AMENDED AND RESTATED
SNAP-ON INCORPORATED
1986 INCENTIVE STOCK PROGRAM
(As Amended April 26, 1996)
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.
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). 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.
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.
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 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 Four Million
(4,000,000) 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 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
200,000 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 300,000 Shares, (ii) receiving Benefits in any
single fiscal year of the Company relating to more than 150,000 Shares of
Restricted Stock, (iii) receiving more than 150,000 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 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, including, without
limitation, restricting the time during which a Participant may exercise a
Stock Appreciation Right to specified periods as may be necessary to
satisfy the requirements of Rule 16b-3.
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.
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 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.Shares to a Participant
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 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 2,000 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 as to
any Director Options by action taken after the holder of the Director
Options ceases to be subject to the provisions of Section 16 of the
Exchange Act. 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.
(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; provided, however, that no action may be taken under
this Section 16(b) with respect to Director Options if such action could
disqualify a non-employee Director from being a "disinterested person" for
purposes of Rule 16b-3. 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 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;
(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
(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 out-
standing 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 immedi-
ately 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 propor-
tionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately following such transaction or series of
transactions.
(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 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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