terminate; provided,
however, that the Committee may in its sole discretion extend the
option period of any option for up to three years from the date of
termination of employment regardless of the original option
period;
(ii) If the optionee shall die, the option may be exercised
only within 450 calendar days after the optionee's death and
within the option period and only by the optionee's personal
representative or persons entitled thereto under the optionee's
will or the laws of descent and distribution;
(iii) The option may not be exercised for more shares
(subject to adjustment as provided in Section 12) after the
termination of the optionee's employment or the optionee's death
than the optionee was entitled to purchase thereunder at the time
of the termination of the optionee's employment or the optionee's
death;
(iv) If an optionee owns (or is deemed to own under
applicable provisions of the Code and rules and regulations
promulgated thereunder) more than 10% of the combined voting power
of all classes of stock of the Company (or any parent or
subsidiary corporation of the Company) and an option granted to
such optionee is intended to qualify as an Incentive Stock Option,
the option by its terms may not be exercisable after the
expiration of five years from the date such option is granted; and
(v) No option granted to an optionee subject to Section
16(b) may be exercised during the six-month period beginning on
the date of grant.
(e) The option price of each share purchased pursuant to an
option shall be paid in full at the time of each exercise (the "Payment
Date") of the option (i) in cash; (ii) in the discretion of the
Committee, through the delivery to the Company of previously owned shares
of Capital Stock having an aggregate fair market value equal to the
option price of the shares being purchased pursuant to the exercise of
the option; provided, however, that, with respect to an optionee who is
subject to Section 16(b), shares of Capital Stock acquired pursuant to an
option or share award granted within the six-month period prior to the
Payment Date may not be utilized to pay the option price for any option
hereunder; (iii) through an election pursuant to Section 8 hereof to have
shares of Capital Stock otherwise issuable to the optionee withheld to
pay the exercise price of such option; or (iv) in the discretion of the
Committee, through any combination of the payment procedures set forth in
subsections (i)-(iii) of this Section 7(e).
(f) The Committee, in its discretion, may authorize "stock
retention options" which provide, upon the exercise of an option granted
under this Plan, the Stock Option Plan of 1982 or the Stock Option and
Incentive Plan of 1988 (a "prior option") using previously owned shares,
for the automatic issuance of a new option under this Plan with an
exercise price equal to the current fair market value and for up to the
number of shares equal to the number of previously owned shares delivered
in payment of the exercise price of the prior option. Such stock
retention option shall have the same option period as the prior option.
(g) In consideration for the granting of each option, the
optionee shall agree to remain in the employment of the Company or one of
its subsidiaries, at the pleasure of the Company or such subsidiary, for
at least one year from the date of the granting of such option or until
the first day of the month coinciding with or next following the
optionee's sixty-fifth birthday, whichever may be earlier. Nothing
contained in the Plan nor in any stock option agreement shall confer upon
any optionee any right with respect to the continuance of employment by
the Company or any of its subsidiaries nor interfere in any way with the
right of the Company or any subsidiary to terminate his employment or
change his compensation at any time.
(h) The Committee may include such other terms and conditions not
inconsistent with the foregoing as the Committee shall approve. Without
limiting the generality of the foregoing sentence, the Committee shall be
authorized to determine that options shall be exercisable in one or more
installments during the term of the option and the right to exercise may
be cumulative as determined by the Committee.
SECTION 8. SHARE WITHHOLDING.
(a) An optionee may, in the discretion of the Committee, elect
to pay the exercise price of an option, in whole or in part, by
requesting that the Company withhold shares of stock otherwise issuable
to the optionee having a fair market value equal to the portion of the
exercise price of the option being paid pursuant to such election (a
"Share Withholding Election").
(b) A Share Withholding Election shall be subject to the
following restrictions:
(i) The Share Withholding Election must be in writing
and must be delivered to the Company no later than with the
delivery of the notice of exercise of the option;
(ii) The Share Withholding Election shall be irrevocable
by the optionee; provided, however, that a Share Withholding
Election may be changed pursuant to a subsequent irrevocable Share
Withholding Election to take effect at least six months from the
date of such subsequent Share Withholding Election; and
(iii) The Share Withholding Election shall be subject to
approval by the Committee, which approval may be granted or
withdrawn at any time prior to the exercise date of the option.
(c) With respect to a Share Withholding Election by an optionee
who is subject to Section 16(b), the following additional restrictions
apply:
(i) The Share Withholding Election: (a) must be made at
least six months prior to the date of exercise of the option; (b)
must take effect during a ten-day "window period" beginning on the
third business day following the release of the Company's
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release; or
(c) must be incident to the death, disability, retirement or
termination of employment of the optionee;
(ii) If a Share Withholding Election is made and such
Share Withholding Election does not comply with either subsection
(c)(i)(a) or (c)(i)(c) of this Section 8, the option must be
exercised during a ten-day "window period";
(iii) A Share Withholding Election made at least six
months prior to the date of exercise of the option may be a
"standing" Share Withholding Election requesting the withholding
of shares with respect to all future exercises of options or may
be a "one-time" Share Withholding Election with respect to a
particular exercise of an option; and
(iv) Notwithstanding the foregoing, the withholding of
shares in payment of the exercise price of an option may not occur
during the six-month period following the date on which such option
was granted, and no Share Withholding Election attempting to effect
a withholding of shares within such six-month period shall be
effective.
SECTION 9. SHARE AWARDS.
(a) The Committee may, from time to time, subject to the
provisions of the Plan, award shares to participants. The award of
shares shall be evidenced by a share award agreement executed by the
Company and the grantee setting forth the number of shares of Capital
Stock awarded, the vesting period, the vesting schedule or criteria and
such other terms and conditions as the Committee may determine.
(b) The grantee of a share award shall receive shares of Capital
Stock without payment to the Company immediately upon grant; provided,
however, that the grantee's ownership of such shares shall be subject to
the following terms and conditions:
(i) Shares awarded hereunder shall vest in installments
upon achievement by the Company or grantee of such specified
performance or other goals, including but not limited to the
continued employment of the grantee during the vesting period, as
determined by the Committee and as provided in the share award
agreement;
(ii) If the grantee or the Company, as the case may be,
fails to achieve the designated goals or the grantee ceases to be
employed by the Company for any reason (including death, permanent
disability or retirement) prior to the expiration of the vesting
period the grantee shall forfeit all shares so awarded which have
not then vested;
(iii) A grantee who has received a share award pursuant
to the Plan shall have all rights of a stockholder in such Capital
Stock, including but not limited to the right to vote and receive
dividends with respect thereto; provided, however, that shares
awarded pursuant to the Plan which have not vested may not be sold
or otherwise transferred by the grantee and stock certificates
representing such shares shall bear a restrictive legend to that
effect; and
(iv) No share award (or portion thereof) granted to a
person subject to Section 16(b) shall vest within the six-month
period beginning on the date of grant of such share award.
SECTION 10. LIMITATION ON OPTIONS AND AWARDS. The aggregate number of
shares covered by any option or options or share awards to one person shall
not exceed ten percent (10%) of the aggregate number of shares subject to the
Plan as provided in Section 5 hereof, excluding in the computation of such
percentage for any individual the number of shares covered by any option
previously granted to such person to the extent that such option shall have
expired or terminated without being exercised and further excluding the number
of shares awarded to the extent the award has terminated without vesting.
SECTION 11. TAX WITHHOLDING.
(a) Whenever shares are to be issued under the Plan, the
Company shall have the right to require the grantee to remit to the
Company an amount sufficient to satisfy federal, state and local tax
withholding requirements prior to the delivery of any certificate for
such shares; provided, however, that in the case of a grantee who is
subject to Section 16(b), or who receives an award of shares under the
Plan which is not fully vested, the grantee shall remit such amount on
the first business day following the Tax Date. The "Tax Date" for
purposes of this Section 11 shall be the date on which the amount of tax
to be withheld is determined. If an optionee makes a disposition of
shares acquired upon the exercise of an Incentive Stock Option within
either two years after the option was granted or one year after the
receipt of stock by the optionee, the optionee shall promptly notify the
Company and the Company shall have the right to require the optionee to
pay to the Company an amount sufficient to satisfy federal, state and
local tax withholding requirements.
(b) A grantee who is obligated to pay the Company an amount
required to be withheld under applicable tax withholding requirements may
pay such amount (i) in cash; (ii) in the discretion of the Committee,
through the delivery to the Company of previously owned shares of Capital
Stock having an aggregate fair market value on the Tax Date equal to the
tax obligation; provided, however, that, with respect to a grantee who is
subject to Section 16(b), shares of Capital Stock acquired pursuant to an
option or share award granted within the six (6) month period prior to
the Tax Date may not be utilized to pay the tax obligation; (iii) through
an election pursuant to Section 11(c) hereof to have shares of Capital
Stock otherwise issuable to the grantee withheld to pay the tax
obligation; or (iv) in the discretion of the Committee, through any
combination of payment procedures set forth in subsections (i)-(iii) of
this Section 11(b).
(c) A grantee who is obligated to pay to the Company an amount
required to be withheld under applicable tax withholding requirements in
connection with either the exercise of a Nonstatutory Stock Option or a
share award under the Plan may, in the discretion of the Committee, elect
to satisfy this withholding obligation, in whole or in part, by
requesting that the Company withhold shares of stock otherwise issuable
to the grantee having a fair market value on the Tax Date equal to the
amount of the tax required to be withheld; provided, however, that shares
may be withheld by the Company only if such withheld shares have vested.
Any fractional amount shall be paid to the Company by the optionee in
cash or shall be withheld from the optionee's next regular paycheck.
(d) An election by a grantee to have shares of stock withheld to
satisfy federal, state and local tax withholding requirements pursuant to
Section 11(c) (a "Tax Withholding Election") shall be subject to the
following restrictions:
(i) The Tax Withholding Election must be in writing
and delivered to the Company prior to the Tax Date;
(ii) The Tax Withholding Election shall be irrevocable by
the grantee; provided, however, that the Tax Withholding Election
may be changed pursuant to a subsequent irrevocable Tax
Withholding Election to take effect at least six months from the
date of such subsequent Tax Withholding Election; and
(iii) The Tax Withholding Election shall be subject to
approval by the Committee, which approval may be granted or
withdrawn at any time prior to the Tax Date.
(e) With respect to the Tax Withholding Election by a grantee
who is subject to Section 16(b), the following additional restrictions
apply:
(i) The Tax Withholding Election: (a) must be made at
least six months prior to the Tax Date; (b) must take effect
during a ten-day "window period" beginning on the third business
day following the release of the Company's quarterly or annual
summary statement of sales and earnings and ending on the twelfth
business day following such release; or (c) must be incident to
the death, disability, retirement or termination of employment of
the grantee;
(ii) If a Tax Withholding Election with respect to a
Nonstatutory Stock Option is made and such Tax Withholding
Election does not comply with either subsection (e)(i)(a) or
(e)(i)(c) of this Section 11, the Nonstatutory Stock Option must
be exercised during a ten-day "window period";
(iii) A Tax Withholding Election made at least six months
prior to the Tax Date may be a "standing" Tax Withholding Election
requesting the withholding of shares with respect to all future
exercises of Nonstatutory Stock Options or vesting of share awards
or may be a "one-time" Tax Withholding Election with respect to a
particular exercise of a Nonstatutory Stock Option or vesting of a
share award, and
(iv) Notwithstanding the foregoing, the withholding of
shares to satisfy tax withholding obligations arising from the
exercise of a Nonstatutory Stock Option or vesting of shares under
a share award may not occur during the six-month period following
the date on which such Nonstatutory Stock Option or share award
was granted, and no Tax Withholding Election attempting to effect
a withholding of shares within such six-month period shall be
effective;
(f) Where the Tax Date of a grantee is deferred pursuant to
Section 83(a) of the Code beyond the date on which stock is received, and
the grantee makes the Tax Withholding Election pursuant to Section 11(c),
the full number of shares shall be issued to the grantee upon exercise of
the option or award of shares but the grantee shall be unconditionally
obligated to tender back to the Company, on the first business day
following the Tax Date(s), the number of shares of stock, the fair market
value of which shall equal the amount of the tax withholding obligation
determined on the Tax Date.
SECTION 12. ADJUSTMENT OF NUMBER AND PRICE OF SHARES.
(a) In the event that a dividend shall be declared upon the
Capital Stock of the Company payable in shares of said stock, the number
of shares of Capital Stock covered by each outstanding option, the number
of shares awarded pursuant to any share award agreement, and the number
of shares available for issuance pursuant to the Plan but not yet covered
by an option or share award agreement shall be adjusted by adding thereto
the number of shares which would have been distributable thereon if such
shares had been outstanding on the date fixed for determining the
stockholders entitled to receive such stock dividend.
(b) In the event that the outstanding shares of Capital Stock
of the Company shall be changed into or exchanged for a different number
or kind of shares of stock or other securities of the Company or of
another corporation, whether through reorganization, recapitalization,
stock split-up, combination of shares, merger or consolidation, then
there shall be substituted for the shares of Capital Stock covered by
each outstanding option, each share award agreement, and the shares
available for issuance pursuant to the Plan but not yet covered by an
option or share award agreement, the number and kind of shares of stock
or other securities which would have been substituted therefor if such
shares had been outstanding on the date fixed for determining the
stockholders entitled to receive such changed or substituted stock or
other securities.
(c) In the event there shall be any change, other than specified
in this Section 12, in the number or kind of outstanding shares of
Capital Stock of the Company or of any stock or other securities into
which such Capital Stock shall be changed or for which it shall have been
exchanged, then, if the Board of Directors shall determine, in its
discretion, that such change equitably requires an adjustment in the
number or kind of shares covered by outstanding options or share award
agreement or which are available for issuance pursuant to the Plan but
not yet covered by an option or share award agreement, such adjustment
shall be made by the Board of Directors and shall be effective and
binding for all purposes of the Plan and on each outstanding stock option
agreement and share award agreement.
(d) In the event that, by reason of a corporate merger,
consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Board of Directors shall authorize the
issuance or assumption of a stock option or stock options in a
transaction to which Section 424(a) of the Code applies, then,
notwithstanding any other provision of the Plan, the Committee may grant
an option or options upon such terms and conditions as it may deem
appropriate for the purpose of assumption of the old option, or
substitution of a new option for the old option, in conformity with the
provisions of Code Section 424(a) and the rules and regulations
thereunder, as they may be amended from time to time.
(e) No adjustment or substitution provided for in this
Section 12 shall require the Company to issue or to sell a fractional
share under any stock option agreement or share award agreement and the
total adjustment or substitution with respect to each stock option and
share award agreement shall be limited accordingly.
(f) In the case of any adjustment or substitution provided
for in this Section 12, the option price per share in each stock option
agreement shall be equitably adjusted by the Board of Directors to
reflect the greater or lesser number of shares of stock or other
securities into which the stock covered by the option may have been
changed or which may have been substituted therefor.
SECTION 13. FAIR MARKET VALUE. In any determination of fair market
value hereunder, fair market value shall be deemed to be the mean between the
highest and lowest sales prices for the Capital Stock of the Company as
reported in the New York Stock Exchange -- Composite Transactions reporting
system for the date in question, or if no sales were made on that date, on the
next preceding date on which sales were made.
SECTION 14. CHANGE IN CONTROL.
(a) In the event of a Change in Control of the Company,
as hereinafter defined, the following provisions shall apply to options
and share awards previously awarded under the Plan, notwithstanding any
provision herein or in any agreement to the contrary:
(i) All options which provide for exercise in one or
more installments shall become immediately exercisable in full;
(ii) If any optionee shall cease to be employed by
the Company or any of its subsidiaries within one (1) year
following a Change in Control, then the option may in all events
be exercised for a period of three months after such termination
of employment and within the option period;
(iii) All awards of shares under the Plan which have not
previously vested shall become vested.
(b) The term "Change in Control" shall mean a change in control
of the Company of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A promulgated under the Exchange Act
as in effect on the date thereof or, if Item 6(e) is no longer in effect,
any regulations issued by the Securities and Exchange Commission pursuant
to the Exchange Act which serve similar purposes; provided that, without
limitation, such a Change in Control shall be deemed to have occurred if:
(i) the Company shall be merged or consolidated with another corporation,
or (ii) the Company shall sell all or substantially all of its operating
properties and assets to another person, group of associated persons or
corporation, excluding affiliates of the Company, if any, or (iii) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than any person who on the date hereof is a director
or officer of the Company, is or becomes a beneficial owner, directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities
coupled with or followed by the election as directors of the Company of
persons who were not directors at the time of such acquisition if such
person shall elect a majority of the Board of Directors of the Company;
and provided, however, that if the transaction, transactions or elections
causing the Change in Control shall have been approved by the affirmative
vote of at least two-thirds (2/3) of the members of the Board of
Directors of the Company immediately prior to the Change in Control, then
such transaction, transactions or election shall not be deemed to be a
Change in Control for purposes of this Plan.
SECTION 15. AMENDMENT AND DISCONTINUANCE. The Board of Directors may
alter, amend, suspend or discontinue the Plan, provided that no such action
shall deprive any person without such person's consent of any rights
theretofore granted pursuant hereto. The Board of Directors may, in its
discretion, submit any proposed amendment to the Plan to the stockholders of
the Company for approval and shall submit proposed amendments to the Plan to
the stockholders of the Company for approval if such approval is required in
order for the Plan to comply with Rule 16b-3 of the Exchange Act (or any
successor rule).
SECTION 16. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Notwithstanding
any provision of the Plan or the terms of any agreement entered into pursuant
to the Plan, the Company shall not be required to issue any shares hereunder
prior to registration of the shares subject to the Plan under the Securities
Act of 1933 or the Exchange Act, if such registration shall be necessary, or
before compliance by the Company or any participant with any other provisions
of either of those acts or of regulations or rulings of the Securities and
Exchange Commission thereunder, or before compliance with other federal and
state laws and regulations and rulings thereunder, including the rules of the
New York Stock Exchange, Inc. The Company shall use its best efforts to
effect such registrations and to comply with such laws, regulations and
rulings forthwith upon advice by its counsel that any such registration or
compliance is necessary.
SECTION 17. COMPLIANCE WITH SECTION 16. 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 (or its successor
rule). To the extent that any provision of the Plan or any action by the
Board of Directors or the Committee fails to so comply, it shall be deemed
null and void to the extent permitted by law and to the extent deemed
advisable by the Committee.
SECTION 18. PARTICIPATION BY FOREIGNERS. The Committee may, in order to
fulfill the purposes of the Plan and without amending the Plan, modify grants
to foreign nationals or United States citizens employed abroad in order to
recognize differences in local law, tax policy or custom.
SECTION 19. EFFECTIVE DATE OF PLAN. The Plan shall become effective
upon approval and adoption of the Plan by the holders of a majority of the
outstanding shares of Capital Stock of the Company at the 1992 annual meeting
of stockholders.