EXHIBIT 10 (K)
OilDri Corporation of America
1995 Long Term Incentive Plan
TABLE OF CONTENTS
1.Establishment, Purpose and Effective Date and Termination of the Oil-Dri
Corporation of America
1988 Stock Option Plan
(a) Establishment
(b) Purpose
(c) Effective Date
(d) Termination of Oil-Dri Corporation of America 1988 Stock Option Plan
2.Definitions
3.Scope of Plan
(a) Number of Shares Available Under the Plan
(b) Reduction in the Available Shares in Connection with Award Grants
(c) Effect of the Expiration or Termination of Awards
(d) Maximum Number of Options and Stock Appreciation Rights to any
Individual Grantee
4.Administration
(a) Committee Administration
(b) Board Reservation and Delegation
(c) Committee Authority
(d) Committee Determinations Final
5.Eligibility
6.Conditions to Grants
(a) General Conditions
(b) Grant Options and Option Price
(c) Grant of Incentive Stock Options
(d) Grant of Shares of Restricted Stock
(e) Grant of Stock Appreciation Rights
(f) Grant of Performance Units and Performance Shares
(g) Grant of Phantom Stock
(h) Grant of Stock Bonuses
(i)Tandem Awards
(j)Performance Goals
7.Non-transferability
8.Exercie
(a) Exercise of Options
(b) Exercise of Stock Appreciation Rights
(c) Exercise of Performance Units
(d) Payment of Performance Shares
(e) Payment of Phantom Stock Awards
(f) Full Vesting Upon Change of Control
(g) Pooling of Interest
(h) Special Rules for Section 16 Grantees
(i) Exercise, Cancellation, Expiration or Forfeiture of Tandem Awards
9.Effect of Certain Transactions
10.Mandatory Withholding Taxes
11.Termination of Employment
12.Securities Law Matters
13.No Funding Required
14.No Employment Rights
15.Rights as a Stockholder
TABLE OF CONTENTS (CONT'D)
16.Nature of Payments
17.Non-Uniform Determinations
18.Adjustments
19.Amendment of the Plan
20.Termination of the Plan
21.No Illegal Transactions
22.Governing Law
23.Severability
1. Establishment, Purpose and Effective Date and Termination of the Oil-
Dri Corporation of America 1988 Stock Option Plan.
(a) Establishment. The Company hereby establishes the Oil-Dri Corporation of
America 1995 Long-Term Incentive Plan (Plan).
(b) Purpose. The primary purpose of the Plan is to provide a means by which
key employees of the Company and its Subsidiaries can acquire and maintain
stock ownership, thereby strengthening their commitment to the success of
the Company and its Subsidiaries and their desire to remain employed by the
Company and its Subsidiaries, focusing their attention on managing the
Company as an equity owner, and aligning their interests with those of the
Company's stockholders. The Plan also is intended to attract and retain
key employees and to provide such employees with additional incentive and
reward opportunities designed to encourage them to enhance the profitable
growth of the Company and its Subsidiaries.
(c) Effective Date. The Plan shall become effective upon its adoption by the
Board, subject to the approval of the votes of a majority of the shares of
Common Stock and Class B Stock of the Company voting together present or
represented by proxy at the 1995 annual meeting of stockholders. Until
such approval shall have been obtained, no Option, stock appreciation
right, or performance unit shall be exercised, no stock bonus shall be
granted, no performance share shall be paid, and no shares of restricted
stock shall become nonforfeitable. If such shareholder approval is not
obtained at the 1995 annual meeting of shareholders, all Awards shall
automatically become null and void and no further Awards shall be granted.
(d) Termination of the Oil-Dri Corporation of America 1988 Stock Option Plan.
Effective upon stockholder approval of this Plan, the Oil-Dri Corporation
of America 1988 Stock Option Plan shall terminate and the shares of Stock
allotted for stock option grants under that plan, which are not the subject
of outstanding options granted under that plan, shall not be available for
the granting of any further options or other awards under that plan or any
other employee or director plan or arrangement of the Company. The options
outstanding under the Oil-Dri Corporation of America 1988 Stock Option Plan
shall remain outstanding and exercisable in accordance with their
respective terms.
2. Definitions. As used in the Plan, terms defined parenthetically
immediately after their use shall have the respective meanings provided by
such definitions and the terms set forth below shall have the following
meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
(a) Award means Options, shares of restricted Stock, stock appreciation
rights, performance units, or performance shares stock bonuses or shares of
phantom stock granted under the Plan.
(b) Award Agreement means the written agreement by which an Award is
evidenced.
(c) Beneficial Owner, Beneficially Owned, Beneficially Owning, and
Beneficial Ownership shall have the meanings applicable under Rule 13d-
3 promulgated under the 1934 Act.
(d) Board means the board of directors of the Company.
(e) Change in Capitalization means any increase or reduction in the
number of shares of Stock, or any change in the shares of Stock or exchange
of shares of Stock for a different number or kind of shares or other
securities by reason of a stock dividend (either as a dividend of the same
class of Stock or as a dividend of a different class of Stock), stock split,
reverse stock split, share combination, reclassification, recapitalization,
merger, consolidation, spin-off, split-up, reorganization, issuance of
warrants or rights, liquidation, exchange of shares, repurchase of shares,
change in corporate structure, or similar event, of or by the Company.
(f) Change of Control means any of the following
(i) Class B Stock together with the Common Stock held by the
Beneficial Owner of the Class B Stock, has less than 50% of the
Voting Power of the Company, and
(A) the acquisition by any person or group of Beneficial Ownership
of stock possessing more than 20% of the Voting Power of the
Company, except that (i) no such person or group shall be
deemed to own beneficially (a) any securities acquired
directly from the Company pursuant to a written agreement
with the Company, or (b) any securities held by the Company
or a Subsidiary or any employee benefit plan (or any related
trust) of the Company or a Subsidiary, and (ii) no Change of
Control shall be deemed to have occurred solely by reason of
any such acquisition by a corporation with respect to which,
after such acquisition, more than 60% of both the then-
outstanding common shares of such corporation and the Voting
Power of such corporation are then Beneficially Owned,
directly or indirectly, by the persons who were the
Beneficial Owners of the Stock and voting securities of the
Company immediately before such acquisition in substantially
the same proportions as their ownership, immediately before
such acquisition, of the then outstanding Stock or the Voting
Power of the Company, as the case may be; or
(B) individuals who, as of the Effective Date, constitute the
Board (the Incumbent Board) cease for any reason to
constitute at least a majority of the Board; provided that
any individual who becomes a director after the Effective
Date whose election or nomination for election by the
Company's stockholders was approved by a vote of at least two-
thirds of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office is in
connection with an actual or threatened election contest
relating to the election of the directors of the Company (as
such terms are used in Rule 14a-11 under the 1934 Act); or
(ii) approval by the stockholders of the Company of (A) a merger,
reorganization or consolidation with respect to which the
individuals and entities who were the respective Beneficial
Owners of the Stock and Voting Power of the Company
immediately before such merger, reorganization or
consolidation do not, immediately after such merger,
reorganization or consolidation, beneficially own, directly or
indirectly, more than 60% of, respectively, the then
outstanding common shares and the Voting Power of the
corporation resulting from such merger, reorganization or
consolidation, (B) a liquidation or dissolution of the Company
or (C) the sale or other disposition of all or substantially
all of the assets of the Company.
For purposes of this definition, person means such terms as used
in SEC Rule 13d-5(b) under the 1934 Act, and group means two or more
persons acting together in such a way to be deemed a person for
purposes of Section 13(d) of the 1934 Act.
Notwithstanding the foregoing, a Change of Control shall be deemed
not to have occurred with respect to any Grantee if such Grantee is, by
written agreement, a participant on such Grantee's own behalf in a
transaction in which the persons (or their affiliates) with whom such
Grantee has the written agreement cause the Change of Control to occur
and, pursuant to the written agreement, the Grantee has or is to
acquire an equity interest in the resulting entity.
(g) Committee means the committee of the Board appointed pursuant to
Article 4.
(h) Company means Oil-Dri Corporation of America, a Delaware
corporation.
(i) Disability means for purposes of the exercise of an incentive stock
option, a disability within the meaning of Section 22(e)(3) of the Code,
and for all other purposes, a mental or physical condition which, in the
opinion of the Committee, renders a Grantee unable or incompetent to
carry out the job responsibilities which such Grantee held or the duties
to which such Grantee was assigned at the time the disability was
incurred, and which is expected to be permanent or for an indefinite
duration.
(j) Effective Date means the date that the Plan is adopted by the Board.
(k) Fair Market Value of any security of the Company or any other issuer
means, as of any applicable date:
(i) if the security is listed for trading on the New York Stock
Exchange, the closing price, regular way, of the security as reported
on the New York Stock Exchange Composite Tape, or if no such reported
sale of the security shall have occurred on such date, on the next
preceding date on which there was such a reported sale, or
(ii) if the security is not so listed, but is listed on another
national securities exchange or authorized for quotation on the
National Association of Securities Dealers Inc.'s NASDAQ National
Market Systems (NASDAQ/NMS), the closing price, regular way, of the
security on such exchange or NASDAQ/NMS, as the case may be, or if
no such reported sale of the security shall have occurred on such
date, on the next preceding date on which there was such a reported
sale, or
(iii) if the security is not listed for trading on a national
securities exchange or authorized for quotation on NASDAQ/NMS, the
average of the closing bid and asked prices as reported by the National
Association of Securities Dealers Automated Quotation System
(NASDAQ) or, if no such prices shall have been so reported for
such date, on the next preceding date for which such prices were so
reported, or
(iv) if the security is not listed for trading on a national securities
exchange or is not authorized for quotation on NASDAQ/NMS or
NASDAQ, the fair market value of the Common Stock of the Company as
determined in good faith by the above terms.
(l) Grant Date means the date of grant of an Award determined in
accordance with Article 6.
(m) Grantee means an individual who has been granted an Award.
(n) Incentive Stock Option means an Option satisfying the requirements
of Section 422 of the Internal Revenue Code and designated by the
Committee as an Incentive Stock Option.
(o) Internal Revenue Code means the Internal Revenue Code of 1986, as
amended, and regulations and rulings thereunder. References to a
particular Section of the Internal Revenue Code shall include references
to successor provisions.
(p) Measuring Period has the meaning specified in Article 6(f)(ii)(B).
(q) Minimum Consideration means the $.10 par value per share of Stock or
such larger amount determined pursuant to resolution of the Board to be
capital within the meaning of Section 154 of the Delaware General
Corporation Law.
(r) 1934 Act means the Securities Exchange Act of 1934, as amended.
(s) Nonqualified Stock Option means an Option which is not an Incentive
Stock Option or other type of statutory stock option under the Internal
Revenue Code.
(t) Option means an option to purchase Stock granted under the Plan.
(u) Option Price means the per share purchase price of (i) Stock subject
to an Option or (ii) restricted Stock subject to an Option.
(v) Performance Goals has the meaning set forth in Article 6(j).
(w) Performance Percentage has the meaning specified in Article
6(f)(ii)(C).
(x) Person means a person within the meaning of Sections 13(d) or 14(d)
of the 1934 Act.
(y) Plan has the meaning set forth in Article 1(a).
(z) SEC means the Securities and Exchange Commission.
(aa) Section 16 Grantee means a person subject to potential liability
with respect to equity securities of the Company under Section 16(b) of
the 1934 Act.
(bb) Stock means Class A Common Stock or if no Class A Common Stock is
issued and publicly traded on any securities market described in Article 2(k)
above, then Common Stock par value $.10 per share, of the Company.
Class A Common Stock, Class B Stock and Common Stock shall have the
meaning as provided in the Company's Certificate of Incorporation.
(cc) Subsidiary means for purposes of grants of incentive stock options, a
corporation as defined in Section 424(f) of the Internal Revenue Code,
with the Company being treated as the employer corporation for purposes
of this definition and, for all other purposes , a corporation with
respect to which the Company owns, directly or indirectly, 25% or the
then-outstanding common shares.
(dd) 10% Owner means a person who owns stock (including stock treated as
owned under Section 424(d) of the Internal Revenue Code) possessing more
than 10% of the Voting Power of the Company.
(ee) Termination of Employment occurs the first day on which an individual
is for any reason no longer employed by the Company or any of its
Subsidiaries, or with respect to an individual who is an employee of a
Subsidiary, the first day on which the Company no longer owns Voting
Securities possessing at least 25% of the Voting Power of such
Subsidiary.
(ff) Voting Power means the combined voting power of the then outstanding
Voting Securities.
(gg) Voting Securities means, with respect to the Company or any
Subsidiary, any securities issued by the Company or such Subsidiary,
respectively, which generally entitle the holder thereof to vote for the
election of directors of the Company.
3. Scope of the Plan.
(a) Number of Shares Available Under the Plan. The maximum number of
shares of Stock that may be made the subject of Awards granted under the
Plan is 500,000 (or the number and kind of shares of Stock or other
securities to which such shares of Stock are adjusted upon a Change in
Capitalization pursuant to Article 18). The Company shall reserve for
the purpose of the Plan, out of its authorized but unissued shares of
Stock or out of shares held in the Company's treasury, or partly out of
each, such number of shares as shall be determined by the Board. The
Board shall have the authority to cause the Company to purchase from time
to time shares of Stock to be held as treasury shares and used for or in
connection with Awards.
(b) Reduction in the Available Shares in Connection with Awards Grants.
Upon the grant of an Award, the number of shares of Stock available under
Article 3(a) for the granting of further Awards shall be reduced as follows:
(i) Performance Units Denominated in Dollars. In connection with the
granting of each performance unit denominated in dollars, the number
of shares of Stock available under Article 3(a) for the granting of
further Awards shall be reduced by the quotient of (x) the dollar
amount represented by the performance unit divided by (y) the Fair
Market Value of a share of Stock on the date immediately preceding the
Grant Date of the performance unit.
(ii) Other Awards. In connection with the granting of each Award,
other than a performance unit denominated in dollars, the number of
shares of Stock available under Article 3(a) for the granting of
further Awards shall be reduced by a number of shares equal to the
number of shares of Stock in respect of which the Award is granted or
denominated.
Notwithstanding the foregoing, where two or more Awards are granted
with respect to the same shares of Stock, such shares shall be taken
into account only once for purposes of this Article 3(b).
(c) Effect of the Expiration or Termination of Awards. If and to the
extent an Award expires, terminates or is canceled or forfeited for any
reason without having been exercised in full (including, without limitation,
a cancellation of an Option pursuant to Article 4(c)(vi)), the shares of
Stock associated with the expired, terminated, canceled or forfeited
portion of the Award (to the extent the number of shares available for
the granting of Awards was reduced pursuant to Article 3(b)) shall again
become available for Awards under the Plan.
Notwithstanding anything contained in this Article 3, the number of
shares of Stock available for Awards at any time under the Plan shall be
reduced to such lesser amount as may be required pursuant to the methods
of calculation necessary so that the exemptions provided pursuant to
Rule 16b-3 under the 1934 Act will continue to be available for
transactions involving all current and future Awards. In addition,
during the period that any Awards remain outstanding under the Plan the
Committee may make good faith adjustments with respect to the number of
shares of Stock attributable to such Awards for purposes of calculating
the maximum number of shares available for the granting of future Awards
under the Plan, provided that following such adjustments the exemptions
provided pursuant to Rule 16b-3 under the 1934 Act will continue to be
available for transactions involving all current and future Awards.
(d) Maximum Number of Options and Stock Appreciation Rights to any
Individual Grantee. No individual Grantee may be granted Options and stock
appreciation rights to purchase more than one-fourth of the maximum
number of shares of Stock that may be made subject of Awards under the
Plan as set forth in Article 3(a).
4. Administration.
(a) Committee Administration. Subject to Article 4(b), the Plan shall be
administered by the Committee, which shall consist of not less than three
disinterested persons within the meaning of Rule 16b-3 under the 1934 Act;
provided, however, that the membership of the Committee shall be subject to
such changes (including, if appropriate, a change in the minimum number of
members of the Committee) as the Board deems appropriate and permissible to
permit transactions pursuant to the Plan to be exempt from potential
liability under Section 16(b) of the 1934 Act.
(b) Board Reservation and Delegation. The Board may, in its discretion,
reserve to itself or delegate to another committee of the Board any or all
of the authority and responsibility of the Committee with respect to Awards to
Grantees who are not Section 16 Grantees at the time any such delegated
authority or responsibility is exercised. Such other committee may consist
of one or more directors who may, but need not be, officers or employees of
the Company or of any of its Subsidiaries. To the extent that the Board
has reserved to itself or delegated the authority and responsibility of the
Committee to such other committee, all references to the Committee in the
Plan shall be to the Board or to such other committee.
(c) Committee Authority. The Committee shall have full and final
authority, in its discretion, but subject to the express provisions of the
Plan, as follows:
(i) to grant Awards,
(ii) to determine (A) when Awards may be granted and (B) whether or not
specific Awards shall be identified with other specific Awards, and if
so, whether they shall be exercisable cumulatively with, or
alternatively to, such other specific Awards,
(iii) to interpret the Plan and to make all determinations necessary or
advisable for the administration of the Plan,
(iv) to prescribe, amend, and rescind rules and regulations relating
to the Plan, including without limitation, rules with respect to the
exercisability and non-forfeitability of Awards upon the Termination
of Employment of a Grantee,
(v) to determine the terms and provisions of the Award Agreements,
including Performance Goals, if any, which need not be identical and,
with the consent of the Grantee, to modify any such Award Agreement at
anytime, provided that the consent of the Grantee shall not be
required for any amendment which (A) does not adversely affect the
rights of the Grantee, or (B) is necessary or advisable (as determined
by the Committee) to carry out the purpose of the Award as a result of
any new or change in existing applicable law, regulation, ruling or
judicial decision; provided that any such change shall be applicable
only to Awards which have not been exercised;
(vi) to cancel, with consent of the Grantee, outstanding Awards,
(vii) to accelerate or extend (subject to Article 6(a)(ii)) the time
during which any Award or Grant of Award may be exercised and to
accelerate or waive any or all of the restrictions and conditions
applicable to, any Award,
(viii) to make such adjustment or modifications to Awards to Grantees
working outside the United States as are necessary and advisable to
fulfill the purposes of the Plan,
(ix) to authorize any action of or make any determination by the
Company as the Committee shall deem necessary or advisable for
carrying out the purposes of the Plan, and
(x) to impose such additional conditions, restrictions, and
limitations upon the grant, exercise or retention of Awards as the
Committee may, before or concurrently with the grant thereof deem
appropriate, including, without limitation, requiring simultaneous
exercise of related identified Awards, and limiting the percentage of
Awards which may from time to time be exercised by a Grantee.
(d) Committee Determinations Final. The determination of the Committee on
all matters relating to the Plan or any Award Agreement shall be conclusive
and final. No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Award.
5. Eligibility. Awards may be granted to any employee of the Company or
any of its Subsidiaries. In selecting the individuals to whom Awards may
be granted, as well as in determining the number of shares of Stock subject
to, and the other terms and conditions applicable to, each Award, the
Committee shall take into consideration such factors as it deems relevant
in promoting the purposes of the Plan.
6. Conditions to Grants.
(a) General Conditions.
(i) The Grant Date of an Award shall be the date on which the Committee
grants the Award or such later date as specified in advance by the Committee.
(ii) The term of each Award (subject to Article 6(c) with respect to
Incentive Stock Options) shall be a period of not more than ten years from
the Grant Date, and shall be subject to earlier termination as provided
herein or in the applicable Award Agreement.
(iii) The Committee may grant Awards with terms and conditions which
differ among the Grantees thereof. To the extent not set forth in the
Plan, the terms and conditions of each Award shall be set forth in an Award
Agreement.
(b) Grant of Options and Option Price. The Committee may, in its
discretion, grant Options to acquire unrestricted Stock or restricted
Stock to any employee eligible under Article 5 to receive Awards. No
later than the Grant Date of any Option, the Committee shall determine
the Option Price which shall not be less than 100% of the Fair Market
Value of the Stock on the Grant Date.
(c) Grant of Incentive Stock Options. At the time of the grant of
any Option, the Committee may designate that such Option shall be an
Incentive Stock Option. Any Option designated as an Incentive Stock
Option:
(i) shall have an Option Price of (A) not less than 100% of the
Fair Market Value of the Stock on the Grant Date or (B) in the case of a
10% Owner, not less than 110% of the Fair Market Value of the Stock on
the Grant Date;
(ii) shall have a term of not more than ten years (five years, in
the case of 10% Owner) from the Grant Date, and shall be subject to
earlier termination as provided herein or in the applicable Award
Agreement;
(iii) shall not have an aggregate Fair Market Value (determined for
each Incentive Stock Option at its Grant Date) of Stock with respect to
which Incentive Stock Options are exercisable for the first time by such
Grantee during any calendar year (under the Plan and any other employee
stock option plan of the Grantee's employer or any parent or subsidiary
thereof (other Plans)), determined in accordance with the provisions
of Section 422 of the Internal Revenue Code, which exceeds $100,000 (the
$100,000 Limit);
(iv) shall, if, with respect to any grant, the aggregate Fair Market
Value of Stock (determined on the Grant Date) of all Incentive Stock
Options previously granted under the Plan and any Other Plans (Prior
Grants) and any Incentive Stock Options under such grant (the Current
Grant) which are exercisable for the first time during any calendar
year would exceed the $100,000 Limit, be exercisable as follows:
(A) the portion of the Current Grant exercisable for the first
time by the Grantee during any calendar year which would be, when added
to any portions of any Prior Grants exercisable for the first time by
the Grantee during such calendar year with respect to Stock which would
have an aggregate Fair Market Value (determined as of the respective
Grant Date for such Options) in excess of the $100,000 Limit shall,
notwithstanding the terms of the Current Grant, be exercisable for the
first time by the Grantee in the first subsequent calendar year or
years in which it could be exercisable for the first time by the
Grantee when added to all Prior Grants without exceeding the $100,000
Limit; and
(B) if, viewed as of the date of the Current Grant, any portion
of a Current Grant could not be exercised under the provisions of
Article 6(c)(iv)(A) during any calendar year commencing with the
calendar year in which it is first exercisable through and including
the last calendar year in which it may by its terms be exercised, such
portion of the Current Grant shall not be an Incentive Stock Option,
but shall be exercisable as a separate Nonqualified Stock Option at
such date or dates as are provided in the Current Grant;
(v) shall be granted within ten years from the earlier of the date
of the Plan is adopted by the Board or the date the Plan is approved by
the stockholders of the Company; and
(vi) shall require the Grantee to notify the Committee of any
disposition of any Stock issue pursuant to the exercise of the Incentive
Stock Option under the circumstances described in Section 421(b) of the
Internal Revenue Code (relating to certain disqualifying dispositions)
within ten days of such disposition.
(d) Grant of Shares of Restricted Stock.
(i) The Committee may, in its discretion, grant shares of
restricted Stock to any employee eligible under Article 5 to receive
Awards.
(ii) Shares of restricted Stock will be Class A Common Stock or if
no Class A Common Stock is publicly traded on any securities market
described in Article 2(k) on the Grant Date of such shares of restricted
Stock, then such shares of restricted Stock shall be Common Stock.
(iii) Before the grant of any shares of restricted Stock, the
Committee shall determine, in its discretion:
(A) whether the certificates for such shares shall be delivered
to the Grantee or held (together with a stock power executed in blank
by the Grantee) in escrow by the Secretary of the Company until such
shares become nonforfeitable or are forfeited,
(B) the per share purchase price of such shares, which may be
zero, provided, however, that
(1) the per share purchase price of all such shares (other
than treasury shares) shall not be less than the Minimum
Consideration for each such share; and
(2) if such shares are to be granted to a Section 16 Grantee
and the purchase price is to be in excess of the Minimum
Consideration, to the extent necessary so that such grant qualifies
for the exemption provided pursuant to Rule 16b-3 under the 1934
Act, the per share purchase price of any such shares shall be at
least 50% of the Fair Market Value of the Stock on the Grant Date;
(C) the restrictions applicable to such grant; and
(D) whether the payment to the Grantee of dividends, or a
specified portion thereof, declared or paid on such shares by the
Company shall be deferred until the lapsing of the restrictions imposed
upon such shares shall be held by the Company for the account of the
Grantee, whether such dividends shall be reinvested in additional
shares of restricted Stock (to the extent shares are available under
Article 3) subject to the same restrictions and other terms as apply to
the shares with respect to which such dividends are issued or otherwise
reinvested in Stock or held in escrow, whether interest will be
credited to the account of the Grantee with respect to any dividends
which are not reinvested in restricted or unrestricted Stock, and
whether any Stock dividends issued with respect to the restricted Stock
to be granted shall be treated as additional shares of restricted
Stock.
(iv) Payment of the purchase price (if greater than zero) for
shares of restricted Stock shall be made in full by the Grantee before
the delivery of such shares and, in any event, no later than ten days
after the Grant Date for such shares. Such payment may be made, as
determined by the Committee in its discretion, in any one or any
combination of the following:
(A) cash, or
(B) shares of restricted or unrestricted Stock owned by the
Grantee prior to such grant and valued at its Fair Market Value on the
business day immediately preceding the date of payment;
provided, however, that in the case of payments in shares of restricted
or unrestricted Stock,
(1) the use of shares of restricted or unrestricted Stock in
payment of such purchase price by a Section 16 Grantee is subject
to the prior receipt by the Company of either an option of counsel
for the Company or an interpretive or no action letter from the
staff of the SEC to the effect that such use of stock does not
raise the potential for liability under Section 16(b) of the 1934
Act or render inapplicable any exemption otherwise available
pursuant to Rule 16b-3 under the 1934 Act; and
(2) if the purchase price for restricted Stock (New
Restricted Stock) is paid with shares of restricted Stock (Old
Restricted Stock), the restrictions applicable to the New
Restricted Stock shall be the same as if the Grantee had paid for
the New Restricted Stock in cash unless, in the judgment of the
Committee, the Old Restricted Stock was subject to a greater risk
of forfeiture, in which case a number of shares of New Restricted
Stock equal to the number of shares of Old Restricted Stock
tendered in payment for New Restricted Stock shall be subject to
the same restrictions as the Old Restricted Stock, determined
immediately before such payment.
(v) Upon the date that shares of restricted Stock become non-
forfeitable, the Company shall exchange such shares of Common Stock
for an equal number of shares of Class A Common Stock if such
shares of restricted Stock have been granted as shares of Common
Stock and if such A Common Stock is issued and publicly traded on
any securities market as described in Article 2(k).
(vi) The Committee may, but need not, provide that all or any
portion of a Grantee's Award of restricted Stock shall be forfeited
(A) except as otherwise specified in the Award Agreement, upon
the Grantee's Termination of Employment within a specified time period
after the Grant Date, or
(B) if the Company or the Grantee does not achieve specified
performance goals within a specified time period after the Grant Date
and Before the Grantee's Termination of Employment, or
(C) upon failure to satisfy such other restrictions as the
Committee may specify in the Award Agreement.
(vii) If a share of restricted Stock is forfeited, then
(A) the Grantee shall be deemed to have resold such share of
restricted Stock to the Company at the lesser (1) the purchase price
paid by the Grantee (such purchase price shall be deemed to be zero
dollars ($0) if no purchase price was paid) or (2) the Fair Market
Value of a share of Stock on the date of such forfeiture;
(B) the Company shall pay to the Grantee the amount determined
under clause (A) of this sentence, if not zero, as soon as is
administratively practicable, but in any case within 90 days after
forfeiture; and
(C) such share of restricted Stock shall cease to be outstanding,
and shall no longer confer on the Grantee thereof any rights as a
stockholder of the Company, from and after the date of the Company's
tender of the payment specified in clause (B) of this sentence, whether
or not such tender is accepted by the Grantee, or the date the
restricted Stock is forfeited if no purchase price was paid for the
restricted Stock.
(viii) Any share of restricted Stock shall bear an appropriate legend
specifying that such share is non-transferable and subject to the
restrictions set forth in the Plan. If any shares of restricted Stock
become nonforfeitable, the Company shall cause certificates for such
shares to be issued or reissued without such legend and delivered to the
Grantee or, at the request of the Grantee, shall cause such shares to be
credited to a brokerage account specified by the Grantee.
(e) Grant of Stock Appreciation Rights. The Committee may grant
stock appreciation rights to any employee eligible under Article 5 to
receive Awards. When granted, stock appreciation rights may, but need not,
be identified with shares of Stock subject to a specific Option awarded to
the Grantee (including any Option granted on or before the Grant Date of
the stock appreciation rights) in a number equal to or different from the
number of stock appreciation rights so granted. If stock appreciation
rights are identified with shares of Stock subject to an Option then,
unless otherwise provided in the applicable Award Agreement, the Grantee's
associated stock appreciation rights shall terminate upon the exercise,
expiration, termination, forfeiture, or cancellation of such Option.
(f) Grant of Performance Units and Performance Shares.
(i) The Committee may, in its discretion, grant performance units
or performance shares to any employee eligible under Article 5 to
receive Awards.
(ii) Before the grant of any performance unit or performance share,
the Committee shall:
(A) determine Performance Goals applicable to such grant,
(B) designate a period, of not less than one year nor more than
five years, for the measurement of the extent to which Performance
Goals are attained (the Measuring Period), and
(C) assign a Performance Percentage to each level of attainment
of Performance Goals during the Measuring Period, with the percentage
applicable to minimum attainment being zero percent (0%) and the
percentage applicable to optimum attainment to be determined by the
Committee from time to time.
(g) Grant of Phantom Stock. The Committee may, in its discretion,
grant shares of phantom stock to any employee who is eligible under Article
5 to receive Awards and is employed outside the United States. Such
phantom stock shall be subject to the terms and conditions established by
the Committee and set forth in the applicable Award Agreement.
(h) Grant of Stock Bonuses. The Committee may grant shares of Stock
as a bonus to any individual eligible under Article 5 to receive Awards.
(i) Tandem Awards. The Committee may grant and identify any Award
with any other Award granted under the Plan, on terms and conditions
determined by the Committee.
(j) Performance Goals. Performance Goals shall mean the goals
applicable to an Award which shall be set forth in a written document prior
to the commencement of the Grantee's services to which the Performance
Goals under the Award relate and while the outcome is still substantially
uncertain. In establishing Performance Goals, the Committee may consider
such factor or factors relating to performance as it deems appropriate,
including net income, growth in net income, earnings per share, growth of
earnings per share return on equity, return on capital, or any other
business criteria as contemplated in Section 162(m) of the Code. The
Committee, if applicable, shall certify in writing prior to payment of
compensation related to any applicable performance unit, performance share,
restricted stock or share of phantom stock that the Performance Goals and
any other material terms were satisfied. The Committee may, at any time,
modify Performance Goals as a result of changes required in applicable
laws. If a Grantee is promoted, demoted or transferred to a different
business unit of the Company during a performance period, then, to the
extent the Committee determines the Performance Goals are no longer
appropriate, the Committee may adjust, change or eliminate the Performance
Goals or as it deems appropriate in order to make them appropriate and
comparable to the initial Performance Goals.
7. Non-transferability. Each Award (other than restricted Stock) granted
hereunder shall by its terms not be assignable or transferable, other than
as permitted pursuant to the applicable provisions of Rule 16b-3 under the
1934 Act and as provided in the applicable Award Agreement, and may be
exercised, during the Grantee's lifetime, only by the Grantee. Each share
of restricted Stock shall be non-transferable until such shares become
nonforfeitable. Notwithstanding the foregoing, the Grantee may, to the
extent provided in the Plan and in a manner specified by the Committee (a)
designate in writing a beneficiary to exercise his or her Options after the
Grantee's death, and (b) transfer an Option (other than an Incentive Stock
Option), stock appreciation right, performance unit or performance share to
a revocable, inter vivos trust as to which the Grantee is both the settlor
and the trustee, but in no event shall any such transfer be effective
unless the Company shall have received an opinion of counsel for the
Company or an interpretive or no action letter from the staff of the SEC
to the effect that such a transfer does not raise the potential for
liability under Section 16(b) of the 1934 Act or render inapplicable any
exemption otherwise available pursuant to Rule 16b-3 under the 1934 Act.
8. Exercise.
(a) Exercise of Options. Subject to Article 4(c)(vii), 11 and 12 and
such terms and conditions as the Committee may impose, each Option shall be
exercisable in one or more installments commencing not earlier than the
first anniversary of the Grant Date of such Option; provided, however, that
all Options held by each Grantee shall become fully (100%) exercisable upon
the occurrence of a Change of Control regardless of whether the
acceleration of the exercisability of such Options would cause such Options
to lose their eligibility for treatment as Incentive Stock Options.
Notwithstanding the foregoing, Options may not be exercised by a Grantee
for twelve months following a hardship distribution to the Grantee, to the
extent such exercise is prohibited under Treasury Regulation 1.401(k)-
1(d)(2)(iv)(B)(4). Each Option shall be exercised by delivery to the
Company of written notice of intent to purchase a specific number of shares
of Stock or restricted Stock subject to the Option. Such stock will be
Class A Common Stock or if no Class A Common Stock is publicly traded on
any securities market described in Article 2(k) on the date such options
are exercised, then Common Stock. The Option Price of any shares of Stock
or restricted Stock as to which an Option shall be exercised shall be paid
in full at the time of the exercise. Payment may be made, as determined by
the Committee in its discretion, in any one or any combination of the
following:
(i) cash,
(ii) shares of restricted or unrestricted Stock owned by the
Grantee prior to the exercise of the Option and valued at its Fair
Market Value on the last business day immediately preceding the date of
exercise, or
(iii) through simultaneous sale through a broker of shares of
unrestricted Stock acquired on exercise, as permitted under Regulation T
of the Federal Reserve Board.
Payment in Stock or restricted Stock may be made, with the consent of the
Committee and if the Company obtains an opinion of counsel for the Company
or an interpretive or no action letter from the staff of the SEC to the
effect that no potential liability under Section 16(b) of the 1934 Act
would result, by pyramiding (i.e. paying the Option Price with shares of
Stock simultaneously acquired by Option exercise).
If restricted Stock (Tendered Restricted Stock) is used to pay the
Option Price for Stock, then a number of shares of Stock acquired on
exercise of the Option equal to the number of shares of Tendered Restricted
Stock shall be subject to the same restrictions as the Tendered Restricted
Stock, determined as of the date of exercise of the Option. If the Option
Price for restricted Stock is paid with Tendered Restricted Stock, and if
the Committee determines that the restricted Stock acquired on exercise of
the Option shall be subject to restrictions (Greater Restrictions) that
cause it to have a greater risk of forfeiture than the Tendered Restricted
Stock, then notwithstanding the preceding sentence, all the restricted
Stock acquired on exercise of the Option shall be subject to such Greater
Restrictions.
Shares of unrestricted Stock acquired by a Grantee on exercise of an
Option shall be delivered to the Grantee or, at the request of the Grantee,
shall be credited directly to a brokerage account specified by the Grantee.
(b) Exercise of Stock Appreciation Rights. Subject to Article
4(c)(vii), 11 and 12 and such terms and conditions as the Committee may
impose, each stock appreciation right shall be exercisable not earlier than
the first anniversary of the Grant Date of such stock appreciation right
and, if such stock appreciation right is identified with an Option, to the
extent such Option may be exercised unless otherwise provided by the
Committee, Stock appreciation rights shall be exercised by delivery to the
Company of written notice of intent to exercise a specific number of stock
appreciation rights. Unless otherwise provided in the applicable Award
Agreement, the exercise of stock appreciation rights which are identified
with shares subject to an Option shall result in the forfeiture of such
Option to the extent of such exercise.
The benefit for each stock appreciation right exercised shall be equal to
the excess, if any, of
(i) the Fair Market Value of a share of Stock on the date of such
exercise, over
(ii) an amount equal to
(A) in the case of a stock appreciation right identified with a
share of Stock subject to an Option, the Option Price of such Option,
unless the Committee in the grant of the stock appreciation right
specified a higher amount, or
(B) in the case of any other stock appreciation right, the Fair
Market Value of a share of Stock on the Grant Date of such stock
appreciation right, unless the Committee in the grant of the stock
appreciation right specified a higher amount;
provided that the Committee, in its discretion, may provide that the
benefit for any stock appreciation right shall not exceed a maximum amount
(i.e. a cap) set by Committee, which cap may be expressed as (i) a
percentage of the excess amount described above (not to exceed 100%), (ii)
a percentage of the Fair Market Value of a share of Stock on the Grant Date
of the stock appreciation right, or (iii) a fixed dollar amount. The
benefit upon the exercise of a stock appreciation right shall be payable
in cash, except that the Committee, with respect to any particular
exercise, may, in its discretion, pay benefits wholly or partly in Stock
delivered to the Grantee or credited to a brokerage account specified by
the Grantee.
(c) Exercise of Performance Units.
(i) Subject to Article 4(c)(vii), 11 and 12 and such terms and
conditions as the Committee may impose, and unless otherwise provided in
the applicable Award Agreement, if, with respect to any performance
unit, the minimum Performance Goals have been achieved during the
applicable Measuring Period, then such performance unit shall be deemed
exercised on the date on which it first becomes exercisable.
(ii) The benefit for each performance unit exercised shall be an
amount equal to the product of
(A) The Unit Value (as defined below), multiplied by
(B) the Performance Percentage attained during the Measuring
Period for such performance unit.
(iii) The Unit Value shall be, as specified by the Committee,
(A) a dollar amount,
(B) an amount equal to the Fair Market Value of a share of Stock
on the Grant Date,
(C) an amount equal to the Fair Market Value of a share of Stock
on the exercise date of the performance unit, plus, if so provided in
the Award Agreement, an amount (Dividend Equivalent Amount) equal to
the Fair Market Value of the number of shares of Stock that would have
been purchased if each dividend paid on a share of Stock on or after
the Grant Date and on or before the exercise date were invested in
shares of Stock at a purchase price equal to its Fair Market Value on
the respective dividend payment date, or
(D) an amount equal to the Fair Market Value of a share of Stock
on the exercise date of the performance unit (plus, if so specified in
the Award Agreement, a Dividend Equivalent Amount), reduced by the Fair
Market Value of a share of Stock on the Grant Date of the performance
unit.
(iv) The benefit upon the exercise of a performance unit shall be
payable to the Grantee (or at the request of the Grantee, deliver to a
brokerage account specified by the Grantee), as soon as is
administratively practicable (but in any event within 90 days) after the
later of (A) the date the Grantee is deemed to exercise such performance
unit, or (B) the date (or dates in the event of installment payments) as
provided in the applicable Award Agreement. Such benefit shall be
payable in cash, except that the Committee, with respect to any
particular exercise, may, provide in the Award Agreement that benefits
may be paid wholly or partly in Stock. The number of shares of Stock
payable in lieu of cash shall be determined by valuing the Stock at its
Fair Market Value on the business day next preceding the date such
benefit is to be paid.
(d) Payment of Performance Shares. Subject to Article 4(c)(vii), 11
and 12 and such terms and conditions as the Committee may impose, and
unless otherwise provided in the applicable Award Agreement, if the minimum
Performance Goals specified by the Committee with respect to an Award of
performance shares have been achieved during the applicable Measuring
Period, then the Company shall pay to the Grantee of such Award (or, at the
request of the Grantee, deliver to a brokerage account specified by the
Grantee) shares of Stock equal in number to the product of the number of
the performance share(s) specified in the applicable Award Agreement
multiplied by the Performance Percentage achieved during such Measuring
Period, except to the extent that the Committee in its discretion
determines that cash be paid in lieu of some or all of such shares of
Stock. The amount of cash payable in lieu of a share of Stock shall be
determined by valuing such share at its Fair Market Value on the business
day next preceding the date such cash is to be paid. Payment pursuant to
this Article 8(d) shall be made as soon as administratively practicable
(but in any event within 90 days) after the end of the applicable Measuring
Period. Any performance shares with respect to which the Performance Goals
have not been achieved by the end of the applicable Measuring Period shall
expire.
(e) Payment of Phantom Stock Awards. Upon the vesting of a phantom
stock Award, the Grantee shall be entitled to receive a cash payment in
respect of each share of phantom stock which shall be equal to the Fair
Market Value of a share of Stock as of the date the phantom stock Award was
granted, or such other date as determined by the committee at the time the
phantom stock Award was granted. The Committee may at the time a phantom
stock Award is granted, provide a limitation on the amount payable in
respect of each share of phantom stock.
(f) Full Vesting upon Change of Control. In the event of a Change of
Control, all unvested Awards shall become immediately vested and
exercisable; provided that the benefit payable with respect to any
performance unit of performance share with respect to which the Measuring
Period has not ended as of the date of such Change of Control shall be
equal to the product of the Unit Value multiplied successively by each of
the following:
(1) a fraction, the numerator of which is the number of months
(including as a whole month any partial month) that have elapsed since
the beginning of such Measuring Period until the date of such Change of
Control and the denominator of which is the number of months (including
as a whole month any partial month) in the Measuring Period; and
(2) a percentage equal to the greater of the target percentage, if
any, specified in the applicable Award Agreement or the maximum
percentage, if any, that would be earned under the terms of the
applicable Award Agreement assuming that the rate at which the
performance goals have been achieved as of the date of such Change of
Control would continue until the end of the Measuring Period.
(g) Pooling of Interests. If the Committee in its discretion
determines that the exercise of an Award would preclude the use of pooling
of interests accounting following a sale of the Company which is reasonably
likely to occur and that such preclusion of pooling would have a material
adverse effect on the sale of the Company, the Committee, in its
discretion, may take such action as it deems appropriate in order to
preserve the pooling of interests accounting including either unilaterally
barring the exercise of such Award by canceling the Award prior to the
Change of Control or by causing the Company to pay the Award rights benefit
in Stock if it determines that such payment would not cause the transaction
to be ineligible for pooling.
(h) Special Rules for Section 16 Grantees. No stock appreciation
right, Option, performance unit, performance share or share of phantom
stock (if the benefit payable with respect to such performance unit,
performance share or share of phantom stock is to be determined by
reference to the Fair Market Value of Stock on the date the performance
unit, performance share or share of phantom stock is deemed to be
exercised) shall be exercisable by a Section 16 Grantee during the first
six months after its Grant Date, except as may be exempt from Section 16(b)
of the 1934 Act pursuant to Rule 16a-2(d) under the 1934 Act.
(i) Exercise, Cancellation, Expiration or Forfeiture of Tandem
Awards. Upon the exercise, cancellation, expiration, forfeiture or payment
in respect of any Award which is identified with any other Award (the
Tandem Award) pursuant to Article 6(h), the Tandem Award shall
automatically terminate to the extent of the number of shares in respect of
which the Award is so exercised, canceled, expired, forfeited or paid,
unless otherwise provided by the Committee at the time of grant of the
Tandem Award or thereafter.
9. Effect of Certain Transactions. With respect to any Award which
relates to Stock, in the event of a merger or consolidation of the Company
(a Transaction), the Plan and the Awards issued hereunder shall continue
in effect in accordance with their respective terms and each Grantee shall
be entitled to receive in respect of each share of Stock subject to any
outstanding Awards, upon the vesting, payment or exercise of the Award (as
the case may be), the same number and kind of stock, securities, cash,
property, or other consideration that each holder of share of Stock was
entitled to receive in the Transaction in respect of a share of Stock.
With respect to any Award which relates to stock, in the event of a
liquidation or dissolution of the Company, the Committee may take such
actions as it deems appropriate.
10. Mandatory Withholding Taxes. The Company shall have the right to
deduct from any distribution of cash to any Grantee an amount equal to the
federal, state and local income taxes and other amounts as may be required
by law to be withheld (the Withholding Taxes) with respect to any Award.
If a Grantee is to experience a taxable event in connection with the
receipt of shares pursuant to an Option exercise or the vesting or payment
of another type of Award (a Taxable Event), the Grantee shall pay the
Withholding Taxes to the Company prior to the issuance, or release from
escrow, of such shares or payment of such Award. Payment of the applicable
Withholding Taxes may be made, as determined by the Committee in its
discretion, in any one or any combination of (i) cash, (ii) shares of
restricted or unrestricted Stock owned by the Grantee prior to the Taxable
Event and valued at its Fair Market Value on the business day immediately
preceding the date of exercise, or (iii) by making a Tax Election (as
described below). For purposes of this Article 10, a Grantee may make a
written election, which may be accepted or rejected at the discretion of
the Committee (the Tax Election), to have withheld a portion of the
shares then issuable to him or her having an aggregate Fair Market Value,
on the date preceding the date of such issuance, equal to the Withholding
Taxes, provided that in respect of a Section 16 Grantee either: (i) in the
case of a Taxable Event involving any Award (A) the Tax Election is made at
least six months prior to the date of the Taxable Event and (B) the Tax
Election is irrevocable with respect to all Taxable Events of a similar
nature occurring prior to the expiration of six months following a
revocation of the Tax Election; or (ii) in the case of the exercise of an
Option a stock appreciation (A) the Grantee makes the Tax Election at least
six months after the date the Option or stock appreciation right was
granted, (B) the Option or stock appreciation right is exercised during the
ten day beginning on the third business day and ending on the twelfth
business day following the release for publication of the Company's
quarterly or annual statement of sales and earnings (a Window Period) and
(C) the Tax Election is made during the Window Period in which the related
Option or stock appreciation right is exercised or prior to such Window
Period and subsequent to the immediately preceding Window Period; or (iii)
in the case of a Taxable Event relating to the payment or vesting of an
Award which does not involve the exercise of an Option or a stock
appreciation right (A) the Grantee makes the Tax Election at least six
months after the date the Award was granted and (B) the Tax Election is
made (x) in the case of a Taxable Event occurring within a Window Period,
during the Window Period in which the Taxable Event occurs, or (y) in the
case of a Taxable Event not occurring within a Window Period, during the
Window Period immediately preceding the Taxable Event relating to the
Award. Notwithstanding the foregoing, the Committee may, by the adoption
of rules or otherwise, (i) modify the provisions of this Article 10 or
impose such other restrictions or limitations on Tax Elections as may be
necessary to ensure that the Tax Elections will be exempt transactions
under Section 16(b) of the 1934 Act, and (ii) permit Tax Elections to be
made at such other times and subject to such other conditions as the
Committee determines will constitute exempt transactions under Section
16(b) of the 1934 Act.
11. Termination of Employment. The Award Agreement pertaining to
each Award shall set forth the terms and conditions applicable to such
Award upon a Termination of Employment of the Grantee by the Company, a
Subsidiary or an operating division or unit, as the Committee may, in its
discretion, determine at the time the Award is granted or thereafter;
provided however, that if a Grantee's employment is terminated as a result
of (i) the Grantee's conviction of a felony which is, in the opinion of the
Committee, likely to result in injury of a material nature to the Company
or a Subsidiary, or (ii) the gross and habitual negligence by the Grantee
in the performance of the Grantee's duties to the Company or is
Subsidiaries (termination for Cause), the Grantee's shares of restricted
stock that are forfeitable, subject to the provisions of Section 6(d)(vii)
regarding repayment of certain amounts to the Grantee, and any unexercised
option, stock appreciation right, performance unit, performance share or
share of phantom stock shall thereupon terminate.
12. Securities Law Matters.
(a) If the Committee deems it necessary to comply with the Securities
Act of 1933, the Committee may require a written investment intent
representation by the Grantee and may require that a restrictive legend be
affixed to certificates for shares of Stock.
(b) If, based upon the opinion of counsel for the Company, the
Committee determines that the exercise or non forfeitability of, or
delivery of benefits pursuant to, any Award would violate any applicable
provision of (i) federal or state securities law or (ii) the listing
requirements of any national securities exchange on which are listed any of
the Company's equity securities, then the Committee may postpone any such
exercise, non-forfeitability or delivery, as the case may be, but the
Company shall use its best efforts to cause such exercise, non-
forfeitability or delivery to comply with all such provisions at the
earliest practicable date.
(c) Subject to Articles 13(a) and (b) above, no shares of Stock
shall be issued to any Grantee in respect of any Award prior to the time a
registration statement under the Securities Act of 1933 is effective with
respect to such shares.
13. No Funding Required. Benefits payable under the Plan to any
person shall be paid directly by the Company. The Company shall not be
required to fund, or otherwise segregate assets to be used for payment of,
benefits under the Plan.
14. No Employment Rights. Neither the establishment of the Plan, nor
the granting of any Award shall be construed to (a) give any Grantee the
right to remain employed by the Company or any of its Subsidiaries or to
any benefits not specifically provided by the Plan or (b) in any manner
modify the right of the Company or any of its Subsidiaries to modify,
amend, or terminate any of its employee benefit plans.
15. Rights as a Stockholder. A Grantee shall not, by reason of any
Award (other than restricted Stock), have any right as a stockholder of the
Company with respect to the shares of Stock which may be deliverable upon
exercise or payment of such Award until such shares have been delivered to
him. Shares of restricted Stock held by a Grantee or held in escrow by the
Secretary of the Company shall confer on the Grantee all rights of a
stockholder of the Company, except as otherwise provided in the Plan.
16. Nature of Payments. Any and all grants, payments of cash, or
deliveries of shares of Stock hereunder shall constitute special incentive
payments to the Grantee and shall not be taken into account in computing
the amount of salary or compensation of the Grantee for the purpose of
determining any pension, retirement, death or other benefits under (a) any
pension, retirement, profit-sharing, bonus, life insurance or other
employee benefit plan of the Company or any of its Subsidiaries or (b) any
agreement between the Company or any Subsidiary, on the one hand, and the
Grantee, on the other hand, except as such plan or agreement shall
otherwise expressly provide.
17. Non-Uniform Determinations. Neither the Committee's nor the
Board's determinations under the Plan need be uniform and may be made by
the Committee or the Board selectively among persons who receive, or are
eligible to receive, Awards (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Committee
shall be entitled, among other things, to make non-uniform and selective
determinations, to enter into non-uniform and selective Award Agreements as
to (a) the identity of the Grantees, (b) the terms and provisions of
Awards, and (c) the treatment of Terminations of Employment.
18. Adjustments. In the event of Change in Capitalization, the
Committee shall, in its sole discretion, make equitable adjustment of
(a) the aggregate number and class of shares of Stock or other
stock or securities available under Article 3,
(b) the number and class of shares of Stock or other stock or
securities covered by an Award,
(c) the Option Price applicable to outstanding Options,
(d) the terms of performance unit and performance share grants,
and
(e) the Fair Market Value of Stock to be used to determine the
amount of the benefit payable upon exercise of stock appreciation
rights, performance units, performance shares or phantom stock.
19. Amendment of the Plan. The Board may from time to time in its
discretion amend or modify the Plan without the approval of the
stockholders of the Company, except as such stockholder approval may be
required (a) to retain Incentive Stock Option treatment under Section 422
of the Internal Revenue Code, (b) to permit transactions in Stock pursuant
to the Plan to be exempt from potential liability under Section (16(b) of
the 1934 Act or (c) under the listing requirements of any securities
exchange on which any of the Company's equity securities are listed.
20. Termination of the Plan. The Plan shall terminate on the tenth
(10th) anniversary of the Effective Date or at such earlier time as the
Board may determine. Any termination, shall not affect any Award then
outstanding under the Plan.
21. No Illegal Transactions. The Plan and all Awards granted
pursuant to it are subject to all laws and regulations of any governmental
authority which may be applicable thereto; and notwithstanding any
provision of the Plan or any Award, Grantees shall not be entitled to
exercise Awards or receive the benefits thereof and the Company shall not
be obligated to deliver any Stock or pay any benefits to a Grantee if such
exercise, delivery, receipt or payment of benefits would constitute a
violation by the Grantee or the Company of any provision of any such law or
regulation.
22. Governing Law. Except where preempted by federal law, the law of
the State of Delaware shall be controlling in all matters relating to the
Plan, without giving effect to the conflicts of law principles thereof.
23. Severability. If all or any part of the Plan is declared by any
court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not sever to invalidate any portion of the
Plan not declared to be unlawful or invalid. Any Article or part of an
Article so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such Article
or part of an Article to the fullest extent possible while remaining lawful
and valid.