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SOUTHWEST GAS CORPORATION
MANAGEMENT INCENTIVE PLAN
1993
Effective May 12, 1993
Amended and Restated May 10, 1994
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Table of Contents
Page
1. Purpose of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. Incentive Award Opportunities . . . . . . . . . . . . . . . . . . . . 8
6. Procedures for Calculating and Paying Actual Awards . . . . . . . . . 8
7. Performance Shares. . . . . . . . . . . . . . . . . . . . . . . . . . 10
8. Participant Terminations and Transfers. . . . . . . . . . . . . . . . 11
9. Changes in Capital Structure and Other Events . . . . . . . . . . . . 14
10. Provisions Regarding Withholding Taxes. . . . . . . . . . . . . . . . 15
11. Provisions Applicable to Common Stock . . . . . . . . . . . . . . . . 16
12. Effective Date; Stockholder Approval. . . . . . . . . . . . . . . . . 18
13. Amendment and Termination of the Plan . . . . . . . . . . . . . . . . 18
14. Benefit Claims Procedure. . . . . . . . . . . . . . . . . . . . . . . 18
15. General Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . 19
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SOUTHWEST GAS CORPORATION
1993 Management Incentive Plan
________________________________________________________________________________
1. PURPOSE OF THE PLAN
This 1993 Management Incentive Plan is intended to both replace the
existing Southwest Gas Corporation Management Incentive Plan and
encourage a selected group of highly compensated or management employees
of the Company to remain in its employment and to put forth maximum
efforts to achieve the Company's short- and long-term performance goals.
2. DEFINITIONS
(a) "Actual Award" means the dollar amount earned by a Participant on
the basis of the performance of the Company during the annual
Performance Period.
(b) "Annual Base Salary" means the calendar year-end rate of
compensation paid to a Key Employee, including salary deferrals, but
excluding bonuses, incentives, commissions, overtime, monetary and
nonmonetary awards for employment service to the Company or payments
or Company contributions to or from this Plan or any other Company
retirement or deferred compensation, or similar plans.
(c) "Annual Performance Measures" shall mean the performance criteria
used by the Committee in determining the performance of the Company
for the purpose of calculating Actual Awards for Participants earned
under the Plan during a Performance Period.
(d) "Award Conversion" means the division of Actual Awards earned into
two portions:
(i) A portion payable in cash as soon as the Committee deems
practicable following the end of an annual Performance Period.
(ii) A portion converted into Performance Shares and subject to a
Restriction Period.
(e) "Award Conversion Date" means the day that the Committee performs
the Award Conversion on Actual Awards for a Performance Period.
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(f) "Board" or "Board of Directors" means the Board of Directors of
Southwest Gas Corporation.
(g) "Committee" means the Nominating and Compensation Committee of the
Board of Directors, or any such other committee designated by the
Board to administer the Plan.
(h) "Common Stock" means the common stock of Southwest Gas Corporation.
(i) "Company" means Southwest Gas Corporation and its present and future
subsidiaries (other than PriMerit Bank and its subsidiaries) and any
successor thereto.
(j) "Disability" or "Disabled". A Participant shall be considered to be
"Disabled" or to have incurred a "Disability" if he or she qualifies
for a disability benefit under Southwest Gas Corporation's group
long-term disability plan. In the event a Participant does not
qualify for benefits under such disability plan, the Committee, in
its sole and absolute discretion, may determine that a Participant
is Disabled for purposes of this Plan.
(k) "Dividend Credits" means the additional Performance Shares
determined as set forth in Plan Section 7(d) calculated for each
Restriction Period for the Participant's Performance Shares subject
to such period.
(l) "Employee" means any person who is a regular full-time employee of
the Company, including those who are officers or Board members.
(m) "Fiscal Year" means the Fiscal Year of the Company beginning each
January 1st and ending the following December 31st.
(n) "Incentive Award Opportunity" means the range of an Actual Award
available to each Participant in this Plan for a given Performance
Period.
(o) "Involuntary Termination Without Cause" means a Participant's
termination of employment (i) due to reorganization, downsizing,
restructuring or layoff and (ii) not due to what the Committee
determines was, in its sole and absolute discretion, either the
Participant's inability to adequately perform his or her job, a
violation of Company work rules or policies, or misconduct that the
Committee determines is detrimental to the Company's best interests.
(p) "Key Employee" means a management or highly compensated Employee of
the Company who the Committee determines to (i) have a direct and
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significant impact on the performance of the Company, and (ii) has a
position or compensation that allows him or her to affect or
influence, through negotiation or otherwise, the design or operation
of this Plan so as to eliminate the Employee's need for the
substantive rights and protections of Title I of the Employee
Retirement Income Security Act of 1974.
(q) "Long-Term Performance Measures" means the performance measures
developed and utilized by the Committee in determining the
performance of the Company for the purpose of calculating the number
of shares of Common Stock payable to the Participant following the
end of a Restriction Period.
(r) "Participant" means a Key Employee who in the Committee's sole and
absolute discretion is determined to be eligible to receive an
Incentive Award Opportunity under this Plan.
(s) "Peer Group" means the companies comprising the group against which
the Committee assesses the performance of the Company for the
purposes of determining Actual Awards earned, or for modifying the
number of shares of Common Stock that are payable to Participants
following the end of a Restriction Period.
(t) "Performance Period" means a period of twelve months corresponding
to the Company's Fiscal Year and for which the Company's performance
is assessed by the Committee for the purpose of its determining
Actual Awards earned.
(u) "Performance Share" means a hypothetical share of Common Stock that
will be converted into, and paid out, as a share of Common Stock
only if all restrictions and conditions set forth in this Plan have
been satisfied. The Performance Share carries no voting rights but
does entitle the Participant to receive Dividend Credits
determinable under Plan Section 7(d).
(v) "Plan" means the Southwest Gas Corporation 1993 Management Incentive
Plan as set forth herein and as amended from time to time.
(w) "Restriction Period" means, with respect to each grant of
Performance Shares to a Participant, a period of at least thirty six
(36) consecutive calendar months beginning with the last day of
February prior to the Award Conversion Date applicable to such
shares.
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(x) "Retire" or "Retirement" means the termination of a Participant's
employment with the Company on or after the Participant has attained
his or her early retirement date, normal retirement date, or
deferred retirement date as defined in the Retirement Plan for
Employees of Southwest Gas Corporation, as amended and in effect
from time to time.
(y) "Target Award" means the Incentive Award Opportunity available to
each Participant if all Performance Measures for a Performance
Period are fully met but not exceeded.
3. ADMINISTRATION
(a) The Plan shall be administered by non-Employee members of the
Committee, which shall be composed of not less than three members of
the Board of Directors. The non-Employee members of the Committee
chosen to administer the Plan shall not have received an award under
this Plan or any plan preceding this Plan within the last calendar
year. The Board of Directors may designate alternate members of the
Committee from non-Employee Board members who satisfy the above
criteria to act in the place and stead of any absent member of the
Committee.
(b) The Committee shall have full and final authority to operate,
manage, and administer the Plan on behalf of the Company. This
authority includes but is not limited to the following:
(i) Determination of eligibility for participation in the Plan;
(ii) Determination of Actual Awards earned and the Award
Conversion of the Actual Awards;
(iii) Payment of Actual Awards that have become nonforfeitable;
(iv) Directing the Company to make the accruals and payments
provided for by the Plan;
(v) Interpretation of the Plan and the resolution of any
inconsistent or conflicting Plan language as well as factual
or nonfactual questions regarding a Participant's eligibility
for, and the amount of, benefits payable under the Plan;
(vi) Power to prescribe, amend, or rescind rules and regulations
relating to the Plan;
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(vii) Power to determine the vesting schedules, if any, for all
awards; and
(viii) Powers prescribed to the Committee elsewhere in the Plan.
(c) With respect to Incentive Award Opportunities and Actual Awards
earned, the Committee shall have full and final authority in its
sole and absolute discretion to determine the Incentive Award
Opportunities for individual Participants; determine the time or
times at which Actual Awards may be calculated; determine the length
of all applicable Performance Periods and/or Restriction Periods;
determine the award schedule and the Annual and Long-Term
Performance Measures (and the Company's satisfaction or failure to
satisfy such measures) that will be used in calculating Actual
Awards and in determining the number of shares of Common Stock
payable to Participants at the end of the Restriction Period; and
determine the composition of the Peer Group to be used in assessing
the Company's performance.
(d) A majority of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a
quorum is present, or acts approved in writing by all the members in
the absence of a meeting, shall be the acts of the Committee. All
Committee interpretations, determinations, and actions will be
final, conclusive, and binding on all parties.
(e) No member of the Board or the Committee will be liable for any
action taken or determination made in good faith by the Board or the
Committee with respect to the Plan or any Actual Award calculated
and paid hereunder.
4. ELIGIBILITY
(a) In determining the Key Employees that will be Participants and the
Incentive Award Opportunity for each Participant, the Committee
shall take into account the duties of the respective Participant,
their present and potential contributions to the success of the
Company, and such other factors as the Committee shall deem relevant
in connection with accomplishing the purpose of the Plan.
(b) No Incentive Award Opportunity will be available to any person who,
at the beginning of the applicable Performance Period, is a member
of the Committee responsible for the administration of the Plan.
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5. INCENTIVE AWARD OPPORTUNITIES
(a) The Committee will establish the Incentive Award Opportunity for
each Participant or class of Participants designated by the
Committee. The Incentive Award Opportunity will be expressed as
percentages of the Participant's Annual Base Salary.
(b) An Incentive Award Opportunity will range from zero to some specific
maximum percentage of the Participant's Annual Base Salary (or
maximum dollar amount).
(c) Before or during each Performance Period a Participant will be
assigned a specific Target Award that will fall within the range of
the Participant's Incentive Award Opportunity. The Target Award
will be awarded to the Participant if, in the judgement of the
Committee, all applicable Annual Performance Measures have been
fully met.
(d) Actual Awards for each Participant in the Plan shall be determined
by the Committee following the end of the applicable Performance
Period, taking into account how the Company performed on the basis
of the Annual Performance Measures developed and utilized by the
Committee for the Performance Period. Notwithstanding the
foregoing, if Southwest Gas Corporation's Chief Executive Officer
(hereinafter the "CEO") or Chief Financial Officer (hereinafter the
"CFO") are Participants, the Committee may consider the performance
of PriMerit Bank during a Performance Period when examining the
Annual Performance Measures and determining the Actual Award for the
CEO and/or CFO for the period.
6. PROCEDURES FOR CALCULATING AND PAYING ACTUAL AWARDS
(a) The Committee shall establish the Annual Performance Measures that
will be utilized for one or more Performance Periods in assessing
the performance of the Company for the purpose of determining the
Actual Awards earned under this Plan. These measures and the
standards of performance associated with them may change from year
to year and may receive different emphasis or weight according to
the changing priorities of the Company. It is expected that the
Annual Performance Measures generally will be tied to the financial
performance of the Company and will be based on a combination of (i)
the Company's performance in relation to its own performance
standards and (ii) the Company's performance in relation to that of
its Peer Group. In addition to the Annual Performance Measures,
each Participant will be expected to meet individual performance
goals.
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(b) Following the end of each Performance Period, the Committee will
compare the Company's actual performance during such period with the
Annual Performance Measures it established for the period, and the
Actual Award, if any, for a Participant will be calculated. For
each Performance Period the Committee will utilize an award schedule
for calculating the Actual Awards earned on the basis of the
Company's performance. The award schedule may be modified by the
Committee from year to year as Annual Performance Measures or the
standards of performance associated with such measures change.
(c) Following the calculation of Actual Awards, the Chief Executive
Officer will make an overall assessment of each Participant's
attainment of individual performance goals and may reduce a
Participant's Actual Award based upon such assessment. Further, the
Chief Executive Officer may recommend to the Committee that no
Actual Award be given to a Participant based on his assessment of
individual performance. The assessment of the individual
performance of the Chief Executive Officer will be made by the Board
of Directors.
(d) Following the calculation of the Actual Awards, adjusted as provided
for in Plan Section 6 (c), an Award Conversion will be made whereby
the Actual Awards for each Participant will be split into two
components. The first component will be a dollar amount that is
payable to the Participant in cash as soon as the Committee deems
practical following the Award Conversion Date. The second component
will be a dollar amount that is converted into whole or partial
Performance Shares, which shall be restricted for a period of at
least thirty six consecutive calendar months beginning on the Award
Conversion Date applicable to such shares. The number of
Performance Shares allocable to each Participant shall be determined
by dividing (i) the dollar amount available for the Participant's
Performance Shares (determined by the Award Conversion), by (ii) the
closing per share value of the Common Stock on the New York Stock
Exchange on the last trading day on the Exchange before the Award
Conversion Date. Payment of Performance Shares shall occur at the
time provided in Plan Section 7(c).
(e) The Committee shall have the sole and absolute responsibility for
determining Actual Awards of Participants. Generally, the Actual
Awards generated by application of the award schedule established by
the Committee for one or more Performance Periods will be the Actual
Awards that will be payable to each Participant; provided, however,
that the Committee may, prior to the Award Conversion Date, alter
the Actual Awards generated by the awards schedule if, in the
opinion of the Committee, there have been exceptional circumstances
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that have either created inappropriate windfalls or shortfalls in
the Company's performance (or the performance of PriMerit Bank in
the case of the CFO and CEO), which, in turn, have resulted in
inappropriately large or small Actual Awards.
(f) If, during a Performance Period, the Committee determines that the
established Annual Performance Measures are no longer suitable due
to a change in the Company's business, operations, corporate
structure, capital structure, or other conditions the Committee
deems to be material, the Committee may modify the Annual
Performance Measures as it considers appropriate and equitable.
7. PERFORMANCE SHARES
(a) On the Award Conversion Date, Participants who earned an Actual
Award during the preceding Performance Period will have an entry
made on the Company's books reflecting the Performance Shares
allocable to them as determined pursuant to Plan Section 6(c).
(b) A Participant's Performance Shares earned in a given Performance
Period will be subject to a Restriction Period of at least thirty
six consecutive calendar months beginning on the Award Conversion
Date applicable to such shares. During the Restriction Period, the
Participant may not, except as provided in Plan Section 8(d),
receive payment for his or her Performance Shares.
(c) For the Restriction Period applicable to each Performance Period,
the Committee shall establish certain Long-Term Performance Measures
that will be used to determine the number of Performance Shares that
shall be paid to the Participant on the date(s) determined by the
Committee which shall be within a reasonable period following the
end of the Restriction Period. Notwithstanding anything in this
Plan to the contrary, if the Committee determines that the Company
has satisfied or failed to satisfy the Long-Term Performance
Measures, it may, as provided in Plan Section 7(e), increase or
decrease the number of Performance Shares credited to the
Participant at the beginning, and over the course of the Restriction
Period. The Long-Term Performance Measures will be tied to the
performance of the Company (in the case of the CEO and CFO, the
Committee may also consider the performance of PriMerit Bank) as
measured against certain financial criteria and may be specified in
absolute terms or specified relative to the performance of a Peer
Group (in the case of the CEO and CFO the Committee may also
consider the performance of PriMerit Bank).
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(d) During each Restriction Period, a Participant will receive Dividend
Credits equal to the quarterly dividend paid per share of Common
Stock, multiplied by the number of Performance Shares then credited
to the Participant on the Company's records, and divided by the
closing per share value of the Common Stock on the New York Stock
Exchange on the date such dividends are paid or the last trading day
on the Exchange before such payment. These additional Performance
Shares will be subject to the same restrictions as the Performance
Shares already credited to the Participant, and such restrictions
will lapse at the same time as the restrictions lapse on the
Performance Shares granted at the Award Conversion Date.
(e) Following the end of a Restriction Period, the Participant shall
receive a specific number of shares of Common Stock equal to the
total number of Performance Shares allocated to the Participant at
the beginning of such Restriction Period plus the Performance Shares
credited quarterly through Dividend Credits during the Restriction
Period. The total number of shares of Common Stock the Participant
is entitled to receive may be modified by up to plus or minus 20% on
the basis of how the Company performs (as to the CEO and CFO, the
Committee may also consider the performance of PriMerit Bank) during
the length of the Restriction Period against the Long-Term
Performance Measures established by the Committee for the
Restriction Period. Payment of Common Stock pursuant to this
paragraph shall occur on the date(s) determined by the Committee
which shall be within a reasonable period following the end of the
Restriction Period applicable to such Performance Shares.
(f) Notwithstanding anything else in this Plan to the contrary, if the
Plan is not approved by Southwest Gas Corporation shareholders
pursuant to Plan Section 12, the Performance Shares shall not
entitle the Participant to receive shares of Common Stock of the
Company following the end of the Restriction Period but shall
instead entitle the Participant to receive a cash payment following
the end of the Restriction Period. The cash payment shall equal the
fair market value of the shares of Common Stock the Participant
would have received hereunder. For this purpose, the fair market
value of the Common Stock shall be determined using closing per
share value of the stock on the New York Stock Exchange on the last
trading day on the Exchange of the applicable Restriction Period.
8. PARTICIPANT TERMINATIONS AND TRANSFERS
(a) Should a Participant's continuous employment with the Company
terminate for any reason other than death, Disability, Retirement,
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or Involuntary Termination Without Cause during a Performance
Period, the Participant's right to receive an Actual Award for such
period will be forfeited by the Participant.
(b) Should a Participant's continuous employment with the Company
terminate for any reason other than death, Disability, Retirement,
or Involuntary Termination Without Cause during a Restriction
Period, the Participant's right to receive payments of his or her
outstanding Performance Shares will be forfeited by the Participant.
(c) Should a Participant die, become Disabled, Retire, or have his or
her employment Involuntarily Terminated Without Cause during the
Performance Period, the Participant (or the Participant's
beneficiary in the case of a deceased Participant) will be entitled
to receive an Actual Award at the end of the Performance Period
determined on a pro rata basis according to the number of months of
the Performance Period actually worked while being a Participant in
the Plan.
(d) Should a Participant die, become Disabled, Retire, or have his or
her employment Involuntarily Terminated Without Cause during a
Restriction Period, the Participant (or the Participant's
beneficiary in the case of a deceased Participant) will receive a
distribution of Common Stock equal to the total number of
Performance Shares then credited to the Participant. If Plan
Section 7(f) applies, cash and not Common Stock shall be paid and
the amount of such payment shall be determined by multiplying the
Participant's Performance Shares by the closing per share value of
the Common Stock on the New York Stock Exchange on the date of such
event or the last trading day on the Exchange before such event.
Payment of Common Stock (or cash if Plan Section 7(f) applies) shall
occur within a reasonable period (as determined by the Committee)
following the date of the Participant's death, Disability,
Retirement, Disability, or Involuntary Termination Without Cause.
A Participant shall have the right to designate any person as his or
her Beneficiary to whom benefits determined under Plan Section 8(c)
and the preceding paragraph ("Death Benefits") shall be paid in the
event of the Participant's death prior to the total distribution of
his/her Death Benefits. If greater than 50 percent of the Death
Benefits is designated to a beneficiary other than the Participant's
lawful spouse, such beneficiary designation must be consented to by
the Participant's lawful spouse. Each beneficiary designation must
be in written form prescribed by the Committee and will be effective
only when filed with the Committee, or its designee, during the
Participant's lifetime.
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A Participant may change a beneficiary designation, subject to
spousal consent under the preceding paragraph, by filing a new
beneficiary designation with the Committee or its designee. The
filing of a new beneficiary designation form will cancel all
beneficiary designations previously filed. The Committee shall be
entitled to rely on the beneficiary designation last filed by the
Participant prior to his/her death. Any payment made in accordance
with such designation shall fully discharge the Company from all
further obligations with respect to the amount of such payments.
If a beneficiary entitled to receive benefits under the Plan is a
minor or a person declared incompetent, the Committee may direct
payment of such benefits to the guardian or legal representative of
such minor or incompetent person. The Committee may require proof
of incompetency, minority or guardianship as it may deem appropriate
prior to distribution of any Death Benefits. Such distribution
shall completely discharge the Committee and the Company from all
liability with respect to such payments.
If no beneficiary designation is in effect at the time of the
Participant's death, or if the named beneficiary predeceased the
Participant, then the beneficiary shall be: (1) the surviving lawful
spouse; (2) if there is no surviving lawful spouse, then
Participant's issue per stirpes; or (3) if no surviving lawful
spouse or issue, then Participant's estate.
(e) If a Participant changes jobs with the Company during the course of
a Performance Period and his or her new job has a different
Incentive Award Opportunity under the Plan, the Participant's
Incentive Award Opportunity for the Performance Period shall be the
sum of the products obtained by multiplying (i) the percentage of
the full Performance Period spent in each job by (ii) the Incentive
Award Opportunity for each such job. In special circumstances,
which the Committee may identify from time to time, the Participant
may be assigned for the full Performance Period the Incentive Award
Opportunity that corresponds to any one of the jobs held by the
Participant during the Performance Period rather than combining
partial Incentive Award Opportunities for the jobs.
(f) Should a Key Employee become eligible to participate in the Plan
after the beginning of a Performance Period, the Participant will be
entitled to an Incentive Award Opportunity on the basis of the
number of months of the full Performance Period the Key Employee is
a Participant in the Plan.
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9. CHANGES IN CAPITAL STRUCTURE AND OTHER EVENTS
(a) Notwithstanding anything in the Plan to the contrary, upon
dissolution or liquidation of the Company (or upon a reorganization,
merger, or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving
corporation,) or upon the sale of all or substantially all of the
assets of the Company, Performance Shares then outstanding under the
Plan will, within a reasonable time period following such change, be
determined by the Committee and settled and paid on the basis of the
amount, and other terms, as determined by the Committee, unless
provisions are made for the continuance of the Plan and the
assumption or the substitution of such Performance Shares with new
awards by such successor employer corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number
and kind of units, prices, and Performance Share values.
(b) All determinations, decisions, and adjustments made by the Committee
pursuant to Plan Section 9(a) will be final, binding, and
conclusive. No fractional interest will be issued under the Plan on
account of such adjustments.
(c) In the event (i) a report on Schedule 13D is filed with the
Securities and Exchange Commission pursuant to Section 13(d) of the
Securities Exchange Act of 1934 (referred to as the "Act")
disclosing that any "person" (as defined in Section 13(d) of the
Act) other than the Company or one of its subsidiaries or an
employee benefit plan sponsored by the Corporation or one of its
subsidiaries is the beneficial owner, directly or indirectly, or
twenty percent (20%) or more of the combined voting power of the
then outstanding securities of the Company; (ii) any "person" (as
defined in Section 13(d) of the Act) other than the Company or one
of its subsidiaries, or an employee benefit plan sponsored by the
Company or one of its subsidiaries shall purchase securities
pursuant to a tender offer or exchange offer to acquire any Common
Stock of the Company (or securities convertible in Common Stock) for
cash, securities, or any other consideration, provided that after
the consummation of the offer, the person in question is the
"beneficial owner" (as such term is defined in Rule 13d-3 under the
Act), directly or indirectly or twenty percent (20%) or more of the
combined voting power of the then outstanding securities of the
Company (as determined under paragraph (d) of Rule 13d-3 under the
Act, in the case of rights to acquire Common Stock); (iii) the
stockholders of the Company shall approve (a) any consolidation or
merger of the Company (1) in which the Company is not the continuing
or surviving corporation, (2) pursuant to which shares of Common
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Stock of the Company would be converted into cash securities, or
other property, or (3) with a corporation that prior to such
consolidation or merger owned twenty percent (20%) or more of the
cumulative voting power of the then outstanding securities of the
corporation, or (b) any sale, lease, exchange, or other transfer (in
one transaction or a series of related transactions) of all or
substantially all the assets of the Company; or (iv) there shall
have been a change in the majority of the Board of the Company
within a twelve-month period, unless the election or nomination for
election by the Company's stockholders of each director during such
twelve-month period was approved by the vote of two-thirds (2/3) of
the directors then in office who were directors at the beginning of
such twelve-month period, the Committee may in its sole and absolute
discretion, without obtaining stockholder approval, at the time of
any one or more of the foregoing actions, to the extent permitted in
Plan Section 7, with respect to all Participants:
(i) Accelerate the settlement dates of some or all outstanding
Performance Shares;
(ii) Make any other adjustments or amendments to the Plan and
outstanding Incentive Award Opportunities and Performance
Shares; or
(iii) Substitute new Incentive Award Opportunities.
10. PROVISIONS REGARDING WITHHOLDING TAXES
(a) The Committee may require a Participant receiving Common Stock upon
conversion of Performance Shares awarded hereunder to reimburse the
Company for any taxes required by any government to be withheld or
otherwise deducted and paid by the Company in respect of the
issuance to or disposition of shares by the Participant (a "Taxable
Event"). Any payment on account of a tax obligation shall be in a
form acceptable to the Committee. If upon the occurrence of a
Taxable Event the Participant does not, in the time required by law
or designated by the Committee, reimburse the Company for taxes as
provided for above: (i) the Company shall have the right to
withhold some or all of the amount of such taxes from any other sums
due or to become due from the Company to the Participant upon such
terms and conditions as the Committee shall prescribe, and (ii) the
Company may satisfy some or all of the tax obligation of such
Participant by withholding shares of Common Stock acquired by the
Participant in the conversion of any Performance Shares and may in
the same manner satisfy some or all of any additional tax obligation
resulting from such withholding.
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(b) At any time that the Company becomes subject to a withholding
obligation under applicable law with respect to the conversion of
Performance Shares, except as set forth below with respect to
persons subject to Section's 16(a) and (b) of the Exchange Act, a
Participant may elect to satisfy, in whole or in part, the
Participant's related estimated personal tax liabilities by
directing the Company to withhold from the shares of Common Stock
issuable in the related conversion of Performance Shares either (i)
a specified percentage of shares, (ii) a specified number of shares
or (iii) shares having a specified value, in each case with a value
not in excess of such estimated tax liabilities. Such an election
shall be irrevocable. The shares of Common Stock withheld in
payment shall be valued at their fair market value on the date that
the withholding obligation arises (the "Tax Date"). The Committee
may disapprove of any election, suspend or terminate the right to
make elections or provide that the right to make elections shall not
apply to particular conversions. If a Participant is a person
subject to Sections 16(a) and (b) of the Exchange Act then (A) any
election by such Participant must be made either (i) at least six
months prior to the relevant Tax Date or (ii) on or prior to the
relevant Tax Date and during a period that begins on the third
business day following the date of release for publication of the
Company's quarterly or annual summary statements of sales and
earnings and that ends on the twelfth business day following such
date and (B) the election may not be made with respect to shares of
Common Stock representing a conversion of a Performance Shares
grant, or the withholding obligation arising thereon, if the
relevant Performance Shares were granted six months or less prior to
the date of election. The Committee may impose any other conditions
or restrictions on the right to make an election as it shall deem
appropriate.
11. PROVISIONS APPLICABLE TO COMMON STOCK
(a) Shares of Common Stock to be delivered to Participants at the end of
the Restriction Period may be previously authorized but unissued
shares or may be previously issued and reacquired shares.
(b) If at any time the Board shall determine in its discretion that the
listing, registration or qualification upon any national securities
exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale,
purchase, issuance or delivery of Common Stock under the Plan, no
Common Stock shall be sold, purchased, issued or delivered, as the
case may be, unless and until such listing, registration,
qualification, consent or approval shall have been effected or
17
obtained, or otherwise provided for, free of any conditions not
acceptable to the Board.
(c) Except as hereafter provided and if so required by the Committee,
the recipient of any Performance Share award shall, upon receipt of
any shares of Common Stock due to the Award Conversion of
Performance Shares represented by the award, execute and deliver to
the Company a written statement, in form satisfactory to the
Company, in which such Participant represents and warrants that such
Participant is acquiring the shares for such Participant's own
account, for investment only and not with a view to the resale or
distribution thereof, and agrees that any subsequent offer for sale
or sale or distribution of any such shares of Common Stock shall be
made only pursuant to either (a) a Registration Statement on an
appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), which Registration Statement has become effective
and is current with regard to the shares of Common Stock being
offered or sold, or (b) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption
the holder or recipient shall, if required by the Company, prior to
any offer for sale or sale of such shares, obtain a favorable
written opinion, in form and substance satisfactory to the Company,
from counsel for or approved by the Company, as to the applicability
of such exemption thereto. The foregoing restriction shall not
apply to (i) issuances by the Company so long as the shares being
acquired are registered under the Securities Act and a prospectus in
respect thereof is current or (ii) reofferings of shares by
affiliates of the Company (as defined in Rule 405 or any successor
rule or regulation promulgated under the Securities Act) if the
shares being reoffered are registered under the Securities Act and a
prospectus in respect thereof is current.
(d) The Company may endorse such legend or legends upon the certificates
for shares of Common Stock issued upon conversion of Performance
Shares made hereunder and may issue such "stop transfer"
instructions to its transfer agent in respect of such shares as, in
its discretion, it determines to be necessary or appropriate to (i)
prevent a violation of, or to perfect an exemption from, the
registration requirements of the Securities Act, or (ii) implement
the provisions of the Plan and any agreement between the Company and
the Participant.
(e) The Company shall pay all issue taxes with respect to the issuance
of shares of Common Stock upon conversion of Performance Shares, as
well as all fees and expenses necessarily incurred by the Company in
connection with such issuance.
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12. EFFECTIVE DATE; STOCKHOLDER APPROVAL
The Plan shall become effective upon adoption by the Board, provided,
however, that unless and until the Plan is approved by a vote of the
shareholders of Southwest Gas Corporation at the 1994 annual
shareholders' meeting, all Performance Shares awarded hereunder shall,
when otherwise payable under the Plan, be, as provided in Plan Section
7(f), converted into cash and not Common Stock.
13. AMENDMENT AND TERMINATION OF THE PLAN
The Board at any time and from time to time may, without prior notice to
Participants, suspend, terminate, modify, or amend the Plan. Except as
otherwise provided for in Plan Sections 5, 6, 7, 8 and 9, no suspension,
termination, modification, or amendment of the plan may adversely affect
any award previously granted, unless the written consent of the
Participant is obtained. Notwithstanding the authority granted to the
Board herein, if the shareholder's of Southwest Gas Corporation have
approved this Plan as contemplated in Plan Section 12 above, no amendment
to the Performance Share provisions of this Plan shall become effective
without shareholder approval if, as to executive officer Participants,
such amendment would:
(i) materially increase the benefits accruing to such Participants
under the Plan;
(ii) materially increase the number of Performance Shares which may be
issued to such Participants under the Plan; or
(iii) materially modify the requirements as to eligibility for
executive participation in the Plan.
14. BENEFIT CLAIMS PROCEDURE
(a) Any claim for money or stock awards under the Plan shall be made in
writing to the Committee. If such claim is wholly or partially
denied, the Committee shall, within ninety (90) days after receipt
of the claim, notify the Participant or Beneficiary of the denial of
the claim. Such notice of denial shall (i) be in writing, (ii) be
written in a manner calculated to be understood by the Participant or
Beneficiary, and (iii) contain the specific reason or reasons for
denial of the claim, a specific reference to the pertinent Plan
provisions upon which the denial is based, a description of any
additional material or information necessary to perfect the claim,
19
along with an explanation of why such material or information is
necessary, and an explanation of the claim review procedure. The
ninety (90) day period may, under special circumstances, be extended
up to an additional ninety (90) days upon written of such extension
to the Participant or Beneficiary which notice shall specify the
special circumstances and the extended date of the decision. Notice
of extension must be given prior to expiration of the initial ninety
(90) day period. If not notice of decision is given within the
periods specified above, the claim shall, on the last day of the
notice period, be deemed to have been denied and the Participant or
Beneficiary may file a request for review as provided in the next
paragraph.
(b) Within sixty (60) days after the receipt of the decision denying a
claim (or the occurrence of the date that a claim is deemed denied)
by the Participant or Beneficiary, the Participant or Beneficiary may
file a written request with the Committee that it conduct a full and
fair review of the denial of the claim. The Participant or
Beneficiary or his or her duly authorized representative may review
pertinent documents and submit issues and comments in writing to the
Committee in connection with the review.
(c) The Committee shall deliver to the Participant or Beneficiary a
written decision on the review of the denial within sixty (60) days
after receipt of the aforesaid request for review, except that if
there are special circumstances (such as the need to hold a hearing,
if necessary) which require an extension of time for processing, the
aforesaid sixty (60) day period shall, upon written notice to the
Participant or Beneficiary be extended an additional sixty (60) days.
Such decision shall (i) be in writing, (ii) be written in a manner
calculated to be understood by the Participant or Beneficiary, (iii)
include the specific reason or reasons for the decision, and
(iv) contain a specific reference to the pertinent Plan provisions
upon which the decision is based. If the decision on review is not
delivered to the Participant or Beneficiary within the periods
specified, the claim shall be considered denied on the last day of
the review period.
(d) Upon a Participant or Beneficiary filing a claim, the Committee shall
notify the party filing of the claim and review procedure including
the time periods involved.
15. GENERAL PROVISIONS
(a) Nothing in this Plan or in any award granted pursuant hereto shall
confer on an individual any right to continue in the employ of the
20
company or any of its subsidiaries or interfere in any way with the
right of the Company or any such subsidiary to terminate any
employment.
(b) Upon its adoption by the Board, this Plan shall replace the existing
Southwest Gas Corporation Management Incentive Plan with respect to
periods commencing January 1, 1993.
(c) Awards granted under the Plan shall not be transferable otherwise
than as provided for in Plan Section 8(d), by will or by the laws of
descent and distribution, and awards may be realized during the
lifetime of the Participant only by the Participant or by his
guardian or legal representative.
(d) The section and subsection heading are contained herein for
convenience only and shall not affect the construction hereof.
(e) A Participant's rights to Performance Shares and other Plan benefits
represent rights to merely an unfunded and unsecured promise of a
future payment of money or property. A Participant shall look only
to the Company for the payment of Performance Shares and other Plan
benefits and such shares and benefits shall, until paid, be subject
to the claims of Company creditors. A Participant's rights under the
Plan shall be only that of an unsecured general creditor of the
Company.
IN WITNESS WHEREOF, Southwest Gas Corporation has caused this Plan to be
executed this 13th day of May, 1994.
SOUTHWEST GAS CORPORATION
By /s/ MICHAEL O. MAFFIE
______________________________________
Its President/Chief Executive Officer
______________________________________