EXHIBIT 10.1.8.2
UNITED AUTO GROUP, INC.
SECOND AMENDED AND RESTATED
STOCK OPTION PLAN
DECEMBER 11, 2002
1. DEFINITIONS: As used herein, the following definitions shall apply:
(a) "Award" shall mean any stock option, stock appreciation right,
restricted stock, restricted stock unit, performance share award or other
stock-based award granted under the Plan.
(b) "Committee" shall mean a committee consisting of two or more
members of the Board of Directors of the Corporation, each of whom (1) shall be
an "outside director" as defined under Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "CODE"), and the Treasury Regulations thereunder,
and (2) shall be a "non-employee director" as defined under Rule 16b-3 of the
Rules and Regulations under the Securities Exchange Act of 1934, as amended, or
any similar or successor provision, as appointed by the Board of Directors of
the Corporation to administer the Plan.
(c) "Corporation" shall mean United Auto Group, Inc., a Delaware
corporation, or any successor thereof.
(d) "Discretion" shall mean in the sole discretion of the Committee,
with no requirement whatsoever that the Committee follow past practices, act in
a manner consistent with past practices, or treat a Participant (as hereinafter
defined) in a manner consistent with the treatment afforded other Participants
with respect to the Plan.
(e) "Incentive Option" shall mean an option to purchase Common Stock of
the Corporation which meets the requirements set forth in the Plan and also
meets the definition of an incentive stock option set forth in Section 422 of
the Code.
(f) "Nonqualified Option" shall mean an option to purchase Common Stock
of the Corporation which meets the requirements set forth in the Plan but does
not meet the definition of an incentive stock option set forth in Section 422 of
the Code.
(g) "Other stock-based award" shall mean any right granted under
Paragraph 20 of the Plan.
(h) "Participant" shall mean (i) any person employed on a full-time
basis by the Corporation or any of its subsidiaries or (ii) any person employed
by an affiliate of the Corporation who performs services for the Corporation or
any of its subsidiaries or (iii) any director or former employee of the
Corporation or any of its subsidiaries.
(i) "Performance share" shall mean a grant of Common Stock of the
Corporation upon the attainment of one or more performance goals during a
performance period established by the Committee, as provided in Paragraph 19.
(j) "Plan" shall mean this United Auto Group, Inc. Second Amended and
Restated Stock Option Plan, which is a continuation of, but which amends and
restates, the First Amended and Restated Stock Option Plan of the Corporation
dated February 8, 2000 (the "PREDECESSOR PLAN").
(k) "Restricted stock" shall mean a grant of Common Stock of the
Corporation which is subject to restrictions against transfer, forfeiture and
such other terms and conditions determined by the Committee, as provided in
Paragraph 18.
(l) "Restricted stock unit" shall mean a grant of a right to obtain the
value of a share of Common Stock of the Corporation which is subject to
restrictions against transfer, forfeiture and such other terms and conditions
determined by the Committee, as provided in Paragraph 18.
(m) "Stock appreciation right" shall mean a right to receive the
appreciation in value, or a portion of the appreciation in value, of a specified
number of shares of the Common Stock of the Corporation, as provided in
Paragraph 12.
2. PURPOSE OF PLAN: The purpose of the Plan is to provide Participants selected
to participate in the Plan with incentives to make significant and extraordinary
contributions to the long-term performance and growth of the Corporation and its
subsidiaries and affiliates, to join the interests of Participants selected to
participate in the Plan with the interests of the shareholders of the
Corporation, and to facilitate attracting and retaining persons with exceptional
abilities by selecting them as Participants for participation in the Plan.
3. ADMINISTRATION: The Plan shall be administered by the Committee. Subject to
the provisions of the Plan, the Committee shall determine, from those eligible
to be Participants under the Plan, the persons to be granted Awards, the type of
Awards and the amount of stock or rights covered by Awards to be granted to each
such person, and the terms and conditions of any Awards. Subject to the
provisions of the Plan, the Committee is authorized to interpret the Plan, to
promulgate, amend and rescind rules and regulations relating to the Plan and to
make all other determinations necessary or advisable for its administration.
Interpretation and construction of any provision of the Plan by the Committee
shall, unless otherwise determined by the Board of Directors of the Corporation,
be final and conclusive. A majority of the Committee shall constitute a quorum,
and the acts approved by a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
Committee, shall be the acts of the Committee.
4. INDEMNIFICATION OF COMMITTEE MEMBERS: In addition to such other rights of
indemnification as they may have, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Award
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by the Board of Directors of the
Corporation) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
determined in such action, suit or proceeding that such Committee member has
acted in bad faith; provided, however, that within
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sixty (60) days after receipt of notice of institution of any such action, suit
or proceeding, a Committee member shall offer the Corporation in writing the
opportunity, at its own cost, to handle and defend the same.
5. MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN: The stock to be issued pursuant to
Awards which may be granted under the Plan and the stock with respect to which
Awards may be granted under the Plan shall be shares of authorized but unissued
Common Stock of the Corporation or previously issued shares of Common Stock of
the Corporation which have been reacquired by the Corporation. The aggregate
number of shares of Common Stock as to which Awards may be granted under the
Plan at any time shall not exceed 3,000,838, subject to adjustment from time to
time in accordance with the provisions of this Paragraph 5. The aggregate number
of shares of Common Stock of the Corporation with respect to which Awards may be
granted during any calendar year to any Participant is 500,000.
The number of shares of Common Stock of the Corporation with respect to which
Awards may be granted at any time under the Plan shall be decreased by the
number of shares with respect to which Awards have been granted prior to such
time under the Plan or under the Predecessor Plan; provided, however, that if,
prior to the end of the period during which Awards may be granted under the
Plan, any shares covered by an Award or to which an Award relates are forfeited,
or if an Award otherwise terminates without delivery of shares or of other
consideration, then the shares covered by such Award, or to which such Award
relates, or the number of shares otherwise counted against the aggregate number
of shares available under the Plan with respect to such Award, to the extent of
any such forfeiture or termination, shall again be, or shall become, available
for granting Awards under the Plan. Notwithstanding the foregoing, all shares
with respect to which an Award is granted shall be counted against the available
remaining shares for purposes of the 500,000 share per-Participant per-calendar
year limitation, regardless of whether the Participant did not realize the
benefit of the Award as a result of forfeiture, cancellation, expiration,
termination or other event; for this purpose, if, after grant, the exercise
price of a stock option or the base amount applicable to a stock appreciation
right is reduced, the transaction shall be treated as cancellation of the stock
option or stock appreciation right and the grant of a new stock option or stock
appreciation right.
The number of shares with respect to each outstanding Award, the option price
with respect to outstanding stock options, the grant value with respect to
outstanding stock appreciation rights, the aggregate number of shares available
at any time under the Plan, and the maximum number of shares with respect to
which Awards may be made to an individual Participant during any calendar year
shall be appropriately adjusted for any increase or decrease in the number of
outstanding shares of Common Stock of the Corporation resulting from a stock
split or other subdivision or consolidation of shares of Common Stock of the
Corporation or for other capital adjustments or payments of stock dividends or
stock distributions or other increases or decreases in the outstanding shares of
Common Stock effected without receipt of consideration in any form permitted
under Delaware law; provided, however, that no fractional shares shall be issued
pursuant to the Plan, no Awards may be granted under the Plan with respect to
fractional shares, and any fractional shares resulting from such adjustments
shall be eliminated from any outstanding Award. Any adjustment pursuant to this
Paragraph 5 shall be conclusively determined by the Committee.
6. PARTICIPANTS: Participants shall be limited to those eligible persons who
have received notice of their selection to participate in the Plan and who have
entered into a written agreement as
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specified in Paragraph 7 of the Plan. No eligible person shall at any time have
a right to be selected as a Participant.
7. WRITTEN AGREEMENT: Each Award granted under the Plan shall be evidenced by a
written agreement between the Corporation and the Participant which shall
contain such provisions as may be approved by the Committee. Such agreements
shall constitute binding contracts between the Corporation and the Participant,
and every Participant, upon acceptance of such agreement, shall be bound by the
terms and restrictions of the Plan and of such agreement. The terms of each such
agreement shall be in accordance with the Plan, but the agreements may include
such additional provisions and restrictions determined by the Committee,
provided that such additional provisions and restrictions do not violate the
terms of the Plan.
8. ALLOTMENT OF SHARES: The Committee shall determine and fix, in its
Discretion, the number of shares with respect to which each Participant may be
granted Awards; provided, however, that no Incentive Option may be granted under
the Plan to any one Participant which would result in the aggregate fair market
value, determined as of the date the option is granted, of underlying stock with
respect to which Incentive Options are exercisable for the first time by such
Participant during any calendar year under any plan maintained by the
Corporation (or any parent or subsidiary of the Corporation) exceeding $100,000.
9. STOCK OPTIONS: Subject to the terms of the Plan, the Committee, in its
Discretion, may grant to Participants either Incentive Options, Nonqualified
Options or any combination thereof; provided, however, that an Incentive Option
may only be granted to an employee of the Corporation or a subsidiary or
affiliate of the Corporation, and in the case of a subsidiary or affiliate only
if (i) the subsidiary or affiliate is treated as a disregarded entity owned by
the Corporation, or (ii) the subsidiary or affiliate is a corporation (or is
treated as a disregarded entity owned by a corporation) fifty percent or more of
the combined voting power of all classes of stock of which is owned, directly or
indirectly, by the Corporation. Moreover, an Incentive Option may only be
granted within ten (10) years after the earlier of (i) the date the Predecessor
Plan was adopted, or (ii) the date the Predecessor Plan was approved by the
shareholders of the Corporation. Each option granted under the Plan shall
designate the number of shares covered thereby, if any, with respect to which
the option is an Incentive Option, and the number of shares covered thereby, if
any, with respect to which the option is a Nonqualified Option.
10. STOCK OPTION PRICE: Subject to the rules set forth in this Paragraph 10, at
the time any stock option is granted, the Committee, in its Discretion, shall
establish the price per share for which the shares covered by the option may be
purchased. With respect to an Incentive Option, such option price shall not be
less than 100% of the fair market value of the stock on the date on which such
option is granted; provided, however, that with respect to an Incentive Option
granted to a Participant who at the time of the grant owns (after applying the
attribution rules of Section 424(d) of the Code) more than 10% of the total
combined voting stock of the Corporation or of any parent or subsidiary, the
option price shall not be less than 110% of the fair market value of the stock
on the date such option is granted. With respect to a Nonqualified Option, the
option price shall not be less than 50% of the fair market value of the stock on
the date such option is granted. Fair market value of a share shall be
determined by the Committee and may be determined by taking the mean between the
highest and lowest quoted selling prices of the Corporation's stock on any
exchange or other market on which the shares of Common Stock of the Corporation
shall be
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traded on such date or, if there are no sales on such date, on the next
following day on which there are sales. The option price shall be subject to
adjustment in accordance with the provisions of Paragraph 5 of the Plan.
11. PAYMENT OF STOCK OPTION PRICE: At the time of the exercise in whole or in
part of any stock option granted hereunder, payment of the option price in full
in cash or, with the consent of the Committee, in Common Stock of the
Corporation or by a promissory note payable to the order of the Corporation
which is acceptable to the Committee, shall be made by the Participant for all
shares so purchased. Such payment may, with the consent of the Committee, also
consist of a cash down payment and delivery of such a promissory note in the
amount of the unpaid exercise price. In the Discretion of, and subject to such
conditions as may be established by, the Committee, payment of the option price
may also be made by the Corporation retaining from the shares to be delivered
upon exercise of the stock option that number of shares having a fair market
value on the date of exercise equal to the option price of the number of shares
with respect to which the Participant exercises the option. In the Discretion of
the Committee, a Participant may exercise an option, if then exercisable, in
whole or in part, by delivery to the Corporation of written notice of the
exercise in such form as the Committee may prescribe, accompanied by irrevocable
instructions to a stock broker to promptly deliver to the Corporation full
payment for the shares with respect to which the option is exercised from the
proceeds of the stock broker's sale of or loan against some or all of the shares
(a "Regulation T Stock Option Exercise"). In the event the Corporation then has
in effect a stock repurchase program, in its Discretion and subject to such
terms and conditions as it may impose, the Committee may permit a Participant to
exercise an option and pay the option price by delivering to the Corporation a
written notice of exercise which includes a request that the Corporation
repurchase (and retain the repurchase price of) that number of the option shares
having a fair market value on the date of exercise equal to the option price of
the number of shares with respect to which the Participant exercises the option.
Such payment may also be made in such other manner as the Committee determines
is appropriate, in its Discretion. No Participant shall have any of the rights
of a shareholder of the Corporation under any stock option until the actual
issuance of shares to said Participant, and prior to such issuance no adjustment
shall be made for dividends, distributions or other rights in respect of such
shares, except as provided in Paragraph 5.
12. STOCK APPRECIATION RIGHTS: Subject to the terms of the Plan, the Committee
may grant stock appreciation rights to Participants either in conjunction with,
or independently of, any stock options granted under the Plan. A stock
appreciation right granted in conjunction with a stock option may be an
alternative right wherein the exercise of the stock option terminates the stock
appreciation right to the extent of the number of shares purchased upon exercise
of the stock option and, correspondingly, the exercise of the stock appreciation
right terminates the stock option to the extent of the number of shares with
respect to which the stock appreciation right is exercised. Alternatively, a
stock appreciation right granted in conjunction with a stock option may be an
additional right wherein both the stock appreciation right and the stock option
may be exercised. A stock appreciation right may not be granted in conjunction
with an Incentive Option under circumstances in which the exercise of the stock
appreciation right affects the right to exercise the Incentive Option or vice
versa, unless the stock appreciation right, by its terms, meets all of the
following requirements:
(a) the stock appreciation right will expire no later
than the Incentive Option;
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(b) the stock appreciation right may be for no more than
the difference between the option price of the
Incentive Option and the fair market value of the
shares subject to the Incentive Option at the time
the stock appreciation right is exercised;
(c) the stock appreciation right is transferable only
when the Incentive Option is transferable, and under
the same conditions;
(d) the stock appreciation right may be exercised only
when the Incentive Option is eligible to be
exercised; and
(e) the stock appreciation right may be exercised only
when the fair market value of the shares subject to
the Incentive Option exceeds the option price of the
Incentive Option.
Upon exercise of a stock appreciation right, a Participant shall be entitled to
receive, without payment to the Corporation (except for applicable withholding
taxes), an amount equal to the excess of or, in the Discretion of the Committee,
a portion of the excess of (i) the then aggregate fair market value of the
number of shares with respect to which the Participant exercises the stock
appreciation right, over (ii) the aggregate fair market value of such number of
shares at the time the stock appreciation right was granted. This amount shall
be payable by the Corporation, in the Discretion of the Committee, in cash, in
shares of Common Stock of the Corporation, in other property or any combination
thereof.
13. GRANTING AND EXERCISE OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS:
Subject to the provisions of this Paragraph 13, each stock option and stock
appreciation right granted hereunder shall be exercisable at any such time or
times or in any such installments as may be determined by the Committee at the
time of the grant; provided, however, that the aggregate fair market value
(determined at the time the option is granted) of the stock with respect to
which Incentive Options are exercisable for the first time by a Participant
during any calendar year shall not exceed $100,000. A Participant may exercise a
stock option or stock appreciation right, if then exercisable, in whole or in
part, by delivery to the Corporation of written notice of the exercise, in such
form as the Committee may prescribe, accompanied, in the case of a stock option,
by payment for the shares with respect to which the stock option is exercised as
provided in Paragraph 11 (unless the Committee, in its Discretion, permits a
cashless form of option exercise permitted by Paragraph 11). Except as provided
in Paragraph 17, stock options and stock appreciation rights may be exercised
only while the Participant is an employee of the Corporation or one of its
subsidiaries or otherwise continues to qualify as a Participant. Successive
stock options and stock appreciation rights may be granted to the same
Participant, whether or not the stock option(s) and stock appreciation right(s)
previously granted to such Participant remain unexercised. A Participant may
exercise a stock option or stock appreciation right, if then exercisable,
notwithstanding that stock options and stock appreciation rights previously
granted to such Participant remain unexercised.
14. NON-TRANSFERABILITY OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS: No stock
option or stock appreciation right granted under the Plan to a Participant shall
be transferable by such
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Participant otherwise than by will, or by the laws of descent and distribution,
and stock options and stock appreciation rights shall be exercisable, during the
lifetime of the Participant, only by the Participant. Notwithstanding the
foregoing, in its Discretion and subject to such terms and conditions as it may
prescribe, the Committee may permit a Participant to transfer a Nonqualified
Option or a related or independently granted stock appreciation right.
15. TERM OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS: If not sooner
terminated, each stock option and stock appreciation right granted hereunder
shall expire not more than ten (10) years from the date of the granting thereof;
provided, however, that with respect to an Incentive Option granted to a
Participant who, at the time of the grant, owns (after applying the attribution
rules of Section 424(d) of the Code) more than 10% of the total combined voting
stock of all classes of stock of the Corporation or any parent or subsidiary,
such option shall expire not more than five (5) years after the date of granting
thereof.
16. CONTINUATION OF EMPLOYMENT: The Committee may require, in its Discretion,
that any Participant under the Plan to whom a stock option or a stock
appreciation right shall be granted shall agree in writing as a condition of the
granting of such stock option or stock appreciation right to remain an employee
of the Corporation or a subsidiary (or to otherwise remain qualified as a
Participant) for a designated minimum period from the date of the granting of
such stock option or stock appreciation right as shall be fixed by the
Committee, and the Committee may further require, in its Discretion, that any
Participant agree in writing to comply with any confidentiality,
non-solicitation, non-competition and non-disparagement provisions and covenants
that the Committee may require as a condition precedent to the exercise of a
stock option or a stock appreciation right.
17. TERMINATION OF EMPLOYMENT: If the employment of an employee Participant
terminates or if a director Participant ceases to be a director (hereinafter
collectively referred to as a "termination of employment"), the Committee may,
in its Discretion, permit the exercise of stock options and stock appreciation
rights granted to such Participant (a) for a period not to exceed three months
following such termination of employment (or one year following termination of
employment on account of the Participant's death or permanent disability) with
respect to Incentive Options or related stock appreciation rights, and (b) for a
period not to extend beyond the expiration date with respect to Nonqualified
Options or related or independently granted stock appreciation rights. In no
event, however, shall a stock option or stock appreciation right be exercisable
subsequent to its expiration date. A stock option or stock appreciation right
may only be exercised after a Participant's termination of employment to the
extent exercisable on the date of termination of employment; provided, however,
that if the termination of employment is due to the Participant's death,
permanent disability or retirement at a retirement age permitted under the
Corporation's or a subsidiary's retirement plan or policies, or if the
termination of employment results from action by the Corporation or a subsidiary
without cause or from an agreement between the Corporation or a subsidiary and
the Participant (hereinafter collectively referred to as a "qualifying
termination of employment"), the Committee, in its Discretion, may permit all or
part of the stock options and stock appreciation rights granted to such
Participant to thereupon become exercisable in full or in part. For purposes of
this Paragraph 17 and any other provision of the Plan where the term is used,
the Committee's definition of "cause" shall be final and conclusive.
18. RESTRICTED STOCK OR RESTRICTED STOCK UNITS: Subject to the terms of the
Plan, the Committee may award Participants shares of restricted stock and/or the
Committee may grant
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Participants restricted units with respect to a specified number of shares of
stock. All shares of restricted stock and all restricted stock units granted to
Participants under the Plan shall be subject to the following terms and
conditions (and to such other terms and conditions prescribed by the Committee):
(a) At the time of each award of restricted shares or restricted
stock units, there shall be established for the shares or
units a restricted period, which period may differ among
Participants and may have different expiration dates with
respect to portions of shares or units covered by the same
award.
(b) Shares of restricted stock or restricted stock units awarded
to Participants may not be sold, assigned, transferred,
pledged, hypothecated or otherwise encumbered during the
restricted period applicable to such shares or units. Except
for such restrictions on transfer, a Participant may be
provided all of the rights of a shareholder in respect of
restricted shares including, but not limited to, the right to
receive dividends on, and the right to vote, the shares. A
Participant shall have no ownership interest in shares of
stock with respect to which restricted stock units are
granted; provided, however, that the Committee may, in its
Discretion, permit payment to such Participant of dividend
equivalents on such units equal to the amount of dividends, if
any, which are paid on that number of shares with respect to
which the restricted stock units are granted.
(c) If there is a termination of employment of a Participant, all
shares or units theretofore awarded to the Participant which
are still subject to the restrictions imposed by Paragraph
18(b) shall upon such termination of employment be forfeited
and transferred back to the Corporation, without payment of
any consideration by the Corporation; provided, however, that
in the event of a qualifying termination of employment, the
Committee may, in its Discretion, release some or all of the
shares or units from the restrictions.
(d) Shares of restricted stock granted under the Plan may be
evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry
registration or issuance of stock certificates. If stock
certificates are issued in respect of shares of restricted
stock, such certificates shall be registered in the name of
the Participant, deposited with the Corporation or its
designee, together with a stock power endorsed in blank, and,
in the Discretion of the Committee, a legend shall be placed
upon such certificates reflecting that the shares represented
thereby are subject to restrictions against transfer and
forfeiture.
(e) At the expiration of the restricted period applicable to
restricted shares, the Corporation shall deliver to the
Participant or the legal representative of the Participant's
estate stock certificates for such shares. If stock
certificates were previously issued for the shares and a
legend has been placed on such certificates, the Corporation
shall cause such certificates to be reissued without the
legend.
(f) At the expiration of the restricted period applicable to
restricted stock units, the Corporation shall pay to the
Participant an amount equal to the then fair market
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value of that number of shares to which such restricted stock
units relate. In the Discretion of the Committee, such amount
may be paid in cash, stock, other property or any combination
thereof. Moreover, in the Discretion of the Committee, such
amount may be paid in a lump sum or in installments, currently
upon expiration of the restricted period or on a deferred
basis, with provision for the payment or crediting of a
dividend equivalent or reasonable rate of interest on
installment or deferred payments in the Discretion of the
Committee.
In the case of events such as stock dividends, stock splits, recapitalizations,
mergers, consolidations or reorganizations of or by the Corporation, any stock,
securities or other property which a Participant receives or is entitled to
receive by reason of his ownership of restricted shares shall, unless otherwise
determined by the Committee, be subject to the same restrictions applicable to
the restricted shares.
19. PERFORMANCE SHARES: The Committee may grant to a Participant the right to
obtain performance shares subject to the following terms and conditions:
(a) The Participant's right to obtain performance shares shall be
subject to attainment of one or more performance goals over a
performance period prescribed by the Committee.
(b) The performance goal applicable to an award to a Participant
of the right to obtain performance shares shall be based upon
free cash flow, cash flow return on investment, stock price,
market share, sales, revenues, earnings per share, return on
equity, total stockholder return, costs, net income, working
capital turnover, inventory or receivable turnover and/or
margins of the Corporation, a subsidiary, an affiliate or a
division or unit thereof. The specific targets and other
details of the performance goal shall be established by the
Committee in its Discretion. A performance goal must, however,
be objective so that a third party with knowledge of the
relevant facts could determine whether the goal has been
attained.
(c) The performance goal applicable to an award to a Participant
of the right to obtain performance shares shall be established
by the Committee in writing at any time during the period
beginning on the date of the award and ending on the earlier
of (i) ninety (90) days after commencement of the performance
period applicable to the award, or (ii) expiration of the
first 25% of the performance period; provided, however, that
there must be substantial uncertainty whether a performance
goal will be attained at the time it is established by the
Committee.
(d) The performance goal established by the Committee must
prescribe an objective formula or standard, that could be
applied by a third party having knowledge of the relevant
performance results, to compute the number of performance
shares issuable to the Participant if the goal is attained.
(e) Unless otherwise determined by the Committee in the case of a
Participant who dies or becomes permanently disabled,
performance shares shall be issued to a Participant only after
(i) expiration of the performance period and attainment of the
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performance goal applicable to the award, and (ii) issuance of
a written certification by the Committee (including approved
minutes of the meeting of the Committee at which the
certification is made) that the performance goal and any other
material terms of the award have been attained or satisfied.
(f) No Participant shall have any of the rights of a shareholder
of the Corporation in respect of the shares covered by a
performance share award until the actual issuance of the
shares to said Participant and, prior to such issuance, no
adjustments shall be made for dividends, distributions or
other rights in respect of such shares, except as provided in
Paragraph 5.
(g) In its Discretion and subject to such terms and conditions as
it may impose, the Committee may permit a Participant to elect
to defer receipt of performance shares to a time later than
the time the shares otherwise would be issued to the
Participant. In such event, the Committee may, in its
Discretion, provide for the payment by the Corporation of a
dividend equivalent or interest at a rate determined by the
Committee.
(h) In the Discretion of the Committee, in lieu of settling a
performance share award by issuance of shares of Common Stock
of the Corporation to a Participant, all or a portion of the
award may be settled by payment of cash or other property to
the Participant in an amount or having a value equal to the
then value of the otherwise issuable shares; provided,
however, that the amount of cash and the value of any other
property paid to any Participant during any calendar year in
settlement of a performance share award shall not exceed $5.0
Million.
(i) Unless otherwise determined by the Committee, performance
shares or rights therein awarded to a Participant may not be
sold, assigned, transferred, pledged, hypothecated or
otherwise encumbered by the Participant at any time before
actual issuance of the shares to the Participant.
(j) In its Discretion, the Committee may subject a performance
share award to a Participant to any other terms or conditions
not inconsistent with the foregoing, including, without
limitation, a requirement that the Participant remain an
employee of the Corporation or a subsidiary or affiliate
(including at or above a specified salary grade), or that the
Participant remain a director of the Corporation or a
subsidiary, for the entire performance period applicable to
the award.
20. OTHER STOCK-BASED AWARDS: The Committee may grant to Participants such other
awards that are denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, shares of Common Stock of the
Corporation as are deemed by the Committee, in its Discretion, to be consistent
with the purposes of the Plan; provided, however, that such grants must comply
with applicable law.
21. INVESTMENT PURPOSE: If the Committee, in its Discretion, determines that as
a matter of law such procedure is or may be desirable, it may require a
Participant, upon any acquisition of stock hereunder and as a condition to the
Corporation's obligation to deliver certificates
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representing such shares, to execute and deliver to the Corporation a written
statement in form satisfactory to the Committee, representing and warranting
that the Participant's acquisition of shares of stock shall be for such person's
own account, for investment and not with a view to the resale or distribution
thereof and that any subsequent offer for sale or sale of any such shares shall
be made either pursuant to (a) a Registration Statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), which
Registration Statement has become effective and is current with respect to the
shares being offered and sold, or (b) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption the
Participant shall, prior to any offer for sale or sale of such shares, obtain a
favorable written opinion from counsel for or approved by the Corporation as to
the availability of such exemption. The Corporation may endorse an appropriate
legend referring to the foregoing restriction upon the certificate or
certificates representing any shares issued or transferred to the Participant
under the Plan.
22 RIGHTS TO CONTINUED EMPLOYMENT: Nothing contained in the Plan or in any Award
granted pursuant to the Plan, nor any action taken by the Committee hereunder,
shall confer upon any Participant any right with respect to continuation of
employment or service as an employee or as a director of the Corporation or a
subsidiary or affiliate nor interfere in any way with the right of the
Corporation or a subsidiary or affiliate to terminate such person's employment
or service at any time with or without cause.
23. WITHHOLDING PAYMENTS: If, upon the grant, exercise, release of restrictions
or settlement of or in respect of an Award, or upon any other event or
transaction under or relating to the Plan, there shall be payable by the
Corporation or a subsidiary or affiliate any amount for income or employment tax
withholding, in the Committee's Discretion, either the Corporation shall
appropriately reduce the amount of stock, cash or other property to be paid to
the Participant or the Participant shall pay such amount to the Corporation or
subsidiary or affiliate to enable it to pay or to reimburse it for paying such
income or employment tax withholding. The Committee may, in its Discretion,
permit Participants to satisfy such withholding obligations, in whole or in
part, by electing to have the amount of Common Stock delivered or deliverable by
the Corporation in respect of an Award appropriately reduced, or by electing to
tender Common Stock back to the Corporation subsequent to receipt of such stock
in respect of an Award. The Corporation or any of its subsidiaries or affiliates
shall also have the right to withhold the amount of such taxes from any other
sums or property due or to become due from the Corporation or any of its
subsidiaries or affiliates to the Participant upon such terms and conditions as
the Committee shall prescribe. The Corporation may also defer issuance of stock
under the Plan until payment by the Participant to the Corporation or any of its
subsidiaries or affiliates of the amount of any such tax. In the case of a
Regulation T Stock Option Exercise, the Committee may in its Discretion permit
the Participant to irrevocably instruct a stock broker to promptly deliver to
the Corporation an amount (in addition to the option exercise price) equal to
any withholding tax owing in respect of such option exercise from the proceeds
of the stock broker's sale of or loan against some or all of the shares. In the
event the Corporation then has in effect a stock repurchase program, in its
Discretion and subject to such terms and conditions as it may impose, the
Committee may permit Participants to satisfy their withholding tax obligations
by requesting that the Corporation repurchase (and retain the repurchase price
of) that number of shares issuable or issued under the Plan having a then fair
market value equal to the amount of withholding tax due. The Committee may make
such other arrangements with respect to income or employment tax withholding as
it shall determine.
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24. CHANGE IN CONTROL: Notwithstanding any other provision of the Plan or any
provision of a grant or award agreement, in the event the Committee determines
that there has been or will be a change in control of the Corporation or of any
subsidiary or affiliate, the Committee may, without the consent of the holder,
provide for any treatment of outstanding Awards which it determines, in its
Discretion, to be appropriate. Such treatment may include, without limitation,
acceleration of vesting of stock options and stock appreciation rights, release
of restrictions applicable to restricted stock or restricted stock units, or
deeming performance share awards to have been earned. In determining whether
there has been or will be a change in control of the Corporation or of any
subsidiary or affiliate, the Committee may utilize a definition it deems
appropriate of a change in control contained in any existing agreement between
the Corporation or a subsidiary or affiliate, and one of its senior executives.
25. EFFECTIVENESS OF PLAN: The Plan shall be effective on the date the Board of
Directors of the Corporation adopts the Plan and shall apply with respect to
Awards granted on or after such date; provided, however, that the terms of the
Predecessor Plan shall continue to apply to Awards granted prior to the date the
Board of Directors of the Corporation adopts the Plan.
26. TERMINATION, DURATION AND AMENDMENTS OF PLAN: The Plan may be abandoned or
terminated at any time by the Board of Directors of the Corporation. Unless
sooner terminated by the Board of Directors, the Plan shall terminate on the
date ten (10) years after its adoption by the Board of Directors, and no Awards
may be granted thereafter. The termination of the Plan shall not affect the
validity of any Award outstanding on the date of termination.
For the purpose of conforming to any changes in applicable law or governmental
regulations, or for any other lawful purpose, the Board of Directors of the
Corporation shall have the right, without approval of the shareholders of the
Corporation, to amend or revise the terms of the Plan at any time; provided,
however, that no such amendment or revision shall (i) with respect to the Plan,
increase the maximum number of shares in the aggregate which are subject to the
Plan or with respect to which Awards may be made to individual Participants
(subject, however, to the provisions of Paragraph 5), or materially change the
class of persons eligible to be Participants under the Plan, without approval or
ratification of the shareholders of the Corporation; or (ii) with respect to an
Award previously granted under the Plan, except as otherwise specifically
provided in the Plan, alter or impair any such Award without the consent of the
holder thereof.
As adopted by the Board of Directors on December 11, 2002.
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