ELECTRIC LIGHTWAVE, INC.
1997 EQUITY INCENTIVE PLAN
Section 1. Purpose
The purpose of the Electric Lightwave, Inc. 1997 Equity Incentive Plan (the
"Plan") is to provide compensation incentives for high levels of performance and
productivity by employees of the Company and its Participating Companies (as
that term is defined later herein) and individuals who perform services for the
Company as director, consultant or otherwise. The Plan is intended to strengthen
the Company's existing operations and its ability to attract and retain
outstanding personnel upon whose judgment, initiative and efforts the continued
efficiency, productivity, growth and development of the Company is dependent, as
well as encourage such personnel to have a greater personal financial investment
in the Company through ownership of its common stock.
Section 2. Definitions
When used herein, the following terms have the following meanings:
(a) "Affiliate" means any company controlled by the Company, controlling the
Company or under common control with the Company.
(b) "Award" means an award granted to any Eligible Individual in accordance with
the provisions of the Plan.
(c) "Award Agreement" means the written agreement or certificate evidencing the
terms of the Award granted to a Participant under the Plan.
(d) "Beneficiary" means the beneficiary or beneficiaries designated pursuant to
Section 11 to receive the amount, if any, payable under the Plan upon the
death of an Eligible Individual.
(e) "Board" means the Board of Directors of the Company.
(f) A "Change in Control" shall mean the occurrence of any of the following
events with respect to the Company:
(i) (A) a third "Person" (other than an employee benefit plan of the
Company or the Company's parent company, Citizens Utilities Company, or an
Affiliate of Citizens Utilities Company), including a "group", as those
terms are used in Section 13(d) of the Exchange Act, is or becomes the
beneficial owner (as that term is used in said Section 13(d)) of stock
having twenty percent (20%) or more of the total number of votes that may
be cast for the election of members of the Board or (B) the receipt by the
Company of any report, schedule, application or other document filed with a
state or federal governmental agency or commission disclosing such
ownership or proposed ownership;
(ii) approval by the stockholders of the Company of any (A)
consolidation or merger or sale of assets of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of stock of the Company would be converted into cash, securities or
other property, other than a consolidation or merger of the Company in
which holders of its common stock immediately prior to the consolidation or
merger have substantially the same proportionate ownership of common stock
of the surviving corporation immediately after the consolidation or merger
as they held immediately before, or (B) sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of 51% or
more of the assets or businesses of the Company;
(iii) as a result of, or in connection with, any cash tender offer,
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions (a
"Transaction"), the persons who are members of the Board before the
Transaction shall cease to constitute a majority of the Board or any
successor to the Company.
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(g) "Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. (All citations to Sections of the Code are to such
Sections as they are currently designated and reference to such Sections
shall include the provisions thereof as they may from time to time be
amended or renumbered as well as any successor provisions and any applicable
regulations.)
(h) "Company" means Electric Lightwave, Inc., and its successors and assigns.
(i) "Committee" means the Compensation Committee of the Board of Directors of
the Company.
(j) "Deferred Stock" means Stock credited to a Participant under the Plan
subject to the requirements of Section 8 and such other terms and
restrictions as the Committee deems appropriate or desirable.
(k) "Effective Date" means October 16, 1997.
(l) "Eligible Individual" means a director, officer or employee of any
Participating Company or an individual who performs services for the
Company directly or indirectly as a director, consultant or otherwise, upon
whose judgment, initiative and efforts, in the judgment of the Committee,
the continued efficiency, productivity, growth and development of the
Company is dependent. Where required by the context, "Eligible Individual"
includes an individual who has been granted an Award but is no longer an
employee of any Participating Company.
(m) "Fair Market Value" means, unless another reasonable method for determining
fair market value is specified by the Committee (which may include
appraisal by a third party or the Board), the average of the high and low
sales prices of a share of the Stock as reported by the NASDAQ (or if such
shares are listed on a national stock exchange, as reported or quoted by
such exchange) on the date in question or, if no such sales were reported
for such date, for the most recent date on which sales prices were quoted.
(n) "Family Member" and "Family Trust" shall have the same meanings as are
employed from time to time by the SEC in describing individuals, trusts,
partnerships, pass-through and other entities which qualify for exemption
from any of the rules promulgated by the SEC which would otherwise limit
transferability of stock options and stock awards for purposes of Section 16
of the Exchange Act and/or the use of Form S-8 under the Securities Act or
for any comparable purpose, provided that, for the purposes of the Plan, the
phrases "Family Member" and "Family Trust" shall also be limited, when
applied to any Participant, so that said Participant shall not be free to
make a transfer to an individual or entity if such a transfer or the ability
of said Participant to make such a transfer shall have adverse consequences
to the Company or said Participant by reason of Section 162(m) of the Code.
(o) "Option" means an option to purchase Stock, including Restricted Stock,
Deferred Stock, or share units or phantom shares, if the Committee so
determines, subject to the applicable provisions of Section 5 and awarded in
accordance with the terms of the Plan, which may be an incentive stock
option qualified under Section 422 of the Code or a nonqualified stock
option.
(p) "Participating Company" means the Company or any subsidiary or other
Affiliate of the Company which is 50% or more owned directly or indirectly
by the Company or which owns 50% or more of the voting power of the shares
of Stock of the Company, or is controlled by, or controls, or is under
common control with the Company; provided, however, for incentive stock
options only, "Participating Company" means the Company, any corporation or
other entity which at the time such option is granted under the Plan
qualifies as a subsidiary of the Company under the definition of "subsidiary
corporation" contained in Section 425(f) of the Code.
(q) "Participant" means an Eligible Individual who has been or is being granted
an Award. When required by the context, the definition of Participant shall
include an individual who has been granted an Award but is no longer an
employee of any Participating Company.
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(r) "Performance Share" means a performance share of Stock subject to the
requirements of Section 6 and awarded in accordance with the terms of the
Plan.
(s) "Plan" means the Electric Lightwave, Inc. 1997 Equity Incentive Plan, as the
same may be amended, administered or interpreted from time to time.
(t) "Restricted Stock" means Stock subject to the requirements of Section 7 and
awarded in accordance with the terms of the Plan.
(u) "SAR" means a stock appreciation right subject to the appropriate
requirements under Section 5 and awarded in accordance with the terms of the
Plan.
(v) "SEC" means the Securities and Exchange Commission. "Exchange Act" means the
Securities Exchange Act of 1934. "Rule 16b-3" shall mean such rule
promulgated by the SEC under the Exchange Act and, unless the circumstances
require otherwise, shall include any other rule or regulation adopted under
Sections 16(a) or 16(b) of the Exchange Act relating to compliance with, or
an exemption from, Section 16(b). "Securities Act" means the Securities Act
of 1933. Reference to any section of the Securities Act, Exchange Act or any
rule promulgated thereunder shall include any successor section or rule.
(w) "Stock" means the Class A or Class B Common Stock of the Company and any
successor common stock, and includes share units or phantom shares unless
the context required otherwise. The number of shares of Stock included in
any Award or used in any other designation of number of shares herein shall
be based on an assumed capitalization and will be appropriately adjusted to
reflect the actual number of shares of Class A and Class B Common Stock
outstanding immediately after an initial public offering.
(x) "Termination Without Cause" means termination of employment with a
Participating Company by the employer for any reason other than death, Total
Disability or termination for deliberate, willful or gross misconduct, and
also includes voluntary termination of employment by an employee.
(y) "Total Disability" means the complete and permanent inability of an Eligible
Individual to perform all of his or her duties under the terms of his or her
employment with any Participating Company, as determined by the Committee
upon the basis of such evidence, including independent medical reports and
data, as the Company deems appropriate or necessary.
Section 3. Shares Subject to the Plan
(a) Subject to adjustment as provided in Section 14 hereof, 4,170,600 shares of
Stock are hereby reserved for issuance pursuant to Awards under the Plan.
Shares reserved for issuance under the Plan shall be made available either
from authorized and unissued shares, shares held by the Company in its
treasury or reacquired shares. The term "issued" shall include all
deliveries to a Participant of shares of Stock pursuant to Awards under the
Plan. The Committee may, in its discretion, decide to award other securities
issued by the Company that are convertible into Stock or make such shares
subject to purchase by an option, in which event the maximum number of
shares of Stock into which such securities may be converted, or which may be
so purchased, shall be used in applying the aggregate share limit under this
Section 3 and all provisions of the Plan relating to Stock shall apply with
full force and effect with respect to such convertible securities or options
and the underlying shares of Stock.
(b) If, for any reason, any shares of Stock awarded or subject to purchase or
issuance under the Plan are not delivered or are reacquired by the Company
for reasons including, but not limited to, a forfeiture of Restricted Stock
or Deferred Stock or termination, expiration or a cancellation of an Option,
SAR or a Performance Share, or other award, such shares of Stock shall be
deemed not to have been issued pursuant to Awards under the Plan or to have
been subject to the Plan; provided, however, that the counting of shares of
Stock subject to Awards granted under the Plan against the number of shares
available for further Awards shall in all cases conform to legal
requirements.
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(c) With respect to any Award constituting an Option or SAR granted to any
Eligible Individual who is a "covered employee" as defined in Section 162(m)
of the Code that is canceled, the number of shares of Stock originally
subject to such Award shall continue to count in accordance with Section
162(m) of the Code and the regulations promulgated thereunder.
(d) Unless the Committee otherwise determines, shares of Stock received by the
Company in connection with the exercise of Options by delivery of shares or
in connection with the payment of withholding taxes shall reduce the number
of shares deemed to have been issued pursuant to Awards under the Plan for
the limit set forth in Section 3(a) hereof.
Section 4. Grant of Awards and Award Agreements
(a) Subject to and in furtherance of the provisions of the Plan, the Committee
shall (i) determine and designate from time to time those Eligible
Individuals or groups of Eligible Individuals to whom Awards are to be
granted; (ii) grant Awards to Eligible Individual; (iii) determine the form
or forms of Award to be granted to any Eligible Individual; (iv) determine
the amount or number of shares of Stock subject to each Award, including
Awards of any nature which may be granted under the Plan, if the Committee
so determines; (v) determine the terms and conditions (which need not be
identical) of each Award; (vi) determine the rights of each Participant
after employment has terminated and the periods during which such rights may
be exercised; (vii) establish and modify performance objectives; (viii)
determine whether and to what extent Eligible Individuals shall be allowed
or required to defer receipt of any Awards or other amounts payable under
the Plan to the occurrence of a specified date or event; (ix) determine the
price at which shares of Stock may be offered under each Award which price
may, except in the case of Options, be zero; (x) permit cashless exercise of
Options and other Awards or provisions in the nature of a sale, or loan
covering exercise prices and/or income taxes; (xi) interpret, construe and
administer the Plan and any related Award Agreement and define the terms
employed therein; and (xii) make all of the determinations necessary or
advisable with respect to the Plan or any Award granted thereunder. Awards
granted to different Eligible Individuals or Participants need not be
identical and, in addition, may be modified in different respects by the
Committee.
(b) Each Award granted under the Plan shall be evidenced by a written Award
Agreement, in a form approved by the Committee. Such agreement shall be
subject to and incorporate the express terms and conditions, if any,
required under the Plan or as required by the Committee for the form of
Award granted and such other terms and conditions as the Committee may
specify.
(c) The Committee may modify or amend any Awards (by cancellation and regrant or
substitution of Awards or otherwise and with terms and conditions more or
less favorable to Eligible Individuals) or waive any restrictions or,
conditions applicable to any Awards or the exercise or realization thereof
(except that the Committee may not undertake any such modifications,
amendments or waivers if the effect thereof, taken as a whole, adversely and
materially affects the rights of any recipient of previously granted Awards
without his or her consent, unless such modification, amendment or waiver is
necessary or desirable for the continued validity of the Plan or its
compliance with Rule 16b-3 or any other applicable law, rule or regulation
or pronouncement or to avoid any adverse consequences under Section 162(m)
of the Code or any requirement of a securities exchange or association or
regulatory or self-regulatory body).
(d) The Committee may permit the voluntary surrender of all or a portion of any
Award granted under the Plan to be conditioned upon the granting of a new
Award or may require such voluntary surrender as a condition to a grant of a
new Award. Any such new Award shall be subject to such terms and conditions
as are specified by the Committee at the time the new Award is granted,
determined in accordance with the provisions of the Plan without regard to
the terms of the surrendered Award.
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(e) In any calendar year, no Eligible Individual may receive Awards covering
more than 500,000 shares of the Company's Stock if the Award is denominated
in number of shares, or, if the Award is denominated in dollars, $750,000 in
dollar value. Such number of shares shall be adjusted in accordance with
Section 14 hereof.
Section 5. Stock Options and Stock Appreciation Rights
(a) With respect to the Options and SARS, the Committee shall (i) authorize the
granting of incentive stock options, nonqualified stock options, SARs or a
combination of incentive stock options, nonqualified stock options and SARS;
(ii) determine the number of shares of Stock subject to each Option or the
number of shares of Stock that shall be used to determine the value of a
SAR; (iii) determine whether such Stock shall be Restricted Stock or, with
respect to nonqualified stock options, Deferred Stock or share units or
phantom shares; (iv) determine the time or times when and the manner in
which each Option shall be exercisable and the duration of the exercise
period; and (v) determine whether or not all or part of each Option may be
canceled by the exercise of a SAR; provided, however, that the aggregate
Fair Market Value (determined as of the date of Option is granted) of the
Stock (disregarding any restrictions in the case of Restricted Stock) for
which incentive stock options granted to any Eligible Individual under this
Plan may first become exercisable in any calendar year shall not exceed
$100,000. Notwithstanding the foregoing, to the extent that Options intended
to be incentive stock options granted to an Eligible Individual under this
Plan for any reason exceed such limit on exercisability, such excess Options
shall be treated as nonqualified stock options as provided under Section
422(d) of the Code, but shall in all other respects remain outstanding and
exercisable in accordance with their terms.
(b) The exercise period for a nonqualified stock option or SAR shall be 10 years
from the date of grant or such shorter period as may be specified by the
Committee at the time of grant. The exercise period for an incentive stock
option and any related SAR, including any extension which the Committee may
from time to time decide to grant, shall not exceed 10 years from the date
of grant; provided, however, that, in the case of an incentive stock option
granted to an Eligible Individual who, at the time of grant, owns stock
possessing more than 10% of the total combined voting power of all classes
of stock of the Company (a "10% Stockholder"), such period, including
extensions, shall not exceed five years from the date of grant.
(c) The Option or SAR price per share shall be determined by the Committee at
the time any Option is granted and shall be not less than 85% of the Fair
Market Value in the case of non-qualified stock option, 100% of the Fair
Market Value in the case of a SAR or incentive stock option, or 110% of Fair
Market Value in the case of an incentive stock option granted to a 10%
Stockholder and any related tandem SARS (disregarding any restrictions in
the case of any Restricted Stock or Deferred Stock), on the date the Option
is granted, all as determined by the Committee; provided, however, that such
price shall be at least equal to the par value of one share of Stock;
provided further, however, that in the discretion of the Committee in the
case of a nonstatutory stock option, the Option or SAR price per share may
be less than the Fair Market Value in the case of an Option or SAR granted
in order to induce new employees and others to commence to render services
to a Participating Company or in the case of an Option or SAR granted to a
new or prospective Eligible Individual in order to replace stock options or
other long-term incentives under a program maintained by a prior employer
which are forfeited or cease to be available to the individual by reason of
his termination of employment or other relationship with his prior employer.
(d) No part of any Option or SAR may be exercised (i) until the Participant who
has been granted the Award shall have remained in the employ of, or
continued to render services to, a Participating Company for such period
after the date on which the Option or SAR is granted as the Committee may
specify and (ii) until achievement of such performance or other criteria, if
any, by the Participant, as the Committee may specify. A SAR and a related
Option shall commence to be exercisable no earlier than six months following
the date the Option and SAR are granted. The Committee may further require
that an Option or SAR become exercisable in installments.
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(e) Except as otherwise provided in the Plan, the purchase price of the shares
as to which an Option shall be exercised shall be paid to the Company at the
time of exercise either in cash or in such other consideration as the
Committee deems appropriate, including Stock, stock units or phantom shares,
or with respect to nonqualified options, Restricted Stock or Deferred Stock
already owned by the optionee (subject to any minimum holding period
specified by the Committee), having a total Fair Market Value, or
equivalent, as determined by the Committee, equal to the purchase price, or
a combination of cash and such other consideration having a total Fair
Market Value, as so determined, equal to the purchase price; provided,
however, that if payment of the exercise price is made in whole or in part
in the form of Restricted Stock or Deferred Stock, the Stock received upon
the exercise of the Option shall be Restricted Stock or Deferred Stock, as
the case may be, at least with respect to the same number of shares and
subject to the same restrictions or other limitations as the Restricted
Stock or Deferred Stock paid on the exercise of the Option. The Committee
may provide that a Participant who delivers shares of Stock to the Company,
or sells shares of Stock and applies all of the proceeds, (a) to pay, or
reimburse the payment of, the exercise price of shares of Stock acquired
under an employee stock option or SAR or to purchase shares of Stock under
an employee award or grant, an employee purchase plan or program or any
other stock-based employee benefit or incentive plan (whether or not such
award or grant is under this Plan) and/or (b) to pay federal or state income
taxes resulting from the exercise of such options or SARs or the purchase of
shares of Stock pursuant to any such grant, award, plan or program, shall
receive a replacement Option under this Plan to purchase a number of shares
of Stock equal to the number of shares of Stock delivered to the Company, or
sold, the proceeds of the sale of which are applied as aforesaid in this
sentence. The replacement Option shall have an exercise price equal to Fair
Market Value on the date of such payment and shall include such other terms
and conditions as the Committee may specify.
(f) (i) Upon the Termination Without Cause of a Participant holding Options or
SARs (who has not both reached the age of 55 and also achieved at least five
years of service with the Company or a Participating Company), his or her
Options and SARs may be exercised to the extent exercisable on the date of
Termination Without Cause, at any time and from time to time within the
three months of the date of such Termination. The Committee, however, in its
discretion, may provide that any Option or SAR of such a Participant which
is not exercisable by its terms on the date of Termination Without Cause
will become exercisable in accordance with a schedule (which may extend the
time limit referred to above, but not later than the final expiration date
specified in the Option or SAR Award Agreement) to be determined by the
Committee at any time during the period that any other Options or SARs held
by the Participant are exercisable.
(ii) Upon the death or Total Disability (during a Participant's employment
or within three months after termination of employment for any reason other
than termination for cause) of a Participant holding an Option or SAR (who
has not both reached the age of 55 and also achieved at least five years of
service with the Company or a Participating Company), his or her Options and
SARs may be exercised only to the extent exercisable at the time of death or
Total Disability (or such earlier termination of employment) from time to
time (A) in the event of death or Total Disability, within the twelve months
following death or Total Disability or (B) in the event of such termination
of employment followed by death or Total Disability within the three months
after such termination, within the twelve months following such termination.
The Committee, however, in its discretion, may provide that any Options or
SAR's outstanding but not exercisable at the date of the first to occur of
death or, Total Disability will become exercisable in accordance with a
schedule (which may extend the limits referred to above, but not to a date
later than the final expiration date specified in such Option or SAR Award
Agreement) to be determined by the Committee at any time during the period
while any other Option or SARs held by the Participant are exercisable.
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(iii) Upon death, Total Disability or Termination Without Cause of a
Participant holding an Option(s) or SAR(s) (who has reached the age of 55
and has at least five years of service with the Company or a Participating
Company), his or her Options or SARs may be exercised in full as to all
shares or SAR rights covered by Options and SAR Award Agreements (whether or
not then exercisable) at any time, or from time to time, but no later than
the expiration date specified in such Option or SAR Award Agreement as
specified in Section 5(b) above or, in the case of incentive Options, within
12 months following such death, Total Disability or Termination Without
Cause.
(iv) If the employment of a Participant holding an Option or SAR is
terminated for deliberate, willful or gross misconduct, as determined by the
Company, all rights of such Participant and any Family Member or Family
Trust or other transferee to which such Participant has transferred his or
her Option or SAR shall expire upon receipt by the Participant of the notice
of such termination.
(v) In the event of the death of a Participant, his or her Options and
SARs may be exercised by the person or persons to whom the Participant's
rights under the Option or SAR pass by will, or if no such person has such
right, by his or her executors or administrators or Beneficiary. The death
of a Participant after Total Disability or Termination Without Cause will
not adversely effect the rights of a Participant or anyone entitled to the
benefits of such Option or SAR.
(g) Except as otherwise determined by the Committee, no Option or SAR granted
under the Plan shall be transferable other than by will or by the laws of
descent and distribution, unless the Committee determines that an Option or
SAR may be transferred by a Participant to a Family Member or Family Trust
or other transferee. Such transfer shall be evidenced by a writing from a
grantee to the Committee or Committee's designee on a form established by
the Committee. Absent an authorized transfer during the lifetime of the
Participant, an Option shall be exercisable only by him or her by his or her
guardian or legal representative.
(h) With respect to an incentive stock option, the Committee shall specify such
terms and provisions as the Committee may determine to be necessary or
desirable in order to qualify such Option as an incentive stock option
within the meaning of Section 422 of the Code.
(i) Upon exercise of a SAR, the Participant shall be entitled, subject to such
terms and conditions as the Committee may specify at any time, to receive
upon exercise thereof all or a portion of the excess of (i) the Fair Market
Value of a specified number of shares of Stock at the time of exercise, as
determined by the Committee, over (ii) a specified amount which shall not,
subject to Section 5(c), be less than the Fair Market Value of such
specified number of shares of Stock at the time the SAR is granted. Upon
exercise of a SAR, payment of such excess shall be made as the Committee
shall specify (A) in cash, (B) through the issuance or transfer to the
Participant of whole shares of Stock, including Restricted Stock or Deferred
Stock, with a Fair Market Value, disregarding any restrictions in the case
of Restricted Stock or Deferred Stock, at such time equal to any such
excess, or (C) a combination of cash and shares of Stock with a combined
Fair Market Value at such time equal to such excess, all as determined by
the Committee; provided, however, a fractional share of Stock shall be paid
in cash equal to the Fair Market Value of the fractional share of Stock,
disregarding any restrictions in the case of Restricted Stock or Deferred
Stock, at such time.
(j) If the Award granted to a Participant allows the Participant to elect to
cancel all or any portion of an unexercised Option by exercising a related
SAR, then the Option price per share of Stock shall be used as the specified
price in Section 5(i), to determine the value of the SAR upon such exercise;
and, in the event of the exercise of such SAR, the Company's obligation in
respect of such Option or such portion thereof will be discharged by payment
of the SAR so exercised.
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(k) If authorized by the Committee in its sole discretion, the Company may
accept the surrender of the right to exercise any Option granted under the
Plan (whether or not granted with a related SAR) as to all or any of the
shares of Stock as to which the Option is then exercisable, in exchange for
payment to the optionee (in cash or shares of Stock valued at the then Fair
Market Value) of an amount not to exceed the difference between the option
price and the then Fair Market Value of the shares as to which such right to
exercise is surrendered.
Section 6. Performance Shares
(a) The Committee may award Performance Shares to Participants under the Plan,
which may be denominated in Stock or in dollars. The Committee shall
determine the performance periods (the "Performance Periods") and the
performance objectives relating to each Performance Share Award. Performance
objectives may vary from Participant to Participant and between groups of
Participants, and shall only be based upon any one or more of the following
performance criteria, any combination and/or specifics of which shall be
determined by the Committee as it may deem appropriate: (i) stock price;
(ii) market shares; (iii) sales; (iv) earnings per share; (v) operating cash
flow; (vi) free cash flow; (vii) net income or loss; (viii) net income or
loss adjusted to exclude specified items, such as gain or losses from
extraordinary or non-recurring items and non-cash expense and income, and
before specified expense items such as interest, depreciation, amortization
and income taxes; (ix) EBITDA; (x) revenues; (xi) return on equity or
assets; or (xii) cost control. Performance objectives may be in respect to
the performance of the Company and its subsidiaries or a particular
subsidiary or division and may be expressed in absolute terms or in relation
to another company or companies or a division thereof. Performance Periods
may overlap and Participants may participate simultaneously with respect to
Performance Shares for which different Performance Periods are prescribed.
(b) At the beginning of each Performance Period, (but in any event prior to the
earlier of the elapsing of ninety days or 25% of such Performance Period)
the Committee shall determine and set forth in writing for each Participant
or group of Participants the number of Performance Shares or the dollar
value of the Performance Share Awards made and the applicable performance
objectives, each of which may be fixed or may be expressed in terms of the
progression within a specified range. At the end of each Performance Period,
the Committee shall certify in writing the extent to which the prescribed
performance objectives have been satisfied. An Eligible Individual shall be
eligible to be awarded, in any calendar year, Performance Share Awards up to
the maximum number of shares contemplated in Section 4(e) and shall also be
eligible to be awarded Performance Shares Awards denominated in dollars
subject to a maximum limitation of $750,000 for all such dollar-denominated
Awards granted to any Eligible Individual in any calendar year.
(c) If during the course of a Performance Period there shall occur significant
events as determined by the Committee, including, but not limited to a
reorganization of the Company, which the Committee expects to have a
substantial effect on a performance objective during such period, the
Committee may revise such objective.
(d) An Award may provide that, if a Participant terminates service with all
Participating Companies during a Performance Period because of death, Total
Disability, or a significant event, as determined by the Committee, that
Participant shall be entitled to payment in settlement of each Performance
Share for which the Performance Period was prescribed (i) based upon the
performance objectives satisfied at the end of such period and (ii) prorated
for the portion of the Performance Period during which the Participant was
employed by any Participating Company; provided, however, the Committee may
provide for an earlier payment in settlement of such Performance Share in
such amount and under such terms and conditions as the Committee deems
appropriate or desirable with the consent of the Participant. If a
Participant terminates service with all Participating Companies during a
Performance Period for any other reason, then such Participant shall not be
entitled to
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any payment with respect to that Performance Period unless the Award so
provides or the Committee shall otherwise determine. The Award may provide
that the Performance Period shall not be cancelled or otherwise affected by
the termination of service by a Participant.
(e) Each Performance Share may be paid in whole shares of Stock, including
Restricted Stock or Deferred Stock (together with any cash representing
fractional shares of Stock), or cash, or a combination of Stock and cash
either as a lump sum payment or in annual installments, all as the Committee
shall determine, at the time of grant of the Performance Share or otherwise,
commencing as soon as practicable after the end of the relevant Performance
Period. Any dividends or distributions payable on Performance Shares (or the
equivalent as specified in the grant), other than cash dividends
representing the periodic distribution of profits which shall be retained by
the Company, shall be paid over to the Participant when and if payment is
made of the underlying Performance Shares, unless the grant provides
otherwise.
Except as otherwise provided in this Section 6, no Performance Shares
awarded to Participants shall be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of during the Performance Period unless
the Committee determines that an Award may be transferred to a Family
Member or Family Trust or other transferee.
Section 7. Restricted Stock
(a) Restricted Stock may be received by a Participant either as an Award or as
the result of an exercise of an Option or SAR or as payment for a
Performance Share. Restricted Stock shall be subject to a restriction period
(after which restrictions shall lapse) which shall mean a period commencing
on the date the Award is granted and ending on such date or upon the
achievement of such performance or other criteria as the Committee shall
determine (the "Restriction Period"). The Committee may provide for the
lapse of restrictions in installments where deemed appropriate.
(b) Except as otherwise provided in this Section 7, no shares of Restricted
Stock received by a Participant shall be sold, exchanged, transferred,
pledged, hypothecated or otherwise disposed of during the Restriction Period
unless the Committee determines that an Award may be transferred by a
Participant to a Family Member or Family Trust or other transferee;
provided, however, the Restriction Period for any Participant shall expire
and all restrictions on shares of Restricted Stock shall lapse upon the
Participant's (i) death, (ii) Total Disability or (iii) Termination Without
Cause where the Participant has reached the age of 55 and has at least five
years of service with the Company or an Affiliate, or with the consent of
the Company, or upon some significant event, as determined by the Committee,
including, but not limited to, a reorganization of the Company.
(c) If the Award Agreement so provides, if a Participant terminates employment
with all Participating Companies for any reason other than under the
circumstances referred to in clause (b) before the expiration of the
Restriction Period, all shares of Restricted Stock still subject to
restriction shall, unless the Committee otherwise determines within ninety
days after such termination, be forfeited by the Participant and shall be
reacquired by the Company, and, in the case of Restricted Stock purchased
through the exercise of an Option, the Company shall refund the purchase
price paid on the exercise of the Option.
(d) The Committee may require under such terms and conditions as it deems
appropriate or desirable that the certificates for Restricted Stock
delivered under the Plan may be held in custody until the Restriction Period
expires or until restrictions thereon otherwise lapse, and may require as a
condition of any receipt of Restricted Stock that the Participant shall have
delivered a stock power endorsed in blank relating to the Restricted Stock.
(e) Nothing in this Section 7 shall preclude a Participant from exchanging any
shares of Restricted Stock subject to the restrictions contained herein for
any other shares of Stock that are similarly restricted.
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(f) Unless the Award Agreement provides otherwise, amounts equal to any cash
dividends representing the periodic distributions of profits declared and
payable during the Restriction Period with respect to the number of shares
of Restricted Stock credited to a Participant shall be paid to the
Participant within thirty days after each dividend becomes payable, unless,
at the time of the Award, the Committee determines that the dividends should
be reinvested in additional shares of Restricted Stock, in which case
additional shares of Restricted Stock shall be credited to the Participant
based on the Stock's Fair Market Value at the time of each such dividend, or
unless the Committee specifies otherwise. All dividends or distributions
payable on shares (other than cash dividends representing periodic
distributions of profits) of Restricted Stock (or the equivalent as
specified in the grant) shall be paid over to the Participant when and if as
restrictions lapse on the underlying shares of Restricted Stock, unless the
grant provides otherwise.
Section 8. Deferred Stock
(a) Deferred Stock may be credited to an Eligible Individual either as an Award
or as the result of an exercise of an Option or SAR or as payment for a
Performance Share. Deferred Stock shall be subject to a deferral period
which shall mean a period commencing on the date the Award is granted and
ending on such date or upon the achievement of such performance or criteria
as the Committee shall determine (the "Deferral Period"). The Committee may
provide for the expiration of the Deferral Period in installments where
deemed appropriate.
(b) Except as otherwise provided in this Section 8, no Deferred Stock credited
to Participant shall be sold, exchanged, transferred, pledged, hypothecated
or otherwise disposed of during the Deferral Period unless the Committee
determines that, in the circumstances, an Award may be transferred to a
Family Member or Family Trust or other transferee; provided, however, the
Deferral Period for any Participant shall expire upon the Participant's (i)
death, (ii) Total Disability or (iii) Termination Without Cause where the
Participant has reached the age of 55 and has at least five years of service
with the Company or an Affiliate, or with the consent of the Company, or
upon some significant event, as determined by the Committee, including, but
not limited to, a reorganization of the Company.
(c) At the expiration of the Deferral Period, the Participant shall be entitled
to receive a certificate pursuant to Section 10 for the number of shares of
Stock equal to the number of shares of Deferred Stock credited on his or her
behalf. Unless the Award Agreement provides otherwise, amounts equal to any
cash dividends representing the periodic distributions of profits declared
and payable during the Deferral Period with respect to the number of shares
of Deferred Stock credited to a Participant shall be paid to such
Participant within thirty days after each dividend becomes payable unless,
at the time of the Award, the Committee determined that such dividends
should be reinvested in additional shares of Deferred Stock, in which case
additional shares of Deferred Stock shall be credited to the Participant
based on the Stock's Fair Market at the time of each such dividend, or
unless the Committee specifies otherwise. All dividends or distributions
payable on shares (other than cash dividends representing periodic
distributions of profits) of Deferred Stock (or the equivalent as specified
in the grant) shall be paid over to the Participant when the Deferral Period
ends, unless the grant provides otherwise.
(d) Unless the Award Agreement provides otherwise, if a Participant terminates
employment with all Participating Companies for any reason other than under
the circumstances referred to in clause (b) before the expiration of the
Deferral Period, all shares of Deferred Stock shall, unless the Committee
otherwise determines within 90 days after such termination, be forfeited by
the Participant, and, in the case of Deferred Stock purchased through the
exercise of an Option, the Company shall refund the purchase price paid on
the exercise of the Option.
Section 9. Other Stock-Based Awards
The Committee may grant other Awards under the Plan which are denominated in
stock or shares, or as phantom shares or phantom units, or as units or pursuant
to which shares of Stock may be acquired, including Awards valued using measures
other than market value or Fair Market Value, if deemed by the Committee in its
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discretion to be consistent with the purposes of the Plan. Subject to the terms
of the Plan, the Committee shall determine the form of such Awards, the number
of shares of Stock to be granted or covered pursuant to and represented by such
Awards, the manner of paying out such shares or units in dollars, Stock or other
credits and all other terms and conditions of such Awards.
Section 10. Certificates for Awards of Stock
(a) Subject to Section 7(d), each Participant entitled to receive shares of
Stock under the Plan shall be issued a certificate for such shares or have
their shares registered for their account in book entry form by the
Company's transfer agent. In the instance of a certificate, such certificate
shall be registered in the name of the Participant, and shall bear an
appropriate legend reciting the terms, conditions and restrictions, if any,
applicable to such shares and shall be subject to appropriate stop-transfer
orders.
(b) The Company shall not be required to issue or deliver any shares or
certificates for shares of Stock prior to (i) the listing of such shares on
any stock exchange or quotation system on which the Stock may then be listed
or quoted, and (ii) the completion of any registration, qualification,
approval or authorization of such shares under any federal or state law, or
any ruling or regulation or approval or authorization of such shares under
any governmental body which the Company shall, in its sole discretion,
determine to be necessary or advisable.
(c) All shares and certificates for shares of Stock delivered under the Plan
shall also be subject to such stop-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the SEC, any stock exchange upon which the Stock is then
listed and any applicable federal or state securities or regulatory laws,
and the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. The
foregoing provisions of this Section 10(c) shall not be effective if and to
the extent that the shares of Stock delivered under the Plan are covered by
an effective and current registration statement under the Securities Act, or
if the Committee determines that application of such provisions is no longer
required or desirable. In making such determination, the Committee may rely
upon an opinion of counsel for the Company.
(d) Except for the restrictions on Restricted Stock under Section 7, each
Participant who receives an award of Stock shall have all of the rights of a
stockholder with respect to such shares, including the right to vote the
shares and receive dividends and other distributions. No Participant awarded
an Option, a SAR, or Performance Share or Deferred Stock shall have any
right as a stockholder with respect to any shares subject to such Award
prior to the date of issuance to him or her of certificate or certificates
for such shares.
Section 11. Beneficiary
(a) Each Eligible Individual shall file with the Committee a written designation
of one or more persons as the Beneficiary who shall be entitled to receive
the Award, if any, payable under the Plan upon his or her death. An Eligible
Individual may from time to time revoke or change his or her Beneficiary
designation without the consent of any prior Beneficiary by filing a new
designation with the Committee. The last such designation received by the
Committee shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to the Eligible Individual's death, and in no event shall it
be effective as of a date prior to such receipt.
(b) If no such Beneficiary designation is in effect at the time of an Employee's
death, or if no designated Beneficiary survives the Eligible Individual or
if such designation conflicts with law, the Eligible Individual's estate
shall be entitled to receive the Award, if any, payable under the Plan upon
his or her death. If the Committee is in doubt as to the right of any person
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to receive such Award, the Company may retain such Award, without liability
for any interest thereon, until the Committee determines the right thereto,
or the Company may pay such Award into any court of appropriate jurisdiction
and such payment shall be a complete discharge of the liability of the
Company therefor.
Section 12. Administration of the Plan
(a) The Plan shall be administered by the Committee, as appointed by the Board
and serving at the Board's pleasure. Each member of the Committee shall be a
member of the Board and shall satisfy both the "nonemployee director" or
similar successor requirements, if any, of Rule 16b-3 under the Exchange Act
and the "outside director" or similar successor requirements, if any, of
Section 162(m) of the Code and the regulations promulgated thereunder or
other similar requirements of applicable law or regulation.
(b) All decisions, determinations or actions of the Committee made or taken
pursuant to grants of authority under the Plan shall be made or taken in the
sole and absolute discretion of the Committee and shall be final, conclusive
and binding on all persons for all purposes.
(c) The Committee shall have full power, discretion and authority to interpret,
construe and administer the Plan and any part thereof and any related Award
Agreement and define the terms employed in the Plan or any agreement, and
its interpretations and constructions thereof and actions taken thereunder
shall be final, conclusive and binding on all persons for all purposes.
(d) The Committee shall have full power, discretion and authority to prescribe
and rescind rules, regulations and policies for the administration of the
Plan.
(e) The Committee's decisions and determinations under the Plan and with respect
to any Award granted thereunder need not be uniform and may be made
selectively among Awards, Participants or Eligible Individuals, whether or
not such Awards are similar or such Participants or Eligible Individuals are
similarly situated.
(f) The Committee shall keep minutes of its actions under the Plan. The act of a
majority of the members present at a meeting duly called and held shall be
the act of the Committee. Any decision or determination reduced to writing
and signed by all members of the Committee shall be fully as effective as if
made by unanimous vote at a meeting duly called and held.
(g) The Committee may employ such legal counsel, including without limitation
independent legal counsel and counsel regularly employed by the Company,
consultants and agents as the Committee may deem appropriate for the
administration of the Plan and may rely upon any opinion received from any
such counsel or consultant and any computations received from any such
consultant or agent. All expenses incurred by the Committee in interpreting
and administering the Plan, including without limitation, meeting fees and
expenses and professional fees, shall be paid by the Company.
(h) No member or former member of the Committee or the Board shall be liable for
any action or determination made in good faith with respect to the Plan or
any Award granted under it. Each member or former member of the Committee or
the Board shall be indemnified and held harmless by the Company against all
cost or expense (including counsel fees and expenses) or liability
(including any sum paid in settlement of a claim with the approval of the
Board) arising out of any act or omission to act in connection with the Plan
unless arising out of such member's or former member's own fraud or bad
faith. Such indemnification shall be in addition to any rights to
indemnification or insurance the members or former member may have as
directors or under the by-laws of the Company or otherwise.
(i) The Committee's determination that an Option, SAR, Performance Share,
Restricted Stock, Deferred Stock or other Stock-based Awards may be
transferred by a Participant to a Family Member or Family Trust or other
transferee may be set forth in determinations pursuant to Section 12(c),
rules and regulations of general application adopted pursuant to Section
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12(d), in the written Award Agreement, or by a writing delivered to the
Participant made any time after the relevant Award or Awards have been
granted, on a case-by-case basis, or otherwise. In any event, the transferee
or Family Member or Family Trust shall agree in writing to be bound by all
the provisions of the Plan and the Award Agreement, and in no event shall
any such transferee have greater rights under such Award than the
Participant effecting such transfer. Exercisability of Awards and similar
matters will be determined with reference to the employment status of the
Participant.
(j) With respect to credits, shares, cash or other property credited to a
Participant by reason of dividends or distributions, if the Committee shall
so determine, all such credits, shares, cash or other property to a
Participant shall be paid to the Participant periodically at the end of the
applicable period, whether or not the performance, employment or other
standards (or lapse of time) upon which such Award is conditioned have been
satisfied. In addition, the Committee may determine to include in Award
Agreements granting Options and SARs a provision to the effect that (a) an
amount equal to any dividends (payable in cash or other property) paid after
the grant of the Option or SAR and before to the exercise of such Option or
SAR with respect to the number of shares of Stock subject to such Option or
SAR shall be credited to a Participant and, if the Award Agreement so
provides, thereafter paid to such Participant within thirty days after each
dividend becomes payable or, (b) if the Committee so determines, such Award
shall be reinvested in additional shares of Stock, in which case such
additional shares of Stock shall be credited to the Participant based on the
Stock's Fair Market Value at the time of payment of each such dividend. In
the latter event, if the Committee so determines, such additional shares of
Stock shall be delivered to the Participant (whether or not such Option or
SAR is exercised) at the time that such Option or SAR ceases to be
exercisable in accordance with its terms or otherwise.
(k) Any power, action, authority or discretion granted to or exercisable by the
Committee pursuant to the provisions of this Plan may, if the Committee or
the Board so determines, be exercised by or delegated to the Board.
Section 13. Amendment or Discontinuance
The Board may, at any time, amend or terminate the Plan. The Plan may also
be amended by the Committee, provided that all such amendments shall be reported
to the Board. No amendments shall become effective unless approved by
affirmative vote of the Company's stockholders if such approval is necessary or
desirable for the continued validity of the Plan or if the failure to obtain
such approval would adversely affect the compliance of the Plan with Rule 16b-3
or any successor rule under the Exchange Act or Section 162(m) of the Code or
any other rule or regulation of a stock exchange or other body. No amendment or
termination shall, when taken as a whole, adversely and materially affect the
rights of any Participant who has received a previously granted Award without
his or her consent unless the amendment or termination is necessary or desirable
for the continued validity of the Plan or its compliance with Rule 16b-3 or any
other applicable law, rule or regulation or pronouncement or to avoid any
adverse consequences under Section 162(m) of the Code or any requirement of a
securities exchange or association or regulatory or self-regulatory body),
Section 14. Adjustments in Event of Change in Common Stock
In the event of a change in corporate capitalization, stock split or stock
dividend, the number of shares purchasable upon exercise of an Option or SAR
shall be increased to the new number of shares which result from the shares
covered by the Option or SAR immediately before the change, split or dividend.
The purchase price per share shall be reduced proportionately and the total
purchase price will remain the same.
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In the event of any other change in corporate capitalization, or a
corporate transaction, such as any merger of a corporation into another
corporation, any consolidation of two or more corporations into another
corporation, any separation of a corporation (including a spinoff or other
distribution of stock or property by a corporation), any reorganization of a
corporation (whether or not such reorganization comes within the definition of
such term in Section 368 of the Code), or any partial or complete liquidation by
a. corporation or other similar event which could distort the implementation of
the Plan or the realization of its objectives, the Committee shall make an
appropriate adjustment in the number of shares of Stock (i) which are covered by
the Plan, (ii) which may be granted to any one Eligible Individual and which are
subject to any Award, and the purchase price therefor, and in terms, conditions
or restrictions on securities as the Committee deems equitable, with the
objective that the securities covered under the Plan or an Award shall be those
securities which a Participant would have received if he or she had exercised
his or her Option or SAR prior to the event or been entitled to his or her
Restricted or Deferred Stock or Performance Shares.
All such events occurring between the effective date of the Option and its
exercise shall result in an adjustment to the Option terms.
Section 15. Change in Control
Awards may include, or may incorporate from any relevant guidelines adopted
by the Committee, terms which provide that any or all of the following actions
or consequences, with any modifications adopted by the Committee, may occur as a
result of, or in anticipation of, any Change in Control to assure fair and
equitable treatment of Participants:
(a) Any Options outstanding at least six months as of the date of Change in
Control shall, if held by a current employee of the Company, become
immediately exercisable in full. A Participant may be granted the election
to cancel all or any portion of any Option or Award no later than ninety
days after the Change in Control, in which event the Company shall pay to
such electing Participant, an amount in cash equal to the excess, if any, of
the Current Market Value (as defined below) of the shares of Stock,
including Performance Shares, Restricted Stock or Deferred Stock, subject to
the Option or of the portion thereof so canceled over the option price for
such shares; provided, however, that no Participant shall have the right to
elect cancellation unless and until at least six months have elapsed after
the date of grant of the Option.
(b) Any Performance Periods or portions thereof shall be accelerated and the
Company shall pay each Participant an amount in cash equal to the value of
such Participant's performance shares, or specified portion thereof, based
upon the Stock's Current Market Value in settlement of such performance
shares.
(c) Any Restriction Periods or portions thereof shall be accelerated and the
Company shall pay each Participant an amount in cash equal to the Current
Market Value of the Restricted Stock or specified portion thereof, held by,
or on behalf of, each Participant in exchange for such Restricted Stock.
(d) Any Deferral Periods or portions thereof shall be accelerated and the
Company shall pay to each Participant an amount in cash equal to the Current
Market Value of the number of shares of Stock equal to the number of shares
of Deferred Stock or specified portion thereof, credited to such Participant
in settlement of any Deferred Stock Award.
(e) The Company shall pay to each Participant all amounts due, if any, deferred
by or payable under Awards granted to such Participant under the Plan which
are not Performance Shares, Restricted Stock or Deferred Stock, in
accordance with the terms provided by the Committee at the time of deferral
or grant.
(f) Adjustments or modifications to outstanding awards to maintain and protect
the rights and interest of Participants.
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(g) For purpose of this Section 15, "Current Market Value" means the highest
Fair Market Value during the period commencing thirty days prior to the
Change in Control and ending thirty days after the Change in Control (the
"reference period"); provided that, if the Change in Control occurs as a
result of a tender offer or exchange offer, or a merger, purchase of assets
or stock, or another transaction approved by shareholders of the Company,
Current Market Value means the higher of (i) the highest Fair Market Value
during the reference period, or (ii) the highest price paid per share of
Stock pursuant to such tender offer, exchange offer or transaction.
Section 16. Miscellaneous
(a) Nothing in this Plan or any Award granted hereunder shall confer upon any
employee any right to continue in the employ of any Participating Company or
interfere in any way with the right of any Participating Company to
terminate his or her employment at any time.
(b) No Award payable under the Plan shall be deemed salary or compensation for
the purpose of computing benefits under any employee benefit plan or other
arrangement of any Participating Company for the benefit of its employees
unless the Company shall determine otherwise.
(c) No Eligible Individual or Participant shall have any claim to an Award until
it is actually granted under the Plan. To the extent that any person
acquires a right to receive payments from the Company under this Plan, such
right shall be no greater than the right of an unsecured general creditor of
the Company. All payments of Awards provided for under the Plan shall be
paid by the Company either by issuing shares of Stock or by delivering cash
from the general funds of the Company or other property of the Company;
provided, however, that such payments shall be reduced by the amount of any
payments made to the Participant or his or her dependents, beneficiaries or
estate from any trust or special or separate fund established in connection
with this Plan. The Company shall not be required to establish a special or
separate fund or other segregation of assets to assure such payments, and,
if the Company shall make any investments to aid it in meeting its
obligations hereunder, the Participant shall have no right, title, or
interest whatever in or to any such investments except as may otherwise be
expressly provided in a separate written instrument relating to such
investments.
(d) If an Award is granted to a Participant who is not an employee of the
Company or a Participating Company, the Participant shall be deemed to be in
the employ of the Company and/or a Participating Company, and shall be
deemed to be an employee (for the purpose of the Plan, including the
continued exercisability of Awards) so long as the Participant is rendering
services to the Company or the Participating Company or the relationship
(including a directorship or direct or indirect consultancy arrangement)
pursuant to which such services are rendered or to be rendered continues.
Termination of such services or relationship shall be deemed to be the
termination of employment hereunder provided that the Committee is
authorized in its sole discretion to extend or modify the period and
conditions of exercisability of the Award so as to effectuate the purposes
of the Plan. Absence on leave approved by a duly constituted officer of the
Company shall not be considered interruption or termination of employment
for any purposes of the Plan; provided, however, that no Award may be
granted to an employee while he or she is absent on leave.
(e) If the Committee shall find that any person to whom any Award, or portion
thereof, is payable under the Plan is unable to care for his or her affairs
because of illness or accident, or is a minor, then any payment due him or
her (unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so directs the Company, be paid to his
or her spouse, a child, a relative, an institution maintaining or having
custody of such person, or any other person deemed by the Committee to be a
proper recipient on behalf of such person otherwise entitled to payment. Any
such payment shall be a complete discharge of the liability of the Company
therefor.
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(f) The right of any Participant or other person to any Award payable under the
Plan may not be assigned, transferred, pledged or encumbered, either
voluntarily or by operation of law, except as provided in Section 11 with
respect to the designation of a Beneficiary or as may otherwise be required
by law or pursuant to a qualified domestic relations order as defined by the
Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder or unless the Committee determines, in the circumstances, that an
Award may be transferred to a Family Member or Family Trust or other
transferee. If, by reason of any attempted assignment, transfer, pledge, or
encumbrance or any bankruptcy or other event happening at any time, any
amount payable under the Plan would be made subject to the debts or
liabilities of the Participant or his or her Beneficiary or would otherwise
devolve upon anyone else and not be enjoyed by the Participant or his or her
Beneficiary or transferee, Family Trust or Family Member, then the Committee
may terminate such person's interest in any such payment and direct that the
same be held and applied to or for the benefit of the Participant, his or
her Beneficiary, taking into account the expressed wishes of the Participant
(or, in the event of his or her death, those of his or her Beneficiary) in
such manner as the Committee may deem proper.
(g) Copies of the Plan and all amendments, administrative rules and procedures
and interpretations shall be made available for review to all Eligible
Individuals at all reasonable times at the Company's administrative offices.
(h) The Committee may cause to be made, as a condition precedent to the payment
of any Award, or otherwise, appropriate arrangements with the Participant or
his or her Beneficiary, for the withholding of any federal, state, local or
foreign taxes. The Committee may in its discretion permit the payment of
such withholding taxes by authorizing the Company to withhold shares of
Stock to be issued, or the Participant to deliver to the Company shares of
Stock owned by the Participant or Beneficiary, in either case having a Fair
Market Value equal to the amount of such taxes, or otherwise permit a
cashless exercise.
(i) All elections, designations, requests, notices, instructions and other
communications from an Eligible Individual, Participant, Beneficiary or
other person to the Committee, required or permitted under the Plan, shall
be in such form as is prescribed from time to time by the Committee and
shall be mailed by first class mail or transmitted by facsimile copy or
delivered to such location as shall be specified by the Committee.
(j) The terms of the Plan shall be binding upon the Company and its successors
and assigns.
(k) Captions preceding the sections hereof are inserted solely as a matter of
convenience and in no way define or limit the scope or intent of any
provision hereof.
(1) The Plan and the grant, exercise and carrying out of Awards shall be subject
to all applicable federal and state laws, rules, and regulations and to all
required or otherwise appropriate approvals and authorizations by any
governmental or regulatory agency or commission. The Company shall have no
obligation of any nature hereunder to any Eligible Individual, Participant
or any other person in the absence of all necessary or desirable approvals
or authorizations and shall have no obligation to seek or obtain the same.
(m) Whenever possible, each provision of this Plan and any Award Agreement will
be interpreted in such manner as to be effective and valid under applicable
law, but if any such provision is held to be ineffective, invalid, illegal
or unenforceable in any respect under the applicable laws or regulations of
the United States or any state, such ineffectiveness, invalidity, illegality
or unenforceability will not affect any other provision but this Plan and
any such agreement will be reformed, construed and enforced so as to carry
out the intent hereof or thereof and as if any invalid or illegal provision
had never been contained herein.
(n) The Committee, in its discretion, may defer, without the consent of the
Participant, the payment of an Award, if such payment would otherwise cause
the annual remuneration of a Participant, who is a covered employee under
Section 162(m) of the Code, to exceed $1,000,000.
(o) The Plan shall be construed and governed under the laws of the State of
Delaware.
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Section 17. Effective Date and Stockholder Approval
The Effective Date of the Plan shall be October 16, 1997, subject to
approval by the holders of a majority of the Company's common stock at a meeting
of stockholders to be held no later than the latest date by which all approvals
of the stockholders of the Company must be obtained in order to satisfy the
requirements of each of (a) Section 162(m) of the Code relating to the approval
of the stockholders of the Company, (b) any national stock market or quotation
organization or other body on which the Company's common stock is listed or
quoted that requires approval of the stockholders of the Company, and (c) any
other applicable rule, policy order or regulation which requires approval of
stockholders of the Company. Any Awards granted prior to stockholder approval
will be subject to the receipt of such approval. No Awards will be granted under
the Plan after the expiration of ten years from the Effective Date.
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