Exhibit 10(iii)(d)
Amended and restated as of December 23, 1996
THE HARTFORD STEAM BOILER INSPECTION
AND INSURANCE COMPANY
1985 STOCK OPTION PLAN
ARTICLE I - PLAN ADMINISTRATION AND ELIGIBILITY
1.1 Purpose
The purpose of the 1985 Stock Option Plan is to attract and retain
persons of ability as employees of the Company and its Subsidiaries and
to motivate such employees to exert their best efforts to contribute to
the long-term growth of the Company by encouraging ownership in the
Company. The Plan is further designed to promote a closer identity of
interest between key employees and the Company's stockholders. The Plan
has been amended and restated, effective January 1, 1987, to provide
for the payment of a Related Tax Benefit upon the exercise of certain
options and for awards of Restricted Stock.
1.2 Definitions
(a) "Appreciation" shall mean the excess of the Fair Market Value
of a share over the option price per share specified in an
option agreement multiplied by the number of shares subject to
the option or portion thereof which is surrendered.
(b) "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.
(c) "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.
(d) "Beneficiary" shall mean the legal representative of the
estate of a deceased Optionee or the person or persons who
shall acquire the right to exercise an option or Stock
Appreciation Right by bequest or inheritance or by reason of
the death of the Optionee. In the case where a Participant's
right to shares of Restricted Stock vest as provided in
Section 2.6(d) on or prior to his date of death, the term
"Beneficiary" shall also mean the legal representative of the
estate of the Participant or the person or persons who shall
acquire the right to such vested shares of Stock by bequest or
inheritance or by reason of the death of such Participant.
(e) "Board" shall mean the Board of Directors of the Company.
(f) "Change in Control" shall be deemed to have occurred if
the events set forth in any one of the following paragraphs
shall have occurred:
(I) any Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially
owned by such Person any securities acquired directly
from the Company or its affiliates) representing 25%
or more of the combined voting power of the Company's
then outstanding securities, excluding any Person who
becomes such a Beneficial Owner in connection with a
transaction described in clause (i) of paragraph
(III) below; or
(II) the following individuals cease for
any reason to constitute a majority of the number of
directors then serving: individuals who, on December
23, 1996, constitute the Board and any new director
(other than a director whose initial assumption of
office is in connection with an actual or threatened
election contest, including but not limited to a
consent solicitation, relating to the election of
directors of the Company) whose appointment or
election by the Board or nomination for election by
the Company's shareholders was approved or
recommended by a vote of at least two-thirds (2/3) of
the directors then still in office who either were
directors on December 23, 1996 or whose appointment,
election or nomination for election was previously so
approved or recommended; or
(III) there is consummated a merger or
consolidation of the Company or any direct or
indirect subsidiary of the Company with any other
corporation, other than (i) a merger or consolidation
which would result in the voting securities of the
Company outstanding immediately prior to such merger
or consolidation continuing to represent (either by
remaining outstanding or by being converted into
voting securities of the surviving entity or any
parent thereof), in combination with the ownership of
any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any
subsidiary of the Company, at least 60% of the
combined voting power of the securities of the
Company or such surviving entity or any parent
thereof outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no Person
is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not
including in the securities Beneficially Owned by
such Person any securities acquired directly from the
Company or its Affiliates) representing 25% or more
of the combined voting power of the Company's then
outstanding securities; or
(IV) the shareholders of the Company approve a plan
of complete liquidation or dissolution of the Company
or there is consummated an agreement for the sale or
disposition by the Company of all or substantially
all of the Company's assets, other than a sale or
disposition by the Company of all or substantially
all of the Company's assets to an entity, at least
60% of the combined voting power of the voting
securities of which are owned by shareholders of the
Company in substantially the same proportions as
their ownership of the Company immediately prior to
such sale.
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record holders of
the common stock of the Company immediately prior to such
transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the
Company immediately following such transaction or series of
transactions.
(g) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(h) "Committee" shall mean the Human Resources Committee of the
Board or any future committee of the Board performing similar
functions.
(i) "Company" shall mean The Hartford Steam Boiler Inspection and
Insurance Company and, except in determining under Section
1.2(f) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its
business and/or assets which assumes this Plan by operation of
law, or otherwise.
(j) "Disability" shall mean any condition which would entitle an
employee of the Company or a Subsidiary to receive benefits
under the Company's Long-Term Disability Plan or any long-term
disability plan maintained by the Subsidiary.
(k) "Exchange Act" shall mean the Securities Act of 1934,
as amended.
(l) "Fair Market Value" shall mean the average of the high and low
prices per share of the Company's Stock as reported by the New
York Stock Exchange Composite Transaction Reporting System
(NYSE) on the date for which the Fair Market Value is being
determined, or if no quotations are available for the
Company's Stock, for the next preceding date for which such a
quotation is available. If shares of Company Stock are not
then listed on the NYSE, Fair Market Value shall be reasonably
determined by the Committee, in its sole discretion.
(m) "Incentive Stock Option" shall mean an option described in
Section 422A of the Code.
(n) "Nonstatutory Stock Option" shall mean an option which does
not qualify as an Incentive Stock Option under Section 422A of
the Code.
(o) "Optionee" shall mean an employee of the Company or one of
its Subsidiaries to whom an option is granted.
(p) "Participant" shall mean an employee of the Company or one of
its Subsidiaries to whom an option is granted or to whom
Restricted Stock is awarded.
(q) "Person" shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not
include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates,
(iii) an underwriter temporarily holding securities pursuant
to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their
ownership of stock of the Company.
(r) "Plan" shall mean The Hartford Steam Boiler Inspection and
Insurance Company 1985 Stock Option Plan, as amended.
(s) "Related Tax Benefit" shall mean the payment to an Optionee,
upon the exercise of a Nonstatutory Stock Option designated by
the Committee as subject to a Related Tax Benefit, of an
amount, computed in accordance with the following formula
where X equals the lower of the percent established by the
Committee at the time of grant of the Related Tax Benefit, or
the highest marginal rate imposed under Section 1 of the Code
for the taxable year in which the exercise occurs:
(i) X percent of the excess of the Fair Market Value of
one share of Stock over the respective option price
per share multiplied by the number of whole and
fractional shares of Stock distributed by the Company
to the Optionee with respect to such an exercised
option or portion of such an option, the Fair Market
Value to be determined as of the date of such
distribution; divided by
(ii) One (1) minus X percent.
(t) "Restricted Stock" shall mean one or more shares of Stock
awarded to an eligible employee under Section 2.6 of the Plan
and subject to the terms and conditions set forth in Section
2.6.
(u) "Retirement" shall mean the termination of employment under
circumstances which entitle an employee to receive retirement
benefits under the Company's Employees' Retirement Plan or any
Subsidiary's retirement plan.
(v) "Stock" shall mean the Common Stock of the Company.
(w) "Stock Appreciation Right" shall mean a right to surrender to
the Company all or any portion of an option and, as determined
by the Committee, to receive in exchange therefor cash or
whole shares of Stock (valued at current Fair Market Value) or
a combination thereof having an aggregate value equal to the
excess of the current Fair Market Value of one (1) share over
the option price of one (1) share specified in such option
grant multiplied by the number of shares subject to such
option or the portion thereof which is surrendered.
(x) "Subsidiary" shall mean any corporation of which at least 50%
of the voting stock is owned by the Company and/or one or more
of its other Subsidiaries.
1.3 Administration
The Plan shall be administered by the Committee as defined herein. No
member of the Committee shall be eligible to be granted an option under
the Plan. Each member of the Committee shall be a "disinterested
director" within the meaning of Rule 16b-3 of the General Rules and
Regulations promulgated under the Exchange Act and an "outside
director" within the meaning of Section 162(m) of the Code. The
Committee shall have the responsibility of interpreting the Plan and
establishing and amending such rules and regulations necessary or
appropriate for the administration of the Plan or for the continued
qualification of any Incentive Stock Options granted hereunder. In
addition, the Committee shall have the authority to designate the
employees who shall be granted options and awarded Restricted Stock
under the Plan and the amount and nature of the options, related rights
and awards to be granted to each such employee. All interpretations of
the Plan or of any options, related rights or awards issued under it
made by the Committee or any subcommittee shall be final and binding
upon all persons having an interest in the Plan. No member of the
Committee shall be liable for any action or determination taken or made
in good faith with respect to this Plan or any option granted
hereunder.
1.4 Eligibility
Executive and middle management employees of the Company or its
Subsidiaries shall be eligible to receive grants of stock options and
awards of Restricted Stock under the Plan.
1.5 Stock Subject to the Plan
(a) The maximum number of shares which may be optioned or awarded
under the Plan shall be 2,600,000 shares of Stock. Preferred
Stock may be used in lieu of grants of Stock under the Plan
subject to further authorization of the Board of the Company.
The limitation on the number of shares which may be optioned
or awarded under the Plan shall be subject to adjustment under
Section 3.2 of this Plan.
(b) If any outstanding option under the Plan for any reason
expires, lapses or is terminated, the shares of the Stock
which were subject to such option shall be restored to the
total number of shares available for grant pursuant to the
Plan. Shares as to which there is a surrender in whole or in
part of an option upon the exercise of a Stock Appreciation
Right shall not again be available for grant pursuant to the
Plan. Stock delivered upon the exercise of a Stock
Appreciation Right shall not be charged against the number of
shares of Stock available for the grant of options.
(c) Upon the exercise of an option or a Stock Appreciation Right, or
payment of a Restricted Stock award, the Company may distribute
newly issued shares or shares previously repurchased on behalf of
the Company through a broker or other independent agent
designated by the Committee. Such repurchases shall be subject to
such rules and procedures as the Committee may establish
hereunder and shall be consistent with such conditions as may be
prescribed from time to time by law or by the Securities and
Exchange Commission ("SEC") in any rule or regulation or in any
exemptive order or no-action letter issued by the SEC to the
Company or the broker with respect to the making of such purchase
or otherwise.
ARTICLE II - OPTIONS, RELATED TAX BENEFITS, STOCK APPRECIATION
RIGHTS AND RESTRICTED STOCK
2.1 Granting of Options
The Committee may grant Incentive Stock Options (ISOs), Nonstatutory
Stock Options or any combination thereof, provided that the aggregate
Fair Market Value (determined at the time the option is granted) of the
shares of Stock with respect to which ISOs are exercisable for the
first time by an employee during any calendar year (under this Plan and
any other option plan of the Company or its Subsidiaries) shall not
exceed $100,000. No such maximum limitation shall apply to Nonstatutory
Stock Options.
2.2 Terms and Conditions of Options
Each option granted under the Plan shall be authorized by the Committee
and shall be evidenced by a written agreement, in a form approved by
the Committee, containing the following terms and conditions and such
other terms and conditions as the Committee may deem appropriate:
(a) Option Term - Each option agreement shall specify the term for
which the option thereunder is granted and shall provide that the
option shall expire at the end of such term. In no event shall
any option be exercisable any earlier than one year after the
date of such grant. The Committee shall have authority to grant
options exercisable in cumulative or non-cumulative installments.
No option shall be exercisable after the expiration of ten years
from the date upon which such option is granted. Notwithstanding
anything to the contrary contained herein, in the event of a
Change in Control, all outstanding options shall immediately
become exercisable.
(b) Option Price - The option price per share shall be determined by
the Committee at the time an option is granted, and shall not be
less than the Fair Market Value of one share of Stock on the date
the option is granted.
(c) Exercise of Option -
(1) Options may be exercised only by written notice to the
Company accompanied by the proper amount of payment for
the shares.
(2) No ISO granted prior to January 1, 1987 shall be
exercised while there is outstanding any other ISO
previously granted to the employee, pursuant to the
Plan or any other plan of the Company or any Subsidiary
(or a predecessor of any such corporations) to purchase
shares of Stock or stock of any Subsidiary (or any
predecessor of any such corporations). For purposes of
this section, an ISO shall be treated as outstanding
until such option is exercised in full or expires by
reason of the lapse of time. An ISO shall be considered
exercised in full when either the underlying option or
the related Stock Appreciation Right is exercised.
(3) The Committee may postpone any exercise of an option or
a Stock Appreciation Right or the delivery of Stock
following the lapse of certain restrictions with
respect to awards of Restricted Stock for such time as
the Committee in its discretion may deem necessary, in
order to permit the Company with reasonable diligence
(i) to effect or maintain registration of the Plan or
the shares issuable upon the exercise of the option or
the Stock Appreciation Right or the lapse of certain
restrictions respecting awards of Restricted Stock
under the Securities Act of 1933, as amended, or the
securities laws of any applicable jurisdiction, or (ii)
to determine that such shares and Plan are exempt from
such registration; the Company shall not be obligated
by virtue of any option agreement or any provision of
the Plan to recognize the exercise of an option or the
exercise of a Stock Appreciation Right or the lapse of
certain restrictions respecting awards of Restricted
Stock to sell or issue shares in violation of said Act
or of the law of the government having jurisdiction
thereof. Any such postponement shall not extend the
term of an option; neither the Company nor its
directors or officers shall have any obligation or
liability to the Optionee of an option or Stock
Appreciation Right, or to the Optionee's Beneficiary
with respect to any shares as to which the option or
Stock Appreciation Right shall lapse because of such
postponement.
(4) To the extent an option is not exercised for the total
number of shares with respect to which such options
become exercisable, the number of unexercised shares
shall accumulate and the option shall be exercisable,
to such extent, at any time thereafter, but in no event
later than ten years from the date the option was
granted or after the expiration of such shorter period
(if any) which the Committee may have established with
respect to such option pursuant to Subsection (a) of
this Section 2.2.
(d) Payment of Purchase Upon Exercise - Payment for the shares as to
which an option is exercised shall be made in one of the
following ways:
(1) payment in cash of the full option price of the shares
purchased;
(2) if permitted by the Committee, the delivery of Stock of
the Company held by the purchaser for at least six
months accompanied by the certificates therefor
registered in the name of such purchaser and properly
endorsed for transfer, having a Fair Market Value (as
of the date of exercise) equal to the full option
price; or
(3) if permitted by the Committee, a combination of cash
and Stock (as described in (2) above) such that the sum
of the amount of cash and the Fair Market Value of the
Stock (as of the date of exercise) is equal to the full
option price.
(e) Nontransferability - No option or Stock Appreciation Right
granted under the Plan shall be transferable other than by will
or by the laws of descent and distribution subject to Section 2.5
hereunder. During the lifetime of an Optionee, an option or Stock
Appreciation Right shall be exercisable only by such Optionee.
(f) Laws and Regulations - The Committee shall have the right to
condition any issuance of shares to any Optionee or Participant
hereunder on such Optionee's or Participant's undertaking in
writing to comply with such restrictions on the subsequent
disposition of such shares as the Committee shall deem necessary
or advisable as a result of any applicable law or regulation. In
the case of Stock issued or cash paid upon exercise of options or
associated Stock Appreciation Rights, or payment of a Related Tax
Benefit or the lapse of restrictions with respect to Restricted
Stock awarded to a Participant under the Plan, the Optionee,
Participant or other person receiving such Stock or cash shall be
required to pay to the Company or a Subsidiary the amount of any
taxes which the Company or Subsidiary is required to withhold
with respect to such Stock or cash. The Company or a subsidiary
may, in its sole discretion, permit an optionee or participant or
other person receiving such Stock or cash to satisfy any federal,
state or local (if any) tax withholding requirements, in whole or
in part by (i) delivering to the Company or subsidiary shares of
Stock held by such optionee, participant or other person having a
Fair Market Value equal to the amount of the tax or (ii)
directing the Company or subsidiary to retain Stock otherwise
issuable to the optionee, participant or other person under the
Plan having a Fair Market Value equal to the amount of the tax.
If Stock is used to satisfy tax withholding, such stock shall be
valued based on the Fair Market Value when the tax withholding is
required to be made.
(g) Modification - The Committee shall have authority to modify an
option agreement without the consent of the Optionee, provided
that such modification does not affect the exercise price or
otherwise materially diminish the value of such option agreement
to the Optionee, and provided further, that except in connection
with an amendment to the Plan, the Committee shall not have
authority to make any modification to any particular option
agreement that materially increases the value of the option
agreement to the Optionee.
2.3 Related Tax Benefit
(a) The Committee may, but shall not be required to designate an
option, either at date of grant of a Nonstatutory Stock Option or
thereafter, as being subject to a Related Tax Benefit. A Related
Tax Benefit shall be payable to the Optionee only upon the
exercise of the option with which it is associated and payment
shall be made at the time of such exercise. The conditions and
limitations of a Related Tax Benefit shall be determined by the
Committee and the Committee shall have the authority to amend the
formula set forth in Subsection (s) of Section 1.2 at any time
without the consent of the Optionee.
(b) On and after January 1, 1987, an Optionee may, with respect to
any unexercised Incentive Stock Option, apply to the Committee to
elect to convert, at the discretion of the Committee, such option
to a Nonstatutory Stock Option. The Committee may, but shall not
be required to, approve such conversion to a Nonstatutory Stock
Option. Effective upon approval of such conversion by the
Committee, the option that was an Incentive Stock Option prior to
such conversion shall cease to be an option described in Section
422A of the Code and shall be deemed to be a Nonstatutory Stock
Option. Following the approval of such conversion, the Committee
may, in accordance with the provisions of Section 2.3(a),
designate such Nonstatutory Stock Option as being subject to a
Related Tax Benefit in accordance with the provisions of this
Section 2.3.
(c) A Related Tax Benefit shall be payable in cash or, at the
discretion of the Committee, in Stock or a combination of cash
and Stock such that the sum of the amount of cash, if any, and
the Fair Market Value of the Stock (as of the date of exercise)
is equal to the amount of such Related Tax Benefit. Payment of
any Related Tax Benefit shall be subject to the provisions of
Section 2.2(f) respecting the payment of taxes which the Company
or Subsidiary is required to withhold.
2.4 Stock Appreciation Rights
(a) The Committee may, but shall not be required to, grant a Stock
Appreciation Right to the Optionee either at the time an option
is granted or by amending the option agreement at any time during
the term of such option. A Stock Appreciation Right shall be
exercisable only during the term of the option with which it is
associated. The Stock Appreciation Right shall be an integral
part of the option with which it is associated and shall have no
existence apart therefrom. The conditions and limitations of the
Stock Appreciation Right shall be determined by the Committee and
shall be set forth in the option agreement or amendment thereto.
An amendment granting a Stock Appreciation Right shall not be
deemed to be a grant of a new option for purposes of the Plan.
(b) A Stock Appreciation Right may be exercised by:
(1) filing with the Secretary of the Company a written election,
which election shall be delivered by the Secretary to the
Committee specifying:
(i) the option or portion thereof to be surrendered; and
(ii) the percentage of the Appreciation which the Optionee
desires to receive in cash, if any; and
(2) surrendering such option for cancellation or partial
cancellation, as the case may be, provided, however, that
any election to receive any portion of the Appreciation in
cash shall be of no force or effect unless and until the
Committee shall have consented to such election.
(c) No election to receive any portion of the Appreciation in cash
shall be filed with the Secretary and no Stock Appreciation Right
shall be exercised to receive any cash unless such election and
exercise shall occur during the period (hereinafter referred to
as the "Cash Window Period") beginning on the third business day
following the date of release for publication by the Company of a
regular quarterly or annual statement of sales and earnings and
ending on the twelfth business day following such date. The
Committee may consent to the election of a holder to receive any
portion of the Appreciation in cash at any time after such
election has been made. If such election is consented to, the
Stock Appreciation Right shall be deemed to have been exercised
during the Cash Window Period in which, or next occurring after
which, the Optionee completed all acts required of him under the
preceding paragraphs to exercise the Stock Appreciation Right.
Any Stock Appreciation Right exercised during said Cash Window
Period shall be valued and deemed exercised as of the date during
such Cash Window Period when the average of the high and low
prices for the shares of Stock as reported by the NYSE is the
highest.
2.5 Exercise of Option or Stock Appreciation Right in the Event
of Termination of Employment or Death
(a) Options and associated Stock Appreciation Rights shall terminate
immediately upon the termination of the Optionee's employment
with the Company or a Subsidiary unless the option agreement of
such Optionee provides otherwise. The conditions established by
the Committee in the agreement for exercising options and Stock
Appreciation Rights following termination of employment are
limited by the following restrictions.
(1) If termination of employment is by reason of the
death of the Optionee, no exercise by the Optionee's
Beneficiary may occur more than two years after the
Optionee's death.
(2) If termination of employment is the result of
Disability or Retirement, no exercise by the Optionee
or his Beneficiary may occur more than two years
following such termination of employment.
(3) If termination of employment is for a reason other
than death, Disability, Retirement or "involuntary
termination for cause", no exercise by the Optionee
may occur more than three months following such
termination of employment. As used herein
"involuntary termination for cause" shall mean
termination of employment by reason of the Optionee's
commission of a felony, fraud or willful misconduct
which has resulted, or is likely to result, in
substantial and material damage to the Company or its
Subsidiaries. Whether an involuntary termination is
for "cause" will be determined in the sole discretion
of the Committee.
(b) If the Optionee should die after termination of employment, such
termination being for a reason other than Disability, Retirement
or involuntary termination for cause, but while the option is
still exercisable, the option or associated Stock Appreciation
Right, if any, may be exercised by the Beneficiary of the
Optionee no later than one year from the date of termination of
employment of the Optionee.
(c) Under no circumstances may an option or Stock Appreciation Right
be exercised by an Optionee or Beneficiary after the expiration
of the term specified in the option agreement.
2.6 Awarding of Restricted Stock
(a) The Committee shall from time to time in its absolute discretion
select from among the eligible employees the Participants to whom
awards of Restricted Stock shall be granted and the number of
shares subject to such awards. Each award of Restricted Stock
under the Plan shall be evidenced by an instrument delivered to
the Participant in such form as the Committee shall prescribe
from time to time in accordance with the Plan. The Restricted
Stock subject to such award shall be registered in the name of
the Participant and held in escrow by the Committee during the
Restricted Period (as defined herein).
(b) Upon the award to a Participant of shares of Restricted Stock
pursuant to Section 2.6(a), the Participant shall, subject to
Subsection (c) of this Section 2.6, possess all incidents of
ownership of such shares, including the right to receive
dividends with respect to such shares and to vote such shares.
(c) Shares of Restricted Stock awarded to a Participant may not be
sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or the laws of descent and
distribution, for a period of five years, or such shorter period
as the Committee shall determine, from the date on which the
award is granted (the "Restricted Period"). The Committee may
also impose such other restrictions and conditions on the shares
as it deems appropriate and any attempt to dispose of any such
shares of Restricted Stock in contravention of such restrictions
shall be null and void and without effect. In determining the
Restricted Period of an award, the Committee may provide that the
foregoing restrictions shall lapse with respect to specified
percentages of the awarded shares on successive anniversaries of
the date of such award. In no event shall the Restricted Period
end with respect to awarded shares prior to the satisfaction by
the Participant of any liability arising under Section 2.2(f).
(d) The restrictions described in Section 2.6(c) shall lapse upon the
completion of the Restricted Period with respect to specific
shares of Restricted Stock and the Participant's right to such
shares shall vest on such date or, if earlier, on the date that
the Participant's employment terminates on account of the death,
Disability or Retirement of the Participant. The Company shall
deliver to the Participant, or the Beneficiary of such
Participant, if applicable, within 30 days of the termination of
the Restricted Period, the number of shares of Stock that were
awarded to the Participant as Restricted Stock and with respect
to which the restrictions imposed under Section 2.6(c) have
lapsed, less any stock returned by the Company to satisfy tax
withholding pursuant to Section 2.2(f), if applicable.
(e) Except as provided in Sections 2.6(d) and (f), if the
Participant's continuous employment with the Company or a
Subsidiary shall terminate for any reason prior to the expiration
of the Restricted Period of an award, any shares remaining
subject to restrictions shall thereupon be forfeited by the
Participant and transferred to, and reacquired by, the Company or
a Subsidiary at no cost to the Company or Subsidiary.
(f) The Committee shall have the authority (and the instrument
evidencing an award of Restricted Stock may so provide) to cancel
all or any portion of any outstanding restrictions prior to the
expiration of the Restricted Period with respect to any or all of
the shares of Restricted Stock awarded to an employee hereunder
on such terms and conditions as the Committee may deem
appropriate.
(g) In the event of a Change in Control, all restrictions on any
outstanding shares of Restricted Stock shall lapse as of the date
of such Change in Control.
ARTICLE III - GENERAL PROVISIONS
3.1 Authority
Appropriate officers of the Company designated by the Committee are
authorized to execute and deliver option agreements, and amendments
thereto, in the name of the Company, as directed from time to time by
the Committee.
3.2 Adjustments in the Event of Change in Common Stock of the
Company
In the event of any change in the Stock of the Company by reason of any
stock dividend, stock split, recapitalization, reorganization, merger,
consolidation, split-up, combination, or exchange of shares, or rights
offering to purchase Stock at a price substantially below Fair Market
Value, or of any similar change affecting the Stock, the number and
kind of shares which thereafter may be obtained and sold under the Plan
and the number and kind of shares subject to options in outstanding
option agreements and the purchase price per share thereof and the
number of shares of Restricted Stock awarded pursuant to Section 2.6(a)
with respect to which all restrictions have not lapsed, shall be
appropriately adjusted consistent with such change in such manner as
the Board in its discretion may deem equitable to prevent substantial
dilution or enlargement of the rights granted to, or available for,
Participants in the Plan. Any fractional shares resulting from such
adjustments shall be eliminated. However, without the consent of the
Optionee, no adjustment shall be made in the terms of an ISO which
would disqualify it from treatment under Section 421(a) of the Code or
would be considered a modification, extension or renewal of an option
under Section 425(h) of the Code.
3.3 Rights of Employees
The Plan and any option or award granted under the Plan shall not
confer upon any Optionee or Participant any right with respect to
continuance of employment by the Company or any Subsidiary nor shall
they interfere in any way with the right of the Company or Subsidiary
by which an Optionee or Participant is employed to terminate his
employment at any time. The Company shall not be obligated to issue
Stock pursuant to an option or an award of Restricted Stock for which
the restrictions hereunder have lapsed if such issuance would
constitute a violation of any applicable law. No Optionee shall have
any rights as a stockholder with respect to any shares subject to his
option prior to the date of issuance to such optionee of a certificate
or certificates for such shares. Except as provided herein, no
Participant shall have any rights as a stockholder with respect to any
shares of Restricted Stock awarded to such participant.
3.4 Amendment, Suspension and Discontinuance of the Plan
The Board may from time to time amend, suspend or discontinue the Plan,
provided that the Board may not, without the approval of the holders of
a majority of the outstanding shares entitled to vote, take any of the
following actions unless such actions fall within the provisions of
Section 3.2 herein:
(a) increase the number of shares reserved for options pursuant to
Section 1.5;
(b) alter in any way the class of persons eligible to participate in
the Plan;
(c) permit the granting of any option at an option price less than
that provided under Section 2.2(b) hereof; or
(d) extend the term of the Plan or the term during which any option
may be granted or exercised.
No amendment, suspension or discontinuance of the Plan shall impair an
Optionee's rights under an option previously granted to an Optionee
without the Optionee's consent.
3.5 Governing Law
This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Connecticut.
3.6 Effective Date of the Plan
The Plan as amended and restated shall be effective on January 1, 1987,
subject to the requisite approval of stockholders. No option shall be
granted pursuant to this Plan later than April 15, 1995, but options
granted before such date may extend beyond it in accordance with their
terms and the terms of the Plan.