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Exhibit 10.3
CAREY DIVERSIFIED LLC
1997 SHARE INCENTIVE PLAN
The name of the plan is the Carey Diversified LLC 1997 Share
Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and enable
the officers, employees and Eligible Directors of Carey Diversified LLC (the
"Company") and its Affiliates upon whose judgment, initiative and efforts the
Company largely depends for the successful conduct of its business to acquire a
proprietary interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and strengthening their desire to remain
with the Company.
SECTION 1
Definitions
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board or the Committee as a participating
employer under the Plan.
"Award" or "Awards", except where referring to a particular category
of grant under the Plan, shall include Incentive Listed Share Options,
Non-Qualified Listed Share Options, Restricted Listed Shares Awards, Performance
Share Awards and Dividend Equivalent Rights.
"Board" means the Board of Directors of the Company.
"Cause" means and shall be limited to a vote of the Board to the
effect that the participant should be dismissed as a result of (i) any material
breach by the participant of any agreement to which the participant and the
Company or an Affiliate are parties, (ii) any act (other than retirement) or
omission to act by the participant, including without limitation, the commission
of any crime (other than ordinary traffic violations) that may have a material
and adverse effect on the business of the Company or any Affiliate or on the
participant's ability to perform services for the Company or any Affiliate, or
(iii) any material misconduct or neglect of duties by the participant in
connection with the business or affairs of the Company or any Affiliate.
"Change of Control" is defined in Section 13.
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"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" means any Committee of the Board referred to in Section
2.
"Disability" means disability as set forth in Section 22(e)(3) of
the Code.
"Dividend Equivalent Right" means a right, granted under Section 9,
to receive cash, Listed Shares or other property equal in value to dividends
paid with respect to a specified number of Listed Shares or the excess of
dividends paid over a specified rate of return. Dividend Equivalent Rights may
be awarded on a free-standing basis or in connection with another Award, and may
be paid currently or on a deferred basis.
"Effective Date" means the date on which the Plan is approved by the
Board as set forth in Section 16.
"Eligible Director" means members of the Board who are employees of
the Company, its Subsidiaries or their Affiliates and who are not Non-Employee
Directors.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the related rules, regulations and interpretations.
"Fair Market Value" on any given date means the last reported sale
price at which Listed Share is traded on such date or, if no Listed Shares is
traded on such date, the most recent date on which Listed Shares was traded, as
reflected on the New York Stock Exchange or, if applicable, any other national
stock exchange which is the principal trading market for the Listed Shares.
"Incentive Listed Share Option" means any Listed Share option
designated and qualified as an "Incentive Stock Option" as defined in Section
422 of the Code.
"Listed Shares" means the Listed Shares of the Company, subject to
adjustment pursuant to Section 3.
"Non-Employee Director" means a member of the Board who: (i) is not
currently an officer of the Company or any Affiliate; (ii) does not receive
compensation for services rendered to the Company or any Affiliate in any
capacity other than as a Director; (iii) does not possess an interest in any
transaction with the Company for which disclosure would be required under the
securities laws; or (iv) is not engaged in a business relationship with the
Company for which disclosure would be required under the securities laws.
"Non-Qualified Listed Share Option" means any Listed Share Option
that is not an Incentive Listed Share Option.
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"Option" or "Listed Share Option" means any option to purchase
Listed Shares granted pursuant to Section 5.
"Parent" means a "parent corporation" as defined in Section 424(e)
of the Code.
"Performance Share Award" means Awards granted pursuant to Section
7.
"Restricted Listed Share Award" means Awards granted pursuant to
Section 6.
"Subsidiary" means any entity (other than the Company) in an
unbroken chain of entities, beginning with the Company if each of the entities
(other than the last entity in the unbroken chain) owns equity possessing 50% or
more of the total combined voting power of all classes of equity in one of the
other entities in the chain.
SECTION 2
Administration of Plan; Committee Authority to Select Participants
and Determine Awards
(a) Committee. The Plan shall be administered by a committee of not
less than two Non-Employee Directors, as appointed by the Board from time to
time (the "Committee").
(b) Powers of Committee. The Committee shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the officers, employees and Eligible Directors of the
Company and Affiliates to whom Awards may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if
any, of Incentive Listed Share Options, Non-Qualified Listed Share Options,
Restricted Listed Shares, Performance Shares and Dividend Equivalent Rights, or
any combination of the foregoing, granted to any officer, employee or Eligible
Director;
(iii) to determine the number of Listed Shares to be covered by any
Award granted to an officer, employee, Eligible Director or Affiliate;
(iv) to determine and modify the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award granted
to an officer, employee or Director, which terms and conditions may differ among
individual Awards and participants, and to approve the form of written
instruments evidencing the Awards;
(v) to accelerate the exercisability or vesting of all or any
portion of any Award granted to a participant;
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(vi) subject to the provisions of Section 5(ii), to extend the
period in which Listed Share Options granted may be exercised;
(vii) to determine whether, to what extent and under what
circumstances Listed Shares and other amounts payable with respect to an Award
granted to a participant shall be deferred either automatically or at the
election of the participant and whether and to what extent the Company will pay
or credit amounts equal to interest (at rates determined by the Committee) or
dividends or deemed dividends on such deferrals; and
(viii) to adopt, alter and repeal such rules, guidelines
administration of the Plan and for its own acts and shall deem advisable; to
interpret the terms and Plan and any Award (including related written
instruments) granted to a participant; and to decide all disputes arising in
connection with and make all determinations it deems advisable for the
administration of the Plan.
All decisions and interpretations of the Committee shall be binding
on all persons, including the Company and Plan participants.
SECTION 3
Shares Issuable under the Plan; Mergers; Substitution
(a) Shares Issuable. The maximum number of Listed Shares reserved
and available for issuance under the Plan shall be 700,000. For purposes of this
limitation, the Listed Shares underlying any Awards which are forfeited,
canceled, reacquired by the Company, satisfied without the issuance of Listed
Shares or otherwise terminated (other than by exercise) shall be added back to
the Listed Shares available for issuance under the Plan so long as the
participants to whom such Awards had been previously granted received no
benefits of ownership of the underlying Listed Shares to which the Award
related. Listed Shares issued under the Plan may be unissued Listed Shares or
Listed Shares reacquired by the Company.
(b) Listed Shares, Dividends, Mergers, etc. In the event of any
recapitalization, reclassification, split-up or consolidation of Listed Shares,
separation (including a spin-off), dividend on Listed Shares payable in
securities of the Company (including Listed Shares), or other similar change in
capitalization of the Company or a merger or consolidation of the Company or
sale by the Company of all or a portion of its assets or other similar event,
the Committee shall make such appropriate adjustments in the exercise prices of
Awards, including Awards then outstanding, in the number and kind of securities,
cash or other property which may be issued pursuant to Awards under the Plan,
including Awards then outstanding, and in the number of Listed Shares with
respect to which Awards may be granted (in the aggregate and to individual
participants) as the Committee deems equitable with a view toward maintaining
the proportionate interest of the participant and preserving the value of the
Awards.
(c) Substitute Awards. The Committee may grant Awards under the Plan
in substitution for share and share-based awards held by employees of another
corporation who concurrently become employees of the Company or an Affiliate as
the result of a merger or
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consolidation of the employing corporation with the Company or an Affiliate or
the acquisition by the Company or an Affiliate of property or Listed Shares of
the employing corporation. The Committee may direct that the substitute awards
be granted on such terms and conditions as the Committee considers appropriate
in the circumstances.
SECTION 4
Eligibility
Participants in the Plan will be Eligible Directors and such full or
part-time officers and other employees of the Company and its Affiliates who are
responsible for or contribute to the management, growth or profitability of the
Company and its Affiliates and who are selected from time to time by the
Committee, in its sole discretion.
SECTION 5
Listed Share Options
Any Listed Share Option granted under the Plan shall be in such form
as the Committee may from time to time approve. Listed Share Options granted
under the Plan may be either Incentive Listed Share Options, subject to any
required approval of the holders of Listed Shares, or Non-Qualified Listed Share
Options. To the extent that any option does not qualify as an Incentive Listed
Share Option, it shall constitute a Non-Qualified Listed Share Option. No
Incentive Listed Share Option may be granted under the Plan after the tenth
anniversary of the Effective Date.
The Committee in its discretion may grant Listed Share Options to
employees of the Company or any Affiliate. Listed Share Options granted to
Eligible Directors and employees pursuant to this Section 5 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:
(i) Exercise Price. The per share exercise price of a Listed Share
Option granted pursuant to this Section 5 shall be determined by the Committee
at the time of grant. The per share exercise price of an Incentive Listed Share
Option shall not be less than 100% of Fair Market Value on the date of grant. If
an employee owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of equity of the Company or any Subsidiary or Parent
corporation and an Incentive Listed Share Option is granted to such employee,
the option price shall be not less than 110% of Fair Market Value on the grant
date.
(ii) Option Term. The term of each Listed Share Option shall be
fixed by the Committee, but no Incentive Listed Share Option shall be
exercisable more than ten years after the date the option is granted. If an
employee owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than 10% of the combined voting power of all classes of
equity of the Company or any Subsidiary or Parent and an Incentive Listed Share
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Option is granted to such employee, the term of such option shall be no more
than five years from the date of grant.
(iii) Exercisability; Rights of a Shareholder. Listed Share Options
shall become exercisable at such time or times, whether or not in installments,
as shall be determined by the Committee at or after the grant date. The
Committee may at any time accelerate the exercisability of all or any portion of
any Listed Share Option. An optionee shall have the rights of a shareholder only
as to Listed Shares acquired upon the exercise of a Listed Share Option and not
as to unexercised Listed Share Options.
(iv) Method of Exercise. Listed Share Options may be exercised in
whole or in part, by giving written notice of exercise to the Company,
specifying the number of Listed Shares to be purchased. Payment of the purchase
price may be made by one or more of the following methods:
(A) In cash (by certified, bank check, money order or other
instrument acceptable to the Committee);
(B) In the form of Listed Shares that are not then subject to
restrictions under any Company plan, if permitted by the Committee in its
discretion. Such surrendered shares shall be valued at Fair Market Value on the
exercise date; or
(C) Any combination of cash and such shares, in the amount of the
full purchase price for the number of Listed Shares as to which the Option is
exercised; provided, however, that any portion of the option price representing
a fraction of a share shall be paid by the Optionee in cash and no already-owned
Listed Shares which have been held for less than six months may be delivered in
payment of the option price.
(D) By the optionee delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company cash or a check payable and acceptable to the Company to
pay the purchase price; provided that in the event the optionee chooses to pay
the purchase price as so provided, the optionee and the broker shall comply with
such procedures and enter into such agreements of indemnity and other agreements
as the Committee shall prescribe as a condition of such payment procedure.
Payment instruments will be received subject to collection.
The delivery of certificates representing Listed Shares to be
purchased pursuant to the exercise of the Listed Share Option will be contingent
upon receipt from the Optionee (or a purchaser acting in his stead in accordance
with the provisions of the Listed Share Option) by the Company of the full
purchase price for such shares and the fulfillment of any other requirements
contained in the Listed Share Option or applicable provisions of laws.
(v) Non-transferability of Options. No Listed Share Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, except that a Non-Qualified Listed Share Option may be
transferred by gifting for the benefit of a
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participant's descendants for estate planning purposes or pursuant to a
certified domestic relations order, and all Listed Share Options shall be
exercisable, during the optionee's lifetime, only by the optionee.
(vi) Termination by Death. If any optionee's service with the
Company and its Affiliates terminates by reason of death, the Listed Share
Option may thereafter be exercised, to the extent exercisable at the date of
death, or to the full extent of the option, at the Committee's discretion, by
the legal representative or legatee of the optionee, for a period of six months
(or such longer period as the Committee shall specify at any time) from the date
of death, or until the expiration of the stated term of the Option, if earlier.
(vii) Termination by Reason of Disability.
(A) Any Listed Share Option held by an optionee whose service with
the Company and its Affiliates has terminated by reason of Disability may
thereafter be exercised, to the extent it was exercisable at the time of such
termination or to the full extent of the option, at the Committee's discretion,
for a period of twelve months (or such longer period as the Committee shall
specify at any time) from the date of such termination of service, or until the
expiration of the stated term of the Option, if earlier.
(B) The Committee shall have sole authority and discretion to
determine whether a participant's service has been terminated by reason of
Disability.
(C) Except as otherwise provided by the Committee at the time of
grant or otherwise, the death of an optionee during a period provided in this
Section 5(vii) for the exercise of a Non-Qualified Listed Share Option shall
extend such period for six months from the date of death, subject to termination
on the expiration of the stated term of the Option, if earlier.
(viii) Termination for Cause. If any optionee's service with the
Company or its Affiliates has been terminated for Cause, any Listed Share Option
held by such optionee shall immediately terminate and be of no further force and
effect; provided, however, that the Committee may, in its sole discretion,
provide that such Listed Share Option can be exercised for a period of up to 30
days from the date of termination of service or until the expiration of the
stated term of the Option, if earlier.
(ix) Other Termination. Unless otherwise determined by the
Committee, if an optionee's service with the Company and its Affiliates
terminates for any reason other than death, Disability, or for Cause, any Listed
Share Option held by such optionee may thereafter be exercised for such period,
as the Committee shall specify at any time but in no event later than the
expiration of the stated term of the option.
(x) Annual Limit on Incentive Listed Share Options. To the extent
required for "Incentive Stock Option" treatment under Section 422 of the Code,
the aggregate Fair Market Value (determined as of the time of grant) of the
Listed Shares with respect to which Incentive Listed Share Options granted under
this Plan and any other plan of the Company or its
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Subsidiaries become exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000.
(xi) Restrictions on Listed Shares. Listed Shares issued upon
exercise of a Listed Share Option shall be free of all restrictions under the
Plan, except as otherwise provided herein.
SECTION 6
Restricted Listed Share Awards
(a) Nature of Restricted Listed Share Award. The Committee may grant
Restricted Listed Share Awards to Eligible Directors and employees of the
Company or any Affiliate. A Restricted Listed Share Award is an Award entitling
the recipient to acquire, at no cost or for a purchase price determined by the
Committee, Listed Shares subject to such restrictions and conditions as the
Committee may determine at the time of grant ("Restricted Listed Shares").
Conditions may be based on continuing service and/or achievement of
pre-established performance goals and objectives. In addition, a Restricted
Listed Share Award may be granted to a Eligible Director or employee by the
Committee in lieu of, or in addition to, any compensation due to such Eligible
Director or employee.
(b) Acceptance of Award. A participant who is granted a Restricted
Listed Share Award shall have no rights with respect to such Award unless the
participant shall have accepted the Award within 60 days (or such shorter date
as the Committee may specify) following the award date by making payment to the
Company, if required, by certified or bank check or other instrument or form of
payment acceptable to the Committee in an amount equal to the specified purchase
price, if any, of the Listed Shares, covered by the Award and by executing and
delivering to the Company a written instrument that sets forth the terms and
conditions of the Restricted Listed Shares in such form as the Committee shall
determine.
(c) Rights as a Shareholder. Upon complying with Section 6(b) above,
a participant shall have all the rights of a shareholder with respect to the
Restricted Listed Shares including voting and dividend rights, subject to
transferability restrictions and Company repurchase or forfeiture rights
described in this Section 6 and subject to such other conditions contained in
the written instrument evidencing the Restricted Listed Share Award. Unless the
Committee shall otherwise determine, certificates evidencing shares of
Restricted Listed Shares shall remain in the possession of the Company until
such shares are vested as provided in Section 6(e) below.
(d) Restrictions. Restricted Listed Shares may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein.
(e) Vesting of Restricted Listed Shares. The Committee at the time
of grant shall specify the date or dates and/or the attainment of
pre-established performance goals, objectives and other conditions on which the
non-transferability of the Restricted Listed Shares
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and the Company's right of repurchase or forfeiture shall lapse. Subsequent to
such date or dates and/or the attainment of such pre-established performance
goals, objectives and other conditions, the Listed Shares on which all
restrictions have lapsed shall no longer be Restricted Listed Shares and shall
be deemed "vested."
(f) Waiver, Deferral and Reinvestment of Dividends. The written
instrument evidencing the Restricted Listed Share Award may require or permit
the immediate payment, waiver, deferral or investment of dividends paid on the
Restricted Listed Shares.
SECTION 7
Performance Share Awards
(a) Nature of Performance Shares. A Performance Share Award is an
award entitling the recipient to acquire Listed Shares upon the attainment of
specified performance goals. The Committee may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. Performance Share Awards may be granted under the Plan to Eligible
Directors and employees of the Company or any Affiliate, including those who
qualify for awards under other performance plans of the Company. The Committee
in its sole discretion shall determine whether and to whom Performance Share
Awards shall be made, the performance goals applicable under each such Award,
the periods during which performance is to be measured, and all other
limitations and conditions applicable to the awarded Performance Shares;
provided, however, that the Committee may rely on the performance goals and
other standards applicable to other performance based plans of the Company in
setting the standards for Performance Share Awards under the Plan.
(b) Restrictions on Transfer. Performance Share Awards and all
rights with respect to such Awards may not be sold, assigned, transferred,
pledged or otherwise encumbered.
(c) Rights as a Shareholder. A participant receiving a Performance
Share Award shall have the rights of a shareholder only as to Listed Shares
actually received by the participant under the Plan and not with respect to
Listed Shares subject to the Award but not actually received by the participant.
A participant shall be entitled to receive a Listed Share certificate evidencing
the acquisition of Listed Shares under a Performance Share Award only upon
satisfaction of all conditions specified in the written instrument evidencing
the Performance Share Award (or in a performance plan adopted by the Committee).
(d) Termination. Except as may otherwise be provided by the
Committee at any time prior to termination of service, a participant's rights in
all Performance Share Awards shall automatically terminate upon the
participant's termination of service with the Company and its Affiliates for any
reason (including, without limitation, death, Disability and for Cause).
(e) Acceleration, Waiver, Etc. At any time prior to the
participant's termination of service with the Company and its Affiliates, the
Committee may in its sole discretion accelerate, waive or, subject to Section
12, amend any or all of the goals, restrictions or conditions imposed under any
Performance Share Award; provided, however, that in no event
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shall any provision of the Plan be construed as granting to the Committee any
discretion to increase the amount of compensation payable under any Performance
Share Award to the extent such an increase would cause the amounts payable
pursuant to the Performance Share Award to be nondeductible in whole or in part
pursuant to Section 162(m) of the Code and the regulations thereunder, and the
Committee shall have no such discretion notwithstanding any provision of the
Plan to the contrary.
SECTION 8
Dividend Equivalent Rights
A Dividend Equivalent Right is an Award entitling the recipient to
receive credits based on cash dividends that would be paid on the Listed Shares
specified in the Dividend Equivalent Right (or other award to which it relates)
if such shares were held by the recipient. A Dividend Equivalent Right may be
granted hereunder to any participant as a component of another Award or as a
freestanding Award. The terms and conditions of Dividend Equivalent Rights shall
be specified in the grant. Dividend Equivalent Rights credited to a participant
may be paid currently or may be deemed to be reinvested in additional Listed
Shares. Any such reinvestment shall be at Fair Market Value on the date of
reinvestment or such other price as may then apply under a dividend reinvestment
plan sponsored by the Company, if any. Dividend Equivalent Rights may be settled
in cash or Listed Shares or a combination thereof, in a single installment or
installments. A Dividend Equivalent Right granted as a component of another
Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement, or payment of, or lapse of restrictions on, such other
award, and that such Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other award. A Dividend Equivalent
Right granted as a component or another Award may also contain terms and
conditions different from such other award.
SECTION 9
Tax Withholding
(a) Payment by Participant. Each participant shall, no later than
the date as of which the value of an Award or of any Listed Shares or other
amounts received thereunder first becomes includible in the gross income of the
participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of, any Federal,
state, or local taxes of any kind required by law to be withheld with respect to
such income. The Company and its 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.
(b) Payment in Shares. A participant may elect to have such tax
withholding obligation satisfied, in whole or in part, by (i) authorizing the
Company to withhold from Listed Shares to be issued pursuant to any Award a
number of shares with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the withholding amount due, or (ii)
transferring to the Company Listed Shares owned by the participant with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding
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amount due. With respect to any participant who is subject to Section 16 of the
Act, the following additional restrictions shall apply:
(1) the election to satisfy tax withholding obligations relating to
an Award in the manner permitted by this Section 9(b) and the actual tax
withholding shall be made during the period beginning on the third business day
following the date of release of quarterly or annual summary statements of
revenues and earnings of the Company and ending on the twelfth business day
following such date.
Alternatively, such election may be made at least six months prior
to the date as of which the receipt of such an Award first becomes a taxable
event for Federal income tax purposes;
(2) such election shall be irrevocable;
(3) such election shall be subject to the consent or disapproval of
the Committee; and
(4) the Listed Shares withheld to satisfy tax withholding, if
granted at the discretion of the Committee, must pertain to an Award which has
been held by the participant for at least six months from the date of grant of
the Award.
SECTION 10
Transfer, Leave of Absence, Etc.
For purposes of the Plan, the following events shall not be deemed a
termination of service:
(a) a transfer to the employment of the Company from an Affiliate or
from the Company to an Affiliate, or from one Affiliate to another; and
(b) an approved leave of absence for military service or sickness,
or for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
SECTION 11
Amendments and Termination
The Board may at any time amend or discontinue the Plan and the
Committee may at any time amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award if it were
then initially granted under this Plan) for the purpose of satisfying changes in
law or for any
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other lawful purpose, but no such action shall adversely affect rights under any
outstanding Award without the holder's consent.
SECTION 12
Status of Plan
With respect to the portion of any Award which has not been
exercised and any payments in cash, Listed Shares or other consideration not
received by a participant, a participant shall have no rights greater than those
of a general unsecured creditor of the Company unless the Committee shall
otherwise expressly determine in connection with any Award or Awards. In its
sole discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the Company's obligations to deliver Listed Shares or make
payments with respect to Awards hereunder, provided that the existence of such
trusts or other arrangements is consistent with the provision of the foregoing
sentence.
SECTION 13
Change of Control Provisions
Upon the occurrence of a Change of Control as defined in this
Section 13:
(a) Each Listed Share Option shall automatically become fully
exercisable unless the Committee shall otherwise expressly provide at the time
of grant.
(b) Restrictions and conditions on Awards of Restricted Listed
Shares, Performance Shares and Dividend Equivalent Rights shall automatically be
deemed waived, and the recipients of such Awards shall become entitled to
receipt of the maximum amount of Listed Shares subject to such Awards unless the
Committee shall otherwise expressly provide at the time of grant.
(c) Unless otherwise expressly provided at the time of grant,
participants who hold Listed Share Options shall have the right, in lieu of
exercising the Option, to elect to surrender all or part of such Option to the
Company and to receive cash in an amount equal to the excess of (i) the higher
of (x) the Fair Market Value of a Listed Share on the date such right is
exercised and (y) the highest price paid for Listed Shares or, in the case of
securities convertible into Listed Shares or carrying a right to acquire Listed
Shares, the highest effective price (based on the prices paid for such
securities) at which such securities are convertible into Listed Shares or at
which Listed Shares may be acquired, by any person or group whose acquisition of
voting securities has resulted in a Change of Control of the Company over (ii)
the exercise price per share under the Option, multiplied by the number of
shares of Listed Shares with respect to which such right is exercised.
(d) "Change of Control" shall mean the occurrence of any one of the
following events:
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(i) any "person", as such term is used in Sections 13(d) and 14(d)
of the Act (other than the Company, any of its Subsidiaries, any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan of the Company or any of its Subsidiaries), together with all
"affiliates" and "associates" (as such terms are defined in Rule 12b-2 under the
Act) of such person, shall become the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 25% or more of either (A) the combined voting power of
the Company's then outstanding securities having the right to vote in an
election of the Company's Board of Eligible Directors ("Voting Securities") or
(B) the then outstanding shares of Listed Shares of the Company (in either such
case other than as a result of acquisition of securities directly from the
Company); or
(ii) persons (as defined in the previous subsection) who, as of the
first day of trading of the Listed Shares on the New York Stock Exchange,
constitute the Company's Board of Eligible Directors (the "Incumbent Eligible
Directors") cease for any reason, including without limitation, as a result of a
tender offer, proxy contest, merger or similar transaction, to constitute at
least a majority of the Board, provided that any person becoming a Eligible
Director of the Company subsequent to the Closing of the Company's initial
public offering whose election or nomination for election was approved by a vote
of at least a majority of the Incumbent Eligible Directors shall, for purposes
of this Plan, be considered an Incumbent Eligible Director; or
(iii) the Listed Shareholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the Listed
Shareholders of the Company, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, beneficially own (as
such term is defined in Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate 50% or more of the voting equity of the
entity issuing cash or securities in the consolidation or merger (or of its
ultimate parent entity, if any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of the Company
or (C) any plan or proposal for the liquidation or dissolution of the Company;
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Listed Shares outstanding, increases (x) the proportionate
number of Listed Shares beneficially owned by any person to 25% or more of the
Listed Shares then outstanding or (y) the proportionate voting power represented
by the Listed Shares beneficially owned by any person to 25% or more of the
combined voting power of all then outstanding voting Securities; provided,
however, that if any person referred to in clause (x) or (y) of this sentence
shall thereafter become the beneficial owner of any additional Listed Shares or
other Voting Securities (other than pursuant to a Listed Shares split, Listed
Shares dividend, or similar transaction), then a "Change of Control" shall be
deemed to have occurred for purposes of the foregoing clause (i).
14
SECTION 14
General Provisions
(a) No Distribution; Compliance with Legal Requirements. The
Committee may require each person acquiring shares pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof.
No shares of Listed Shares shall be issued pursuant to an Award
until all applicable securities laws and other legal and Listed Shares exchange
requirements have been satisfied. The Committee may require the placing of such
stop-orders and restrictive legends on certificates for Listed Shares and Awards
as it deems appropriate.
(b) Delivery of Listed Shares Certificates. Delivery of Listed
Shares certificates to participants under this Plan shall be deemed effected for
all purposes when the Company or a Listed Shares transfer agent of the Company
shall have delivered such certificates in the United States mail, addressed to
the participant, at the participant's last known address on file with the
Company.
(c) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to Listed Shareholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of the
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
SECTION 15
Effective Date of Plan
The Plan shall become effective upon approval by the Board, or any
committee thereof with such authority. The ability to grant Incentive Listed
Share Option Awards requires approval by the Listed Shareholders, and no such
Awards may be issued hereunder prior to such approval.
SECTION 16
Governing Law
This plan shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, to the extent applicable.