MDU RESOURCES GROUP, INC.
1997 EXECUTIVE LONG-TERM INCENTIVE PLAN
Article 1. Establishment, Purpose and Duration
1.1 Establishment of the Plan. MDU Resources Group,
Inc., a Delaware corporation (hereinafter referred to as the
"Company"), hereby establishes an incentive compensation
plan to be known as the "MDU Resources Group, Inc. 1997
Executive Long-Term Incentive Plan" (hereinafter referred to
as the "Plan"), as set forth in this document. The Plan
permits the grant of Nonqualified Stock Options (NQSO),
Incentive Stock Options (ISO), Stock Appreciation Rights
(SAR), Restricted Stock, Performance Units, Performance
Shares and other awards.
The Plan shall become effective when approved by the
stockholders at the annual meeting on April 22, 1997 (the
"Effective Date"), and shall remain in effect as provided in
Section 1.3 herein.
1.2 Purpose of the Plan. The purpose of the Plan is
to promote the success and enhance the value of the Company
by linking the personal interests of Participants to those
of Company stockholders and customers.
The Plan is further intended to provide flexibility to
the Company in its ability to motivate, attract and retain
the services of Participants upon whose judgment, interest
and special effort the successful conduct of its operations
is largely dependent.
1.3 Duration of the Plan. The Plan shall commence on
the Effective Date, as described in Section 1.1 herein, and
shall remain in effect, subject to the right of the Board of
Directors to terminate the Plan at any time pursuant to
Article 15 herein, until all Shares subject to it shall have
been purchased or acquired according to the Plan's
provisions. However, in no event may an Award be made under
the Plan on or after the day immediately preceding the tenth
anniversary of the Effective Date.
Article 2. Definitions
Whenever used in the Plan, the following terms shall
have the meanings set forth below and, when such meaning is
intended, the initial letter of the word is capitalized:
2.1 "Award" means, individually or collectively, a
grant under the Plan of NQSOs, ISOs, SARs, Restricted Stock,
Performance Units, Performance Shares or any other type of
award permitted under Article 10 of the Plan.
2.2 "Award Agreement" means an agreement entered into
by each Participant and the Company, setting forth the terms
and provisions applicable to an Award granted to a
Participant under the Plan.
2.3 "Base Value" of an SAR shall have the meaning set
forth in Section 7.1 herein.
2.4 "Board" or "Board of Directors" means the Board of
Directors of the Company.
2.5 "Change in Control" means the earliest of the
following to occur: (a) the public announcement by the
Company or by any person (which shall not include the
Company, any subsidiary of the Company, or any employee
benefit plan of the Company or of any subsidiary of the
Company) ("Person") that such Person, who or which, together
with all Affiliates and Associates (within the meanings
ascribed to such terms in the Rule 12b-2 of the General
Rules and Regulations under the Exchange Act) of such
Person, shall be the beneficial owner of twenty percent
(20%) or more of the voting stock of the Company
outstanding; (b) the commencement of, or after the first
public announcement of any Person to commence, a tender or
exchange offer the consummation of which would result in any
Person becoming the beneficial owner of voting stock
aggregating thirty percent (30%) or more of the then
outstanding voting stock of the Company; (c) the
announcement of any transaction relating to the Company
required to be described pursuant to the requirements of
Item 6(e) of Schedule 14A of Regulation 14A under the
Exchange Act; (d) a proposed change in constituency of the
Board such that, during any period of two (2) consecutive
years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at
least a majority thereof, unless the election or nomination
for election by the stockholders of the Company of each new
Director was approved by a vote of at least two-thirds (2/3)
of the Directors then still in office who were members of
the Board at the beginning of the period; or (e) any other
event which shall be deemed by a majority of the
Compensation Committee to constitute a "change in control".
2.6 "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
2.7 "Committee" means the Committee, as specified in
Article 3, appointed by the Board to administer the Plan
with respect to Awards.
2.8 "Company" means MDU Resources Group, Inc., a
Delaware corporation, or any successor thereto as provided
in Article 17 herein.
2.9 "Covered Employee" means any Participant who would
be considered a "Covered Employee" for purposes of Section
162(m) of the Code.
2.10 "Director" means any individual who is a member of
the Board of Directors of the Company.
2.11 "Disability" means "permanent and total
disability" as defined under Section 22(e)(3)of the Code.
2.12 "Dividend Equivalent" means, with respect to Shares
subject to an Award, a right to be paid an amount equal to
dividends declared on an equal number of outstanding Shares.
2.13 "Eligible Employee" means an Employee who is
eligible to participate in the Plan, as set forth in Section
5.1 herein.
2.14 "Employee" means any full-time or regularly-
scheduled part-time employee of the Company or of the
Company's Subsidiaries, who is not covered by any collective
bargaining agreement to which the Company or any of its
Subsidiaries is a party. Directors who are not otherwise
employed by the Company shall not be considered Employees
for purposes of the Plan. For purposes of the Plan,
transfer of employment of a Participant between the Company
and any one of its Subsidiaries (or between Subsidiaries)
shall not be deemed a termination of employment.
2.15 "Exchange Act" means the Securities Exchange Act
of 1934, as amended from time to time, or any successor act
thereto.
2.16 "Exercise Period" means the period during which an
SAR or Option is exercisable, as set forth in the related
Award Agreement.
2.17 "Fair Market Value" shall mean the average of the
high and low sale prices as reported in the consolidated
transaction reporting system or, if there is no such sale on
the relevant date, then on the last previous day on which a
sale was reported.
2.18 "Freestanding SAR" means an SAR that is granted
independently of any Option.
2.19 "Incentive Stock Option" or "ISO" means an option
to purchase Shares, granted under Article 6 herein, which is
designated as an Incentive Stock Option and satisfies the
requirements of Section 422 of the Code.
2.20 "Nonqualified Stock Option" or "NQSO" means an
option to purchase Shares, granted under Article 6 herein,
which is not intended to be an Incentive Stock Option under
Section 422 of the Code.
2.21 "Option" means an Incentive Stock Option or a
Nonqualified Stock Option.
2.22 "Option Price" means the price at which a Share
may be purchased by a Participant pursuant to an Option, as
determined by the Committee and set forth in the Option
Award Agreement.
2.23 "Participant" means an Employee of the Company who
has outstanding an Award granted under the Plan.
2.24 "Performance Goals" means the performance goals
established by the Committee, which shall be based on one or
more of the following measures: sales or revenues, earnings
per share, shareholder return and/or value, funds from
operations, operating income, gross income, net income, cash
flow, return on equity, return on capital, earnings before
interest, operating ratios, stock price, customer
satisfaction, accomplishment of mergers, acquisitions,
dispositions or similar extraordinary business transactions,
profit returns and margins, financial return ratios and/or
market performance. Performance goals may be measured
solely on a corporate subsidiary or business unit basis, or
a combination thereof. Performance goals may reflect
absolute entity performance or a relative comparison of
entity performance to the performance of a peer group of
entities or other external measure.
2.25 "Performance Unit" means an Award granted to an
Employee, as described in Article 9 herein.
2.26 "Performance Share" means an Award granted to an
Employee, as described in Article 9 herein.
2.27 "Period of Restriction" means the period during
which the transfer of Restricted Stock is limited in some
way, as provided in Article 8 herein.
2.28 "Person" shall have the meaning ascribed to such
term in Section 3(a)(9) of the Exchange Act, as used in
Sections 13(d) and 14(d) thereof, including usage in the
definition of a "group" in Section 13(d) thereof.
2.29 "Qualified Restricted Stock" means an Award of
Restricted Stock designated as Qualified Restricted Stock by
the Committee at the time of grant and intended to qualify
for the exemption from the limitation on deductibility
imposed by Section 162(m) of the Code that is set forth in
Section 162(m)(4)(C).
2.30 "Restricted Stock" means an Award of Shares granted
to a Participant pursuant to Article 8 herein.
2.31 "Shares" means the shares of common stock of the
Company.
2.32 "Stock Appreciation Right" or "SAR" means a right,
granted alone or in connection with a related Option,
designated as an SAR, to receive a payment on the day the
right is exercised, pursuant to the terms of Article 7
herein. Each SAR shall be denominated in terms of one
Share.
2.33 "Subsidiary" means any corporation that is a
"subsidiary corporation" of the Company as that term is
defined in Section 424(f) of the Code.
2.34 "Tandem SAR" means an SAR that is granted in
connection with a related Option, the exercise of which
shall require forfeiture of the right to purchase a Share
under the related Option (and when a Share is purchased
under the Option, the Tandem SAR shall be similarly
canceled).
Article 3. Administration
3.1 The Committee. The Plan shall be administered by
the Compensation Committee of the Board, or by any other
Committee appointed by the Board. The members of the
Committee shall be appointed from time to time by, and shall
serve at the discretion of, the Board of Directors.
3.2 Authority of the Committee. The Committee shall
have full power except as limited by law, the Articles of
Incorporation and the Bylaws of the Company, subject to such
other restricting limitations or directions as may be
imposed by the Board and subject to the provisions herein,
to determine the size and types of Awards; to determine the
terms and conditions of such Awards in a manner consistent
with the Plan; to construe and interpret the Plan and any
agreement or instrument entered into under the Plan; to
establish, amend or waive rules and regulations for the
Plan's administration; and (subject to the provisions of
Article 15 herein) to amend the terms and conditions of any
outstanding Award. Further, the Committee shall make all
other determinations which may be necessary or advisable for
the administration of the Plan. As permitted by law, the
Committee may delegate its authorities as identified
hereunder.
3.3 Restrictions on Share Transferability. The
Committee may impose such restrictions on any Shares
acquired pursuant to Awards under the Plan as it may deem
advisable, including, without limitation, restrictions to
comply with applicable Federal securities laws, with the
requirements of any stock exchange or market upon which such
Shares are then listed and/or traded and with any blue sky
or state securities laws applicable to such Shares.
3.4 Approval. The Board or the Committee shall
approve all Awards made under the Plan and all elections
made by Participants, prior to their effective date, to the
extent necessary to comply with Rule 16b-3 under the
Exchange Act.
3.5 Decisions Binding. All determinations and
decisions made by the Committee pursuant to the provisions
of the Plan and all related orders or resolutions of the
Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Employees,
Participants and their estates and beneficiaries.
3.6 Costs. The Company shall pay all costs of
administration of the Plan.
Article 4. Shares Subject to the Plan
4.1 Number of Shares. Subject to Section 4.2 herein,
the maximum number of Shares available for grant under the
Plan shall be 5,800,000. Shares underlying lapsed or
forfeited Awards, or Awards that are not paid in Shares, may
be reused for other Awards. Shares granted pursuant to the
Plan may be (i) authorized but unissued Shares of Common
Stock, (ii) treasury shares, or (iii) shares purchased on
the open market.
4.2 Adjustments in Authorized Shares. In the event of
any merger, reorganization, consolidation, recapitalization,
separation, liquidation, stock split, stock dividend, split-
up, share combination or other change in the corporate
structure of the Company affecting the Shares, such
adjustment shall be made in the number and class of Shares
which may be delivered under the Plan, and in the number and
class of and/or price of Shares subject to outstanding
Awards granted under the Plan, as may be determined to be
appropriate and equitable by the Committee, in its sole
discretion, to prevent dilution or enlargement of rights;
provided, however, that the number of Shares subject to any
Award shall always be a whole number. Notwithstanding the
foregoing, (i) each such adjustment with respect to an
Incentive Stock Option shall comply with the rules of
Section 424(a) of the Code and (ii) in no event shall any
adjustment be made which would render any Incentive Stock
Option granted hereunder to be other than an incentive stock
option for purposes of Section 422 of the Code.
4.3 Individual Limitations. Subject to Section 4.2
herein, (i) the total number of Shares with respect to which
Options or SARs may be granted in any calendar year to any
Covered Employee shall not exceed 1,000,000 Shares; (ii) the
total number of shares of Qualified Restricted Stock that
may be granted in any calendar year to any Covered Employee
shall not exceed 1,000,000 Shares; (iii) the total number of
Performance Shares or Performance Units that may be granted
in any calendar year to any Covered Employee shall not
exceed 1,000,000 Shares or Units, as the case may be; (iv)
the total number of Shares that are intended to qualify for
deduction under Section 162(m) of the Code granted pursuant
to Article 10 herein in any calendar year to any Covered
Employee shall not exceed 1,000,000 Shares; (v) the total
cash Award that is intended to qualify for deduction under
Section 162(m) of the Code that may be paid pursuant to
Article 10 herein in any calendar year to any Covered
Employee shall not exceed $6,000,000; and (vi) the aggregate
number of Dividend Equivalents that are intended to qualify
for deduction under Section 162(m) of the Code that a
Covered Employee may receive in any calendar year shall not
exceed $6,000,000.
Article 5. Eligibility and Participation
5.1 Eligibility. Persons eligible to participate in
the Plan include all officers and key employees of the
Company and its Subsidiaries, as determined by the
Committee, including Employees who are members of the Board,
but excluding Directors who are not Employees.
5.2 Actual Participation. Subject to the provisions
of the Plan, the Committee may, from time to time, select
from all eligible Employees those to whom Awards shall be
granted and shall determine the nature and amount of each
Award.
Article 6. Stock Options
6.1 Grant of Options. Subject to the terms and
conditions of the Plan, Options may be granted to an
Eligible Employee at any time and from time to time, as
shall be determined by the Committee.
The Committee shall have complete discretion in
determining the number of Shares subject to Options granted
to each Participant (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining
the terms and conditions pertaining to such Options. The
Committee may grant ISOs, NQSOs, or a combination thereof.
6.2 Option Award Agreement. Each Option grant shall
be evidenced by an Option Award Agreement that shall specify
the Option Price, the term of the Option, the number of
Shares to which the Option pertains, the Exercise Period and
such other provisions as the Committee shall determine,
including but not limited to any rights to Dividend
Equivalents. The Option Award Agreement shall also specify
whether the Option is intended to be an ISO or an NQSO.
The Option Price for each Share purchasable under any
Incentive Stock Option granted hereunder shall be not less
than one hundred percent (100%) of the Fair Market Value per
Share at the date the Option is granted; and provided,
further, that in the case of an Incentive Stock Option
granted to a person who, at the time such Incentive Stock
Option is granted, owns shares of stock of the Company or of
any Subsidiary which possess more than ten percent (10%) of
the total combined voting power of all classes of shares of
stock of the Company or of any Subsidiary, the Option Price
for each Share shall be not less than one hundred ten
percent (110%) of the Fair Market Value per Share at the
date the Option is granted. The Option Price will be
subject to adjustment in accordance with the provisions of
Section 4.2 of the Plan.
No Incentive Stock Option by its terms shall be
exercisable after the expiration of ten (10) years from the
date of grant of the Option; provided, however, in the case
of an Incentive Stock Option granted to a person who, at the
time such Option is granted, owns shares of stock of the
Company or of any Subsidiary possessing more than ten
percent (10%) of the total combined voting power of all
classes of shares of stock of the Company or of any
Subsidiary, such Option shall not be exercisable after the
expiration of five (5) years from the date such Option is
granted.
6.3 Exercise of and Payment for Options. Options
granted under the Plan shall be exercisable at such times
and be subject to such restrictions and conditions as the
Committee shall in each instance approve.
A Participant may exercise an Option at any time during
the Exercise Period. Options shall be exercised by the
delivery of a written notice of exercise to the Company or
its designee, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied
by provisions for full payment for the Shares.
The Option Price upon exercise of any Option shall be
payable either: (a) in cash or its equivalent, (b) by
tendering previously acquired Shares having an aggregate
Fair Market Value at the time of exercise equal to the total
Option Price (provided that the Shares which are tendered
must have been held by the Participant for at least six (6)
months prior to their tender to satisfy the Option Price),
(c) by share withholding, (d) by cashless exercise or (e) by
a combination of (a),(b),(c), and/or (d).
As soon as practicable after receipt of a written
notification of exercise of an Option and provisions for
full payment therefor, there shall be delivered to the
Participant, in the Participant's name, Share certificates
in an appropriate amount based upon the number of Shares
purchased under the Option(s).
6.4 Termination of Employment. Each Option Award
Agreement shall set forth the extent to which the
Participant shall have the right to exercise the Option
following termination of the Participant's employment with
the Company and its Subsidiaries. Such provisions shall be
determined in the sole discretion of the Committee (subject
to applicable law), shall be included in the Option Award
Agreement entered into with Participants, need not be
uniform among all Options granted pursuant to the Plan or
among Participants and may reflect distinctions based on the
reasons for termination of employment. If the employment of
a Participant by the Company or by any Subsidiary is
terminated for any reason other than death, any Incentive
Stock Option granted to such Participant may not be
exercised later than three (3) months (one (1) year in the
case of termination due to Disability) after the date of
such termination of employment.
6.5 Transferability of Options. Except as otherwise
determined by the Committee and set forth in the Option
Award Agreement, no Option granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of
descent and distribution, and all Incentive Stock Options
granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant.
Article 7. Stock Appreciation Rights
7.1 Grant of SARs. Subject to the terms and
conditions of the Plan, an SAR may be granted to an Eligible
Employee at any time and from time to time as shall be
determined by the Committee. The Committee may grant
Freestanding SARs, Tandem SARs or any combination of these
forms of SAR.
The Committee shall have complete discretion in
determining the number of SARs granted to each Participant
(subject to Article 4 herein) and, consistent with the
provisions of the Plan, in determining the terms and
conditions pertaining to such SARs.
The Base Value of a Freestanding SAR shall equal the
Fair Market Value of a Share on the date of grant of the
SAR. The Base Value of Tandem SARs shall equal the Option
Price of the related Option.
7.2 SAR Award Agreement. Each SAR grant shall be
evidenced by an SAR Award Agreement that shall specify the
number of SARs granted, the Base Value, the term of the SAR,
the Exercise Period and such other provisions as the
Committee shall determine.
7.3 Exercise and Payment of SARs. Tandem SARs may be
exercised for all or part of the Shares subject to the
related Option upon the surrender of the right to exercise
the equivalent portion of the related Option. A Tandem SAR
may be exercised only with respect to the Shares for which
its related Option is then exercisable.
Notwithstanding any other provision of the Plan to the
contrary, with respect to a Tandem SAR granted in connection
with an ISO: (i) the Tandem SAR will expire no later than
the expiration of the underlying ISO; (ii) the value of the
payout with respect to the Tandem SAR may be for no more
than one hundred percent (100%) of the difference between
the Option Price of the underlying ISO and the Fair Market
Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR
may be exercised only when the Fair Market Value of the
Shares subject to the ISO exceeds the Option Price of the
ISO.
Freestanding SARs may be exercised upon whatever terms
and conditions the Committee, in its sole discretion,
imposes upon them.
A Participant may exercise an SAR at any time during
the Exercise Period. SARs shall be exercised by the
delivery of a written notice of exercise to the Company,
setting forth the number of SARs being exercised. Upon
exercise of an SAR, a Participant shall be entitled to
receive payment from the Company in an amount equal to the
product of:
(a) the excess of (i) the Fair Market Value of a
Share on the date of exercise over (ii) the Base
Value multiplied by
(b) the number of Shares with respect to which
the SAR is exercised.
At the sole discretion of the Committee, the payment to
the Participant upon SAR exercise may be in cash, in Shares
of equivalent value, or in some combination thereof.
7.4 Termination of Employment. Each SAR Award
Agreement shall set forth the extent to which the
Participant shall have the right to exercise the SAR
following termination of the Participant's employment with
the Company and its Subsidiaries. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the SAR Award Agreement entered into with
Participants, need not be uniform among all SARs granted
pursuant to the Plan or among Participants and may reflect
distinctions based on the reasons for termination of
employment.
7.5 Transferability of SARs. Except as otherwise
determined by the Committee and set forth in the SAR Award
Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent
and distribution, and all SARs granted to a Participant
under the Plan shall be exercisable during his or her
lifetime only by such Participant or his or her legal
representative.
Article 8. Restricted Stock
8.1 Grant of Restricted Stock. Subject to the terms
and conditions of the Plan, Restricted Stock may be granted
to Eligible Employees at any time and from time to time, as
shall be determined by the Committee.
The Committee shall have complete discretion in
determining the number of shares of Restricted Stock granted
to each Participant (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining
the terms and conditions pertaining to such Restricted
Stock.
In addition, the Committee may, prior to or at the time
of grant, designate an Award of Restricted Stock as
Qualified Restricted Stock, in which event it will condition
the grant or vesting, as applicable, of such Qualified
Restricted Stock upon the attainment of the Performance
Goals selected by the Committee.
8.2 Restricted Stock Award Agreement. Each Restricted
Stock grant shall be evidenced by a Restricted Stock Award
Agreement that shall specify the Period or Periods of
Restriction, the number of Restricted Stock Shares granted
and such other provisions as the Committee shall determine.
8.3 Transferability. Restricted Stock granted
hereunder may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the
applicable Period of Restriction established by the
Committee and specified in the Restricted Stock Award
Agreement. All rights with respect to the Restricted Stock
granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant or his
or her legal representative.
8.4 Certificate Legend. Each certificate representing
Restricted Stock granted pursuant to the Plan may bear a
legend substantially as follows:
"The sale or other transfer of the shares of stock
represented by this certificate, whether
voluntary, involuntary or by operation of law, is
subject to certain restrictions on transfer as set
forth in MDU Resources Group, Inc. 1997 Executive
Long-Term Incentive Plan, and in a Restricted
Stock Award Agreement. A copy of such Plan and
such Agreement may be obtained from MDU Resources
Group, Inc."
The Company shall have the right to retain the
certificates representing Restricted Stock in the Company's
possession until such time as all restrictions applicable to
such Shares have been satisfied.
8.5 Removal of Restrictions. Restricted Stock shall
become freely transferable by the Participant after the last
day of the Period of Restriction applicable thereto. Once
Restricted Stock is released from the restrictions, the
Participant shall be entitled to have the legend referred to
in Section 8.4 removed from his or her stock certificate.
8.6 Voting Rights. During the Period of Restriction,
Participants holding Restricted Stock may exercise full
voting rights with respect to those Shares.
8.7 Dividends and Other Distributions. Subject to the
Committee's right to determine otherwise at the time of
grant, during the Period of Restriction, Participants
holding Restricted Stock shall receive all regular cash
dividends paid with respect to all Shares while they are so
held. All other distributions paid with respect to such
Restricted Stock shall be credited to Participants subject
to the same restrictions on transferability and
forfeitability as the Restricted Stock with respect to which
they were paid and shall be paid to the Participant within
forty-five (45) days following the full vesting of the
Restricted Stock with respect to which such distributions
were made.
8.8 Termination of Employment. Each Restricted Stock
Award Agreement shall set forth the extent to which the
Participant shall have the right to receive unvested
Restricted Stock following termination of the Participant's
employment with the Company and its Subsidiaries. Such
provisions shall be determined in the sole discretion of the
Committee, shall be included in the Restricted Stock Award
Agreement entered into with Participants, need not be
uniform among all grants of Restricted Stock or among
Participants and may reflect distinctions based on the
reasons for termination of employment.
Article 9. Performance Units and Performance Shares
9.1 Grant of Performance Units and Performance Shares.
Subject to the terms and conditions of the Plan, Performance
Units and/or Performance Shares may be granted to an
Eligible Employee at any time and from time to time, as
shall be determined by the Committee.
The Committee shall have complete discretion in
determining the number of Performance Units and/or
Performance Shares granted to each Participant (subject to
Article 4 herein) and, consistent with the provisions of the
Plan, in determining the terms and conditions pertaining to
such Awards.
9.2 Performance Unit/Performance Share Award
Agreement. Each grant of Performance Units and/or
Performance Shares shall be evidenced by a Performance Unit
and/or Performance Share Award Agreement that shall specify
the number of Performance Units and/or Performance Shares
granted, the initial value (if applicable), the Performance
Period, the Performance Goals and such other provisions as
the Committee shall determine, including but not limited to
any rights to Dividend Equivalents.
9.3 Value of Performance Units/Performance Shares.
Each Performance Unit shall have an initial value that is
established by the Committee at the time of grant. The
value of a Performance Share shall be equal to the Fair
Market Value of a Share. The Committee shall set
Performance Goals in its discretion which, depending on the
extent to which they are met, will determine the number
and/or value of Performance Units/Performance Shares that
will be paid out to the Participants. The time period
during which the Performance Goals must be met shall be
called a "Performance Period."
9.4 Earning of Performance Units/Performance Shares.
After the applicable Performance Period has ended, the
holder of Performance Units/Performance Shares shall be
entitled to receive a payout with respect to the Performance
Units/Performance Shares earned by the Participant over the
Performance Period, to be determined as a function of the
extent to which the corresponding Performance Goals have
been achieved.
9.5 Form and Timing of Payment of Performance
Units/Performance Shares. Payment of earned Performance
Units/Performance Shares shall be made following the close
of the applicable Performance Period. The Committee, in its
sole discretion, may pay earned Performance
Units/Performance Shares in cash or in Shares (or in a
combination thereof), which have an aggregate Fair Market
Value equal to the value of the earned Performance
Units/Performance Shares at the close of the applicable
Performance Period. Such Shares may be granted subject to
any restrictions deemed appropriate by the Committee.
9.6 Termination of Employment. Each Performance
Unit/Performance Share Award Agreement shall set forth the
extent to which the Participant shall have the right to
receive a Performance Unit/Performance Share payment
following termination of the Participant's employment with
the Company and its Subsidiaries during a Performance
Period. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award
Agreement entered into with Participants, need not be
uniform among all grants of Performance Units/Performance
Shares or among Participants and may reflect distinctions
based on reasons for termination of employment.
9.7 Transferability. Except as otherwise determined
by the Committee and set forth in the Performance
Unit/Performance Share Award Agreement, Performance
Units/Performance Shares may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated,
other than by will or by the laws of descent and
distribution, and a Participant's rights with respect to
Performance Units/Performance Shares granted under the Plan
shall be available during the Participant's lifetime only to
such Participant or the Participant's legal representative.
Article 10. Other Awards
The Committee shall have the right to grant other
Awards which may include, without limitation, the grant of
Shares based on attainment of Performance Goals established
by the Committee, the payment of Shares in lieu of cash, or
cash based on attainment of Performance Goals established by
the Committee, and the payment of Shares in lieu of cash
under other Company incentive or bonus programs. Payment
under or settlement of any such Awards shall be made in such
manner and at such times as the Committee may determine.
Article 11. Beneficiary Designation
Each Participant under the Plan may, from time to time,
name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the
Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company,
and will be effective only when filed by the Participant in
writing with the Company during the Participant's lifetime.
In the absence of any such designation, benefits remaining
unpaid at the Participant's death shall be paid to the
Participant's estate.
The spouse of a married Participant domiciled in a
community property jurisdiction shall join in any
designation of beneficiary or beneficiaries other than the
spouse.
Article 12. Deferrals
The Committee may permit a Participant to defer the
Participant's receipt of the payment of cash or the delivery
of Shares that would otherwise be due to such Participant
under the Plan. If any such deferral election is permitted,
the Committee shall, in its sole discretion, establish rules
and procedures for such payment deferrals.
Article 13. Rights of Employees
13.1 Employment. Nothing in the Plan shall interfere
with or limit in any way the right of the Company to
terminate any Participant's employment at any time, for any
reason or no reason in the Company's sole discretion, nor
confer upon any Participant any right to continue in the
employ of the Company.
13.2 Participation. No Employee shall have the right
to be selected to receive an Award under the Plan, or,
having been so selected, to be selected to receive a future
Award.
Article 14. Change in Control
The terms of this Article 14 shall immediately become
operative, without further action or consent by any person
or entity, upon a Change in Control, and once operative
shall supersede and take control over any other provisions
of this Plan.
Upon a Change in Control
(a) Any and all Options and SARs granted
hereunder shall become immediately exercisable;
(b) Any restriction periods and restrictions
imposed on Restricted Shares and Qualified
Restricted Shares shall be deemed to have expired
and such Restricted Shares and Qualified
Restricted Shares shall become immediately vested
in full; and
(c) The target payout opportunity attainable
under all outstanding Awards of Performance Units,
Performance Shares and other Awards shall be
deemed to have been fully earned for the entire
Performance Period(s) as of the effective date of
the Change in Control. The vesting of all Awards
denominated in Shares shall be accelerated as of
the effective date of the Change in Control, and
there shall be paid out in cash to Participants
immediately following the effective date of the
Change in Control the full amount of the targeted
cash payout opportunities associated with
outstanding cash-based Awards.
Article 15. Amendment, Modification and Termination
15.1 Amendment, Modification and Termination. The
Board may, at any time and from time to time, alter, amend,
suspend or terminate the Plan in whole or in part, provided
that no amendment shall be made which shall increase the
total number of Shares which may be issued and sold pursuant
to Incentive Stock Options, reduce the minimum exercise
price in the case of an Incentive Stock Option or modify the
provisions of the Plan relating to eligibility with respect
to Incentive Stock Options unless such amendment is made by
or with the approval of the stockholders within 12 months of
the effective date of such amendment, but only if such
approval is required by any applicable provision of law.
The Board of Directors of the Company is also authorized to
amend the Plan and the Options granted hereunder to maintain
qualification as "incentive stock options" within the
meaning of Section 422 of the Code, if applicable.
15.2 Awards Previously Granted. No termination,
amendment or modification of the Plan shall adversely affect
in any material way any Award previously granted under the
Plan, without the written consent of the Participant holding
such Award, unless such termination, modification or
amendment is required by applicable law and except as
otherwise provided herein.
Article 16. Withholding
16.1 Tax Withholding. The Company shall have the power
and the right to deduct or withhold, or require a
Participant to remit to the Company, an amount sufficient to
satisfy Federal, state and local taxes (including the
Participant's FICA obligation) required by law to be
withheld with respect to an Award made under the Plan.
16.2 Share Withholding. With respect to withholding
required upon the exercise of Options or SARs, upon the
lapse of restrictions on Restricted Stock, or upon any other
taxable event arising out of or as a result of Awards
granted hereunder, Participants may elect to satisfy the
withholding requirement, in whole or in part, by tendering
previously-owned Shares or by having the Company withhold
Shares having a Fair Market Value on the date the tax is to
be determined equal to the statutory total tax which could
be imposed on the transaction. All elections shall be
irrevocable, made in writing and signed by the Participant.
Article 17. Successors
All obligations of the Company under the Plan, with
respect to Awards granted hereunder, shall be binding on any
successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially
all of the business and/or assets of the Company.
Article 18. Legal Construction
18.1 Gender and Number. Except where otherwise
indicated by the context, any masculine term used herein
also shall include the feminine, the plural shall include
the singular and the singular shall include the plural.
18.2 Severability. In the event any provision of the
Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining
parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been
included.
18.3 Requirements of Law. The granting of Awards and
the issuance of Shares under the Plan shall be subject to
all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national
securities exchanges as may be required.
18.4 Governing Law. To the extent not preempted by
Federal law, the Plan, and all agreements hereunder, shall
be construed in accordance with, and governed by, the laws
of the State of Delaware.