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BIRMINGHAM UTILITIES, INC.
1998 STOCK INCENTIVE PLAN
ARTICLE I.
Purpose and Scope of the Plan
-----------------------------
1.01 Purpose. The purpose of the Birmingham Utilities, Inc. 1998
Stock Incentive Plan (the "Plan") is to promote the long-term success of
Birmingham Utilities, Inc. by providing financial incentives to key
employees who are in a position to make significant contributions toward
such success. The Plan is designed to attract and retain key employees
and to encourage them to acquire a proprietary interest in the Company
and thereby to increase their personal interest in the long-term success
of the Company.
1.02 Definitions. Unless the context clearly indicates otherwise,
the following terms have the meanings set forth below:
"Board of Directors" or "Board" means the Board of Directors of the
Company.
"Business Day" shall mean any day except Saturday, Sunday or a legal
holiday in the State of Connecticut.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Personnel and Pension Committee of three or
more members appointed by the Board of Directors and selected from
those directors who are not employees of the Company, its parent or
any Subsidiary, as defined in Section 424(e) and (f) of the Code.
The Board may at any time and from time to time remove any member
of the Committee, with or without cause, appoint additional members
to the Committee and fill vacancies, however caused, in the
Committee. A majority of the members of the Committee shall
constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. Any decision or determination
of the Committee reduced to writing and signed by all of the
members of the Committee shall be fully as effective as if it had
been made at a meeting duly called and held.
"Common Stock" means the common stock, without par value, of the
Company.
"Company" means Birmingham Utilities, Inc., a Connecticut
corporation.
"Disability", as applied to a Grantee, means permanent and total
disability as defined in Section 22(e)(3) of the Code.
"Employee" means any employee of the Company or any of its
Subsidiaries.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" of a share of Common Stock on any particular
date is the average of the high and low sales price of a share of
Common Stock on the NASDAQ Small Cap Market (or any exchange on
which the Common Stock is then traded) as reported for that date
by NASDAQ or, if no sales price is reported for that date, the
average bid quotation for the Common Stock on that date as
reported by NASDAQ; provided, however, that if no such sales or
quotation are reported by NASDAQ for such date, the Fair Market
Value of a share of Common Stock on such date shall be the average
of the high and low sales price or, if no sales price is reported
for that date, the average bid quotation as reported by NASDAQ for
the first Business Day immediately after such date on which such
sales or quotation are reported.
"Grant Date," as used with respect to a particular award, means the
date on which such award is granted by the Committee pursuant to
the Plan.
"Grantee" means an individual to whom an award has been granted by
the Committee pursuant to the Plan.
"Immediate family members" of a Grantee means the Grantee's
children, grandchildren and spouse.
"Incentive Stock Option" means an Option that qualifies as an
Incentive Stock Option as described in Section 422 of the Code.
"Key Employee" means any Employee who, in the judgment of the
Committee, is in a position to contribute significantly to the
growth and prosperity of the Company.
"Non-qualified Stock Option" means any Option other than an
Incentive Stock Option.
"Option" means an option, granted by the Committee pursuant to
Article II, to purchase shares of Common Stock and which shall be
designated as either an "Incentive Stock Option" or a
"Non-qualified Stock Option."
"Option Period" means the period beginning on the Grant Date and
ending such day as determined by the Committee with such day being
prior to the tenth anniversary of the Grant Date.
"Performance Stock" means an award entitling the Grantee to payment
of shares of Common Stock or cash or a combination thereof
contingent upon the attainment of performance objectives
determined in the discretion of the Committee.
"Plan" means the Birmingham Utilities, Inc. 1994 Stock Option
Plan as set forth herein and as amended from time to time.
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"Restricted Stock" means an award of Common Stock with such
restrictions placed thereon as the Committee in its discretion
deems appropriate.
"Retirement", as applied to an Employee, shall mean a termination
of employment with the Company which qualifies for the payment of
retirement benefits under the qualified pension plan applicable
to such employee or a termination of employment which occurs
following the Employee's attaining age 62 with ten years of
service to the Company.
"Subsidiary" shall mean a "subsidiary corporation" of the Company
as defined in Section 425(f) of the Code.
1.03 Aggregate Limitation.
(a) The aggregate number of shares of Common Stock to be
delivered under the Plan shall not exceed 30,000 shares, subject to
adjustment in accordance with Section 3.06.
(b) Any shares of Common Stock to be delivered or purchased
or used for reference purposes under the Plan shall be issued from the
Company's authorized but unissued shares of Common Stock or from shares
of Common Stock held in the treasury, at the discretion of the Board.
(c) If any shares are subject to an award which for any
reason expires or terminates during the term of the Plan prior to the
issuance of such shares or other payment of such awards, the shares
subject to but not delivered under such award shall be available for
issuance under the Plan. In the case of an award of Restricted Stock any
part of which is forfeited prior to full vesting, such shares as are
forfeited prior to vesting shall be available for issuance under the
Plan. The shares referenced in an exercised stock appreciation right,
shares in lieu of which an optionee elects to receive cash, or shares
under a related option which is surrendered upon the exercise of a stock
appreciation right shall all be charged against the aggregate number of
shares available for issuance under the Plan.
1.04 Administration of the Plan.
(a) The Committee shall have all the powers vested in it by
the terms of the Plan, including exclusive authority (within the
limitations described herein) to select the employees to be granted
awards under the Plan, to determine the type, size and terms of awards
to be made to each employee selected, to determine the time when awards
will be granted to employees, to establish objectives and conditions, if
any, for earning such awards and to determine whether such awards will
be paid after the end of an award period. The Committee shall have full
power and authority to administer and interpret the Plan, to adopt such
rules, regulations, agreements, guidelines and instruments for the
administration of the Plan and for the conduct of its business as the
Committee deems necessary or advisable, to accelerate the exercisability
or vesting of all or any portion of any Option or to extend the period
during which an Option is exercisable and to make all other
determinations necessary or advisable in order to administer the Plan.
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The Committee's interpretation of the Plan and all actions taken and
determinations made by the Committee pursuant to the powers vested in it
hereunder shall be conclusive and binding on all parties concerned,
including the Corporation, its stockholders, any Grantees and any other
employee of the Corporation or any of its subsidiaries.
(b) Options, stock appreciation rights, dividend equivalents,
Restricted Stock and Performance Stock shall be evidenced by written
agreements which shall contain such terms and conditions consistent with
the Plan as may be determined by the Committee. Each agreement shall be
signed on behalf of the Corporation by the Chief Executive Officer or
other duly authorized officer of the Corporation.
(c) All decisions made by the Board of Directors pursuant to
the provisions of the Plan shall be final and conclusive.
1.05 Effective Date and Duration of Plan. The Plan shall become
effective upon its adoption by the Board; provided that no Option or
award granted pursuant to the Plan shall be exercised or will vest prior
to the approval of the Plan by (1) the shareholders of the Company
within twelve (12) months of its adoption by the Board, and (2) the
Connecticut Department of Public Utility Control ("DPUC"). Unless
previously terminated by the Board, the Plan shall terminate, as to any
shares as to which Options or awards have not theretofore been granted,
on the tenth anniversary of its adoption by the Board. Subject to the
provisions of Section 2.02(f) hereof, the period during which an award
under the Plan may be exercised shall be the period, expiring not later
than the tenth anniversary of the Grant Date of the award, as may be
determined by the Committee.
1.06 Awards.
(a) Types. Awards under the Plan shall be made with
reference to shares of Common Stock and may include, but need not be
limited to, shares of stock, which may be granted with or without
restrictions in the discretion of the Committee, options, stock
appreciation rights, dividend equivalents and Performance Stock. The
Committee may make any other type of award which it shall determine is
consistent with the objectives and limitations of the Plan.
(b) Performance Goals. The Committee may, but need not,
establish performance goals to be achieved within such performance
periods as may be selected by it in its sole discretion, using such
measures of the performance of the Corporation and/or its subsidiaries
as it may select.
(c) Guidelines. From time to time, the Committee may adopt
written policies implementing the Plan. Such policies may include, but
need not be limited to, the type, size and terms of awards to be made to
Employees and the conditions for payment of such awards. The Committee
may determine the amount and form of consideration, if any, payable on
the issuance or exercise of awards of stock, whether granted with or
without restrictions, and awards of Performance Stock. However, Common
Stock to be issued for such awards shall be issued either at no cost,
provided the consideration received for such shares is, in the opinion
of counsel to the Company, adequate under the laws of the Company's
state of incorporation, or a price not to exceed the par value of such
shares. Grantees of awards of stock, whether granted with or without
restrictions, and awards of Performance Stock must accept such awards by
execution of a written agreement with the Company in such form as the
Committee determines not more than sixty (60) days following the award
date or else such rights shall expire.
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ARTICLE II.
Stock Options and Other Awards
------------------------------
2.01 Grant of Options. Key Employees shall be eligible to receive
Options under the Plan. Directors who are not Employees shall not be
eligible to receive Options.
Each Option shall be exercisable from time to time during such
periods and in such manner and number of shares as determined by the
Committee and set forth in the Agreement evidencing such Option,
provided that no Option granted under the Plan to a person subject to
the requirements of Section 16 of the Exchange Act shall be exercisable
in whole or in part prior to the expiration of six (6) months from its
Grant Date except in the case of death or Disability. The date of
exercise shall be the date on which payment is received by the Company.
The term of each Option shall be determined and may be extended by the
Committee, but in no event shall the term of an Option exceed ten (10)
years.
2.02 Option Requirements.
(a) Each Option shall be designated as an Incentive Stock
Option or a Non-Qualified Stock Option and shall be evidenced by a
written instrument specifying the number of shares of Common Stock that
may be purchased by its exercise and containing such terms and
conditions consistent with the Plan as the Committee may determine.
(b) An Option shall not be granted on or after the tenth
anniversary of the date upon which the Plan is adopted by the Board or,
if earlier, the tenth anniversary of the date upon which the Plan is
approved by the shareholders of the Company.
(c) An Option shall not be exercisable after the expiration
of the Option Period.
(d) The Committee may provide, in the instrument evidencing
an Option, for the lapse of the Option, prior to the expiration of the
Option Period, upon the occurrence of any event specified by the
Committee.
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(e) The option price per share of Common Stock shall not be
less than the Fair Market Value of a share of Common Stock on the Grant
Date, provided, however, that the option price per share of Common Stock
on the date of exercise shall not be less than the par value per share
of Common Stock, if any, on the date of exercise.
(f) Upon the termination of a Grantee's employment by the
Company or any of its Subsidiaries for any reason the Grantee may
exercise an Option, to the extent such Option was exercisable on the
date of such termination, until the earlier of the expiration of its
original term or:
(i) If such termination is due to Retirement, three (3)
months after such termination in the case of an
Incentive Stock Option and twelve months after such
termination in the case of a Non-Qualified Stock
Option;
(ii) If such termination is due to Disability, one (1)
year after such termination in the case of an
Incentive Stock Option and three years after such
termination in the case of a Non-Qualified Stock
Option;
(iii) Upon the death of any such Grantee while in active
service or of any such disabled or retired Grantee
within the above-referenced period, the person or
persons to whom the rights under the Option are
transferred by will or the laws of descent and
distribution may, within twelve months after the
date of the Grantee's death, exercise some or all of
the Grantee's Options which were exercisable on the
date of death by the Grantee.
(iv) If such termination is for any other reason, Grantee
may, within three months after the date of such
termination, purchase some or all of the shares
covered by the Grantee's Options which were
exercisable immediately prior to such termination,
provided that, notwithstanding the foregoing, the
Options of a Grantee shall automatically terminate as
of the date his or her employment is terminated, if
terminated on account of any act of (a) fraud or
intentional misrepresentation, or (b) embezzlement,
misappropriation or conversion of assets or
opportunities of the Company or any Subsidiary.
(v) An Incentive Stock Option not exercised within three
months (twelve months in the case of Disability) after
the date of termination due to Disability or Retirement
may be exercised within twelve months in the case of
Retirement and three years in the case of Disability
after the date of such termination but no longer will
be eligible for the treatment afforded Incentive Stock
Options under Section 422 of the Code.
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Leaves of absence for such periods and purposes conforming to the
personnel policy of the Company as may be approved by the Committee shall
not be deemed terminations or interruptions of employment.
In the event that a Grantee to whom a stock appreciation right has
been granted ceases employment with the Company, its parent and
subsidiaries for any reason, including death, Disability or Retirement,
such stock appreciation right shall be exercisable only to the extent
and upon the conditions that its related Option, if any, is exercisable
under this subparagraph (f) of this Article, or as provided in a stock
appreciation rights agreement, if such right is granted without a related
option.
The Committee may adopt rules and regulations, whether or not
inconsistent with this Article, but not inconsistent with the provisions
of Section 422 of the Code, setting forth the terms and conditions of
awards relating to the Grantee's rights in the event of termination of
employment.
(g) A person electing to exercise an Option shall give written
notice, in such form as the Committee may require, of such election to
the Company and shall tender to the Company the full purchase price of
the shares of Common Stock for which the election is made. Payment of
the purchase price shall be made in cash or in such other form as the
Committee may approve, including shares of Common Stock valued as
provided in Section 3.02 hereof or a combination of cash and/or such
other form of property.
2.03 Incentive Stock Option Requirements.
(a) An Option designated by the Committee as an "Incentive
Stock Option" is intended to qualify as an "incentive stock option"
within the meaning of Subsection (b) of Section 422 of the Code and
shall satisfy, in addition to the conditions of Section 2.02, the
conditions set forth in this Section 2.03.
(b) An Incentive Stock Option shall not be granted to an
individual who, on the date of grant, owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of its parent or any Subsidiary unless the
requirements of subsection (c) hereof are satisfied.
(c) If any employee to whom an Incentive Stock Option is to
be granted pursuant to the provisions of the Plan is on the date of grant
the owner of stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of its
parent or any Subsidiary, then the following special provisions shall be
applicable to the Incentive Stock Option granted to such individual:
(i) The option price per share of the Common Stock
subject to such Incentive Stock Option shall not be
less than one hundred ten percent (110%) of the Fair
Market Value of one share of Common Stock on the date
of grant; and
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(ii) The option exercise period shall not exceed five
years from the date of the grant.
In determining whether the ten percent (10%) threshold has
been reached, the stock attribution rules of Section 424(d) of the Code
shall apply.
(d) The aggregate Fair Market Value, determined on the Grant
Date, of the shares of Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by a Grantee during any
calendar year (under all such plans of the Grantee's employer corporation
and its parent and Subsidiary corporations) shall not exceed $100,000.
(e) Except as modified by the preceding provisions of this
Section 2.03, all of the provisions of the Plan shall be applicable to
Incentive Stock Options granted hereunder.
2.04 Stock Appreciation Rights.
The Committee may also grant stock appreciation rights to Key
Employees. Stock appreciation rights granted in conjunction with
Options under the Plan may be granted either at the time of grant of
such Options pursuant to the Plan or by subsequent action prior to the
exercise, termination or expiration of such Options. Such stock
appreciation rights hall be subject to the same terms and conditions as
the related Options and may be exercised only at a time when the Fair
Market Value of a share of Common Stock exceeds the option price for
such shares, the Options are otherwise exercisable, and if, at the time
of such exercise, the Grantee surrenders the privilege of exercising the
related Options to the extent that the Grantee exercises a stock
appreciation right. In the event of a grant of stock appreciation right
without a related option, the Common Stock price referenced in such
grant shall not be less than the Fair Market Value per share of Common
Stock on the Grant Date.
Upon exercise of a stock appreciation right and surrender of the
related Option (or any portion of such Option), if any, the Grantee
shall be entitled to receive, subject to the provisions of the Plan and
such rules and regulations as may be established by the Committee, a
payment equal to the product of (A) the excess of (i) the Fair Market
Value of one share of Common Stock at the time of such surrender over
(ii) the price per share specified in such related Option or stock
appreciation rights agreement, times (B) the number of such shares
called for by the related Option, or portion thereof, which is so
surrendered or specified in such stock appreciation rights agreement.
Such payment shall be made as determined by the Committee, in its sole
discretion, either in (i) cash, or (ii) shares of Common Stock valued at
Fair Market Value as of the date of exercise, or (iii) partly in cash
and partly in shares of Common Stock. Neither a stock appreciation right
held by a Grantee who is an officer or director of the Company, the
exercise of which would result in a cash payment, nor any related Option
Page Thirty-Two
shall be exercisable during the first six months of the option period
(or during the first six months from the Grant Date of the stock
appreciation right if granted subsequently to the related Option). If,
upon settlement of a stock appreciation right, a Grantee is to receive
payment or a portion thereof in shares of Common Stock, the number of
shares shall be determined by dividing such payment or portion by the
Fair Market Value of a share of Common Stock on the date of exercise.
However, if the Committee, in its discretion, decides to permit a
Grantee who is an officer or director of the Corporation to elect to
receive cash in full or partial settlement of the exercise of a stock
appreciation right, then such election shall be made during the period
beginning on the third business day following the date of release for
publication of quarterly and annual summary statements of sales and
earnings of the Corporation and ending on the twelfth business day
following such date, unless a different period is specified in Rule
16b-3 under the Exchange Act, as in effect at the time of such exercise,
or any law, rule, regulation or other provision that may hereafter
replace such Rule (the "Window Period").
The Committee shall also determine whether, and if so to what
extent, the exercise of an Option shall be required as a condition to
the exercise of a related stock appreciation right. No stock
appreciation right can be exercised by a Grantee who is an officer or
director of the Company unless the Company has been subject to the
reporting requirements of Section 13 of the Exchange Act for at least
one year prior to the date of said exercise and has filed all reports
and statements required to be filed pursuant to that section during that
period.
2.05 Dividend Equivalents.
The Committee may also grant dividend equivalents to employees
granted related awards under the Plan pursuant to rules and regulations
adopted by the Committee. The Committee may require or permit the
immediate payment or the waiver, deferral or investment of (1) dividends
paid on awards under the Plan, and (2) amounts equal to dividends which
would have been paid if shares subject to an award had been outstanding
on the dividend record date. No payment, credits or accruals shall be
made on shares subject to an award which are not yet issued and
outstanding on account of the payment of a stock dividend or other
distribution in kind on the Common Stock.
Page Thirty-Three
Article III.
General Provisions
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3.01 Exercise of Options and Stock Appreciation Rights and Payment
of Other Awards.
(a) No Option or stock appreciation right may be exercised
and no other award will vest or be paid prior to the approval of the
Plan by the Company's shareholders and the DPUC.
(b) No Option or stock appreciation right may at any time be
exercised with respect to a fractional share or exercised in part with
respect to fewer than twenty-five (25) shares. No fractional shares
shall be issued and the Committee shall determine whether cash shall be
paid in lieu of such fractional shares or such fractional shares shall
be eliminated.
(c) No shares shall be delivered pursuant to the exercise of
any Option or in payment of an award, in whole or in part, until
qualified for delivery under such securities laws and regulations as the
Committee may deem to be applicable thereto and until payment in full of
the option price is received by the Company in cash, by check or in stock
as provided in Section 3.02 hereof or, if authorized by the Committee's
regulations and accomplished in accordance therewith, by delivery of a
properly executed exercise notice together with irrevocable instructions
to a broker to deliver promptly to the Company sale or loan proceeds
sufficient to pay the option price. Neither a Grantee nor such Grantee's
legal representative, legatee or distributee shall be or be deemed to be
a holder of any shares subject to such Option unless and until a
certificate or certificates therefor is issued in his or her name or in
the name of a person designated by him or her.
3.02 Stock as Form of Exercise Payment. A Grantee may elect to
use Common Stock valued at the Fair Market Value on the last business day
preceding the exercise date to pay all or part of the exercise price of
an award, provided, however, that such form of payment shall not be
permitted unless at least one hundred (100) shares of Common Stock are
delivered for such purpose and the shares delivered have been held by the
Grantee for at least six months.
3.03 Withholding Taxes for Awards. Each Grantee exercising an
award as a condition to such exercise shall pay to the Company the
amount, if any, required to be withheld from distributions resulting from
such exercise under applicable Federal and State income tax laws
("Withholding Taxes"). Such Withholding Taxes shall be payable as of the
date income from such exercise is includable in the Grantee's gross
income for Federal income tax purposes (the "Tax Date"). The Grantee may
satisfy this requirement by electing one of the following methods (or a
combination thereof), which election is subject to the approval of the
Committee:
(i) remitting to the Company in cash or by check the amount of
such Withholding Taxes;
Page Thirty-Four
(ii) remitting to the Company a number of shares of Common Stock
having an aggregate Fair Market Value as of the last
business day preceding the Tax Date equal to the amount of
such Withholding Taxes;
(iii) electing to have the Company withhold from such
distribution the number of shares of Common Stock having
an aggregate Fair Market Value as of the last business day
preceding the Tax Date equal to the amount of such
Withholding Taxes.
Any election by a Grantee pursuant to clause (ii) or (iii) of this
Section 3.03 must be made on or prior to the Tax Date and will be
irrevocable. In addition, if the Grantee is subject to Section 16 of the
Exchange Act, an election pursuant to clause (ii) or (iii) of this
Section 3.03 cannot be made until at least six (6) months after the Grant
Date of the Option (except that this limitation shall not apply in the
event the death or Disability of the Grantee occurs prior to the
expiration of the six (6) month period), and such election must be made
either by the date which is at least six (6) months prior to the Tax Date
or during any period beginning prior to the Tax Date which begins on the
third business day following the date of release for publication by the
Company of quarterly or annual summary statements of earnings and ending
on the twelfth business day following such date.
3.04 Transfer of Awards. An award shall not be transferable other
than by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order, as defined in the Code, and, during
the Grantee's lifetime, shall be exercisable only by the Grantee, except
that the Committee may:
(i) permit exercise, during the Grantee's lifetime, by the
Grantee's guardian or legal representative; and
(ii) permit transfer, upon the Grantee's death, to
beneficiaries designated by the Grantee in a manner
authorized by the Committee, provided that the Committee
determines that such exercise and such transfer are
consonant with requirements for exemption from Section
16(b) of the Exchange Act and, with respect to an
Incentive Stock Option, the requirements of Section
422(b)(5) of the Code.
(iii) grant Non-Qualified Stock Options that are transferable
in accordance with such transferability restrictions, if
any, as may be imposed by Rule 16b-3, as hereafter
amended, or amend outstanding Non-Qualified Stock Options
to make them so transferable, without payment of
consideration, to immediate family members of the Grantee
or to trusts or partnerships for such family members.
Page Thirty-Five
3.05 Change in Ownership. In the event of (x) a dissolution or
liquidation of the Company, (y) a merger or consolidation in which the
Company is not the surviving corporation, or (z) any other capital
reorganization in which more than fifty percent (50%) of the shares of
the Company entitled to vote are exchanged, the Company shall give to
each Grantee, at the time of adoption of the plan for liquidation,
dissolution, merger, consolidation or reorganization, either (i) a
reasonable time thereafter within which to exercise the Option or other
award, prior to the effectiveness of such liquidation, dissolution,
merger, consolidation or reorganization, at the end of which time the
Option shall terminate, or (ii) the right to exercise the Option or
award (or a substitute Option or award) as to an equivalent number of
shares of stock of the corporation succeeding the Company or acquiring
its business by reason of such liquidation, dissolution, merger,
consolidation or reorganization.
3.06 Adjustment Upon Changes in Capitalization.
(a) Changes in Capitalization. If the number of shares of
Common Stock of the Company as a whole are increased, decreased or
changed into, or exchanged for, a different number or kind of shares or
securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend,
stock split, combination of shares, exchange of shares, change in
corporate structure or the like, an appropriate and proportionate
adjustment shall be made in the number and kind of shares subject to
this Plan, and in the number, kind, and per share exercise price of the
shares of Common Stock subject to unexercised Options, rights and other
awards or portions thereof granted prior to any such change. Any such
adjustment in an outstanding Option or award, however, shall be made
without a change in the total price applicable to the unexercised
portion of the Option or award but with a corresponding adjustment in
the price for each share covered by the Option or award.
(b) Acquisition. Upon a reorganization, merger or
consolidation in which the Company is not the surviving corporation,
or upon the sale of all or substantially all of the property of the
Company to another corporation, provision shall be made in connection
with such transaction for the assumption of the Plan and the Options
and awards theretofore granted by the successor corporation. Provision
may, alternatively, be made for the substitution for such Options and
awards of new options and awards of the successor corporation or a
parent or subsidiary thereof. In any such case, appropriate adjustment
as to the number and kind of shares and the per share exercise prices
shall be made. No fractional shares of stock shall be issued under the
Plan on account of any adjustment specified above.
(c) Dissolution or Liquidation. Upon the dissolution or
liquidation of the Company, this Plan and the Options and issued
thereunder shall terminate.
3.07 Additional Conditions. Any shares of Common Stock issued or
transferred under any provision of the Plan may be issued or transferred
subject to such conditions (including, without limitation, restrictions
on transferability), in addition to those specifically provided in the
Plan, as the Committee may impose.
Page Thirty-Six
3.08 No Right to Employment. Nothing in the Plan or any
instrument executed pursuant hereto shall confer upon any Employee any
right to continue in the employ of the Company or any of its
Subsidiaries nor shall anything in the Plan affect the right of the
Company or any of its Subsidiaries to terminate the employment of any
Employee, with or without cause.
3.09 Legal Restrictions. The Company will not be obligated to
issue shares of Common Stock or make any payment if counsel to the
Company determines that such issuance or payment would violate any law
or regulation of any governmental authority or any agreement between the
Company and any national securities exchange upon which the Common Stock
is listed. In connection with any stock issuance or transfer, the
person acquiring the shares shall, if requested by the Company, give
assurances satisfactory to counsel to the Company regarding such matters
as the Company may deem desirable to assure compliance with all legal
requirements. The Company shall in no event be obliged to take any
action in order to permit the exercise of any Option.
3.10 No Rights as Shareholders. No Grantee, and no beneficiary or
other person claiming through a Grantee, shall have any interest in any
shares of Common Stock allocated for the purposes of the Plan or subject
to any Option or award until such shares of Common Stock shall have been
transferred to the Grantee or such person. Furthermore, the existence
of the Options and awards shall not affect: the right or power of the
Company or its stockholders to make adjustments, recapitalization,
reorganizations or other changes in the Company's capital structure;
the dissolution or liquidation of the Company, or sale or transfer of
any part of its assets or business; or any other corporate act, whether
of a similar character or otherwise.
3.11 Choice of Law. The validity, interpretation and
administration of the Plan and of any rules, regulations, determinations
or decisions made thereunder, and the rights of any and all persons
having or claiming to have any interest therein or thereunder, shall be
determined exclusively in accordance with the laws of the State of
Connecticut (regardless of the laws that might be applicable under
principles of conflicts of laws). Without limiting the generality of the
foregoing, the period within which any action in connection with the
Plan must be commenced shall be governed by the laws of the State of
Connecticut (regardless of the laws that might be applicable under
principles of conflicts of laws), without regard to the place where the
act or omission complained of took place, the residence of any party to
such action or the place where the action may be brought.
3.12 Amendment, Suspension and Termination of Plan. The Board may
at any time terminate, suspend or amend the Plan.