WAUSAU-MOSINEE PAPER CORPORATION
1991 EMPLOYEE STOCK OPTION PLAN
As amended March 4, 1999
WAUSAU-MOSINEE PAPER CORPORATION
1991 EMPLOYEE STOCK OPTION PLAN
Wausau-Mosinee Paper Corporation, a Wisconsin corporation (the
"Company"), hereby adopts the Wausau-Mosinee Paper Corporation 1991
Employee Stock Option Plan (the "Plan"), as set forth herein.
Section 1. PURPOSE. The Plan has been adopted for the purpose of
recognizing and rewarding the job performance of key employees of the
Company and to enable the Company to attract and retain superior
management-level employees by increasing the personal interest of all
such employees in the growth and success of the Company. It is the
express intent of the Company that, subject to Section 6(g) hereof, all
options granted hereunder designated "Incentive Stock Options" shall
meet the requirements of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or any successor section or sections.
It is the further intent of the Company that options granted hereunder
designated "Non-Qualified Stock Options" shall not meet the
requirements of Section 422 of the Code.
Section 2. NUMBER OF SHARES AVAILABLE FOR OPTIONS. The aggregate
number of shares of common stock, no par value, of the Company (the
"Shares") which may be issued under options granted pursuant to the
Plan shall be 250,000.
Section 3. ADMINISTRATION OF THE PLAN.
Section 3.1 GENERAL. The Plan shall be administered by a committee
(the "Committee") consisting of at least two members designated by the
Board of Directors of the Company from among those of its members who
are not officers or employees of the Company or a parent or subsidiary
of the Company and who otherwise satisfy the definition of a
"Non-Employee Director" in Rule 16b-3(b)(3) promulgated under Section
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16 of the Securities Exchange Act of 1934 (the "Exchange Act") and the
definition of an "Outside Director" in the regulations under Section
162(m) of the Code. In the absence of specific rules to the contrary,
action by the Committee shall require the consent of a majority of the
members of the Committee, expressed either orally at a meeting of the
Committee or in writing in the absence of a meeting.
Section 3.2 AUTHORITY OF COMMITTEE. The Committee shall have full
and complete authority to grant options to such eligible employees on
such terms, which need not be the same as to all Optionees, as will, in
its discretion and subject only to the specific limitations elsewhere
contained in the Plan, carry out the purpose of the Plan. The
Committee shall also have full and complete authority to interpret the
Plan and adopt rules governing the administration of the Plan. The
Committee's decision on any matter with respect to the Plan shall be
final.
Section 3.3 INDEMNIFICATION OF COMMITTEE. To the extent permitted
by applicable law, the members of the Committee and each of them shall
be indemnified and saved harmless by the Company from any liability or
claim of liability which may arise from the administration of the Plan
if the acts giving rise to such liability or claim of liability were
taken in good faith and without negligence.
Section 4. ELIGIBLE EMPLOYEES.
Section 4.1 DEFINITION OF ELIGIBLE EMPLOYEES. Subject to the
limitations of Section 4.2, key employees of the Company and its
subsidiary corporations shall be eligible to participate in the Plan.
For purposes of the Plan, the term "key employee" shall include all
employees of all participating employers employed in management,
administrative or professional capacities.
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Section 4.2 LIMITATIONS ON ELIGIBILITY. No person who is serving
as a member of the Committee shall be eligible to receive an option;
provided, however, that options outstanding prior to an Optionee's
becoming a member of the Committee shall remain in effect.
Section 5. GRANTING OF OPTIONS. Subject to the limitations of
Section 4.2, options to purchase Shares shall be granted to such key
employees who are eligible to participate in the Plan as the Committee
may, from time to time and at any time, select. Membership in a class
of eligible key employees shall not, without specific Committee action,
entitle a key employee to receive an option to purchase Shares.
Eligible key employees selected by the Committee shall be referred to
herein as "Optionees."
Section 6. TERMS AND CONDITIONS OF THE OPTIONS.
Section 6.1 WRITTEN INSTRUMENT. Each option to purchase Shares
granted under the Plan shall be evidenced by a written option agreement
signed on behalf of the Company and the Optionee which sets forth the
name of the Optionee, the date granted, the price at which the Shares
subject to the option may be purchased (the "option price"), whether
the option is an Incentive Stock Option or a Non-Qualified Stock
Option, the number of Shares subject to the option and such other terms
and conditions consistent with the Plan as determined by the Committee.
The Committee may at the time of grant or at any time thereafter impose
such additional terms and conditions on the exercise of such option as
it deems necessary or desirable for compliance with Section 16 of the
Exchange Act and the regulations promulgated thereunder. Such option
agreement shall incorporate by reference all terms, conditions and
limitations set forth in the Plan.
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Section 6.2 TERMS AND CONDITIONS OF THE OPTIONS. In addition to
any other limitations, terms and conditions specified in the Plan, each
option granted hereunder shall, as to each Optionee, satisfy the
following requirements:
(a) DATE OF GRANT. Options must be granted on or before June
18, 2001.
(b) EXPIRATION. No Incentive Stock Option shall be
exercisable after the expiration of ten years from the date such
option is granted. No Non-Qualified Stock Option shall be
exercisable after the expiration of twenty years from the date such
option is granted.
(c) PRICE. The option price as to any Share subject to an
Incentive Stock Option or Non-Qualified Stock Option will be not
less than one hundred percent of the fair market value of the Share
on the date the option is granted.
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For purposes of the Plan, the fair market value of a Share means:
(i) The mean between the high and the low prices at which the
Shares were traded if the Shares were then listed for trading
on a national or regional securities exchange or were then
traded on a bona fide over-the-counter market; or
(ii) If the Shares were not traded on an exchange or a bona fide
over-the-counter market, a value determined by an appraiser
selected by the Committee.
In the event that the date on which the fair market value of a
Share is to be determined is a date on which there is no trading of
the Shares on a national or regional securities exchange or on the
over-the-counter market, such fair market value shall be determined
by referring to the next preceding business day on which trading
occurs.
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(d) TRANSFERABILITY.
(i) No Incentive Stock Option shall be transferable by the
Optionee otherwise than by will or the laws of descent and
distribution nor can it be exercised by anyone other than the
Optionee during the Optionee's lifetime.
(ii) The Committee may, in its discretion, authorize all or a
portion of any options to be granted to an Optionee or which
were granted to any Optionee on or before December 16, 1996 to
permit transfer by the Optionee to (A) the spouse, children or
grandchildren of the Optionee ("Immediate Family"), (B) a
trust for the exclusive benefit of the Optionee or the
Optionee's Immediate Family, (C) a partnership in which the
Optionee or the Optionee's Immediate Family are the only
partners, or (D) to a former spouse of the Optionee pursuant
to a domestic relations order within the meaning of Rule
16a-12 promulgated under Section 16 of the Exchange Act;
provided, however, that (X) there may be not consideration for
any such transfer, (Y) the written option agreement required
by Section 6.1, or any amendment thereof approved by the
Committee, must expressly provide for transferability of the
option evidenced in such agreement in a manner consistent with
this Section 6.2(d), and (Z) once transferred pursuant to the
preceding provisions of this Section 6.2(d)(ii), no subsequent
transfer of any options shall be permitted except a transfer
by will or the laws of descent and distribution. In
authorizing all or any portion of an option to be transferred,
the Committee may impose any conditions on exercise, prescribe
a holding period for the Shares acquired upon such exercise
and/or impose any other conditions or limitations it deems
desirable or necessary in order to carry out the purposes and
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requirements of the Plan. Following transfer, the terms and
conditions of the plan and the written option agreement
relating to such option shall continue to be applicable in all
respects to the Optionee making such transfer and each
transferred option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to
transfer as if such option had not been transferred,
including, but not limited to, the terms and conditions with
respect to the lapse and termination of such option. For
purposes of Section 7, the transferee of an option shall be
deemed an "Optionee". Neither the Company, the Committee or
any Optionee shall have any obligation to inform any
transferee of the termination or lapse of any option for any
reason. Notwithstanding any other provision of the plan, (YY)
following the termination of employment of an Optionee, a
transferred Non-Qualified Option shall be exercisable by the
transferee only to the extent, and for the periods specified
in Section 6(e) as if such option had not been transferred and
(ZZ) no Non-Qualified Stock Option granted prior to November
1, 1996 may be transferred until such option has been held by
the Optionee for a period of not less than six months after
the date on which such option was granted.
(e) EMPLOYMENT.
(i) Except as otherwise provided in Section 6.2(e)(ii), no option
shall be exercisable unless the Optionee shall have been
employed by the Company (or any present or future parent or
subsidiary of the Company) during the period beginning on the
date the option is granted and ending on a date ninety days
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before the date of exercise; provided, however, that in the
event an Optionee dies while in the employ of the Company (or
any present or future parent or subsidiary of the Company) or
within ninety days after such employment had terminated, the
employment period requirement described above (the "90-day
limit") shall be deemed to have been satisfied, and, provided
further, that the Committee may permit the exercise of a
Non-Qualified Stock Option without regard to "90-day limit"
if (A) the Optionee (or the Optionee's personal
representative or estate in the event of the Optionee's
death) is, in the sole discretion of the Committee, directly
or indirectly prevented from exercising such option by reason
of the application of federal securities laws within the
90-day limit or the Company or its shareholders would be
adversely affected by reason of the application of federal
securities laws to an exercise of such option within such
90-day limit, (B) the Optionee was not, at the time of his
termination of employment, a person with respect to whom
payment of compensation by the Company is then subject to (or
would be, but for an exemption from) the provisions of
Section 162(m) of the Code, and (C) such action by the
Committee would not adversely affect the tax or accounting
practices of the Company or otherwise adversely affect the
business or operations of the Company.
(ii) In the event an Optionee has attained his Retirement Date (as
defined herein), (A) the provisions of Section 6(e)(i) shall
not be applicable to such Optionee's Non-Qualified Stock
Options and (B) such Optionee's Non-Qualified Stock Options
shall not be exercisable after the second anniversary of such
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Optionee's Retirement Date. For purposes of this Plan, the
term "Retirement Date" shall mean the date on which the
Optionee's employment with the Company (and any parent or
subsidiary of the Company) terminates (including termination
because of death) if the Optionee had then attained age 55 and
completed ten calendar years of service with the Company (or
any parent or subsidiary of the Company).
(f) MINIMUM HOLDING PERIOD. No option granted prior to
November 1, 1996 may be exercised before the date which is six
months after the date on which such option was granted. Each
option shall contain such additional or other restriction or
restrictions with respect to the stated percentage of Shares
covered by such option as to which such option may be exercised as
the Committee may deem desirable or necessary in order to carry out
the purposes and requirements of the Plan.
(g) ADDITIONAL RESTRICTIONS RELATING TO INCENTIVE STOCK
OPTIONS. To the extent that the aggregate fair market
value (determined as of the time the option is granted) of the
Shares for which Incentive Stock Options are exercisable for the
first time by an individual during any calendar year (under this
Plan or any other plan of the Company or any of its subsidiaries)
exceeds $100,000 (or such other individual limit as may be in
effect under the Code on the date of grant), such options shall not
be Incentive Stock Options. No Incentive Stock Option shall be
granted to an employee who, at the time such option is granted,
owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Company or any parent
or subsidiary of the Company within the meaning of Section
422(b)(6) of the Code unless: (i) at the time the option is
granted, the option price is at least one hundred ten percent of
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the fair market value of the Shares subject to the option,
and (ii) such option by its terms is not exercisable after the
expiration of five years from the date such option is granted.
(h) LIMITATION ON OPTION GRANTS. No Optionee may be granted
options under Section 5 of the Plan in any fiscal year with respect
to more than 50,000 Shares.
Section 7. EXERCISE AND PAYMENT OF OPTION PRICE.
Section 7.1 EXERCISE OF OPTIONS. Options shall be exercised as to
all or a portion of the Shares by written notice to the Company setting
forth the exact number of Shares as to which the option is being
exercised and including with such notice payment of the option price
(plus required tax withholding). The date of exercise shall be the
date such written notice and payment have been delivered to the
Secretary of the Company either in person or by depositing said notice
and payment in the United States mail, postage pre-paid and addressed
to such officer at the Company's home office. Notwithstanding the fact
that an option has been transferred pursuant to Section 6.2(d)(ii), the
grantee of such option shall remain liable for any required tax
withholding.
Section 7.2 PAYMENT FOR SHARES. Payment of the option price (plus
required tax withholding) may be made by (a) tendering cash (in the
form of a check or otherwise) in such amount, or (b) tendering Shares
with a fair market value on the date of exercise equal to such amount,
or (c) delivering a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company
the sale or loan proceeds equal to such amount. Notwithstanding the
fact that an option has been transferred pursuant to Section
6.2(d)(ii), the grantee of such option shall remain liable for any
required tax withholding.
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Section 8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If any
option is exercised in whole or in part subsequent to any stock
dividend, stock split, recapitalization, reorganization, merger or
other change in the corporate structure of the Company as a result of
which (a) shares of any class or classes of the Company shall be issued
in respect of the Shares or (b) the Shares shall be changed into the
same or a different number of shares of the same or another class or
classes of the Company or another corporation, the Optionee so
exercising the option shall receive, for the aggregate option price
payable upon such exercise, the aggregate number and class or classes
of shares equal to the number and class or classes of shares such
Optionee would have had on the date of actual exercise if the Optionee
had purchased on the date the option was granted the Shares as to which
the option is so exercised and the Shares so purchased had not been
disposed of as of the date of such actual exercise, taking into
consideration such stock dividend, stock split, recapitalization,
reorganization, merger or other change in the corporate structure of
the Company.
Section 9. TERMINATION OR LAPSE OF OPTIONS. Each option shall
terminate or lapse upon the first to occur of (a) the expiration date
set forth in the applicable Stock Option Agreement, (b) the applicable
date set forth in Section 6.2(b), or (c) the date which is the day next
following the last day such option could be exercised by the Optionee
under Section 6.2(e); provided, however, that in the event of an
Optionee's death while in the employ of the Company or a parent or
subsidiary of the Company or, if the Optionee is no longer so employed,
in the event of the Optionee's death on or before the last day such
option could be exercised by the Optionee under Section 6.2(e), an
option may be exercised, to the extent exercisable by the Optionee
immediately prior to his death, in whole or in part by the Optionee's
estate or his designee by will, or, if applicable, the transferee of
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such option pursuant to Section 6.2(d)(ii), but only if the date of
exercise is on or before the first to occur of (i) the expiration date
set forth in the applicable Stock Option Agreement, (ii) the applicable
date set forth in Section 6.2(b), or (iii) (A) for options subject to
Section 6.2(e)(i), the date which is twelve months after the date of
the Optionee's death, and (B) for options subject to Section
6.2(e)(ii), the second anniversary of the deceased Optionee's
Retirement Date.
Section 10. AMENDMENT AND TERMINATION OF PLAN.
Section 10.1 AMENDMENT OF PLAN. The Board of Directors of the
Company may amend the Plan from time to time and at any time; provided,
however, that no amendment shall adversely affect any option which has
been granted prior to the amendment and no amendment with respect to
the maximum number of Shares which may be issued pursuant to options or
the class of eligible employees, or which constitutes a change in the
material terms of the Plan (within the meaning of section 162(m) of the
Code) shall be effective unless approved by a majority of the shares
entitled to vote at a meeting of shareholders.
Section 10.2 TERMINATION OF PLAN. The Plan shall terminate on the
first to occur of (a) June 18, 2001 or (b) the date specified by the
Board of Directors of the Company as the effective date of Plan
termination; provided, however, that the termination of the Plan shall
not limit or otherwise affect any options outstanding on the date of
termination.
Section 11. EFFECTIVE DATE. The Effective Date of the Plan shall
be June 19, 1991, the date of approval by the Board of Directors of the
Company; provided, however, that neither the Plan nor grants made under
the Plan shall be effective unless the adoption of the Plan is approved
at the annual meeting of the Company's shareholders next following such
date by the majority of the shares entitled to vote at such meeting.
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Section 12. INVESTMENT INTENT. Shares acquired pursuant to the
exercise of an option, if not registered by the Company under the
Securities Act of 1933 (the "Act"), will be "restricted" stock which
will not be freely transferable by the holder after exercise of the
option. Each participating employee and assignee in interest of the
employee accordingly represents, as a condition of participation in the
Plan, that Shares which are unregistered under the Act are being
acquired for the Optionee's (or his assignee's) own account for
investment only and not with a view to offer for sale or for sale in
connection with the distribution or transfer thereof.
Section 13. AVAILABILITY OF INFORMATION. The Company shall
furnish each Optionee with (a) a copy of the Plan and the Company's
most recent annual report to its shareholders at the time the option
agreement provided for in Section 6.1 is executed by the Optionee and
(b) a copy of each subsequent annual report, on or about the same date
as such report shall be made available to shareholders of the Company.
The Company will furnish, upon written request addressed to the
Secretary of the Company, but at no charge to the Optionee or any duly
authorized representative of the Optionee, copies of all reports filed
by the Company with the Securities and Exchange Commission or the
commissioner of securities of any state, including, but not limited to,
the Company's annual reports on Form 10-K, its quarterly reports on
Form 10-Q, and its proxy statements.
Section 14. CONDITIONS OF EMPLOYMENT. Participation in or
eligibility for participation in the Plan shall not confer upon any
employee the right to be continued as an employee of the Company or any
present or future parent or subsidiary of the Company and the Company
and its participating subsidiaries hereby expressly reserve the right
to terminate the employment of any employee, with or without cause, as
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if the Plan and any options granted pursuant to it were not in effect.
Section 15. CHANGE IN CONTROL.
15.1 DEFINITION OF "CHANGE IN CONTROL." For purposes of the
Plan, a "Change in Control" means the happening of any of the
following events:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding Shares (the "Outstanding
Company Common Stock") or (ii) the combined voting power of
the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); excluding, however,
the following: (A) any acquisition directly from the Company
other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted
was itself acquired directly from the Company, (B) any
acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any entity controlled by the
Company, (D) any acquisition pursuant to a transaction which
complies with clauses (i), (ii), and (iii) of paragraph (c) of
this Section 15.1, (E) except as provided in paragraphs (d)
and (e), any acquisition by any of the Woodson Entities or any
of the Smith Entities, or (F) any increase in the
proportionate number of shares of Outstanding Company Common
Stock or Outstanding Company Voting Securities beneficially
owned by a Person to 20% or more of the shares of either of
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such classes of stock if such increase was solely the result
of the acquisition of Outstanding Company Common Stock or
Outstanding Company Voting Securities by the Company;
provided, however, that this clause (F) shall not apply to any
acquisition of Outstanding Company Common Stock or Outstanding
Company Voting Securities not described in clauses (A), (B),
(C), (D), or (E) of this paragraph (a) by the Person acquiring
such shares which occurs after such Person had become the
beneficial owner of 20% or more of either the Outstanding
Company Common Stock or Outstanding Company Voting Securities
by reason of share purchases by the Company; or
(b) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute
the Board (such Board shall be hereinafter referred to as
the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, for
purposes of the Plan, that any individual who becomes a
member of the Board subsequent to the Effective Date
whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at
least a majority of those individuals who are members of
the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this proviso)
shall be deemed to be and shall be considered as though
such individual were a member of the Incumbent Board, but
provided, further, that any such individual whose initial
assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A
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promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board shall
not be so deemed or considered as a member of the Incumbent
Board; or
(c) Consummation of a reorganization, merger or consolidation, or
sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of the assets or
securities of any other entity (a "Corporate Transaction");
excluding, however, such a Corporate Transaction pursuant to
which (i) all or substantially all of the individuals and
entities who are the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly,
more than 60% of, respectively, the outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a
result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) (the "Resulting
Corporation") in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no Person (other
than the Company, any employee benefit plan (or related trust)
of the Company, any Woodson Entity, any Smith Entity, or such
Resulting Corporation) will beneficially own, directly or
indirectly, 20%
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or more of, respectively, the outstanding shares of common
stock of the Resulting Corporation or the combined voting
power of the then outstanding voting securities of such
Resulting Corporation entitled to vote generally in the
election of directors except to the extent that such ownership
existed with respect to the Company prior to the Corporate
Transaction, and (iii) individuals who were members of the
Incumbent Board will constitute at least a majority of the
members of the board of directors of the Resulting
Corporation; or (d) The Woodson Entities acquire beneficial
ownership of more than 35% of the Outstanding Company Common
Stock or Outstanding Company Voting Securities or of the
outstanding shares of common stock or the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the Resulting Corporation; or
(e) The Smith Entities acquire beneficial ownership of more
than 35% of the Outstanding Company Common Stock or
Outstanding Company Voting Securities or of the outstanding
shares of common stock or the combined voting power of the
then outstanding voting securities entitled to vote generally
in the election of directors, as the case may be, of the
Resulting Corporation; or
(f) The approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
For purposes of this Section 15.1, the term "Woodson Entities"
shall mean Aytchmonde P. Woodson, Leigh Yawkey Woodson and Alice
Richardson Yawkey, members of their respective families and their
respective descendants (the "Woodson Family"), heirs or legatees of
any of the
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Woodson Family members, transferees by will, laws of descent or
distribution or by operation of law of any of the foregoing
(including of any such transferees) (including any executor or
administrator of any estate of any of the foregoing), any trust
established by any of Aytchmonde P. Woodson, Leigh Yawkey Woodson,
or Alice Richardson Yawkey, whether pursuant to last will or
otherwise, any partnership, trust or other entity established
primarily for the benefit of, or any other Person the beneficial
owners of which consist primarily of, any of the foregoing or any
Affiliates or Associates of any of the foregoing or any charitable
trust or foundation to which any of the foregoing transfers or may
transfer securities of the Company (including any beneficiary or
trustee, partner, manager or director of any of the foregoing or
any other Person serving any such entity in a similar capacity).
For purposes of this Section 15.1, the term "Smith Entities" shall
mean David B. Smith and Katherine S. Smith, members of their
respective families and their respective descendants (the "Smith
Family"), heirs or legatees of any of the Smith Family members,
transferees by will, laws of descent or distribution or by
operation of law of any of the foregoing (including of any such
transferees) (including any executor or administrator of any estate
of any of the foregoing), any trust established by either of David
B. Smith or Katherine S. Smith, whether pursuant to last will or
otherwise, any partnership, trust or other entity established
primarily for the benefit of, or any other Person the beneficial
owners of which consist primarily of, any of the foregoing or any
Affiliates or Associates of any of the foregoing or any charitable
trust or foundation to which
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any of the foregoing transfers or may transfer securities of the
Company (including any beneficiary or trustee, partner, manager or
director of any of the foregoing or any other Person serving any
such entity in a similar capacity).
For purposes of this Section 15.1, the terms "Affiliate" and
"Associate" shall have the meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations under the Exchange Act
as in effect on the date of this Plan.
Section 15.2 EFFECTS OF CHANGE IN CONTROL.
(a) In the event of a Change in Control,
(i) all options outstanding on the date on which such Change in
Control has occurred (the "Change in Control Date") shall, to
the extent not then exercisable or vested, immediately become
exercisable in full, and
(ii) each Optionee may elect, with respect to each option held by
such Optionee on the Change in Control Date (the Optionee's
"Election Right"), to surrender such option for an immediate
lump sum cash payment in an amount equal to the product of (A)
the number of Shares then subject to the option as to which
the election is being exercised, multiplied by (B) the excess,
if any, of (1) the greater of (a) the Change in Control Price
or (b) the highest fair market value of a Share on any day in
the 60-day period ending on the Change in Control Date, over
(2) the option price of such option. For purposes of this
Section 15.2, the "Change in Control Price" shall mean, if the
Change in Control is the result of a tender or exchange offer
or a Corporate Transaction (as defined in Section 15.1(c), the
highest price per Share paid in such tender or exchange offer
or Corporate Transaction;
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provided, however, that in the case of Incentive Stock
Options, the Change in Control Price shall be in all cases
the Fair Market Value of the Shares on the date such Incentive
Stock Option is exercised. To the extent that the
consideration paid in any such transaction consists all or in
part of securities or other noncash consideration, the value
of such securities or other noncash consideration shall be
determined in the sole discretion of the Committee.
(b) The exercise of an Election Right must be in writing, specify
the option or options and the number of Shares as to which the
election is being exercised, and be delivered to the Secretary
of the Company either in person or by depositing said notice
and payment in the United States mail, postage pre-paid and
addressed to such officer at the Company's home office on or
before the 60th day following the Change in Control Date.
(c) All payments due an Optionee pursuant to the provisions of
this Section 15.2 shall be made by the Company on or before
the 5th business day following the date on which the
Optionee's election has been delivered to the Company pursuant
to Section 15.2(b).
(d) Notwithstanding any other provision of this Section 15.2, if
the grant or the exercise of an Optionee's Election Right or
payment of cash provided for in Section 15.2(b) would make a
Change in Control transaction ineligible for
pooling-of-interests accounting treatment under APB No. 16,
that, but for the nature of such grant or exercise of Election
Rights or payment of cash, would otherwise be eligible for
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such pooling-of-interests accounting treatment, the
Committee shall have the right and authority to substitute for
the cash payments to be made to the Optionee pursuant to
Section 15.2(a), Common Stock with a fair market value,
determined as of the date of delivery of such Shares, equal to
the cash that would otherwise be payable to such Optionee in
connection with the exercise of an Optionee's Election Right
hereunder or, to the extent necessary to preserve such
pooling-of-interests accounting treatment, to otherwise
modify, eliminate, or terminate such Election Right.
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