Exhibit No. (10)l
KIMBERLY-CLARK CORPORATION
OUTSIDE DIRECTORS'
COMPENSATION PLAN
(Effective November 12, 2002)
1. INTRODUCTION
The Kimberly-Clark Corporation Outside Directors' Compensation Plan
(the "Plan") is intended to promote the interests of Kimberly-Clark Corporation
(the "Company") and its stockholders by enhancing the Company's ability to
attract, motivate and retain as Outside Directors persons of training,
experience and ability, and to encourage the highest level of Outside Director
performance. The Plan is intended to permit the Company maximum flexibility in
implementing a compensation policy including aligning the Outside Directors'
economic interests closely with those of the Company's stockholders by use of
equity based compensation awards.
2. DEFINITIONS
Unless otherwise defined in the text of the Plan, capitalized terms
herein shall have the meanings set forth in this Section 2.
"Affiliate" means any company in which the Company owns 20 percent or
more of the equity interest (collectively, the "Affiliates").
"Award" has the meaning set forth in Section 3 of this Plan.
"Board" means the Board of Directors of the Company.
"Change of Control" means an event deemed to have taken place if: (i) a
third person, including a "group" as defined in section 13(d)(3) of the
Securities Exchange Act of 1934, acquires shares of the Company having 20
percent or more of the total number of votes that may be cast for the election
of Directors of the Company; or (ii) as the result of any cash tender or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the Company before the
Transaction shall cease to constitute a majority of the Board of Directors of
the Company or any successor to the Company.
"Code" means the Internal Revenue Code of 1986 and the regulations
thereunder, as amended from time to time.
"Committee Rules" means the Committee Rules for the Kimberly-Clark
Corporation 1992 Equity Participation Plan or any successor plan.
"Compensation Committee" means the Compensation Committee of the Board.
"Director" means a member of the Board.
"Effective Date" means January 1, 2001.
"Exchange Act" means the Securities Exchange Act of 1934 and the rules
and regulations thereunder, as amended from time to time.
"Fair Market Value" means the reported closing price of the Stock, on
the relevant date as reported on the composite list used by The Wall Street
Journal for reporting stock prices or, if no such sale shall have been made on
that day, on the last preceding day on which there was such a sale.
"Nominating and Corporate Governance Committee" means the Nominating
and Corporate Governance Committee of the Board.
"Option" means a right to purchase a specified number of shares of
Stock at a fixed option price equal to no less than 100 percent of the Fair
Market Value of the Stock on the date the Option is granted. For purposes of
this Plan, Options shall be issued either as "Annual Options," as described in
subsection 8(a)(iii), or "Additional Options," as described in subsection 8(b).
"Outside Director" means a Director who is not on the date of grant of
an Award pursuant to the Plan, or within one year prior to the date of such
grant, an employee of the Company or any of its Affiliates.
"Restricted Period" shall mean the period of time during which the
Transferability Restrictions applicable to Awards will be in force.
"Restricted Share" shall mean a share of Stock which may not be traded
or sold, until the date the Transferability Restrictions expire.
"Restricted Share Unit" means the right, as described in Section 10, to
receive an amount, payable in either cash or shares of Stock, equal to the value
of a specified number of shares of Stock. No certificates shall be issued with
respect to such Restricted Share Unit, except as provided in subsection 10(d),
and the Company shall maintain a bookkeeping account in the name of the Outside
Director to which the Restricted Share Unit shall relate.
"Retainer" means the annual retainer payable to an Outside Director for
services rendered as a Director. As of the Effective Date, the amount of the
cash portion of such Retainer shall be $50,000 per year, payable in quarterly
installments in advance. The Board may, from time to time, establish a different
retainer amount and/or the method of paying the retainer.
"Rule 16b-3" means Rule 16b-3 under the Securities Exchange Act of
1934, as amended.
"Retirement" and "Retires" means the termination of service as a
Director on or after the date the Director has attained age 55.
"Stock" means the shares of the Company's common stock, par value $1.25
per share.
"Stock Appreciation Right (SAR)" has the meaning set forth in
subsection 8(l)(i) of this Plan.
"Transferability Restrictions" means the restrictions on
transferability imposed on Awards of Restricted Shares or Restricted Share
Units.
3. COMPENSATION
The Outside Directors will be entitled to receive compensation for
their services as a member of the Board, and any of its committees, as may be
determined from time to time by the Board following a review of, and
recommendation on, Outside Director compensation made by the Nominating and
Corporate Governance Committee. The compensation paid to each Outside Director
is referred to herein as an "Award", and may be paid in cash, Stock, Options,
Restricted Shares, Restricted Share Units, other forms of equity or any
combination thereof as is determined by the Board.
4. PARTICIPATION AND FORM OF GRANT
Participation in the Plan is limited to Outside Directors. It is
intended that all Outside Directors will be participants in the Plan.
All Awards under the Plan shall be made in the form of Options, Stock,
Cash, Restricted Shares, Restricted Share Units, other forms of equity or any
combination thereof. Notwithstanding anything in this Plan to the contrary, any
Awards shall contain restrictions on assignability to the extent required under
Rule 16b-3 of the Exchange Act.
5. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board, which shall have sole and
complete discretion and authority with respect thereto, except as expressly
limited by the Plan. All action taken by the Board in the administration and
interpretation of the Plan shall be final and binding on all matters relating to
the Plan. All questions of interpretation, administration and application of the
Plan shall be determined by a majority of the members of the Board, except that
the Board may authorize any Directors, officers or employees of the Company to
assist the Board in the administration of the Plan and to execute documents on
behalf of the Board. The Board also may delegate to a committee of the Board, or
such other Directors, officers or employees, as the Board determines, such other
ministerial and discretionary duties as it sees fit.
The Company or the Board may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan, and may rely
upon any advice or opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. No member of the Board
shall be liable for any act done or omitted to be done by such member, or by any
other member of the Board, in connection with the Plan, except for such member's
own willful misconduct or as otherwise expressly provided by statute.
The Board shall have the power to promulgate rules and other guidelines
in connection with the performance of its obligations, powers and duties under
the Plan, including its duty to administer and construe the Plan and the Awards.
All expenses of administering the Plan shall be paid by the Company.
6. TERM OF PLAN
The Plan shall become effective as the Effective Date. The Plan shall
remain in effect until December 31, 2011, unless the Plan is terminated prior
thereto by the Board. No Awards may be granted after the termination date of the
Plan, but Awards theretofore granted shall continue in force beyond that date
pursuant to their terms.
7. SHARES SUBJECT TO THE PLAN; ADJUSTMENTS
(a) Shares Subject to the Plan. The aggregate maximum number of shares
of Stock available for grant under the Plan shall be 1,000,000 shares, subject
to the adjustment provision set forth in subsection 7(b) below. Shares of Stock
subject to the Plan will be shares that were once issued and subsequently
reacquired by the Company in the form of treasury stock. Shares subject to
Awards which become ineligible for purchase, and Restricted Shares forfeited,
will be available for Awards under the Plan to the extent permitted by section
16 of the Exchange Act (or the rules and regulations promulgated thereunder) and
to the extent determined to be appropriate by the Board. Notwithstanding
anything in this Plan to the contrary, each grant of Awards under this Plan
shall be subject to the availability of shares under this subsection 7(a).
(b) Adjustments. In the event there are any changes in the Stock or the
capitalization of the Company through a corporate transaction, such as any
merger, any acquisition through the issuance of capital stock of the Company,
any consolidation, any separation of the Company (including a spin-off or other
distribution of stock of the Company), any reorganization of the Company
(whether or not such reorganization comes within the definition of such term in
section 368 of the Code), or any partial or complete liquidation by the Company,
recapitalization, stock dividend, stock split or other change in the corporate
structure, appropriate adjustments and changes shall be made by the Board, to
the extent necessary to preserve the benefit to the Outside Director
contemplated hereby, to reflect such changes in (a) the aggregate number of
shares subject to the Plan, (b) the number of shares and the Award Price per
share of all shares of Stock subject to outstanding Awards, and (c) such other
provisions of the Plan as may be necessary and equitable to carry out the
foregoing purposes, provided, however, that no such adjustment or change may be
made to the extent that such adjustment or change will result in the dilution or
enlargement of any rights of any Outside Director.
8. STOCK OPTIONS
(a) Annual Grant of Options. Except to the extent that the Board
determines otherwise, options shall be granted to Outside Directors under the
Plan as follows:
(i) Each Outside Director in office on January 1 of the calendar year
shall be automatically granted an Option to purchase 2,500 shares.
Each Outside
Director who is first elected or appointed to the Board after
January 1 of the calendar year, shall be automatically granted a
pro rata number of Options hereunder, without further action by
the Board or the stockholders of the Company, on the earlier of
the date of the first regular meeting during the calendar year of
the Board or the Compensation Committee after the date such
Outside Director first becomes eligible for the grant of Options
under this subsection 8(a). The Options to be pro rated will be
the amount that would have been paid during the calendar year.
(ii) In addition, each Outside Director who during the calendar year is
designated to serve as the Chair of any one or more of the Audit,
Compensation, or Nominating and Corporate Governance Committees of
the Board, or such other committee as may be determined by the
Board, shall be granted an Option to purchase an additional 300
shares for each Chair.
(iii) A grant of Options as payment of either the annual retainer or for
each applicable Chair of a Committee are referred to herein as
"Annual Options."
(iv) Except as otherwise determined by the Board, each Outside
Director, and each Chair of the Audit, Compensation, or Nominating
and Corporate Governance Committees, as of January 1 of the
calendar year, shall be automatically granted the Options
hereunder, without further action by the Board or the stockholders
of the Company, on the date of the February Compensation Committee
meeting.
(b) Election of Additional Option. Each Outside Director may elect to
receive the cash portion of his or her annual Retainer in the form of an
additional option (hereinafter referred to as an "Additional Option"), in
increments of 50 percent of such cash portion of the Retainer. Except as
otherwise provided below, such election must be made prior to the date that
services are rendered in the calendar year in which such Retainer otherwise
would be paid and shall be irrevocable thereafter for such calendar year;
provided, however, that an election by an Outside Director pursuant to this
subsection for a calendar year (or portion thereof) shall be valid and effective
for all purposes for all succeeding calendar years, unless and until such
election is revoked or modified by such Outside Director prior to the date that
services are rendered in such succeeding calendar year(s); and, provided
further, that no such election, revocation or modification may be made within
six months of another such election, revocation or modification if the exemption
afforded by Rule 16b-3 would not be available as a result thereof.
Notwithstanding the preceding, an individual who is first elected to
the Board as an Outside Director during a calendar year shall be permitted to
make an election to receive the cash portion of his or her annual Retainer in
the form of an Additional Option, in increments of 50 percent of such cash
portion of the Retainer, during the thirty day period following his or her
election date. An election under this paragraph shall be subject to the terms
and conditions of this Section.
The number of shares subject to this Additional Option shall be based
on 85 percent of the Black-Scholes valuation of the cash portion of the Retainer
elected to be received as an Additional Option as of the date of grant. Each
Outside Director as of
January 1 of the calendar year, shall be automatically granted the Additional
Options elected hereunder, without further action by the Board or the
stockholders of the Company, on the date of the February Compensation Committee
meeting. Each Outside Director who first becomes eligible for a grant after
January 1 of the calendar year, shall be automatically granted the Additional
Options elected hereunder, without further action by the Board or the
stockholders of the Company, on the earlier of the date of the first regular
meeting during the calendar year of either the Board or the Compensation
Committee after the date such Outside Director first becomes eligible and elects
the grant of Additional Options under this subsection 8(b).
(c) Form of Additional Option Election. An election by an Outside
Director to receive some or all of the cash portion of his or her Retainer as an
Additional Option shall (i) be in writing, (ii) be delivered to the Secretary of
the Company, and (iii) be irrevocable in all respects with respect to the
calendar year(s) to which the election relates. If no election has ever been
made by the Outside Director pursuant to subsection 8(b) above, he or she shall
be deemed to have made an election to receive the entire cash portion of the
Retainer in cash.
(d) Period of Option. The period of each Option shall be 10 years
from the date it is granted.
(e) Option Price. The exercise price of an Option shall be the Fair
Market Value of the Stock at the time the Option is granted.
(f) Limitations on Exercise. Each Option shall not be exercisable until
at least one year has expired after the granting of the Option, during which
time the Outside Director shall have been in the continuous service as a
Director of the Company; provided, however, that the provisions of this
subsection 8(f) shall not apply and all Options outstanding under the Plan shall
be exercisable in full if a Change in Control occurs. Commencing one year after
the date the Option was granted, the Outside Director may purchase the total
number of shares covered by the Option; provided, however, that if the
Director's service is terminated for any reason other than death, Retirement, a
voluntary decision by the Outside Director not to stand for reelection to the
Board or total and permanent disability, the Option shall be exercisable only
for the number of shares of Stock which were exercisable on the date of such
termination. In no event, however, may an Option be exercised more than 10 years
after the date of its grant.
(g) Exercise; Notice Thereof. Options shall be exercised by delivering
to the Company, as directed by the office of the Treasurer at the World
Headquarters, written notice of the number of shares with respect to which
Option rights are being exercised and by paying in full the Option Price of the
shares at the time being acquired. Payment may be made in cash, a check payable
to the Company or in shares of Stock transferable to the Company and having a
Fair Market Value on the transfer date equal to the amount payable to the
Company. The date of exercise shall be deemed to be the date the Company
receives the written notice and payment for the shares being purchased. An
Outside Director shall have none of the rights of a stockholder with respect to
shares covered by an Option until the Outside Director becomes the record holder
of such shares.
(h) Exercise after Death, Retirement, Disability or Voluntary
Termination of Service. If a Director dies, retires, becomes totally and
permanently disabled, or terminates service on the Board by reason of a
voluntary decision by the Outside Director not to stand for reelection to the
Board, without having exercised an Option in full, the remaining portion of such
Option may be exercised, without regard to the limitations in subsection 8(f),
within the remaining period of the Option. Upon an Outside Director's death, the
Option may be exercised by the person or persons to whom such Outside Director's
rights under the Option shall pass by will or the laws of descent and
distribution or, if no such person has such rights, by his executor or
administrator.
(i) Non-transferability. During the Outside Director's lifetime,
Options shall be exercisable only by such Outside Director. Options shall not be
transferable other than by will or the laws of descent and distribution upon the
Outside Director's death. Notwithstanding anything in this subsection 8(i) to
the contrary, Outside Directors shall have the right to transfer Options, to the
extent allowed under Rule 16b-3 of the Exchange Act, subject to the same terms
and conditions applicable to options granted to the Chief Executive Officer of
the Company under Committee Rules.
(j) Purchase for Investment. It is contemplated that the Company will
register shares sold to Directors pursuant to the Plan under the Securities Act
of 1933. In the absence of an effective registration, however, an Outside
Director exercising an Option hereunder may be required to give a representation
that he/she is acquiring such shares as an investment and not with a view to
distribution thereof.
(k) Options for Nonresident Aliens. In the case of any Option awarded
to an Outside Director who is not a resident of the United States, the Board may
(i) waive or alter the conditions set forth in subsections 8(a) through 8(j) to
the extent that such action is necessary to conform such Option to applicable
foreign law, or (ii) take any action, either before or after the award of such
Option, which it deems advisable to obtain approval of such Option by an
appropriate governmental entity; provided, however, that no action may be taken
hereunder if such action would (1) increase any benefits accruing to any Outside
Directors under the Plan, (2) increase the number of securities which may be
issued under the Plan, (3) modify the requirements for eligibility to
participate in the Plan, or (4) result in a failure to comply with applicable
provisions of the Securities Act of 1933, the Exchange Act or the Code.
(l) Election to Receive Cash Rather than Stock.
(i) At the same time as Options are granted the Board
may also grant to designated Outside Directors the right to
convert a specified number of shares of Stock covered by such
Options to cash, subject to the terms and conditions of this
subsection 8(l). For each such Option so converted, the
Outside Director shall be entitled to receive cash equal to
the difference between the Outside Director's Option Price and
the Fair Market Value of the Stock on the date of conversion.
Such a right shall be referred to herein as a Stock
Appreciation Right ("SAR"). Outside Directors to whom an SAR
has been granted shall be notified of such grant and of the
Options to which such SAR pertains. An SAR may be revoked by
the Board, in its sole discretion, at any time, provided,
however, that no such revocation may be taken hereunder if
such action would result in the disallowance of a deduction to
the Company under section 162(m) of the Code or any successor
section.
(ii) An Outside Director who has been granted an SAR
may exercise such SAR during such periods as provided for in
the rules promulgated under section 16 of the Exchange Act.
The SAR shall expire when the period of the subject Option
expires.
(iii) At the time an Outside Director converts one or
more shares of Stock covered by an Option to cash pursuant to
an SAR, such Outside Director must exercise one or more
Options, which were granted at the same time as the Option
subject to such SAR, for an equal number of shares of Stock.
In the event that the number of shares and the Option Price
per share of all shares of Stock subject to outstanding
Options is adjusted as provided in the Plan, the above SARs
shall automatically be adjusted in the same ratio which
reflects the adjustment to the number of shares and the Option
Price per share of all shares of Stock subject to outstanding
Options.
(m) Deferral of Award Payment. The Board may establish one or more
programs under the Plan to permit Outside Directors the opportunity to elect to
defer receipt of consideration upon exercise of an Award or other event that
absent the election would entitle the Outside Director to payment or receipt of
Stock or other consideration under an Award. The Compensation Committee may
establish the election procedures, the timing of such elections, the mechanisms
for payments of, and accrual of interest or other earnings, if any, on amounts
of Stock so deferred, and such other terms, conditions, rules and procedures
that the Compensation Committee deems advisable for the administration of any
such deferral program.
9. RESTRICTED SHARES
The Board may from time to time designate those Outside Directors who
shall receive Restricted Share Awards. Each grant of Restricted Shares under the
Plan shall be evidenced by a notice from the Board to the Outside Director. The
notice shall contain such terms and conditions, not inconsistent with the Plan,
as shall be determined by the Board and shall indicate the number of Restricted
Shares awarded and the following terms and conditions of the award.
(a) Grant of Restricted Shares. The Board shall determine the number of
Restricted Shares to be included in the grant and the period or periods during
which the Transferability Restrictions applicable to the Restricted Shares will
be in force (the "Restricted Period"). The Restricted Period may be the same for
all Restricted Shares granted at a particular time to any one Outside Director
or may be different with respect to different Outside Directors or with respect
to various of the Restricted Shares granted to the same Outside Director, all as
determined by the Board at the time of grant.
(b) Transferability Restrictions. During the Restricted Period,
Restricted Shares may not be sold, assigned, transferred or otherwise disposed
of, or mortgaged, pledged or otherwise encumbered. Furthermore, an Outside
Director's right, if any, to
receive Stock upon termination of the Restricted Period may not be assigned
or transferred except by will or by the laws of descent and distribution. In
order to enforce the limitations imposed upon the Restricted Shares the Board
may (i) cause a legend or legends to be placed on any such certificates, and/or
(ii) issue "stop transfer" instructions as it deems necessary or appropriate.
Holders of Restricted Shares limited as to sale under this subsection 9(b) shall
have rights as a shareholder with respect to such shares to receive dividends in
cash or other property or other distribution or rights in respect of such
shares, and to vote such shares as the record owner thereof. With respect to
each grant of Restricted Shares, the Board shall determine the Transferability
Restrictions which will apply to the Restricted Shares for all or part of the
Restricted Period. By way of illustration but not by way of limitation, the
Board may provide (i) that the Outside Director will not be entitled to receive
any shares of Stock unless he or she still serves as a Director of the Company
at the end of the Restricted Period, (ii) that the Outside Director will become
vested in Restricted Shares according to a schedule determined by the Board, or
under other terms and conditions determined by the Board, and (iii) how any
Transferability Restrictions will be applied, modified or accelerated in the
case of the Outside Director's death or total and permanent disability.
(c) Manner of Holding and Delivering Restricted Shares. Each
certificate issued for Restricted Shares shall be registered in the name of the
Outside Director and deposited with the Company or its designee. These
certificates shall remain in the possession of the Company or its designee until
the end of the applicable Restricted Period or, if the Board has provided for
earlier termination of the Transferability Restrictions following an Outside
Director's death, total and permanent disability or earlier vesting of the
shares of Stock, such earlier termination of the Transferability Restrictions.
At whichever time is applicable, certificates representing the number of shares
to which the Outside Director is then entitled shall be delivered to the Outside
Director free and clear of the Transferability Restrictions; provided that in
the case of an Outside Director who is not entitled to receive the full number
of Restricted Shares evidenced by the certificates then being released from
escrow because of the application of the Transferability Restrictions, those
certificates shall be returned to the Company and canceled and a new certificate
representing the shares of Stock, if any, to which the Outside Director is
entitled pursuant to the Transferability Restrictions shall be issued and
delivered to the Outside Director, free and clear of the Transferability
Restrictions.
10. RESTRICTED SHARE UNITS
The Board shall from time to time designate those Outside Directors who
shall receive Restricted Share Unit Awards. The Compensation Committee shall
advise such Outside Directors of their Awards by a letter indicating the number
of Restricted Share Units awarded and the following terms and conditions of the
award.
(a) Restricted Share Units may be granted to Outside Directors as of
the first day of a Restricted Period. The number of Restricted Share Units to be
granted to each Outside Director and the Restricted Period shall be determined
by the Board in its sole discretion.
(b) Transferability Restrictions. During the Restricted Period,
Restricted Share Units may not be sold, assigned, transferred or otherwise
disposed of, or
mortgaged, pledged or otherwise encumbered. Furthermore, an Outside
Director's right, if any, to receive cash or Stock upon termination of the
Restricted Period may not be assigned or transferred except by will or by the
laws of descent and distribution. With respect to each grant of Restricted Share
Units, the Compensation Committee shall determine the Transferability
Restrictions which will apply to the Restricted Share Units for all or part of
the Restricted Period. By way of illustration but not by way of limitation, the
Compensation Committee may provide (i) that the Outside Director will forfeit
any Restricted Share Units unless he or she still serves as a Director of the
Company at the end of the Restricted Period, (ii) that the Outside Director will
become vested in Restricted Share Units according to a schedule determined by
the Compensation Committee, or under other terms and conditions determined by
the Compensation Committee, and (iii) how any Transferability Restrictions will
be applied, modified or accelerated in the case of the Outside Director's death
or total and permanent disability.
(c) During the Restricted Period, Outside Directors will be credited
with dividends, equivalent in value to those declared and paid on shares of
Stock, on all Restricted Share Units granted to them. These dividends will be
regarded as having been reinvested in Restricted Share Units on the date of the
Stock dividend payments based on the then Fair Market Value of the Stock thereby
increasing the number of Restricted Share Units held by an Outside Director.
Holders of Restricted Share Units under this subsection 10(c) shall have none of
the rights of a shareholder with respect to such shares. Holders of Restricted
Share Units are not entitled to receive dividends in cash or other property, nor
other distribution of rights in respect of such shares, nor to vote such shares
as the record owner thereof.
(d) Payment of Restricted Share Units. The payment of Restricted Share
Units shall be made in cash or shares of Stock, or a combination of both, as
determined by the Board at the time of grant. The payment of Restricted Share
Units shall be made within 90 days following the end of the Restricted Period.
11. NOTICES; DELIVERY OF STOCK CERTIFICATES
Any notice required or permitted to be given by the Company or the
Board pursuant to the Plan shall be deemed given when personally delivered or
deposited in the United States mail, registered or certified, postage prepaid,
addressed to the Outside Director at the last address shown for the Outside
Director on the records of the Company.
12. AMENDMENT AND TERMINATION
The Board may at any time amend, suspend, or discontinue the Plan or
alter or amend any or all Awards under the Plan to the extent (i) permitted by
law, (ii) permitted by the rules of any stock exchange on which the Stock or any
other security of the Company is listed, and (iii) permitted under applicable
provisions of the Securities Act of 1933, as amended, the Exchange Act
(including Rule 16b-3 thereof); provided, however, that if any of the foregoing
requires the approval by the stockholders of any such amendment, suspension or
discontinuance, then the Board may take such action subject to the approval of
the stockholders. Except as provided in subsection 7(b), no such amendment,
suspension or termination of the Plan shall, without the consent of the
Director, adversely alter or change any of the rights or obligations under any
Award granted to the Director. The Board may in its sole and absolute
discretion, by written notice to a Director, (i) limit the period in which an
Award may be exercised to a period ending at least three months following the
date of such notice, and/or (ii) limit or eliminate the number of shares subject
to Award after a period ending at least three months following the date of such
notice. Except as provided in subsection 8(k) and this Section 12, no such
amendment, suspension, or termination of the Plan shall, without the consent of
the Director, adversely alter or change any of the rights or obligations under
any Options or other rights previously granted the Director under the Plan.
13. TAXES
The Company shall require the withholding of all taxes as required by
law. An Outside Director may elect to have any portion of the federal, state or
local income tax withholding required with respect to an Award satisfied by
tendering Stock to the Company, which, in the absence of such an election, would
have been issued to the Director in connection with the Award.
14. GOVERNING LAW
The terms of the Plan shall be governed, construed, administered and
regulated in accordance with the laws of the state of Delaware and applicable
federal law. In the event any provision of the Plan shall be determined to be
illegal or invalid for any reason, the other provisions of the Plan shall
continue in full force and effect as if such illegal or invalid provision had
never been included herein.
15. DIRECTOR'S SERVICE
Nothing contained in the Plan, or with respect to any grant hereunder,
shall interfere with or limit in any way the right of stockholders of the
Company to remove any Director from the Board, nor confer upon any Director any
right to continue to serve on the Board as a Director.