FURON COMPANY
1995 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
Page
1. THE PLAN. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Administration and Authorization; Power and
Procedure. . . . . . . . . . . . . . . . . . . . . . 1
1.3 Participation. . . . . . . . . . . . . . . . . . . . 2
1.4 Shares Available for Awards; Share Limits. . . . . . 2
1.5 Grant of Awards. . . . . . . . . . . . . . . . . . . 4
1.6 Award Period . . . . . . . . . . . . . . . . . . . . 4
1.7 Limitations on Exercise and Vesting of Awards. . . . 5
1.8 Acceptance of Notes to Finance Exercise. . . . . . . 5
1.9 No Transferability . . . . . . . . . . . . . . . . . 6
2. OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Grants . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Option Price . . . . . . . . . . . . . . . . . . . . 7
2.3 Limitations on Grant and Terms of Incentive Stock
Options. . . . . . . . . . . . . . . . . . . . . . . 8
2.4 Limits on 10% Holders. . . . . . . . . . . . . . . . 8
3. STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . . 8
3.1 Grants . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Exercise of Stock Appreciation Rights. . . . . . . . 9
3.3 Payment. . . . . . . . . . . . . . . . . . . . . . . 9
4. RESTRICTED STOCK AWARDS . . . . . . . . . . . . . . . . . 10
4.1 Grants . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Restrictions . . . . . . . . . . . . . . . . . . . . 10
5. PERFORMANCE SHARE AWARDS. . . . . . . . . . . . . . . . . 11
6. OTHER PROVISIONS. . . . . . . . . . . . . . . . . . . . . 11
6.1 Rights of Eligible Employees, Participants and
Beneficiaries. . . . . . . . . . . . . . . . . . . . 11
6.2 Adjustments; Possible Early Termination of Awards;
Acceleration . . . . . . . . . . . . . . . . . . . . 12
6.3 Effect of Termination of Employment. . . . . . . . . 13
6.4 Compliance with Laws . . . . . . . . . . . . . . . . 15
6.5 Tax Withholding. . . . . . . . . . . . . . . . . . . 15
6.6 Plan Amendment, Termination and Suspension . . . . . 16
6.7 Privileges of Stock Ownership. . . . . . . . . . . . 17
6.8 Effective Date of the Plan . . . . . . . . . . . . . 17
6.9 Governing Law/Construction/Severability. . . . . . . 17
6.10 Captions . . . . . . . . . . . . . . . . . . . . . . 18
6.11 Non-Exclusivity of Plan. . . . . . . . . . . . . . . 18
7. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 18
7.1 Definitions. . . . . . . . . . . . . . . . . . . . . 18
FURON COMPANY
1995 STOCK INCENTIVE PLAN
1. THE PLAN.
1.1 Purpose.
The purpose of this Plan is to promote the success of
the Company by providing an additional means to attract,
motivate, retain and reward key employees, including officers,
whether or not directors, of the Company through the grant of
Awards that provide added long-term incentives for high levels of
individual performance and for significant efforts to improve the
financial performance of the Company. "Corporation" means Furon
Company and "Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are
defined in Article 7.
1.2 Administration and Authorization; Power and Procedure.
(a) Committee. This Plan shall be administered by and
all Awards to Eligible Employees shall be authorized by the
Committee. Action of the Committee with respect to the
administration of this Plan shall be taken pursuant to a majority
vote or by written consent of its members.
(b) Plan Awards; Interpretation; Powers of Committee.
Subject to the express provisions of this Plan, the Committee
shall have the authority:
(i) to determine from among the class of Eligible
Employees those persons who will receive any Awards;
(ii) to grant Awards to Eligible Employees,
determine the price at which securities will be offered or
awarded and the amount of securities to be offered or
awarded to any of such persons, and determine the other
specific terms and conditions of such Awards consistent with
the express limits of this Plan, and establish the
installments (if any) in which such Awards shall become
exercisable or shall vest, or determine that no delayed
exercisability or vesting is required, and establish the
events of termination or reversion of such Awards;
(iii) to approve the forms of Award Agreements
(which need not be identical either as to type of award or
among Participants);
(iv) to construe and interpret this Plan and any
agreements defining the rights and obligations of the
Company and Participants under this Plan, further define the
terms used in this Plan, and prescribe, amend and rescind
rules and regulations relating to the administration of this
Plan;
(v) to cancel, modify, or waive the Corporation's
rights with respect to, or modify, discontinue, suspend, or
terminate any or all outstanding Awards held by Eligible
Employees, subject to any required consent under Section
6.6;
(vi) to accelerate or extend the exercisability or
extend the term of any or all such outstanding Awards within
the maximum ten-year term of Awards under Section 1.6; and
(vii) to make all other determinations and
take such other action as contemplated by this Plan or as
may be necessary or advisable for the administration of this
Plan and the effectuation of its purposes.
(c) Binding Determinations. Any action taken by, or
inaction of, the Corporation, any Subsidiary, the Board or the
Committee relating or pursuant to this Plan shall be within the
absolute discretion of that entity or body and shall be
conclusive and binding upon all persons. No member of the Board
or Committee, or officer of the Corporation or any Subsidiary,
shall be liable for any such action or inaction of the entity or
body, of another person or, except in circumstances involving bad
faith, of himself or herself. Subject only to compliance with
the express provisions hereof, the Board and Committee may act in
their absolute discretion in matters within their authority
related to this Plan.
(d) Reliance on Experts. In making any determination
or in taking or not taking any action under this Plan, the
Committee or the Board, as the case may be, may obtain and may
rely upon the advice of experts, including professional advisors
to the Corporation. No director, officer or agent of the Company
shall be liable for any such action or determination taken or
made or omitted in good faith.
(e) Delegation. The Committee may delegate
ministerial, non-discretionary functions to individuals who are
officers or employees of the Company.
1.3 Participation.
Awards may be granted by the Committee only to those
persons that the Committee determines to be Eligible Employees.
An Eligible Employee who has been granted an Award may, if
otherwise eligible, be granted additional Awards if the Committee
shall so determine. Non-Employee Directors shall not be eligible
to receive any Awards.
1.4 Shares Available for Awards; Share Limits.
(a) Shares Available. Subject to the provisions of
Section 6.2, the capital stock that may be delivered under this
Plan shall be shares of the Corporation's authorized but unissued
Common Stock. The shares may be delivered for any lawful
consideration.
(b) Share Limits. For each Fiscal Year occurring
during the term of this Plan from and including the Fiscal Year
beginning February 4, 1996, the maximum number of shares of
Common Stock that may be covered by Awards granted to Eligible
Employees under this Plan during such year shall be 1.8% of the
issued and outstanding shares of the Corporation's Common Stock
as of the last day of the preceding Fiscal Year; provided,
however, that the number of shares available for granting Awards
in any such Fiscal Year shall be increased in any such Fiscal
Year by the number of shares so available for Awards under this
Plan in previous Fiscal Years but not covered by Awards granted
under this Plan in such Fiscal Years (the limitation described in
this sentence shall hereinafter be referred to as the "Share
Limit"). The maximum number of shares of Common Stock that may
be delivered pursuant to options qualified as Incentive Stock
Options granted under this Plan is 1,000,000 shares. The maximum
number of shares subject to Options and Stock Appreciation Rights
that are granted during any calendar year to any individual shall
be limited to 175,000 shares. The maximum number of shares of
Common Stock that may be covered by Restricted Stock Awards and
Performance Share Awards granted during each Fiscal Year,
commencing with the Fiscal Year beginning February 4, 1996, under
this Plan shall be 1.08% of the issued and outstanding shares of
the Corporation's Common Stock as of the last day of the
preceding Fiscal Year; provided, however, that the number of
shares available for granting Restricted Stock Awards and
Performance Share Awards in any such Fiscal Year shall be
increased in any such Fiscal Year by the number of shares so
available for such Awards in previous Fiscal Years but not
covered by such Awards in such Fiscal Years. Each of the four
foregoing numerical limits shall be subject to adjustment as
contemplated by this Section 1.4 and Section 6.2.
(c) Calculation of Available Shares and Replenishment.
Shares subject to outstanding Awards of derivative securities (as
defined in Rule 16a-1(c) under the Exchange Act) shall be
reserved for issuance. If any Option or other right to acquire
shares of Common Stock under an Award shall expire or be
cancelled or terminated without having been exercised in full, or
any Common Stock subject to a Restricted Stock Award or other
Award shall not vest or be delivered, the unpurchased, unvested
or undelivered shares subject thereto shall again be available
for the purposes of the Plan, subject to any applicable
limitations under Rule 16b-3. If a Stock Appreciation Right or
similar right is exercised or a Performance Share Award based on
the increased market value of a specified number of shares of
Common Stock is paid, the number of shares of Common Stock to
which such exercise or payment relates under the applicable Award
shall be charged against the maximum amount of Common Stock that
may be delivered pursuant to Awards under this Plan and, if
applicable, such Award. If the Corporation withholds shares of
Common Stock pursuant to Section 6.5, the number of shares that
would have been deliverable with respect to an Award but that are
withheld pursuant to the provisions of Section 6.5 may in effect
not be issued, but the aggregate number of shares issuable with
respect to the applicable Award and under the Plan shall be
reduced by the number of shares withheld and such shares shall
not be available for additional Awards under this Plan. To the
extent a Performance Share Award or dividend equivalent
constitutes an equity security (as this phrase is defined in Rule
16a-1 under the Exchange Act) issued by the Corporation and is
paid in shares of Common Stock, the number of shares of Common
Stock (if any) subject to such Performance Share Award or
dividend equivalent shall be charged (but in the case of tandem
or substituted Awards or dividend equivalents, without
duplication) against the maximum number of shares of Common Stock
that may be delivered pursuant to Awards under this Plan.
Notwithstanding the foregoing provisions, but subject to Section
1.4(d), 3.2(b) and 6.10(c), Awards payable solely in cash shall
not reduce the number of shares available for Awards under this
Plan and any imputed charges to the maximum number of shares
deliverable under this Plan pursuant to Awards payable in shares
or cash shall be reversed to the extent the Awards are actually
paid in cash. To the extent any shares were previously reserved
in respect of such Awards payable in cash or shares, the number
of shares not issued shall (except as above expressly provided
with respect to withholding under Section 6.5) again be available
for purposes of this Plan.
(d) Cash Only Award Limit. Awards payable solely in
cash under the Plan that would constitute derivative securities
but for the exclusion in Rule 16a-1(c)(3)(i) under the Exchange
Act shall constitute and be referred to as "Cash Only Awards".
The number of Cash Only Awards shall be determined by reference
to the number of shares or share equivalents referenced in or
otherwise linked to such Awards for purposes of determining the
amount, value or price of the Cash Only Awards. The maximum
number of Cash Only Awards shall not, together with the aggregate
number of shares previously issued and subject to then
outstanding Awards payable (or deemed payable) in Common Shares
under this Plan, exceed the Share Limit, plus the number of
reacquired shares available for reissue consistent with the
provisions of subsection (c) above, in each case, subject to
adjustments under Section 6.2.
1.5 Grant of Awards.
Subject to the express provisions of this Plan, the
Committee shall determine the number of shares of Common Stock
subject to each Award, the price (if any) to be paid for the
shares or the Award and, in the case of Performance Share Awards,
in addition to matters addressed in Section 1.2(b), the specific
objectives, goals and performance criteria (such as an increase
in EVA, sales, market value, earnings or book value over a base
period, the years of service before vesting, the relevant job
classification or level of responsibility or other factors) that
further define the terms of the Performance Share Award. Each
Award shall be evidenced by an Award Agreement signed by the
Corporation and, if required by the Committee, by the
Participant.
1.6 Award Period.
Each Award and all executory rights or obligations
under the related Award Agreement shall expire on such date (if
any) as shall be determined by the Committee, but in the case of
Options or other rights to acquire Common Stock not later than
ten (10) years after the Award Date.
1.7 Limitations on Exercise and Vesting of Awards.
(a) Provisions for Exercise. Unless the Committee
otherwise expressly provides, no Award shall be exercisable or
shall vest until at least six months after the initial Award
Date, and once exercisable an Award shall remain exercisable
until the expiration or earlier termination of the Award.
(b) Procedure. Any exercisable Award shall be deemed
to be exercised when the Secretary of the Corporation receives
written notice of such exercise from the Participant, together
with any required payment made in accordance with Section 2.2(b).
(c) Fractional Shares/Minimum Issue. Fractional share
interests shall be disregarded. The Committee, however, may
determine that cash, other securities, or other property will be
paid or transferred in lieu of any fractional share interests.
No fewer than 10 shares may be purchased on exercise of any Award
at one time unless the number purchased is the total number at
the time available for purchase under the Award.
1.8 Acceptance of Notes to Finance Exercise.
The Corporation may, with the Committee's approval,
accept one or more notes from any Participant in connection with
the exercise or receipt of any outstanding Award; provided that
any such note shall be subject to the following terms and
conditions:
(a) The principal of the note shall not exceed the
amount required to be paid to the Corporation upon the
exercise or receipt of one or more Awards under the Plan and
the note shall be delivered directly to the Corporation in
consideration of such exercise or receipt.
(b) The initial term of the note shall be determined
by the Committee; provided that the term of the note,
including extensions, shall not exceed a period of five
years.
(c) The note shall provide for full recourse against
the Participant and shall bear interest at a rate determined
by the Committee.
(d) If the employment of the Participant terminates,
the unpaid principal balance of the note shall become due
and payable on the 10th business day after such termination;
provided, however, that if a sale of such shares would cause
such Participant to incur liability under Section 16(b) of
the Exchange Act, the unpaid balance shall become due and
payable on the 10th business day after the first day on
which a sale of such shares could have been made without
incurring such liability assuming for these purposes that
there are no other transactions by the Participant
subsequent to such termination.
(e) If required by the Committee or by applicable law,
the note shall be secured by a pledge of any shares or
rights financed thereby in compliance with applicable law.
(f) The terms, repayment provisions, and collateral
release provisions of the note and the pledge securing the
note shall conform with applicable rules and regulations of
the Federal Reserve Board as then in effect.
1.9 No Transferability.
(a) Limit On Exercise. Prior to the expiration of any
applicable transition period in respect of Rule 16b-3 described
in Section 6.9(d), and thereafter, unless otherwise expressly
permitted by the Committee and by applicable law (including (if
applicable) Rule 16b-3) and the express terms of an Award
Agreement, Awards may be exercised only by, and amounts payable
or shares issuable pursuant to an Award shall be paid only to (or
for the account of), the Participant or, if the Participant has
died, the Participant's Beneficiary or, if the Participant has
suffered a Total Disability, the Participant's Personal
Representative, if any, or if there is none, the Participant.
The Committee may permit Awards to be exercised by and paid to
certain persons or entities related to the Participant who are
transferees of the Participant without consideration pursuant to
such conditions and procedures as the Committee may establish and
(for Awards intended to satisfy the conditions of Rule 16b-3) as
may be permitted under Rule 16b-3.
(b) Limit On Transfer. No right or similar benefit or
derivative security granted under this Plan or any Award,
including, without limitation, any Option, undistributed
Performance Share Award, or share of Restricted Stock that has
not vested, shall be transferrable by the Participant or shall be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge (other than
to the Corporation), except (i) by will or the laws of descent
and distribution, (ii) pursuant to a QDRO, or pursuant to any
other exception to transfer restrictions expressly permitted by
the Committee and set forth in the Award Agreement (or an
amendment thereto) and, in the case of Awards intended to satisfy
the conditions of Rule 16b-3, to the extent permitted by Rule
16b-3 (or, in the case of Awards not intended to satisfy Rule
16b-3, as may be not inconsistent with the issue of Awards under
this Plan that do satisfy the Rule), or (iii) in the case of
Awards comprising Incentive Stock Options, as permitted by the
Code. Any attempted transfer in violation of these provisions
shall be void and the Corporation shall disregard any attempt at
transfer, assignment or other alienation prohibited hereby.
During the transition period described in Section 6.9(d), any
derivative securities granted under this Plan whose grant is
intended to be exempt from Rule 16b-3 shall be not transferable
other than as permitted by former Rule 16b-3(d)(1)(ii).
(c) Designation of Beneficiary. The designation of a
Beneficiary hereunder shall not constitute a transfer prohibited
by the foregoing provisions.
(d) Exceptions. The restrictions on exercise and
transfer above shall not be deemed to prohibit the authorization
by the Committee of "cashless exercise" procedures with
unaffiliated third parties who provide financing for the purpose
of (or who otherwise facilitate) the exercise of Awards
consistent with applicable legal restrictions and Rule 16b-3,
nor, to the extent permitted by the Committee, transfers for
estate and financial planning purposes, notwithstanding that the
inclusion of such features may render the particular Awards
ineligible for the benefits of Rule 16b-3, nor, in the case of
Participants who are not Section 16 persons, transfers to such
other persons or in such other circumstances as the Committee may
in the Award Agreement or other writing expressly permit.
2. OPTIONS.
2.1 Grants.
One or more Options may be granted under this Article
to any Eligible Employee. Each Option granted may be either an
Option intended to be an Incentive Stock Option, or not so
intended, and such intent shall be indicated in the applicable
Award Agreement. Notwithstanding any other provision of the Plan
to the contrary, it is intended that Options which are granted
with a purchase price per share that is not less than 100% of the
Fair Market Value of the Common Stock on the date of grant shall
satisfy the requirement for "performance-based compensation"
under Section 162(m) of the Code. In addition, notwithstanding
anything else contained herein to the contrary, no Incentive
Stock Options shall be granted more than ten years after the
effective date of this Plan set forth in Section 6.8.
2.2 Option Price.
(a) Pricing Limits. The purchase price per share of
the Common Stock covered by each Option shall be determined by
the Committee at the time of the Award, but in the case of
Incentive Stock Options shall not be less than 100% (110% in the
case of a Participant who owns or is deemed to own under Section
424(d) of the Code more than 10% of the total combined voting
power of all classes of stock of the Corporation) of the Fair
Market Value of the Common Stock on the date of grant.
(b) Payment Provisions. The purchase price of any
shares purchased on exercise of an Option granted under this
Article shall be paid in full at the time of each purchase in one
or a combination of the following methods: (i) in cash or by
electronic funds transfer; (ii) by check payable to the order of
the Corporation; (iii) if authorized by the Committee or
specified in the applicable Award Agreement, by a promissory note
of the Participant consistent with the requirements of Section
1.8; (iv) by notice and third party payment in such manner as may
be authorized by the Committee; or (v) by the delivery of shares
of Common Stock of the Corporation already owned by the
Participant, provided, however, that any shares delivered must
have been owned by the Participant at least six months as of the
date of delivery and the Committee may in its absolute discretion
limit the Participant's ability to exercise an Award by
delivering such shares. Shares of Common Stock used to satisfy
the exercise price of an Option shall be valued at their Fair
Market Value on the date of exercise.
2.3 Limitations on Grant and Terms of Incentive Stock
Options.
(a) $100,000 Limit. To the extent that the aggregate
"fair market value" of stock with respect to which incentive
stock options first become exercisable by a Participant in any
calendar year exceeds $100,000, taking into account both Common
Stock subject to Incentive Stock Options under this Plan and
stock subject to incentive stock options under all other plans of
the Company, such options shall be treated as nonqualified stock
options. For this purpose, the "fair market value" of the stock
subject to options shall be determined as of the date the options
were awarded. In reducing the number of options treated as
incentive stock options to meet the $100,000 limit, the most
recently granted options shall be reduced first. To the extent a
reduction of simultaneously granted options is necessary to meet
the $100,000 limit, the Committee may, in the manner and to the
extent permitted by law, designate which shares of Common Stock
are to be treated as shares acquired pursuant to the exercise of
an Incentive Stock Option.
(b) Option Period. Each Option and all rights
thereunder shall expire no later than ten years after the Award
Date.
(c) Other Code Limits. There shall be imposed in any
Award Agreement relating to Incentive Stock Options such terms
and conditions as from time to time are required in order that
the Option be an "incentive stock option" as that term is defined
in Section 422 of the Code.
2.4 Limits on 10% Holders.
No Incentive Stock Option may be granted to any person
who, at the time the Option is granted, owns (or is deemed to own
under Section 424(d) of the Code) shares of outstanding Common
Stock possessing more than 10% of the total combined voting power
of all classes of stock of the Corporation, unless the exercise
price of such Option is at least 110% of the Fair Market Value of
the stock subject to the Option and such Option by its terms is
not exercisable after the expiration of five years from the date
such Option is granted.
3. STOCK APPRECIATION RIGHTS.
3.1 Grants.
In its discretion, the Committee may grant to any
Eligible Employee Stock Appreciation Rights concurrently with the
grant of another Award. Any Stock Appreciation Right granted in
connection with an Incentive Stock Option shall contain such
terms as may be required to comply with the provisions of Section
422 of the Code and the regulations promulgated thereunder,
unless the holder otherwise agrees. Notwithstanding any other
provision of the Plan to the contrary, it is intended that Stock
Appreciation Rights with a base price per share of Common Stock
not less than Fair Market Value on the date of grant shall
satisfy the requirements for "performance-based compensation"
under Section 162(m) of the Code.
3.2 Exercise of Stock Appreciation Rights.
(a) Exercisability. Unless the Award Agreement or the
Committee otherwise provides, a Stock Appreciation Right related
to another Award shall be exercisable at such time or times, and
to the extent, that the related Award shall be exercisable.
(b) Effect on Available Shares. To the extent that a
Stock Appreciation Right is exercised, the number of underlying
shares of Common Stock theretofore subject to a related Award
shall be charged against the maximum amount of Common Stock that
may be delivered pursuant to Awards under this Plan. The number
of shares subject to the Stock Appreciation Right and the related
Option of the Participant shall be reduced by the number of
underlying shares as to which the exercise related, unless the
Award Agreement otherwise provides.
3.3 Payment.
(a) Amount. Unless the Committee otherwise provides,
upon exercise of a Stock Appreciation Right and the attendant
surrender of an exercisable portion of any related Award, the
Participant shall be entitled to receive payment of an amount
determined by multiplying
(i) the difference obtained by subtracting the
exercise price per share of Common Stock under the related
Award from the Fair Market Value of a share of Common Stock
on the date of exercise of the Stock Appreciation Right, by
(ii) the number of shares with respect to which
the Stock Appreciation Right shall have been exercised.
(b) Form of Payment. The Committee, in its sole
discretion, shall determine the form in which payment shall be
made of the amount determined under paragraph (a) above, either
solely in cash, solely in shares of Common Stock (valued at Fair
Market Value on the date of exercise of the Stock Appreciation
Right), or partly in such shares and partly in cash, provided
that the Committee shall have determined that such exercise and
payment are consistent with applicable law. If the Committee
permits the Participant to elect to receive cash or shares (or a
combination thereof) on such exercise, any such election shall be
subject to such conditions as the Committee may impose and, in
the case of any Section 16 Person, any election to receive cash
shall be subject to any applicable limitations under Rule 16b-3
unless the Committee otherwise provides.
4. RESTRICTED STOCK AWARDS.
4.1 Grants.
The Committee may, in its discretion, grant one or more
Restricted Stock Awards to any Eligible Employee. Each
Restricted Stock Award Agreement shall specify the number of
shares of Common Stock to be issued to the Participant, the date
of such issuance, the consideration for such shares (but not less
than the minimum lawful consideration under applicable state law)
by the Participant, the extent to which the Participant shall be
entitled to dividends, voting and other rights in respect of the
shares and the restrictions imposed on such shares and the
conditions of release or lapse of such restrictions. Such
restrictions shall not lapse earlier than six months after the
Award Date, except to the extent the Committee may otherwise
provide. Stock certificates evidencing shares of Restricted
Stock pending the lapse of the restrictions ("restricted shares")
shall bear a legend making appropriate reference to the
restrictions imposed hereunder and shall be held by the
Corporation or by a third party designated by the Committee until
the restrictions on such shares shall have lapsed and the shares
shall have vested in accordance with the provisions of the Award
and Section 1.7. Upon issuance of the Restricted Stock Award,
the Participant may be required to provide such further assurance
and documents as the Committee may require to enforce the
restrictions.
4.2 Restrictions.
(a) Pre-Vesting Restraints. Except as provided in
Section 4.1 and 1.9, restricted shares comprising any Restricted
Stock Award may not be sold, assigned, transferred, pledged or
otherwise disposed of or encumbered, either voluntarily or
involuntarily, until the restrictions have lapsed.
(b) Dividend and Voting Rights. Unless otherwise
provided in the applicable Award Agreement, a Participant
receiving a Restricted Stock Award shall be entitled to cash
dividend and voting rights for all shares issued even though they
are not vested, provided that such rights shall terminate
immediately as to any restricted shares which cease to be
eligible for vesting.
(c) Cash Payments. If the Participant shall have paid
or received cash (including any dividends) in connection with the
Restricted Stock Award, the Award Agreement shall specify whether
and to what extent such cash shall be returned (with or without
an earnings factor) as to any restricted shares which cease to be
eligible for vesting.
5. PERFORMANCE SHARE AWARDS.
The Committee may, in its discretion, grant Performance
Share Awards to Eligible Employees based upon such factors, which
in the case of any Award to a Section 16 Person shall include but
not be limited to the contributions, responsibilities and other
compensation of the person as the Committee shall deem relevant
in light of the specific type and terms of the award. An Award
Agreement shall specify the maximum number of shares of Common
Stock (if any) subject to the Performance Share Award, the
consideration (but not less than the minimum lawful
consideration) to be paid for any such shares as may be issuable
to the Participant, the duration of the Award and the conditions
upon which delivery of any shares or cash to the Participant
shall be based. The amount of cash or shares or other property
that may be deliverable pursuant to such Award shall be based
upon the degree of attainment over a specified period (a
"performance cycle") as may be established by the Committee of
such measure(s) of the performance of the Company (or any part
thereof) or the Participant as may be established by the
Committee. The Committee may provide for full or partial credit,
prior to completion of such performance cycle or the attainment
of the performance achievement specified in the Award, in the
event of the Participant's death, Retirement, or Total
Disability, an Event or in such other circumstances as the
Committee may determine.
6. OTHER PROVISIONS.
6.1 Rights of Eligible Employees, Participants and
Beneficiaries.
(a) Employment Status. Status as an Eligible Employee
shall not be construed as a commitment that any Award will be
made under this Plan to an Eligible Employee or to Eligible
Employees generally.
(b) No Employment Contract. Nothing contained in this
Plan (or in any other documents related to this Plan or to any
Award) shall confer upon any Eligible Employee or other
Participant any right to continue in the employ or other service
of the Company or constitute any contract or agreement of
employment or other service, nor shall interfere in any way with
the right of the Company to change such person's compensation or
other benefits or to terminate the employment of such person,
with or without cause, but nothing contained in this Plan or any
document related hereto shall adversely affect any independent
contractual right of such person without his or her consent
thereto.
(c) Plan Not Funded. Awards payable under this Plan
shall be payable in shares of Common Stock or from the general
assets of the Corporation, and (except as provided in Section
1.4(c)) no special or separate reserve, fund or deposit shall be
made to assure payment of such Awards. No Participant,
Beneficiary or other person shall have any right, title or
interest in any fund or in any specific asset (including shares
of Common Stock, except as expressly otherwise provided) of the
Company by reason of any Award hereunder. Neither the provisions
of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the
provisions of this Plan shall create, or be construed to create,
a trust of any kind or a fiduciary relationship between the
Company and any Participant, Beneficiary or other person. To the
extent that a Participant, Beneficiary or other person acquires a
right to receive payment pursuant to any Award hereunder, such
right shall be no greater than the right of any unsecured general
creditor of the Company.
6.2 Adjustments; Possible Early Termination of Awards;
Acceleration.
(a) Adjustments. If there shall occur any
extraordinary dividend or other extraordinary distribution in
respect of the Common Stock (whether in the form of cash, Common
Stock, other securities, or other property), or any
recapitalization, stock split (including a stock split in the
form of a stock dividend), reverse stock split, reorganization,
merger, combination, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Stock or other
securities of the Corporation, or there shall occur any other
like corporate transaction or event in respect of the Common
Stock, or a sale of substantially all the assets of the
Corporation as an entirety, then the Committee shall, in such
manner and to such extent (if any) as it deems appropriate and
equitable (but subject to the requirements of Section 6.2(c)) (1)
proportionately adjust any or all of (a) the number and type of
shares of Common Stock (or other securities) which thereafter may
be made the subject of Awards (including the specific numbers of
shares set forth elsewhere in this Plan), (b) the number, amount
and type of shares of Common Stock (or other securities or
property) subject to any or all outstanding Awards, (c) the
grant, purchase, or exercise price of any or all outstanding
Awards, (d) the securities, cash or other property deliverable
upon exercise of any outstanding Awards, or (e) the performance
standards appropriate to any outstanding Awards, or (2) in the
case of an extraordinary dividend or other distribution, merger,
reorganization, consolidation, combination, sale of assets, split
up, exchange, or spin off, make provision for a cash payment or
for the substitution or exchange of any or all outstanding Awards
or the cash, securities or property deliverable to the holder of
any or all outstanding Awards based upon the distribution or
consideration payable to holders of the Common Stock of the
corporation upon or in respect of such event; provided, however,
in each case, that with respect to Awards of Incentive Stock
Options, no such adjustment shall be made which would cause the
Plan to violate Section 424(a) of the Code or any successor
provisions thereto without the written consent of holders
materially adversely affected thereby. In any of such events,
the Committee may take such action sufficiently prior to such
event if necessary to permit the Participant to realize the
benefits intended to be conveyed with respect to the underlying
shares in the same manner as is available to shareholders
generally.
(b) Possible Early Termination of Awards. Subject to
the requirements of Section 6.2(c), upon the dissolution or
liquidation of the Corporation, or upon a reorganization, merger
or consolidation of the Corporation with one or more corporations
as a result of which the Corporation is not the surviving
corporation, the Plan shall terminate, and any outstanding Awards
shall terminate and be forfeited. Notwithstanding the foregoing,
the Committee may provide in writing in connection with, or in
contemplation of, any such transaction for any or all of the
following alternatives (separately or in combinations): (i) for
the assumption by the successor corporation of the Awards
theretofore granted or the substitution by such corporation for
such Awards of awards covering the stock of the successor
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; (ii)
for the continuance of the Plan by such successor corporation in
which event the Plan and the Awards shall continue in the manner
and under the terms so provided; or (iii) for the payment in cash
or shares of Common Stock in lieu of and in complete satisfaction
of such Awards; provided, however, that the rights of
Participants under Section 6.2(c) to acceleration of Awards under
certain circumstances shall not in any way be modified, amended,
altered or impaired by virtue of this Section 6.2(b).
(c) Acceleration of Awards. Except as otherwise
explicitly provided in an Award Agreement, upon the occurrence of
an Event (i) each Option and Stock Appreciation Right shall
become immediately exercisable to the full extent theretofore not
exercisable, (ii) Restricted Stock shall immediately vest free of
restrictions, and (iii) the number of shares covered by each
Performance Share Award shall be issued to the Participant and
the compensation payable under a cash-based Performance Share
Award shall be paid to the Participant; provided, however, that
in no event shall any Award be accelerated as to any Section 16
Person to a date less than six months after the Award Date of
such Award. Any acceleration of Awards shall comply with
applicable regulatory requirements, including without limitation
Section 422 of the Code. Notwithstanding the foregoing, this
Section 6.2(c) shall not apply to any Participant who alone or
together with one or more other persons acting as a partnership,
limited partnership, syndicate, or other group for the purpose of
acquiring, holding or disposing of securities of the Corporation
triggers a "Change in Control" under Section 7.1(r)(4)(A) which
causes the occurrence of the Event.
6.3 Effect of Termination of Employment.
(a) Unless the Committee provides otherwise in an
applicable Award Agreement or by resolution, if a Participant's
employment by the Company terminates for any reason other than
Retirement, death or Total Disability, the Participant shall
have, subject to earlier termination pursuant to or as
contemplated by Section 1.6, three months from the date of
termination of employment to exercise any Option to the extent it
shall have become exercisable on that date, and any Option not
exercisable on that date shall terminate. Notwithstanding the
preceding sentence, in the event the Participant is discharged
for cause as determined by the Committee in its sole discretion,
all Options shall lapse immediately upon such termination of
employment.
(b) Unless the Committee provides otherwise in an
applicable Award Agreement or by resolution, if a Participant's
employment by the Company terminates as a result of Total
Disability, the Participant or Participant's Personal
Representative, as the case may be, shall have, subject to
earlier termination pursuant to or as contemplated by Section
1.6, twelve (12) months from the date of termination of
employment to exercise any Option to the extent it shall have
become exercisable by that date and any Option not exercisable on
that date shall terminate. If the Participant's employment by
the Company terminates as a result of Retirement, the Participant
shall have, subject to earlier termination pursuant to or as
contemplated by Section 1.6, thirty-six (36) months from the date
of termination of employment to exercise any Option; provided,
further, that upon the date of termination of a Participant's
employment as a result of Retirement all Options outstanding
shall become immediately exercisable, except if such Option has
been awarded within six months of the date of termination of
employment as a result of Retirement. In such case, the Options
so awarded shall become fully exercisable after the expiration of
six months from the date of the Award.
(c) Unless the Committee provides otherwise in an
applicable Award Agreement or by resolution, if the Participant's
employment by the Company terminates as a result of death while
the Participant is employed by the Company or during either the
twelve (12) or thirty-six (36) month period referred to in
Section 6.3(b) above, the Participant's Option shall be
exercisable by the Participant Beneficiary, subject to earlier
termination pursuant to or as contemplated by Section 1.6, during
the twelve (12) month period following the Participant's death,
as to all or any part of the shares for Common Stock covered
thereby including all shares as to which the Option could not
otherwise be exercisable.
(d) Each Stock Appreciation Right shall have the same
termination provisions and exercisability periods as the Option
to which it relates.
(e) In the event of termination of employment with the
Company for any reason, (i) shares of Common Stock subject to the
Participant's Restricted Stock Award shall be forfeited in
accordance with the provisions of the related Award Agreement to
the extent such shares have not become vested on that date; and
(ii) shares of Common Stock subject to the Participant's
Performance Share Award shall be forfeited in accordance with the
provisions of the related Award Agreement to the extent such
shares have not been issued or become issuable on that date.
(f) In the event of termination of employment with the
Company for any reason, other than discharge for cause, the
Committee may, in its discretion, increase the portion of the
Participant's Award available to the Participant, or
Participant's Beneficiary or Personal Representative, as the case
may be, upon such terms as the Committee shall determine.
(g) If an entity ceases to be a Subsidiary, such
action shall be deemed for purposes of this Section 6.3 to be a
termination of employment of each employee of that entity.
(h) Upon forfeiture of a Restricted Stock Award
pursuant to this Section 6.3, the Participant, or his or her
Beneficiary or Personal Representative, as the case may be, shall
transfer to the Corporation the portion of the Restricted Stock
Award not vested at the date of termination of employment,
without payment of any consideration by the Company for such
transfer unless the Participant paid a purchase price in which
case repayment, if any, of that price shall be governed by the
Award Agreement. Notwithstanding any such transfer to the
Corporation, or failure, refusal or neglect to transfer, by the
Participant, or his or her Beneficiary or Personal
Representative, as the case may be, such nonvested portion of any
Restricted Stock Award shall be deemed transferred automatically
to the Corporation on the date of termination of employment. The
Participant's original acceptance of the Restricted Stock Award
shall constitute his or her appointment of the Corporation and
each of its authorized representatives as attorney(s)-in-fact to
effect such transfer and to execute such documents as the
Corporation or such representatives deem necessary or advisable
in connection with such transfer.
6.4 Compliance with Laws.
This Plan, the granting and vesting of Awards under
this Plan and the issuance and delivery of shares of Common Stock
and/or the payment of money under this Plan or under Awards
granted hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not
limited to state and federal securities law and federal margin
requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith.
Any securities delivered under this Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if
requested by the Corporation, provide such assurances and
representations to the Corporation as the Corporation may deem
necessary or desirable to assure compliance with all applicable
legal requirements.
6.5 Tax Withholding.
(a) Cash or Shares. Upon any exercise, vesting, or
payment of any Award or, if required under the Code, upon the
disposition of shares of Common Stock acquired pursuant to the
exercise of an Incentive Stock Option prior to satisfaction of
the holding period requirements of Section 422 of the Code, the
Company shall have the right at its option to (i) require the
Participant (or Personal Representative or Beneficiary, as the
case may be) to pay or provide for payment of the amount of any
taxes which the Company may be required to withhold with respect
to such Award event or payment or (ii) deduct from any amount
payable in cash the amount of any taxes which the Company may be
required to withhold with respect to such cash payment. In any
case where a tax is required to be withheld in connection with
the delivery of shares of Common Stock under this Plan, the
Committee may in its sole discretion grant (either at the time of
the Award or thereafter) to the Participant the right to elect,
pursuant to such rules and subject to such conditions as the
Committee may establish, to have the Corporation reduce the
number of shares to be delivered by (or otherwise reacquire) the
appropriate number of shares valued at their then Fair Market
Value, to satisfy such withholding obligation.
(b) Tax Loans. The Company may, in its discretion,
authorize a loan to an Eligible Employee in the amount of any
taxes which the Company may be required to withhold with respect
to shares of Common Stock received (or disposed of, as the case
may be) pursuant to a transaction described in subsection (a)
above. Such a loan shall be for a term, at a rate of interest
and pursuant to such other terms and conditions as the Company,
under applicable law may establish and such loan need not comply
with the provisions of Section 1.8.
6.6 Plan Amendment, Termination and Suspension.
(a) Board Authorization. The Board may, at any time,
terminate or, from time to time, amend, modify or suspend this
Plan, in whole or in part. No Awards may be granted during any
suspension of this Plan or after termination of this Plan, but
the Committee shall retain jurisdiction as to Awards then
outstanding in accordance with the terms of this Plan.
(b) Shareholder Approval. If any amendment would (i)
materially increase the benefits accruing to Participants under
this Plan, (ii) materially increase the aggregate number of
securities that may be issued under this Plan, or (iii)
materially modify the requirements as to eligibility for
participation in this Plan, then to the extent then required by
Rule 16b-3 to secure benefits thereunder or to avoid liability
under Section 16 of the Exchange Act (and Rules thereunder) or
required under Section 425 of the Code or any other applicable
law, or deemed necessary or advisable by the Board, such
amendment shall be subject to shareholder approval.
(c) Amendments to Awards. Without limiting any other
express authority of the Committee under but subject to the
express limits of this Plan, the Committee by agreement or
resolution may waive conditions of or limitations on Awards to
Eligible Employees that the Committee in the prior exercise of
its discretion has imposed, without the consent of a Participant,
and may make other changes to the terms and conditions of Awards
that do not affect in any manner materially adverse to the
Participant, his or her rights and benefits under an Award.
Notwithstanding anything else contained herein to the contrary,
the Committee shall not, without prior shareholder approval, (i)
authorize the amendment of outstanding Options or Stock
Appreciation Rights to reduce the exercise or base price, as
applicable, except as contemplated by Section 6.2(a), or (ii)
cancel and replace outstanding Options or Stock Appreciation
Rights with similar Awards having an exercise or base price which
is lower, except as contemplated by Section 6.2(a).
(d) Limitations on Amendments to Plan and Awards. No
amendment, suspension or termination of the Plan or change of or
affecting any outstanding Award shall, without written consent of
the Participant, affect in any manner materially adverse to the
Participant any rights or benefits of the Participant or
obligations of the Corporation under any Award granted under this
Plan prior to the effective date of such change. Changes
contemplated by Section 6.2 shall not be deemed to constitute
changes or amendments for purposes of this Section 6.6.
6.7 Privileges of Stock Ownership.
Except as otherwise expressly authorized by the
Committee or this Plan, a Participant shall not be entitled to
any privilege of stock ownership as to any shares of Common Stock
not actually delivered to and held of record by him or her. No
adjustment will be made for dividends or other rights as a
shareholder for which a record date is prior to such date of
delivery.
6.8 Effective Date of the Plan.
This Plan shall be effective as of April 12, 1995, the
date of Board approval, subject to shareholder approval within 12
months thereafter.
6.9 Governing Law/Construction/Severability.
(a) Choice of Law. This Plan, the Awards, all
documents evidencing Awards and all other related documents shall
be governed by, and construed in accordance with the laws of the
state of California.
(b) Severability. If any provision shall be held by a
court of competent jurisdiction to be invalid and unenforceable,
the remaining provisions of this Plan shall continue in effect.
(c) Plan Construction.
(1) Rule 16b-3. It is the intent of the
Corporation that this Plan and Awards hereunder satisfy and be
interpreted in a manner that in the case of Participants who are
or may be subject to Section 16 of the Exchange Act satisfies the
applicable requirements of Rule 16b-3 so that such persons
(unless they otherwise agree) will be entitled to the benefits of
Rule 16b-3 or other exemptive rules under Section 16 of the
Exchange Act and will not be subjected to avoidable liability
thereunder. If any provision of this Plan or of any Award would
otherwise frustrate or conflict with the intent expressed above,
that provision to the extent possible shall be interpreted and
deemed amended so as to avoid such conflict, but to the extent of
any remaining irreconcilable conflict with such intent as to such
persons in the circumstances, such provision shall be
disregarded.
(2) Section 162(m). It is the further intent of
the Company that Options or Stock Appreciation Rights with an
exercise or base price not less than Fair Market Value on the
date of grant shall qualify as performance-based compensation
under Section 162(m) of the Code, and this Plan shall be
interpreted consistent with such intent.
(d) Limitations Prior to Expiration of Rule 16b-3
Transition Period. Notwithstanding any other provision of this
Plan, any Award granted to a Section 16 Person prior to September
1, 1995 (or any other date at which the transition period for
purposes of new Rule 16b-3, as to this Plan, expires) is subject
to the following additional limitations:
(1) the Award may provide for the issuance of shares
of Common Stock as a stock bonus for no consideration other
than services rendered; and
(2) in the event of an Award under which shares of
Common Stock are or in the future may be issued for any
other type of consideration, the amount of such
consideration either (a) shall be equal to the minimum
amount (such as the par value of such shares) required to be
received by the Corporation to comply with applicable state
law, or (b) shall be equal to or greater than 50% of the
Fair Market Value of the shares of Common Stock on the date
of the Award; provided that in the case of Restricted Stock
Awards, the amount shall equal the minimum lawful amount
(but not more than 10% of the market value of the stock
subject to the Award on the Award Date) and any right to
purchase the Restricted Stock must be exercised within 60
days of the Award Date.
6.10 Captions.
Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material
or relevant to the construction or interpretation of the Plan or
any provision thereof.
6.11 Non-Exclusivity of Plan.
Nothing in this Plan shall limit or be deemed to limit
the authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to
the Common Stock, under any other plan or authority.
7. DEFINITIONS.
7.1 Definitions.
(a) "Award" shall mean any Option, Stock Appreciation
Right, Restricted Stock Award, or Performance Share Award under
this Plan.
(b) "Award Agreement" shall mean any writing setting
forth the terms of an Award that has been authorized by the
Committee.
(c) "Award Date" shall mean the date upon which the
Committee took the action granting an Award or such later date as
the Committee designates as the Award Date at the time of the
Award.
(d) "Beneficiary" shall mean the person, persons,
trust or trusts designated by a Participant or, in the absence of
a designation, entitled by will or the laws of descent and
distribution, to receive the benefits specified in the Award
Agreement and under this Plan in the event of a Participant's
death, and shall mean the Participant's executor or administrator
if no other Beneficiary is designated and able to act under the
circumstances.
(e) "Board" shall mean the Board of Directors of the
Corporation.
(f) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(g) "Commission" shall mean the Securities and
Exchange Commission.
(h) "Committee" shall mean a committee appointed by
the Board to administer this Plan, which committee shall be
comprised only of three (or, effective September 1, 1995, or any
other date at which the transition period for purposes of new
Rule 16b-3, as to this Plan, expires, two) or more directors or
such greater number of directors as may be required under
applicable law, each of whom, during such time as one or more
Participants may be subject to Section 16 of the Exchange Act
and/or Section 162(m) of the Code, shall be Disinterested and/or
an "outside director" (as such term is defined under Section
162(m) of the Code and regulations issued thereunder).
(i) "Common Stock" shall mean the Common Stock of the
Corporation and such other securities or property as may become
the subject of Awards, or become subject to Awards, pursuant to
an adjustment made under Section 6.2 of this Plan.
(j) "Company" shall mean, collectively, the
Corporation and its Subsidiaries.
(k) "Corporation" shall mean Furon Company, a
California corporation, and its successors.
(l) "Disinterested" shall mean disinterested within
the meaning of any applicable regulatory requirements, including
Rule 16b-3.
(m) "Eligible Employee" shall mean an officer (whether
or not a director) or key employee of the Company.
(n) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
(o) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(p) "EVA" shall have the meaning set forth in the
Corporation's Economic Value Added (EVA) Incentive Compensation
Plan.
(q) "Event" shall mean any of the following:
(1) Approval by the shareholders of the
Corporation of the dissolution or liquidation of the
Corporation;
(2) Approval by the shareholders of the
Corporation of an agreement to merge or consolidate, or
otherwise reorganize, with or into one or more entities that
are not Subsidiaries, as a result of which less than 50% of
the outstanding voting securities of the surviving or
resulting entity immediately after the reorganization are,
or are to be, owned by former shareholders of the
Corporation;
(3) Approval by the shareholders of the
Corporation of the sale or transfer of substantially all of
the Corporation's business and/or assets to a person or
entity which is not a Subsidiary;
(4) A Change in Control. A "Change in Control"
shall be deemed to have occurred if:
(A) Any "person", alone or together with all
"affiliates" and "associates" of such person, is or
becomes (i) an "Acquiring Person" as defined in the
Rights Agreement, dated as of March 21, 1989, by and
between the Company and Bank of America National Trust
and Savings Association, Rights Agent or (ii) the
"beneficial owner" of 30% of the outstanding voting
securities of the Corporation (the terms "person",
"affiliates", "associates" and "beneficial owner" are
used as such terms are used in the Securities Exchange
Act of 1934 and the General Rules and Regulations
thereunder); provided, however, that a "Change in
Control Event" shall not be deemed to have occurred if
such "person" is the Corporation, any Subsidiary or any
employee benefit plan of the Corporation or of any
Subsidiary, or any trust or other entity organized,
established or holding shares of such voting securities
by, for or pursuant to, the terms of any such plan; or
(B) Individuals who at the beginning of any
period of two consecutive calendar years constitute the
Board cease for any reason, during such period, to
constitute at least a majority thereof, unless the
election, or the nomination for election by the
Corporation's shareholders, of each new Board member
was approved by a vote of at least three-quarters of
the Board members then still in office who were Board
members at the beginning of such period.
(r) "Fair Market Value" shall mean (i) if the stock is
listed or admitted to trade on a national securities exchange,
the closing price of the stock on the Composite Tape, as
published in the Western Edition of The Wall Street Journal, of
the principal national securities exchange on which the stock is
so listed or admitted to trade, on such date, or, if there is no
trading of the stock on such date, then the closing price of the
stock as quoted on such Composite Tape on the next preceding date
on which there was trading in such shares; (ii) if the stock is
not listed or admitted to trade on a national securities
exchange, the last price for the stock on such date, as furnished
by the National Association of Securities Dealers, Inc. ("NASD")
through the NASDAQ National Market Reporting System or a similar
organization if the NASD is no longer reporting such information;
(iii) if the stock is not listed or admitted to trade on a
national securities exchange and is not reported on the National
Market Reporting System, the mean between the bid and asked price
for the stock on such date, as furnished by the NASD or a similar
organization; or (iv) if the stock is not listed or admitted to
trade on a national securities exchange, is not reported on the
National Market Reporting System and if bid and asked prices for
the stock are not furnished by the NASD or a similar
organization, the value as established by the Committee at such
time for purposes of this Plan.
(s) "Fiscal Year" shall mean the fiscal year of the
Corporation.
(t) "Incentive Stock Option" shall mean an Option
which is designated as an incentive stock option within the
meaning of Section 422 of the Code, the award of which contains
such provisions (including but not limited to the receipt of
shareholder approval of this Plan, if the award is made prior to
such approval) and is made under such circumstances and to such
persons as may be necessary to comply with that section.
(u) "Nonqualified Stock Option" shall mean an Option
that is designated as a Nonqualified Stock Option and shall
include any Option intended as an Incentive Stock Option that
fails to meet the applicable legal requirements thereof. Any
Option granted hereunder that is not designated as an incentive
stock option shall be deemed to be designated a nonqualified
stock option under this Plan and not an incentive stock option
under the Code.
(v) "Non-Employee Director" shall mean a member of the
Board of Directors of the Corporation who is not an officer or
employee of the Company.
(w) "Option" shall mean an option to purchase Common
Stock granted under this Plan. The Committee shall designate any
Option granted to an Eligible Employee as a Nonqualified Stock
Option or an Incentive Stock Option.
(x) "Participant" shall mean an Eligible Employee who
has been granted an Award under this Plan.
(y) "Performance Share Award" shall mean an award of
shares of Common Stock made in accordance with Section 5.
(aa) "Personal Representative" shall mean the person or
persons who, upon the Total Disability or incompetence of a
Participant, shall have acquired on behalf of the Participant, by
legal proceeding or otherwise, the power to exercise the rights
or receive benefits under this Plan and who shall have become the
legal representative of the Participant.
(bb) "Plan" shall mean this 1995 Stock Incentive Plan.
(cc) "QDRO" shall mean a qualified domestic relations
order as defined in Section 414(p) of the Code or Title I,
Section 206(d)(3) of ERISA (to the same extent as if this Plan
were subject thereto), or the applicable rules thereunder.
(dd) "Restricted Stock" shall mean shares of Common
Stock awarded to a Participant under this Plan, subject to
payment of such consideration, if any, and such conditions on
vesting and such transfer and other restrictions as are
established in or pursuant to this Plan, for so long as such
shares remain unvested under the terms of the applicable Award
Agreement.
(ee) "Restricted Stock Award" shall mean an award of
Restricted Stock made pursuant to Section 4.
(ff) "Retirement" shall mean termination of a
Participant's employment with the Company by reason of retirement
on or following the Participant's 60th birthday and such other
terminations of employment as the Committee by rule may include.
(gg) "Rule 16b-3" shall mean Rule 16b-3 as promulgated
by the Commission pursuant to the Exchange Act, as amended from
time to time, but subject to any applicable transition rules.
(hh) "Section 16 Person" shall mean a person subject to
Section 16(a) of the Exchange Act.
(ii) "Stock Appreciation Right" shall mean a right to
receive a number of shares of Common Stock or an amount of cash,
or a combination of shares and cash, the aggregate amount or
value of which is determined by reference to a change in the Fair
Market Value of the Common Stock that is authorized under this
Plan.
(jj) "Subsidiary" shall mean any corporation or other
entity a majority of whose outstanding voting stock or voting
power is beneficially owned directly or indirectly by the
Corporation.
(kk) "Total Disability" shall mean a "permanent and
total disability" within the meaning of Section 22(e)(3) of the
Code and such other disabilities, infirmities, afflictions or
conditions as the Committee by rule may include.