Exhibit 10.4(f)
RYDER SYSTEM, INC.
1995 STOCK INCENTIVE PLAN
(as amended through May 4, 2001)
1. Purpose.
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The purpose of this Plan is to enable the Company to recruit and retain those
key executives most responsible for the Company's continued success and
progress, and by offering comparable incentives, to compete with other
organizations in attracting, motivating and retaining such executives, thereby
furthering the interests of the Company and its shareholders by giving such
executives a greater personal stake in and commitment to the Company and its
future growth and prosperity.
2. Definitions.
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For the purpose of this Plan:
(a) The term "Award" shall mean and include any Stock Option, SAR, Limited
SAR, Performance Unit or Restricted Stock Right granted under this Plan.
(b) During the three (3) year period following a Change of Control, the
term "cause" as used in Section 7 and Section 14(a) of this Plan with respect to
any Stock Option shall mean (i) an act or acts of fraud, misappropriation or
embezzlement on the Grantee's part which result in or are intended to result in
his personal enrichment at the expense of the Company, (ii) conviction of a
felony, (iii) conviction of a misdemeanor involving moral turpitude, or (iv)
willful failure to report to work for more than thirty (30) continuous days not
supported by a licensed physician's statement, all as determined only by a
majority of the Incumbent Board or the Committee, as the case may be.
(c) A "Change of Control" shall be deemed to have occurred if:
(i) any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) (a "Person") becomes the beneficial owner, directly or indirectly,
of twenty percent (20%) or more of the combined voting power of RSI's
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI; provided, however, that for purposes of this
subparagraph (i), the following acquisitions shall not constitute a Change of
Control: (A) any acquisition by any employee benefit plan or plans (or related
trust) of RSI and its subsidiaries and affiliates or (B) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A), (B) and
(C) of subparagraph (iii) of this Section 2(c); or
(ii) the individuals who, as of August 18, 1995, constituted the Board
of Directors of RSI (the "Board" generally and as of August 18, 1995 the
"Incumbent Board") cease for any reason to constitute at least two-thirds (2/3)
of the Board, provided that any person becoming a director subsequent to August
18, 1995 whose election, or nomination for election, was approved by a vote of
the persons comprising at least two-thirds (2/3) of the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act)
shall be, for purposes of this Plan, considered as though such person were a
member of the Incumbent Board; or
(iii) there is a reorganization, merger or consolidation of RSI (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of RSI's outstanding Common Stock and
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities ordinarily having the
right to vote for the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns RSI or all
or substantially all of RSI's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of RSI's outstanding Common
Stock and outstanding voting securities ordinarily having the right to vote for
the election of directors of RSI, as the case may be, (B) no Person (excluding
any corporation resulting from such Business Combination or any employee benefit
plan or plans (or related trust) of RSI or such corporation resulting from such
Business Combination and their subsidiaries and affiliates) beneficially owns,
directly or indirectly, 20% or more of the combined voting power of the then
outstanding voting securities of the corporation resulting from such Business
Combination and (C) at least two-thirds (2/3) of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(iv) there is a liquidation or dissolution of RSI approved by the
shareholders; or
(v) there is a sale of all or substantially all of the assets of
RSI.
If a Change of Control occurs and if a Grantee's employment is terminated prior
to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Grantee that such termination of employment (A) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change of Control or (B) otherwise arose in connection with or in anticipation
of a Change of Control, a Change of Control shall be deemed to have
retroactively occurred on the date immediately prior to the date of such
termination of employment.
(d) The term "Code" shall mean the Internal Revenue Code of 1986 as it may
be amended from time to time.
(e) The term "Committee" shall mean the Compensation Committee of the
Board of Directors of RSI constituted as provided in Section 5 of this Plan.
(f) The term "Common Stock" shall mean the common stock of RSI as from
time to time constituted.
(g) The term "Company" shall mean RSI and its Subsidiaries.
(h) The term "Disability" shall mean total physical or mental disability
of a Grantee as determined by the Committee upon the basis of such evidence as
the Committee in its discretion deems necessary and appropriate.
(i) The term "Employee" shall mean a full-time salaried employee of RSI or
any Subsidiary (which term shall include salaried officers).
(j) The term "Fair Market Value" shall mean, with respect to the Common
Stock, the mean between the highest and lowest sale price for shares as reported
by the composite transaction reporting system for securities listed on the
New York Stock Exchange on the date as of which such determination is being made
or on the most recently preceding date on which there was such a sale.
(k) The term "Grantee" shall mean an Employee who is selected by the
Committee to receive an Award under this Plan and in the case of a deceased
Employee shall mean the beneficiary of the Employee.
(l) The term "Incentive Stock Option" shall mean a Stock Option granted
under this Plan or a previously granted Stock Option that is re-designated by
the Committee as an Incentive Stock Option which is intended to constitute an
incentive stock option within the meaning of Section 422(b) of the Code.
(m) The term "Limited SAR" shall mean a Limited Stock Appreciation Right
granted by the Committee pursuant to Section 9 of this Plan.
(n) The term "Non-employee Director" shall mean any person who qualifies
as a non-employee director as defined in Rule 16b-3, as promulgated under the
1934 Act, or any successor definition.
(o) The term "Non-qualified Stock Option" shall mean a Stock Option
granted under this Plan which is not intended to qualify under Section 422(b) of
the Code.
(p) The term "Offer" shall mean any tender offer or exchange offer for
Shares, other than one made by the Company, including all amendments and
extensions of any such Offer.
(q) The term "Option" shall mean any stock option granted under this Plan.
(r) The term "Performance Goals" shall have the meaning set forth in
Section 10(c) of this Plan.
(s) The term "Performance Period" shall have the meaning set forth in
Section 10(d) of this Plan.
(t) The term "Performance Units" shall mean Performance Units granted by
the Committee pursuant to Section 10 of this Plan.
(u) The term "Plan" shall mean the Ryder System, Inc. 1995 Stock Incentive
Plan as the same shall be amended.
(v) The term "Price" shall mean, upon the occurrence of a Change of
Control, the excess of the highest of:
(i) the highest closing price of the Common Stock reported by the
composite transaction reporting system for securities listed on the New York
Stock Exchange within the sixty (60) days preceding the date of exercise;
(ii) the highest price per share of Common Stock included in a filing
made by any Person on any Schedule 13D pursuant to Section 13(d) of the 1934 Act
as paid within the sixty (60) days prior to the date of such report; and
(iii) the value of the consideration to be received by the holders of
Common Stock, expressed on a per share basis, in any transaction referred to in
subparagraph (iii), (iv) or (v) of Section 2(c), with all noncash consideration
being valued in good faith by the Incumbent Board; over the purchase price per
Share at which the related Option is exercisable as applicable, except that
Incentive Stock Options and, if and to the extent required in order for the
related Option to be treated as an Incentive Stock Option, SARs and Limited SARs
granted with respect to Incentive Stock Options, are limited to the spread
between the Fair Market Value of Common Stock on the date of exercise and the
purchase price per Share at which the related Option is exercisable.
(w) The term "Restricted Period" shall have the meaning set forth in
Section 11(a) of this Plan.
(x) The term "RSI" shall mean Ryder System, Inc.
(y) The term "Restricted Stock Rights" shall mean a Restricted Stock Right
granted by the Committee pursuant to Section 11 of this Plan.
(z) The term "Retirement" shall mean retirement under the provisions of
the various retirement plans of the Company (whichever is appropriate to a
particular Grantee) as then in effect, or in the absence of any such retirement
plan being applicable, as determined by the Committee.
(aa) The term "SAR" shall mean a Stock Appreciation Right granted by the
Committee pursuant to the provisions of Section 8 of this Plan.
(bb) The term "Shares" shall mean shares of the Common Stock and any shares
of stock or other securities received as a result of the adjustment provided for
in Section 12 of this Plan.
(cc) The term "Spread" with respect to a SAR shall have the meaning set
forth in Section 8(b) of this Plan, and with respect to a Limited SAR, the
meanings set forth in Sections 9(c) and 9(d) of this Plan.
(dd) The term "Stock Option" shall mean any stock option granted under this
Plan.
(ee) The term "Subsidiary" shall mean any corporation, other than RSI, or
other form of business entity more than fifty percent (50%) of the voting
interest of which is owned or controlled, directly or indirectly, by RSI and
which the Committee designates for participation in this Plan.
(ff) The term "Termination Date" shall mean the date that a Grantee ceases
to be employed by RSI or any Subsidiary for any reason; provided, however, it
shall mean the end of any severance period applicable to a Grantee with respect
to any Non-qualified Stock Options held by such Grantee.
(gg) The term "Year" shall mean a calendar year.
3. Shares of Stock Subject to this Plan.
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(a) Subject to the provisions of Paragraph (b) of this Section 3, no more
than 11,800,000 Shares shall be issuable pursuant to grants under this Plan.
Shares issued pursuant to this Plan may be either authorized but unissued or
reacquired Shares purchased on the open market or otherwise.
(b) In the event any Stock Option or Restricted Stock Right expires or
terminates unexercised or any Restricted Stock Right is forfeited or cancelled,
the number of Shares subject to such Stock Option or Restricted Stock Right
shall again become available for issuance under this Plan, subject to the
provisions of Sections 7(a), 8(a), 9(b) and 10(i) of this Plan.
(c) No Grantee shall be eligible to receive any Stock Option or series of
Stock Options covering, in the aggregate, more than 500,000 Shares in any
calendar year during the term of this Plan.
(d) The combined amount of Restricted Stock Rights and Performance Units
granted by the Committee during the term of this Plan shall not exceed One
Million Shares.
4. Participation.
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Awards under this Plan shall be limited to key executive Employees selected from
time to time by the Committee.
5. Administration.
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This Plan shall be administered by the Compensation Committee of the Board of
Directors of RSI which shall consist of two or more members of the Board of
Directors, each of whom shall be a Non-employee Director. All members of the
Committee shall be "outside directors" as defined or interpreted for purposes of
Section 162(m) of the Code. The Committee shall have plenary authority, subject
to the express provisions of this Plan, to (i) select Grantees; (ii) establish
and adjust Performance Goals and Performance Periods for Performance Units;
(iii) determine the nature, amount, time and manner of payment of Awards made
under this Plan, and the terms and conditions applicable thereto; (iv) interpret
this Plan; (v) prescribe, amend and rescind rules and regulations relating to
this Plan; (vi) determine whether and to what extent Stock Options previously
granted under this Plan shall be redesignated as Incentive Stock Options and, in
this connection, amend any Stock Option Agreement or make or authorize any
reports or elections or take any other action to the extent necessary to
implement the redesignation of any Stock Option as an Incentive Stock Option,
provided that any redesignation of a previously granted Stock Option as an
Incentive Stock Option shall not be effective unless and until consented to by
the Grantee; and (vii) make all other determinations deemed necessary or
advisable for the administration of this Plan. The Committee's determination on
the foregoing matters shall be conclusive. A majority of the Committee shall
constitute a quorum, and the acts of a majority of the members present at any
meeting at which a quorum is present, or acts approved in writing by all members
of the Committee without a meeting, shall be the acts of the Committee.
Notwithstanding anything to the contrary contained herein, neither the Board of
Directors of RSI nor the Committee shall be permitted to re-price any Stock
Options once they have been granted.
6. Awards.
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Subject to the provisions of Section 3 of this Plan, the Committee shall
determine Awards taking into consideration, as it deems appropriate, the
responsibility level and performance of each Grantee. The Committee may grant
the following types of Awards: Stock Options pursuant to Section 7 hereof, SARs
pursuant to Section 8 hereof, Limited SARs pursuant to Section 9 hereof,
Performance Units pursuant to Section 10 hereof and Restricted Stock Rights
pursuant to Section 11 hereof. Unless otherwise determined by the Committee, a
Grantee may not be granted in any Year both (i) a Restricted Stock Right and
(ii) a Stock Option, SAR, Limited SAR or Performance Unit.
7. Stock Options.
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(a) The Committee from time to time may grant Stock Options either alone
or in conjunction with and related to SARs, Limited SARs and/or Performance
Units to key executive Employees selected by the Committee as being eligible
therefor. The Stock Options may be of two types, Incentive Stock Options and
Non-qualified Stock Options. Each Stock Option shall cover such number of Shares
and shall be on such other terms and conditions not inconsistent with this Plan
as the Committee may determine and shall be evidenced by a Stock Option
Agreement setting forth such terms and conditions executed by the Company and
the Grantee. The Committee shall determine the number of Shares subject to each
Stock Option. The number of Shares subject to an outstanding Stock Option shall
be reduced on a one for one basis to the extent that any related SAR, Limited
SAR or Performance Unit is exercised and such Shares shall not again become
available for issuance pursuant to this Plan.
In the case of Stock Options, the aggregate Fair Market Value
(determined as of the date of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by an Employee during
any Year under this Plan or any other plan of the Company shall not exceed
$100,000. To the extent, if any, that the Fair Market Value of such Common Stock
with respect to which Incentive Stock Options are exercisable exceeds $100,000,
such Incentive Stock Options shall be treated as separate Non-qualified Stock
Options. For purposes of the two immediately preceding sentences of this
subparagraph (a), Stock Options shall be taken into account in the order in
which they were granted.
(b) Unless the Committee shall determine otherwise, each Stock Option may
be exercised only if the Grantee has been continuously employed by RSI or any
Subsidiary for a period of at least one (1) year commencing on the date the
Stock Option is granted; provided, however, that this provision shall not apply
in the event of a Change of Control.
(c) Each Stock Option shall be for such term (but, in no event for greater
than seven years) and shall be exercisable in such installments as shall be
determined by the Committee at the time of grant of the Stock Option.
The Committee may, at any time, provide for the acceleration of
installments or any part thereof.
(d) The price per Share at which Shares may be purchased upon the exercise
of a Stock Option shall be determined by the Committee on the grant of the Stock
Option, but such price shall not be less than one hundred percent (100%) of the
Fair Market Value on the date of grant of the Stock Option. If a Grantee owns
(or is deemed to own under applicable provisions of the Code and rules and
regulations promulgated thereunder) more than ten percent (10%) of the combined
voting power of all classes of the stock of the Company and a Stock Option
granted to such Grantee is intended to qualify as an Incentive Stock Option, the
Incentive Stock Option price shall be no less than one hundred and ten percent
(110%) of the Fair Market Value of the Common Stock on the date the Incentive
Stock Option is granted and the term of such Incentive Stock Option shall be no
more than five years.
(e) Except as provided in Paragraphs (h) and (l) of this Section 7, no
Stock Option may be exercised unless the Grantee, at the time of exercise, is an
Employee and has continuously been an Employee of RSI or any Subsidiary since
the grant of such Stock Option. A Grantee shall not be deemed to have terminated
his period of continuous employ with RSI or any Subsidiary if he leaves the
employ of RSI or any Subsidiary for immediate reemployment with RSI or any
Subsidiary.
(f) To exercise a Stock Option, the Grantee shall (i) give written notice
to the Company in form satisfactory to the Committee indicating the number of
Shares which he elects to purchase, (ii) deliver to the Company payment of the
full purchase price of the Shares being purchased (A) in cash or a certified or
bank cashier's check payable to the order of the Company, or (B) with the
approval of the Committee, in Shares of the Common Stock having a Fair Market
Value on the date of exercise equal to the purchase price, or a combination of
the foregoing having an aggregate Fair Market Value equal to such purchase
price, and (iii) deliver to the Secretary of the Company such written
representations, warranties and covenants as the Company may require under
Section 16(a) of this Plan.
(g) A Grantee of any Stock Option shall not have any rights as a
shareholder until the close of business on the date on which the Stock Option
has been exercised.
(h) Notwithstanding any other provision of this Plan, unless otherwise
determined by the Committee prior to a Change of Control, in the event of a
Change of Control, each Stock Option not previously exercised or expired under
the terms of this Plan shall become immediately exercisable in full and shall
remain exercisable to the full extent of the Shares available thereunder,
regardless of any installment provisions applicable thereto, for the remainder
of its term, unless Section 14(a) of this Plan applies or the Grantee has been
terminated for cause, in which case the Stock Options shall automatically
terminate as of the Incumbent Board's determination pursuant to Section 14(a) or
the Grantee's Termination Date, as appropriate.
(i) If the Committee so determines prior to or during the thirty (30) day
period following the occurrence of a Change of Control, Grantees of Stock
Options not otherwise exercised or expired under the terms of this Plan as to
which no SARs or Limited SARs are then exercisable may, in lieu of exercising,
require RSI to purchase for cash all such Stock Options or portions thereof for
a period of sixty (60) days following the occurrence of a Change of Control at
the Price specified in Section 2(v).
(j) Any determination made by the Committee pursuant to Section 7(h) or
7(i) may be made as to all eligible Stock Options or only as to certain of such
Stock Options specified by the Committee. Once made, any determination by the
Committee pursuant to Section 7(h) or 7(i) shall be irrevocable.
(k) The Company intends that this Section 7 shall comply with the
requirements of Rule 16b-3 under the 1934 Act (the "Rule") during the term of
this Plan. Should any provision of this Section 7 not be necessary to comply
with the requirements of the Rule, or should any additional provisions be
necessary for this Section 7 to comply with the requirements of the Rule, the
Committee may amend this Plan or any Stock Option agreement to add to or modify
the provisions thereof accordingly.
(l) Notwithstanding any of the provisions of this Section 7, a Stock
Option shall in all cases terminate and not be exercisable after the expiration
of the term of the Stock Option established by the Committee. Except as provided
in Section 7(h), Stock Options shall be exercisable after the Grantee ceases to
be employed by RSI or any Subsidiary as follows, unless otherwise determined by
the Committee:
(i) In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of Disability, (A) any Non-qualified Stock Option not
previously exercised or expired shall continue to vest and be exercisable during
the three (3) year period following the Grantee's Termination Date, and to the
extent it is exercisable at the expiration of such three (3) year period, it
shall continue to be exercisable by such Grantee or such Grantee's legal
representatives, heirs or legatees for the term of such Non-qualified Stock
Option, and (B) any Incentive Stock Option shall, to the extent it was
exercisable on the Termination Date, continue to be exercisable by such Grantee
or such Grantee's legal representatives, heirs or legatees for the term of such
Incentive Stock Option; provided, however, that in order to qualify for the
special tax treatment afforded by Section 421 of the Code, Incentive Stock
Options must be exercised within the three (3) month period commencing on the
Termination Date (the exercise period shall be one (1) year in the case of
termination by reason of disability, within the meaning of Section 22(e)(3) of
the Code). Incentive Stock Options not exercised within such three (3) month
period shall be treated as Non-qualified Stock Options.
(ii) In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of death, any Stock Option shall, to the extent it was
exercisable on the Termination Date, continue to be exercisable by such
Grantee's legal representatives, heirs or legatees for the term of such Stock
Option.
(iii) Except as otherwise provided in subparagraph (i) or (ii) above,
in the event that a Grantee ceases to be employed by RSI or any Subsidiary for
any reason other than termination for cause, any Stock Option shall, to the
extent it was exercisable on the Termination Date, continue to be exercisable
for a period of three (3) months commencing on the Termination Date and shall
terminate at the expiration of such period; provided, however, that in the event
of the death of the Grantee during such three (3) month period, such Stock
Option shall, to the extent it was exercisable on the Termination Date, be
exercisable by the Grantee's personal representatives, heirs or legatees for a
period of one (1) year commencing on the date of the Grantee's death and shall
terminate at the expiration of such period.
(m) Except as otherwise provided in Section 7, a Stock Option shall
automatically terminate as of the Termination Date, provided that if a Grantee's
employment is interrupted by reason of Disability or a leave of absence (as
determined by the Committee) the Committee may permit the exercise of some or
all of the Stock Options granted on such terms and for such period of time as it
shall determine.
8. Stock Appreciation Rights.
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(a) The Committee shall have authority in its discretion to grant a SAR to
any Grantee of a Stock Option with respect to all or some of the Shares covered
by such Stock Option. Each SAR shall be on such terms and conditions not
inconsistent with this Plan as the Committee may determine and shall be
evidenced by a SAR Agreement setting forth such terms and conditions executed by
the Company and the holder of the SAR. A SAR may be granted either at the time
of grant of a Stock Option or at any time thereafter during its term. A SAR may
be granted to a Grantee irrespective of whether such Grantee has a Limited SAR.
Each SAR shall be exercisable only if and to the extent that the related Stock
Option is exercisable. Upon the exercise of a SAR, the related Stock Option
shall cease to be exercisable to the extent of the Shares with respect to which
such SAR is exercised and shall be considered to have been exercised to that
extent for purposes of determining the number of Shares available for the grant
of further Awards pursuant to this Plan. Upon the exercise or termination of a
Stock Option, the SAR related to such Stock Option shall terminate to the extent
of the Shares with respect to which such Stock Option was exercised or
terminated.
(b) The term "Spread" as used in this Section 8 shall mean, with respect
to the exercise of any SAR, an amount equal to the product computed by
multiplying (i) the excess of (A) the Fair Market Value per Share on the date
such SAR is exercised over (B) the purchase price per Share at which the related
Stock Option is exercisable by (ii) the number of Shares with respect to which
such SAR is being exercised, provided; however, that the Committee may at the
grant of any SAR limit the maximum amount of the Spread to be paid upon the
exercise thereof.
(c) Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a SAR may be exercised only
when there is a positive Spread, that is, when the Fair Market Value per Share
exceeds the purchase price per Share at which the related Stock Option is
exercisable. Upon the exercise of a SAR, the Committee shall pay to the Grantee
exercising the SAR an amount equivalent to the Spread. The Committee shall have
the sole and absolute discretion to determine whether payment for such SAR will
be made in cash, Shares or a combination of cash and Shares, provided, that any
Shares used for payment shall be valued at their Fair Market Value on the date
of the exercise of the SAR.
(d) The Company intends that this Section 8 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 8 not be necessary to comply with the requirements of the Rule or
should any additional provisions be necessary for this Section 8 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
(e) To exercise a SAR, the Grantee shall (i) give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which such holder is exercising the SAR and (ii)
deliver to the Company such written representations, warranties and covenants as
the Company may require under Section 16(a) of this Plan.
(f) A person exercising a SAR shall not be treated as having become the
registered owner of any Shares issued on such exercise until such Shares are
issued.
(g) The exercise of a SAR shall reduce the number of Shares subject to the
related Stock Option on a one for one basis.
9. Limited SARs.
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(a) The Committee shall have authority in its discretion to grant a
Limited SAR to the holder of any Stock Option with respect to all or some of the
Shares covered by such Stock Option; provided, however, that in the case of
Incentive Stock Options, the Committee may grant Limited SARs only if and to the
extent that the grant of such Limited SARs is consistent with the treatment of
the Stock Option as an Incentive Stock Option. Each Limited SAR shall be on such
terms and conditions not inconsistent with this Plan as the Committee may
determine and shall be evidenced by a Limited SAR Agreement setting forth such
terms and conditions executed by the Company and the holder of the Limited SAR.
A Limited SAR may be granted to a Grantee irrespective of whether such Grantee
has a SAR.
(b) Limited SARs may be exercised only during the sixty (60) day period
commencing after the occurrence of a Change of Control.
Each Limited SAR shall be exercisable only if and to the extent that
the related Option is exercisable. Upon the exercise of a Limited SAR, the
related Stock Option shall cease to be exercisable to the extent of the Shares
with respect to which such Limited SAR is exercised, and the Stock Option shall
be considered to have been exercised to that extent for purposes of determining
the number of Shares available for the grant of further Awards pursuant to this
Plan. Upon the exercise or termination of an Option, the Limited SAR with
respect to such Option shall terminate to the extent of the Shares with respect
to which the Option was exercised or terminated.
(c) For any Limited SAR, the term "Spread" as used in this Section 9 shall
mean an amount equal to the product computed by multiplying (A) the Price
specified in Section 2(v) by (B) the number of Shares with respect to which such
Limited SAR is being exercised.
(d) Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a Limited SAR may be
exercised only when there is a positive Spread, that is, when the Fair Market
Value per Share exceeds the purchase price per Share at which the related Stock
Option is exercisable. Upon the exercise of a Limited SAR, the holder thereof
shall receive an amount in cash equal to the Spread.
(e) Notwithstanding any other provision of this Plan, no SAR or
Performance Unit may be exercised with respect to any Stock Option at a time
when any Limited SAR with respect to such Stock Option held by the Grantee of
such SAR or Performance Unit may be exercised.
(f) The Company intends that this Section 9 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 9 not be necessary to comply with the requirements of the Rule, or
should any additional provisions be necessary for this Section 9 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
(g) To exercise a Limited SAR, the holder shall give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which he is exercising the Limited SAR.
(h) The exercise of a Limited SAR shall reduce on a one for one basis the
number of Shares subject to the related Stock Option.
10. Performance Units.
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(a) In conjunction with the granting of Stock Options under this Plan, the
Committee may grant Performance Units relating to such Stock Options; provided,
however, that in the case of Incentive Stock Options, the Committee may grant
Performance Units only if and to the extent that the grant of such Performance
Units is consistent with the treatment of the Stock Option as an Incentive Stock
Option. Each grant of Performance Units shall cover such number of Shares and
shall be on such other terms and conditions not inconsistent with this Plan as
the Committee may determine and shall be evidenced by a Performance Unit
Agreement setting forth such terms and conditions executed by the Company and
the Grantee of the Performance Units. The number of Performance Units granted
shall be equal to a specified number of Shares subject to the related Stock
Options. The Committee shall value such Units to the extent that Performance
Goals are achieved; provided, however, that in no event shall the value per
Performance Unit exceed one hundred and fifty percent (150%) of the purchase
price per Share at which the related Stock Option is exercisable.
(b) The Committee shall have full and final authority to establish
Performance Goals for each Performance Period on the basis of such criteria, and
the attainment of such objectives, as the Committee may from time to time
determine. In setting Performance Goals, the Committee may take into
consideration such matters which it deems relevant and such financial and other
criteria including but not limited to projected cumulative compounded rate of
growth in earnings per Share and average return on equity. During any
Performance Period, the Committee shall have the authority to adjust Performance
Goals for the Performance Period as it deems equitable in recognition of
extraordinary or nonrecurring events experienced by the Company during the
Performance Period including, but not limited to, changes in applicable
accounting rules or principles or changes in the Company's methods of accounting
during the Performance Period or significant changes in tax laws or regulations
which affect the financial results of the Company.
(c) The term "Performance Goals" as used in this Section 10 shall mean the
performance objectives established by the Committee for the Company for a
Performance Period for the purpose of determining if, as well as the extent to
which, a Performance Unit shall be earned.
(d) The term "Performance Period" as used in this Section 10 shall mean
the period of time selected by the Committee (which period shall be not more
than five nor less than three years) commencing on January 1 of the Year in
which the grant of Performance Units is made, during which the performance of
the Company is measured for the purpose of determining the extent to which
Performance Units have been earned.
(e) Performance Units shall be earned to the extent that Performance Goals
and other conditions established in accordance with Paragraph (b) of this
Section 10 are met. The Company shall promptly notify each Grantee of the extent
to which Performance Units have been earned by such Grantee. A Performance Unit
may be exercised only during the period following such notice and prior to
expiration of the related option. Performance Units which have been earned shall
be paid after exercise by the Grantee pursuant to Paragraph (h) of this Section
10. The Committee shall have the sole and absolute discretion to determine
whether payment for such Performance Unit will be made in cash, Shares or a
combination of cash and Shares, provided that any Shares used for payment shall
be valued at their Fair Market Value on the date of the exercise of the
Performance Unit.
(f) Unless otherwise determined by the Committee, in the event that a
Grantee of Performance Units ceases to be employed by RSI or any Subsidiary
during the term of the related Stock Option, the Performance Units held by him
shall be exercisable only to the extent the related Stock Option is exercisable
and shall be forfeited to the extent that the related Stock Option was not
exercisable on the Termination Date.
(g) The Company intends that this Section 10 shall comply with the
requirements of Section 16(b) of the 1934 Act and the rules thereunder, as from
time to time in effect, including the Rule. Should any provision of this Section
10 not be necessary to comply with the requirements of said Section 16(b) and
the rules thereunder or should any additional provision be necessary for this
Section 10 to comply with the requirements of Section 16(b) and the rules
thereunder, the Committee may amend this Plan or any Award agreement to add to
or modify the provisions thereof accordingly.
(h) To exercise Performance Units, the Grantee shall give written notice
to the Company in form satisfactory to the Committee addressed to the Secretary
of the Company specifying the number of Shares with respect to which he is
exercising Performance Units.
(i) The exercise of Performance Units shall reduce on a one for one basis
the number of Shares subject to the related Stock Option.
11. Restricted Stock Rights.
-----------------------
(a) The Committee from time to time may grant Restricted Stock Rights to
key executive Employees selected by the Committee as being eligible therefor,
which would entitle a Grantee to receive a stated number of Shares subject to
forfeiture of such Rights if such Grantee failed to remain continuously in the
employ of RSI or any Subsidiary for the period stipulated by the Committee (the
"Restricted Period").
(b) Restricted Stock Rights shall be subject to the following restrictions
and limitations:
(i) The Restricted Stock Rights may not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of;
(ii) Except as otherwise provided in Paragraph (d) of this Section 11,
the Restricted Stock Rights and the Shares subject to such Restricted Stock
Rights shall be forfeited and all rights of a Grantee to such Restricted Stock
Rights and Shares shall terminate without any payment of consideration by the
Company if the Grantee fails to remain continuously as an Employee of RSI or any
Subsidiary for the Restricted Period. A Grantee shall not be deemed to have
terminated his period of continuous employment with RSI or any Subsidiary if he
leaves the employ of RSI or any Subsidiary for immediate reemployment with RSI
or any Subsidiary.
(c) The Grantee of Restricted Stock Rights shall not be entitled to any of
the rights of a holder of the Common Stock with respect to the Shares subject to
such Restricted Stock Rights prior to the issuance of such Shares pursuant to
this Plan. During the Restricted Period, for each Share subject to a Restricted
Stock Right, the Company will pay the holder an amount in cash equal to the cash
dividend declared on a Share during the Restricted Period on or about the date
the Company pays such dividend to the stockholders of record.
(d) In the event that the employment of a Grantee terminates by reason of
death, Disability or Retirement, such Grantee shall be entitled to receive the
number of Shares subject to the Restricted Stock Right multiplied by a fraction
(x) the numerator of which shall be the number of days between the date of grant
of such Restricted Stock Right and the date of such termination of employment,
and (y) the denominator of which shall be the number of days in the Restricted
Period, provided, however, that any fractional Share shall be cancelled. If a
Grantee's employment is interrupted by reason of Disability or a leave of
absence (as determined by the Committee), then the Committee may permit the
delivery of the Shares subject to the Restricted Stock Right in such amounts as
the Committee may determine.
(e) Notwithstanding Paragraphs (a) and (b) of this Section 11, unless
otherwise determined by the Committee prior to the occurrence of a Change of
Control, in the event of a Change of Control all restrictions on Restricted
Stock shall expire and all Shares subject to Restricted Stock Rights shall be
issued to the Grantees. Additionally, the Committee may, at any time, provide
for the acceleration of the Restricted Period and of the issuance of all or part
of the Shares subject to Restricted Stock Rights. Any determination made by the
Committee pursuant to this Section 11(e) may be made as to all Restricted Stock
Rights or only as to certain Restricted Stock Rights specified by the Committee.
Once made, any determination by the Committee pursuant to this Section 11(e)
shall be irrevocable.
(f) When a Grantee shall be entitled to receive Shares pursuant to a
Restricted Stock Right, the Company shall issue the appropriate number of Shares
registered in the name of the Grantee.
12. Dilution and Other Adjustments.
------------------------------
If there shall be any change in the Shares subject to this Plan or any Award
granted under this Plan as a result of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other change in the corporate
structure, adjustments may be made by the Committee, as it may deem appropriate,
in the aggregate number and kind of Shares subject to this Plan or to any
outstanding Award, and in the terms and provisions of this Plan and any Awards
granted hereunder, in order to reflect, on an equitable basis, any such change
in the Shares contemplated by this Section 12, provided however, that neither
the Board of Directors of RSI nor the Committee shall be permitted to re-price
any Stock Options once they have been granted. Any adjustment made by the
Committee pursuant to this Section 12 shall be conclusive and binding upon the
Grantee, the Company and any other related person.
13. Substitute Options.
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Incentive and/or Non-qualified Stock Options may be granted under this Plan from
time to time in substitution for either incentive or non-qualified stock options
or both held by employees of other corporations who are about to become
employees of the Company as the result of a merger, consolidation or
reorganization of the employing corporation with the Company, or the acquisition
by the Company of the assets of the employing corporation, or the acquisition by
the Company of stock of the employing corporation as the result of which it
becomes a Subsidiary of the Company. The terms and conditions of the Stock
Options so granted may vary from the terms and conditions set forth in this Plan
to such extent as the Committee at the time of grant may deem appropriate to
conform, in whole or in part, to the provisions of the stock options in
substitution for which they are granted, but, in the event that the option for
which a substitute Stock Option is being granted is an incentive stock option,
no variation shall adversely affect the status of any substitute Stock Option as
an incentive stock option under the Code.
14. Miscellaneous Provisions.
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(a) Notwithstanding any other provision of this Plan, no Stock Option, SAR,
Limited SAR or Restricted Stock Right granted hereunder may be exercised nor
shall any payment in respect of any Performance Unit granted hereunder be made
and all rights of the Grantee thereof, or of the Grantee's legal
representatives, heirs or legatees, shall be forfeited if, prior to the time of
such exercise or payment, the Committee (or in the event of a Change of Control,
the Incumbent Board) determines that the Grantee has (i) used for profit or
disclosed confidential information or trade secrets of the Company to
unauthorized persons, or (ii) breached any contract with, or violated any legal
obligation to, the Company, or (iii) engaged in any other activity which would
constitute grounds for termination for cause of the Grantee by the Company. The
Committee (or the Incumbent Board) shall give a Grantee written notice of such
determination prior to making any such forfeiture. The Committee (or the
Incumbent Board) may waive the conditions of this Paragraph in full or in part
if, in its sole judgment, such waiver will have no substantial adverse effect
upon the Company. The determination of the Committee (or the Incumbent Board) as
to the occurrence of any of the events specified above and to the forfeiture, if
any, shall be conclusive and binding upon the Grantee, the Company and any other
related person.
(b) The Grantee of an Award shall have no rights as a stockholder with
respect thereto, except as otherwise expressly provided in this Plan, unless and
until certificates for Shares are issued.
(c) No Award or any rights or interests therein shall be assignable or
transferable by the Grantee except by will or the laws of descent and
distribution. During the lifetime of the Grantee, an Award shall be exercisable
only by the Grantee or the Grantee's guardian or legal representative.
(d) The Company shall have the right to deduct from all Awards granted
hereunder to be distributed in cash any Federal, state, local or foreign taxes
required by law to be withheld with respect to such cash payments. In the case
of Awards to be distributed in Shares, the holder or other person receiving such
Common Stock shall be required, as a condition of such distribution, either to
pay to the Company at the time of distribution thereof the amount of any such
taxes which the Company is required to withhold with respect to such Shares or
to have the number of the Shares, valued at their Fair Market Value on the date
of distribution, to be distributed reduced by an amount equal to the value of
such taxes required to be withheld.
(e) No Employee shall have any claim or right to be granted an Award under
this Plan, nor having been selected as a Grantee for one Year, any right to be a
Grantee in any other Year. Neither this Plan nor any action taken hereunder
shall be construed as giving any Grantee any right to be retained in the employ
of RSI or any Subsidiary, and the Company expressly reserves its right at any
time to dismiss any Grantee with or without cause.
(f) The costs and expense of administering this Plan shall be borne by the
Company and not charged to any Award nor to any Grantee.
(g) This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under this Plan, and payment of Awards
shall be subordinate to the claims of the Company's general creditors.
(h) Whenever used in this Plan, the masculine gender shall include the
feminine or neuter wherever necessary or appropriate and vice versa and the
singular shall include the plural and vice versa.
(i) With respect to Grantees subject to Section 16 of the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of this Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Committee. Moreover, in the event this Plan does not include a provision
required by Rule 16b-3 to be stated herein, such provision (other than one
relating to eligibility requirements, or the price and amount of Awards) shall
be deemed automatically to be incorporated by reference into this Plan insofar
as Grantees subject to Section 16 are concerned.
15. Indemnification of the Committee.
--------------------------------
Service on the Committee shall constitute service as a director of the Company
and members of the Committee shall be entitled to indemnification, advancement
of expenses and reimbursement as directors of the Company pursuant to its
Restated Articles of Incorporation, By-Laws, resolutions of the Board of
Directors of RSI or otherwise.
16. Compliance with Law.
-------------------
(a) Each Grantee, to permit the Company to comply with the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable blue sky or state
securities laws, shall represent in writing to the Company at the time of the
grant of an Award and at the time of the issuance of any Shares thereunder that
such Grantee does not contemplate and shall not make any transfer of any Shares
to be acquired under an Award except in compliance with the 1933 Act and such
Grantee shall enter into such agreements and make such other representations as,
in the opinion of counsel to the Company, shall be sufficient to enable the
Company legally to issue the Shares without registration thereof under the 1933
Act. Certificates representing Shares to be acquired under Awards shall bear
legends as counsel for the Company may indicate are necessary or appropriate to
accomplish the purposes of this Section 16.
(b) If at any time the Committee shall determine that the listing,
registration or qualification of the Shares subject to any Award upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of or issuance of Shares under
such Award, such Shares shall not be issued unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.
17. Amendment of the Plan.
---------------------
The Committee may at any time (i) terminate this Plan or (ii) modify or amend
this Plan in any respect, except that, to the extent required to maintain the
qualification of this Plan under Section 16 of the 1934 Act, or as otherwise
required to comply with applicable law or the regulations of any stock exchange
on which the Shares are listed, the Committee may not, without shareholder
approval, (A) materially increase the benefits accruing to Grantees under this
Plan, (B) materially increase the number of securities which may be issued under
this Plan or (C) materially modify the requirements as to eligibility for
participation in this Plan. Should this Plan require amendment to maintain full
legal compliance because of rules, regulations, opinions or statutes issued by
the SEC, the U.S. Department of the Treasury or any other governmental or
governing body, then the Committee or the Board may take whatever action,
including but not limited to amending or modifying this Plan, is necessary to
maintain such compliance. The termination or any modification or amendment of
this Plan shall not, without the consent of any Grantee involved, adversely
affect his rights under an Award previously granted to him.
18. Effective Date and Term of the Plan.
-----------------------------------
(a) This Plan shall become effective on May 5, 1995, subject to the
approval of the shareholders of RSI.
(b) Unless previously terminated in accordance with Section 17 of this
Plan, this Plan shall terminate on the close of business on May 4, 2005, after
which no Awards shall be granted under this Plan. Such termination shall not
affect any Awards granted prior to such termination.