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; (e) the sale or other disposition of all or substantially
all of the assets of Montana-Dakota Utilities Co., other than to a
subsidiary of the Company; or (f) 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 "Director" means any individual who is a member of the
Board of Directors of the Company.
2.10 "Disability" means "permanent and total disability" as
defined under Section 22(e)(3)of the Code.
2.11 "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.
2.12 "Eligible Employee" means an Employee who is eligible to
participate in the Plan, as set forth in Section 5.1 herein.
2.13 "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.
2.14 "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor act thereto.
2.15 "Exercise Period" means the period during which an SAR or
Option is exercisable, as set forth in the related Award Agreement.
2.16 "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.
2.17 "Freestanding SAR" means an SAR that is granted
independently of any Option.
2.18 "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.
2.19 "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.
2.20 "Option" means an Incentive Stock Option or a
Nonqualified Stock Option.
2.21 "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.
2.22 "Participant" means an Employee of the Company who has
outstanding an Award granted under the Plan.
2.23 "Performance Unit" means an Award granted to an Employee,
as described in Article 9 herein.
2.24 "Performance Share" means an Award granted to an
Employee, as described in Article 9 herein.
2.25 "Period of Restriction" means the period during which the
transfer of Restricted Stock is limited in some way, as provided in
Article 8 herein.
2.26 "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.
2.27 "Restricted Stock" means an Award of Shares granted to a
Participant pursuant to Article 8 herein.
2.28 "Shares" means the shares of common stock of the Company.
2.29 "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.
2.30 "Subsidiary" means any corporation that is a "subsidiary
corporation" of the Company as that term is defined in
Section 424(f) of the Code.
2.31 "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 1,800,000. 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 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.
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.
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
certain conditions, the payment of Shares in lieu of cash, or cash
based on performance criteria established by the Committee, and the
payment of Shares in lieu of cash under other Company incentive
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 shall be deemed to have expired and
such 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.