EXHIBIT C
MILLENNIUM CHEMICALS INC.
2001 OMNIBUS INCENTIVE COMPENSATION PLAN
Effective January 26, 2001
TABLE OF CONTENTS
Article 1. Establishment, Objectives, and Duration..................... 1
Article 2. Definitions................................................. 1
Article 3. Administration.............................................. 4
Article 4. Shares Subject to the Plan and Maximum Awards............... 5
Article 5. Eligibility and Participation............................... 6
Article 6. Stock Options............................................... 6
Article 7. Stock Appreciation Rights................................... 7
Article 8. Restricted Stock............................................ 8
Article 9. Performance Units, Performance Shares, and Cash-Based
Awards...................................................... 9
Article 10. Performance Measures........................................ 10
Article 11. Beneficiary Designation..................................... 11
Article 12. Deferrals................................................... 11
Article 13. Rights of Employees/Directors............................... 11
Article 14. Change in Control........................................... 11
Article 15. Amendment, Modification, and Termination.................... 12
Article 16. Withholding................................................. 12
Article 17. Indemnification............................................. 12
Article 18. Successors.................................................. 13
Article 19. General Provisions.......................................... 13
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ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Millennium Chemicals Inc., a Delaware
corporation (hereinafter referred to as the 'Company'), hereby establishes an
incentive compensation plan to be known as the 'Millennium Chemicals Inc.
Omnibus Incentive Compensation Plan' (hereinafter referred to as the 'Plan'), as
set forth in this document. The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares, Performance Units, Stock Awards and Cash-Based Awards.
Subject to approval by the Company's stockholders, the Plan shall become
effective as of January 26, 2001 (the 'Effective Date') and shall remain in
effect as provided in Section 1.3 hereof.
1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize the
profitability and growth of the Company through annual and long-term incentives
that are consistent with the Company's goals and that link the personal
interests of Participants to those of the Company's stockholders; to provide
Participants with an incentive for excellence in individual performance; and to
promote teamwork among Participants.
The Plan is further intended to provide flexibility to the Company, its
Affiliates, and Subsidiaries, in their ability to motivate, attract, and retain
the services of Participants who make significant contributions to the Company's
success and to allow Participants to share in such success.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date, as
described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 15 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after the tenth (10th) anniversary
of the Effective Date.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set forth
below, and when the meaning is intended, the initial letter of the word shall be
capitalized:
2.1 'AFFILIATE' shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations of the Exchange Act.
2.2 'AWARD' means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Performance Shares, Performance Units, Stock Awards or
Cash-Based Awards.
2.3 'AWARD AGREEMENT' means either an agreement entered into by the Company
and each Participant setting forth the terms and provisions applicable to Awards
granted under this Plan or a statement issued by the Company to a Participant
describing the terms and provisions of such Award.
2.4 'BOARD' or 'BOARD OF DIRECTORS' means the Board of Directors of the
Company.
2.5 'CASH-BASED AWARD' means an Award granted to a Participant as described
in Article 9 herein.
2.6 'CHANGE IN CONTROL' of the Company shall be deemed to have occurred as of
the first day that any one or more of the following conditions shall have been
satisfied:
(a) any 'person' as such term is used in Sections 13(d) and 14(d) of the
Exchange Act (other than the Company, any trustee or other fiduciary
holding securities under any employee benefit plan of the Company or
any company owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
Common Stock of the Company), becoming the 'beneficial owner' (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing twenty-five percent (25%) or
more of the combined voting power of the Company's then outstanding
securities;
(b) during any period of two consecutive years (not including any period
prior to October 1, 1996), individuals who at the beginning of such
period constitute the Board of Directors of the Company, and any new
director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described
in clause (a), (c), or (d) of this Section 2.6 or a director whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board of Directors of the Company) whose
election by the Board of Directors or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the
beginning of the two-year period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors;
(c) the merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
fifty percent (50%) of the combined voting power of
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the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; provided,
however, that a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
person (other than those covered by the exceptions in (a) above)
acquires more than twenty-five percent (25%) of the combined voting
power of the Company's then outstanding securities shall not
constitute a Change in Control; or
(d) the stockholders of the Company approve a plan of complete liquidation
of the Company or the closing of the sale or disposition by the
Company of all or substantially all of the Company's assets other than
the sale or disposition of all or substantially all of the assets of
the Company to one or more Subsidiaries (as defined below) of the
Company or to a person or persons who beneficially own, directly or
indirectly, at least fifty percent (50%) or more of the combined
voting power of the outstanding voting securities of the Company at
the time of the sale or disposition. 'Subsidiary' has the meaning set
forth in Section 424 of the Code, as amended or superseded, and the
term shall also include any partnership, limited liability company or
other business entity if the Company owns, directly or indirectly,
securities or other ownership interests representing at least fifty
percent (50%) of the ordinary voting power or equity or capital
interests of such entity. Notwithstanding any of the foregoing, the
formation of Equistar Chemicals, LP ('Equistar') and the contribution
of assets by Millennium Petrochemicals Inc. to Equistar on
December 1, 1997 shall not constitute a Change in Control, and the
sale or disposition of all or any part of the Company's interests in
Equistar shall not constitute a Change in Control.
2.7 'CODE' means the Internal Revenue Code of 1986, as amended from time to
time.
2.8 'COMMITTEE' means the committee appointed by the Board of Directors of
the Company from among its members (which may be the Compensation Committee) and
shall be comprised, unless otherwise determined by the Board of Directors,
solely of not less than two members who shall be (i) 'Non-Employee Directors'
within the meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under
the Exchange Act and (ii) 'outside directors' within the meaning of Treasury
Regulation Section 1.162-27(e)(3) under Section 162(m) of the Code.
2.9 'COMPANY' means Millennium Chemicals Inc., a Delaware corporation, and
any successor thereto as provided in Article 18 herein.
2.10 'DIRECTOR' means any individual who is a member of the Board of
Directors of the Company; provided, however, that any Director who is an
Employee shall not be considered to be a Director under the Plan.
2.11 'DISABILITY' shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan, or if no such plan exists, at
the discretion of the Board.
2.12 'EFFECTIVE DATE' shall have the meaning ascribed to such term in Section
1.1 hereof.
2.13 'EMPLOYEE' means any employee of the Company or its Subsidiaries or
Affiliates provided such Subsidiary or Affiliate has been designated by the
Committee as eligible to receive Awards under the Plan.
2.14 'EXCHANGE ACT' means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.15 'FAIR MARKET VALUE' means, for purposes of this Plan and any Awards
hereunder, (i) the closing price of the Company's Shares on the date of
calculation (or on the last preceding trading date if Shares were not traded on
such date) if the Company's Shares are readily tradable on a national securities
exchange or other market system, (ii) if the Company's Shares are not readily
tradable, the amount determined in good faith by the Committee as the fair
market value of the Shares of the Company and (iii) in connection with a Change
in Control of the Company or an event specified in Section 4.2, the value of the
consideration paid to stockholders in connection with such Change in Control or
event or, if no consideration is paid in respect thereof, the amount determined
pursuant to clause (i) above.
2.16 'FREESTANDING SAR' means an SAR that is granted independently of any
Options, as described in Article 7 herein.
2.17 'INCENTIVE STOCK OPTION' or 'ISO' means an option to purchase Shares
granted under Article 6 herein and that is designated as an Incentive Stock
Option and that is intended to meet the requirements of Code Section 422.
2.18 'INSIDER' shall mean an individual who is, on the relevant date, an
officer, director or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.
2.19 'NONQUALIFIED STOCK OPTION' or 'NQSO' means an option to purchase Shares
granted under Article 6 herein and that is not intended to meet the requirements
of Code Section 422, or that otherwise does not meet such requirements.
2.20 'OPTION' means an Incentive Stock Option or a Nonqualified Stock Option,
as described in Article 6 herein.
2.21 'OPTION PRICE' means the price at which a Share may be purchased by a
Participant pursuant to an Option.
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2.22 'PARTICIPANT' means an Employee or Director who has been selected to
receive an Award or who has outstanding an Award granted under the Plan.
2.23 'PERFORMANCE-BASED AWARD' means the Awards that qualify for the
Performance-Based Exception.
2.24 'PERFORMANCE-BASED EXCEPTION' means the performance-based exception from
the tax deductibility limitations of Code Section 162(m).
2.25 'PERFORMANCE SHARE' means an Award granted to a Participant, as
described in Article 9 herein.
2.26 'PERFORMANCE UNIT' means an Award granted to a Participant, as described
in Article 9 herein.
2.27 'PERIOD OF RESTRICTION' means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, at its discretion), and the Shares are subject to a
substantial risk of forfeiture, as provided in Article 8 herein.
2.28 'PERSON' shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
'group' as defined in Section 13(d) thereof.
2.29 'RESTRICTED STOCK' means an Award granted to a Participant pursuant to
Article 8 herein
2.30 'RETIREMENT' means, unless otherwise determined by the Committee or as
specifically provided in an Award Agreement, the Participant's termination of
employment after such Participant reaches age fifty (50) with the accrual of
fifteen (15) years of service (as defined in the qualified retirement plan
applicable to such Participant).
2.31 'SHARES' means the common stock, $.01 par value, of the Company.
2.32 'STOCK APPRECIATION RIGHT' or 'SAR' means an Award, granted alone or in
connection with a related Option, designated as an SAR, pursuant to the terms of
Article 7 herein.
2.33 'STOCK AWARD' means an Award, granted pursuant to the terms of Section
9.7 herein.
2.34 'SUBSIDIARY' means any corporation, partnership, joint venture, or other
entity in which the Company has a majority voting interest.
2.35 'TANDEM SAR' means an SAR that is granted in connection with a related
Option pursuant to Article 7 herein, the exercise of which shall require
forfeiture of the right to purchase a Share under the related Option (and when a
Share is purchased under the Option, the Tandem SAR shall similarly be
canceled).
ARTICLE 3. ADMINISTRATION
3.1 GENERAL. Subject to the terms and conditions of the Plan, the Plan shall
be administered by the Committee; provided, however, that the administration of
the Plan with respect to Awards granted to Directors shall be administered by
the Board. The members of the Committee shall be appointed from time to time by,
and shall serve at the discretion of, the Board of Directors. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan and
to make such determinations and interpretations and to take such action in
connection with the Plan and any Awards granted hereunder as it deems necessary
or advisable. All determinations and interpretations made by the Committee shall
be binding and conclusive on all participants and their legal representatives.
The Committee may delegate to one or more of its members, or to one or more
agents, such administrative duties as it may deem advisable, and the Committee,
or any person to whom it has delegated duties as aforesaid, may employ one or
more persons to render advice with respect to any responsibility the Committee
or such person may have under the Plan. The Committee may employ such legal or
other counsel, consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion or computation received
from any such counsel, consultant or agent. Expenses incurred by the Committee
in the engagement of such counsel, consultant or agent shall be paid by the
Company, or the Subsidiary or Affiliate whose employees have benefited from the
Plan, as determined by the Committee. No member of the Committee or the Board
and no employee of the Company or any of its Subsidiaries shall be liable for
any act or failure to act hereunder, except in circumstances involving his or
her bad faith or willful misconduct, or for any act or failure to act hereunder
by any other member or employee or by any agent to whom duties in connection
with the administration of this Plan have been delegated. The Company shall
indemnify members of the Committee and the Board and any agent of the Committee
or the Board who is an employee of the Company, a Subsidiary or an Affiliate
against any and all liabilities or expenses to which they may be subjected by
reason of any act or failure to act with respect to their duties on behalf of
the Plan, except in circumstances involving such person's bad faith or willful
misconduct.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees who
shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan; establish, amend, or waive rules and regulations for the
Plan's administration; and amend the terms and conditions of any outstanding
Award as provided in the Plan. Further, the Committee shall make all other
determinations that may be necessary or advisable for the administration of the
Plan.
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Notwithstanding anything else in this Plan to the contrary, the Board shall make
all such decisions and determinations with respect to Directors, and references
in this Plan to the Committee shall be to the Board with respect to Directors
and Awards granted to Directors, unless the context clearly indicates otherwise.
3.3 DECISIONS BINDING. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan and all related orders and resolutions of
the Committee shall be final, conclusive, and binding on all persons, including
the Company, its stockholders, Directors, Employees, Participants, and their
estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as provided
in Section 4.2 herein, the number of Shares that may be subject to Awards,
including Options, under the Plan shall be 3,200,000 Shares, of which no more
than 1,000,000 Shares may be granted in the form of Restricted Shares, and the
maximum number of Shares with respect to which Awards may be granted or measured
to any individual Participant under the Plan during the term of the Plan shall
not exceed 1,500,000 Shares. Any Shares subject to an Option or Stock
Appreciation Right which for any reason are cancelled or terminated without
having been exercised, any Shares subject to Stock Awards, Performance Shares or
Performance Units which are forfeited, any Shares subject to Performance Awards
settled in cash or any Shares delivered to the Company as part or full payment
for the exercise of an Option or Stock Appreciation Right shall again be
available for Awards under the Plan. The preceding sentence shall apply only for
purposes of determining the aggregate number of Shares subject to Awards but
shall not apply for purposes of determining the maximum number of Shares with
respect to which Awards (including the maximum number of Shares subject to
Options and Stock Appreciation Rights) that may be granted to any individual
Participant under the Plan. The following rules shall apply to grants of such
Awards under the Plan:
(a) STOCK OPTIONS: The maximum aggregate number of Shares that may be
granted in the form of Stock Options, pursuant to any Award granted in
any one fiscal year to any one single Participant shall be 1,000,000
Shares.
(b) SARS: The maximum aggregate number of Shares that may be granted in
the form of Stock Appreciation Rights, pursuant to any Award granted
in any one fiscal year to any one single Participant shall be
1,000,000 Shares.
(c) RESTRICTED STOCK: The maximum aggregate grant with respect to Awards
of Restricted Stock granted in any one fiscal year to any one
Participant shall be 500,000 Shares.
(d) PERFORMANCE SHARES/PERFORMANCE UNITS AND CASH-BASED AWARDS: The
maximum aggregate grant with respect to Awards of Performance Shares
made in any one fiscal year to any one Participant shall be equal to
the value of 500,000 Shares; the maximum aggregate amount awarded or
credited with respect to Cash-Based Awards or Performance Units to any
one Participant in any one fiscal year may not exceed twelve million
dollars ($12,000,000).
(e) STOCK AWARDS: The maximum aggregate grant with respect to Awards of
Stock Awards granted in any one fiscal year to any one Participant
shall be 500,000 Shares.
4.2 ADJUSTMENTS IN AUTHORIZED SHARES. If there shall be any change in the
Shares of the Company or the capitalization of the Company through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
reverse stock split, split up, spin-off, combination of shares, exchange of
shares, dividend in kind or other like change in capital structure or
distribution (other than normal cash dividends) to stockholders of the Company,
the Committee, in its sole discretion, in order to prevent dilution or
enlargement of Participants' rights under the Plan, shall adjust, in an
equitable manner, as applicable, the number and kind of Shares that may be
issued under the Plan, the number and kind of Shares subject to outstanding
Awards, the exercise price applicable to outstanding Awards, the Fair Market
Value of the Shares and other value determinations applicable to outstanding
Awards; provided, however, that any such arithmetic adjustment to a
Performance-Based Award shall not cause the amount of compensation payable
thereunder to be increased from what otherwise would have been due upon
attainment of the unadjusted award. Appropriate adjustments may also be made by
the Committee in the terms of any Awards under the Plan to reflect such changes
or distributions and to modify any other terms of outstanding Awards on an
equitable basis, including modifications of performance targets and changes in
the length of performance periods; provided, however, that any such arithmetic
adjustment to a Performance-Based Award shall not cause the amount of
compensation payable thereunder to be increased from what otherwise would have
been due upon attainment of the unadjusted award. In addition, other than with
respect to Options, Stock Appreciation Rights, and other awards intended to
constitute Performance-Based Awards, the Committee is authorized to make
adjustments to the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events affecting the Company or the
financial statements of the Company, or in response to changes in applicable
laws, regulations, or accounting principles. Notwithstanding the foregoing,
(i) each such adjustment with respect to an Incentive Stock Option shall comply
with the rules of Section 424(a) of the Code, and (ii) in no event shall any
adjustment be made which would render any Incentive Stock Option granted
hereunder other than an incentive stock option for purposes of Section 422 of
the Code. The determination of the Committee as to the foregoing adjustments, if
any, shall be conclusive and binding on participants under the Plan.
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ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include all
Employees and Directors.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees and
Directors, those to whom Awards shall be granted and shall determine the nature
and amount of each Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine which are not inconsistent with the terms of the Plan.
The Award Agreement also shall specify whether the Option is intended to be an
ISO within the meaning of Code Section 422, or an NQSO whose grant is intended
not to fall under the provisions of Code Section 422. An outstanding Option may
not be modified to reduce the exercise price thereof nor may a new Option at a
lower price be substituted for a surrendered Option (except in accordance with
Section 4.2 of the Plan or Article 14).
6.3 OPTION PRICE. The Option Price for each grant of an Option under this
Plan shall be as determined by the Committee; provided, however, subject to
Section 6.11 below, that the per-share exercise price shall not be less than
100% of the Fair Market Value of the Common Stock on the date the Stock Option
is granted.
6.4 DURATION OF OPTIONS. Each Option granted to a Participant shall expire at
such time as the Committee shall determine at the time of grant; provided,
however, subject to Section 6.11 below, no Option shall be exercisable later
than the tenth (10th) anniversary date of its grant.
6.5 EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6 PAYMENT. Options granted under this Article 6 shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the Company in
full either: (a) in cash or its equivalent; or (b) at the discretion of the
Committee, by tendering previously acquired Shares having an aggregate Fair
Market Value at the time of exercise equal to the total Option Price (provided
that the Shares that are tendered must have been held by the Participant for at
least six (6) months prior to their tender to satisfy the Option Price); or (c)
by a combination of (a) and (b); or (d) any other method approved by the
Committee in its sole discretion at the time of grant and as set forth in the
Award Agreement.
The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purpose and applicable law.
Subject to any governing rules or regulations, as soon as practicable after
receipt of a written notification of exercise and full payment, the Company
shall deliver to the Participant, in the Participant's name, Share certificates
in an appropriate amount based upon the number of Shares purchased under the
Option(s).
Unless otherwise determined by the Committee, all payments under all of the
methods indicated above shall be paid in United States dollars.
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
6.8 TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Participant's Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the Option following termination of the Participant's
employment or directorship with the Company. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant, need not be uniform among all
Options issued pursuant to this Article 6, and may reflect distinctions based on
the reasons for termination.
6.9 POST-EMPLOYMENT EXERCISES. The exercise of any Option after termination
of employment of an Employee with the Company, its Subsidiaries or Affiliates
shall be subject to such conditions as imposed by the Committee at the time of
the Award Agreement and satisfaction of the conditions precedent that the
Employee neither (i) competes with, or takes other employment with or renders
services to a competitor of, the Company, its Subsidiaries or Affiliates without
the written consent of the Company, nor (ii) conducts himself or herself in a
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manner adversely affecting the Company; provided, however, that the Committee,
in its sole discretion, may waive any conditions imposed in the Award Agreement
or as set forth in (i) and (ii) above relating to the exercise of Options after
the date of termination of employment during the term of the option.
6.10 NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, all ISOs granted to a Participant under the
Plan shall be exercisable during his or her lifetime only by such
Participant.
(b) NONQUALIFIED STOCK OPTIONS. Except as provided below, no NQSO granted
under this Article 6 may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws
of descent and distribution and all NQSOs granted to a Participant
under this Article 6 shall be exercisable during his or her lifetime
only by such Participant. Notwithstanding the foregoing, at the
discretion of the Committee, an Award Agreement for the grant of NQSO
may permit the transferability of such an Award by a participant
solely to the participant's spouse, siblings, parents, children and
grandchildren or trusts for the benefit of such persons or
partnerships, corporations, limited liability companies or other
entities owned solely by such persons, including trusts for such
persons, subject to any restriction included in the Award Agreement.
6.11 REQUIREMENTS FOR INCENTIVE STOCK OPTIONS. Incentive Stock Options may be
granted only to participants who are employees of the Company or one of its
subsidiaries (within the meaning of Section 424(f) of the Code) at the date of
grant. The aggregate Fair Market Value (determined as of the time the Incentive
Stock Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by a participant during any calendar
year (under all option plans of the Company and of any parent corporation or
subsidiary corporation (as defined in Sections 424(e) and (f) of the Code,
respectively)) shall not exceed $100,000. For purposes of the preceding
sentence, Incentive Stock Options will be taken into account in the order in
which they are granted. The per-share exercise price of an Incentive Stock
Option shall not be less than 100% of the Fair Market Value of the Shares on the
date of grant, and no Incentive Stock Option may be exercised later than ten
years after the date it is granted; provided, however, Incentive Stock Options
may not be granted to any participant who, at the time of grant, owns stock
possessing (after the application of the attribution rules of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary corporation of the Company,
unless the exercise price is fixed at not less than 110% of the Fair Market
Value of the Shares on the date of grant and the exercise of such option is
prohibited by its terms after the expiration of five years from the date of
grant of such option. In addition, no Incentive Stock Option may be issued to a
participant in tandem with a Nonqualified Stock Option.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARS. Subject to the terms and conditions of the Plan, SARs may
be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee may grant Freestanding SARs, Tandem
SARs, or any combination of these forms of SAR.
Subject to the terms and conditions of the Plan, the Committee shall have
complete discretion in determining the number of SARs granted to each
Participant and, consistent with the provisions of the Plan, in determining the
terms and conditions pertaining to such SARs.
The grant price of a Freestanding SAR shall equal the Fair Market Value of a
Share on the date of grant of the SAR. The grant price of Tandem SARs shall
equal the Option Price of the related Option.
7.2 SAR AGREEMENT. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Committee shall determine.
7.3 TERM OF SARS. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that no
SAR shall be exercisable later than the tenth (10th) anniversary date of its
grant.
7.4 EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes
upon them.
7.5 EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or part of
the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the contrary, with respect
to a Tandem SAR granted in connection with an ISO: (a) the Tandem SAR will
expire no later than the expiration of the underlying ISO; (b) the value of the
payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (c) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO exceeds the Option
Price of the ISO.
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7.6 PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a Share on the date of
exercise over the grant price; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, in some combination thereof, or in any
other manner approved by the Committee at its sole discretion. The Committee's
determination regarding the form of SAR payout shall be set forth in the Award
Agreement pertaining to the grant of the SAR.
7.7 TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Award Agreement shall set
forth the extent to which the Participant shall have the right to exercise the
SAR following termination of the Participant's employment or directorship with
the Company, its Affiliates, and/or its subsidiaries, as the case may be. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with Participants, need not be
uniform among all SARs issued pursuant to the Plan, and may reflect distinctions
based on the reasons for termination.
7.8 POST-EMPLOYMENT EXERCISES. The exercise of any SAR after termination of
employment of an Employee with the Company, its Subsidiaries or Affiliates shall
be subject to such conditions as imposed by the Committee at the time of the
Award Agreement and satisfaction of the conditions precedent that the Employee
neither (i) competes with, or takes other employment with or renders services to
a competitor of, the Company, its Subsidiaries or Affiliates without the written
consent of the Company, nor (ii) conducts himself or herself in a manner
adversely affecting the Company; provided, however, that the Committee, in its
sole discretion, may waive any conditions imposed in the Award Agreement or as
set forth in (i) and (ii) above relating to the exercise of any SAR after the
date of termination of employment during the term of the option.
7.9 NONTRANSFERABILITY OF SARS. Except as provided below, no SAR granted
under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution, and all SARs granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant. Notwithstanding
the foregoing, at the discretion of the Committee, an Award Agreement for the
grant of an SAR may permit the transferability of such an Award by a participant
solely to the participant's spouse, siblings, parents, children and
grandchildren or trusts for the benefit of such persons or partnerships,
corporations, limited liability companies or other entities owned solely by such
persons, including trusts for such persons, subject to any restriction included
in the Award Agreement.
ARTICLE 8. RESTRICTED STOCK
8.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine.
8.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
of Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.
8.3 TRANSFERABILITY. Except as provided in this Article 8, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Restricted Stock
Award Agreement, or upon earlier satisfaction of any other conditions, as
specified by the Committee in its sole discretion and set forth in the
Restricted Stock Award Agreement and all rights with respect to the Restricted
Stock granted to a Participant under the Plan shall be available during his or
her lifetime only to such Participant. Notwithstanding the foregoing, at the
discretion of the Committee, an Award Agreement for the grant of Restricted
Stock may permit the transferability of such an Award by a participant solely to
the participant's spouse, siblings, parents, children and grandchildren or
trusts for the benefit of such persons or partnerships, corporations, limited
liability companies or other entities owned solely by such persons, including
trusts for such persons, subject to any restriction included in the Award
Agreement.
8.4 OTHER RESTRICTIONS. The Committee shall impose such other conditions
and/or restrictions on any Shares of Restricted Stock granted pursuant to the
Plan as it may deem advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of Restricted Stock,
restrictions based upon the achievement of specific performance goals,
time-based restrictions on vesting following the attainment of the performance
goals, time-based restrictions, and/or restrictions under applicable federal or
state securities laws.
To the extent deemed appropriate by the Committee, the Company may retain the
certificates representing Shares of Restricted Stock in the Company's possession
until such time as all conditions and/or restrictions applicable to such Shares
have been satisfied.
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Except as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction.
8.5 VOTING RIGHTS. If the Committee so determines, Participants holding
Shares of Restricted Stock granted hereunder may be granted the right to
exercise full voting rights with respect to those Shares during the Period of
Restriction.
8.6 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may, if the
Committee so determines, be credited with dividends paid with respect to the
underlying Shares while they are so held, in a manner determined by the
Committee in its sole discretion. The Committee may apply any restrictions to
the dividends that the Committee deems appropriate. Without limiting the
generality of the preceding sentence, if the grant or vesting of Restricted
Shares is designed to comply with the requirements of the Performance-Based
Exception, the Committee may apply any restrictions it deems appropriate to the
payment of dividends declared with respect to such Restricted Shares, such that
the dividends and/or the Restricted Shares maintain eligibility for the
Performance-Based Exception.
8.7 TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Award Agreement shall set
forth the extent to which the Participant shall have the right to receive
unvested Restricted Shares following termination of the Participant's employment
or directorship with the Company. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Shares of
Restricted Stock issued pursuant to the Plan, and may reflect distinctions based
on the reasons for termination.
ARTICLE 9. PERFORMANCE UNITS, PERFORMANCE SHARES AND CASH-BASED AWARDS; STOCK
AWARDS
9.1 GRANT OF PERFORMANCE UNITS/SHARES AND CASH-BASED AWARDS. Subject to the
terms of the Plan, Performance Units, Performance Shares, and/or Cash-Based
Awards may be granted to Participants in such amounts and upon such terms, and
at any time and from time to time, as shall be determined by the Committee, and
Awards granted under this Article 9 may consist of any combination of
Performance Units, Performance Shares and/or Cash-Based Awards.
9.2 VALUE OF PERFORMANCE UNITS/SHARES AND CASH-BASED AWARDS. Each Performance
Unit shall have an initial value that is established by the Committee at the
time of grant. Each Performance Share shall have an initial value equal to or
greater than the Fair Market Value of a Share on the date of grant. Each
Cash-Based Award shall have a value as may be determined by the Committee. The
Committee shall set performance goals in its discretion which, depending on the
extent to which they are met, will determine the number and/or value of
Performance Units/Shares and Cash-Based Awards that will be paid out to the
Participant. For purposes of this Article 9, the time period during which the
performance goals must be met shall be called a 'Performance Period.'
9.3 EARNING OF PERFORMANCE UNITS/SHARES AND CASH-BASED AWARDS. Subject to the
terms of this Plan, after the applicable Performance Period has ended (including
any period of deferral as provided in Section 9.4 hereof), the holder of
Performance Units/Shares and Cash-Based Awards shall be entitled to receive
payout on the number and value of Performance Units/Shares and Cash-Based Awards
earned by the Participant over the Performance Period, to be determined as a
function of the extent to which the corresponding performance goals have been
achieved.
9.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES AND
STOCK/CASH-BASED AWARDS. Payment of earned Performance Units/Shares and
Cash-Based Awards shall be as determined by the Committee and as evidenced in
the Award Agreement. Subject to the terms of the Plan, the Committee, in its
sole discretion, may pay earned Performance Units/Shares and Cash-Based Awards
in the form of cash or in Shares (or in a combination thereof) that have an
aggregate Fair Market Value equal to the value of the earned Performance
Units/Shares and Cash-Based Awards at the close of the applicable Performance
Period. Such Shares may be granted subject to any restrictions deemed
appropriate by the Committee. The determination of the Committee with respect to
the form of payout of such Awards shall be set forth in the Award Agreement
pertaining to the grant of the Award.
At the discretion of the Committee, Participants holding Performance
Units/Shares may be entitled to receive dividend units with respect to dividends
declared with respect to the Shares. Such dividends may be subject to the same
accrual, forfeiture, and payout restrictions as apply to dividends earned with
respect to Shares of Restricted Stock, as set forth in Section 8.6 herein, as
determined by the Committee.
Notwithstanding the above, a Participant may elect to defer, or the Committee
may require or permit the deferral of, the receipt of Awards under Article 9
upon such terms as the Committee deems appropriate.
9.5 TERMINATION OF EMPLOYMENT/DIRECTORSHIP. In the event the employment or
directorship terminates for any reason, including by reason of death,
Disability, or Retirement, all Performance Units/Shares and Cash-Based Awards
shall be forfeited by the Participant to the Company unless determined otherwise
by the Committee, as set forth in the Participant's Award Agreement.
9.6 NONTRANSFERABILITY. Except as provided below, Performance Units/Shares
and Cash-Based Awards may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the
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laws of descent and distribution and a Participant's rights under the Plan shall
be exercisable during the Participant's lifetime only by the Participant.
Notwithstanding the foregoing, at the discretion of the Committee, an Award
Agreement for the grant of Performance Units/Shares and Cash-Based Awards may
permit the transferability of any such Awards by a participant solely to the
participant's spouse, siblings, parents, children and grandchildren or trusts
for the benefit of such persons or partnerships, corporations, limited liability
companies or other entities owned solely by such persons, including trusts for
such persons, subject to any restriction included in the Award Agreement.
9.7 STOCK AWARDS. The Committee may, in its discretion, grant Stock Awards
(which may include mandatory payment of bonus incentive compensation in stock)
consisting of Shares issued or transferred to Participants with or without other
payments therefor. Stock Awards may be subject to such terms and conditions as
the Committee determines appropriate, including, without limitation,
restrictions on the sale or other disposition of such shares, the right of the
Company to reacquire such shares for no consideration upon termination of the
Participant's employment within specified periods, and may constitute
Performance-Based Awards, as described in Article 10 hereof. The Committee may
require the participant to deliver a duly signed stock power, endorsed in blank,
relating to the Shares covered by such an Award. The Committee may also require
that the stock certificates evidencing such shares be held in custody or bear
restrictive legends until the restrictions thereon shall have lapsed. The Stock
Award shall specify whether the Participant shall have, with respect to the
Shares subject to a Stock Award, all of the rights of a holder of Shares of the
Company, including the right to receive dividends and to vote the shares.
Notwithstanding the foregoing, at the discretion of the Committee, an Award
Agreement for the grant of a Stock Award may permit the transferability of such
an Award by a participant solely to the participant's spouse, siblings, parents,
children and grandchildren or trusts for the benefit of such persons or
partnerships, corporations, limited liability companies or other entities owned
solely by such persons, including trusts for such persons, subject to any
restriction included in the Award Agreement.
ARTICLE 10. PERFORMANCE-BASED AWARDS AND PERFORMANCE MEASURES
10.1 PERFORMANCE-BASED AWARDS. Certain Awards granted under the Plan may be
granted in a manner such that the Awards qualify as Performance-Based Awards. As
determined by the Committee in its sole discretion, either the granting or
vesting of such Performance-Based Awards shall be based on achievement of hurdle
rates and/or growth rates in one or more business criteria that apply to the
individual participant, one or more business units or the Company as a whole.
The business criteria shall be as set forth in Section 10.2 hereof. With respect
to Performance-Based Awards, (i) the Committee shall establish in writing
(x) the performance goals applicable to a given period, and such performance
goals shall state, in terms of an objective formula or standard, the method for
computing the amount of compensation payable to the participant if such
performance goals are obtained and (y) the individual employees or class of
employees to which such performance goals apply no later than 90 days after the
commencement of such period (but in no event after 25% of such period has
elapsed) and (ii) no Performance-Based Awards shall be payable to or vest with
respect to, as the case may be, any Participant for a given period until the
Committee certifies in writing that the objective performance goals (and any
other material terms) applicable to such period have been satisfied. With
respect to any Awards intended to qualify as Performance-Based Awards, after
establishment of a performance goal, the Committee shall not revise such
performance goal or increase the amount of compensation payable thereunder (as
determined in accordance with Section 162(m) of the Code) upon the attainment of
such performance goal. Notwithstanding the preceding sentence, the Committee may
reduce or eliminate Awards payable upon the attainment of such performance goal.
10.2 PERFORMANCE MEASURES. The performance measure(s) to be used for purposes
of Performance-Based Awards shall be chosen from among:
(a) EVA'r'
(b) Net earnings;
(c) Earnings per share;
(d) Net sales growth;
(e) Net income (before or after taxes);
(f) Net operating profit;
(g) Return measures (including, but not limited to, return on assets,
equity, or sales);
(h) Cash flow (including, but not limited to, operating cash flow and
free cash flow);
(i) Cash flow return on investments, which equals net cash flows divided
by owner's equity;
(j) Earnings before or after taxes, interest, depreciation and/or
amortization;
(k) Internal rate of return or increase in net present value;
(l) Dividend payments to parent;
(m) Gross revenues;
(n) Gross margins;
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(o) Operating margin;
(p) Share price (including, but not limited to, growth measures and
total shareholder return);
(q) Expense targets;
(r) Working capital targets relating to inventory and/or accounts
receivable;
(s) Planning accuracy (as measured by comparing planned results to
actual results);
(t) comparisons to various stock market indices; and
(u) comparisons to the performance of other companies.
For purposes of this Plan, EVA'r' means the positive or negative value
determined by net operating profits after taxes over charge for capital, or any
other financial measure, as determined by the Committee in its sole discretion.
(EVA'r' is a registered trademark of Stern Stewart & Co.).
The Committee may provide in any such Award that any evaluation of performance
exclude any of the following events that occurs during a performance period:
(a) asset write-downs; (b) litigation or claim judgments or settlements;
(c) the effect of changes in tax law, accounting principles or other laws or
provisions affecting reported results; (d) accruals for reorganization and
restructuring programs; (e) extraordinary non-recurring items as described in
Accounting Principles Board Opinion No. 30 and/or in management's discussion and
analysis of financial condition and results of operations appearing in the
Company's annual report to stockholders for the applicable year;
(f) acquisitions or divestitures; and (g) foreign exchange gains and losses. To
the extent such exclusions affect Awards to executives covered by
Section 162(m), they will be prescribed in resolutions that meet the
requirements of Section 162(m) for deductibility.
In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards that shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
ARTICLE 11. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate.
ARTICLE 12. DEFERRALS
The Committee may permit or require a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would otherwise be
due to such Participant by virtue of the exercise of an Option or SAR, the lapse
or waiver of restrictions with respect to Restricted Stock, or the satisfaction
of any requirements or goals with respect to Performance Units/Shares and
Cash-Based Awards. If any such deferral election is required or permitted, the
Committee shall, in its sole discretion, establish rules and procedures for such
payment deferrals.
ARTICLE 13. RIGHTS OF EMPLOYEES/DIRECTORS
13.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant's employment at any time,
nor confer upon any Participant any right to continue in the employ of the
Company.
13.2 PARTICIPATION. No Employee or Director shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
13.3 RIGHTS AS A STOCKHOLDER. A Participant shall have none of the rights of
a shareholder with respect to shares of Common Stock covered by any Award until
the Participant becomes the record holder of such shares.
ARTICLE 14. CHANGE IN CONTROL
14.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges, or unless the Committee shall determine otherwise in the
Award Agreement:
(a) Any and all Options and SARs granted hereunder shall become
immediately exercisable, and shall remain exercisable throughout their
entire term;
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(b) Any restriction periods and restrictions imposed on Restricted Shares
that are not performance-based shall lapse; and
(c) The target payout opportunities attainable under all outstanding
Awards of performance-based Restricted Stock, Performance Units,
Performance Shares, Stock Awards and Cash-Based Awards shall be deemed
to have been earned to the extent described below for the entire
Performance Period(s) as of the effective date of the Change in
Control. The vesting of all Awards denominated in Shares shall be
accelerated as of the effective date of the Change in Control, and
there shall be paid out to Participants, within thirty (30) days
following the effective date of the Change in Control, all Shares
pursuant to such Awards based upon an assumed achievement of all
targeted performance goals at the target (or at such greater level if
achieved). Awards denominated in cash shall also vest and be paid to
participants in cash, within thirty (30) days following the effective
date of the Change in Control, with the amount of the cash award to be
paid based on an assumed achievement of all targeted performance goals
at the target (or at such greater level if achieved).
14.2 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL
PROVISIONS. Notwithstanding any other provision of this Plan (but subject to the
limitations of Section 15.2 hereof) or any Award Agreement provision, the
provisions of this Article 14 may not be terminated, amended, or modified on or
after the date of a Change in Control to affect adversely any Award theretofore
granted under the Plan without the prior written consent of the Participant with
respect to said Participant's outstanding Awards; provided, however, that the
Board may not take any such action within the six months immediately prior to
the date of a Change in Control which would affect adversely any Award
theretofore granted under the Plan without the prior written consent of the
Participant with respect to said Participant's outstanding Awards, and any such
purported action is null.
14.3 POOLING OF INTERESTS ACCOUNTING. Notwithstanding any other provision of
the Plan to the contrary, in the event that the consummation of a Change in
Control is contingent on using pooling of interests accounting methodology, the
Board may take any action necessary to preserve the use of pooling of interests
accounting.
ARTICLE 15. AMENDMENT, MODIFICATION, AND TERMINATION
15.1 AMENDMENT, MODIFICATION, AND TERMINATION. Subject to the terms of the
Plan and Article 14, the Board may at any time and from time to time, alter,
amend, suspend, or terminate the Plan in whole or in part; provided, however,
that no amendment of the Plan may be made without approval of the stockholders
of the Company if the amendment will: (i) disqualify any Incentive Stock Options
granted under the Plan; (ii) increase the aggregate number of Shares that may be
delivered under the Plan; (iii) increase any of the maximum amounts which can be
paid to an individual participant under the Plan as set forth in Article 4
hereof; (iv) change the types of business criteria on which Performance-Based
Awards are to be based under the Plan; or (v) modify the requirements as to
eligibility for participation in the Plan.
15.2 AWARDS PREVIOUSLY GRANTED. Notwithstanding any other provision of the
Plan to the contrary (but subject to Section 14.3 hereof), no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan, without the written consent of
the Participant holding such Award.
ARTICLE 16. WITHHOLDING
16.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.
16.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by requesting the Company to
purchase Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory tax that could be imposed on the
transaction and required to be withheld by the Company. All such elections shall
be irrevocable, made in writing, signed by the Participant, and shall be subject
to any restrictions or limitations that the Committee, in its sole discretion,
deems appropriate.
ARTICLE 17. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgement in any such action, suit, or proceeding against him or her, provided
he or she shall give the Company an opportunity, at its own expense, to handle
and defend the same before he or she undertakes to handle and defend it on his
or her own behalf. The foregoing right
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of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company's Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
ARTICLE 18. SUCCESSORS
All obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 19. GENERAL PROVISIONS
19.1 LEGEND. The Committee may require each person receiving Shares pursuant
to an Award under this Plan to represent to and agree with the Company in
writing that the Participant is acquiring the Shares without a view to
distribution thereof. In addition, to any legend required by this Plan, the
certificates for such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer of such Shares.
19.2 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
19.3 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
19.4 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required. The Company shall receive the consideration
required by law for the issuance of Awards under the Plan.
19.5 SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3 or
its successors under the 1934 Act, unless determined otherwise by the Board. To
the extent any provision of the Plan or action by the Board fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Board.
19.6 LISTING. The Company may use reasonable endeavors to register Shares
allotted pursuant to the exercise of an Option with the United States Securities
and Exchange Commission or to the effect compliance with the registration,
qualification, and listing requirements of any national securities laws, stock
exchange, or automated quotation system.
19.7 DELIVERY OF TITLE. The Company shall have no obligation to issue or
deliver evidence of title for shares of Shares under the Plan prior to:
(a) Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and
(b) Completion of any registration or other qualification of the Shares
under any applicable national or foreign law or ruling of any
governmental body that the Company determines to be necessary or
advisable.
19.8 INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
19.9 INVESTMENT REPRESENTATIONS. As a condition to the exercise of an Option,
the Company may require the person exercising such Option to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.
19.10 NO ADDITIONAL RIGHTS. Neither the Award nor any benefits arising under
this Plan shall constitute part of a Participant's employment contract with the
Company or any Subsidiary or Affiliate, and accordingly subject to Sections 14.2
and 15.2, this Plan and the benefits hereunder may be terminated at any time in
the sole and exclusive discretion of the Committee without giving rise to
liability on the part of the Company or any Affiliate for severance payments.
19.11 EMPLOYEES BASED OUTSIDE OF THE UNITED STATES. Notwithstanding any
provision of the Plan to the contrary, in order to comply with provisions of
laws in other countries in which the Company, its Affiliates, and its
Subsidiaries operate or have Employees, the Board, in their sole discretion,
shall have the power and authority to:
(a) Determine which Affiliates and Subsidiaries will be covered by the
Plan;
(b) Determine which Employees employed outside the United States are
eligible to participate in the Plan;
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(c) Modify the terms and conditions of any Award granted to Employees who
are employed outside the United States to comply with applicable
foreign laws;
(d) Establish subplans, modify exercise procedures, and other terms and
procedures to the extent such actions may be necessary or advisable.
Any subplans and modifications to Plan terms and procedures
established under this Section 19.11 by the Board or the Committee
shall be attached to this Plan document as Appendices; and
(e) Take any action, before or after an Award is made, which it deems
advisable to obtain approval or comply with any necessary local
government regulatory exemptions or approvals.
Notwithstanding the above, the Committee may not take any actions hereunder, and
no Awards shall be granted, which would violate the Exchange Act, the Code, any
securities law or governing statute or any other applicable law.
19.12 UNCERTIFICATED SHARES. To the extent that the Plan provides for
issuance of certificates to reflect the transfer of Shares, the transfer of such
Shares may be effected on a non-certificated basis, to the extent not prohibited
by applicable law or the rules of any stock exchange.
19.13 UNFUNDED PLAN. Participants shall have no right, title, or interest
whatsoever in or to any investments which the Company may make to aid it in
meeting its obligations under the Plan. Nothing contained in the Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Company and any
participant, beneficiary, legal representative or any other person. To the
extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. All payments to be made hereunder shall be paid
from the general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in the Plan. The Plan is not intended to
be subject to the Employee Retirement Income Security Act of 1974, as amended.
19.14 NO FRACTIONAL SHARES. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine whether cash,
or Awards, or other property shall be issued or paid in lieu of fractional
Shares or whether such fractional Shares or any rights thereto shall be
forfeited or otherwise eliminated.
19.15 GOVERNING LAW. The Plan and each Award Agreement shall be governed by
the laws of the state of Delaware, excluding any conflicts or choice of law rule
or principle that might otherwise refer construction or interpretation of the
Plan to the substantive law of another jurisdiction. Unless otherwise provided
in the Award Agreement, recipients of an Award under the Plan are deemed to
submit to the exclusive jurisdiction and venue of the federal or state courts of
New York, county of New York, to resolve any and all issues that may arise out
of or relate to the Plan or any related Award Agreement.
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