AMENDED AND RESTATED
SNAP-ON INCORPORATED
1986 INCENTIVE STOCK PROGRAM
(As Amended through January 22, 1999)
1. Purpose. The purpose of the Amended and Restated Snap-on
Incorporated 1986 Incentive Stock Program (the "Program") is to attract and
retain outstanding people as officers and key employees of Snap-on Incorporated
(the "Company") and its subsidiaries and entities of which at least 20% of the
equity interest is held directly or indirectly by the Company (together,
"Affiliates") and to furnish incentives to such persons by providing such
persons opportunities to acquire shares ("Shares") of the Company's common stock
("Common Stock"), or monetary payments based on the value of such Common Stock
or the financial performance of the Company, or both, on terms as herein
provided.
2. Administration. The Program will be administered by a committee
(the "Committee") of the Board of Directors of the Company (the "Board")
composed of not less than two Directors, each of whom shall qualify as a
"disinterested person" for purposes of Rule 16b-3 ("Rule 16b-3") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and as an
"outside director" under Section 162(m)(4)(C) of the Internal Revenue Code of
1986, as amended (the "Code") (or any successor provision thereto); provided,
however, that from and after such time as Rule 16b-3 as adopted in Securities
and Exchange Commission Release No. 34-37260 applies to the Company, members of
the Board serving on the Committee shall no longer need to be a "disinterested
person" but instead must qualify as a "Non-Employee Director" within the meaning
of Rule 16b-3. To the extent permitted by applicable law, the Board may, in its
discretion, delegate to another committee of the Board or to one or more senior
officers of the Company any or all of the authority and responsibility of the
Committee with respect to Benefits (as defined below) to Participants other than
Participants who are subject to the provisions of Section 16 of the Exchange Act
("Section 16 Participants") at the time any such delegated authority or
responsibility is exercised. The Board also may, in its discretion, delegate to
another committee of the Board consisting entirely of Non-Employee Directors any
or all of the authority and responsibility of the Committee with respect to
Benefits to Section 16 participants and other Participants. To the extent that
the Board has delegated to such other committee or one or more officers the
authority and responsibility of the Committee, all references to the Committee
herein shall include such other committee or one or more officers. The Committee
shall interpret the Program, prescribe, amend and rescind rules and regulations
relating thereto and make all other determinations necessary or advisable for
the administration of the Program. A majority of the 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
Program may be made without notice or meeting of the Committee by a writing
signed by a majority of the Committee members.
3. Participants. Participants in the Program ("Participants") will
consist of such officers or other key employees of the Company and its
Affiliates as the Committee in its sole discretion may designate from time to
time to receive benefits described in Section 4 hereof ("Benefits"). The
Committee's designation of a Participant in any year shall not require the
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Committee to designate such person to receive a Benefit in any other year. The
Committee shall consider such factors as it deems pertinent in selecting
Participants and in determining the type and amount of their respective
Benefits, including without limitation (i) the financial condition of the
Company; (ii) anticipated profits for the current or future years; (iii)
contributions of Participants to the profitability and development of the
Company; and (iv) other compensation provided to Participants.
4. Types of Benefits.
(a) The Committee shall have full power and authority to (i)
determine the type or types of Benefits to be granted to each Participant under
the Program; (ii) determine the number of Shares and/or monetary payments to be
covered by (or with respect to which payments, rights or other matters are to be
calculated in connection with) Benefits granted to Participants; and (iii)
determine any terms and conditions of any Benefit granted to a Participant,
subject in each case only to express requirements of the Program. Benefits under
the Program may be granted in any one or a combination of (A) incentive stock
options granted under Section 6 hereof and intended to meet the requirements of
Section 422 of the Code (or any successor provision thereto) ("Incentive Stock
Options"); (B) options granted under Section 7 hereof not intended to be
Incentive Stock Options ("Non-Qualified Stock Options"); (C) stock appreciation
rights granted pursuant to Section 9 hereof ("Stock Appreciation Rights"); (D)
Shares granted under Section 10 hereof to be held subject to certain
restrictions ("Restricted Stock") and Bonus Shares (are defined in Section 11)
delivered pursuant to Section 11; (E) Shares granted under Section 12 hereof
("Performance Shares"); and (F) monetary units granted under Section 13 hereof
("Performance Units"). For purposes hereof, Incentive Stock Options and
Non-Qualified Stock Options shall be hereinafter referred to collectively as
"Options". Benefits under the Program may be granted either alone or in addition
to, in tandem with, or in substitution for any other Benefit or any other award
or benefit granted under any other plan of the Company or any Affiliate.
Benefits granted in addition to or in tandem with other awards or benefits may
be granted either at the same time as or at different times from grants of such
other Benefits or other awards.
(b) Each member of the Board (a "Director") who is not also an
employee of the Company shall receive Director Options (as defined in Section
14) under the Program as provided in Section 14.
(c) As used in the Plan, the term "Award" shall mean any Benefit
or Director Option granted under the Program.
5. Shares Reserved under the Program.
(a) There is hereby reserved for issuance under the Program after
the Effective Date (as defined below) an aggregate of Six Million (6,000,000)
Shares, consisting of Shares (i) newly authorized effective upon approval of
this Program, as amended and restated, by the Company's shareholders at a
meeting duly called and held (the "Effective Date"), (ii) previously reserved
for issuance under the Program as to which Benefits could be awarded under
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this Program immediately prior to the Effective Date and (iii) subject to awards
of Benefits that are outstanding immediately prior to the Effective Date. Not
more than 300,000 Shares reserved for issuance under the Program after the
Effective Date may be issued as Restricted Stock.
(b) If there is a lapse, expiration, termination or cancellation
of any Award granted hereunder without the issuance of Shares or payment of cash
thereunder, if Shares are issued under any Award and thereafter are reacquired
by the Company pursuant to rights reserved upon the issuance thereof, or if
previously owned Shares are delivered to the Company in payment of the exercise
price of an Award, then the Shares subject to, reserved for or delivered in
payment in respect of such Award may again be used for new Options or other
Awards of any sort authorized under this Program.
(c) No Participant shall be granted Benefits under the Program
that could result in such Participant (i) receiving in any single fiscal year of
the Company Options for, and/or Stock Appreciation Rights with respect to, more
than 450,000 Shares, (ii) receiving Benefits in any single fiscal year of the
Company relating to more than 225,000 Shares of Restricted Stock, (iii)
receiving more than 225,000 Performance Shares in respect of any period
designated under Section 12 or (iv) receiving Performance Units exceeding
$1,000,000 in value in respect of any period designated under Section 13. Such
number of Shares as specified in the preceding sentence shall be subject to
adjustment in accordance with the terms of Section 18(a) hereof. In all cases,
determinations under this Section 5 shall be made in a manner that is consistent
with the exemption for performance-based compensation provided by Section 162(m)
of the Code (or any successor provision thereto) and any regulations promulgated
thereunder.
6. Incentive Stock Options. Incentive Stock Options will be
exercisable at purchase prices of not less than One Hundred percent (100%) of
the fair market value of the Shares on the date of grant, as such fair market
value is determined by such methods or procedures as shall be established from
time to time by the Committee ("Fair Market Value"). Incentive Stock Options
will be exercisable over not more than ten (10) years after date of grant and
shall terminate not later than three (3) months after termination of employment
for any reason other than death, except as otherwise provided by the Committee.
If the Participant should die while employed or within three (3) months after
termination of employment, then the right of the Participant's successor in
interest to exercise an Incentive Stock Option shall terminate not later than
twelve (12) months after the date of death, except as otherwise provided by the
Committee. In all other respects, the terms of any Incentive Stock Option
granted under the Program shall comply with the provisions of Section 422 of the
Code (or any successor provision thereto) and any regulations promulgated
thereunder.
7. Non-Qualified Stock Options. Non-Qualified Stock Options will be
exercisable at purchase prices of not less than One Hundred percent (100%) of
the Fair Market Value of the Shares on the date of grant. Non-Qualified Stock
Options will be exercisable as determined by the Committee over not more than
fifteen (15) years after the date of grant and shall terminate six (6) months
after termination of employment for any reason other than death, except that,
subject to the maximum term of fifteen (15) years, (a) in connection with the
termination of a Participant's employment in a manner that entitles the
Participant immediately to receive the
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payment of benefits under any defined benefit retirement plan of the Company or
any of its Affiliates ("Retirement"), a Non-Qualified Stock Option shall
terminate three (3) years after Retirement and (b) the Committee may provide
otherwise in connection with any termination of employment, including
Retirement. If the Participant should die while employed or within any period
after termination of employment during which the Non-Qualified Stock Option was
exercisable, then, subject to the maximum term of fifteen (15) years, the right
of the Participant's successor in interest to exercise a Non-Qualified Stock
Option shall terminate not later than twelve (12) months after the date of
death, except as otherwise provided by the Committee.
8. Certain Replacement Options. Without in any way limiting the
authority of the Committee to make grants of Options to Participants hereunder,
and in order to induce Participants to retain ownership of Shares acquired upon
the exercise of Options, the Committee shall have the authority (but not an
obligation) to include within any agreement setting forth the terms of any
Options (or any amendment thereto) a provision entitling a Participant to
further Options ("Replacement Options") in the event the Participant exercises
any Options (including a Replacement Option) under the Program, in whole or in
part, by surrendering previously acquired Shares. Any such Replacement Options
shall (a) be Non-Qualified Stock Options under Section 7, exercisable at a
purchase price, unless otherwise determined by the Committee, of 100% of the
Fair Market Value of the Shares on the date the Replacement Options are granted,
(b) be for a number of Shares equal to the number of Shares surrendered, (c)
only become exercisable on the terms specified by the Committee in the event the
Participant holds, for a minimum period of time prescribed by the Committee, the
Shares the Participant acquired upon the exercise in connection with which the
Replacement Options were issued, and (d) be subject to such other terms and
conditions as the Committee may determine.
9. Stock Appreciation Rights. The Committee is hereby authorized to
grant Stock Appreciation Rights to Participants. Subject to the terms of the
Program and any applicable agreement with a Participant, a Stock Appreciation
Right granted under the Program shall confer on the holder thereof a right to
receive, upon exercise thereof, the excess of (a) the Fair Market Value of one
Share (determined on the date the Stock Appreciation Right is exercised) over
(b) the grant price of the Stock Appreciation Right as specified by the
Committee, which shall, unless otherwise determined by the Committee, be 100% of
the Fair Market Value of one Share (determined on the date of grant of the Stock
Appreciation Right). Subject to the terms of the Program, the grant price, term,
calculation of Fair Market Value, methods of exercise, methods of settlement
(including whether the Participant will be paid in cash, Shares, other
securities, other Benefits or other property, or any combination thereof), and
any other terms and conditions of any Stock Appreciation Right shall be as
determined by the Committee. The Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it may deem
appropriate.
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10. Restricted Stock.
(a) The Committee is hereby authorized to issue Restricted Stock
to Participants, with or without payment therefor, as additional compensation,
or in lieu of other compensation, for their services to the Company and/or any
Affiliate. Restricted Stock shall be subject to such terms and conditions as the
Committee determines appropriate, including, without limitation, restrictions on
sale or other disposition and rights of the Company to reacquire such Restricted
Stock upon termination of the Participant's employment within specified periods,
as prescribed by the Committee.
(b) Without limitation, such terms and conditions may provide that
Restricted Stock shall be subject to forfeiture if the Company or the
Participant fails to achieve certain goals established by the Committee over a
designated period of time. Any grant of Restricted Stock subject to such terms
and conditions to a Section 16 Participant shall be in writing. The goals
established by the Committee may relate to any one or more of the following:
revenues, earnings per share, return on shareholder equity, return on average
total capital employed, return on net assets employed before interest and taxes,
economic value added and/or, in the case of Participants other than Section 16
Participants, such other goals as may be established by the Committee in its
discretion. In the event the minimum goal established by the Committee is not
achieved at the conclusion of a period, all Shares of Restricted Stock shall be
forfeited. In the event the maximum goal is achieved, no Shares of Restricted
Stock shall be forfeited. Partial achievement of the maximum goal may result in
forfeiture corresponding to the degree of nonachievement to the extent specified
in writing by the Committee when the grant is made. The Committee shall certify
in writing as to the degree of achievement after completion of the performance
period.
11. Bonus Shares; Deposit Share Program. The Committee is authorized
to provide Participants the opportunity to elect to receive Shares in lieu of a
portion or all of cash bonuses under the Company's incentive compensation
programs and/or increases in base compensation ("Bonus Shares"). Bonus Shares
shall be issued in an amount equal to (a) the dollar amount of bonus or base
compensation a Participant elects to receive in Common Stock (subject to limits
prescribed by the Committee) divided by (b) the Fair Market Value of a Share (as
determined on the date the cash compensation to which the Bonus Shares relate
would otherwise be payable) and shall be subject to such terms and conditions as
the Committee deems appropriate, including, without limitation, restrictions on
withdrawal from the Deposit Share Program (as hereinafter defined), sale or
other disposition.
The Committee may establish a program (the "Deposit Share Program") in
connection with the delivery of Bonus Shares under which (a) Participants
wishing to receive Restricted Stock in tandem with Bonus Shares shall deposit
Bonus Shares with the Company or such other designee of the Company and comply
with all rules relating to the Deposit Share Program as the Committee prescribes
and (b) the Company shall match any Bonus Shares a Participant has deposited
with the Company by depositing up to one (1) Share of Restricted Stock for each
Bonus Share deposited, as determined by the Committee. The Restricted Stock
deposited by the Company shall vest in accordance with such terms and conditions
as determined by the Committee.
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Elections to receive Bonus Shares or to participate in the Deposit
Share Program may be made only in accordance with such rules and regulations
prescribed by the Committee from time to time, including any rules and
regulations applicable to Section 16 Participants.
12. Performance Shares. The Committee may grant Performance Shares
that the Participant may earn in whole or in part if the Company or the
Participant achieves certain goals established by the Committee over a
designated period of time consisting of one or more full fiscal years of the
Company, but not in any event more than five (5) years. Any such grant to a
Section 16 Participant shall be in writing. The goals established by the
Committee may relate to any one or more of the following: revenues, earnings per
share, return on shareholder equity, return on average total capital employed,
return on net assets employed before interest and taxes, economic value added
and/or, in the case of Participants other than Section 16 Participants, such
other goals as may be established by the Committee in its discretion. In the
event the minimum goal established by the Committee is not achieved at the
conclusion of a period, no delivery of Shares shall be made to the Participant.
In the event the maximum goal is achieved, One Hundred percent (100%) of the
Performance Shares shall be delivered to the Participant. Partial achievement of
the maximum goal may result in a delivery corresponding to the degree of
achievement to the extent specified in writing by the Committee when the grant
is made. The Committee shall certify in writing as to the degree of achievement
after completion of the performance period. The Committee shall have the
discretion to satisfy an obligation to deliver a Participant's Performance
Shares by delivery of less than the number of Shares earned together with a cash
payment equal to the then Fair Market Value of the Shares not delivered. The
number of Shares reserved for issuance under this Program shall be reduced only
by the number of Shares delivered in respect of earned Performance Shares.
Subject to Section 18(c)(iii), at the time of making an award of Performance
Shares, the Committee shall set forth the consequences of the termination of a
Participant's employment with the Company or an Affiliate prior to the
expiration of the designated performance period in respect of which the
Performance Shares are awarded.
13. Performance Units. The Committee may grant Performance Units to a
Participant that consist of monetary units and that the Participant may earn in
whole or in part if the Company or the Participant achieves certain goals
established by the Committee over a designated period of time consisting of one
or more full fiscal years of the Company, but not in any event more than five
(5) years. Any such grant to a Section 16 Participant shall be in writing. The
goals established by the Committee may relate to any one or more of the
following: revenues, earnings per share, return on shareholder equity, return on
average total capital employed, return on net assets employed before interest
and taxes, economic value added, Share price and/or, in the case of Participants
other than Section 16 Participants, such other goals as may be established by
the Committee in its discretion. In the event the minimum goal established by
the Committee is not achieved at the conclusion of a period, no payment shall be
made to the Participant. In the event the maximum goal is achieved, One Hundred
percent (100%) of the monetary value of the Performance Units shall be paid to
the Participant. Partial achievement of the maximum goals may result in a
payment corresponding to the degree of achievement to the
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extent specified in writing by the Committee when the grant is made. The
Committee shall certify in writing as to the degree of achievement after
completion of the performance period. Payment of a Performance Unit earned may
be in cash or in Shares or in a combination of both, as the Committee in its
sole discretion determines. The number of Shares reserved for issuance under
this Program shall be reduced only by the number of Shares delivered in payment
of Performance Units. Subject to Section 18(c)(iii), at the time of making an
award of Performance Units, the Committee shall set forth the consequences of
the termination of a Participant's employment with the Company or an Affiliate
prior to the expiration of the designated performance period in respect of which
the Performance Units are awarded.
14. Non-Employee Directors. Each Director who is not also an employee
of the Company (including members of the Committee) and who is a Director on the
date of the annual meeting of shareholders of the Company during the term of the
Program shall automatically be granted on each such meeting date a non-qualified
stock option for the purchase of 3,000 Shares ("Director Options") at a purchase
price equal to One Hundred percent (100%) of the Fair Market Value of the Shares
on the date each Director Option is granted, which shall be the closing price
for the Common Stock on such date as reported on the New York Stock Exchange.
Director Options shall be exercisable for ten (10) years from the date of grant
and shall terminate six (6) months after the non-employee Director ceases to
serve as a Director for any reason other than death, except that, subject to the
maximum term of ten (10) years, (a) as to any Director who, at the time the
Director ceases to serve as a Director, is at least age 65 or has completed six
(6) years of service, the Director Options held by the Director shall terminate
three (3) years after the Director ceases to serve as a Director and (b) the
Committee may amend such time limits. If the Director should die while serving
as a Director, or within any period after termination of his or her service as a
Director during which the Director Option was exercisable, then, subject to the
maximum term of ten (10) years, the right of his or her successor in interest to
exercise a Director Option shall terminate twelve (12) months after the date of
death. Non-employee Directors shall not be eligible for any Benefit under the
Program.
15. Transferability. Each Award granted under this Program shall not
be transferable other than by will or the laws of descent and distribution,
except that a Participant or Director may, to the extent allowed by the
Committee and in a manner specified by the Committee, (a) designate in writing a
beneficiary to exercise the Award after the Participant's or Director's death,
as the case may be, and (b) transfer any Award.
16. Term of Program and Amendment, Modification or Cancellation of
Benefits.
(a) No Award shall be granted more than ten (10) years after the
Effective Date.
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(b) Except as provided in Section 19(a) below and subject to the
requirements of the Program, the Committee may modify or amend any Award or
waive any restrictions or conditions applicable to any Award or the exercise
thereof, and the terms and conditions applicable to any Awards may at any time
be amended, modified or canceled by mutual agreement between the Committee and
the Participant or Director or any other persons as may then have an interest
therein, so long as any amendment or modification does not increase the number
of Shares issuable under this Program. Action may be taken under this Section
16(b) notwithstanding expiration of the Program under Section 16(a).
17. Taxes. The Company shall be entitled to withhold the amount of any
tax attributable to any amount payable or Shares deliverable under the Program
after giving the person entitled to receive such amount or Shares notice as far
in advance as practicable, and the Company may defer making payment or delivery
if any such tax may be pending unless and until indemnified to its satisfaction.
The Committee may, in its discretion and subject to such rules as it may adopt,
permit a Participant to pay all or a portion of the federal, state and local
withholding taxes arising in connection with (a) the exercise of a Non-Qualified
Stock Option, (b) a disqualifying disposition of Common Stock received upon the
exercise of an Incentive Stock Option, (c) the lapse of restrictions on
Restricted Stock or (d) the receipt of Performance Shares, by electing to (i)
have the Company withhold Shares, (ii) tender back Shares received in connection
with such Benefit or (iii) deliver other previously owned Shares, having a Fair
Market Value equal to the amount to be withheld; provided, however, that the
amount to be withheld shall not exceed the Participant's estimated total
federal, state and local tax obligations associated with the transaction. The
election must be made on or before the date as of which the amount of tax to be
withheld is determined and otherwise as required by the Committee. The Fair
Market Value of fractional Shares remaining after payment of the withholding
taxes shall be paid to the Participant in cash.
The Committee may, in its discretion, grant a cash bonus to a
Participant who holds Restricted Stock, either inside or outside of the Deposit
Share Program, or Performance Shares to enable the Participant to pay all or a
portion of the federal, state or local tax liability incurred by the Participant
upon the vesting of Restricted Stock or Performance Shares. The Company shall
deduct from any cash bonus such amount as may be required for the purpose of
satisfying the Company's obligation to withhold federal, state or local taxes.
18. Adjustment Provisions; Change of Control.
(a) If the Company shall at any time change the number of issued
Shares without new consideration to the Company (such as by stock dividends or
stock splits), the total number of Shares reserved for issuance under this
Program and the number of Shares covered by each outstanding Award shall be
adjusted so that the aggregate consideration payable to the Company and the
value of each such Award shall not be changed. The Committee shall also have the
right to provide for the continuation of Awards or for other equitable
adjustments after changes in the Common Stock resulting from reorganization,
sale, merger, consolidation or similar occurrence; provided, however, that
Director Options subject to grant or previously granted to Directors under the
Program at the time of any such event shall be subject to only such adjustment
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as shall be necessary to maintain the proportionate interest of the Director and
preserve, without exceeding, the value of such Director Options.
(b) Notwithstanding any other provision of this Program, and
without affecting the number of Shares otherwise reserved or available
hereunder, the Committee may authorize the issuance or assumption 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.
(c) In the event of a "change of control" (as hereinafter
defined):
(i) each holder of an Option and Director Option (A) shall
have the right at any time thereafter to exercise the Option or
Director Option in full whether or not the Option or Director
Option was theretofore exercisable; and (B) shall have the right,
exercisable by written notice to the Company within 60 days after
the change of control, to receive, in exchange for the surrender
of the Option or Director Option or any portion thereof to the
extent the Option or Director Option is then exercisable in
accordance with clause (A), the highest of (1) an amount of cash
equal to the difference between the Fair Market Value of the
Common Stock covered by the Option or Director Option or portion
thereof that is so surrendered on the date of the change of
control and the purchase price of such Common Stock under the
Option or Director Option, (2) an amount of cash equal to the
difference between the highest price per Share of Common Stock
paid in the transaction giving rise to the change of control and
the purchase price per Share of Common Stock under the Option or
Director Option multiplied by the number of Shares of Common
Stock covered by the Option or Director Option or (3) an amount
of cash equal to the difference between the Fair Market Value of
the Common Stock covered by the Option or Director Option or
portion thereof that is so surrendered, calculated on the date of
surrender, and the purchase price of such Common Stock under the
Option or Director Option; provided that the right described in
this clause (B) shall be exercisable only if a positive amount
would be payable to the holder pursuant to the formula specified
in this clause (B);
(ii) Restricted Stock held inside or outside of the
Deposit Share Program (including Bonus Shares) that is not then
vested shall vest upon the date of the change of control and each
holder of such Restricted Stock shall have the right, exercisable
by written notice to the Company within sixty (60) days after the
change of control, to receive, in exchange for the surrender of
such Restricted Stock, an amount of cash equal to the highest of
(A) the Fair Market Value of such Restricted Stock on the date of
surrender, (B) the highest price per Share of Common Stock paid
in the transaction giving rise to the change of control
multiplied by the number of Shares of Restricted Stock
surrendered or (C) the Fair Market Value of such Restricted Stock
on the effective date of the change of control;
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(iii) each holder of a Performance Share and/or
Performance Unit for which the performance period has not expired
shall have the right, exercisable by written notice to the
Company within 60 days after the change of control, to receive,
in exchange for the surrender of the Performance Share and/or
Performance Unit, an amount of cash equal to the product of the
value of the Performance Share and/or Performance Unit and a
fraction the numerator of which is the number of whole months
which have elapsed from the beginning of the performance period
to the date of the change of control and the denominator of which
is the number of whole months in the performance period; and
(iv) each holder of a Performance Share and/or Performance
Unit that has been earned but not yet paid shall receive an
amount of cash equal to the value of the Performance Share and/or
Performance Unit.
For purposes of this Section 18, the "value" of a Performance Share
shall be equal to the highest of (1) the Fair Market Value of a Share of Common
Stock on the date of the change of control, (2) the highest price per Share of
Common Stock paid in the transaction giving rise to the change of control or (3)
the Fair Market Value of a Share of Common Stock calculated on the date of
surrender or payment, as the case may be.
(d) A "change of control" of the Company shall be deemed to have
occurred for purposes of this Section 18 if the event set forth in any one of
the following paragraphs shall have occurred:
(i) any "Person" (as such term is defined in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as modified and used in Sections 13(d) and 14(d)
thereof, except that for purposes of this Section 18, the term
"Person" shall not include (1) the Company or any of its
subsidiaries, (2) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its
subsidiaries, (3) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (4) a corporation
owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of stock
in the Company) is or becomes the "Beneficial Owner" (as defined
in Rule 13d-3 under the Exchange Act), 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 either the then outstanding Shares of common stock of the
Company or the combined voting power of the Company's then
outstanding voting securities; or
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(ii) the following individuals cease for any reason to
constitute a majority of the number of Directors then serving:
individuals who, on January 1, 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, as such
terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) whose appointment or election by the Board or
nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds (2/3) of the Directors
then still in office who either were Directors on January 1, 1996
or whose appointment, election or nomination for election was
previously so approved; or
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation or
approve the issuance of voting securities of the Company in
connection with a merger or consolidation of the Company (or any
direct or indirect subsidiary of the Company) pursuant to
applicable stock exchange requirements, other than (1) 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) at least 60% of the
combined voting power of the voting securities of the Company or
such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (2) 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 either the then
outstanding Shares of common stock of the Company or the combined
voting power of the Company's then outstanding voting securities;
or
(iv) the shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets (in one transaction or
a series of related transactions within any period of 24
consecutive months), other than a sale or disposition by the
Company of all or substantially all of the Company's assets to an
entity, at least 75% of the combined voting power of the voting
securities of which are owned by Persons in substantially the
same proportions as their ownership of the Company immediately
prior to such sale.
Notwithstanding the foregoing, no "Change of Control" shall be deemed to have
occurred if there is consummated 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.
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(e) As of the Effective Date, any outstanding Benefit previously
granted under the Program shall be deemed amended to provide to the holder of
such Benefit rights corresponding to those described in paragraph (c) of this
Section 18 in the event of a change of control (as defined herein).
(f) The Committee may, in its sole and absolute discretion,
amend, modify or rescind the provisions of this Section 18 if it determines that
the operation of this Section 18 may prevent a transaction in which the Company
or any Affiliate is a party from being accounted for on a pooling-of-interests
basis.
19. Amendment and Termination of the Program; Correction of Defects
and Omissions.
(a) The Board may at any time amend, alter, suspend, discontinue
or terminate the Program; provided, however, that the provisions of Section 14
of the Program shall not be amended more than once every six (6) months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules promulgated thereunder; and
provided further that shareholder approval of any amendment of the Program shall
also be obtained if otherwise required by (i) the rules and/or regulations
promulgated under Section 16 of the Exchange Act (in order for the Program to
remain qualified under Rule 16b-3), (ii) the Code or any rules promulgated
thereunder (in order to allow for Incentive Stock Options to be granted under
the Program or to enable the Company to comply with the provisions of Section
162(m) of the Code so that the Company can deduct compensation in excess of the
limitation set forth therein), or (iii) the listing requirements of the New York
Stock Exchange or any principal securities exchange or market on which the
Shares are then traded (in order to maintain the listing or quotation of the
Shares thereon). Termination of the Program shall not affect the rights of
Participants or Directors with respect to Awards previously granted to them, and
all unexpired Awards shall continue in force and effect after termination of the
Program except as they may lapse or be terminated by their own terms and
conditions.
(b) The Committee may correct any defect, supply any omission, or
reconcile any inconsistency in any Award or agreement covering an Award in the
manner and to the extent it shall deem desirable to carry the Program into
effect.
20. Miscellaneous. The grant of any Award under the Program may also
be subject to other provisions (whether or not applicable to the Benefit awarded
to any other Participant) as the Committee determines appropriate, including,
without limitation, provisions for (a) one or more means to enable Participants
or Directors to defer recognition of taxable income relating to Awards or cash
payments derived therefrom, which means may provide for a return to a
Participant or Director on amounts deferred as determined by the Committee
(provided that no such deferral means may result in an increase in the number of
Shares issuable hereunder); (b) the purchase of Common Stock under Options or
Director Options in installments; (c) the financing of the purchase of Common
Stock under Options or Director Options in the form of a
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promissory note issued to the Company by a Participant or Director on such terms
and conditions as the Committee determines; (d) the payment of the purchase
price of Options or Director Options (i) by delivery of cash or other Shares or
securities of the Company having a then Fair Market Value equal to the purchase
price of such Shares or (ii) by delivery (including by fax) to the Company or
its designated agent of an executed irrevocable option exercise form together
with irrevocable instructions to a broker-dealer to sell or margin a sufficient
portion of the Shares and deliver the sale or margin loan proceeds directly to
the Company to pay for the exercise price; (e) restrictions on resale or other
disposition; and (f) compliance with federal or state securities laws and stock
exchange requirements. Notwithstanding the foregoing, to the extent required by
Rule 16b-3, Director Options shall be automatic, and the amount and terms of
such Director Options shall be determined as provided in Section 14 of the Plan.
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