EXHIBIT 10.22
UNITED AUTO GROUP, INC.
AMENDED AND RESTATED
STOCK OPTION PLAN
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 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, as appointed by the Board of Directors of the
Corporation to administer the Plan. The Committee shall initially
consist of the Corporation's Compensation and Management Development
Committee.
(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. Amended and Restated
Stock Option Plan, which is a continuation of, but which amends and
restates, the Second Amended and Restated Stock Option Plan of the
Corporation dated December 11, 2002 (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
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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 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 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 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;
(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 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 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 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 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 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.
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 the adoption by the Board of Directors of the
Predecessor Plan, 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 10, 2003.