EXHIBIT 10.18
NINE WEST GROUP INC.
FIRST AMENDED AND RESTATED
1994 LONG-TERM PERFORMANCE PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE.
This is the Nine West Group Inc. First Amended and Restated 1994 Long-
Term Performance Plan (the "Plan"), providing for the grant to certain
designated employees of the Company and certain other persons performing
significant services for the Company of stock-based awards. The purpose of this
Plan is to encourage Participants (as defined below) to acquire Common Stock or
to earn monetary payments based on the value of such Common Stock on a basis
mutually advantageous to Participants and the Company and thus provide an
incentive for continuation of the efforts of Participants for the success of the
Company and for continuity of employment.
SECTION 2. DEFINITIONS.
Whenever used herein, the following terms shall have the respective
meanings set forth below:
(a) "Act" means the Securities Exchange Act of 1934, as amended from
time to time.
(b) "Award" means any Stock Option, Stock Appreciation Right or
Restricted Stock granted under the Plan.
(c) "Award Agreement" means the written agreement evidencing an
Award, which shall be executed by the Company and the
Participant.
(d) "Award Date" means the date as of which an Award is granted,
unless another date is specified in the resolution of the
Committee granting such Award.
(e) "Base Price" means, in the case of an Option or a Stock
Appreciation Right, a price fixed by the Committee at which the
Option or the Stock Appreciation Right may be exercised, which
shall not be less than 100% of the Fair Market Value of a share
of Stock on the date of grant of such Option or Stock
Appreciation Right.
(f) "Board" means the Board of Directors of the Company.
(g) "Change of Control" means the merger or consolidation of the
Company with or into another corporation as the result of which
the Company is not the continuing or surviving corporation; the
sale or other disposition of all or substantially all of the
assets of the Company (including the exchange of such assets for
the securities of another corporation); the acquisition by
another person of 80% or more of the Company's then outstanding
shares of voting stock or the recapitalization, reclassification,
liquidation or dissolution of the Company; or other transaction
involving the Company pursuant to which the Common Stock would be
converted into cash, securities or other property.
(h) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, together with all rules and regulations promulgated
thereunder.
(i) "Committee" means a committee composed of at least two members of
the Board who, for as long as Rule 16b-3 under the Act and/or any
rules promulgated pursuant to Section 162(m) of the Code, or
their equivalent(s), are then in effect and applicable with
respect to the Plan, shall be "disinterested persons," "non-
employee directors" and/or "outside directors," as respectively
applicable, within the meaning of such rule(s) or their
equivalent(s) as then in effect.
(j) "Common Stock" means the common stock, $.01 par value per share,
of the Company.
(k) "Company" means Nine West Group Inc., a Delaware corporation, and
its subsidiaries, if any.
(l) "Disability" means a physical and/or mental condition that
renders a Participant unable to perform the duties of his
position on a full-time basis for a period of one hundred eighty
(180) consecutive business days. Disability shall be deemed to
exist when certified by a physician selected by the Company or
its insurers and acceptable to the Participant or the
Participant's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Participant
will submit to such examinations and tests as such physician
deems necessary to make any such Disability determination.
(m) "Employee" means a salaried employee (including officers and
directors who are also employees) of the Company.
(n) "Fair Market Value" means, when a public market for the Common
Stock exists, the average of the high and low reported sales
prices of Common Stock on the exchange on which such Common Stock
is traded (or such other market as shall constitute the principal
trading market for the Common Stock) on the date for which Fair
Market Value is being determined (or, if there is no such trading
on such date, the last preceding date on which there was such
trading). When no public market for the Common Stock of the
Company exists, Fair Market Value shall be determined by the
Board.
(o) "Immediate Family" means a Participant's children, grandchildren,
parents, the spouse of any such person, a trust for the benefit
of any such person, or a partnership in which such persons are
the only partners.
(p) "Incentive Stock Option" shall have the meaning assigned to such
term in Section 422 of the Code.
(q) "Nonqualified Stock Option" means any Option other than an
Incentive Stock Option.
(r) "Option" means the right to purchase Stock at the Base Price for
a specified period of time. For purposes of the Plan, an Option
may be an Incentive Stock Option within the meaning of Section
422 of the Code, a Nonqualified Stock Option, or any other type
of option.
(s) "Participant" means any Employee or other person performing
significant services for the Company designated by the Committee
to participate in the Plan.
(t) "Period of Restriction" means the period during which a grant of
shares of Restricted Stock is restricted pursuant to Section 11
of the Plan.
(u) "Reporting Person" means a person subject to Section 16 of the
Act.
(v) "Restricted Stock" means Stock granted pursuant to Section 11 of
the Plan, but any shares of such Stock shall cease to be
Restricted Stock when the conditions to and limitations on
transferability under Section 11 have been satisfied or have
expired, respectively.
(w) "Retirement" means termination of employment with eligibility for
normal, early or disability retirement benefits under the terms
of the Company's pension plan, as amended and in effect at the
time of such termination of employment.
(x) "Stock" means the authorized and unissued shares of Common Stock
or reacquired shares of Common Stock held in the Company's
treasury.
(y) "Stock Appreciation Right" or "SAR" means the right to receive a
payment from the Company equal to the excess of the Fair Market
Value of a share of Common Stock at the date of exercise over the
Base Price. In the case of a Stock Appreciation Right which is
granted in conjunction with an Option, the Base Price shall be
the Option exercise price.
(z) "Taxable Event" means an event requiring United States Federal,
state or local tax to be withheld with respect to an Award
hereunder, including but not limited to, the exercise of
Nonqualified Stock Options or SARs, the ending of a Period of
Restriction with respect to Restricted Stock, or the making by a
Participant of an election under Section 83(b) of the Code.
(aa) "Vested" or "Vesting" means, with respect to Options and SARs,
that the Options or SARs shall be exercisable; and with respect
to Restricted Stock, that the Period of Restriction has ended.
(bb) "Window Period" means the third through the twelfth business day
following the release for publication of the Company's quarterly
or annual earnings reports.
SECTION 3. ADMINISTRATION.
The Plan will be administered by the Committee. The Committee is
authorized in its sole discretion to determine the individuals to whom Awards
will be granted, the type and amount of such Awards and the terms (including
expiration dates) of grants; to interpret the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to provide for conditions
and assurance deemed necessary or advisable to protect the interests of the
Company, and to make all other determinations necessary or advisable for the
administration of the Plan to the extent not contrary to the express provisions
of the Plan. The determinations of the Committee shall be made in accordance
with the judgment of its members as to the best interests of the Company and its
stockholders and in accordance with the purpose of the Plan. A majority of
members of the Committee shall constitute a quorum, and all determinations of
the Committee shall be made by a majority of its members. Any determination of
the Committee under the Plan may be made without notice or meeting of the
Committee, by a writing signed by a majority of the committee members.
Determinations, interpretations, or other actions made or taken by the Committee
pursuant to the provisions of the Plan shall be final and binding and conclusive
for all purposes and upon all persons whomsoever.
SECTION 4. SHARES RESERVED; CALCULATION OF SHARE AVAILABILITY.
(a) There is hereby reserved for issuance under the Plan an aggregate
of 6,500,000 shares of Stock, which may be authorized but
unissued or treasury shares.
(b) Calculation of the number of shares remaining available for
issuance under the Plan shall be by those methods permissible
under the Securities and Exchange Commission's interpretations
which result in the greatest number of shares remaining available
for issuance, including any permissible methods less restrictive
than those set forth in the remainder of this paragraph 4(b). As
of the date of adoption of the Plan, these include the following:
Stock underlying outstanding Awards will be counted against the
Plan maximum while such Awards are outstanding. Shares
underlying expired, canceled or forfeited Awards (except
Restricted Stock) may be restored to the Plan maximum. When SARs
are exercised for cash, the number of shares covered by such SARs
may be restored to the Plan maximum. When the exercise price of
Options is paid by delivery or withholding of shares of Common
Stock, the number of shares so delivered may be restored to the
Plan maximum to be available solely for the grants to non-
Reporting Persons. Restricted Stock issued pursuant to the Plan
will be counted against the Plan maximum while outstanding even
while subject to restrictions. Shares of Restricted Stock shall
not be restored to the Plan maximum if such Restricted Stock is
forfeited.
SECTION 5. PARTICIPANTS.
Participants will consist of such employees of the Company and certain
other persons performing significant services for the Company as designated by
the Committee in its sole discretion. Designation as a Participant in any year
shall not require the Committee to designate such person to receive an Award in
any other year or to receive the same type or amount of Award (or on the same
terms) as granted to the Participant in any other year or as granted to any
other Participant in any year. The Committee shall consider such factors as it
deems pertinent in selecting Participants and in determining the type and amount
of their respective Awards. Notwithstanding the foregoing, Performance-Based
Awards (as defined in Section 20) shall be granted only to key employees
selected by the Committee in its sole discretion.
SECTION 6. TYPES OF AWARDS; LIMITATION ON GRANTS.
(a) The following Awards may be granted under the Plan: (i) Incentive
Stock Options, (ii) Nonqualified Stock Options, (iii) Stock
Appreciation Rights or (iv) Restricted Stock, or any combination
thereof, all as described below. Except as specifically limited
herein, the Committee shall have complete discretion in
determining the type and number of Awards to be granted to any
Participant, and the terms and conditions which attach to each
Award, which terms and conditions need not be uniform as between
different Participants. All Awards shall be in writing.
(b) The number of shares with respect to which Awards may be granted
to any Participant pursuant to the Plan over the ten-year term of
the Plan (as defined in Section 17 below), shall not exceed
1,500,000, subject to adjustment as provided in Section 12
hereof.
SECTION 7. AWARD DATE AND AWARD AGREEMENT.
All Awards granted under the Plan shall be granted as of an Award
Date. Promptly after each Award Date, the Company shall notify the Participant
of the grant of the Award, and shall hand deliver or mail to the Participant an
Award Agreement, duly executed by and on behalf of the Company, with the request
that the Participant execute and return the Agreement within 30 days after the
date of mailing or delivery by the Company of the Agreement to the Participant.
The Award Agreement shall set forth the terms of the Award, including without
limitation (to the extent applicable to the particular Award), the amount and
type of Award, exercise period, term, restrictions, Vesting schedule and
conditions, transferability, and procedures to be followed to exercise the
Award. If the Participant shall fail to execute and return the written Award
Agreement within said 30-day period, his or her Award may be terminated in the
discretion of the Committee, except that if the Participant dies within said 30-
day period such Award Agreement shall be effective notwithstanding the fact that
it has not been signed prior to death.
SECTION 8. INCENTIVE STOCK OPTIONS.
Incentive Stock Options shall consist of Options to purchase shares of
Stock at purchase prices not less than 100% of the Fair Market Value of the
shares on the Award Date. Said purchase price may be paid by check or, in the
discretion of the Committee, by the delivery of shares of Common Stock then
owned by the Participant or receivable upon exercise of the Incentive Stock
Option. The applicable Award Agreement shall set forth the Vesting schedule,
exercise terms and expiration date of the Incentive Stock Option, provided that
Incentive Stock Options granted to Reporting Persons shall be exercisable not
earlier than six months after the date they are granted, and no Incentive Stock
Option shall be exercisable after the tenth anniversary of the Award Date. The
aggregate Fair Market Value, determined as of the date an Incentive Option is
granted, of the Common Stock for which any Participant may be awarded Incentive
Stock Options which are first exercisable by the Participant during any calendar
year under the Plan or any other stock option plan maintained by the Company
shall not exceed $100,000. Notwithstanding any contrary provisions of the Plan,
no Incentive Stock Option shall be granted to any Participant who, at the time
such Incentive Stock Option is granted, owns (directly, or within the meaning of
section 424(d) of the Code) more than ten percent of the total combined voting
power of all classes of stock of the Company, unless (a) the exercise price
under such Incentive Stock Option is at least 110 percent of the Fair Market
Value of a share of Common Stock on the date such Incentive Stock Option is
granted and (b) such Incentive Stock Option is not exercisable after the
expiration of five years from the date granted. The Participant shall notify
the Company in writing, within 30 days, of any disposition (whether by sale,
exchange, gift or otherwise) of shares of Common Stock acquired by the
Participant pursuant to the exercise of an Incentive Stock Option, within two
years from the date of the granting of such Option or within one year of the
transfer of such shares to the Participant.
SECTION 9. NONQUALIFIED STOCK OPTIONS.
Nonqualified Stock Options shall consist of Options to purchase shares
of Stock at purchase prices not less than 100% of the Fair Market Value of the
shares on the date the Options are granted. Said purchase price may be paid by
check or, in the discretion of the Committee, by the delivery of shares of
Common Stock then owned by the Participant or receivable upon exercise of the
Nonqualified Stock Option. The terms of the applicable Award Agreement shall
set forth the Vesting schedule, exercise terms and expiration date of the
Nonqualified Stock Option, provided that Nonqualified Stock Options granted to
Reporting Persons shall be exercisable not earlier than six months after the
date they are granted, and no Nonqualified Stock Option shall be exercisable
after the tenth anniversary of the Award Date.
SECTION 10. STOCK APPRECIATION RIGHTS.
Stock Appreciation Rights may be granted which, at the discretion of
the Committee, may be exercised (1) in lieu of exercise of an Option, (2) in
conjunction with the exercise of an Option, (3) upon lapse of an Option, (4)
independent of an Option, or (5) each of the above in connection with a
previously awarded Option under the Plan. If the Option referred to in (1),
(2), or (3) above qualified as an Incentive Stock Option pursuant to Section 422
of the Code, the related SAR shall comply with the applicable provisions of the
Code and the regulations issued thereunder. At the time of grant, the Committee
may establish, in its sole discretion, a maximum amount per share which will be
payable upon exercise of a SAR, and may impose such conditions on exercise of a
SAR (including, without limitation, the right of the Committee to limit the time
of exercise to specified periods) as may be required to satisfy the requirements
of Rule 16b-3 (or any successor rule) under the Act. SARs granted to Reporting
Persons shall be exercisable not earlier than six months after the date they are
granted. At the discretion of the Committee, payment for SARs may be made in
cash or Common Stock, or in a combination thereof, provided, however, that
payment may be made in cash for SARs exercised by Reporting Persons only upon
the condition that such exercise is made during a Window Period. The following
will apply upon exercise of a SAR:
(a) EXERCISE OF SARS IN LIEU OF EXERCISE OF OPTIONS. SARs
exercisable in lieu of Options may be exercised for all or part
of the shares of Stock subject to the related Option upon the
exercise of the right to exercise an equivalent number of
Options. A SAR may be exercised only with respect to the shares
of Stock for which its related Option is then exercisable.
(b) EXERCISE OF SARS IN CONJUNCTION WITH EXERCISE OF OPTIONS. SARs
exercisable in conjunction with the exercise of Options shall be
deemed to be exercised upon the exercise of the related Options.
(c) EXERCISE OF SARS UPON LAPSE OF OPTIONS. SARs exercisable upon
lapse of Options shall be deemed to have been exercised upon the
lapse of the related Options as to the number of shares of Stock
subject to the Options.
(d) EXERCISE OF SARS INDEPENDENT OF OPTIONS. SARs exercisable
independent of Options may be exercised upon whatever terms and
conditions the Committee, in its sole discretion, imposes upon
the SARs.
SECTION 11. RESTRICTED STOCK.
Restricted Stock shall consist of Stock issued or transferred under
the Plan (other than upon exercise of Stock Options or SARs) at any purchase
price less than the Fair Market Value thereof on the date of issuance or
transfer, or as a bonus. The terms and conditions of the Vesting of such
Restricted Stock shall be set forth in the applicable Award Agreement. In the
case of any Restricted Stock:
(a) The purchase price, if any, and the conditions to Vesting will be
determined by the Committee.
(b) Restricted Stock may be subject to (i) restrictions on the sale
or other disposition thereof, provided, however, that Restricted
Stock granted to a Reporting Person shall, in addition to any
other restrictions thereon, not be sold or disposed of for six
(6) months following the date of grant; (ii) rights of the
Company to reacquire such Restricted Stock from a Participant at
the purchase price, if any, originally paid therefor upon
termination of the Participant's service with the Company within
specified periods; (iii) representation by the Participant that
he or she intends to acquire Restricted Stock for investment and
not for resale; and (iv) such other restrictions, conditions and
terms as the Committee deems appropriate.
(c) The Participant shall be entitled to all dividends paid with
respect to Restricted Stock during the Period of Restriction and
shall not be required to return any such dividends to the Company
in the event of the forfeiture of the Restricted Stock.
(d) The Participant shall be entitled to vote the Restricted Stock
during the Period of Restriction.
(e) The Committee shall determine whether Restricted Stock is to be
delivered to the Participant with an appropriate legend imprinted
on the certificate or if the shares are to be deposited in escrow
pending removal of the restrictions.
SECTION 12. ADJUSTMENT PROVISIONS.
(a) If the Company shall at any time change the number of issued
shares of Common Stock without new consideration to the Company
(such as by stock dividends or stock splits), the total number of
shares reserved for issuance under this Plan, the maximum number
of shares available to a particular Participant (whether as
Performance-Based Awards or otherwise), and the number of shares
covered by each outstanding Award, shall be adjusted so that the
aggregate consideration payable to the Company, if any, and the
value of each such Award shall not be changed. Awards may also
contain provisions for their continuation or for other equitable
adjustments after changes in the Common stock resulting from
reorganization, sale, merger, consolidation, issuance of stock
rights or warrants or similar occurrence.
(b) Notwithstanding any other provision of this Plan, and without
affecting the number of shares reserved or available hereunder,
the Committee may authorize the equitable adjustment of benefits
in connection with any merger, consolidation, acquisition of
property or stock, or reorganization upon such terms and
conditions as it may deem appropriate.
SECTION 13. CHANGE OF CONTROL.
Notwithstanding any other provision of this Plan, upon a Change of
Control, outstanding Awards shall become immediately and fully exercisable or
payable according to the following terms:
(a) Any outstanding and unexercised Option shall become immediately
and fully exercisable, and shall remain exercisable until it
would otherwise expire by reason of lapse of time.
(b) During the six month and seven day period from and after a Change
of Control (the "Exercise Period"), in the discretion of the
Committee, a Participant may elect, in lieu of the payment of the
Base Price of the Shares of Stock being purchased under an Option
and by giving notice to the Committee, to surrender all or part
of the Option to the Company and to receive in cash, within 30
days of such notice, an amount equal to the amount by which the
Change in Control Price per share of Common Stock on the date of
such election shall exceed the Base Price per share of Stock
under the Option multiplied by the number of shares of Stock
granted under the Option as to which the right granted under this
subsection 13(b) shall have been exercised. Change in Control
Price shall mean the higher of (i) the highest Fair Market Value
during the 60-day period prior to and ending on the date of the
Change of Control and (ii) the highest price per share of the
Common Stock as reflected in a Schedule 13D filed by a person in
connection with the Change in Control); provided, however, that
with respect to any Incentive Stock Option, the Change of Control
Price shall not exceed the market price of a share of Common
Stock (to the extent required pursuant to Section 422 of the
Code) on the date of surrender thereof.
(c) Any outstanding and unexercised Stock Appreciation Rights (other
than such rights which arise pursuant to Section 13(d) hereof)
shall become immediately and fully exercisable.
(d) Any Restricted Stock granted pursuant to Section 11 (and not
forfeited prior to the Change in Control) shall become
immediately and fully Vested, and the Committee shall have sole
discretion to waive any automatic forfeitures provided with
respect to such Restricted Stock arising from the Change in
Control. Any shares held in escrow shall be delivered to the
Participant, and the share certificates shall not contain the
legend referred to in Section 11(e) hereof.
SECTION 14. TRANSFERABILITY.
(a) Except as otherwise expressly provided in the applicable Award
Agreement, each Award granted under the Plan to a Participant
shall not be transferable otherwise than by will or the laws of
descent and distribution or pursuant to a Qualified Domestic
Relations order (as defined in Section 206(d)(3) of the Employee
Retirement Income Security Act of 1974, as amended, and the rules
promulgated thereunder), and shall be exercisable, during the
Participant's lifetime, only by the Participant. In the event of
the death of a Participant, exercise or payment shall be made
only:
(i) By or to the persons named as beneficiaries pursuant to
Section 18(a) hereof, or, if none, by or to the executor or
administrator of the estate of the deceased Participant or
the person or persons to whom the deceased Participant's
rights under the Award shall pass by will or the laws of
descent and distribution; and
(ii) To the extent that the deceased Participant was entitled
thereto at the date of his death.
(b) An Award Agreement may expressly provide that an Award may be
transferable to members of the Participant's Immediate Family.
(c) Other than as expressly set forth herein, Awards shall not be
transferable.
SECTION 15. TAXES.
(a) The Company shall be entitled to withhold the amount of any tax
attributable to any amounts payable or shares of Stock
deliverable under the Plan after giving the person entitled to
receive such payment or delivery notice as far in advance as
practicable, and the Company may defer making payment or delivery
as to any Award if any such tax is payable until indemnified to
its satisfaction. The person entitled to any such delivery,
whether due to exercise of an Option or SAR, or lapse of
restrictions on Restricted Stock, or any other Taxable Event may,
by notice to the Company at the time the requirement for such
delivery is first established, elect to have such withholding
satisfied by a reduction of the number of shares otherwise so
deliverable (a "Stock Withholding Election"), or by delivery of
shares of Stock already owned by the Participant, with the amount
of shares subject to such reduction or delivery to be calculated
based on the Fair Market Value on the date of such Taxable Event.
(b) Reporting Persons may make a Stock Withholding Election only in
accordance with the least restrictive methods then permitted
under applicable Securities and Exchange Commission
interpretations (including any methods less restrictive than
those set forth in the remainder of this Section 15(b)), which
currently provide that such election must be made either (i)
during a Window Period, or (ii) six months in advance of the
Taxable Event, which Taxable Event need not occur during a Window
Period, and which election may not be suspended or revoked except
by another such election which shall not become effective until
six months after it is made.
SECTION 16. NO RIGHT TO EMPLOYMENT.
A Participant's right, if any, to continue to serve the Company as an
officer, employee, or otherwise, shall not be enlarged or otherwise affected by
his or her designation as a Participant under the Plan.
SECTION 17. DURATION, AMENDMENT AND TERMINATION.
No Award shall be granted more than ten years after May 8, 1994;
provided, however, that, subject to applicable law, the terms and conditions
applicable to any Award granted within such period may thereafter be amended or
modified by mutual agreement between the Company and the Participant or such
other person as may then have an interest therein. Also, by mutual agreement
between the Company and a Participant hereunder, Stock Options or other Awards
may be granted to such Participant in substitution and exchange for, and in
cancellation of, any Awards previously granted such Participant under this Plan.
To the extent that any Stock Options or other Awards which may be granted within
the terms of the Plan would qualify under present or future laws for tax
treatment that is beneficial to a recipient, then any such beneficial treatment
shall be considered within the intent, purpose and operational purview of the
Plan and the discretion of the Committee, and to the extent that any such Stock
Options or other Awards would so qualify within the terms of the Plan, the
Committee shall have full and complete authority to grant Stock Options or other
Awards that so qualify (including the authority to grant, simultaneously or
otherwise, Stock Options or other Awards which do not so qualify) and to
prescribe the terms and conditions (which need not be identical as among
recipients) in respect to the grant or exercise of any such Stock Option or
other Award under the Plan. The Board may amend the Plan from time to time or
terminate the Plan at any time. However, no action authorized by this Section
17 shall reduce the amount of any existing Award or change the terms and
conditions thereof without the Participant's consent. No amendment of the Plan
shall, without approval of the stockholders of the Company (a) increase the
total number of shares of Stock which may be issued under the Plan, the amount
or type of Awards that may be granted under the Plan or the individual limit set
forth in Section 6(b) hereof; (b) reduce the minimum purchase price, if any, of
shares of Stock which may be made subject to Awards under the Plan; or (c)
modify the requirements as to eligibility for Awards under the Plan.
SECTION 18. MISCELLANEOUS PROVISIONS
(a) In connection with an Award, a Participant may name one or more
beneficiaries to receive the Participant's benefits, to the
extent permissible pursuant to the various provisions of the
Plan, in the event of the death of the Participant.
(b) All obligations of the Company under the Plan with respect to
Awards issued hereunder shall be binding on any successor to the
Company.
SECTION 19. STOCKHOLDER APPROVAL.
The Plan has an effective date of May 8, 1994. The amendments have an
effective date as of May 28, 1996, subject to approval by the stockholders of
the Company at the Annual Meeting of Stockholders in 1996. If the stockholders
do not approve the amendments to the Plan, such amendments, and any actions
taken conditioned on such approval or in reliance on the amendments shall be
void and of no effect.
SECTION 20. PERFORMANCE-BASED AWARDS.
Certain Awards granted under the Plan may be granted in a manner
constituting "qualified performance-based compensation" within the meaning of
Section 162(m) of the Code. Such Awards (the "Performance-Based Awards") are to
be based upon one or more of the following factors: net sales, pretax income
before allocation of corporate overhead and bonus, budget, earnings per share,
net income, division, group or corporate financial goals, return on
stockholders' equity, return on assets, attainment of strategic and operational
initiatives, appreciation in and/or maintenance of the price of Common Stock or
any other publicly-traded securities of the Company, market share, gross
profits, earnings before interest and taxes, earnings before interest, taxes,
dividends and amortization, economic value-added models and comparisons with
various stock market indices. With respect to Performance-Based Awards, (i) the
Committee shall establish in writing the objective performance-based goals
applicable to a given fiscal period no later than 90 days after the commencement
of such fiscal period (but in no event after 25% of such period has elapsed) and
(ii) no Awards shall be payable to any Participant for a given fiscal period
until the Committee certifies in writing that the objective performance goals
(and any other material terms) applicable to such period have been satisfied.
SECTION 21. GOVERNING LAW.
The Plan and all rights thereunder shall be governed by and construed
in accordance with the laws of the State of Connecticut, without giving effect
to the choice-of-law principles thereof.