WARNER-LAMBERT
COMPANY
***
Incentive Compensation Plan
As Amended To September 27, 1994
WARNER-LAMBERT COMPANY
INCENTIVE COMPENSATION PLAN
_________
ARTICLE I
PURPOSE OF PLAN
Section 1.1. Warner-Lambert Company has prepared this
Plan in order to compensate and reward its Officers and key
Employees in managerial and other important positions for
their share in the growth and success of the Company and in
order to retain and attract persons of competence. The Plan
provides a means of sharing, in addition to salaries,
certain incentive compensation dependent on profits realized
by the Company.
ARTICLE II
DEFINITIONS
Section 2.1. For the purposes of the Plan, unless the
context otherwise indicates, the following definitions shall
be applicable:
(a) "Beneficiary" shall mean the person who has
been so designated by a Participant, on a form and in a
manner acceptable to the Committee or, if no person has
been so designated by a Participant or if a Participant
is not survived by the person so designated,
"Beneficiary" shall mean the estate of the Participant.
(b) "Board of Directors" or "Board" shall mean
the Board of Directors or the Executive Committee of
the Company.
(c) "Committee" shall mean the committee
appointed to administer the Plan, as provided in
Article X, as such committee may from time to time be
constituted.
(d) "Company" shall mean Warner-Lambert Company.
(e) "Deferred Bonus Account" shall mean the
account established in accordance with Section 4.4 of
this Plan.
(f) "Deferred Bonus Portion" shall mean the
amount of the Reserve allocated to a Participant which
is deferred in accordance with Section 4.3 of this
Plan.
(g) "Employee" shall mean an employee of the
Company or of a subsidiary of the Company.
(h) "Fiscal year" shall mean the calendar year or
such other fiscal year as may be established from time
to time by the Company.
(i) "Incentive Compensation Net Income" shall
mean the amount determined under Section 3.2 of this
Plan.
(j) "Incentive Compensation Reserve" shall mean
the appropriation provided for in Section 3.1 of this
Plan.
(k) "Officer" shall mean an officer of the
Company or of a subsidiary of the Company.
(l) "Participant" shall mean an Officer or
Employee (i) to whom an amount of additional incentive
compensation has been allocated under the Plan for any
Fiscal year in accordance with Section 3.4 of this
Plan, (ii) whose Deferred Bonus Portions or balance in
his Deferred Bonus Account to which he is entitled have
not been wholly distributed, or (iii) to whom an amount
of additional incentive compensation previously
allocated under the Plan remains subject to
restrictions, conditions or limitations imposed by the
Committee.
(m) "Plan" shall mean the Incentive Compensation
Plan as set forth herein and in predecessor documents,
and as amended from time to time.
(n) "Reserve" shall mean the Incentive
Compensation Reserve provided for in Section 3.1 of
this Plan.
(o) The use of the singular shall also include
within its meaning the plural and vice versa. The use
of masculine shall include feminine.
ARTICLE III
DETERMINATION AND MAINTENANCE OF INCENTIVE COMPENSATION
RESERVE; DETERMINATION OF PARTICIPANTS
Section 3.1. INCENTIVE COMPENSATION RESERVE.
Beginning with the Fiscal year commencing January 1, 1959,
there shall be established and maintained an Incentive
Compensation Reserve. The Board of Directors may in the
year 1960 and annually thereafter appropriate as additional
incentive compensation for the preceding year an amount up
to but not in excess of the Incentive Compensation Net
Income of the preceding Fiscal year as the Board of
Directors, in its discretion, shall determine. The amount
so appropriated shall be credited to the Reserve.
Section 3.2. DEFINITION OF INCENTIVE COMPENSATION NET
INCOME. The term "Incentive Compensation Net Income" shall
consist of an amount equal to four percent (4%) of the
amount by which the net profit shall exceed six percent (6%)
of the capital actually employed in carrying on the business
of the Company (as such capital shall be determined from
time to time by the Board of Directors, including in such
determination an appropriate amount for goodwill); provided,
however, that no such additional incentive compensation
shall be paid for any Fiscal year of the Company during
which the amount which would otherwise be available for such
purposes shall be less than $80,000, or for any year in
which no cash dividend is paid on the common stock of the
Company.
Said net profit shall be the net profit of the Company
and its subsidiaries computed on a consolidated basis
determined in accordance with generally accepted accounting
principles, provided that, in any event, in making such
determination, the following provisions of this Section
shall govern:
(a) The net profit shall be determined before any
deduction for federal or equivalent foreign taxes based
on income and before any deduction in respect of or
provision for appropriations or distributions made or
to be made under this Plan.
(b) In determining net profit there shall be
deducted an amount equal to dividends and interest
accruing during such year on any stock or other
securities of the Company which are senior to common
stock of the Company, or on any stock or other
securities of a subsidiary not held by the Company or a
subsidiary, which were outstanding during each year.
(c) There shall be excluded from such net profit
extraordinary or unusual or infrequently occurring
items of income and expense which, individually or in
the aggregate, are material in amount.
Section 3.3. PROCEDURE FOR DETERMINATION OF INCENTIVE
COMPENSATION NET INCOME AND AMOUNT OF ANNUAL APPROPRIATION
TO RESERVE. (a) As soon as feasible after the close of the
Fiscal year 1959, and the close of each Fiscal year
thereafter, the fiscal officers of the Company shall
determine the amount of the Incentive Compensation Net
Income for the preceding Fiscal year in accordance with the
provisions of Section 3.2 hereof, and shall report such
determination to the Board of Directors, to the Committee,
and to the independent public accountants of the Company.
(b) The independent public accountants of the Company
shall review such determination and report to the Committee
and to the Board of Directors their opinion thereof and any
corrections which they deem proper. The Committee upon the
receipt of such determination and report shall recommend to
the Board of Directors the amount of the annual
appropriation to be made by the Company to the Reserve,
which shall not exceed the maximum amount authorized by the
provisions of Section 3.1 hereof, as additional incentive
compensation for the preceding year.
(c) Such reports of the fiscal officers of the Company
and of the independent public accountants, and such
determination and recommendations of the Committee, shall be
reviewed by and subject to the approval of the Board of
Directors, which shall authorize the appropriation to be
made by the Company to the Reserve as additional incentive
compensation for the preceding year as provided in Section
3.1, within the maximum limit therein provided.
Section 3.4. DETERMINATION OF PARTICIPANTS AND AMOUNT
OF ALLOCATIONS. The Committee shall each year, after
consultation with management, determine the Officers and key
Employees who shall be entitled to participate under the
Plan for the preceding year, and the amount to be allocated
to each such person as additional incentive compensation for
such year, and the restrictions, conditions or limitations,
if any, which are to be imposed upon all or any part of any
amounts allocated to any or all Participants under the Plan,
which determination shall be reviewed by and subject to the
approval of the Board of Directors. The total compensation
to each Participant, including salary, additional incentive
compensation payable pursuant to the Plan, retirement and
all other benefits, shall not, in the opinion of the
Committee and of the Board of Directors, be in excess of the
fair and reasonable compensation for the services of such
Participant. All determinations, by the Committee and the
Board, of Incentive Compensation Net Income for any year, of
the amounts to be appropriated annually to the Reserve, the
determination of the persons to participate under the Plan,
and the amounts to be allocated to each, shall be final and
conclusive and binding upon all interested parties. No
director shall vote on his own participation in the Plan.
If all of the Reserve for a Fiscal year shall not be
allocated as additional incentive compensation, the excess
shall be credited to the earnings of such Fiscal year.
ARTICLE IV
CURRENT CASH PAYMENTS; ELIGIBILITY FOR DEFERRAL OF BONUS;
DEFERRED BONUS ELECTION; DEFERRED BONUS ACCOUNT
Section 4.1. CURRENT CASH PAYMENTS. Except as
provided in Section 4.3, the amount of the Reserve allocated
to a Participant for any Fiscal year shall be paid, in cash,
to such Participant as soon as practicable in the calendar
year in which such amount is allocated to the Participant,
on a date fixed by the Committee.
Section 4.2. ELIGIBILITY FOR DEFERRAL OF BONUS.
Commencing with Reserves allocated for Fiscal years after
1984, the Committee shall determine the Officers and
Employees who shall be eligible to elect deferral, in
accordance with the provisions of Section 4.3. The
Committee may change such eligibility from time to time in
its sole discretion.
Notwithstanding the foregoing provisions of this
Section 4.2, a Participant who has satisfied the
requirements to elect deferral with respect to allocations
made for Fiscal years prior to 1984 in accordance with
Section 2.5 of the Plan, As Amended To September 27, 1983,
shall continue to be eligible to elect deferral.
Section 4.3. DEFERRED BONUS ELECTION. An Officer or
Employee who is eligible for deferral in accordance with
Section 4.2 hereof may each year elect to defer payment of
all or a portion of the Reserve which may be allocated to
him with respect to such Fiscal year, provided that the
election is made on or before December 31 of the year with
respect to which such allocation is made. The amount so
deferred shall be referred to as the Deferred Bonus Portion.
Except as provided in Article XI, an election to defer
payment of any portion of the Reserve allocated to a
Participant for a particular year shall become irrevocable
on the last day of the year on which such election may be
made.
Section 4.4. DEFERRED BONUS ACCOUNT. There shall be
established, in the name of each Participant who has made
the election described in Section 4.3, a Deferred Bonus
Account. As of January 1 of the year immediately following
the year with respect to which the Deferred Bonus Portion
relates, each Participant's Deferred Bonus Account shall be
credited with the amount of the Deferred Bonus Portion.
Payment of amounts credited to a Participant's Deferred
Bonus Account shall be made in the manner and at the time
prescribed in Section 6.1.
ARTICLE V
INVESTMENT OF AND RETURN ON DEFERRED BONUS PORTION
Section 5.1. USE OF DEFERRED BONUS ACCOUNTS BY
COMPANY. The Company shall not be required to segregate the
funds required for the establishment of a Participant's
Deferred Bonus Account but may utilize such funds for such
purposes as it deems appropriate, including working capital.
Section 5.2. ADJUSTMENT TO DEFERRED BONUS ACCOUNTS.
Deferred Bonus Accounts shall be adjusted and increased each
year, as if interest was credited thereon, at the average
prime rate (as determined by the Committee) for the year
plus 4% which shall be credited to each Participant's
Deferred Bonus Account as of December 31 in each year, or as
of such other date during the year as shall be determined by
the Committee, and such adjustment shall thereafter become a
part of the Participant's Deferred Bonus Account. The rate
of adjustment to be credited to Participants' Deferred Bonus
Accounts shall be subject to annual review by the Committee
which may, in its sole discretion, change such rate as to
succeeding periods. Upon the occurrence of a Change in
Control (as hereinafter defined), the formula for
determining the rate of adjustment to be credited to
Deferred Bonus Accounts of Participants in all future years
may not be reduced below the formula in effect at the Change
in Control. For purposes hereof, a Change in Control shall
be deemed to have occurred if (i) any person (as such term
is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Act")), is or becomes
the beneficial owner (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities, (ii) the stockholders
of the Company approve a merger, consolidation, sale or
disposition of all or substantially all of the Company's
assets or plan of liquidation, or (iii) the composition of
the Board of Directors of Warner-Lambert Company (for
purposes of this paragraph, the "Board") at any time during
any consecutive twenty-four (24) month period changes such
that the Continuity Directors (as hereinafter defined) cease
for any reason to constitute at least fifty-one percent
(51%) of the Board. For purposes of the foregoing clause
(iii), "Continuity Directors" means those members of the
Board who either (a) were directors at the beginning of such
consecutive twenty-four (24) month period, or (b)(1) filled
a vacancy during such twenty-four (24) month period created
by reason of (x) death, (y) a medically determinable
physical or mental impairment which renders the director
substantially unable to function as a director or (z)
retirement at the last mandatory retirement age in effect
for at least two (2) years, and (2) were elected, nominated
or voted for by at least fifty-one percent (51%) of the
current directors who were also directors at the
commencement of such twenty-four (24) month period.
ARTICLE VI
PAYMENT OF DEFERRED BONUS ACCOUNTS
Section 6.1. DISTRIBUTIONS OUT OF DEFERRED BONUS
ACCOUNTS. Subject to the provisions of Section 7.1 hereof,
distributions in respect of the Deferred Bonus Account of
any Participant shall, unless the Committee otherwise
determines, become payable in full to such Participant or to
his Beneficiary, as the case may be, in cash, annually, over
a period of not less than three nor more than fifteen years,
as determined by the Committee, upon the happening of any of
the events described in this Section. The first payment
shall be made within fifteen months after the happening of
any such event. The amount of each distribution shall be
the amount obtained by multiplying the balance in the
Participant's Deferred Bonus Account by a fraction, the
numerator of which is 1 and the denominator of which is the
number of years in which distributions remain to be made
(including the current distribution).
The Participant's Deferred Bonus Account shall be
charged with the amount of each distribution.
The events are as follows:
(a) TERMINATION OF PARTICIPANT'S EMPLOYMENT WITH
THE COMPANY OR A SUBSIDIARY. Termination of a
Participant's employment provided that a leave of
absence approved by the Company shall not constitute a
termination of service. In the event of a
Participant's death, the Deferred Bonus Account shall
be distributed to the Participant's Beneficiary.
(b) TOTAL AND PERMANENT DISABILITY. Such
disability shall be deemed to have occurred only when
certified by a physician appointed by the Company or by
a physician acceptable to the Company. In the event of
the cessation of such disability and the return of such
Participant to work for the Company, distribution in
respect of such part, if any, of such balance as shall
remain to his credit shall be deferred and shall be
made only to such extent and at such time as distri-
bution would otherwise be made in accordance with the
Plan.
Section 6.2. WITHHOLDING OF TAXES. There shall be
deducted from all payments under the Plan any taxes or other
amounts required by any government to be withheld from any
such payments.
Section 6.3. ACCELERATED DISTRIBUTIONS FROM DEFERRED
BONUS ACCOUNTS. Notwithstanding any other provision of the
Plan, upon the occurrence of a Change in Control, the
provisions of this Section 6.3 shall govern all
distributions from the Plan to Participants. Upon the first
to occur after a Change in Control of the Participant's
termination of service with the Company or total and
permanent disability, the Participant shall promptly receive
a lump sum payment, in cash, of the balance in his Deferred
Bonus Account, provided, however, if (x) a Participant was
eligible for bonus deferral under Section 4.2 hereof on
September 27, 1994, and he or she consented in writing to
the provisions described in the following sentence prior to
November 1, 1994, or (y) a Participant became eligible for
bonus deferral after September 27, 1994, then the provisions
described in the following sentence shall apply in lieu of
this sentence. Upon the first to occur within 3 years after
a Change in Control of a Participant's termination of
employment with the Company or the Participant's total and
permanent disability, he or she may, within 30 days
thereafter, designate a distribution schedule for their
Deferred Bonus Account which schedule may provide for a lump
sum payment or installment payments over a period of up to
15 years, provided, however, that no payment shall be made
until the end of the severance period (for example, if the
Participant is entitled to 3 years' severance pay, deferred
bonus payments may not begin until 3 years after termination
even if such Participant receives the severance pay in a
lump sum at termination). If a Participant to whom the
preceding sentence is applicable fails to designate a
distribution schedule in accordance with such sentence, then
the Deferred Bonus Account shall be distributed in a lump
sum at the end of the severance period. This Section shall
not apply to Participants with respect to whom an event
described in Section 6.1 occurred prior to the Change in
Control.
ARTICLE VII
CONTINGENCIES RESULTING IN REDUCTION OF DEFERRED BONUS
ACCOUNTS
Section 7.1. Notwithstanding any of the provisions
hereinabove set forth (except Section 6.3), distribution in
respect of the balance in the Deferred Bonus Account of any
Participant shall be subject to the following conditions:
(a) REDUCTION OF DEFERRED BONUS ACCOUNTS ON
CERTAIN TERMINATIONS OF EMPLOYMENT. If a Participant
shall cease to be an Employee within a period of three
years following the close of a Fiscal year with respect
to which an allocation shall have been made to him, the
balance in his Deferred Bonus Account and the Company's
obligation in respect thereof shall be reduced as
follows: for the third Fiscal year preceding the year
in which he shall cease to be an Employee the balance
shall be reduced by the sum of 5% of the amount
credited to his Deferred Bonus Account with respect to
that year and all adjustments allocable thereto; for
the second Fiscal year preceding such termination of
employment the balance shall be reduced by the sum of
10% of the amount credited to his Deferred Bonus
Account with respect to that year and all adjustments
allocable thereto; and for the Fiscal year immediately
preceding such termination of employment the balance
shall be reduced by the sum of 15% of the amount
credited to his Deferred Bonus Account with respect to
that year and all adjustments allocable thereto. The
amount by which any balance in a Deferred Bonus Account
shall be reduced shall be forfeited by the Participant,
and the Company's obligation in respect thereto shall
be canceled. No such reduction in a balance in a
Deferred Bonus Account, or the cancellation of the
Company's obligation in respect thereto, shall be made,
however, where termination of employment shall have
resulted from death, disability or retirement under a
retirement plan of the Company or a subsidiary, or
shall occur under circumstances deemed by the Committee
in its sole discretion not to be contrary to the
interests of the Company.
(b) SERVICES TO BE RENDERED AFTER TERMINATION OF
EMPLOYMENT. Each Participant who has a balance in a
Deferred Bonus Account shall, after he ceased to be an
Employee, make himself available for such consultative
and advisory services as the Company may reasonably
request taking fairly into consideration the age,
health, residence, and individual circumstances of the
Participant and the total amount of his allocation. If
such Participant shall unreasonably refuse to render
such services, the Company's obligation to make further
payments in respect of the balance in his Deferred
Bonus Account shall forthwith terminate. Such
Participant shall have no obligation to render any
services pursuant to this Plan after he shall cease to
be an Employee except as may be required by the Company
under this subparagraph, and the death or disability of
such Participant or the failure of the Company to call
upon him for rendering of the services called for under
this subparagraph shall not affect in any way the right
of such Participant or his Beneficiary, as the case may
be, to receive distributions with respect to the unpaid
balance in his Deferred Bonus Account, it being the
intent and purpose of this subparagraph that the
obligation of the Participant shall be to use his best
efforts to render such consultative and advisory
services, if any, as the Company may reasonably call
upon him to render during each Fiscal year in which
distribution in respect of the balance in his Deferred
Bonus Account shall have been made or shall be due to
him.
(c) ALLOCATIONS LOST TO BE RETAINED BY COMPANY.
Any amount which a Participant shall not be entitled to
receive by virtue of the provisions of paragraphs (a)
and (b) of this Section shall be retained by the
Company free of all claim or restrictions and the
appropriate amount eliminated from the Participant's
Deferred Bonus Account and the Reserve.
(d) In the event of the occurrence of a Change in
Control, the foregoing provisions of this Section 7
shall cease to apply to Participants.
ARTICLE VIII
SCOPE OF PLAN
Section 8.1. TO WHOM APPLICABLE. This Plan shall
apply to such Officers and key Employees as may be selected
by or under the authority of the Committee after
consultation with the management of the Company.
Section 8.2. NO PROHIBITION AGAINST OTHER PLANS.
Nothing in this Plan shall be construed as preventing the
Company or any of its subsidiaries from establishing sales
commission plans or any other or different plans providing
for incentive compensation for employees.
ARTICLE IX
GENERAL CONDITIONS; MISCELLANEOUS PROVISIONS
Section 9.1. PLAN AMENDMENTS. The Board of Directors
may from time to time amend, suspend or terminate in whole
or in part or may reinstate any or all of the provisions of
the Plan, except that (a) no amendment, suspension or
termination may, without his consent, apply to the payment
made to any Participant of any Reserve amount allocated to
such participant (deferred or otherwise), or with respect to
the balance in his Deferred Bonus Account, prior to the
effective date of such amendment, suspension or termination,
and (b) no amendment may be made which will increase the
maximum amount which may be appropriated to the Reserve
under the Plan without prior approval of the holders of a
majority of the outstanding shares of the common stock of
the Company. Notwithstanding anything in the preceding
sentence to the contrary, the Committee may adopt any
amendment to the Plan which (a)(i) does not increase Plan
liabilities by an amount in excess of five million dollars
($5,000,000) and does not increase Plan expense by an amount
in excess of five hundred thousand dollars ($500,000) or
(ii) is required by an applicable law, regulation or ruling,
(b) can be undertaken by the Board of Directors under the
terms of the Plan, (c) does not involve a termination or
suspension of the Plan, and (d) does not affect the
limitations contained in this sentence and does not affect
the composition or compensation of the Committee. Without
limiting the generality of the foregoing, the Board of
Directors or the Committee may, subject to the limitations
contained in this Section, amend or rescind any provision of
the Plan so as to change the number of installments or
modify the period of time during which any such installments
shall be paid and the contingencies under which any such
installments shall be paid.
Section 9.2. NON-ASSIGNABILITY OF BENEFITS; LOANS
PROHIBITED. Except as otherwise required by law, it is a
condition of the Plan that no Participant or any person
claiming under or through any Participant shall have any
right to assign, transfer, appropriate, encumber, or
anticipate his interest in the Plan or any payments to be
made thereunder, and no benefits or payments, rights or
interests of a Participant of any kind or nature shall in
any way be subject to any legal process to levy upon,
garnishee or attach the same for payment of any claim
against the Participant or any person claiming under or
through the Participant nor shall any Participant or any
person claiming under or through any Participant have any
right of any kind whatsoever with respect to the Plan or any
interest therein other than the right to receive
distributions under the Plan as and when the same are due
and payable under the terms of the Plan.
No loan shall be made by the Company to any Participant
of any amount allocated to him under the Plan.
Section 9.3. RIGHT TO TERMINATE EMPLOYMENT. The
selection of any Officer or Employee for participation in
the Plan in any year shall not give such Participant any
right to participate in the Plan in any future year or to be
retained in the employ of the Company or any subsidiary, and
the right and power of the Company or any subsidiary to
dismiss or discharge any Participant is specifically
reserved.
Section 9.4. UNCLAIMED BENEFIT. Any benefit hereunder
which is unclaimed, including outstanding checks, may, as
determined by the Committee, be forfeited.
Section 9.5. NO VESTED RIGHTS OF PARTICIPANTS. The
Company's sole obligation to a Participant or any person
claiming under or through any Participant in respect of the
payment of any balance in his Deferred Bonus Account shall
be solely a contractual obligation in accordance with the
terms of this Plan. The Company shall have no further or
other obligation in respect of any amounts described above.
The Deferred Bonus Accounts and the Deferred Bonus Portions
credited thereto shall not be held or set aside in trust.
No Participant or any person claiming under or through him
shall have any vested or other rights in the Reserve, in the
Deferred Bonus Portion or the Deferred Bonus Account in his
name.
No Participant shall have any right with respect to any
allocation, until such allocation or written notice thereof
shall have been delivered to him; nor shall any such
Participant or any person claiming under or through him have
any right or interest in this Plan, or in the Reserve, or in
any allocation hereunder, or in any balance in any Deferred
Bonus Account unless and until all the terms, conditions and
provisions of the Plan that affect such Participant have
been complied with as specified herein and, in such case,
only to the extent provided herein.
Section 9.6. WITHHOLDING OF DISTRIBUTIONS. In the
event that any dispute shall arise as to the person or
persons to whom any distribution shall be made, the Company
may withhold such distribution until such dispute shall have
been determined in accordance with law. All distributions
to Participants and Beneficiaries shall be subject to any
applicable tax, community property or other statutes and
regulations of the United States or of any state having
jurisdiction thereof.
Section 9.7. RELIANCE ON ACCOUNTS. The Board of
Directors and the Committee may rely upon any information
supplied to them by an Officer or by the Company's
independent public accountants in connection with the
administration of the Plan. The determination of the
Company's independent public accountants as to the Incentive
Compensation Net Income of the Company for any year and the
maximum amounts which may be appropriated to the Reserve in
any year and any other computations or matters arising under
the Plan and referred to such independent public accountants
by the Committee or the Board for determination shall be
final, conclusive and binding on the Company and on all
Participants and upon all persons claiming through or under
any Participant.
Section 9.8. LIABILITY. No member of the Board of
Directors or of the Committee shall be liable for any act or
action, whether of commission or omission, taken by any
other member, or by any officer, agent, or employee or by
any investment advisor or financial institution appointed by
the Committee.
Section 9.9. GOVERNING LAW. This Plan shall be
governed by the law of the State of New York (regardless of
the law that might otherwise govern under applicable New
York principles of conflicts of laws).
ARTICLE X
ADMINISTRATION OF THE PLAN; COMMITTEE
Section 10.1. APPOINTMENTS OF COMMITTEE. The Plan
shall be administered by a Committee of not less than three
members to be appointed by the Board of Directors from among
its own members, none of whom shall be a present Officer or
Employee. No member of the Committee shall be eligible to
participate in the Plan or in any award of incentive
compensation allocated under the Plan after the date he
becomes a member of the Committee. The membership of the
Committee may be reduced, changed or increased from time to
time in the absolute discretion of the Board of Directors.
Section 10.2. ORGANIZATION OF COMMITTEE. The
Committee shall select a Chairman from among its members and
designate a Secretary, who need not be a member of the
Committee and who may be a Participant under the Plan. The
Secretary shall keep all records of meetings of the
Committee and of any actions taken by the Committee. A
majority of the Committee shall constitute a quorum and the
decision of a majority of the members of the Committee
present at any meeting at which a quorum is present,
expressed from time to time by a vote at a meeting
(including a meeting held by telephone conference call or in
which one or more members of the Committee participate by
telephone), or the decision of a majority of the members
expressed in writing without a meeting, shall govern and
control the exercise of the authority of the Committee. The
Committee shall meet at such time and place as the Chairman
shall designate. The Committee shall serve without
compensation, except that they shall be entitled to the
usual attendance fees and disbursements in connection with
attending any meeting.
Section 10.3. POWERS AND DUTIES OF COMMITTEE. The
Committee shall have full discretionary power to construe
and interpret this Plan, to modify the rate of adjustment to
be paid on the amounts in the Deferred Bonus Accounts on a
prospective basis, to determine any and all questions
arising under the Plan, including the right to remedy
possible ambiguities, inconsistencies and omissions, and to
establish and amend rules and regulations for its
administration. Similarly, the determination of the
happening of any of the contingencies mentioned in Article
VII resulting in the loss or reduction of benefits therein
provided, the determination of those who may participate in
additional incentive compensation under the Plan, the amount
of individual allocation to such Participants, and whether
distributions to any Participants or their Beneficiaries
should be made otherwise than in installments of from three
to fifteen years provided for in Section 6.1, shall rest in
the absolute discretion of the Committee subject to the
review of the Board as herein provided (and no Participant
or Beneficiary shall have the right to require any
distribution otherwise than in accordance with said Section
6.1). The Committee shall make an initial determination of
the amount of the Reserve to be allocated to Participants
and the restrictions, conditions or limitations upon the
payment of all or any part of any amounts allocated to a
Participant under the Plan it considers appropriate at the
time such amount is allocated.
All such determinations, constructions, interpreta-
tions, rules and regulations made pursuant to this Section
shall be conclusive and binding upon all Participants and on
all persons claiming under or through any Participant.
ARTICLE XI
REVOCATION OF ELECTION TO DEFER PAYMENT
FOR FINANCIAL HARDSHIP
Section 11.1. The Committee may, in its sole
discretion, alter or revoke an election made by a
Participant to defer payment of any amount of the Reserve
allocated to such Participant, on a clear showing of
financial hardship suffered or to be suffered by such
Participant.
ARTICLE XII
CONTINGENT ALLOTMENT RESERVE ACCOUNT
Section 12.1. A Participant who had a Contingent
Allotment Reserve Account under the Plan as in effect before
December 31, 1976 shall continue to be governed by the terms
and conditions of Article XII of the Plan, As Amended To
September 27, 1983, with respect to such Contingent
Allotment Reserve Account.
ARTICLE XIII
APPROVAL; EFFECTIVE DATE
Section 13.1. This document restates the Plan in its
entirety, as adopted by the stockholders of the Company at
the Annual Meeting of Stockholders of the Company on May 12,
1959, and as amended by all amendments to the Plan since
that date.
* * *