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EXHIBIT 10.4
MCN CORPORATION
STOCK INCENTIVE PLAN
(as amended effective April 22, 1997)
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TABLE OF CONTENTS
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SECTION Page
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ARTICLE I---------------------------------------------------------------------------1
Purpose
ARTICLE II--------------------------------------------------------------------------1
Definitions
ARTICLE III-------------------------------------------------------------------------2
Administration
ARTICLE IV--------------------------------------------------------------------------3
Shares Subject to the Plan
ARTICLE V---------------------------------------------------------------------------4
Eligibility
ARTICLE VI--------------------------------------------------------------------------5
Stock Options
ARTICLE VII------------------------------------------------------------------------10
Restricted Stock Awards
ARTICLE VIII-----------------------------------------------------------------------11
Performance Unit Awards
ARTICLE IX------------------------------------------------------------------------13
General Provisions
ARTICLE X--------------------------------------------------------------------------20
Amendment and Termination
ARTICLE XI-------------------------------------------------------------------------21
Miscellaneous
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MCN CORPORATION
STOCK INCENTIVE PLAN
(as amended effective April 22, 1997)
ARTICLE I
PURPOSE
The purpose of the MCN Corporation Stock Incentive Plan (the "Plan") is to
promote the success of MCN Corporation (the "Corporation" or "MCN") by providing
a method whereby eligible employees of the Corporation and its affiliated
companies may be awarded additional remuneration for services rendered and
encouraged to invest in the Common Stock of the Corporation, thereby increasing
their proprietary interest in the Corporation's business, encouraging them to
remain in the employ of the Corporation or its affiliated companies, and
increasing their personal interest in the continued success and progress of the
Corporation.
ARTICLE II
DEFINITIONS
2.1 The following terms have the meaning described below when used in the
Plan:
(a) "Award" shall refer to the Restricted Stock Award granted under
Article VII and except for purposes of Article VII, a Performance
Unit Award granted under Article VIII.
(b) "Board of Directors" shall mean the Board of Directors of the
Corporation.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
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(d) "Committee" shall mean the Committee appointed by the Board of
Directors to administer the Plan pursuant to Article III.
(e) "Common Stock" shall mean common stock, par value $.01 of the
Corporation.
(f) "Corporation" shall mean MCN Corporation or any successor to it in
ownership of all or substantially all of its assets.
(g) "Earlier Plan" shall mean the MCN Stock Option Plan.
(h) "Incentive Stock Option" shall mean a stock option granted under
Article VI which is intended to meet the requirements of Section
422A of the Code.
(i) "Nonqualified Stock Option" shall mean a stock option granted
under Article VI which is not intended to be an Incentive Stock
Option.
(j) "Option" shall mean an Incentive or Non-qualified Stock
Option.
(k) "Participant" shall mean an eligible employee who has been granted
an option or Award.
(1) "Participating Company shall mean the Corporation or any
subsidiary or other affiliated entity (whether or not
incorporated) designated by the Board of Directors.
(m) "Restricted Stock Award" shall mean an award of common stock under
Article VII hereof.
(n) "Stock Appreciation Right" shall mean a right granted under
Section 6.5.
(o) "Performance Unit Award" shall mean an award granted under Article
VIII.
(p) "Vesting Date" shall mean the date upon which restrictions or
limitations on Options or Awards lapse.
ARTICLE III
ADMINISTRATION
3.1 (a) The Board of Directors of the Corporation shall appoint not less
than three Directors or disinterested persons to the Committee
which shall administer the Plan. No individual shall become a
member of a Committee if he or she shall have been
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eligible to receive an Option or Award under the Plan (or a
predecessor of any part of the Plan) at any time during the twelve
month period prior to his or her becoming a member and no member
of the Committee shall be eligible to receive an option, Stock
Appreciation Right or Award granted by such Committee under the
Plan while a member of that Committee. 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 Performance Unit Awards under
ARTICLE VIII of the Plan, to interpret the provisions of the Plan
and any agreements relating to Options, Stock Appreciation Rights
and Awards granted under the Plan and to supervise the
administration of the Plan, all subject to ratification or
modification by the Board of Directors, a majority of which
directors acting in any such matter shall be disinterested
persons.
(b) All decisions made by the Committee pursuant to the provisions of
the Plan and related orders or resolutions of the Board of
Directors shall be final, conclusive and binding on all persons,
including the Corporation, stockholders, employees and
beneficiaries of employees.
ARTICLE IV
SHARES SUBJECT TO THE PLAN
4.1 (a) Subject to adjustment pursuant to Section 4.1(b), the aggregate
number of Options, Restricted Stock Awards, and shares of Common
Stock issued upon payout of Performance Units that may be
distributed under the Plan in any calendar year shall not exceed
one percent of the shares of Common Stock outstanding on the first
day of the calendar year on the date such Options, Restricted
Stock, and shares of Common Stock issued upon payout of
Performance Units are distributed. In
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addition, the number of Shares, Options, Stock Appreciation
Rights, Awards, or Performance Units that may be issued under this
Plan subsequent to February 26, 1997 may not exceed 5% of the
number of shares issued and outstanding on that date plus the
number of shares approved and not issued prior to February 26,
1997.
Shares of Common Stock may be made available from the authorized
but unissued shares of the Corporation or from shares reacquired
by the Corporation including shares purchased in the open market.
If an Option, Restricted Stock Award, or Performance Unit granted
under the Plan shall expire or terminate for any reason during a
calendar year, the shares subject to, but not distributed, under
such Option or Restricted Stock shall be available for other
Options and Awards to the same employee or other employees.
(b) In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split or other change in
corporate structure affecting the Common Stock, the Committee
shall make the appropriate adjustment in the aggregate number of
shares which may be delivered under the Plan and the number of
shares subject to outstanding options, Stock Appreciation Rights
and Awards to reflect such action. If any such adjustment shall
result in a fractional share, such fraction shall be disregarded.
ARTICLE V
ELIGIBILITY
5.1 Key employees of the Corporation and other Participating Companies, as
shall be determined by the Committee, are eligible to participate in
the Plan.
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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 on which such rights shall relate. Options may
be either Incentive Stock Options or Nonqualified Stock Options, and
more than one option and Stock Appreciation Right may be granted to the
same person. Stock Appreciation Rights may be granted to holders of any
unexpired options granted under the Plan or the Earlier Plan.
6.2 Option Agreements. Each Option under the Plan shall be evidenced by an
option agreement which shall be signed by an officer of the Corporation
and the optionee and 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. Any option agreement for Nonqualified
Stock options shall state that the Nonqualified Stock Options granted
thereunder shall not be treated as Incentive Stock Options. Each Stock
Appreciation Right shall be evidenced by the option agreement for the
option to which it relates. In the case of any such right relating to
a previously granted option, the option agreement shall be supplemented
to evidence such right.
6.3 Option Price. The price at which shares may be purchased upon exercise
of a particular Incentive Stock option shall be not less than one
hundred percent (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,
disability, retirement and termination of employment, the period
during which each Option may be exercised
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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
Corporation 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
canceled 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 Corporation. Such payment shall be made in cash or, in the
discretion of the Committee, through the delivery of shares of
Common Stock of the corporation with a value equal to the total
option price, or a combination of cash and shares, or by other
means which the Committee determines are consistent with the
Plan's purpose and applicable law, provided that for Incentive
Stock Options such other means are established on or before the
date such Option was granted. Any shares so delivered shall be
valued at their fair market value on the trading day preceding the
exercise date determined as provided in Section 6.3. Payment of
the option price may be made by borrowing from the Corporation
pursuant to the terms and conditions provided for in the MCN Stock
Option Plan previously approved by shareholders. No optionee or
legal representative, legatee of 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 Plan as the
Committee may select and upon such terms
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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 Corporation 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 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 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
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terminated Option or portion thereof granted under the Plan shall
be available for other Options or Awards under the Plan.
(d) The amount payable by the Corporation 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 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. 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.
6.7 Death, Disability, 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:
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(a) Upon the death of any optionee while employed or within the
three-year period referred to in clause (b) below, the person or
persons to whom such optionee's rights under the Option are
transferred by will or the laws of descent and distribution may,
prior to three (3) years after (i) the date of such optionee's
death while employed or (ii) the termination of such optionee's
employment for a reason referred to in clause (b) below, as the
case may be, purchase any or all of the shares with respect to
which such optionee was entitled to exercise such Option
immediately prior to his or her death.
(b) Upon termination of employment as a result of disability as
defined in section 22(e)(3) of the Code or retirement pursuant to
a retirement Plan of the Corporation or any of its direct or
indirect subsidiaries, an optionee may, within three years after
the date of such termination, purchase any or all of the shares
with respect to which such optionee was entitled to exercise such
Option immediately prior to such termination, and
(c) Upon termination of employment for cause, an optionee's Options
shall be canceled to the extent not theretofore exercised.
(d) Upon termination of employment for any reason other than death,
disability, retirement or cause, an optionee may exercise any
Option or Stock Appreciation Right which was exercisable on the
date of termination of employment or such additional period as the
Committee may determine, but in no event later than the original
expiration date of the Option.
(e) For purpose of the Plan, the term "cause" shall mean repeated
material breaches of an optionee's duties of employment which are
not cured after receipt by the optionee of written notice
specifying such breaches or the optionee's conviction of a felony
involving moral turpitude.
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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,
determine the time when each Award shall be granted, the number of
shares subject to each Award, and the date upon which the shares will
vest (the Vesting Date).
7.2 Vesting of Restricted Stock Awards.
(a) Subject to the rules of Sections 7.2(b) and 9.1 each Award shall
fully vest and be one hundred percent (100%) nonforfeitable on the
Vesting Date.
(b) Subject to the rules of Section 9.1, upon termination of a
Participant's employment prior to Vesting Date for any reason
except for disability or retirement, as described below, or death,
his or her 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 disability as defined in Section 22(e)(3) of the
Code or retirement at age 62 or older under a retirement Plan
maintained by the Company or a subsidiary or by reason of death,
any Award granted to such Participant shall be vested and
nonforfeitable to the extent of one hundred percent. Vesting for
participants who retire prior to age 62 shall be as determined by
the Committee.
7.3 Payment of Awards.
(a) 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 or her designated beneficiary or beneficiaries or, in the
absence of a designated beneficiary, to the estate of the
Participant.
(b) In addition to the payment provided for in Section 7.3(a), prior
to Vesting Date, each Participant shall receive a cash payment
equal to the amount of dividends which would have been paid on the
number of shares awarded had such shares been issued
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as shares of Common Stock on the date of grant of such Award. This
payment shall be made on or about the date such dividends would
have been paid.
(c) Payments pursuant to Section 7.3(a) shall be made in either shares
of Common Stock or cash as determined by the Committee provided,
however, that the Participant or his or her beneficiary may
request that the Committee approve a payment composed of a
different ratio of cash and shares of Common Stock. Payment in
cash pursuant to this paragraph shall be made in the amount which
is equal to the closing price of a share of Common Stock on the
New York Stock Exchange Composite Tape for the trading day
preceding the day on which payment is to be made, multiplied by
the number of shares of the Award which are to be paid in cash.
ARTICLE VIII
PERFORMANCE 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 Performance Unit Awards which can be in the form of
Common Stock or units, the value of which is based on whole or in part,
on the value of Common Stock. Subject to the provisions of the Plan
including Section 8.2 below, Performance 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 Performance 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 Performance
Unit Award.
8.2 Rules. In the sole discretion of the Committee a Performance Unit Award
shall be granted subject to the following rules:
(a) Any shares of Common Stock which are part of a Performance Unit
Award may not be assigned, sold, transferred, pledged or otherwise
encumbered prior to the date on
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which the shares are issued or, if later, the date provided by the
Committee at the time of the Award.
(b) Performance 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 be issued in connection
therewith, if applicable, shall be delivered without the payment
of cash consideration, provided that for any Common Stock to be
purchased in connection with a Performance Unit Award the purchase
price shall be at least fifty percent of the fair market value of
such Common Stock on the date such Award is granted.
(c) Performance Unit Awards may relate in whole or in part to certain
performance criteria established by the Committee at the time of
grant.
(d) Performance 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 limitation to which a Performance Unit Award was
made subject to the time of grant.
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ARTICLE IX
GENERAL PROVISIONS
9.1 Change in Control.
(a) (i) In the case of a Change in Control (as defined below) of the
Corporation, each Option and Stock Appreciation Right then
outstanding shall immediately become exercisable in full.
(ii) In the case of a Change in Control (as defined below) of the
Corporation, each Award shall immediately be fully vested and
nonforfeitable and shall be paid within 20 days thereafter at
no less than one hundred (100) percent of the standard or
target award amount or, if greater, the actual award amount
as extrapolated in the determination of the Committee (as so
constituted immediately prior to the Change in Control of the
Corporation), utilizing in each case the Change in Control
Price (as defined below) as the value per share of Common
Stock.
(b) A change in Control shall mean (i) the acquisition by any
individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (a "Person") of beneficial ownership
(within the meaning of Rule 13(d)-3 promulgated under the Exchange
Act) of twenty (20) percent or more of either (1) the then
outstanding shares of common stock of the Corporation (the
"Outstanding Corporation Common Stock") or (2) the combined voting
power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however,
that the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from the Corporation
(excluding an acquisition by virtue of the exercise of a
conversion privilege), (2) any acquisition by the Corporation, (3)
any acquisition by any employee benefit Plan (or related trust)
sponsored or maintained by the Corporation or any corporation
controlled by the
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Corporation or (4) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following such
reorganization, merger or consolidation, the conditions described in
clauses (1),(2) and (3) of subparagraph (iii) of this Section 9.1 (b)
are satisfied; or (ii) individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Corporation's
shareholders, was approved by a vote of at least a majority of the
directors than comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14(a)-l1
of Regulation 14A promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or (iii) approval by the shareholders of
the Corporation of a reorganization, merger or consolidation, in each
case, unless, following such reorganization, merger or consolidation,
(1) more than sixty (60) percent of, respectively, the then
outstanding shares of common stock of the corporation resulting from
such reorganization, merger or consolidation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially
all of the individuals and entitled who were the beneficial owners,
respectively, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially immediately
prior to such reorganization, merger or consolidation in substantially
the same proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be, (2) no
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Person (excluding the Corporation, any employee benefit Plan (or
related trust) of the Corporation or such corporation resulting from
such reorganization, merger or consolidation and any Person
beneficially owning, immediately prior to such reorganization, merger
or consolidation, directly or indirectly, twenty (20) percent or more
of the Outstanding Corporation Common Stock or Outstanding Voting
Securities, as the case may be) beneficially owns, directly or
indirectly, twenty (20) percent or more of respectively, the then
outstanding shares of common stock of the corporation resulting from
such reorganization, merger or consolidation or the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (3) at
least a majority of the members of the board of directors of the
corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such reorganization,
merger or consolidation; or (iv) approval by the shareholders of the
Corporation of (1) a complete liquidation or dissolution of the
Corporation or (2) the sale or other disposition of all or
substantially all of the assets of the Corporation, other than a
corporation, with respect to which following such sale or other
disposition, (A) more than sixty (60) percent of, respectively, the
then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities immediately prior
to such sale or other disposition in substantially the same proportion
as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be, (B) no
Person (excluding the Corporation and any employee benefit Plan (or
related trust) of the Corporation or such corporation any
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person beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, twenty (20) percent or more of
the Outstanding Corporation Common Stock or Outstanding Corporation
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, twenty (20) percent or more of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors and (C) at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at
the time of the execution of the initial agreement or action of the
Board providing for such sale or other disposition of assets of the
Corporation.
9.2 Designation of Beneficiary. Each employee who shall be granted an
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 designations shall be
effective unless so filled prior to the death of such employee.
9.3 No Right of Continued Employment. Neither the establishment of the
Plan, the granting of Options, Stock Appreciation Rights or Awards, or
the payment of any benefits hereunder or any action of the Corporation
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 Corporation or its direct or indirect 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 Corporation shall not be
required to segregate any cash or any shares of Common Stock which may
at any time be represented by Options, Awards, or amounts and the Plan
shall constitute an "unfunded" Plan of the Corporation. No employee
shall have voting or other rights with respect to such shares of
Common Stock prior to the delivery of such shares. The Corporation
shall not, by any provisions of the Plan,
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be deemed to be a trustee of any Common Stock or any other property
and the liabilities of the Corporation 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 Corporation. In its sole
discretion, the Board of Directors may authorize the creation of
trusts or other arrangements to meet the obligations of the
Corporation and each other Participating Company under the Plan
provided, however, that the 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, Stock Appreciation Right or pursuant to the
payment of any Award unless the requirements of such laws and
regulations as may be deemed by the Committee to be applicable thereto
are satisfied.
9.6 Option Cancellation Payment. Notwithstanding any other provision
of this Plan and the terms of any agreement under which the Committee
has granted an Option or Award under this Plan, during the 60 day
period from and after a Change of Control (as defined in Section 9.1)
(the "Exercise Period"), in the case of all Options, an optionee shall
have the right, in lieu of the payment of the exercise price of the
shares of stock being purchased under the Option and by giving notice
to the Corporation, to elect (within the Exercise Period) in lieu of
exercise thereof to surrender all or part of the Option to the
Corporation and to receive in cash, within 30 days of such notice, an
amount in cancellation of the Option (the "Cancellation Payment")
equal to the amount by which the Change in Control Price (as defined
below) per share of Common Stock on the date of such election shall
exceed the exercise price per share of Common Stock under the Option
multiplied by the number of shares of Common Stock granted under the
Option as to which the right granted under this Section 9.6 shall have
been exercised; provided, however, that if such Option is held by an
officer or director of the Corporation (within the meaning of Section
16 of the Exchange Act) and not more than six months has elapsed from
the grant thereof, or the receipt of the
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Cancellation Payment at the time above-specified would subject the
optionee to liability under said Section 16, then the Cancellation
Payment shall be made on the first day when no liability to the
optionee under said Section 16 would result.
9.7 Transfer and Leave of Absence
(a) A transfer of an employee from a Participating Company to an
affiliated company,
and
(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 shall not
be deemed a termination of employment.
9.8 Michigan 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 Michigan.
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 for 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.
9.10 Earlier Plan. The options granted under the Earlier Plan shall
continue to be subject to the terms and conditions of the Earlier Plan
and shall not be subject to this Plan.
9.11 Compliance with Rule 16(b)-3. It is MCN's intent that, with respect to
persons who are subject to Section 16(b) of the Securities Exchange
Act of 1934 (the "Act"), the Plan comply in all material respects with
the provisions of Rule 16(b)-3 promulgated under the Act, as such rule
or a successor rule or rules may be in effect from time to time. If
any such Plan provision is found not to be in compliance with Rule 16
(b)-3, such provision shall be deemed null and void.
9.12 Change in Control Price. Change in Control Price shall mean the higher
of (i) the highest reported sales price, regular way, of a share of
Common Stock on the Composite Tape for New York Stock Exchange Listed
Stocks or, if such shares of the Corporation are not listed
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or admitted to trading on the New York Stock Exchange, the highest
reported sales price as reported on the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which such shares of the
Corporation are listed or admitted to trading, or if such shares of
the Corporation are not listed or admitted to trading on any national
securities exchange, the highest quoted price or, if not so quoted,
the highest average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or
such other system then in use, or, if on any such date such shares of
the Corporation are not quoted by any such organization, the highest
average of the closing bid and asked prices as furnished by a
professional market maker making a market in such shares of the
Corporation as selected by the Board of Directors of the Corporation,
in each case during the 60-day period prior to and ending on the date
of the Change of Control and (ii) if the Change of Control is the
result of a transaction or series of transactions described in
subparagraphs (i) or (iii) of the definition of Change of Control set
forth in Section 9.1, the highest price per share of the Common Stock
paid in such transaction or series of transactions (which in the case
of paragraph (i) shall be the highest price per share of the Common
Stock as reflected in a Schedule 13D by the person having made the
acquisition); provided, however, that with respect to any Incentive
Stock Option, the Change of Control Price shall not exceed the market
price of a share of Common Stock (to the extent required pursuant to
Section 422A of the Code) on the date of surrender thereof.
9.13 Forfeitures. Notwithstanding any other provisions of this Plan, if the
Committee finds by a majority vote after full consideration of the
facts that the employee, before or after termination of his employment
with the Corporation or its subsidiaries for any reason (a) committed
or engaged in fraud, embezzlement, theft, commission of a felony, or
proven dishonesty in the course of his employment by the Corporation
or its subsidiaries, which conduct damaged the Corporation or its
subsidiaries, or disclosed trade secrets of the Corporation or its
subsidiaries, (b) participated, engaged in or had a financial or other
interest, whether as an employee, officer, director, consultant,
contractor, shareholder, owner, or
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otherwise, in any commercial endeavor in the United States which has a
significant competitive impact on the business of the Corporation or
its subsidiaries without the written consent of the Corporation or its
subsidiaries, or (c) has taken any other action that has a significant
adverse impact in the Corporation or its subsidiaries, the employee
shall forfeit all outstanding Options, Restricted Stock, or
Performance Units which are not vested, including all rights related
to such matters, and including all unexercised Options, exercised
Options, and any performance based Stock Awards to which he may be
entitled, and other elections pursuant to which the Corporation has
not yet delivered a stock certificate. Clause (b) shall not be deemed
to have been violated solely by reason of the employee's ownership of
stock or securities of any publicly owned corporation, if that
ownership does not result in effective control of the corporation.
The decision of the Committee as to the cause of the employee's
discharge, the damage done to the Corporation or its subsidiaries, and
the extent of the employee's competitive activity shall be final. No
decision of the Committee, however, shall affect the finality of the
discharge of the employee by the Company or its subsidiaries in any
manner.
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 Sections 4.1(b), the Board of Directors may not,
without the prior approval of the stockholders of the Company, make
any amendment which operates:
(a) To abolish the Committee, change the qualification of its members
or withdraw the administration of the Plan from the Committee
unless otherwise required or directed by law or regulation,
(b) To make any material change in the class of eligible employees as
defined in the Plan,
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(c) To increase the total number of shares of Common Stock available
for Options, Stock Appreciation Rights and Awards granted under
the Plan, or
(d) To extend the period during which Options or Awards may be
granted under the Plan, 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 Limitation. No Option or Award shall be granted under the Plan after
March 1, 2007.
ARTICLE XI
MISCELLANEOUS
No director who also serves as an officer of the Corporation shall be
eligible to vote on any matter regarding the MCN Corporation Stock Incentive
Plan.
IN WITNESS WHEREOF, the undersigned officer of the Company has
executed this Plan this 27th day of July, 1995, pursuant to the resolution
adopted by the Board of Directors of the Company.
MCN CORPORATION
BY: Daniel L. Schiffer
----------------------------------
Daniel L. Schiffer, Senior
Vice President, General Counsel
and Secretary
Dated as of April 22, 1997
Restated April 22, 1997
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MCN CORPORATION
STOCK INCENTIVE PLAN
--------------------
HISTORICAL BACKGROUND
12/12/88 MCN Corporation Minutes of Regular Meeting of Board of
Directors - Resolution directing officers to prepare a
written stock incentive Plan to be considered at the 02/1989
meeting. (p.7+)
02/28/90 MCN Corporation Minutes of Regular Meeting of Board of
Directors - The Plan is amended effective 01/08/90 by
deleting Section 6.7(d) and inserting new Section 6.7(d) and
new Section 6.7(e); Section 9.1(a)(ii) is deleted and new
Section 9.1(a)(ii) "Change in Control" is inserted; Section
9.1(b) is deleted and new Section 9.1(b) is inserted; Section
9.6 is deleted and new Section 9.6 inserted; New Section 9.12
Inserted.
05/08/91 MCN Corporation Minutes of Regular Meeting of Board of
Directors authorizing the Board to approve a resolution to
expressly state that no director who also serves as an
officer of the Corporation shall be eligible to vote on any
matter regarding those plans. (New Article XI -
Miscellaneous)
08/15/92 Restated Plan.
12/15/94 MCN Corporation Minutes of Regular Meeting of Board of
Directors proposes amendments to Sections 4.1(a) and 10.2 for
approval by the Corporation's shareholders at their 1995
annual meeting.
04/27/95 MCN Corporation Minutes of Regular Meeting of Shareholders -
The Shareholders approved the amendments recommended in the
December 15, 1994 MCN Corporation Minutes of Regular Meeting
of Board of Directors. Section 4.1(a) is deleted in its
entirety and new section 4.1(a) is inserted.
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4.1 (a) is amended to read:
"Subject to adjustment pursuant to Section 4.1(b), the
aggregate number of shares of Common Stock with respect to
which Options, Stock Appreciation Rights, Awards and
Performance Units may be granted under the Plan in any
calendar year shall not exceed one percent of the shares of
Common Stock outstanding in any year. The one-percent
limitation shall be calculated by dividing the aggregate
number of shares of Common Stock with respect to which
Options, Stock Appreciation Rights, Awards and Performance
Units are granted under the Plan in any calendar year by the
total number of shares outstanding on the first day during
the calendar year on which Options, Stock Appreciation
Rights, Awards, and Performance Units are granted. If the
number of shares granted with respect to Options, Stock
Appreciation Rights, Awards, or Performance Units is not
determinable, then the limitation shall be calculated using
the largest number of shares expected to be issued. Provided,
however, that the number of Shares, Options, Stock
Appreciation Rights, Awards, or Performance Units that may
issued under this Plan subsequent to February 27, 1995 may
not exceed 5% of the number of shares issued and outstanding
on that date.
"Shares of Common Stock may be made available from the
authorized but unissued shares of the Corporation or from
shares reacquired by the Corporation including shares
purchased in the open market. If an Option, Restricted Stock
Award, or Performance Unit Award granted under the Plan shall
expire or terminate for any reason during a calendar year,
the shares subject to, but not delivered, under such option
or Award shall be available for other options and Awards to
the same employee or other employees."
Section 10.2 is deleted in its entirety and new section 10.2
is inserted as follows: (New 10.2)
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10.2 Limitation. No Option or Award shall be granted under the
Plan after March 1, 2005.
07/27/95 MCN Corporation Minutes of Regular Meeting of Board of
Directors approves an amendment to the Plan that would
provide for the forfeiture of previous awards in
specific situations where an executive or former
executive took actions that were significantly adverse
to the Corporation's interests. New section 9.13 is
inserted as follows:
9.13 Forfeitures. Notwithstanding any other provisions of this
Plan, if the Committee finds by a majority vote after full
consideration of the facts that the employee, before or after
termination of his employment with the Corporation or its
subsidiaries for any reason (a) committed or engaged in
fraud, embezzlement, theft, commission of a felony, or proven
dishonesty in the course of his employment by the Corporation
or its subsidiaries, which conduct damaged the Corporation or
its subsidiaries, or disclosed trade secrets of the
Corporation or its subsidiaries, (b) participated, engaged in
or had a financial or other interest, whether as an employee,
officer, director, consultant, contractor, shareholder,
owner, or otherwise, in any commercial endeavor in the United
States which has a significant competitive impact on the
business of the Corporation or its subsidiaries without the
written consent of the Corporation or its subsidiaries, or
(c) has taken any other action that has a significant adverse
impact in the Corporation or its subsidiaries, the employee
shall forfeit all outstanding Options, Restricted Stock, or
Performance Units which are not vested, including all rights
related to such matters, and including all unexercised
Options, exercised Options, and any performance based Stock
Awards to which me may be entitled, and other elections
pursuant to which the Corporation has not yet delivered a
stock certificate. Clause (b) shall not be deemed to have
been violated solely by reason of the employee's ownership of
stock or securities of any publicly owned corporation, if
that ownership does not result in effective control of the
corporation.
The decision of the Committee as to the cause of the
employee's discharge, the damage done to the Corporation or
its subsidiaries, and the extent of the employee's
competitive activity shall be final. No decision of the
Committee, however, shall affect the finality the discharge
of the employee by the Company or its subsidiaries in any
manner.
04/22/97 MCN Corporation Annual Meeting of Shareholders approves
an amendment to the plan to increase the number of
shares of MCN common stock authorized to be issued
under the plan. In order to meet future potential
performance unit plan awards, an increase in the number
of authorized shares available for distribution under
the plan by 5% of the number of MCN common shares
issued and outstanding as of February 26, 1997 or
3,372,656 shares is approved. The plan is amended and
restated as of 04/22/97.
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(a) Section 4.1(a) is amended to read:
"Subject to adjustment pursuant to Section 4.1(b),
the aggregate number of Options, Restricted Stock
Awards, and shares of Common Stock issued upon payout
of Performance Units that may be distributed under the
Plan in any calendar year shall not exceed one percent
of the shares of Common Stock outstanding on the first
day of the calendar year on the date such Options,
Restricted Stock, and shares of Common Stock issued
upon payout of Performance Units are distributed. In
addition, the number of Shares, Options, Stock
Appreciation Rights, Awards, or Performance Units that
may be issued under this Plan subsequent to February
26, 1997 may not exceed 5% of the number of shares
issued and outstanding on that date plus the number of
shares approved and not issued prior to February 26,
1997.
Shares of Common Stock may be made available from the
authorized but unissued shares of the Corporation or
from shares reacquired by the Corporation including
shares purchased in the open market. If an Option,
Restricted Stock Award, or Performance Unit granted
under the Plan shall expire or terminate for any reason
during a calendar year, the shares subject to, but not
distributed, under such Option or Restricted Stock
shall be available for other Options and Awards to the
same employee or other employees."
(b) Section 102. is amended to read:
"Limitation. No Option or Award shall be granted under
the Plan after March 1, 2007."