Exhibit 10.10
As amended
December 14, 1994
1992 Stock Incentive Plan
of
J. P. Morgan & Co. Incorporated and
Affiliated Companies
ARTICLE I
PURPOSE
The purpose of the 1992 Stock Incentive Plan (the "Plan") is to promote
the success of J. P. Morgan & Co. Incorporated (the "Company") by providing a
method whereby eligible employees of the Company and its affiliated companies
may be awarded additional remuneration for services rendered and encouraged to
invest in the Common Stock of the Company, thereby increasing their proprietary
interest in the Company's business, encouraging them to remain in the employ of
the Company or its affiliated companies, and increasing their personal interest
in the continued success and progress of the Company.
ARTICLE II
DEFINITIONS
2.1. The following terms shall have the meaning described below when used
in the Plan:
(a) "Award" shall refer to a Restricted Stock Award granted under Article
VII or a Stock Unit Award granted under Article VIII.
(b) "Board of Directors" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
(d) "Committee" shall mean the committee appointed by the Board of
Directors to administer the Plan pursuant to Article III except that with
respect to the determinations to be made under Sections 6.1, 6.5, 6.8, 7.1,
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7.2(c), 7.4, 8.1, 8.2, 9.1 and 9.6 with respect to an eligible employee who is a
member of the Board of Directors, Committee shall mean all directors of the
Company who are not employees of the Company or any other Participating Company
and who are disinterested within the meaning of Rule 16b-3 under the Exchange
Act and are outside directors under Section 162(m)(4)(C) of the Code.
(e) "Common Stock" shall mean common stock, par value $2.50, of the
Company.
(f) "Company" shall mean J. P. Morgan & Co. Incorporated or any successor
to it in ownership of all or substantially all of its assets.
(g) "Earlier Plans" shall mean the Company's 1989 Stock Incentive Plan,
1987 Stock Incentive Plan, Stock Option Plan (1984) and Stock Option Plan
(1984).
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(i) "Incentive Stock Option" shall mean a stock option granted under
Article VI which is intended to meet the requirements of Section 422 of the
Code.
(j) "Nonqualified Stock Option" shall mean a stock option granted under
Article VI which is not intended to be an Incentive Stock Option.
(k) "Option" shall mean an Incentive Stock Option or a Nonqualified Stock
Option, including for purposes of Section 6.5 any stock option granted under the
Earlier Plans.
(l) "Participant" shall mean an eligible employee who has been granted a
Restricted Stock Award.
(m) "Participating Company" shall mean the Company, the Trust Company or
any subsidiary or other affiliated entity (whether or not incorporated).
(n) "Restricted Stock Award" shall mean an award of share credits under
Article VII hereof.
(o) "Stock Appreciation Right" shall mean a right granted under Section
6.5.
(p) "Stock Unit Award" shall mean an award granted under Article VIII.
(q) "Trust Company" shall mean Morgan Guaranty Trust Company of New York
or any successor to it in ownership of all or substantially all of its assets.
(r) "Vesting Date" shall mean the fifth anniversary of the date a
Restricted Stock Award was granted or such other time or times the Committee
shall designate in respect of a Restricted Stock Award at the time of the grant
of such Award. If more than one Vesting Date is designated for an Award,
reference in the Plan to Vesting Date in respect of such Award shall be deemed
to refer to each part of such Award and the Vesting Date for such part.
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ARTICLE III
ADMINISTRATION
3.1. (a) The Board of Directors of the Company shall appoint not less than
three Directors to the Committee which shall administer the Plan. No individual
shall become a member of the Committee unless such individual is disinterested
within the meaning of Rule 16b-3 under the Exchange Act. The Committee shall
have full power and authority, subject to such orders or resolutions not
inconsistent with the provisions of the Plan as may from time to time be issued
or adopted by the Board of Directors, to grant to eligible persons Options and
Stock Appreciation Rights under Article VI of the Plan, to grant Restricted
Stock Awards under Article VII of the Plan, to grant Stock Unit Awards under
Article VIII of the Plan, to interpret the provisions of the Plan and any
agreements relating to Options or Awards granted under the Plan, to supervise
the administration of the Plan and to delegate to senior officers of the Company
or the Trust Company the power to act for the Committee as the Committee shall
specify.
(b) All decisions made by the Committee (or such persons acting under a
delegation by the Committee pursuant to Section 3.1(a)) pursuant to the
provisions of the Plan and related orders of the Board of Directors shall be
within the absolute discretion of the Committee or its delegate, as the case may
be, and shall be conclusive and binding on all persons, including the Company,
stockholders, employees and beneficiaries of employees.
ARTICLE IV
SHARES SUBJECT TO THE PLAN
4.1. (a) Subject to adjustment pursuant to Section 4.1(c), the maximum
number of shares of Common Stock with respect to which Options, Stock
Appreciation Rights and Awards may be granted shall be 14,000,000 shares of
Common Stock. Shares of Common Stock may be made available from the authorized
but unissued shares of the Company or from shares reacquired by the Company,
including shares purchased in the open market. If an Option, Restricted Stock
Award or Stock Unit Award granted under the Plan shall expire or terminate for
any reason other than the exercise of a Stock Appreciation Right, the shares
subject to such Option or Award shall be available for other Options and Awards
to the same employee or other employees.
(b) Subject to adjustment pursuant to Section 4.1(c), of the total shares
of Common Stock referred to in Section 4.1(a), the number of shares of Common
Stock with respect to which Awards may be granted shall not exceed 2,800,000
shares of Common Stock.
(c) In the event that the Committee shall determine that any stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of
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shares, warrants or rights offering to purchase Common Stock at a price
substantially below fair market value, or other similar corporate event affects
the Common Stock such that an adjustment is required in order to preserve the
benefits or potential benefits intended to be made available under this Plan,
then the Committee shall, in its sole discretion, and in such manner as the
Committee may deem equitable, adjust any or all of (1) the number and kind of
shares which thereafter may be awarded or optioned and sold or made the subject
of Stock Appreciation Rights under the Plan, (2) the number and kind of shares
subject to outstanding Options and Awards, and Stock Appreciation Rights, and
(3) the option price with respect to any of the foregoing and/or, if deemed
appropriate, make provision for a cash payment to a Participant or a person who
has an outstanding option provided, however, that the number of shares subject
to any Option or Award shall always be a whole number.
ARTICLE V
ELIGIBILITY
5.1. The employees eligible to participate in the Plan and receive
Options, Stock Appreciation Rights and Awards under the Plan shall consist of
key employees of the Company and other Participating Companies.
ARTICLE VI
STOCK OPTIONS
6.1. Subject to the limitations of the Plan, the Committee shall, after
such consultation with and consideration of the recommendations of management as
the Committee considers desirable, select from eligible employees those to be
granted Options and determine the time when each Option shall be granted and the
number of shares subject to each Option and shall select the optionees to
receive Stock Appreciation Rights and the Options to which such rights shall
relate. Options may be either Incentive Stock Options or Nonqualified Stock
Options and more than one Option may be granted to the same person.
6.2. Option Agreements. Each Option under the Plan shall be evidenced by
an option agreement which shall contain such provisions as may be approved by
the Committee. Any such option agreement may be supplemented and amended from
time to time as approved by the Committee provided that the terms of such option
agreement after being amended or supplemented conform to the terms of the Plan.
6.3. Option Price. The price at which shares may be purchased upon
exercise of a particular Option shall be not less than 100% of the fair market
value of such shares on the date such Option is granted, as determined in
accordance with procedures to be established by the Committee.
6.4. Exercise of Options. (a) Subject to the provisions of the Plan with
respect to death, retirement and termination of employment, the period during
which each
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Option may be exercised shall be fixed by the Committee at the time such Option
is granted, but such period in no event shall expire later than ten years from
the date the Option is granted.
(b) Except as permitted by Sections 6.7 and 9.1, each Option may be
exercised only after one year of continued employment by the Company or any of
its affiliated companies and only during the continuance of the optionee's
employment with the Company or any of its affiliated companies. Subject to the
foregoing limitations and the terms and conditions of the option agreement and
unless cancelled prior to exercise, each Option shall be exercisable in whole or
in part in installments at such time or times as the Committee may prescribe and
specify in the applicable option agreement.
(c) No shares shall be delivered pursuant to any exercise of an Option
until payment in full of the option price therefor is received by the Company.
Such payment shall be made in cash or, unless prohibited by the Committee,
through the delivery of shares of Common Stock of the Company with a value equal
to the total option price or a combination of cash and shares. In addition, the
Committee may prescribe additional methods of payment to the extent permitted by
applicable law. Any shares so delivered shall be valued at their fair market
value on the exercise date determined as provided in Section 6.3. No optionee or
legal representative, legatee or distributee of any optionee shall be deemed to
be a holder of any shares subject to any Option prior to the issuance of such
shares upon exercise of such Option or any related Stock Appreciation Right.
6.5. Stock Appreciation Rights. (a) Stock Appreciation Rights may be
granted to such optionees holding Options granted under the Plan or the Earlier
Plans as the Committee may select and upon such terms and conditions as the
Committee may prescribe. Each Stock Appreciation Right shall relate to a
specific Option granted and may be granted concurrently with the Option to which
it relates or at any time prior to the exercise, expiration or termination of
such Option. A Stock Appreciation Right shall entitle the optionee, subject to
the provisions of the Plan and the related option agreement, to receive from the
Company an amount not more than the excess of the fair market value on the
exercise date of the number of shares for which the Stock Appreciation Right is
exercised over the option price for such shares under the related Option. For
this purpose, such fair market value shall be determined as provided in Section
6.3.
(b) A Stock Appreciation Right shall be exercisable on such dates or
during such periods as may be determined by the Committee from time to time,
provided that the Committee may, for administrative convenience, determine that,
for any Stock Appreciation Right relating to a Nonqualified Stock Option which
right can only be exercised during a limited period of time in order to satisfy
rules imposed by the Securities and Exchange Commission, the exercise of any
such right for cash during such limited period shall be deemed to occur for all
purposes hereunder on the day during such limited period on which the fair
market value of the Common Stock, determined as provided in
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Section 6.3, is the highest, and provided, further, that no Stock Appreciation
Right shall be exercisable at a time when the related Option could not be
exercised nor may it be exercised with respect to a number of shares in excess
of the number for which such Option could then be exercised. Any such
determination by the Committee may be changed by the Committee from time to time
and may govern the exercise of Stock Appreciation Rights granted prior to such
determination as well as Stock Appreciation Rights thereafter granted.
(c) A Stock Appreciation Right may be exercised only upon surrender of the
related Option by the optionee, which shall be terminated to the extent of the
number of shares for which the Stock Appreciation Right is exercised. Shares
covered by such a terminated Option or portion thereof granted under the Plan
shall not be available for other Options or Awards under the Plan.
(d) The amount payable by the Company upon exercise of a Stock
Appreciation Right may be paid in cash, in shares (valued at their fair market
value on the exercise date determined as provided in Section 6.3) or in any
combination thereof as the Committee shall determine from time to time. No
fractional shares shall be issued and the optionee shall receive cash in lieu
thereof.
(e) The Committee may impose any other conditions upon the exercise of a
Stock Appreciation Right, which conditions may include a condition that the
Stock Appreciation Right may be exercised only in accordance with rules and
regulations adopted by the Committee from time to time. Such rules and
regulations may govern the right to exercise Stock Appreciation Rights granted
prior to the adoption or amendment of such rules and regulations as well as
Stock Appreciation Rights granted thereafter.
(f) The Committee may at any time amend or suspend any Stock Appreciation
Right theretofore granted under the Plan, provided that the terms of any Stock
Appreciation Right after any amendment shall conform to the provisions of the
Plan. A Stock Appreciation Right shall terminate upon the termination or
expiration of the related Option.
6.6. Transferability of Options and Stock Appreciation Rights. (a) Except
as provided in subsection (b) below, an Option granted under the Plan may not be
transferred except by will or the laws of descent and distribution and, during
the lifetime of the person to whom granted, may be exercised only by such
person. A Stock Appreciation Right may not be transferred to anyone and may be
exercised only by the optionee to whom it was granted.
(b) Notwithstanding subsection (a) above the Committee may determine at
the time of grant or thereafter, that an Option granted under the Plan may be
transferred by the optionee to one or more members of the optionee's immediate
family, to a partnership of which the only partners are members of the
optionee's immediate family, or to a trust established by the optionee for the
benefit of one or more members of the optionee's immediate family. For this
purpose immediate family means the optionee's spouse,
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parents, children, grandchildren and the spouses of such parents, children and
grandchildren. A transferee described in this subsection may not further
transfer an Option except by will or the laws of descent and distribution. An
Option transferred pursuant to this subsection shall remain subject to the
provisions of the Plan, including, but not limited to, the provisions of Section
6.7 relating to the exercise of the Option upon the death, retirement or
termination of employment of the optionee.
6.7. Death, Retirement and Termination of Employment. Subject to the
condition that no Option may be exercised in whole or in part after the
expiration of the option period specified in the applicable option agreement and
subject to the Committee's right to cancel any Option in accordance with Section
9.6:
(a) Upon termination of employment prior to an optionee's attainment of
age 55 but after the optionee is eligible for retirement pursuant to a
retirement plan of the Company or any of its subsidiaries, an optionee may,
within three years after the date of such termination, purchase any or all of
the shares subject to an Option granted at least one year prior to such
termination of employment at or after the time or times specified in the
applicable option agreement (determined without regard to such termination of
employment);
(b) Upon termination of employment on or after attainment of age 55 and
after the optionee is eligible for retirement pursuant to a retirement plan of
the Company or any of its subsidiaries, an optionee may, at any time prior to
the expiration of the option period specified in the applicable option
agreement, purchase any or all of the shares subject to an Option granted at
least one year prior to such termination of employment at or after the time or
times specified in the applicable option agreement (determined without regard to
such termination of employment); and
(c) (i) Upon the death of an optionee while employed or after a
termination of employment described in clause (b) above, the person or persons
to whom such optionee's rights under the Option are transferred by will or the
law of descent and distribution may, at any time during the period commencing
one year from the date of grant of such Option and ending on the expiration of
the option period specified in the applicable option agreement, purchase any or
all of the shares remaining subject to the Option at the time of such death at
or after the time the optionee would have been entitled to purchase such shares
had the optionee survived; and
(ii) Upon the death of an optionee after a termination of employment
described in clause (a) above, the person or persons to whom such optionee's
rights under the Option are transferred by will or the law of descent and
distribution may, at any time prior to the expiration of the three year period
specified in clause (a), purchase any or all of the shares remaining subject to
such Option at or after the time the optionee would have been entitled to
purchase such shares had the optionee survived; and
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(d) Upon termination of employment for any reason other than death or
retirement as aforesaid, an optionee's Options shall be cancelled to the extent
not theretofore exercised.
6.8. Waiver of Limitations. Notwithstanding anything to the contrary in
the Plan, in such circumstances as the Committee may deem advisable, the
Committee may waive or otherwise remove, in whole or in part, any restrictions
or limitations applicable to an Option granted to an eligible employee
(including, without limitation, any restriction or limitation on the period
during which such Option may be exercised following termination of such eligible
employee's employment and any restriction or limitation on the exercisability of
such Option) who, at the time of such waiver or removal, is not subject to
Section 16 of the Exchange Act.
ARTICLE VII
RESTRICTED STOCK AWARDS
7.1. Subject to the limitations of the Plan, the Committee shall, after
such consultation with and consideration of the recommendations of management as
the Committee considers desirable, select from eligible employees those
Participants to be granted Restricted Stock Awards and determine the time when
each Award shall be granted, the Vesting Date or Vesting Dates for each Award,
the time or times as of which vested Awards shall be paid and the number of
share credits (each of which shall be equivalent to one share of Common Stock)
subject to each Award.
7.2. Vesting of Restricted Stock Awards. (a) Subject to the rules of
Sections 7.2(b), 7.2(c) and 9.1 each Award shall fully vest and be 100%
nonforfeitable on the Vesting Date.
(b) Subject to the rules of Section 9.1, upon termination of a
Participant's employment prior to the Vesting Date for any reason except for
retirement, as described below, or death, his Awards shall be forfeited and the
Participant shall have no right with respect to such Awards. Upon termination of
employment prior to the Vesting Date by reason of the Participant's retirement
under a retirement plan maintained by the Company or a subsidiary or by reason
of death, an Award granted to such Participant shall be vested and
nonforfeitable to the extent of 20% (or such other percentage as the Committee
shall have determined at the time of grant of such Award) for each complete
twelve month period from the date of the granting of such Award to the date of
such retirement or death.
(c) Notwithstanding the provisions of Sections 7.2(a) and 7.2(b), upon
termination of a Participant's employment prior to 100% vesting under the rules
of Sections 7.2(a) and 7.2(b), the Committee may, in its sole discretion,
determine that Awards granted to such Participant shall be vested to the extent
determined by the Committee but in no event less than the vesting computed under
the rules of Section 7.2(b).
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7.3. Payment of Awards. (a)(i) Subject to the provisions of subparagraph
(ii) below, as soon as practicable after an Award has become vested in
accordance with Section 7.2, such vested Award shall be paid to the Participant
or, in the case of the death of the Participant, his designated beneficiary or
beneficiaries or, in the absence of a designated beneficiary, to the estate of
the Participant.
(ii) The Committee may, in its discretion, provide that payment of vested
Awards be deferred until such time or times as the Committee shall specify at
the time of grant of such Award or thereafter, or such time or times as the
Participant may elect. Any election of a Participant pursuant to the preceding
sentence shall be filed with the Committee in accordance with such rules and
regulations, including any deadline for the making of such an election, as the
Committee may provide.
(b)(i) Except as may be otherwise determined by the Committee at the time
of grant of an Award or thereafter, in addition to the payment provided for in
Section 7.3(a), each Participant (or beneficiary) entitled to payment under
Section 7.3(a) shall receive the dividend equivalent amount calculated under
subparagraph (ii) below.
(ii) The dividend equivalent amount is the number of additional share
credits attributable to the number of share credits awarded plus additional
share credits calculated hereunder. Such additional share credits shall be
determined and credited as of the end of each calendar year by dividing (A) the
aggregate cash dividends which would have been paid had the share credits
awarded or credited under this subparagraph (ii), as the case may be, been
actual shares of Common Stock on the record date for each such dividend during
such calendar year by (B) the average market prices per shares of Common Stock
on the last trading day of each calendar month during the 12 months ending on
the November 30 preceding the date such determination is being made. For this
purpose, the market price on any day shall be the average of the highest and
lowest price of a share of Stock as reported on the composite tape for such day,
unless the Committee determines that another procedure for determining market
price would be more appropriate.
(iii) In such cases as the Committee may deem advisable, the Committee
may, in lieu of the crediting provided for in subparagraph (ii), determine to
pay all or part of the dividend equivalent amount in cash as dividends are
actually paid on Common Stock, or at such other time or times as the Committee
may otherwise determine.
(c) Payments pursuant to Section 7.3(a) and 7.3(b) shall be made in shares
of Common Stock except there may be paid in cash dividend equivalents or that
part of the total payment determined by the Company to be necessary to satisfy
tax withholding.
7.4. Waiver of Restrictions. In such circumstances as the Committee may
deem advisable, the Committee may waive or otherwise remove, in whole or in
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part, any restrictions or limitations to which a Restricted Stock Award was made
subject at the time of grant.
ARTICLE VIII
STOCK UNIT AWARDS
8.1. In addition to granting Options, Stock Appreciation Rights and
Restricted Stock Awards, the Committee shall have authority to grant to eligible
employees Stock Unit Awards which can be in the form of Common Stock or units,
the value of which is based, in whole or in part, on the value of Common Stock.
Subject to the provisions of the Plan, including Section 8.2 below, Stock Unit
Awards shall be subject to such terms, restrictions, conditions, vesting
requirements and payment rules (all of which are sometimes hereinafter
collectively referred to as "rules") as the Committee may determine in its sole
discretion, all such rules applicable to a particular Stock Unit Award to be
reflected in writing and furnished to the employee at the time of grant. The
rules need not be identical for each Stock Unit Award.
8.2. Rules. In the sole discretion of the Committee, a Stock Unit Award
shall be granted subject to the following rules:
(a) Any shares of Common Stock which are part of a Stock Unit Award may
not be assigned, sold, transferred, pledged or otherwise encumbered prior to the
date on which the shares are issued or, if later, the date provided by the
Committee at the time of the Award.
(b) Stock Unit Awards may provide for the payment of cash consideration by
the person to whom such Award is granted or provide that the Award, and Common
Stock to be issued in connection therewith, if applicable, shall be delivered
without the payment of cash consideration.
(c) Stock Unit Awards may relate in whole or in part to certain
performance criteria established by the Committee at the time of grant.
(d) Stock Unit Awards may provide for deferred payment schedules, vesting
over a specified period of employment, the payment (on a current or deferred
basis) of dividend equivalent amounts, with respect to the number of shares of
Common Stock covered by the Award, and elections by the employee to defer
payment of the Award or the lifting of restrictions on the Award, if any.
(e) In such circumstances as the Committee may deem advisable, the
Committee may waive or otherwise remove, in whole or in part, any restrictions
or limitations to which a Stock Unit Award was made subject at the time of
grant.
ARTICLE I
GENERAL PROVISIONS
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9.1. Change in Control. (a)(i) In the case of a Change in Control (as
defined below) of the Company, each Option then outstanding shall (unless the
Committee determines otherwise) immediately become exercisable in full;
(ii) In the case of a Change in Control (as defined below) of the Company,
each Award shall (unless the Committee determines otherwise) immediately be
fully vested and nonforfeitable and shall thereupon be paid as soon as
practicable.
(b) Any determination by the Committee made pursuant to this Section 9.1
may be made as to all outstanding Options or Awards or only as to certain
Options or Awards specified by the Committee and all such determinations shall
be made in cases covered by subparagraphs (i) or (ii) below, prior to or as soon
as practicable after the occurrence of such event and in the cases covered by
subparagraphs (iii) and (iv) below, prior to the occurrence of such event.
(c) A Change in Control shall occur if:
(i) any "person" or "group of persons" as such terms are used in Section
13(d) and 14(d) of the Exchange Act directly or indirectly purchases or
otherwise becomes the "beneficial owner" (as defined in Rule d-3 under the
Exchange Act) or has the right to acquire such beneficial ownership (whether or
not such right is exercisable immediately, with the passage of time, or subject
to any condition), of voting securities representing 25% or more of the combined
voting power of all outstanding voting securities of the Company;
(ii) during any period of two consecutive years, the individuals who at
the beginning of such period constitute the Board of Directors cease for any
reason to constitute at least a majority of the members thereof, unless (1)
there are seven or more directors then still in office who were directors at the
beginning of the period, and (2) the election, or the nomination for election by
the Company's stockholders, of each new director was approved by at least
two-thirds of the directors then still in office who were directors at the
beginning of the period;
(iii) the stockholders of the Company shall approve an agreement to merge
or consolidate the Company with or into another corporation as a result of which
less than 50% of the outstanding voting securities of the surviving or resulting
entity are or are to be owned by the former shareholders of the Company
(excluding from former shareholders, a shareholder who is or, as a result of the
transaction in question, becomes an "affiliate," as defined in Rule 12b-2 under
the Exchange Act, of any party to such consolidation or merger); or
(iv) the stockholders of the Company shall approve the sale of all or
substantially all of the Company's business and/or assets to a person or entity
which is not a wholly-owned subsidiary of the Company.
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9.2. Designation of Beneficiary. Subject to such rules and regulations as
the Committee may prescribe, including the right of the Committee to limit the
types of designations which are acceptable for purposes of the Plan, each
employee who shall be granted an Option or Award under the Plan may designate a
beneficiary or beneficiaries and may change such designation from time to time
by filing a written designation of beneficiaries with the Committee on a form to
be prescribed by it, provided that no such designation shall be effective unless
so filed prior to the death of such employee.
9.3. No Right of Continued Employment. Neither the establishment of the
Plan, the granting of Options or Awards, nor the payment of any benefits
hereunder nor any action of the Company or of the Board of Directors or of the
Committee shall be held or construed to confer upon any person any legal right
to be continued in the employ of the Company or its subsidiaries, each of which
expressly reserves the right to discharge any employee whenever the interest of
any such company in its sole discretion may so require without liability to such
company, the Board of Directors or the Committee except as to any rights which
may be expressly conferred upon such employee under the Plan.
9.4. No Segregation of Cash or Shares. The Company shall not be required
to segregate any cash or any shares of Common Stock which may at any time be
represented by Options, Awards, share credits or dividend equivalent amounts and
the Plan shall constitute an "unfunded" plan of the Company. No employee shall
have voting or other rights with respect to shares of Common Stock prior to the
delivery of such shares. The Company shall not, by any provisions of the Plan,
be deemed to be a trustee of any Common Stock or any other property, and the
liabilities of the Company to any employee pursuant to the Plan shall be those
of a debtor pursuant to such contract obligations as are created by or pursuant
to the Plan, and the rights of any employee, former employee or beneficiary
under the Plan shall be limited to those of a general creditor of the Company.
In its sole discretion, the Board of Directors may authorize the creation of
trusts or other arrangements to meet the obligations of the Company and each
other Participating Company under the Plan, provided, however, that existence of
such trusts or other arrangements is consistent with the unfunded status of the
Plan.
9.5. Delivery of Shares. No shares shall be delivered pursuant to any
exercise of an Option or Stock Appreciation Right or pursuant to the payment of
any Award until the requirements of such laws and regulations as may be deemed
by the Committee to be applicable thereto are satisfied.
9.6. Cancellation of Options, Stock Appreciation Rights and Awards. (a)
Prior to the occurrence of a Change in Control, but not thereafter, the
Committee may, in its sole discretion and with or without cause, cancel any
Option, Stock Appreciation Right or Award in whole or in part to the extent it
has not theretofore been exercised or, in the case of Awards, become vested.
Such cancellation shall be effective as of the date specified by the Committee.
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(b) Notwithstanding subsection (a) above, prior to payment of any Award,
the Committee may, in its sole discretion, in cases involving a serious breach
of conduct by an employee or former employee, or activity of a former employee
in competition with the business of a Participating Company, cancel any Award,
whether or not vested, in whole or in part. Such cancellation shall be effective
as of the date specified by the Committee. The determination of whether an
employee or former employee has engaged in a serious breach of conduct or
activity in competition with the business of a Participating Company shall be
determined by the Committee in good faith and in its sole discretion.
9.7. Transfer, Leave of Absence, etc. For purposes of the Plan: (a) a
transfer of an employee from a Participating Company to an affiliated company,
(b) a leave of absence, duly authorized in writing by the Participating Company,
for military service or sickness, or for any other purpose approved by the
Participating Company if the period of such leave does not exceed ninety days,
and (c) a leave of absence in excess of ninety days, duly authorized in writing
by the Participating Company, provided the employee's right to reemployment is
guaranteed either by a statute or by contract, shall not be deemed a termination
of employment.
9.8. New York Law to Govern. All questions pertaining to the construction,
regulation, validity and effect of the provisions of the Plan shall be
determined in accordance with the laws of the State of New York.
9.9. Payments and Tax Withholding. The delivery of any shares of Common
Stock and the payment of any amount in respect of a Stock Appreciation Right or
Award shall be of the account of the applicable Participating Company and any
such delivery or payment shall not be made until the recipient shall have made
satisfactory arrangements for the payment of any applicable withholding taxes.
ARTICLE X
AMENDMENT AND TERMINATION
10.1. Amendments, Suspension or Discontinuance. The Board of Directors may
amend, suspend or discontinue the Plan, provided, however, that except as
permitted by Section 4.1(c), the Board of Directors may not, without the prior
approval of the stockholders of the Company, make any amendment for which
stockholder approval is necessary to comply with any applicable tax or
regulatory requirement, including for these purposes any approval requirement
which is a prerequisite for exemptive relief under Section 16(b) of the Exchange
Act, and provided, further, that upon the occurrence of a Change in Control no
amendment may adversely affect the rights of any person in connection with any
Option or Award previously granted.
10.2. Termination. No Option or Award shall be granted under the Plan
after expiration of three years from the date upon which the Plan is approved by
vote of the stockholders of the Company.
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