NATIONAL MEDICAL ENTERPRISES, INC.
1991 STOCK INCENTIVE PLAN
Dated September 25, 1991
1. Purpose of the Plan.
The purpose of the 1991 Stock Incentive Plan of National Medical
Enterprises, Inc. is to promote the interests of the Company and its
shareholders by strengthening the Company's ability to attract, motivate and
retain employees, advisors and consultants of training, experience and ability,
and to provide a means to encourage stock ownership and a proprietary interest
in the Company to officers and valued employees of the Company and consultants
and advisors to the Company upon whose judgment, initiative, and efforts the
financial success and growth of the business of the Company largely depend.
2. Definitions.
(a) "Appreciation Right" means a right to receive an amount, representing
the difference between a price per share of Common Stock assigned on the date of
grant and the Fair Market Value of a share of Common Stock on the date of
exercise of such grant, payable in cash and/or Common Stock.
(b) "Board" means the Board of Directors of the Company.
(c) "Committee" means the Compensation and Stock Option Committee of the
Board, unless the Board appoints another committee to administer the Plan.
(d) "Common Stock" means the $.075 par value Common Stock of the Company.
(e) "Company" means National Medical Enterprises, Inc., a Nevada
corporation.
(f) "Eligible Person" means an Employee, advisor or consultant of the
Company or any of its present or future subsidiary corporations eligible to
receive an Incentive Award but shall not include a director who is not an
Employee of the Company.
(g) "Employee" means any executive officer or any employee of the Company,
or of any of its present or future subsidiary corporations.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time or any successor statute.
(i) "Fair Market Value" means the closing price of a share of Common Stock
on the New York Stock Exchange on the date as of which fair market value is to
be determined or the actual sale price of the shares acquired upon exercise if
the shares are sold in a same day sale, or if no sales were made on such date,
the closing price of such shares on the New York Stock Exchange on the next
preceding date on which there were such sales.
(j) "Incentive Award" means an Option, Incentive Stock Award, Appreciation
Right, Performance Unit, Restricted Unit, or cash bonus award granted under the
Plan.
(k) "Incentive Stock Award" means a right to the grant or purchase, at a
price determined by the Committee, of Common Stock of the Company which is
nontransferable and subject to substantial risk of forfeiture until specific
conditions are met. Such conditions will be determined by the Committee. An
Incentive Stock Award includes a Performance Unit paid in Common Stock of the
Company.
(l) "Incentive Stock Option" means an Option intended to qualify under
Section 422 of the Internal Revenue Code of 1986, as amended and the Treasury
Regulations thereunder.
(m) "Option" means an Incentive Stock Option or a nonqualified or
nonstatutory stock option.
(n) "Performance Unit" means a grant made under Section 9 entitling a
Participant to a payment of Common Stock or cash at the end of a performance
period if certain conditions as may be established by the Committee are met.
(o) "Participant" means any Eligible Person selected to receive an
Incentive Award pursuant to Section 5.
(p) "Plan" means the 1991 Stock Incentive Plan as set forth herein, which
may be amended from time to time.
(q) "Restricted Unit" means a grant made under Section 10 entitling a
Participant to a payment of cash at the end of a vesting period established by
the Committee equivalent in value to the Fair Market Value of a share of Common
Stock with such limits as to maximum value, if any, as may be established by the
Committee.
3. Shares of Common Stock Subject to the Plan.
(a) Subject to the provisions of Section 3(c) and Section 11 of the Plan,
the aggregate number of shares of Common Stock that may be issued or transferred
or exercised pursuant to Incentive Awards under the Plan is 18,000,000 shares of
Common Stock.
(b) The shares of Common Stock to be delivered under the Plan will be made
available, at the discretion of the Board or the Committee, either from
authorized but unissued shares of Common Stock or from previously issued shares
of Common Stock reacquired by the Company, including shares purchased on the
open market.
(c) If any share of Common Stock that is the subject of an Incentive Award
is not issued or transferred and ceases to be issuable or transferable for any
reason, such share of Common Stock will no longer be charged against the
limitations provided for in Section 3(a) and may again be made subject to
Incentive Awards. However, shares as to which an Option has been surrendered in
connection with the exercise of a related Appreciation Right will not again be
available for the grant of any further Incentive Awards. Incentive Awards to the
extent they are paid out in cash and not in Common Stock shall not be applied
against the limitations provided for in Section 3(a).
4. Administration of the Plan.
(a) The Plan will be administered by the Committee, which will consist of
two or more persons (i) who are not eligible to receive Incentive Awards under
the Plan, and (ii) who have not been eligible at any time within one year before
appointment to the Committee for selection as
persons to whom Incentive Awards may be granted pursuant to the Plan, or to whom
shares may be allocated or Options or Appreciation Rights may be granted
pursuant to any other plan of the Company or any of its subsidiary corporations
entitling the participants therein to acquire stock, appreciation rights, or
options of the Company or any of its present or future subsidiary corporations,
except that this requirement shall not prohibit any person from serving on the
Committee solely by reason of the fact that such person is eligible or may have
been granted such rights under the Company's Directors Stock Option Plan or the
Director Restricted Share Plan.
(b) The Committee has and may exercise such powers and authority of the
Board as may be necessary or appropriate for the Committee to carry out its
functions as described in the Plan. The Committee has authority in its
discretion to determine the Eligible Persons to whom, and the time or times at
which, Incentive Awards may be granted and the number of shares, units, or
Appreciation Rights subject to each Incentive Award. The Committee also has
authority to interpret the Plan, to make determinations as to whether a grantee
is permanently and totally disabled, and to determine the terms and provisions
of the respective Incentive Award agreements and to make all other
determinations necessary or advisable for Plan administration. The Committee
has authority to prescribe, amend, and rescind rules and regulations relating to
the Plan. All interpretations, determinations, and actions by the Committee
will be final, conclusive, and binding upon all parties.
(c) No member of the Board nor the Committee will be liable for any action
or determination made in good faith by the Board or the Committee with respect
to the Plan or any Incentive Award under it.
5. Eligibility.
(a) All Employees who have been determined by the Committee to be key
Employees and all consultants and advisors to the Company, or to any subsidiary,
present or future, that have been selected by the Committee are eligible to
receive Incentive Awards under the Plan; however, only Employees who have been
determined by the Committee to be key Employees shall be eligible to receive
Incentive Stock Options under the Plan. The Committee has authority, in its
sole discretion, to determine and designate from time to time those Eligible
Persons who are to be granted Incentive Awards, and the type and amount of
Incentive Award to be granted. Each Incentive Award will be evidenced by a
written instrument and may include any other terms and conditions consistent
with the Plan, as the Committee may determine.
(b) No person will be eligible for the grant of any Incentive Stock Option
who owns or would own immediately after the grant of such Option, directly or
indirectly, stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or of any subsidiary corporation.
This does not apply if, at the time such Incentive Stock Option is granted, the
Incentive Stock Option price is at least 110% of the Fair Market Value of the
Common Stock on the date of the grant. In this event, the Incentive Stock
Option by its terms is not exercisable after the expiration of five years from
the date of grant.
6. Terms and Conditions of Stock Options.
(a) The purchase price of Common Stock under each Option shall be
determined by the Committee and shall not be less than an amount allowed by
applicable law; however, the purchase price under an Incentive Stock Option will
be at least equal to the Fair Market Value of the Common
Stock on the date of grant.
(b) Options may be exercised as determined by the Committee but in no
event after 15 years from the date of grant; however, an Incentive Stock Option
shall not be exercisable after the expiration of 10 years from the date of the
grant.
(c) Upon the exercise of an Option, the purchase price will be payable in
full in cash or, in the discretion of the Committee, by the assignment and
delivery to the Company of shares of Common Stock owned by the optionee
(including Common Stock subject to Incentive Stock Awards under the Plan); or in
the discretion of the Committee, by a promissory note secured by shares of
Common Stock bearing interest at a rate determined by the Committee; or by a
combination of any of the above. The purchase price may, in the discretion of
the Committee, also be paid by delivering a properly executed exercise notice
for such Option along with irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds necessary to fully
pay the purchase price and such other documents as the Committee may determine.
Any shares assigned and delivered to the Company in payment or partial payment
of the purchase price will be valued at the Fair Market Value on the exercise
date.
(d) With respect to Incentive Stock Options granted under the Plan, the
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of the number of shares with respect to which Incentive Stock
Options are exercisable for the first time by an Employee during any calendar
year shall not exceed one hundred thousand dollars ($100,000) or such other
limit as may be required by the Internal Revenue Code of 1986, as amended.
(e) No fractional shares will be issued pursuant to the exercise of an
Option nor will any cash payment be made in lieu of fractional shares.
(f) With respect to the exercise of an Option under the Plan, the
Participant may, in the discretion of the Committee, receive a replacement
Option under the Plan to purchase a number of shares of Common Stock equal to
the number of shares of Common Stock, if any, which the Participant delivered on
exercise of the Option, with a purchase price equal to the Fair Market Value on
the exercise date and with a term extending to the expiration date of the
original Option.
(g) At the time a Participant exercises an Option, the Committee may grant
a cash bonus award in such amount as the Committee may determine. The Committee
may make such a determination at the time of grant or exercise. The cash bonus
award may be subject to any condition imposed by the Committee, including a
reservation of the right to revoke a cash bonus award at any time before it is
paid.
(h) All Incentive Stock Options shall be granted within 10 years from the
date this Plan is adopted or is approved by the shareholders, whichever is
earlier.
(i) Incentive Stock Options by their terms shall not be transferable by an
Employee, other than by will or by laws of descent and distribution and shall be
exercisable only by an Employee during his or her lifetime.
7. Terms and Conditions of Appreciation Rights.
(a) An Appreciation Right may be granted in connection with an Option,
either at the time of grant or at any time thereafter during the term of the
Option.
(b) An Appreciation Right granted in connection with an Option will
entitle the holder, upon exercise, to surrender such Option or any portion
thereof to the extent unexercised, with respect to the number of shares as to
which such Appreciation Right is exercised, and to receive payment of an amount
computed pursuant to Section 7(d). Such Option will, to the extent surrendered,
then cease to be exercisable.
(c) Subject to Section 7(i), an Appreciation Right granted in connection
with an Option hereunder will be exercisable at such time or times, and only to
the extent that a related Option is exercisable, will expire no later than the
related Option expires, and will not be transferable except to the extent that
such related Option may be transferable.
(d) Upon the exercise of an Appreciation Right granted in connection with
an Option, the holder will be entitled to receive payment of an amount
determined by multiplying:
(i) The difference obtained by subtracting the purchase price of a
share of Common Stock specified in the related Option from the Fair Market
Value of a share of Common Stock on the date of exercise of such
Appreciation Right, by
(ii) The number of shares as to which such Appreciation Right will
have been exercised.
(e) An Appreciation Right granted without relationship to an Option will
be exercisable as determined by the Committee but in no event after 15 years
from the date of grant.
(f) An Appreciation Right granted without relationship to an Option will
entitle the holder, upon exercise of the Appreciation Right, to receive payment
of an amount determined by multiplying:
(i) The difference obtained by subtracting the amount assigned to the
Appreciation Right by the Committee on the date of grant (which shall not
be less than allowed by applicable law) from the Fair Market Value of a
share of Common Stock on the date of exercise of such Appreciation Right,
by
(ii) The number of shares as to which such Appreciation Right will
have been exercised.
(g) At the time of grant of an Appreciation Right, the Committee may
determine the maximum amount payable with respect to such Appreciation Right.
(h) Payment of the amount determined under Section 7(d) or (f) may be made
solely in whole shares of Common Stock valued at their Fair Market Value on the
date of exercise of the Appreciation Right or alternatively, in the sole
discretion of the Committee, solely in cash or a combination of cash and shares
as the Committee deems advisable. If the Committee decides that payment may be
made in shares of Common Stock, and the amount payable results in a fractional
share, payment for the fractional share will be made in cash.
(i) An Appreciation Right granted in connection with an Incentive Stock
Option may be exercised only when the market price of the Common Stock subject
to the Incentive Stock Option exceeds the purchase price of a share of Common
Stock related to the Incentive Stock Option.
8. Terms and Conditions of Incentive Stock Awards.
(a) All shares of Incentive Stock Awards granted pursuant to the Plan will
be subject to the following conditions:
(i) The shares may not be transferred, assigned or subject to any
encumbrance, pledge or charge until the restrictions are removed or expire
or unless otherwise allowed by the Committee.
(ii) The Committee may require the Participant to enter into an escrow
agreement providing that the certificates representing Incentive Stock
Awards granted or sold pursuant to the Plan will remain in the physical
custody of an escrow holder until all restrictions are removed or expire.
(iii) Each certificate representing Incentive Stock Awards granted
pursuant to the Plan will bear a legend making appropriate reference to the
restrictions imposed.
(iv) The Committee may impose the conditions on any shares granted or
sold pursuant to the Plan as it may deem advisable, including, without
limitation, restrictions under the Securities Act of 1933, as amended,
under the requirements of any stock exchange upon which such shares of the
same class are then listed and under any blue sky or other securities laws
applicable to such shares.
(v) The Committee, in its sole discretion, may elect to settle all or
a portion of an Incentive Stock Award in cash in lieu of issuing shares of
Common Stock based on the Fair Market Value on the date of payment.
(b) The restrictions imposed under subparagraph (a) above upon Incentive
Stock Awards will lapse in accordance with a schedule or other conditions as
determined by the Committee, subject to the provisions of Section 11(d) and
Section 13(e).
(c) Subject to the provisions of subparagraph (a) above and Section 13(e),
the holder will have all rights of a shareholder with respect to the Incentive
Stock Awards granted or sold, including the right to vote the shares and receive
all dividends and other distributions paid or made with respect thereto, unless
the Committee determines otherwise at the time the Incentive Stock Awards are
granted or sold.
9. Terms and Conditions of Performance Units.
Performance Units, measured in whole or in part by the value of shares of
Common Stock, the performance of the Participant, the performance of the
Company, its subsidiaries or any separate business units or properties thereof,
or any combination thereof, may be granted under the Plan. Such incentives may
be payable in Common Stock, cash or both, and shall be subject to such
restrictions and conditions, as the Committee shall determine. At the time of a
Performance Unit grant, the Committee shall determine, in its sole discretion,
one or more performance periods and performance goals to be achieved during the
applicable performance periods as well as a target payment value for the
Performance Unit or a range of payment values. No performance period shall
exceed 15 years from the date of the grant. The performance goals applicable to
a Performance Unit grant may be subject to such later revisions as the Committee
shall deem appropriate to reflect significant unforeseen events such as changes
in laws, regulations or accounting practices, or unusual or nonrecurring items
or occurrences. At the end of the performance period, the Committee shall
determine the extent to which performance goals have been attained or a degree
of achievement between maximum and minimum levels in order to establish the
level of payment to
be made, if any, and shall determine if payment is to be made in the form of
Common Stock or cash or both.
10. Terms and Conditions of Restricted Units.
Restricted Units may be granted under the Plan based on past, current and
potential performance. Such Units shall be subject to such restrictions and
conditions as the Committee shall determine. At the time of a Restricted Unit
grant, the Committee shall determine, in its sole discretion, the vesting period
of the Units and the maximum value of the Units. No vesting period shall exceed
15 years from the date of the grant. A Restricted Unit grant may be made
subject to such later revisions as the Committee shall deem appropriate to
reflect significant unforeseen events such as changes in laws, regulations or
accounting practices, or unusual or nonrecurring items or occurrences. At the
end of the vesting period applicable to Restricted Units granted to a
Participant, a cash amount equivalent in value to the Fair Market Value of one
share of Common Stock on the last day of the vesting period, subject to any
maximum value determined by the Committee at the time of grant, shall be paid
with respect to each such Restricted Unit to the Participant.
During the vesting period for Restricted Units, the Committee may provide
that a Participant shall be paid with respect to each Restricted Unit, cash
amounts in the same amount and at the same time as a dividend on a share of
Common Stock.
11. Adjustment Provisions.
(a) Subject to Section 11(b), if the outstanding shares of Common Stock of
the Company are increased, decreased, or exchanged for a different number or
kind of shares or other securities, or if additional shares or new or different
shares or other securities are distributed with respect to such shares of Common
Stock or other securities, through merger, consolidation, spin off, sale of all
or substantially all the property of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other distribution with respect to such shares of Common Stock, or
other securities, an appropriate and proportionate adjustment may be made in (i)
the maximum number and kind of shares provided in Section 3, (ii) the number and
kind of shares, units, or other securities subject to the then-outstanding
Incentive Awards, and (iii) the price for each share or other unit of any other
securities subject to then-outstanding Incentive Awards without change in the
aggregate purchase price or value as to which such Incentive Awards remain
exercisable or subject to restrictions.
(b) Despite the provisions of Section 11(a), upon dissolution or
liquidation of the Company or upon a reorganization, merger, or consolidation of
the Company with one or more corporations as a result of which the Company is
not the surviving corporation, or upon the sale of all or substantially all the
property of the Company, all Incentive Awards then outstanding under the Plan
will be fully vested and exercisable and all restrictions will immediately
cease, unless provisions are made in connection with such transaction for the
continuance of the Plan and the assumption or the substitution for such
Incentive Awards of new incentive awards covering the stock of a successor
employer corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices.
(c) Adjustments under Section 11(a) and 11(b) will be made by the
Committee, whose determination as to what adjustments will be made and the
extent thereof will be final, binding and conclusive. No fractional interest
will be issued under the Plan on account of any such adjustments.
(d) In the event a Change of Control occurs or in the event that any
Person makes a filing under Sections 13(d) or 14(d) of the Exchange Act with
respect to the Company, the Committee may, in its sole discretion, without
obtaining shareholder approval, take any one or more of the following actions
with respect to all Eligible Persons and Participants:
(i) Accelerate the exercise dates of any outstanding Appreciation
Rights or Options, accelerate the vesting dates of outstanding Restricted
Units or Incentive Stock Awards or the performance period of outstanding
Performance Units, make outstanding Appreciation Rights or Options fully
vested and exercisable, or make outstanding Restricted Units fully vested
and outstanding Performance Units fully payable;
(ii) Determine that all or any portion of conditions associated with
any Incentive Award have been met;
(iii) Grant a cash bonus award to any of the holders of
outstanding Options;
(iv) Grant Appreciation Rights to holders of outstanding Options;
(v) Pay cash to any or all Option holders in exchange for the
cancellation of their outstanding Options;
(vi) Make any other adjustments or amendments to the Plan and
outstanding Incentive Awards and substitute new Incentive Awards.
For purposes of this Section 11(d), the following definitions shall apply:
(A) A "Change in Control" of the Company shall have occurred when a
Person, alone or together with its Affiliates and Associates, becomes
the beneficial owner of 20% or more of the general voting power of the
Company.
(B) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(C) "Person" shall mean an individual, firm, corporation or other entity
or any successor to such entity, but "Person" shall not include the
Company, any subsidiary of the Company, any employee benefit plan or
employee stock plan of the Company, or any Person organized,
appointed, established or holding Voting Stock by, for or pursuant to
the terms of such a plan or any Person who acquires 20% or more of the
general voting power of the Company in a transaction or series of
transactions approved prior to such transaction or series of
transactions by the Board.
(D) "Voting Stock" shall mean shares of the Company's capital stock having
general voting power, with "voting power" meaning the power under
ordinary circumstances (and not merely upon the happening of a
contingency) to vote in the election of directors.
12. General Provisions.
(a) Nothing in the Plan or in any instrument executed pursuant to the Plan
will confer upon any Participant who is an Employee any right to continue in the
employ of the Company or any of its subsidiaries or affect the right of the
Company to terminate the employment of such Participant or terminate the
consulting or advisory services of any Participant at any time with or without
cause.
(b) No shares of Common Stock will be issued or transferred pursuant to an
Incentive Award unless and until all then-applicable requirements imposed by
federal and state securities and other laws, rules and regulations and by any
regulatory agencies having jurisdiction, and by any stock exchanges upon which
the Common Stock may be listed, have been fully met. As a condition precedent
to the issuance of shares pursuant to the grant or exercise of an Incentive
Award, the Company may require the Participant to take any reasonable action to
meet such requirements.
(c) No Participant and no beneficiary or other person claiming under or
through such Participant will have any right, title or interest in or to any
shares of Common Stock allocated or reserved under the Plan or subject to any
Incentive Award except as to such shares of Common Stock, if any, that have been
issued or transferred to such Participant.
(d) The Company shall have the right to deduct from any settlement,
including the delivery or vesting of shares or Units, made under the Plan any
federal, state or local taxes of any kind required by law to be withheld with
respect to such payments or take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.
With respect to any nonqualified stock Option, the Committee may, in its
discretion, permit the Participant to satisfy, in whole or in part, any tax
withholding obligation which may arise in connection with the exercise of the
nonqualified stock Option by electing to have the Company withhold shares of
Common Stock having a Fair Market Value equal to the amount of the tax
withholding.
(e) No Incentive Award and no right under the Plan, contingent or
otherwise, will be transferable, assignable or subject to any encumbrances,
pledge or charge of any nature except that, under such rules and regulations as
the Company may establish pursuant to the terms of the Plan, a beneficiary may
be designated with respect to an Incentive Award in the event of death of a
Participant. If such beneficiary is the executor or administrator of the estate
of the Participant, any rights with respect to such Incentive Award may be
transferred to the person or persons or entity (including a trust) entitled
thereto.
(f) The Company may make a loan to a Participant in connection with (i)
the exercise of an Option in an amount not to exceed the aggregate exercise
price of the Option being exercised and the amount of any federal and state
taxes payable in connection with such exercise for the purpose of assisting such
optionee to exercise such Option and (ii) an Incentive Stock Award or
Performance Unit paid in Common Stock in an amount not to exceed the amount of
any federal and state taxes payable upon expiration of any applicable forfeiture
provision, performance period or vesting period for the purpose of assisting the
holder of the Incentive Stock Award or Performance Unit to enjoy the rights
thereunder. Any such loan may be secured by shares of Common Stock or other
collateral deemed adequate by the Committee and will comply in all respects with
all applicable laws and regulations. The Committee may adopt policies regarding
eligibility for such loans, the maximum amounts thereof and any terms and
conditions not specified in the Plan upon which such loans will be made. Such
loans will bear interest at a rate determined by the Committee.
(g) The Committee may cancel, with the consent of the Participant, all or
a portion of any Option or Appreciation Right granted under the Plan to be
conditioned upon the granting to the Participant of a new Option or Appreciation
Right for the same or a different number of shares as
the Option or Appreciation Right surrendered, or may require such voluntary
surrender as a condition to a grant of a new Option or Appreciation Right to
such Participant. Subject to the provisions of Section 6(d), such new Option or
Appreciation Right shall be exercisable at the price, during the period and in
accordance with any other terms or conditions specified by the Committee at the
time the new Option or Appreciation Right is granted, all determined in
accordance with the provisions of the Plan without regard to the price, period
of exercise, or any other terms or conditions of the Option or Appreciation
Right surrendered.
(h) The forms of Options and Appreciation Rights granted under the Plan
may contain such other provisions as the Committee may deem advisable.
13. Amendment and Termination.
(a) The Board will have the power, in its discretion, to amend, suspend or
terminate the Plan at any time, subject to approval of the shareholders of the
Company to the extent necessary for the continued applicability of Rule 16b-3
under the Exchange Act.
(b) The Committee may, with the consent of a Participant, make such
modifications in the terms and conditions of an Incentive Award agreement as it
deems advisable.
(c) No amendment, suspension or termination of the Plan will, without the
consent of the Participant, alter, terminate, impair or adversely affect any
right or obligation under any Incentive Award previously granted under the Plan.
(d) An Appreciation Right or an Option held by a person who was an
Employee at the time such Appreciation Right or Option was granted will expire
immediately if and when the Participant ceases to be an Employee, except as
follows:
(i) If the employment of an Employee is terminated by the Company
other than for cause, for which the Company will be the sole judge, then
the Appreciation Rights and Options will expire three months thereafter
unless by their terms they expire sooner. During said period, the
Appreciation Rights and Options may be exercised in accordance with their
terms, but only to the extent exercisable on the date of termination of
employment.
(ii) If the Employee retires at normal retirement age or retires with
the consent of the Company at an earlier date or becomes permanently and
totally disabled, as determined by the Committee, while employed by the
Company, the Appreciation Rights and Options of the Employee will be
exercisable and will expire in accordance with their terms.
(iii) If an Employee dies while employed by the Company, the
Appreciation Rights and Options of the Employee will become fully
exercisable as of the date of death and will expire three years after the
date of death unless by their terms they expire sooner. If the Employee
dies or becomes permanently and totally disabled as determined by the
Committee within the three months referred to in subparagraph (i) above,
the Appreciation Rights and Options will become fully exercisable as of the
date of death or such permanent disability and will expire, in the case of
death, one year after the date of such death. In the case of permanent and
total disability such Options and Appreciation Rights will expire in
accordance with their terms. If the Employee dies or becomes permanently
and totally disabled as determined by the Committee subsequent to the time
the Employee retires at normal retirement age or retires with the consent
of the Company at an earlier date, the Appreciation Rights and Options will
fully vest as of the date of death or permanent and total
disability and will expire, in the case of death, one year after the date
of death. In the case of permanent and total disability, such Appreciation
Rights and Options will expire in accordance with their terms.
(e) In the event a holder of Incentive Stock Awards, Performance Units or
Restricted Units ceases to be an Employee, all such Incentive Stock Awards,
Performance Units or Restricted Units subject to restrictions at the time his or
her employment terminates will be returned to the Company unless the Committee
determines otherwise except as follows:
(i) In the event the holder of Incentive Stock Awards or Restricted
Units ceases to be an Employee due to death all such Incentive Stock Awards
or Restricted Units subject to restrictions at the time his or her
employment terminates will no longer be subject to said restrictions.
(ii) If an Employee retires at normal retirement age or retires with
the consent of the Company at an earlier date or becomes permanently and
totally disabled as determined by the Committee, all such Incentive Stock
Awards, Performance Units and Restricted Units will continue to vest over
the applicable vesting or performance period provided that during these
periods such Employee does not engage in or assist any business that the
Company, in its sole discretion, determines to be in competition with
businesses engaged in by the Company.
(iii) In the event a holder of Performance Units ceases to be an
Employee prior to the end of a performance period applicable thereto, the
Committee in its sole discretion shall determine whether to make any
payment to the Participant in respect of such Performance Unit and the
timing of such payment, if any.
(f) The Committee may in its sole discretion determine, (i) with respect
to an Incentive Award, that any Participant who is on leave of absence for any
reason will be considered as still in the employ of the Company, provided that
rights to such Incentive Award during a leave of absence will be limited to the
extent to which such right was earned or vested at the commencement of such
leave of absence, or (ii) with respect to any Appreciation Rights and Options of
any Employee who is retiring at normal retirement age or with the consent of the
Company at an earlier age, or of an Employee who becomes permanently and totally
disabled as determined by the Committee that the Appreciation Rights and/or
Options of such Employee will accelerate and become fully exercisable on a date
specified by the Committee which is not later than the effective date of such
Employee's retirement or on a date specified by the Committee which is not later
than the date that the Employee becomes permanently and totally disabled as
determined by the Committee.
14. Effective Date of Plan and Duration of Plan.
This Plan will become effective upon adoption by the Board subject to
approval by the holders of a majority of the shares which are represented in
person or by proxy and entitled to vote on the subject at the 1991 Annual
Meeting of Shareholders of the Company. Unless previously terminated, the Plan
will terminate on September 25, 2006 except with respect to Incentive Awards
then outstanding.