THE COOPER COMPANIES, INC.
1988 LONG TERM INCENTIVE PLAN
AMENDED AND RESTATED AS OF JANUARY 16, 1995
THE COOPER COMPANIES, INC.
1988 LONG TERM INCENTIVE PLAN
Section Contents Page
1. Purpose; Definitions.........................A-1
2. Administration...............................A-2
3. Stock Subject to Plan........................A-3
4. Eligibility..................................A-4
5. Stock Options................................A-4
6. Stock Appreciation Rights....................A-7
7. Restricted Stock.............................A-8
8. Deferred Stock...............................A-9
9. Stock Purchase Rights.......................A-10
10. Long Term Performance Awards................A-11
11. Phantom Stock Units.........................A-12
12. Change in Control Provisions................A-13
13. Amendments and Termination..................A-14
14. Unfunded Status of Plan.....................A-15
15. General Provisions..........................A-15
16. Effective Date of Plan......................A-16
17. Term of Plan................................A-16
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THE COOPER COMPANIES, INC.
1988 LONG TERM INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of The Cooper Companies, Inc. 1988 Long Term
Incentive Plan (the "Plan") is to enable The Cooper Companies, Inc.
(the "Company") to attract, retain and reward key employees and
consultants to the Company and its Subsidiaries and Affiliates, and
strengthen the mutuality of interests between such key employees,
consultants and the Company's shareholders, by offering such key
employees and consultants performance-based incentive equity
interests in the Company.
For purposes of the Plan, the following terms shall be defined
as set forth below:
(a) "Affiliate" means any entity other than the Company and
its Subsidiaries that is designated by the Board as a participating
employer under the Plan, provided that the Company directly or
indirectly owns at least 20% of the combined voting power of all
classes of stock of such entity or at least 20% of the ownership
interests in such entity.
(b) "Board" means the Board of Directors of the Company.
(c) "Book Value" means, as of any given date, on a per share
basis (i) the Stockholders' Equity in the Company as of the end of
the immediately preceding fiscal year as reflected in the Company's
consolidated balance sheet, subject to such adjustments as the
Committee shall specify at or after grant, divided by (ii) the
number of then outstanding shares of Stock as of such year-end date
(as adjusted by the Committee for subsequent events).
(d) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(e) "Committee" means the Committee referred to in Section 2
of the Plan. If at any time no Committee shall be in office, then
the functions of the Committee specified in the Plan shall be
exercised by the Board.
(f) "Company" means The Cooper Companies, Inc., a corporation
organized under the laws of the State of Delaware, or any successor
corporation.
(g) "Deferred Stock" means an award made pursuant to Section
8 below of the right to receive Stock at the end of a specified
deferral period.
(h) "Disability" means disability as determined under
procedures established by the Committee for purposes of this Plan.
(i) "Disinterested Person" shall have the meaning set forth in
Rule 16b-3(d)(3) as promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, or any
successor definition adopted by the Commission.
(j) "Early Retirement" means retirement, with the express
consent for purposes of this Plan of the Company at or before the
time of such retirement, from consulting or active employment with
the Company and any Subsidiary or Affiliate pursuant to the early
retirement provisions of the applicable pension plan of such
entity.
(k) "Fair Market Value" means, as of any given date, unless
otherwise determined by the Committee in good faith, the mean
between the highest and lowest quoted selling price, regular way,
of the Stock on the New York Stock Exchange or, if no such sale of
Stock occurs on the New York Stock Exchange on such date, the fair
market value of the Stock as determined by the Committee in good
faith.
(1) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "Incentive Stock Option" within the
meaning of Section 422A of the Code.
(m) "Long Term Performance Award" means an award under Section
10 below that is valued in whole or in part based on the
achievement of Company, Subsidiary, Affiliate, or individual
performance factors or criteria as the Committee may deem
appropriate.
(n) "Non-Qualified Stock Option" means any Stock Option that
is not an Incentive Stock Option.
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(o) "Normal Retirement" means retirement from consulting or
active employment with the Company and any Subsidiary or Affiliate
on or after age 65.
(p) "Phantom Stock Unit" means a right, pursuant to an award
granted under Section 11 and subject to the provisions thereof, to
receive from the Company cash in an amount equal to the Fair Market
Value of a share of Stock.
(q) "Plan" means this 1988 Long Term Incentive Plan, as
hereinafter amended from time to time.
(r) "Restricted Stock" means an award of shares of Stock that
is subject to restrictions under Section 7 below.
(s) "Retirement" means Normal or Early Retirement.
(t) "Stock" means the Common Stock, $0.10 par value per share,
of the Company.
(u) "Stock Appreciation Right" means the right pursuant to an
award granted under Section 6 below (a) to surrender to the Company
all (or a portion) of a Stock Option in exchange for an amount in
any combination of cash or Common Stock equal to the difference
between (i) the Fair Market Value, as of the date such Stock Option
(or such portion thereof) is surrendered, of the shares of Stock
covered by such Stock Option (or such portion thereof), subject,
where applicable, to the pricing provisions in Section 6(b)(ii),
and (ii) the aggregate exercise price of such Stock Option (or such
portion thereof) or (b) to receive from the Company an amount of
cash based upon the excess, if any, of the Fair Market Value of a
number of shares of Stock specified in such award at the time of
exercise of the right over the Fair Market Value of such number of
shares of Stock on the date the right was granted.
(v) "Stock Option" or "Option" means any option to purchase
shares of Stock (including Restricted Stock and Deferred Stock, if
the Committee so determines) granted pursuant to Section 5 below.
(w) "Stock Purchase Right" means the right to purchase Stock
pursuant to Section 9.
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(x) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company if each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing 50% or
more of the total combined voting power of all classes of stock in
one of the other corporations in the chain.
In addition, the terms "Change in Control", "Potential Change
in Control" and "Change in Control Price" shall have meanings set
forth, respectively, in Sections 12(b), (c) and (d) below and the
term "Cause" shall have the meaning set forth in Section 5(i)
below.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Board or by a Committee
of not less than three Disinterested Persons, who shall be
appointed by the Board and who shall serve at the pleasure of the
Board. (If at any time no Committee shall be in office, then the
functions of the Committee specified in the Plan shall be exercised
by the Board.)
The Committee shall have full authority to grant, pursuant to
the terms of the Plan, to officers, consultants and other key
employees eligible under Section 4: (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock, (iv) Deferred Stock,
(v) Stock Purchase Rights, (vi) Long Term Performance Awards and/or
(vii) Phantom Stock Units.
In particular, the Committee shall have the authority:
(i) to select the officers, consultants and other key
employees of the Company and its Subsidiaries and Affiliates to
whom Stock Options, Stock Appreciation Rights, Restricted Stock,
Deferred Stock, Stock Purchase Rights, Long Term Performance Awards
and/or Phantom Stock Units may from time to time be granted
hereunder;
(ii) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock, Deferred Stock, Stock Purchase Rights, Long Term
Performance Awards and/or Phantom Stock Units or any combination
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thereof, are to be granted hereunder to one or more eligible
employees;
(iii) to determine the number of shares, if applicable, to be
covered by each such award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder
(including, but not limited to, the share price and any restriction
or limitation, or any vesting acceleration or waiver of forfeiture
restrictions regarding any Stock Option or other award and/or the
shares of Stock relating thereto, based in each case on such
factors as the Committee shall determine, in its sole discretion);
(v) to determine whether and under what circumstances a Stock
Option may be settled in cash, Restricted Stock and/or Deferred
Stock under Section 5(k) or (1), as applicable, instead of Stock;
(vi) to determine whether, to what extent and under what
circumstances Option grants and/or other awards under the Plan
and/or other cash awards made by the Company are to be made, and
operate, on a tandem basis vis a vis other awards under the Plan
and/or cash awards made outside of the Plan, or on an additive
basis;
(vii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an
award under this Plan shall be deferred either automatically or at
the election of the participant (including providing for and
determining the amount (if any) of any deemed earnings on any
deferred amount during any deferral period); and
(viii) to determine the terms and restrictions applicable to
Stock Purchase Rights and the Stock purchased by exercising such
Rights.
The Committee shall have the authority to adopt, alter and
repeal such rules, guidelines and practices governing the Plan as
it shall, from time to time, deem advisable; to interpret the terms
and provisions of the Plan and any award issued under the Plan (and
any agreements relating thereto); and to otherwise supervise the
administration of the Plan.
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All decisions made by the Committee pursuant to the provisions
of the Plan shall be made in the Committee's sole discretion and
shall be final and binding on all persons, including the Company
and Plan participants.
SECTION 3. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for
distribution pursuant to stock options or other awards relating to
Stock made under the Plan shall be 5,800,000 shares. To this
number will be added any additional amount of shares equal to the
number of shares reserved for issuance but not issued or for which
options have not been granted as of September 15, 1988 under the
Company's 1982 Stock Option Plan, 1984 Key Employee Restricted
Stock Plan, 1985 Key Employee Restricted Stock Plan and 1985 Stock
Option Plan. Such shares may consist, in whole or in part, of
authorized and unissued shares or treasury shares.
Subject to Section 6(b)(iv) below, if any shares of Stock that
have been optioned cease to be subject to a Stock Option, or if any
such shares of Stock that are subject to any Restricted Stock or
Deferred Stock award, Stock Purchase Right, or Long Term
Performance Award granted hereunder are forfeited or any such award
otherwise terminates without a payment being made to the
participant in the form of Stock, such shares shall again be
available for distribution in connection with future awards under
the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, Stock dividend, Stock split or other change in
corporate structure affecting the Stock, such substitution or
adjustment shall be made in the aggregate number of shares reserved
for issuance under the Plan, in the number and option price of
shares subject to outstanding Options granted under the Plan, in
the number and purchase price of shares subject to outstanding
Stock Purchase Rights under the Plan, in the number of Phantom
Stock Units, and in the number of shares subject to other
outstanding awards granted under the Plan as may be determined to
be appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a
whole number. Such adjusted option price shall also be used to
determine the amount payable by the Company upon the exercise of
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any Stock Appreciation Right associated with any Stock Option. In
addition, the Committee, in its sole discretion, shall determine
the amount of cash to which the recipient of a Stock Appreciation
Right not associated with an Option shall be entitled upon exercise
so that there will be no increase or decrease in the cash to which
the recipient shall be entitled upon exercise by reason of such
event.
SECTION 4. ELIGIBILITY.
Officers, consultants and other key employees of the Company
and its Subsidiaries and Affiliates (but excluding members of the
Committee and any person who serves only as a director) who are
responsible for or contribute to the management, growth and/or
profitability of the business of the Company and/or its
Subsidiaries and Affiliates are eligible to be granted awards under
the Plan.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone, in addition to or in
tandem with other awards granted under the Plan and/or cash awards
made outside of the Plan. Any Stock Option granted under the Plan
shall be in such form as the Committee may from time to time
approve.
Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant to any
optionee Incentive Stock Options, Non-Qualified Stock Options, or
both types of Stock Options (in each case with or without Stock
Appreciation Rights); provided, however, that Incentive Stock
Options shall only be granted to an individual who, at the time of
grant, is an employee of the Company or a Subsidiary.
Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan,
as the Committee shall deem desirable:
(a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the
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Committee at the time of grant but shall not be less than 85% of
Fair Market Value as determined by the Committee; provided,
however, that in the case of an Incentive Stock Option, the option
price shall not be less than 100% of Fair Market Value as of the
date of grant.
(b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercisable more
than ten years after the date the Option is granted.
(c) Exercisability. Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as
shall be determined by the Committee at or after grant, provided,
however, that, except as provided in Section 5(f), (g) and (h) and
Section 12, unless otherwise determined by the Committee at or
after grant, no Stock Option shall be exercisable prior to the
first anniversary date of the granting of the Option. If the
Committee provides, in its sole discretion, that any Stock Option
is exercisable only in installments, the Committee may waive such
installment exercise provisions at any time at or after grant in
whole or in part, based on such factors as the Committee shall
determine, in its sole discretion.
(d) Method of Exercise. Subject to whatever installment
exercise provisions apply under Section 5(c), Stock Options may be
exercised in whole or in part at any time during the option period,
by giving written notice of exercise to the Company specifying the
number of shares to be purchased.
Such notice shall be accompanied by payment in full of the
purchase price, either by check, note or such other instrument as
the Committee may accept. As determined by the Committee, in its
sole discretion, at or after grant, payment in full or in part may
also be made in the form of unrestricted Stock which has been
beneficially owned by the optionee for at least six months or, in
the case of the exercise of a Non-Qualified Stock Option,
Restricted Stock subject to an award hereunder which has been
beneficially owned by the optionee for at least six months (based,
in each case, on the Fair Market Value of the Stock on the date the
option is exercised, as determined by the Committee); provided,
however, that, in the case of an Incentive Stock Option, the right
to make a payment in the form of already owned shares may be
authorized only at the time the option is granted. If payment of
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the option exercise price of a Non-Qualified Stock Option is made
in whole or in part in the form of Restricted Stock, any Stock
received upon the exercise shall be subject to the same forfeiture
restrictions or deferral limitations, unless otherwise determined
by the Committee, in its sole discretion, at or after grant.
No shares of Stock shall be issued until full payment therefor
has been made. An optionee shall generally have the rights to
dividends or other rights of a shareholder with respect to shares
subject to the Option when the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has
given the representation described in Section 15(a).
(e) Non-Transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws
of descent and distribution, and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee.
(f) Termination by Death. Subject to Section 5(j), if an
optionee's employment by or consultancy with the Company and any
Subsidiary or Affiliate terminates by reason of death, any Stock
Option held by such optionee may thereafter be exercised, to the
extent such option was exercisable at the time of death or on such
accelerated basis as the Committee may determine at or after grant
(or as may be determined in accordance with procedures established
by the Committee), by the legal representative of the estate or by
the legatee of the optionee under the will of the optionee, for a
period of three years (or such other period as the Committee may
specify at grant) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever
period is the shorter.
(g) Termination by Reason of Disability. Subject to Section
5(j), if an optionee's employment by or consultancy with the
Company and any Subsidiary or Affiliate terminates by reason of
Disability, any Stock Option held by such optionee may thereafter
be exercised by the optionee, to the extent it was exercisable at
the time of termination or on such accelerated basis as the
Committee may determine at or after grant (or as may be determined
in accordance with procedures established by the Committee), for a
period of three years (or such other period as the Committee may
specify at grant) from the date of such termination of employment
or consultancy or until the expiration of the stated term of such
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Stock Option, whichever period is the shorter; provided, however,
that, if the optionee dies within such three-year period (or such
other period as the Committee shall specify at grant), any
unexercised Stock Option held by such optionee shall thereafter be
exercisable to the extent to which it was exercisable at the time
of death for a period of twelve months from the date of such death
or until the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination of
employment by reason of Disability, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply
for purposes of Section 422A of the Code, such Stock Option will
thereafter be treated as a Non-Qualified Stock Option.
(h) Termination by Reason of Retirement. Subject to Section
5(j), if an optionee's employment by or consultancy with the
Company and any Subsidiary or Affiliate terminates by reason of
Normal or Early Retirement, any Stock Option held by such optionee
may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of such Retirement or on such accelerated
basis as the Committee may determine at or after grant (or as may
be determined in accordance with procedures established by the
Committee), for a period of three years (or such other period as
the Committee may specify at grant) from the date of such
termination of employment or consultancy or the expiration of the
stated term of such Stock Option, whichever period is the shorter;
provided, however, that, if the optionee dies within such
three-year period (or such other period as the Committee may
specify at grant), any unexercised Stock Option held by such
optionee shall thereafter be exercisable, to the extent to which it
was exercisable at the time of death, for a period of twelve months
from the date of such death or until the expiration of the stated
term of such Stock Option, whichever period is the shorter. In the
event of termination of employment by reason of Retirement, if an
Incentive Stock Option is exercised after the expiration of the
exercise periods that apply for purposes of Section 422A of the
Code, the option will thereafter be treated as a Non-Qualified
Stock Option.
(i) Other Termination. Unless otherwise determined by the
Committee (or pursuant to procedures established by the Committee)
at or after grant, if an optionee's employment by or consultancy
with the Company and any Subsidiary or Affiliate terminates for any
reason other than death, Disability or Normal or Early Retirement,
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the Stock Option shall thereupon terminate, except that such Stock
Option may be exercised for the lesser of three months or the
balance of such Stock Option's term if the optionee is
involuntarily terminated by the Company and any Subsidiary or
Affiliate without Cause. For purposes of this Plan, "Cause" means
a felony conviction of a participant or the failure of a
participant to contest prosecution for a felony, or a participant's
willful misconduct or dishonesty, any of which is directly and
materially harmful to the business or reputation of the Company or
any Subsidiary or Affiliate.
(j) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term of this Plan relating to
Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify the Plan under Section 422A of the
Code, or, without the consent of the optionee(s) affected, to
disqualify any Incentive Stock Option under such Section 422A.
To the extent required for "incentive stock option" status
under Section 422A(b)(7) of the Code (taking into account
applicable Internal Revenue Service regulations and
pronouncements), the Plan shall be deemed to provide that the
aggregate Fair Market Value (determined as of the time of grant) of
the stock with respect to which Incentive Stock Options granted
after 1986 are exercisable for the first time by the optionee
during any calendar year under the Plan and/or any other stock
option plan of the Company or any Subsidiary or parent corporation
(within the meaning of Section 425 of the Code) after 1986 shall
not exceed $100,000. If Section 422A is hereafter amended to
delete the requirement now in Section 422A(b)(7) that the Plan text
expressly provide for the $100,000 limitation set forth in Section
422A(b)(7), then this paragraph of Section 5(j) shall no longer be
operative.
(k) Buyout Provisions. The Committee may at any time offer to
buy out for a payment in cash, Stock, Deferred Stock or Restricted
Stock an option previously granted, based on such terms and
conditions as the Committee shall establish and communicate to the
optionee at the time that such offer is made.
(l) Settlement Provisions. If the option agreement so
provides at grant or is amended after grant and prior to exercise
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to so provide (with the optionee's consent), the Committee may
require that all or part of the shares to be issued with respect to
the spread value of an exercised Option take the form of Deferred
or Restricted Stock, which shall be valued on the date of exercise
on the basis of the Fair Market Value (as determined by the
Committee) of such Deferred or Restricted Stock determined without
regard to the deferral limitations and/or forfeiture restrictions
involved.
(m) 10% Stockholders. No Incentive Stock Option may be
granted under this Plan to any employee who, at the time the
Incentive Stock Option is granted, owns, or is considered as
owning, within the meaning of Section 422A of the Internal Revenue
Code, shares possessing more than ten percent (10%) of the total
combined voting power or value of all classes of stock of the
Company, a Subsidiary or a parent corporation (within the meaning
of Section 425 of the Code) unless the option price under such
Option is at least 110 percent (110%) of the Fair Market Value of
a share of Stock on the date such Option is granted and the
duration of such Option is no more than five (5) years.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be
granted separately or in conjunction with all or part of any Stock
Option granted under the Plan. In the case of a Non-Qualified
Stock Option, such rights may be granted either at or after the
time of the grant of such Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the time
of the grant of such Stock Option.
A Stock Appreciation Right or applicable portion thereof
granted with respect to a given Stock Option shall terminate and no
longer be exercisable upon the termination or exercise of the
related Stock Option, subject to such provisions as the Committee
may specify at grant where a Stock Appreciation Right is granted
with respect to less than the full number of shares covered by a
related Stock Option.
A Stock Appreciation Right may be exercised by a recipient,
subject to Section 6(b), in accordance with the procedures
established by the Committee for such purpose. Upon such exercise,
the recipient shall be entitled to receive an amount determined in
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the manner prescribed in Section 6(b). Stock Options relating to
exercised Stock Appreciation Rights shall no longer be exercisable
to the extent that the related Stock Appreciation Rights have been
exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be
subject to such terms and conditions, not inconsistent with the
provisions of the Plan, as shall be determined from time to time by
the Committee, including the following:
(i) Stock Appreciation Rights awarded with no associated Stock
Option shall be exercisable in accordance with their terms and
Stock Appreciation Rights granted in association with Stock Options
shall be exercisable only at such time or times and to the extent
that the Stock Options to which they relate shall be exercisable in
accordance with the provisions of Section 5 and this Section 6 of
the Plan; provided, however, that any Stock Appreciation Right
granted to a recipient subject to Section 16(b) of the Securities
Exchange Act of 1934 (the "Exchange Act") shall not be exercisable
during the first six months of its term (and any related Stock
Option shall not be exercisable during the first six months of its
term), except that this special limitation shall not apply in the
event of the death or disability of the recipient prior to the
expiration of the six-month period. The exercise of Stock
Appreciation Rights held by recipients who are subject to Section
16(b) of the Exchange Act shall comply with Rule 16b-3 thereunder,
to the extent applicable.
(ii) Upon the exercise of a Stock Appreciation Right granted
in association with a Stock Option, a recipient shall be entitled
to receive an amount in cash and/or shares of Stock, as the
Committee in its sole discretion shall determine, equal in value to
the excess of the Fair Market Value of one share of Stock over the
option price per share specified in the associated Stock Option
multiplied by the number of shares in respect of which the Stock
Appreciation Right shall have been exercised. Upon the exercise of
a Stock Appreciation Right awarded with no associated Stock Option,
a recipient shall be entitled to receive an amount in cash equal in
value to the excess, if any, of the Fair Market Value of a number
of shares of Stock specified in the award at the date of exercise
of the Stock Appreciation Right over the Fair Market Value of such
number of shares of Stock at the date of grant of the Stock
Appreciation Right. When payment is to be made in shares, the
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number of shares to be paid shall be calculated on the basis of the
Fair Market Value of the shares on the date of exercise. When
payment is to be made in cash to a recipient subject to Section
16(b) of the Exchange Act, such amount shall be calculated on the
basis of the average of the highest and lowest quoted selling
price, regular way, of the stock on the New York Stock Exchange
during the applicable period referred to in Rule 16b-3(e) under the
Exchange Act to the extent applicable.
(iii) Stock Appreciation Rights shall not be transferable by
the recipient thereof otherwise than by will or by the laws of
descent and distribution, and all Stock Appreciation Rights shall
be exercisable, during the recipient's lifetime, only by the
recipient.
(iv) Upon the exercise of a Stock Appreciation Right, any
Stock Option or part thereof to which such Stock Appreciation Right
is associated shall be deemed to have been exercised for the
purpose of the limitation set forth in Section 3 of the Plan on the
number of shares of Stock to be issued under the Plan.
(v) In its sole discretion, the Committee may grant "Limited"
Stock Appreciation Rights under this Section 6, i.e., Stock
Appreciation Rights that become exercisable only in the event of a
Change in Control and/or a Potential Change in Control, subject to
such terms and conditions as the Committee may specify at grant.
Such Limited Stock Appreciation Rights shall be settled solely in
cash.
(vi) The Committee, in its sole discretion, may also provide
that, in the event of a Change in Control and/or a Potential Change
in Control, the amount to be paid upon the exercise of a Stock
Appreciation Right or Limited Stock Appreciation Right shall be
based on the Change in Control Price, subject to such terms and
conditions as the Committee may specify at grant.
SECTION 7. RESTRICTED STOCK.
(a) Administration. Shares of Restricted Stock may be issued
either alone, in addition to or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. The
Committee shall determine the eligible persons to whom, and the
time or times at which, grants of Restricted Stock will be made,
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the number of shares to be awarded, the price to be paid by the
recipient of Restricted Stock (subject to Section 7(b)), the time
or times within which such awards may be subject to forfeiture, and
all other terms and conditions of the awards.
The Committee may condition the grant of Restricted Stock upon
the attainment of specified performance goals or such other factors
as the Committee may determine, in its sole discretion.
The provisions of Restricted Stock awards need not be the same
with respect to each recipient.
(b) Awards and Certificates. The prospective recipient of a
Restricted Stock award shall not have any rights with respect to
such award, unless and until such recipient has executed an
agreement evidencing the award and has delivered a fully executed
copy thereof to the Company, and has otherwise complied with the
applicable terms and conditions of such award. Each award shall be
subject to the following terms and conditions:
(i) The purchase price for shares of Restricted Stock shall be
equal to or greater than their par value.
(ii) Awards of Restricted Stock must be accepted within a
period of 60 days (or such shorter period as the Committee may
specify at grant) after the award date, by executing a Restricted
Stock award agreement and paying whatever price is required under
Section 7(b)(i).
(iii) Each participant receiving a Restricted Stock award
shall be issued a stock certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered in the name
of such participant, and shall bear an appropriate legend referring
to the terms, conditions and restrictions applicable to such award.
(iv) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions, if any, thereon shall have lapsed, and that, as a
condition of any Restricted Stock award, the participant shall have
delivered a stock power, endorsed in blank, relating to the Stock
covered by such award.
15
(c) Restrictions and Conditions. The shares of Restricted
Stock awarded pursuant to this Section 7 shall be subject to the
following restrictions and conditions:
(i) Subject to the provisions of this Plan and the award
agreement, during a period set by the Committee commencing with the
date of such award (the "Restriction Period"), the participant
shall not be permitted to sell, transfer, pledge or assign shares
of Restricted Stock awarded under the Plan. Within these limits,
the Committee, in its sole discretion, may provide for the lapse of
such restrictions in installments and may accelerate or waive such
restrictions in whole or in part, based on service, performance
and/or such other factors or criteria as the Committee may
determine, in its sole discretion.
(ii) Except as provided in this paragraph (ii) and Section
7(c)(i), the participant shall have, with respect to the shares of
Restricted Stock, all of the rights of a shareholder of the
Company, including the right to vote the shares, and the right to
receive any cash dividends. The Committee, in its sole discretion,
as determined at the time of award, may permit or require the
payment of cash dividends to be deferred and, if the Committee so
determines, reinvested, subject to Section 15(e), in additional
Restricted Stock to the extent shares are available under Section
3, or otherwise reinvested. Pursuant to Section 3 above, Stock
dividends issued with respect to Restricted Stock shall be treated
as additional shares of Restricted Stock that are subject to the
same restrictions and other terms and conditions that apply to the
shares with respect to which such dividends are issued.
(iii) Subject to the applicable provisions of the award
agreement and this Section 7, upon termination of a participant's
employment or consultancy with the Company and any Subsidiary or
Affiliate for any reason during the Restriction Period, all shares
still subject to restriction will vest, or be forfeited, in
accordance with the terms and conditions established by the
Committee at or after grant. If any Restricted Stock is forfeited,
the Company shall pay to the participant (or the estate of a
deceased participant) an amount equal to the price the participant
paid with respect to such Restricted Stock.
(iv) If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock subject to such
16
Restriction Period, certificates for an appropriate number of
unrestricted shares shall be delivered to the participant promptly.
SECTION 8. DEFERRED STOCK.
(a) Administration. Deferred Stock may be awarded either
alone, in addition to or in tandem with other awards granted under
the Plan and/or cash awards made outside of the Plan. The
Committee shall determine the eligible persons to whom and the time
or times at which Deferred Stock shall be awarded, the number of
shares of Deferred Stock to be awarded to any person, the duration
of the period (the "Deferral Period") during which, and the
conditions under which, receipt of the Stock will be deferred, and
the other terms and conditions of the award in addition to those
set forth in Section 8(b).
The Committee may condition the grant of Deferred Stock upon
the attainment of specified performance goals or such other factors
or criteria as the Committee shall determine, in its sole
discretion.
The provisions of Deferred Stock awards need not be the same
with respect to each recipient.
(b) Terms and Conditions. The shares of Deferred Stock
awarded pursuant to this Section 8 shall be subject to the
following terms and conditions:
(i) Subject to the provisions of this Plan and the award
agreement referred to in Section 8(b)(vi) below, Deferred Stock
awards may not be sold, assigned, transferred, pledged or otherwise
encumbered during the Deferral Period. At the expiration of the
Deferral Period (or the Elective Deferral Period referred to in
Section 8(b)(v), where applicable), share certificates shall be
issued and delivered to the participant, or his legal
representative, in a number equal to the shares covered by the
Deferred Stock award.
(ii) Unless otherwise determined by the Committee at grant,
amounts equal to any dividends declared during the Deferral Period
with respect to the number of shares covered by a Deferred Stock
award will be paid to the participant currently, or deferred and
deemed to be reinvested in additional Deferred Stock, or otherwise
17
reinvested, all as determined at or after the time of the award by
the Committee, in its sole discretion.
(iii) Subject to the provisions of the award agreement and
this Section 8, upon termination of a participant's employment or
consultancy with the Company and any Subsidiary or Affiliate for
any reason during the Deferral Period for a given award, the
Deferred Stock in question will vest, or be forfeited, in
accordance with the terms and conditions established by the
Committee at or after grant. If any Deferred Stock is forfeited,
the Company shall pay to the participant (or the estate of a
deceased participant) an amount equal to the price, if any, the
participant paid with respect to such Deferred Stock.
(iv) Based on service, performance and/or such other factors
or criteria as the Committee may determine, the Committee may, at
or after grant, accelerate the vesting of all or any), part of any
Deferred Stock award and/or waive the deferral limitations for all
or any part of such award.
(v) A participant may elect to further defer receipt of an
award (or an installment of an award) for a specified period or
until a specified event (the "Elective Deferral Period"), subject
in each case to the Committee's approval and to such terms as are
determined by the Committee, all in its sole discretion. Subject
to any exceptions adopted by the Committee, such election must
generally be made at least 12 months prior to completion of the
Deferral Period for such Deferred Stock award (or such
installment).
(vi) Each award shall be confirmed by, and subject to the
terms of, a Deferred Stock agreement executed by the Company and
the participant.
(vii) A recipient of a Deferred Stock award shall have no
rights as a stockholder with respect to any shares covered by his
Deferred Stock award until the issuance of a stock certificate for
such shares.
SECTION 9. STOCK PURCHASE RIGHTS.
(a) Awards and Administration. Subject to Section 3 above,
the Committee may grant eligible participants Stock Purchase Rights
18
which shall enable such participants to purchase Stock (including
Deferred Stock and Restricted Stock):
(i) at its Fair Market Value on the date of grant;
(ii) at 50% of such Fair Market Value on such date;
(iii) at an amount equal to Book Value on such date; or
(iv) at an amount equal to the par value of such Stock on such
date.
However, no share of Stock shall be sold at less than its par
value. The Committee shall also impose such deferral, forfeiture
and/or other terms and conditions as it shall determine, in its
sole discretion, on such Stock Purchase Rights or the exercise
thereof.
The terms of Stock Purchase Rights awards need not be the same
with respect to each participant. Each Stock Purchase Right award
shall be confirmed by, and be subject to the terms of, a Stock
Purchase Rights agreement.
(b) Exercisability. Stock Purchase Rights shall generally be
exercisable for such period after grant as is determined by the
Committee not to exceed 90 days. However, the Committee may
provide, in its sole discretion, that the Stock Purchase Rights of
persons potentially subject to Section 16(b) of the Securities
Exchange Act of 1934 shall not become exercisable until six months
and one day after the grant date, and shall then be exercisable for
10 trading days at the purchase price specified by the Committee in
accordance with Section 9(a).
(c) Loans. If the Committee so determines, the Company shall
make or arrange for a loan to a participant with respect to the
exercise of Stock Purchase Rights. The Committee shall have full
authority to decide whether such a loan should be made and to
determine the amount, term and other provisions of any such loan,
including the interest rate to be charged, whether the loan is to
be with or without recourse against the borrower, the security, if
any, therefor, the terms on which the loan is to be repaid and the
conditions, if any, under which it may be forgiven. However, no
loan hereunder shall have a term (including extensions) exceeding
19
ten years in duration or be in an amount exceeding 90% of the total
purchase price paid by the borrower.
SECTION 10. LONG TERM PERFORMANCE AWARDS.
(a) Administration. Long Term Performance Awards may be
granted either alone or in addition to other awards granted under
the Plan. The Committee shall determine the nature, length and
starting date of the performance period (the "Performance Period")
for each Long Term Performance Award, which shall be at least two
years (subject to Section 12), and shall determine the performance
objectives to be used in the valuation of Long Term Performance
Awards and determining the extent to which such Long Term
Performance Awards have been earned. Performance objectives may
vary from participant to participant and between groups of
participants and shall be based upon such Company, Subsidiary,
Affiliate or individual performance factors or criteria as the
Committee may deem appropriate, including, but not limited to,
earnings per share or return on equity. Performance Periods may
overlap and participants may participate simultaneously with
respect to Long Term Performance Awards that are subject to
different Performance Periods and different performance factors and
criteria. Long Term Performance Awards shall be confirmed by, and
be subject to the terms of, a Long Term Performance Award
agreement. The terms of such awards need not be the same with
respect to each participant.
At the beginning of each Performance Period, the Committee
shall determine for each Long Term Performance Award subject to
such Performance Period the range of dollar values or number of
shares of Stock (including Deferred or Restricted Stock) to be
awarded to the participant at the end of the Performance Period, if
and to the extent that the relevant measures of performance for
such Long Term Performance Award are met. Such dollar values or
number of shares of Stock may be fixed or may vary in accordance
with such performance or other criteria as may be determined by the
Committee.
(b) Adjustment of Awards. The Committee may adjust the
performance goals and measurements applicable to the Long Term
Performance Awards to take into account changes in law and
accounting and tax rules and to make such adjustments as the
Committee deems necessary or appropriate to reflect the inclusion
20
or exclusion of the impact of extraordinary or unusual items,
events or circumstances in order to avoid windfalls or hardships.
(c) Termination. Subject to Section 12 and unless otherwise
provided in the applicable Long Term Performance Award agreement,
if a participant terminates employment or his consultancy during a
Performance Period because of death, Disability or Retirement, such
participant shall be entitled to a payment with respect to each
outstanding Long Term Performance Award at the end of the
applicable Performance Period:
(i) based, to the extent relevant under the terms of the
award, upon the participant's performance for the portion of such
Performance Period ending on the date of termination and the
performance of the Company or any applicable business unit for the
entire Performance Period, and
(ii) prorated for the portion of the performance period during
which the participant was employed by the Company, a subsidiary or
affiliate, all as determined by the Committee. The Committee may
provide for an earlier payment in settlement of such award in such
amount and under such terms and conditions as the Committee deems
appropriate.
Subject to Section 12 and except as otherwise provided in the
applicable Long Term Performance Award agreement, if a participant
terminates employment or his consultancy during a Performance
Period for any other reason, then such participant shall not be
entitled to any payment with respect to the Long Term Performance
Award subject to such Performance Period, unless the Committee
shall otherwise determine.
(d) Form of Payment. The earned portion of a Long Term
Performance Award may be paid currently or on a deferred basis with
such interest or earnings equivalent as may be determined by the
Committee. Payment shall be made in the form of cash or whole
shares of Stock, including Restricted Stock or Deferred Stock, or
a combination thereof, either in a lump sum payment or in annual
installments, all as the Committee shall determine. If and to the
extent a Long Term Performance Award is payable in Stock and the
full amount therefor is not paid in Stock, then the shares of Stock
representing the portion of the value of the Long Term Performance
21
Award not paid in Stock shall again become available for award
under the Plan.
SECTION 11. PHANTOM STOCK UNITS.
(a) Administration. Phantom Stock Units may be awarded alone,
in addition to or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. The Committee
shall determine the eligible persons to whom and the time or times
at which Phantom Stock Units shall be awarded, the number of
Phantom Stock Units to be awarded to any person and the terms and
conditions of the award in addition to those set forth in Section
11(b).
The Committee may condition the grant of Phantom Stock Units
upon the attainment of specified performance goals or such other
factors or criteria as the Committee, in its sole discretion, shall
determine.
The provisions of Phantom Stock Unit awards need not be the
same with respect to each recipient.
(b) Terms and Conditions. The Phantom Stock Units awarded
pursuant to this Section 11 shall be subject to the following terms
and conditions:
(i) Subject to the provisions of the Plan, Phantom Stock Units
may not be sold, assigned, transferred, pledged or otherwise
encumbered.
(ii) Unless otherwise determined by the Committee at grant,
amounts equal to cash dividends, or the Fair Market Value of Stock
dividends declared and paid with respect to the number of shares of
Stock equal to the number of Phantom Stock Units previously granted
to a recipient but not yet surrendered as provided in clause (iii)
below will be paid to the recipient currently or reinvested, at the
sole discretion of the Committee, in an additional number of
Phantom Stock Units, which number shall be determined by dividing
the amount of such cash dividends, or the Fair Market Value of such
Stock dividends, by the Fair Market Value of a share of Stock on
the date the dividends were declared, provided that fractional
Phantom Stock Units shall be paid in cash.
22
(iii) A recipient shall be entitled to surrender to the
Company Phantom Stock Units granted to him, such surrender to be
upon any date or dates or during any period specified by the
Committee, in its sole discretion, in the award and upon such other
terms and conditions as the Committee, in its sole discretion,
shall specify in such award. Upon such surrender the Company shall
deliver to the recipient cash in an amount equal to the Fair Market
Value of a share of Stock on the date of surrender multiplied by
the number of Phantom Stock Units so surrendered.
(iv) Subject to the provisions of the award and this Section
11, upon termination of a recipient's employment or consultancy
with the Company and any Subsidiary or Affiliate for any reason,
all Phantom Stock Units previously granted to the recipient that
have not vested will vest, or be forfeited, in accordance with the
terms and conditions of the award established by the Committee at
or after grant.
(v) Subject to the provisions of the award and this Section
11, if termination of a recipient's employment or consultancy with
the Company and any Subsidiary or Affiliate is by reason of death,
Early Retirement, Normal Retirement or Disability, the recipient or
the representatives of his estate shall have the privilege of
surrendering for cash the recipient's Phantom Stock Units which the
recipient or the deceased could have surrendered at the time of his
Early Retirement, Normal Retirement, Disability or death, provided
that such surrender must occur prior to the expiration of the
surrender period and within six months after the recipient's Early
Retirement, Normal Retirement, Disability or death.
SECTION 12. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. In the event of:
(1) a "Change in Control" as defined in Section 12(b) or
(2) a "Potential Change in Control" as defined in Section
12(c), but only if and to the extent so determined by the
Committee or the Board at or after grant (subject to any
right of approval expressly reserved by the Committee or
the Board at the time of such determination), the
following acceleration and valuation provisions shall
apply:
23
(i) Any Stock Appreciation Rights (including, without
limitation, any, Limited Stock Appreciation Rights)
outstanding for at least six months and any Stock Options
awarded under the Plan not previously exercisable and
vested shall become fully exercisable and vested.
(ii) The restrictions and deferral limitations applicable to
any Restricted Stock, Deferred Stock, Stock Purchase
Rights, Phantom Stock Units and Long Term Performance
Awards, in each case to the extent not already vested
under the Plan, shall lapse and such shares and awards
shall be deemed fully vested.
(iii) Outstanding Long Term Performance Awards shall be vested
and paid out on a pro-rata basis, based on the target
values of each award and the number of months completed
in the Performance Period, compared to the total number
of months.
(iv) The value of all outstanding Stock Options, Stock
Appreciation Rights, Deferred Stock, Stock Purchase
Rights, Phantom Stock Units and Long Term Performance
Awards, in each case to the extent vested, shall, unless
otherwise determined by the Committee in its sole
discretion at or after grant but prior to any Change in
Control, be cashed out on the basis of the "Change in
Control Price" as defined in Section 12(d) as of the date
such Change in Control or such Potential Change in
Control is determined to have occurred or such other date
as the Committee may determine prior to the Change in
Control.
(b) Definition of Change in Control. For purposes of Section
12(a), a "Change in Control" means the happening of any
of the following:
(i) When any "person" as defined in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d)
of the Exchange Act but excluding the Company and any
Subsidiary and any employee benefit plan sponsored or
maintained by the Company or any Subsidiary (including
24
any trustee of such plan acting as trustee), directly or
indirectly, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act, as amended from time
to time), of securities of the Company representing 20
percent or more of the combined voting power of the
Company's then outstanding securities with respect to the
election of directors of the Company;
(ii) When, during any period of 24 consecutive months during
the existence of the Plan, the individuals who, at the
beginning of such period, constitute the Board (the
"Incumbent Directors") cease for any reason other than
death to constitute at least a majority thereof,
provided, however, that a director who was not a director
at the beginning of such 24-month period shall be deemed
to have satisfied such 24-month requirement (and be an
Incumbent Director) if such director was elected by, or
on the recommendation of or with the approval of, at
least two-thirds of the directors who then qualified as
Incumbent Directors either actually (because they were
directors at the beginning of such 24-month period) or by
prior operation of this Section 12(b)(ii); or
(iii) The occurrence of a transaction requiring shareholder
approval for the acquisition of the Company by an entity
other than the Company or a Subsidiary through purchase
of assets, or by merger, or otherwise.
(c) Definition of Potential Change in Control. For purposes
of Section 12(a), a "Potential Change in Control" means
the happening of any one of the following:
(i) The approval by shareholders of an agreement by the
Company, the consummation of which would result in a
Change In Control of the Company as defined in Section
12(b); or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than
the Company or a Subsidiary or any Company employee
benefit plan (including any trustee of such plan acting
as such trustee)) of securities of the Company
representing five percent or more of the combined voting
25
power of the Company's outstanding securities and the
adoption by the Board of Directors of a resolution to the
effect that a Potential Change in Control of the Company
has occurred for purposes of this Plan.
(d) Change in Control Price. For purposes of this Section
12, "Change in Control Price" means the highest price per
share paid in any transaction reported on the New York
Stock Exchange Composite Index, or paid or offered in any
bona fide transaction related to a Change in Control or
Potential Change in Control of the Company at any time
during the sixty-day period immediately preceding the
occurrence of the Change in Control (or, where
applicable, the occurrence of the Potential Change in
Control event), in each case as determined by the
Committee except that, in the case of Incentive Stock
Options and Stock Appreciation Rights relating to
Incentive Stock Options, such price shall be based only
on transactions reported for the date on which the
optionee exercises such Stock Appreciation Rights (or
Limited Stock Appreciation Rights) or, where applicable,
the date on which a cashout occurs under Section
12(a)(iii).
(e) With respect to any grants made under Sections 5 through
11 hereof subsequent to December 19, 1994 (other than
those grants to be made to the Company's Chief Operating
Officer which are the subject of an existing agreement),
this Section 12 shall be of no force and effect. All
references in this Plan to Section 12 or events occurring
thereunder shall remain in full force and effect
exclusively with respect to awards made by the Committee
prior to December 19, 1994.
SECTION 13. AMENDMENTS AND TERMINATION.
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which would
impair the rights of an optionee or participant under a Stock
Option, Stock Appreciation Right (or Limited Stock Appreciation
Right), Restricted or Deferred Stock Award, Stock Purchase Right,
Phantom Stock Unit award or Long Term Performance Award theretofore
26
granted, without the optionee's or participant's consent, or which,
without the approval of the Company's stockholders, would:
(a) except as expressly provided in this Plan, increase the
total number of shares reserved for the purpose of the Plan;
(b) change the employees or class of employees eligible to
participate in the Plan; or
(c) extend the maximum option period under Section 5(b) of the
Plan.
The Committee may amend the terms of any Stock Option or other
award theretofore granted, prospectively or retroactively, but,
subject to Section 3 above, no such amendment shall impair the
rights of any holder without the holder's consent. The Committee
may also substitute new Stock Options for previously granted Stock
Options (on a one for one or other basis), including previously
granted Stock Options having higher option exercise prices.
Subject to the above provisions, the Board shall have broad
authority to amend the Plan to take into account changes in
applicable securities and tax laws and accounting rules, as well as
other developments.
SECTION 14. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any payments
not yet made to a participant or optionee by the Company, nothing
contained herein shall give any such participant or optionee any
rights that are greater than those of a general creditor of the
Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock or payments in lieu of or
with respect to awards hereunder, provided, however, that, unless
the Committee otherwise determines with the consent of the affected
participant, the existence of such trusts or other arrangements is
consistent with the "unfunded" status of the Plan.
27
SECTION 15. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares
pursuant to a Stock Option or other award under the Plan to
represent to and agree with the Company in writing that the
optionee or participant is acquiring the shares for investment and
without a view to distribution thereof. The certificates for such
shares may include any legend which the Committee deems appropriate
to reflect any restrictions on transfer.
The Committee may condition the exercise of an Option or the
issuance and delivery of Stock upon the listing, registration or
qualification of the Stock upon a securities exchange or under
applicable securities laws.
All certificates for shares of Stock or other securities
delivered under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which
the Stock is then listed, and any applicable federal or state
securities law, and the Committee may cause a legend or legends to
be put on any such certificates to make appropriate reference to
such restrictions.
(b) Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements,
subject to stockholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable
only in specific cases.
(c) The making of an award under this Plan shall not confer
upon any employee of the Company or any Subsidiary or Affiliate any
right to continued employment with the Company or a Subsidiary or
Affiliate, as the case may be, nor shall it interfere in any way
with the right of the Company or a Subsidiary or Affiliate to
terminate the employment of any of its employees at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for federal
income tax purposes with respect to any award under the Plan, the
participant shall pay to the Company, or make arrangements
satisfactory to the Committee regarding the payment of, any
28
federal, state or local taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined
by the Committee, withholding obligations may be settled with
Stock, including Stock that is part of the award that gives rise to
the withholding requirement. The obligations of the Company under
the Plan shall be conditional on such payment or arrangements and
the Company and its Subsidiaries or Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
(e) The actual or deemed reinvestment of dividends or dividend
equivalents in additional Restricted Stock (or in Deferred Stock or
other types of Plan awards other than Phantom Stock Units) at the
time of any dividend payment shall only be permissible if
sufficient shares of Stock are available under Section 3 for such
reinvestment (taking into account then outstanding Stock Options,
Stock Purchase Rights and other Plan awards other than Phantom
Stock Units).
(f) The Plan and all awards made and actions taken thereunder
shall be governed by and construed in accordance with the laws of
the State of Delaware.
SECTION 16. EFFECTIVE DATE OF PLAN.
The Plan shall be effective as of September 15, 1988, subject
to the approval of the Plan by the holders of a majority of the
shares of the Company's Common Stock at the next annual
shareholders' meeting in 1988. Any grants made under the Plan
prior to such approval shall be effective when made (unless
otherwise specified by the Committee at the time of grant), but
shall be conditioned on, and subject to, such approval of the Plan
by such shareholders. Notwithstanding any other provision of the
Plan to the contrary, no Option, Stock Appreciation Right or Stock
Purchase Right may be exercised and no Restricted or Deferred Stock
or Long Term Performance Award shall become vested until such
approval.
SECTION 17. TERM OF PLAN.
No Stock Option, Stock Appreciation Right, Restricted Stock
Award, Deferred Stock Award, Stock Purchase Right, Other
Stock-Based Award, Phantom Stock Unit award or Long Term
29
Performance Award shall be granted pursuant to the Plan on or after
September 15, 1998, but awards granted prior to such date may
extend beyond that date.
30