THE NEW YORK TIMES COMPANY
1991 EXECUTIVE STOCK INCENTIVE PLAN EXHIBIT 10.1
AS AMENDED
1. NAME AND GENERAL PURPOSE
The name of this plan is The New York Times Company 1991 Executive Stock
Incentive Plan (hereinafter called the "Plan"). The purpose of the Plan is to
enable the Company (as hereinafter defined) to retain and attract executives who
enhance its tradition and contribute to its success by their ability, ingenuity
and industry, and to enable them to participate in the long-term success and
growth of the Company.
2. DEFINITIONS
(a) "Awards"--has the meaning specified in Section 12 hereof.
(b) "Board"--means the Board of Directors of the Company.
(c) "Cash Plan"--means the Company's 1991 Executive Cash Bonus Plan.
(d) "Code"--means the Internal Revenue Code of 1986, as amended.
(e) "Committee"--means the Committee referred to in Section 3 of the Plan.
If at any time no Committee shall be in office then the functions of the
Committee specified in the Plan shall be exercised by those members of the Board
who are Non-Employee Directors.
(f) "Common Stock"--means shares of the Class A Common Stock of the
Company.
(g) "Company"--means The New York Times Company, a corporation organized
under the laws of the State of New York (or any successor corporation), and,
unless the context otherwise requires, its subsidiaries (as hereinafter defined)
and other non-corporate entities in which it owns directly or indirectly 20% or
more of the equity interests. A "subsidiary" means any corporation in which the
Company possesses directly or indirectly 50% or more of the combined voting
power of all classes of stock.
(h) "Consolidated Statement of Income"--means the consolidated statement of
income (or any comparable statement, however designated) of the Company, audited
by the independent certified public accountants of the Company and contained in
the Company's annual report to stockholders or proxy statement.
(i) "Disability"--means total disability as defined under the Company's
long-term disability plan, whether or not the Participant is covered by such
plan, as determined by the Committee.
(j) "Fair Market Value"--means the arithmetic mean of the highest and
lowest sales prices of the Common Stock as reported in the Consolidated
Transactions of the American Stock Exchange ("AMSE") (or such other national
securities exchange on which the Common Stock may be listed at the time of
determination, and if the Common Stock is listed on more than one exchange, then
on the one located in New York or if the Common Stock is listed only on the
National Association of Securities Dealers Automated Quotations System
("NASDAQ"), then on such system) on the date of the grant or other date on which
the Common Stock is to be valued hereunder. If no sale shall have been made on
the AMSE, such other exchange or the NASDAQ on such date or if the Common Stock
is not then listed on any exchange or on the NASDAQ, Fair Market Value shall be
determined by the Committee in accordance with Treasury Regulations applicable
to incentive stock options.
(k) "Income Before Income Taxes"--means the amount designated as Income
Before Income Taxes for the applicable year and shown separately on the
Consolidated Statement of Income for such year.
(l) "Non-Employee Director"--means any Director of the Company who at the
time of acting is a "Non-Employee Director" under Rule 16b-3 or any successor
rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(m) "Participant"--means a key employee of the Company who is selected by
the Committee to participate in any one or more parts of the Plan from among
persons who in the judgment of the Committee are key employees of the Company.
In general, key employees are those employees who have principal responsibility
for, or who contribute substantially to, the management efficiency, editorial
achievement or financial success of the Company. Only employees of The New York
Times Company, its subsidiaries and other non-corporate entities in which it
owns directly or indirectly 40% or more of the equity interests are eligible to
participate in the Plan.
(n) "Retirement"--means retirement as defined by the terms of "The New York
Times Companies Pension Plan" which became effective December 31, 1988, or any
successor retirement plan, whether or not the Participant is a member of such
retirement plan, and, in the case of employees of Affiliated Publications, Inc.,
or any subsidiary thereof, who retire under the terms of the Globe Newspaper
Company Retirement Plan, which became effective January 1, 1994 (the "Globe
Pension Plan") or any successor retirement plan, "Retirement" shall also mean
retirement as defined by the terms of the Globe Pension Plan or any successor
plan.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board or the Committee appointed by
it and composed of two or more directors all of whom shall be Non-Employee
Directors. The membership of the Committee shall be constituted so as to comply
at all times with the applicable requirements of Rule 16b-3, and with the
administration requirements of Section 162(m)(4)(C) of the Code. The Committee
shall serve at the pleasure of the Board and shall have such powers as the Board
may from time to time confer upon it.
4. OPTIONS AND AWARDS UNDER THE PLAN
Options, which include "Non-Qualified Options" and "Incentive Stock
Options" or combinations thereof, are rights to purchase Common Stock.
Non-Qualified Options and Incentive Stock Options are subject to the terms,
conditions and restrictions provided in Part I of the Plan.
Awards under the Plan may include one or more of the following types,
either alone or in any combination thereof: (i) "Stock Awards," (ii) "Restricted
Stock Awards," (iii) "Retirement Unit Awards," (iv) "Annual Performance Awards,"
(v) "Performance Awards" or "Other Awards."
Stock Awards are granted under Part IIA of the Plan. Restricted Stock
Awards are granted under Part IIB of the Plan. Retirement Unit Awards are
granted under Part IIC of the Plan. Annual Performance Awards are granted under
Part IID of the Plan. Performance Awards or Other Awards are granted under Part
IIE of the Plan. Awards are subject to the terms, conditions and restrictions
provided in the respective subparts of Part II of the Plan. Annual Performance
Awards will be based exclusively on the criteria set forth in Section 27A.
PART I STOCK OPTIONS
5. PURPOSE
The purpose of the Stock Option portion of the Plan is to provide an added
incentive for effective service and high levels of performance to Participants
by affording them an opportunity, under the terms of the Plan, to acquire Common
Stock and thereby to increase their proprietary interest in the continued
progress and success of the Company.
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6. DETERMINATION OF OPTIONEES; SHARES SUBJECT TO OPTIONS
(a) The Committee may grant options to purchase Common Stock ("Options") to
Participants in such amounts as the Committee may determine, subject to the
conditions and limitations set forth in the Plan. Options may be granted in
combination with Awards made under the Plan, and Options may be granted to any
Participant whether or not he or she was eligible for, or received, an Award.
(b) The number of shares of Common Stock with respect to which Options may
be granted to any key employee during any calendar year shall not exceed 200,000
(subject to adjustment as provided in Sections 28 and 29 hereof).
(c) There may be issued under the Plan pursuant to the exercise of Options,
an aggregate of not more than 20,000,000 shares of Common Stock, subject to
adjustment as provided in Sections 28 and 29 hereof. Shares of Common Stock
issued pursuant to Options may be either authorized but unissued shares,
treasury shares, reacquired shares, or any combination thereof. Any shares
subject to an Option which expires without being exercised shall be available
for issuance under new Options.
7. OPTION PRICE
The exercise price of Common Stock subject to Options granted pursuant to
the Plan shall be the Fair Market Value thereof at the time the Option is
granted. If a Participant owns or is deemed to be the owner of, by reason of the
attribution rules under Section 425(d) of the Code, more than 10% of the
combined voting power of all classes of the stock of the Company or any
subsidiary of the Company and an Option granted to such Participant is intended
to qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code, the option price shall be no less than 110% of the Fair Market Value of
the Common Stock on the date the Option is granted.
8. PAYMENT OF OPTION PRICE
The purchase price is to be paid in full when the Option is exercised and
stock certificates will be delivered only against such payment. Such purchase
price may be paid in such form as the Committee may determine. Payment of the
option price may be made (i) in cash, (ii) by delivering a properly executed
exercise notice to the Company together with a copy of irrevocable instructions
to a broker to deliver promptly to the Company the amount of sale or loan
proceeds to pay the purchase price, (iii) by delivering to the Company shares of
Common Stock previously owned, (iv) by electing to have the Company retain
Common Stock which would be otherwise issued on exercise of the Option, or (v)
any combination of the foregoing forms, all subject to the approval of the
Committee and to such rules as the Committee may adopt. In determining the
number of shares of Common Stock necessary to be delivered to or retained by the
Company, such Common Stock shall be valued at Fair Market Value.
9. TYPES OF STOCK OPTIONS
(a) Options granted under the Plan may be two types, an incentive stock
option ("Incentive Stock Option") and a non-qualified stock option
("Non-Qualified Option"). It is intended that Incentive Stock Options granted
hereunder shall constitute incentive stock options within the meaning of Section
422 of the Code. Anything in the Plan to the contrary notwithstanding, (i) no
provision of this Plan relating to Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify either the Plan or any Incentive Stock
Option granted under such provisions of the Code, and (ii) no Option designated
by the Committee as a Non-Qualified Option shall constitute an Incentive Stock
Option. In furtherance of the foregoing and not by way of limitation, no
Incentive Stock Option shall be granted to a Participant who is not an employee
of The New York Times Company or one of its subsidiaries.
(b) If the aggregate Fair Market Value of the Common Stock (determined as
of the date of grant) for which any optionee may for the first time exercise
Incentive Stock Options in any calendar year
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under the Plan and any other stock option plan of the Company, considered in the
aggregate, exceeds $100,000, such excess Incentive Stock Options will be treated
as Non-Qualified Options.
10. TERMS OF STOCK OPTIONS
(a) Each Option will be for a term of not more than ten years from the date
of grant, except that if a Participant owns or is deemed to be the owner of, by
reason of the attribution rules of Section 425(d) of the Code, more than 10% of
the combined voting power of all classes of stock of the Company or any
subsidiary of the Company and an Incentive Stock Option is granted to such
Participant, the term of such Option shall be no more than five years from the
date of grant.
(b) An Option may not be exercised within one year after the date of grant
except in the case of the death of the optionee or upon termination of active
employment with the Company by reason of the Disability or Retirement of the
optionee during such period. Thereafter, an Option shall be exercisable in such
installments, if any, as the Committee may specify, and shall be exercisable
during the optionee's lifetime only by the optionee (or, if the optionee is
disabled, by any guardian or other legal representative appointed to represent
him or her) and, except as provided in subsections (c) and (d) below, shall not
be exercisable by the optionee unless at the time of exercise such optionee is
an employee of the Company.
(c) Upon termination of active employment with the Company by reason of
Disability or Retirement, an optionee (or, if the optionee is disabled, any
guardian or legal representative appointed to represent him or her) may exercise
all Options otherwise exercisable by him or her at the time of such termination
of employment (subject to the provisions of subsection (e) below) until the
expiration thereof. In the event an optionee dies while employed by the Company
or after termination of employment by reason of Disability or Retirement, the
person who acquired the right to exercise his or her Options by reason of the
death of the optionee, as provided in Section 30 hereof, may exercise such
Options otherwise exercisable at the time of death (subject to the provisions of
subsection (e) below) at any time until the expiration thereof.
(d) Upon termination of employment with the Company for any reason other
than death, Retirement or Disability, the optionee may exercise all Options
otherwise exercisable by him or her at the time of such termination of
employment for an additional one year after such termination of employment. In
the event such optionee dies within such one-year period, the person who
acquired the right to exercise his or her Options by reason of the death of the
optionee, as provided in Section 30 hereof, may exercise such Options at any
time within the period of the greater of (i) the remainder of the one-year
period described in the foregoing sentence, or (ii) three months from the date
of the optionee's death. For purposes of this Section 10(d), in the event that
any optionee is rehired by the Company within one year of such optionee's
termination of employment with the Company, such optionee shall be deemed not to
have terminated employment for purposes of determining the expiration date of
all unexpired non-qualified stock options held by such individual on the date of
rehire, with the effect that such options shall continue to be exercisable at
any time until the expiration thereof (subject to the terms thereof and the
provisions of this Section 10).
(e) Notwithstanding any of the foregoing, no Option shall be exercisable in
whole or in part after the expiration date provided in the Option. In the event
of the death of the optionee while employed by the Company, or the Disability or
Retirement of the optionee, the Committee shall have the discretion to provide
for the acceleration of the exercisability of Options exercisable over a period
of time, or alternatively, to provide for all or any part of such Options to
continue to become exercisable in such installments as originally specified by
the Committee, or such revised installments as specified by the Committee at the
time of termination of employment (but in no event beyond the original
expiration date), in either case subject to such conditions as determined by the
Committee in its discretion. No Option shall be transferable otherwise than by
will or by the laws of descent and distribution.
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11. OPTION AGREEMENTS
In consideration of any Options granted to a Participant under the Plan, if
requested by the Committee, such Participant shall enter into an Option
Agreement with the Company providing, in addition to such other terms as the
Committee may deem advisable, that the optionee must remain in the employ of the
Company for one year before such optionee will be entitled to exercise the
Option, except as provided in Section 10 hereof with respect to death,
Disability and Retirement, and specifying the installments, if any, in which
such Option shall become exercisable.
PART II AWARDS
12. FORM OF AWARDS
The Award portion of the Plan is designed to provide incentives for
Participants by the making of awards of supplemental compensation ("Awards").
The Committee, subject to the terms and conditions hereof, may make Awards to a
Participant in any one, or in any combination, of the following forms:
(a) Common Stock as provided in Part IIA of the Plan ("Stock
Awards");
(b) Restricted Stock as provided in Part IIB of the Plan ("Restricted
Stock Awards");
(c) Retirement Units as provided in Part IIC of the Plan ("Retirement
Unit Awards");
(d) Annual Performance Awards as provided in Part IID of the Plan
("Annual Performance Awards"); and
(e) Performance Awards ("Performance Awards") or other forms of
Awards ("Other Awards"), as provided in Part IIE of the Plan.
Awards may be made to a Participant whether or not he or she is receiving an
Option grant under Part I of the Plan for the year and whether or not he or she
receives an award under the Cash Plan.
Awards will be based on a Participant's performance in those areas for
which the Participant is directly responsible. Performance for this purpose may
be measured by the achievement of specific management goals such as, but not
limited to, an increase in earnings or the operating cash flow of the Company,
outstanding initiative or achievement in any department of the Company, or any
other standards specified by the Committee. Annual Performance Awards will be
based exclusively on the criteria set forth in Section 27A.
13. MAXIMUM AMOUNT AVAILABLE FOR THE ACCRUAL OF AWARDS UNDER PART II OF THE PLAN
FOR ANY YEAR
(a) No accrual for Awards shall be made hereunder (or under the Cash Plan)
for any year unless cash dividends of not less than ten cents ($.10) per share
(subject to adjustment as provided in Sections 28 and 29 hereof) have been
declared on the outstanding Class A and Class B Common Stock of the Company
during such year.
(b) In the event that the above condition is met for any year during the
continuance of this Plan, the maximum aggregate amount that may be accrued for
Awards under the Plan and the Cash Plan for such year shall be 4% of Income
Before Income Taxes. The Committee, in its sole discretion, may make adjustments
in Income Before Income Taxes to take account of extraordinary, unusual or
infrequently occurring events and transactions, changes in accounting principles
that substantially affect the foregoing, or such other circumstances as the
Committee may determine warrant such adjustment.
(c) As soon as feasible after the close of each year, the independent
certified public accountants of the Company shall report the maximum amount that
may be accrued for Awards for such year under the formula described in Section
13(b), subject to the second sentence of such Section.
(d) If amounts are accrued in any year under the formula described in this
Section 13 and are not awarded in full in such year under the Plan and the Cash
Plan, such unawarded amounts may, in the
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discretion of the Committee, be carried forward and be available for Awards
under the Plan and under the Cash Plan in any future year without regard to the
provisions of Sections 13(a) or (b) of the Plan applicable to Awards made in
such year.
(e) Awards under the Plan for any year may not exceed the sum of (i) the
amount accrued for such year under Section 13(b) above plus (ii) unawarded
accrued amounts carried forward from previous years under Section 13(d) above
plus (iii) amounts that may become available for Awards pursuant to the last
sentence of Sections 15(c) and 27A hereof, minus (x) the amount of interest or
dividend equivalents set aside during such year pursuant to Sections 15(c) and
27A hereof and the amount of dividend equivalents allocated to Retirement Unit
Accounts during such year pursuant to Section 24 hereof, and minus (y) the
amount of awards made for such year under the Cash Plan (and any interest
equivalents allocated during such year pursuant to Section 10(b), 11(f) and
12(b) thereof). For this purpose, the amount of Awards of Common Stock under the
Plan shall be based on the Fair Market Value of the Common Stock subject to
Awards as of the date of grant of such Awards.
(f) Subject to Sections 28 and 29 hereof, the aggregate number of shares of
Common Stock for which Stock, Restricted Stock, Retirement Units, Annual
Performance Awards, and Performance and Other Awards may be made under the Plan
shall not exceed 1,000,000 shares, which shall be treasury shares reserved for
issuance of Awards under the Plan. Shares of Common Stock subject to, but not
issued under, any deferred Award which has been discontinued by the Committee
pursuant to the provisions hereof or any Restricted Stock which is forfeited by
any Participant shall again be available for Awards under the Plan.
14. DETERMINATION OF AWARDS AND PARTICIPANTS
(a) As promptly as practicable after the end of each year, the Committee
may make Awards (other than Annual Performance Awards, which are to be made
exclusively as set forth in Section 27A) for such year and determine the amounts
to be carried forward for Awards in future years. The Committee may also, in its
discretion, make Awards (other than Annual Performance Awards, which are to be
made exclusively as set forth in Section 27A) prior to the end of the year based
on the amounts available under clauses (ii) and (iii) of Section 13(e) and
reasonable estimates of the accrual for the year in question.
(b) The Committee shall have absolute discretion to determine the key
employees who are to receive Awards (other than Annual Performance Awards, which
are to be made exclusively as set forth in Section 27A) under the Plan for any
year and to determine the amount of such Awards based on such criteria and
factors as the Committee in its sole discretion may determine, such as the
Company's operating cash flow and overall financial performance. Recommendations
as to the key employees who are to receive Awards (including Annual Performance
Awards) under the Plan for any year and as to the amount and form of such Awards
shall, however, be made to the Committee by the chief executive officer of the
Company. The fact that an employee is selected as eligible for an Award shall
not mean, however, that such employee will necessarily receive an Award.
(c) A person whose employment terminates during the year or who is granted
a leave of absence during the year may, in the discretion of the Committee and
under such rules as the Committee may from time to time prescribe, be given an
Award with respect to the period of such person's service during such year.
15. METHOD AND TIME OF PAYMENT OF AWARDS
(a) Awards shall be paid in full as soon as practicable after the Award is
made; provided, however, that the payment of Annual Performance Awards shall be
subject to the provisions of Section 27A, and further provided that the payment
of any or all Awards may be deferred, divided into annual installments, or made
subject to such other conditions as the Committee in its sole discretion may
authorize under such rules and regulations as may be adopted from time to time
by the Committee.
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(b) The Committee's rules and regulations may include procedures by which a
Participant expresses a preference to the Committee as to the form of Award or
method of payment of an Award but the final determination as to the form and the
terms and conditions of any Award shall rest solely with the Committee.
(c) Awards deferred under the Plan shall become payable to the Participant
or, in the event of the Participant's death, as specified in Section 30 hereof,
in such manner, at such time or times (which may be either before or after
Retirement or other termination of service), and subject to such conditions as
the Committee in its sole discretion shall determine. In any year the Committee
shall have the discretion to set aside, for payment in such year or any future
year, interest on any deferred Award payable partly in cash, and amounts
equivalent to dividends on any deferred Award payable wholly or partly in stock;
provided, however, that the total amount of such interest and dividend
equivalents shall be deducted from the maximum amount available for Awards under
Section 13(e) of the Plan. Any forfeited deferred Awards (including any
forfeited stock at its Award value) shall be carried forward and be available
for Awards in any future year without regard to the provisions of Sections 13(a)
or (b) of the Plan.
16. INDIVIDUAL AGREEMENTS
(a) The Committee may in its discretion require that each Participant
receiving an Award enter into an agreement with the Company which shall contain
such terms and conditions as the Committee in its discretion may require.
(b) The Committee may cancel any unexpired, unpaid or deferred Award at any
time if the Participant is not in compliance with all applicable provisions of
the agreement referred to above, if any, and the Plan.
17. STATUS OF PARTICIPANTS
No Participant in this Plan shall be deemed to be a stockholder of the
Company, or to have any interest in any stock or any specific assets of the
Company by reason of the fact that deferred Stock Awards, Retirement Unit
Awards, Annual Performance Awards, Performance Awards, Other Awards or dollar
credits are to be recorded as being held for such Participant's account to be
paid in installments in the future. The interest of all Participants shall
derive from and be determined solely by the terms and provisions of the Plan set
forth herein.
18. [INTENTIONALLY LEFT BLANK]
PART IIA STOCK AWARDS
19. DETERMINATION OF STOCK AWARDS
(a) Each year the Committee shall designate those Participants who shall
receive Stock Awards under this part of the Plan. Stock Awards are made in the
form of grants of Common Stock, which may be delivered immediately, in
installments or on a deferred date, as the Committee, in its discretion, may
provide.
(b) If the Committee determines that some portion of a Stock Award to a
Participant shall be treated as a deferred Stock Award and payable in annual or
other periodic installments, then the Participant will be notified in writing
when such deferred Stock Awards shall be paid and over what period of time. As
soon as feasible after the granting of such a Stock Award, there shall be
reserved out of the treasury shares of the Company, a number (which may include
a fraction) of shares of Common Stock equal to the number of shares of Common
Stock so awarded. In each year at the discretion of the Committee there may also
be allocated or credited to each Participant a dollar amount equal to the cash
dividends declared and paid by the Company on its Common Stock which the
Participant would have
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received had such Participant been the owner of the number of shares of any
Common Stock deferred for future payment. Any amounts provided for pursuant to
the preceding sentence shall become payable in such manner, at such time or
times, and subject to such conditions (which may include provision for an amount
equivalent to interest on such dividend equivalents at rates fixed by the
Committee) as the Committee in its sole discretion shall determine; provided,
however, that the total value of such dividend equivalents (and any interest
thereon) shall be deducted from the amount available for Awards under the
provisions of Section 13(e) of the Plan. The Committee in its discretion may
make appropriate equitable adjustments to such deferred Stock Award to account
for any dividends of property (other than cash) declared and paid by the Company
on its Common Stock, or to account for any other event described in Sections 28
and 29 hereof.
PART IIB RESTRICTED STOCK AWARDS
20. DETERMINATION OF RESTRICTED STOCK AWARDS
Each year the Committee shall designate the Participants who shall receive
Restricted Stock Awards. Shares awarded under this part of the Plan, while
subject to the restrictions hereinafter set forth, are referred to as
"Restricted Stock."
21. TERMS OF RESTRICTED STOCK AWARDS
Any Award of Restricted Stock shall be subject to the following terms and
conditions and to any other terms and conditions not inconsistent with the Plan
as shall be prescribed by the Committee in its sole discretion and which may be
contained in the agreement, if any, referred to in Section 16 above (or in any
amendment thereto):
(a) DELIVERY OF RESTRICTED STOCK. Unless otherwise determined by the
Committee, the Company shall transfer treasury shares to each Participant
to whom an Award of Restricted Stock has been made equal to the number of
shares of Restricted Stock specified in the Award, and hold the
certificates representing such shares of Restricted Stock for the
Participant for the period of time during which such shares shall remain
subject to the restrictions set forth in the Award (the "Restricted
Period"). Shares of Restricted Stock may not be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered by a Participant
during the Restricted Period, except as hereinafter provided. Except for
the restrictions set forth herein and unless otherwise determined by the
Committee, a Participant shall have all the rights of a stockholder with
respect to the shares of Restricted Stock comprising his or her Award,
including, but not limited to, the right to vote and the right to receive
dividends (which if in shares of Common Stock shall be Restricted Stock
under the same terms and conditions).
(b) LAPSE OF RESTRICTED PERIOD. The Restricted Period shall commence
upon the date of the Award (which unless otherwise specified by the
Committee shall be the date the Restricted Stock is transferred to the
Participant) and, unless sooner terminated as otherwise provided herein,
shall continue for such period of time as specified by the Committee in the
Award, which shall in no event be less than one year, and thereafter shall
lapse in such installments, if any, as provided by the Committee in the
Award.
(c) LEGEND. Each certificate issued in respect of shares of Restricted
Stock transferred or issued to a Participant under an Award shall be
registered in the name of the Participant and shall bear the following (or
a similar) legend:
"THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE
SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE NEW YORK
TIMES COMPANY 1991 EXECUTIVE STOCK INCENTIVE PLAN (THE "PLAN")
APPLICABLE TO RESTRICTED STOCK AND TO THE RESTRICTED STOCK
AGREEMENT DATED (THE "AGREEMENT"), AND
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MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED, HYPOTHECATED,
OR OTHERWISE DISPOSED OF OR ENCUMBERED IN ANY MANNER DURING THE
RESTRICTED PERIOD SPECIFIED IN SUCH AGREEMENT. COPIES OF SUCH
PLAN AND AGREEMENT ARE ON FILE WITH THE SECRETARY OF THE
COMPANY."
(d) DEATH OR DISABILITY. Unless the Committee shall otherwise determine
in the Award, if a Participant ceases to be employed by the Company by
reason of death or Disability, the Restricted Period covering all shares of
Restricted Stock transferred or issued to such Participant under the Plan
shall immediately lapse.
(e) RETIREMENT. Unless the Committee shall otherwise determine in the
Award, the Restricted Period covering all shares of Restricted Stock
transferred to a Participant under the Plan shall immediately lapse upon
such Participant's Retirement, whether early or not.
(f) TERMINATION OF EMPLOYMENT. Unless the Committee shall otherwise
determine in the Award or otherwise determine at or after the date of
grant, if a Participant ceases to be employed by the Company other than due
to a condition described in Sections 21(d) or (e) above, all shares of
Restricted Stock owned by such Participant for which the Restricted Period
has not lapsed shall revert back to the Company upon such termination.
Authorized leave of absence or absence in military service shall constitute
employment for the purposes of this Section 21(f). Whether absence in
government service may constitute employment for the purposes of the Plan
shall be conclusively determined by the Committee.
(g) WAIVER OF FORFEITURE PROVISIONS. The Committee, in its sole and
absolute discretion, may waive the forfeiture provisions in respect of all
or some of the Restricted Stock awarded to a Participant.
(h) ISSUANCE OF NEW CERTIFICATES. Upon the lapse of the Restricted
Period with respect to any shares of Restricted Stock, such shares shall no
longer be subject to the restrictions imposed in the Award and shall no
longer be considered Restricted Stock for the purposes of the Award and the
Plan, and the Company shall issue new share certificates respecting such
shares registered in the name of the Participant without the legend
described in Section 21(c) in exchange for those previously issued.
PART IIC RETIREMENT UNIT AWARDS
22. DETERMINATION OF RETIREMENT UNIT AWARDS
Each year the Committee shall designate those Participants who shall
receive Retirement Unit Awards under the Plan. The Company shall create and
maintain appropriate records of account for each Participant which shall be
designated as the Participant's Retirement Unit Account.
23. CREDITS TO RETIREMENT UNIT ACCOUNTS
The Committee shall allocate to each Participant selected to receive a
Retirement Unit Award for that year such dollar amount as the Committee shall
determine, taking into account the value of the Participant's services to the
Company. Such dollar amount shall thereupon be converted into Retirement Units
or fractions of Units and credited to each such Participant's Retirement Unit
Account in a number equal to the quotient obtained by dividing such allocated
dollar amount by the Fair Market Value of one share of Common Stock as of the
date the allocation is made.
24. DIVIDEND CREDITS
At the discretion of the Committee there may also be allocated in each year
to each Participant a dollar amount equal to the cash dividends declared and
paid by the Company on the Common Stock
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which the Participant would have received had such Participant been the owner of
the number of shares of Common Stock equal to the number of the whole Retirement
Units (but not fractional Units) credited to the Participant's Retirement Unit
Account; provided, however, that the total value of such dividend equivalents
shall be deducted from the amount available for Awards under Section 13 of the
Plan. The dollar amounts allocated shall be converted into and credited to the
Participant's Retirement Unit Accounts as Retirement Units or fractions thereof
as set forth in Section 23 above as of the date on which such dividends were
paid by the Company. No interest shall be paid on the dollar amount so allocated
to the Retirement Unit Account of any Participant. The Committee in its
discretion may make appropriate equitable adjustments to such Retirement Unit
Accounts to account for any dividends of property (other than cash) declared and
paid by the Company on its Common Stock, or to account for any other event
described in Sections 28 and 29 hereof.
25. RESERVATION OF STOCK AND ACCOUNTING RECORDS
The Company shall keep records of the Participant's Retirement Unit
Accounts. At the time of any allocation to a Participant's account under
Sections 23 or 24 hereof, there shall be reserved out of treasury shares of the
Company a number (which may include a fraction) of shares of Common Stock equal
to the number of Units or fraction thereof so allocated.
26. MATURITY AND PAYMENT AFTER MATURITY
(a) The Retirement Unit Account of each Participant shall mature upon such
Participant's death, Retirement or other termination of employment.
(b) After maturity, the Company shall deliver to the Participant (or in the
event of the death of the Participant, as specified in Section 30 hereof) in ten
approximately equal annual installments, shares of Common Stock equal in the
aggregate to the number of Retirement Units credited to the Participant's
Retirement Unit Account. Any fraction of a Unit credited to the Participant's
account at maturity shall be paid in cash with the first installment, the
fractional Unit being converted into cash at the Fair Market Value of the Common
Stock on such first payment date. The first such installment shall be paid
within 90 days after maturity. However, the Committee in its discretion at or
any time after maturity may, with the consent of the Participant (or the
beneficiary of a deceased Participant as specified in Section 30 hereof), (i)
defer the commencement of such distribution or defer any installment, (ii)
deliver full payment of the shares of Common Stock equal to the aggregate number
of Retirement Units credited to the Participant's Retirement Unit Account and
the dollar amount credited thereto, or (iii) reduce or increase the number of
annual installments in which the payments are to be made.
(c) So long as Retirement Units remain credited to the Retirement Unit
Account of a Participant subsequent to maturity, such account shall be credited
with the dollar amount allocated to the account as dividends as provided for in
Section 24 hereof. Any dollar amount so credited may be paid in cash with the
next succeeding annual installment made under Section 26(b) above, or in such
manner, at such time or times, and subject to such conditions as the Committee
in its sole discretion shall determine; provided, however, that in the case of
any dollar amount credited to an account after maturity in respect of a dividend
declared prior to maturity, such dollar amounts shall be converted to Retirement
Units as of the date of payment and the remaining installments of Common Stock
shall be increased accordingly.
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PART IID ANNUAL PERFORMANCE AWARDS
27A. DETERMINATION OF ANNUAL PERFORMANCE AWARDS
(a) GENERAL. Each year the Committee may make Annual Performance Awards
under this part of the Plan; provided that no Participant may be eligible to
receive an Annual Performance Award hereunder and under the Cash Plan in the
same year.
(b) CERTAIN DEFINITIONS. For the purposes of this Section 27A, the
following terms shall have the meanings specified:
"Affected Officers" shall mean those executive officers of the Company
whose compensation is required to be disclosed in the Company's annual
proxy statement relating to the election of directors.
"Code Section 162(m)" shall mean Section 162(m) of the Code (or any
successor provision), and "Regulations" shall mean the regulations
promulgated thereunder, as from time to time in effect.
"Eligible Participants" shall have the meaning set forth in subsection
(c) below.
"Performance Adjustment" means, for any year, a factor ranging from 0%
to 200%, based upon the achievement of Performance Goal Targets established
by the Committee, that, when multiplied by an Eligible Participant's Target
Award, determines the amount of such Eligible Participant's Annual
Performance Award for such year.
"Performance Goal" means, for any year, the business criteria selected
by the Committee to measure the performance during such year of the Company
(or of a division, subsidiary or group thereof) from one or more of the
following:
(i) earnings per share of the Company for the year;
(ii) net income of the Company for the year;
(iii) return on assets of the Company for the year (net income of
the Company for the year divided by average total assets during such
year);
(iv) return on stockholders' equity of the Company for the year
(net income of the Company for the year divided by average stockholders'
equity during such year); and
(v) operating profit of the Company or of a division, subsidiary or
group thereof for the year.
"Performance Goal Target" means, for any Performance Goal, the levels
of performance during a year under such Performance Goal established by the
Committee to determine the Performance Adjustment to an Eligible
Participant's Target Award for such year.
"Target Award" means, for any year, with respect to an Eligible
Participant, the dollar amount set by the Committee that, when multiplied
by the applicable Performance Adjustment, determines the dollar amount of
such Eligible Participant's Annual Performance Award.
(c) ELIGIBILITY. Annual Performance Awards are available each year only to
Plan Participants who are designated by the Committee, prior to March 31 of such
year (or prior to such later date as permitted by Code Section 162(m) and the
Regulations), as likely to be Affected Officers for such year, whose annual
salary and bonus for such year are expected to exceed $1,000,000 and who are not
designated by the Committee as eligible for an annual performance award under
the Cash Plan for such year ("Eligible Participants").
(d) DETERMINATION OF ANNUAL PERFORMANCE AWARDS. Prior to March 31 of each
year (or prior to such later date as permitted by Code Section 162(m) and the
Regulations), the Committee will
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determine the Eligible Participants for such year, will designate those Eligible
Participants who will be entitled to earn an Annual Performance Award for such
year under this Plan, and will establish for each such Eligible Participant for
such year: (i) a Target Award, (ii) one or more Performance Goals, and (iii) for
each such Performance Goal, a Performance Goal Target, the method by which
achievement thereof will be measured and a schedule of Performance Adjustment
factors corresponding to varying levels of Performance Goal Target achievement.
In the event more than one Performance Goal is established for any Eligible
Participant, the Committee shall at the same time establish the weighting of
each such Performance Goal in determining such Eligible Participant's Annual
Performance Award. Notwithstanding anything in this Section 27A to the contrary,
the Annual Performance Award payable to any Eligible Participant in any year may
not exceed $1.5 million.
(e) PAYMENT OF ANNUAL PERFORMANCE AWARDS. Subject to subsection (f) below,
Annual Performance Awards will be paid as soon as practicable after the end of
the year to which it relates and after the Committee certifies the extent to
which the Performance Goal Target or Targets under the Performance Goal or Goals
have been met or exceeded. In the discretion of the Committee, an Annual
Performance Award may be paid in cash, shares of Common Stock, shares of
Restricted Stock (subject to the provisions of Section 21 hereof), Retirement
Units (subject to the provisions of Sections 23-26 hereof) or any combination
thereof. For this purpose, shares of Common Stock shall be valued at Fair Market
Value, and Restricted Stock and Retirement Units shall be deemed to have a value
equal to the Fair Market Value of the underlying Common Stock, in each case as
of the date of the Committee's determination to pay such Annual Performance
Award in such form or forms. If permitted by the Regulations and Code Section
162(m), the Committee may determine to pay a portion of an Annual Performance
Award in December of the year to which it relates. The Committee may not
increase the amount of an Annual Performance Award that would otherwise be
payable upon achievement of the Performance Target or Targets, but it may reduce
any Eligible Participant's Annual Performance Award in its discretion. Subject
to Section 14(c) above, no Annual Performance Award will be payable to any
Eligible Participant who is not an employee of the Company on the last day of
the year to which such Annual Performance Award relates.
(f) DEFERRAL OF ANNUAL PERFORMANCE AWARDS. If the Committee determines that
some portion of an Annual Performance Award to an Eligible Participant shall be
treated as a deferred Annual Performance Award and be payable in annual or other
periodic installments, the Eligible Participant will be notified in writing when
such deferred Annual Performance Award shall be paid and over what period of
time. A deferred Award in the form of shares of Common Stock shall be subject to
the provisions of Section 19 (b) hereof. In the case of a deferred Award in the
form of cash, in each year the Committee shall have the discretion to provide
for the payment of an amount equivalent to interest, at such rate or rates fixed
by the Committee, on such deferred cash Annual Performance Award. Any amounts
provided for pursuant to the preceding sentence shall become payable in such a
manner, at such time or times, and subject to such conditions as the Committee
shall in its sole discretion determine; provided, however, that the total amount
of such interest shall be deducted from the maximum amount available for Awards
under the formula described in Section 13 of the Plan.
(g) CODE SECTION 162(m). It is the intent of the Company that Annual
Performance Awards satisfy, and this Section 27A be interpreted in a manner that
satisfies, the applicable requirements of Code Section 162(m) and the
Regulations so that the Company's tax deduction for Annual Performance Awards to
Affected Officers is not disallowed in whole or in part by operation of Code
Section 162(m). If any provision of this Plan or of any Annual Performance Award
would otherwise frustrate or conflict with such intent, that provision shall be
interpreted and deemed amended so as to avoid such conflict. To the extent of
any irreconcilable conflict with such intent, such provision shall be deemed
void as applicable to Eligible Participants.
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PART IIE PERFORMANCE OR OTHER AWARDS
27. DETERMINATION OF PERFORMANCE AND OTHER AWARDS
(a) Each year the Committee in its sole discretion may authorize other
forms of Awards such as, but not limited to, Performance Awards, if the
Committee deems it appropriate to do so in order to further the purposes of the
Plan.
(b) A "Performance Award" shall mean an Award which entitles the
Participant to receive Common Stock, Restricted Stock, Retirement Units, Options
under Part I of the Plan or other compensation (which may include cash), or any
combination thereof, in an amount which depends upon the financial performance
of the Company during a stated period of more than one year. Performance for
this purpose may be measured by the growth in book value of the Common Stock, an
increase in per share earnings of the Company, an increase in operating cash
flow, or any other indicators specified by the Committee. The Committee shall
also fix the period during which such performance is to be measured, the value
of a Performance Award for purposes of providing for the accrual pursuant to
Section 13 of the Plan and the form of payment to be made in respect of the
Performance Award.
PART III GENERAL PROVISIONS
28. STOCK DIVIDEND OR STOCK SPLIT
If at any time the Company shall take any action whether by stock dividend,
stock split, combination of shares, or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, (i) the number of shares of Common Stock
then subject to deferred Awards, credited to Retirement Unit Accounts (matured
or unmatured) or set aside for Performance or Other Awards, (ii) the number of
outstanding Options, the number of shares of Common Stock for which such Options
are exercisable and the exercise price thereof, (iii) the number of shares of
Common Stock reserved for Awards, (iv) the number of shares of Common Stock
reserved for Options, and (v) the maximum number of shares with respect to which
Options may be granted to any key employee in any calendar year under Section
6(b), shall be increased or decreased in the same proportion. The Committee
shall make an appropriate equitable adjustment to the provisions of Section
13(a) to take account of such increase or decrease in issued and outstanding
shares. The Committee in its discretion may make appropriate equitable
adjustments respecting deferred Stock Awards, Retirement Units, Annual
Performance Awards, Performance or Other Awards and outstanding Options to take
account of a dividend by the Company of property other than cash. All such
adjustments shall be made by the Committee whose determination shall be
conclusive and binding upon all Participants and any person claiming under or
through any Participant.
29. RECLASSIFICATION OR MERGER
If at any time the Company reclassifies or otherwise changes its issued and
outstanding Common Stock (other than in par value) or the Company and one or
more corporations merge and the Company is the surviving corporation of such
merger, then each Stock Award, Retirement Unit (matured or unmatured), Annual
Performance Award, Performance or Other Award which at the time of such
reclassification or merger is credited as a Stock Award, Retirement Unit, Annual
Performance Award, Performance or Other Award shall thereafter be deemed to be
the equivalent of (and all Units thereafter credited to a Retirement Unit
Account shall be computed with reference to), and outstanding Options shall be
exercisable for, the shares of stock or other securities of the Company which
pursuant to the terms of such reclassification or merger are issued with respect
to each share of Common Stock. The Committee shall also make an appropriate
equitable adjustment to the provisions of Sections 6(b) and 13(a) to take
account of such event. All such adjustments shall be made by the Committee whose
determination shall be conclusive and binding upon all Participants and any
person claiming under or through any Participant.
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30. NON-ALIENATION OF BENEFITS
Except as herein specifically provided, no right or unpaid benefit under
this Plan shall be subject to alienation, assignment, pledge or charge and any
attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or person entitled to the benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease. Notwithstanding the foregoing,
rights and benefits hereunder shall pass by will or the laws of descent and
distribution in the following order: (i) to beneficiaries so designated by the
Participant; if none, then (ii) to a legal representative of the Participant; if
none, then (iii) to the persons entitled thereto as determined by a court of
competent jurisdiction. Awards so passing shall be made at such times and in
such manner as if the Participant were living.
31. WITHHOLDING OR DEDUCTION FOR TAXES
If at any time specified herein for the making of any payment or delivery
of any Common Stock to any Participant or beneficiary, any law or regulation of
any governmental authority having jurisdiction in the premises shall require the
Company to withhold, or to make any deduction for, any taxes or take any other
action in connection with the payment or delivery then to be made, such payment
or delivery shall be deferred until such withholding or deduction shall have
been provided for by the Participant or beneficiary, or other appropriate action
shall have been taken. The Participant or beneficiary may satisfy the obligation
for such withholding or deduction in whole or in part by electing to deliver
shares of Common Stock already owned or to have the Company retain from the
distribution shares of Common Stock, in each case having a Fair Market Value
equal to the amount to be withheld or deducted.
32. ADMINISTRATION EXPENSES
The entire expense of administering this Plan shall be borne by the
Company.
33. GENERAL CONDITIONS
(a) The Board in its discretion may from time to time amend, suspend or
terminate any or all of the provisions of this Plan, provided that no change may
be made which would prevent Incentive Stock Options granted under the Plan from
being Incentive Stock Options as described therein without the consent of the
optionees concerned, and further provided that the Board may not make any
amendment which (1) changes the class of persons eligible for Incentive Stock
Options, or (2) increases the total number of shares for which Options may be
granted under Section 6(b), or (3) materially affects the provisions of Sections
13(a) or (b) of the Plan, or (4) increases the total number of shares authorized
under Section 13(f) for which Awards may be granted, without the consent and
approval of the holders of a majority of the outstanding shares of Class A and
Class B Common Stock of the Company entitled to vote thereon, voting together as
one class. The foregoing provisions shall not be construed to prevent the
Committee from exercising its discretion, or to limit such discretion, to
increase the total number of shares for which Options may be granted under
Section 6(b) or the total number of shares authorized under Section 13(f) for
which Awards may be granted, as expressly permitted by Sections 28 and 29
hereof, or to adjust the provisions of Sections 13(a) and (b) hereof as
expressly permitted by Sections 13(b), 28 and 29 hereof, or otherwise to
exercise any discretion to the extent expressly authorized hereunder.
(b) Nothing contained in the Plan shall prohibit the Company from
establishing incentive compensation arrangements in addition to this Plan and
the Cash Plan. Payments made under any such separate arrangements shall not be
included in or considered a part of the maximum dollar amount available for
Awards under the Plan and Cash Plan, or number of shares available for Awards or
Options under the Plan, and shall not be charged against the dollar or share
amounts available for Awards under the Plan and Cash Plan or Options under the
Plan. In the discretion of the Committee,
14
employees shall be eligible to participate in such other arrangements, as well
as the Plan and Cash Plan, in the same year.
(c) Nothing in this Plan shall be deemed to limit in any way the right of
the Company to terminate a Participant's employment with the Company at any
time.
(d) The Committee may promulgate rules and regulations relating to the
administration and interpretation of, and procedures under, the Plan. Any
decision or action taken by the Company, the Board or the Committee arising out
of or in connection with the construction, administration, interpretation and
effect of the Plan shall be conclusive and binding upon all Participants and any
person claiming under or through any Participant.
(e) No member of the Board or of the Committee shall be liable for any act
or action, whether of commission or omission, taken by any other member or by
any officer, agent or employee, nor for anything done or omitted to be done by
such Director except in circumstances involving actual bad faith.
(f) Notwithstanding any other provision of this Plan, the Company shall not
be obligated to make any Award, issue any shares of Common Stock, or grant any
Option with respect thereto, unless it is advised by counsel of its selection
that it may do so without violation of the applicable Federal and State laws
pertaining to the issuance of securities, and may require any stock so issued to
bear a legend, may give its transfer agent instructions, and may take such other
steps, as in its judgment are reasonably required to prevent any such violation.
(g) It is the intent of the Company that transactions involving Options or
Awards granted under the Plan be entitled to the exemption from Section 16 of
the Exchange Act provided by Rule 16b-3, that any ambiguities or inconsistencies
in construction of the Plan be interpreted to give effect to such intention and
that if any provision of the Plan is found not to be in compliance with Rule
16b-3, such provision shall be deemed null and void to the extent required to
permit any such transaction to comply with Rule 16b-3. The Committee may adopt
rules and regulations under, and amend, the Plan in furtherance of the intent of
the foregoing.
34. TRANSITION
Upon the effectiveness of this Plan, as provided below, and the Cash Plan,
such plans replaced the Company's Executive Incentive Compensation Plan
("EICP"), except that the EICP shall continue to govern options and awards of
restricted stock outstanding under the EICP. No further awards will be made
under the EICP, and all amounts accrued for awards under the EICP and unawarded
were carried forward and made available for Awards under the Plan and awards
under the Cash Plan. All unmatured and matured but undistributed retirement
units and all performance awards respecting current performance cycles awarded
under the EICP became Retirement Units and Performance Awards hereunder and any
payments or distributions in respect thereof shall be made hereunder; provided,
however, that the number of shares of Common Stock available for Awards pursuant
to Section 13(f) hereof shall not be reduced by the number of such retirement
units previously awarded under the EICP and paid subsequently under the Plan.
35. EFFECTIVE DATES
The Plan became effective for periods beginning after January 1, 1991 upon
approval by the holders of a majority of the outstanding shares of Class A and
Class B Common Stock of the Company entitled to vote thereon at the 1991 Annual
Meeting of Stockholders, in person or by proxy, voting together as a single
class. No Options may be granted or Awards made under the Plan after December
31, 2000, or such earlier expiration date as may be designated by resolution of
the Board.
15