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EXHIBIT 10-A-10
(AS AMENDED BY THE BOARD OF DIRECTORS ON MARCH 3, 1994
SUBJECT TO STOCKHOLDER APPROVAL ON MAY 19, 1994)
CHRYSLER CORPORATION
1991 STOCK COMPENSATION PLAN
EFFECTIVE MAY 16, 1991
(AS AMENDED THROUGH MAY 19, 1994)
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of the plan is the Chrysler Corporation 1991 Stock Compensation
Plan (the "Plan"). The purpose of the Plan is to enable the Company (as
hereinafter defined) and its Subsidiaries (as hereinafter defined) to obtain
and retain competent personnel who will contribute to the Company's success by
their ability, ingenuity and industry and to provide incentives to the
participating officers, key salaried employees and nonemployee directors which
are related to increases in stockholder value and will therefore inure to the
benefit of all stockholders of the Company.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Award" means any grant under the Plan in the form of Stock
Options, Stock Appreciation Rights, Limited Stock Appreciation Rights,
Performance Stock Units, Restricted Stock Units or any combination of the
foregoing.
(b) "Board" means the Board of Directors of the Company.
(c) "Change in Control" has the meaning given in Section 12 of the
Plan.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor thereto.
(e) "Committee" means the Stock Option Committee, or any other
committee the Board may subsequently appoint to administer the Plan. The
Committee shall be composed entirely of directors who meet the
qualifications referred to in Section 2 of the Plan.
(f) "Company" means Chrysler Corporation, a corporation incorporated
under the laws of the State of Delaware (or any successor corporation).
(g) "Disability" means being permanently and totally disabled under
any insurance program of the Company, any Subsidiary or any Related
Entity.
(h) "Disinterested Person" shall have the meaning set forth in Rule
16b-3 ("Rule 16b-3"), as promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended from
time to time (the "Exchange Act"), or any successor definition adopted by
the Securities and Exchange Commission.
(i) "Eligible Employee" means an employee of the Company, any
Subsidiary or any Related Entity as described in Section 4 of the Plan.
(j) "Fair Market Value" means, as of any given date, with respect to
any Awards granted hereunder, the mean of the high and low trading price
of the Stock on such date as reported on the New York Stock Exchange or,
if the Stock is not then traded on the New York Stock Exchange, on such
other national securities exchange on which the Stock is admitted to
trade or, if none, on the National Association of Securities Dealers
Automated Quotation System if the Stock is admitted for quotation
thereon; provided, however, that if any such exchange or quotation system
is closed on any day on which Fair Market Value is to be determined, Fair
Market Value shall be determined as of the first day immediately
preceding such day on which such exchange or quotation system was open
for trading.
(k) "Incentive Stock Option" means any Stock Option intended to
qualify as an "incentive stock option" within the meaning of Section 422
of the Code.
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(l) "Limited Stock Appreciation Right" means a Stock Appreciation
Right that can be exercised only in the event of a Change in Control.
(m) "Nonqualified Stock Option" means any Stock Option that is not
an Incentive Stock Option.
(n) "Optionee" means a Participant granted a Stock Option pursuant
to Section 5 of the Plan which remains outstanding.
(o) "Participant" means any Eligible Employee selected by the
Committee, pursuant to the Committee's authority in Section 2 of the
Plan, to receive Awards and, solely to the extent provided by Section 9
of the Plan, nonemployee directors of the Company.
(p) "Performance Stock Unit" means the right to receive one share of
Stock as set forth in an Award granted pursuant to Section 8 of the Plan,
the vesting of which is subject to restrictions that will lapse upon the
attainment of performance objectives.
(q) "Related Entity" means any corporation, joint venture or other
entity, domestic or foreign, other than a Subsidiary, in which the
Company owns, directly or indirectly, a substantial equity interest.
(r) "Restricted Stock Unit" means the right to receive one share of
Stock as set forth in an Award granted pursuant to Section 8 of the Plan,
the vesting of which is subject to restrictions that will lapse with the
passage of time.
(s) "Retirement" means (i) retirement from active employment under a
pension plan of the Company, any Subsidiary or Related Entity or under an
employment contract with any of them or (ii) termination of employment at
or after age 55 under circumstances which the Committee, in its sole
discretion, deems equivalent to retirement.
(t) "Stock" means the common stock of the Company.
(u) "Stock Appreciation Right" means the right pursuant to an Award
granted under Section 6 of the Plan, (i) in the case of a Related Stock
Appreciation Right (as defined in Section 6 of the Plan), to surrender to
the Company all or a portion of the related Stock Option and receive an
amount equal to the excess of the Fair Market Value of one share of Stock
as of the date such Stock Option or portion thereof is surrendered over
the option price per share specified in such Stock Option, multiplied by
the number of shares of Stock in respect of which such Stock Option is
being surrendered, and (ii) in the case of a Freestanding Stock
Appreciation Right (as defined in Section 6 of the Plan), to exercise
such Freestanding Stock Appreciation Right and receive an amount equal to
the excess of the Fair Market Value of one share of Stock as of the date
of exercise over the price per share specified in such Freestanding Stock
Appreciation Right, multiplied by the number of shares of Stock in
respect of which such Freestanding Stock Appreciation Right is being
exercised.
(v) "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5 of the Plan, including any Reload Option
(as defined in Section 5 of the Plan).
(w) "Subsidiary" means any corporation in an unbroken chain of
corporations, beginning with the Company, if each of the corporations
(other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Committee, composed of not less
than three directors who are Disinterested Persons, who shall be appointed by
the Board and who shall serve at the pleasure of the Board.
The Committee shall have the power and authority in its sole discretion
to grant Awards to Eligible Employees pursuant to the terms and provisions of
the Plan.
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In particular, the Committee shall have full authority, not inconsistent
with the Plan:
(a) to select Participants from among the Eligible Employees;
(b) to determine whether and to what extent Awards are to be granted
to Eligible Employees hereunder;
(c) to determine the number of shares of Stock to be covered by each
such Award granted hereunder, but in no case shall the aggregate of all
shares of stock issued under the Plan be greater than that allowed under
the Plan, and in no case shall the number of shares of Stock to be covered
by all such Awards (excluding grants of Restricted Stock Units) made to
the same Eligible Employee during the five year period beginning January
1, 1994 and ending December 31, 1998 exceed ten percent of the total
number of shares of Stock approved by the stockholders of the Company for
issuance under the Plan (as such number be increased from time to time in
accordance with Section 10 hereof, and as such number may be
adjusted from time to time in accordance with Section 3 hereof for changes
in corporate structure or capitalization affecting the Stock);
(d) to determine the terms and conditions of any Award granted
hereunder (including, without limitation, (i) the restricted periods
applicable to Restricted Stock Unit Awards and (ii) the performance
objectives and periods applicable to Performance Stock Unit Awards);
(e) to waive compliance by a Participant with any obligation to be
performed by him or her under any Award and to waive any term or
condition of any such Award (provided, however, that no such waiver shall
detrimentally affect the rights of a Participant without such
Participant's consent); and
(f) to determine the terms and conditions which shall govern all
written agreements evidencing the Awards.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the provisions of the Plan and
the terms and conditions of any Award issued, expired, terminated, cancelled
or surrendered under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan and as to the terms and conditions of any Award (and any agreements
relating thereto) shall be final and binding on all persons, including the
Company and the Participants.
Notwithstanding anything else contained in this Plan to the contrary, if
any award of Performance Stock Units is intended at the time of grant to be
other performance based compensation within the meaning of Section 162(m)(4)(C)
of the Code, to the extent required to so qualify any award hereunder, the
Committee shall not be entitled to exercise any discretion otherwise authorized
under this Plan with respect to such award if the ability to exercise such
discretion (as oppposed) to the exercise of such discretion) would cause such
award to fail to qualify as other performance based compensation.
SECTION 3. NUMBER OF SHARES OF STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for issuance
under the Plan shall be twenty-eight (28) million, consisting of (a) eleven
(11) million shares as constituted at the time of the annual meeting of
stockholders on May 16, 1991, plus (b) seventeen (17) million shares as
constituted at the time of the annual meeting of stockholders on May 19, 1994.
Such shares of Stock may consist, in whole or in part, of authorized and
unissued shares of Stock or issued shares of Stock reacquired by the Company at
any time, as the Board may determine.
To the extent that (a) a Stock Option expires or is otherwise terminated,
cancelled or surrendered without being exercised (including, without
limitation, in connection with the grant of a replacement option) or (b) any
Restricted Stock Unit Award or Performance Stock Unit Award granted hereunder
expires or is otherwise terminated or is cancelled, the shares of Stock
underlying such Stock Option or subject to such
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Restricted Stock Unit Award or Performance Stock Unit Award shall again be
available for issuance in connection with future Awards under the Plan.
Upon the exercise of a Related Stock Appreciation Right or Related
Limited Stock Appreciation Right (as defined in Section 7 of the Plan), the
Stock Option, or the part thereof to which such Related Stock Appreciation
Right or Related Limited Stock Appreciation Right is related, shall be deemed
to have been exercised for the purpose of the limitation on the number of
shares of Stock to be issued under the Plan, but only to the extent of the
number of shares of Stock in respect of which the Related Stock Appreciation
Right or Related Limited Stock Appreciation Right was exercised.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure or
capitalization affecting the Stock, the Committee in its sole discretion may
make an adjustment or substitution in the number and class of shares reserved
for issuance under the Plan, the number and class of shares covered by
outstanding Awards and the option price per share of Stock Options or the
applicable price per share specified in Stock Appreciation Rights or Limited
Stock Appreciation Rights to reflect the effect of such change in corporate
structure or capitalization on the Stock; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated;
provided, further, however, that if by reason of any such change in corporate
structure or capitalization a Participant holding a Restricted Stock Unit
Award or Performance Stock Unit Award shall be entitled, subject to the terms
and conditions of such Award, to additional or different shares of any
security, the issuance of such additional or different shares shall thereupon
be subject to all of the terms and conditions (including restrictions and
performance criteria) which were applicable to such Award prior to such change
in corporate structure or capitalization; and, provided, further,
however, that unless the Committee in its sole discretion determines otherwise,
any issuance by the Company of shares of stock of any class or securities
convertible into shares of stock of any class shall not affect, and no such
adjustment or substitution by reason thereof shall be made with respect to, the
number or class of shares reserved for issuance under the Plan, the number or
class of shares covered by outstanding Awards or any option price or applicable
price.
SECTION 4. ELIGIBILITY.
Officers and other key salaried employees of the Company, its Subsidiaries
and its Related Entities who are responsible for or contribute to the
management, growth or profitability of the business of the Company, its
Subsidiaries or its Related Entities shall be eligible to be granted Awards and
any former officers and key salaried employees of the Company, its Subsidiaries
and its Related Entities shall be eligible to be granted Reload Options with
respect to Stock Options granted to them while they were employees; provided,
however, with respect to an employee of a Related Entity, that such person was
an employee of the Company, a Subsidiary or, if originally an employee of the
Company or a Subsidiary, or another Related Entity immediately prior to
becoming employed by such Related Entity and accepted employment with such
Related Entity at the request of the Company or a Subsidiary. The Participants
under the Plan shall be selected, from time to time, by the Committee, in its
sole discretion, from among those Eligible Employees.
SECTION 5. STOCK OPTIONS.
(a) Grant and Exercise. Stock Options may be granted either alone or in
addition to other Awards granted under the Plan. Any Stock Option granted
under the Plan shall be in such form as the Committee may, from time to time,
approve, and the terms and conditions of Stock Option Awards need not be the
same with respect to each Optionee. Optionees shall enter into a Stock Option
agreement ("Stock Option Agreement") with the Company, in such form as the
Committee shall determine, which agreement shall set forth, among other
things, the option price of the option, the term of the option and conditions
regarding exercisability of the option granted thereunder.
(i) Nature of Options. The Committee shall have the authority to
grant any Participant either Incentive Stock Options, Nonqualified Stock
Options or both types of Stock Options (in each case with or without
Stock Appreciation Rights or Limited Stock Appreciation Rights), except
that the Committee shall not grant any Incentive Stock Options to an
employee of a Related Entity. Any Stock Option which
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does not qualify as an Incentive Stock Option, or the terms of
which at the time of its grant provide that it shall not be treated as an
Incentive Stock Option, shall constitute a Nonqualified Stock Option.
(ii) Exercisability. Subject to such terms and conditions as shall
be determined by the Committee in its sole discretion at or after the
time of grant, Stock Options shall be exercisable from time to time to
the extent of 40% of the number of shares of Stock covered by the Stock
Option on and after the first anniversary and before the second
anniversary of the date of grant of the Stock Option, to the extent of
70% of the number of shares of Stock covered by the Stock Option on and
after the second anniversary and before the third anniversary of the date
of grant of the Stock Option and to the extent of 100% of the number of
shares of Stock covered by the Stock Option on and after the third
anniversary of the date of grant of the Stock Option and before the
expiration of the stated term of the Stock Option (or to such lesser
extent as the Committee in its sole discretion shall determine at the
time of grant or to such greater extent as the Committee in its sole
discretion shall determine at or after the time of grant).
(iii) Method of Exercise. Stock Options may be exercised by giving
written notice of exercise delivered in person or by mail as required by
the terms of any Stock Option Agreement at the Company's principal
executive office, specifying the number of shares of Stock with respect
to which the Stock Option is being exercised, accompanied by payment in
full of the option price in cash or its equivalent as determined by the
Committee in its sole discretion. If requested by the Committee, the
Optionee shall deliver to the Company the Stock Option Agreement
evidencing the Stock Option being exercised for notation thereon of such
exercise and return thereafter of such agreement to the Optionee. As
determined by the Committee in its sole discretion at or after the time of
grant, payment of the option price in full or in part may also be made
in the form of shares of unrestricted Stock already owned by the Optionee
(based on the Fair Market Value of the Stock on the date the Stock Option
is exercised); provided, however, that in the case of an Incentive Stock
Option, the right to make payment of the option price in the form of
already owned shares of Stock may be authorized only at the time of grant.
An Optionee shall generally have the rights to dividends or other rights
of a stockholder with respect to shares of Stock subject to the Stock
Option when the Optionee has given written notice of exercise, has paid in
full for such shares of Stock, and, if requested, has made the
representations described in Section 13(a) of the Plan.
(iv) Reload Options. The Committee shall have the authority to
specify, at the time of grant or, with respect to Nonqualified Stock
Options, at or after the time of grant, that an Optionee shall be granted
a Nonqualified Stock Option (a "Reload Option") in the event such
Optionee exercises all or a part of a Stock Option (an "Original Option")
by surrendering in accordance with Section 5(a)(iii) of the Plan already
owned shares of unrestricted Stock in full or partial payment of the
option price under such Original Option, subject to the availability of
shares of Stock under the Plan at the time of such exercise; provided,
however, that no Reload Option shall be granted to a Nonemployee Director
(as defined in Section 9 of the Plan). Each Reload Option shall cover a
number of shares of Stock equal to the number of shares of Stock
surrendered in payment of the option price under such Original Option,
shall have an option price per share of Stock equal to the Fair Market
Value of the Stock on the date of grant of such Reload Option and shall
expire on the stated expiration date of the Original Option. A Reload
Option shall be exercisable at any time and from time to time from and
after the date of grant of such Reload Option (or, as the Committee in
its sole discretion shall determine at or after the time of grant, at
such time or times as shall be specified in the Reload Option); provided,
however, that a Reload Option granted to a director or officer of the
Company shall not be exercisable during the first six months from the
date of grant of such Reload Option. Any Reload Option may provide for
the grant, when exercised, of subsequent Reload Options to the extent and
upon such terms and conditions, consistent with this Section 5(a)(iv), as
the Committee in its sole discretion shall specify at or after the time
of grant of such Reload Option. A Reload Option shall contain such other
terms and conditions, which may include a restriction on the
transferability of the shares of Stock received upon exercise of the
Original Option representing at least the after-tax profit received upon
exercise of the Original Option, as the Committee in its sole discretion
shall deem desirable and which may be set forth in rules or guidelines
adopted by the Committee or in the Stock Option Agreements evidencing the
Reload Options.
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(b) Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan,
as the Committee shall deem desirable.
(i) Option Price. The option price per share of Stock purchasable
under a Stock Option (other than a Reload Option) shall be determined by
the Committee at the time of grant, but shall be not less than 100% of
the Fair Market Value of the Stock on the date of the grant; provided,
however, that if any Participant owns or is deemed to own (by reason of
the attribution rules of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Company or any
Subsidiary when an Incentive Stock Option is granted to such Participant,
the option price of such Incentive Stock Option (to the extent required
by the Code at the time of grant) shall be not less than 110% of the Fair
Market Value of the Stock on the date such Incentive Stock Option is
granted.
(ii) Option Term. The term of each Stock Option shall be fixed by
the Committee at the time of grant, but no Stock Option shall be
exercisable more than ten years after the date such Stock Option is
granted; provided, however, that if any Participant owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company or any Subsidiary when an Incentive Stock Option is granted to
such Participant, such Stock Option (to the extent required by the Code
at time of grant) shall not be exercisable more than five years from the
date such Incentive Stock Option is granted.
(iii) Transferability of Options. No Stock Options shall be
transferable by the Optionee otherwise than by will or by the laws of
descent and distribution and all Stock Options shall be exercisable,
during the Optionee's lifetime, only by the Optionee.
(iv) Option Exercise After Termination by Reason of Disability or
Retirement. If an Optionee's employment with the Company, any Subsidiary
or any Related Entity terminates by reason of Disability or Retirement,
any Stock Option held by such Optionee may thereafter be exercised for a
period of five years (or such shorter period as the Committee in its sole
discretion shall specify at or after the time of grant) from the date of
such termination or until the expiration of the stated term of such Stock
Option, whichever period is shorter, to the extent to which the Optionee
would on the date of exercise have been entitled to exercise the Stock
Option if such Optionee had continued to be employed by the Company, such
Subsidiary or such Related Entity (or to such greater or lesser extent as
the Committee in its sole discretion shall determine at or after the time
of grant). In the event of a termination of employment by reason of
Disability or Retirement, if an Incentive Stock Option is exercised after
the expiration of the exercise period that applies for purposes of
Section 422 of the Code, such Stock Option will thereafter be treated as
a Nonqualified Stock Option.
(v) Option Exercise After Termination by Consent. If an Optionee's
employment with the Company or any Subsidiary is terminated by the
Company or such Subsidiary under mutually satisfactory conditions or if
an Optionee's employment with a Related Entity is terminated under
conditions mutually satisfactory to such Related Entity and the Optionee,
the Committee, in its sole discretion, may permit the Optionee to
exercise any Stock Option held by such Optionee for a period of one year
(or such shorter period as the Committee in its sole discretion shall
specify at or after the time of grant) from the date of such termination
or until the expiration of the stated term of such Stock Option,
whichever period is shorter, to the extent to which the Optionee would on
the date of exercise have been entitled to exercise the Stock Option if
such Optionee had continued to be employed by the Company, such
Subsidiary or such Related Entity (or to such greater or lesser extent as
the Committee in its sole discretion shall determine at or after the time
of grant). If an Optionee's employment with the Company or any Subsidiary
is terminated in connection with such Optionee's acceptance of
employment, at the request of the Company or a Subsidiary, with a Related
Entity (or an Optionee's employment with one Related Entity is terminated
in connection with such Optionee's acceptance of employment, at the
request of the Company or a Subsidiary, with another Related Entity), the
Committee in its sole discretion may permit the Optionee to exercise any
Stock Option held by such Optionee after the date of such termination at
any time until the expiration of the stated term of such Stock Option (or
such shorter
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period as the Committee in its sole discretion shall specify
at or after the time of grant), to the extent that the Optionee would on
the date of exercise have been entitled to exercise such Stock Option if
such Optionee had continued to be employed by the Company or such
Subsidiary (or such initial Related Entity), provided that the Optionee
has been in continuous employ with the Related Entity to which such
Optionee has moved from the date of acceptance of employment therewith
until the date of exercise. In the event of a termination of employment
by the Company, any Subsidiary or any Related Entity under mutually
satisfactory conditions, if an Incentive Stock Option is exercised after
the expiration of the exercise period that applies for purposes of
Section 422 of the Code, such Stock Option will thereafter be treated as
a Nonqualified Stock Option.
(vi) Option Exercise After Termination by Death. If (x) an
Optionee's employment with the Company, any Subsidiary or any Related
Entity terminates by reason of death, (y) an Optionee dies within the
five year period (or such shorter period as the Committee shall have
specified for exercise in accordance with Section 5(a)(iv) of the Plan)
following termination by reason of Disability or Retirement as set forth
in Section 5(a)(iv) of the Plan or (z) an Optionee dies within the one
year period (or such shorter period as the Committee shall have specified
for exercise in accordance with Section 5(a)(v) of the Plan) following
termination under mutually satisfactory conditions as set forth in the
first sentence of Section 5(a)(v) of the Plan, any Stock Option held by
such Optionee may thereafter be exercised by the legal representative of
the estate or by the legatee of the Optionee under the will of the
Optionee for a period of one year (or such shorter period as the
Committee in its sole discretion shall specify at or after the time of
grant) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is shorter, to the
extent to which the Optionee would on the date of exercise have been
entitled to exercise the Stock Option if such Optionee had continued to be
employed by the Company, such Subsidiary or such Related Entity (or to
such greater or lesser extent as the Committee in its sole discretion
shall determine at or after the time of grant).
(vii) Restriction on Exercise After Termination. Notwithstanding the
provisions of this Section 5, but subject to the provisions of Section 12
of the Plan, the exercise of any Stock Option after termination of
employment shall be subject to satisfaction of the conditions precedent
that the Optionee neither, (x) takes other employment or renders services
to others without the written consent of the Company, nor (y) conducts
himself in a manner adversely affecting the Company.
(viii) Other Termination. Except as otherwise provided in this
Section 5 or Section 12 of the Plan, or as determined by the Committee in
its sole discretion, if an Optionee's employment with the Company, any
Subsidiary or any Related Entity terminates, all Stock Options held by
the Optionee will terminate.
(ix) Annual Limit on Incentive Stock Options. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the date the Incentive
Stock Option is granted) of the shares of Stock with respect to which
Incentive Stock Options granted under the Plan and all other option plans
of the Company or any Subsidiary become exercisable for the first time by
an Optionee during any calendar year shall not exceed $100,000; provided,
however, that if the aggregate Fair Market Value (so determined) of the
shares of Stock covered by such options exceeds $100,000 during any year
in which they become exercisable, such options with a Fair Market Value
in excess of $100,000 will be Nonqualified Stock Options.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be granted either
in conjunction with all or part of any Stock Option granted under the Plan
("Related Stock Appreciation Rights") or alone ("Freestanding Stock
Appreciation Rights") and, in either case, in addition to other Awards granted
under the Plan. Participants shall enter into a Stock Appreciation Rights
agreement with the Company if requested by the Committee, in such form as the
Committee shall determine.
(i) Time of Grant. Related Stock Appreciation Rights related to a
Nonqualified Stock Option may be granted either at or after the time of
the grant of such Nonqualified Stock Option. Related Stock
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Appreciation Rights related to an Incentive Stock Option may be
granted only at the time of the grant of such Incentive Stock Option.
Freestanding Stock Appreciation Rights may be granted at any time.
(ii) Exercisability. Related Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the Stock
Options to which they relate shall be exercisable in accordance with the
provisions of Section 5(a)(ii) of the Plan and Freestanding Stock
Appreciation Rights shall be exercisable, subject to such terms and
conditions as shall be determined by the Committee in its sole discretion
at or after the time of grant, from time to time, to the extent that
Stock Options are exercisable in accordance with the provisions of
Section 5(a)(ii) of the Plan; provided, however, that any Stock
Appreciation Right granted to a director or officer of the Company shall
not be exercisable during the first six months from the date of grant of
such Stock Appreciation Right, except that this additional limitation
shall not apply in the event of death or Disability of the director or
officer prior to the expiration of the six-month period. A Related Stock
Appreciation Right granted in connection with an Incentive Stock Option
may be exercised only if and when the Fair Market Value of the Stock
subject to the Incentive Stock Option exceeds the option price of such
Stock Option.
(iii) Method of Exercise. Stock Appreciation Rights shall be
exercised by a Participant by giving written notice of exercise delivered
in person or by mail as required by the terms of any agreement evidencing
the Stock Appreciation Right at the Company's principal executive office,
specifying the number of shares of Stock in respect of which the Stock
Appreciation Right is being exercised. If requested by the Committee, the
Participant shall deliver to the Company the agreement evidencing the
Stock Appreciation Right being exercised and, in the case of a Related
Stock Appreciation Right, the Stock Option Agreement evidencing any
related Stock Option, for notation thereon of such exercise and return
thereafter of such agreements to the Participant.
(iv) Amount Payable. Upon the exercise of a Related Stock
Appreciation Right, an Optionee shall be entitled to receive an amount in
cash or shares of Stock equal in value to the excess of the Fair Market
Value of one share of Stock on the date of exercise over the option price
per share specified in the related Stock Option, multiplied by the number
of shares of Stock in respect of which the Related Stock Appreciation
Right shall have been exercised, with the Committee having in its sole
discretion the right to determine the form of payment.
Upon the exercise of a Freestanding Stock Appreciation Right, a
Participant shall be entitled to receive an amount in cash or shares of
Stock equal in value to the excess of the Fair Market Value of one share
of Stock on the date of exercise over the price per share specified in
the Freestanding Stock Appreciation Right, which shall be not less than
100% of the Fair Market Value of the Stock on the date of grant,
multiplied by the number of shares of Stock in respect of which the
Freestanding Stock Appreciation Right shall have been exercised, with the
Committee having in its sole discretion the right to determine the form
of payment.
(b) Terms and Conditions. Stock Appreciation Rights granted under the
Plan shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable.
(i) Term of Stock Appreciation Rights. The term of a Related Stock
Appreciation Right shall be the same as the term of the related Stock
Option. A Related Stock Appreciation Right or applicable portion thereof
shall terminate and no longer be exercisable upon the exercise,
termination, cancellation or surrender of the related Stock Option,
except that, unless otherwise provided by the Committee in its sole
discretion at or after the time of grant, a Related Stock Appreciation
Right granted with respect to less than the full number of shares of
Stock covered by a related Stock Option shall terminate and no longer be
exercisable if and to the extent that the number of shares of Stock
covered by the exercise, termination, cancellation or surrender of the
related Stock Option exceeds the number of shares of Stock not covered by
the Related Stock Appreciation Right.
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The term of each Freestanding Stock Appreciation Right shall be fixed by
the Committee, but no Freestanding Stock Appreciation Right shall be
exercisable more than ten years after the date such right is granted.
(ii) Transferability of Stock Appreciation Rights. Stock
Appreciation Rights shall be transferable only when and to the extent
that a Stock Option would be transferable under Section 5(b) (iii) of the
Plan.
(iii) Termination of Employment. In the event of the termination of
employment of an Optionee holding a Related Stock Appreciation Right,
such right shall be exercisable to the same extent that the related Stock
Option is exercisable after such termination.
In the event of the termination of employment of the holder of a
Freestanding Stock Appreciation Right, such right shall be exercisable to
the same extent that a Stock Option with the same terms and conditions as
such Freestanding Stock Appreciation Right would have been exercisable in
the event of the termination of employment of the holder of such Stock
Option.
SECTION 7. LIMITED STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Limited Stock Appreciation Rights may be granted
either in conjunction with all or part of any Stock Option granted under the
Plan ("Related Limited Stock Appreciation Rights") or alone ("Freestanding
Limited Stock Appreciation Rights") and, in either case, in addition to other
Awards granted under the Plan. Participants shall enter into a Limited Stock
Appreciation Rights agreement with the Company if requested by the Committee,
in such form as the Committee shall determine.
(i) Time of Grant. Related Limited Stock Appreciation Rights related
to a Nonqualified Stock Option may be granted either at or after the time
of the grant of such Nonqualified Stock Option. Related Limited Stock
Appreciation Rights related to an Incentive Stock Option may be granted
only at the time of the grant of such Incentive Stock Option.
Freestanding Limited Stock Appreciation Rights may be granted at any
time.
(ii) Exercisability. Limited Stock Appreciation Rights can only be
exercised within the sixty-day period following a Change in Control;
provided, however, that any Limited Stock Appreciation Right granted to a
director or officer of the Company must be held for a period of six
months prior to a Change in Control, except that this additional
limitation shall not apply in the event of death or Disability of the
director or officer prior to the expiration of the six-month period.
(iii) Amount Payable. Upon the exercise of a Limited Stock
Appreciation Right, a Participant shall be entitled to receive an amount
in cash equal to the Change in Control Stock Appreciation (as defined in
Section 12 of the Plan) of one share of Stock on the date of exercise,
multiplied by the number of shares of Stock in respect of which the
Limited Stock Appreciation Right shall have been exercised.
(b) Other Provisions. The other provisions of Section 6 of the Plan shall
apply to Limited Stock Appreciation Rights to the extent not inconsistent with
the provisions of this Section 7.
SECTION 8. RESTRICTED STOCK UNITS AND PERFORMANCE STOCK UNITS.
(a) Grant. Awards of Restricted Stock Units or Performance Stock Units
may be granted either alone or in addition to other Awards granted under the
Plan. Each Restricted Stock Unit or Performance Stock Unit represents the
right to receive, subject to the terms and provisions of the Plan and any
agreements evidencing such Awards, one share of Stock. If the Committee in its
sole discretion so determines at the time of grant, a Participant to whom a
Restricted Stock Unit Award or Performance Stock Unit Award has been granted
may be credited with an amount equivalent to all cash dividends ("Dividend
Equivalents") that would have been paid to the holder of such Restricted Stock
Unit Award or Performance Stock Unit Award if one share of Stock for every
Restricted Stock Unit or Performance Stock Unit awarded had been issued to the
holder on the date of grant of such Restricted Stock Unit Award or Performance
Stock Unit Award. The Committee shall determine the terms and conditions of
each Restricted Stock Unit Award and Performance Stock Unit
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Award including, without limitation, the number of Restricted Stock
Units or Performance Stock Units to be covered by such Award, the restricted
period applicable to Restricted Stock Unit Awards and the performance
objectives applicable to Performance Stock Unit Awards. The Committee in its
sole discretion may prescribe terms and conditions applicable to the vesting of
such Restricted Stock Unit Awards or Performance Stock Unit Awards in addition
to those provided in the Plan. The Committee shall establish such rules and
guidelines governing the crediting of Dividend Equivalents, including the
timing, form of payment and payment contingencies of Dividend Equivalents, as
it may deem desirable. The Committee in its sole discretion may at any time
accelerate the time at which the restrictions on all or any part of a
Restricted Stock Unit Award lapse or determine the performance objectives with
respect to all or any part of a Performance Stock Unit Award to have been
attained; provided, however, that the Committee shall not be entitled to
exercise such discretion to the extent that the ability to exercise such
discretion would cause the Performance Stock Unit Award to fail to qualify as
other performance based compensation under Section 162(m) of the Code.
Restricted Stock Unit Awards and Performance Stock Unit Awards shall
not be transferable otherwise than by will or by the laws of descent and
distribution. Shares of Stock shall be deliverable upon the vesting of
Restricted Stock Unit Awards and Performance Stock Unit Awards for no
consideration other than services rendered or, in the Committee's sole
discretion, the minimum amount of consideration other than services (such as
the par value per share of Stock) required to be received by the Company in
order to assure compliance with applicable state law, which amount shall not
exceed 10% of the Fair Market Value of such shares of Stock on the date of
issuance. Each such Award shall be evidenced by a Restricted Stock Unit Award
agreement ("Restricted Stock Unit Award Agreement") or Performance Stock Unit
Award agreement ("Performance Stock Unit Award Agreement").
(b) Terms and Conditions. Unless otherwise determined by the Committee in
its sole discretion:
(i) a breach of any term or condition provided in the Plan, the
Restricted Stock Unit Award Agreement or the Performance Stock Unit Award
Agreement or established by the Committee with respect to such Restricted
Stock Unit Award or Performance Stock Unit Award will cause a
cancellation of the unvested portion of such Restricted Stock Unit Award
or Performance Stock Unit Award (including any unvested Dividend
Equivalents credited in respect thereof) and the Participant shall not be
entitled to receive any consideration in respect of such cancellation;
and
(ii) subject to Section 12 of the Plan, termination of such holder's
employment with the Company, any Subsidiary or any Related Entity prior
to the lapsing of the applicable restriction period or attainment of
applicable performance objectives will cause a cancellation of the
unvested portion of such Restricted Stock Unit Award or Performance Stock
Unit Award (including any Dividend Equivalents credited in respect
thereof) and the Participant shall not be entitled to receive any
consideration in respect of such cancellation.
(c) Completion of Restriction Period and Attainment of Performance
Objectives. To the extent that restrictions with respect to any Restricted
Stock Unit Award lapse or performance objectives with respect to any
Performance Stock Unit Award are attained and provided that other applicable
terms and conditions have then been satisfied:
(i) such of the Restricted Stock Units or Performance Stock Units as
to which restrictions have lapsed or performance objectives have been
attained shall become vested and the Committee shall cause to be issued
and delivered to the Participant a stock certificate representing a
number of shares of Stock equal to such number of Restricted Stock Units
or Performance Stock Units, free of all restrictions, except as provided
in Section 13(a) of the Plan; and
(ii) any Dividend Equivalents credited in respect of such Restricted
Stock Units or Performance Stock Units shall become vested to the extent
that such Restricted Stock Units or Performance Stock Units shall have
become vested and the Committee shall cause such Dividend Equivalents to
be delivered to the Participant.
Any such Restricted Stock Unit Award or Performance Stock Unit Award
(including any Dividend Equivalents credited in respect thereof) that shall
not have become vested at the end of the applicable
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restricted period or the period given for the attainment of performance
objectives shall expire, terminate and be cancelled and the Participant shall
not thereafter have any rights with respect to the Restricted Stock Units or
Performance Stock Units (or any Dividend Equivalents credited in respect
thereof) covered thereby.
SECTION 9. GRANT OF STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND LIMITED STOCK
APPRECIATION RIGHTS TO NONEMPLOYEE DIRECTORS.
Each person who is not an employee of the Company, any Subsidiary or any
Related Entity and who on and after May 16, 1991 is elected or reelected as a
director (a "Nonemployee Director") of the Company at any annual or special
meeting of stockholders of the Company, shall as of the date of each such
election or reelection automatically be granted an Award consisting of (a) a
Stock Option to purchase 1,500 shares of Stock (as constituted at the time of
the annual meeting of stockholders on May 16, 1991) for an option price equal
to 100% of the Fair Market Value of the Stock on the date of such election or
reelection and, (b) with respect to such number of shares of Stock, (i) a
Related Stock Appreciation Right, the stock appreciation on which shall be
payable all in cash, and (ii) a Limited Stock Appreciation Right, subject, in
each case, to applicable law. The action of the stockholders in electing or
reelecting a Nonemployee Director shall constitute the granting of the Award
and the date on which the stockholders shall take such action shall be the
date of granting of such Award. All such Stock Options shall be designated as
Nonqualified Stock Options. Subject to Section 12 of the Plan, a Nonemployee
Director must serve continuously as a Nonemployee Director of the Company for
a period of twelve consecutive months from the date such Award is granted
before he or she can exercise any part of such Award. Thereafter, on and after
the first anniversary of the date of granting the Award and before the second
anniversary, the Nonemployee Director may exercise the Award with respect to
not more than 40% of the number of shares of Stock covered thereby, on and
after the second anniversary and before the third anniversary, the Nonemployee
Director may exercise the Award with respect to not more than 70% of the number
of shares of Stock covered thereby, and on and after the third anniversary and
before the expiration of the stated term of the Award, which shall be ten years
from the date of its granting, the Nonemployee Director may at any time or from
time to time exercise the Award with respect to all or any portion of the
shares of Stock covered thereby. The Related Limited Stock Appreciation Right
component of the Award shall be exercisable only as set forth in Section
7(a)(ii) of the Plan. If a Nonemployee Director's service with the Company
terminates by reason of permanent and total disability or retirement from
active service as a director of the Company, any Award held by such Nonemployee
Director may be exercised for a period of five years from the date of such
termination or until the expiration of the Award, whichever is shorter, to the
extent to which the individual would on the date of exercise have been entitled
to exercise the Award if such individual had continued to serve as a
Nonemployee Director. If a Nonemployee Director's service with the Company
terminates by reason of death or under mutually satisfactory conditions, or if
a Nonemployee Director dies within the five-year period following termination
by reason of permanent and total disability or retirement from active service
as a director of the Company or within the one-year period following
termination under mutually satisfactory conditions, any Award held by such
Nonemployee Director may be exercised for a period of one year from the date of
such termination or post-termination death, as the case may be, or until the
expiration of the stated term of the Award, whichever is shorter, to the extent
to which the individual would on the date of exercise have been entitled to
exercise the Award if such individual had continued to serve as a Nonemployee
Director. All applicable provisions of the Plan not inconsistent with this
Section 9 shall apply to Awards granted to Nonemployee Directors; provided,
however, that the Committee may not exercise discretion under any provision of
the Plan with respect to Awards granted under this Section 9 to the extent that
such discretion is inconsistent with Rule 16b-3. The maximum number of shares
of Stock as to which Stock Options may be granted to any Nonemployee Director
under both the Plan, as in effect through May 16, 2001, and under the Company's
1972 Stock Option Plan, as in effect through April 17, 1992, shall be 22,500
shares of Stock (as constituted at the time of the annual meeting of
stockholders on May 16, 1991).
SECTION 10. AMENDMENT AND TERMINATION.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of
a Participant under any Award theretofore
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granted without such Participant's consent, or which, without the approval
of the stockholders of the Company (where such approval is necessary to satisfy
then-applicable requirements of Rule 16b-3, any Federal tax law relating to
Incentive Stock Options or applicable state law), would:
(a) except as provided in Section 3 of the Plan, increase the total
number of shares of Stock which may be issued under the Plan;
(b) except as provided in Section 3 of the Plan, decrease the option
price of any Stock Option to less than 100% of the Fair Market Value on
the date of the grant of the option;
(c) change the class of employees eligible to participate in the
Plan; or
(d) extend (i) the period during which Stock Options may be granted
or (ii) the maximum period of any Award under Sections 5(b)(ii) or
6(b)(i) of the Plan.
Except as restricted herein with respect to Incentive Stock Options or
othwerwise, the Committee may amend or alter the terms and conditions of any
Award theretofore granted, and of any agreement evidencing such Award,
prospectively or retroactively, but no such amendment or alteration
shall impair the rights of any Participant under such Award or agreement
without such Participant's consent.
SECTION 11. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan. With respect to
any payments not yet made and due to a Participant by the Company, nothing
contained herein shall give any such Participant any rights that are greater
than those of a general unsecured creditor of the Company.
SECTION 12. CHANGE IN CONTROL.
The following acceleration and valuation provisions shall apply in the
event of a Change in Control notwithstanding other provisions of the Plan or
any provisions of any applicable agreement to the contrary:
(a) In the event of a Change in Control:
(i) any Stock Appreciation Right and any Stock Option awarded
under the Plan not previously exercisable in full shall become fully
exercisable, provided that any Stock Appreciation Right granted to a
director or officer within six months prior to the date of a Change in
Control shall not, except in the event of death or disability, be
exercisable during the first six months from the date of granting of
such Stock Appreciation Right;
(ii) the restriction period applicable to any Restricted Stock
Unit Award shall lapse, the performance objectives applicable to any
Performance Stock Unit Award shall be deemed attained, and any other
restrictions or conditions applicable to any Restricted Stock Unit
Award or Performance Stock Unit Award shall be waived and the shares
of Stock covered thereby and all unrestricted Dividend Equivalents
credited in respect thereof shall be deemed fully vested; and
(iii) any Participant holding an Award who is terminated by the
Company or any Subsidiary for any reason within the two year period
immediately following a Change in Control shall be permitted to
exercise any Stock Option, Stock Appreciation Right or Limited Stock
Appreciation Right after such termination of employment at any time
(x) within the three month period commencing on the later of the date
of termination of his or her employment or the date on which such
Award would first be exercisable in accordance with the terms of the
Plan had such termination not occurred or (y) until the stated term of
such Award, whichever period is shorter.
(b) For purposes of the Plan, "Change in Control" shall mean a
Change in Control of the Company, which shall be deemed to have occurred
if:
(i) any Person (as defined in this Section 12) is or becomes the
Beneficial Owner (as defined in this Section 12) of securities of the
Company representing 20% or more of the combined voting
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power of the Company's then outstanding securities (unless the event
causing the 20% threshold to be crossed is an acquisition of securities
directly from the Company);
(ii) during any period of two consecutive years beginning after
May 16, 1991, individuals who at the beginning of such period
constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (i), (iii) or (iv)
of this Change in Control definition) whose election or nomination for
election was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved cease for any reason to constitute a
majority of the Board;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the entity surviving such merger or
consolidation), in combination with voting securities of the Company
or such surviving entity held by a trustee or other fiduciary pursuant
to any employee benefit plan of the Company or such surviving entity
or of any Subsidiary of the Company or such surviving entity, at least
80% of the combined voting power of the securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation); or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or an agreement for the sale
or disposition by the Company of all or substantially all of the
Company's assets.
(c) For purposes of the definition of Change in Control, "Person"
shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act is supplemented by Section 13(d)(3) of the Exchange Act;
provided, however, that Person shall not include (i) the Company, any
Subsidiary or any other Person controlled by the Company, (ii) any
trustee or other fiduciary holding securities under any employee benefit
plan of the Company or of any Subsidiary, or (iii) a corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of securities of
the Company.
(d) For purposes of the definition of Change in Control, a Person
shall be deemed the "Beneficial Owner" of any securities which such
Person, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" (within the meaning of Rule 13d-3 under the
Exchange Act) of, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that: (i) a
Person shall not be deemed the Beneficial Owner of any security as a
result of an agreement, arrangement or understanding to vote such
security (x) arising solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the Exchange Act and the applicable rules and
regulations thereunder or (y) made in connection with, or to otherwise
participate in, a proxy or consent solicitation made, or to be made,
pursuant to, and in accordance with, the applicable provisions of the
Exchange Act and the applicable rules and regulations thereunder; in
either case described in clause (x) or clause (y) above, whether or not
such agreement, arrangement or understanding is also then reportable by
such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); and (ii) a Person engaged in business as an
underwriter of securities shall not be deemed to be the Beneficial Owner
of any securities acquired through such Person's participation in good
faith in a firm commitment underwriting until the expiration of forty
days after the date of such acquisition.
(e) For purposes of this Section 12, "Change in Control Stock
Appreciation" with respect to any share of Stock shall mean an amount
equal to the excess, if any, of
(i) the higher of (x) the Fair Market Value of such share on the
date the Limited Stock Appreciation Right is exercised or (y) (A) in
the case of transactions described in clauses (i) or (iii) of the
Change in Control definition, the highest per share price paid (below
called the "Highest
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Price") for shares of Stock in the transaction constituting the Change
in Control, (B) in the case of a transaction described in clause (ii)
of the Change in Control definition which occurs in connection with a
transaction described in clauses (i), (iii), or (iv) of the Change in
Control definition, the Highest Price, (C) in the case of a transaction
described in clause (ii) of the Change in Control definition which does
not occur in connection with a transaction described in clauses (i),
(iii) or (iv) of the Change in Control definition, the average of the
daily closing prices per share of Stock of the Company on the New York
Stock Exchange, if such shares are traded thereon, or, if not, such
other national securities exchange on which such shares are admitted to
trade or, if none, the National Association of Securities Dealers
Automated Quotation System if such shares are admitted for quotation
thereon, on the thirty consecutive trading days immediately preceding
the Change in Control or (D) in the case of a transaction described in
clause (iv) of the Change in Control definition, the equivalent of the
Highest Price as determined by the Committee, over
(ii) in the case of a Related Limited Stock Appreciation Right,
the option price specified in the related Stock Option and, in the
case of a Freestanding Limited Stock Appreciation Right, the price per
share specified therein, which shall not be less than 100% of the Fair
Market Value of the Stock on the date of grant; provided, however,
that with respect to a Related Limited Stock Appreciation Right
associated with a Stock Option which is an Incentive Stock Option
immediately prior to the exercise of such Limited Related Stock
Appreciation Right, the Change in Control Stock Appreciation thereon
shall not exceed the maximum amount which will permit such Stock
Option to continue to qualify as an Incentive Stock Option.
SECTION 13. GENERAL PROVISIONS.
(a) The Committee may require each Optionee purchasing shares of Stock
pursuant to a Stock Option to represent to and agree with the Company in
writing that such Optionee is acquiring the shares of Stock without a view to
distribution thereof.
All certificates for shares of Stock delivered under the Plan and, to the
extent applicable, all evidences of ownership with respect to Dividend
Equivalents delivered under the Plan, shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed or
quotation system on which the Stock is admitted for trading and any applicable
federal or state securities law, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to
such restrictions.
(b) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required, and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan
shall not confer upon any employee of the Company, any Subsidiary or any
Related Entity any right to continued employment with the Company, any
Subsidiary or any Related Entity, as the case may be, nor shall it interfere
in any way with the right of the Company, any Subsidiary or any Related Entity
to terminate the employment of any of its employees at any time.
(c) Each Participant shall be deemed to have been granted any Award on
the date the Committee took action to grant such Award under the Plan or such
later date as the Committee in its sole discretion shall determine at the time
such grant is authorized; provided, however, that a Reload Option shall be
deemed to have been granted on the date on which is exercised the Original
Option in respect of the exercise of which such Reload Option is granted or
such later date as the Committee in its sole discretion shall determine prior
to the date on which such exercise occurs.
(d) Unless the Committee otherwise determines, each Participant shall, no
later than the date as of which the value of an Award first becomes includible
in the gross income of the Participant for federal income tax purposes, pay to
the Company, or make arrangements satisfactory to the Committee regarding
payment of, any federal, state or local taxes of any kind required by law to
be withheld with respect to the Award. The obligations of the Company under
the Plan shall be conditional on such payment or arrangements and the
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Company (and, where applicable, its Subsidiaries and its Related Entities)
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Participant.
A Participant (other than a Nonemployee Director) may elect to have such
tax withholding obligation satisfied, in whole or in part, by (i) authorizing
the Company to withhold from shares of Stock to be issued upon the exercise of
a Stock Option or Stock Appreciation Right or upon the vesting of any
Restricted Stock Unit Award or Performance Stock Unit Award a number of shares
of Stock with an aggregate Fair Market Value that would satisfy the
withholding amount due, or (ii) transferring to the Company shares of Stock
owned by the Participant with an aggregate Fair Market Value that would
satisfy the withholding amount due. With respect to any Participant who is a
director or officer, the following additional restrictions shall apply:
(i) the election to satisfy tax withholding obligations relating to
the exercise of a Stock Option or Stock Appreciation Right or to the
vesting of a Restricted Stock Unit Award or Performance Stock Unit Award
in the manner permitted by this subsection (d) shall be made either (x)
during the period beginning on the third business day following the date
of release of quarterly or annual summary statements of sales and
earnings and ending on the twelfth business day following such date, or
(y) at least six months prior to the date on which the amount of tax to
be withheld upon the exercise of such Stock Option or Stock Appreciation
Right or the vesting of such Restricted Stock Unit Award or Performance
Stock Unit Award is determinable;
(ii) such election shall be irrevocable;
(iii) such election shall be subject to the consent or disapproval
of the Committee; and
(iv) such election shall not be made within six months of the date
of the grant of such Award.
(e) No member of the Board or the Committee, nor any officer or employee
of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, failure to act, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Committee and each and any officer or employee of
the Company acting on their behalf shall, to the extent permitted by law, be
fully indemnified and protected by the Company in respect of any such action,
failure to act, determination or interpretation.
(f) The Plan is intended to satisfy the conditions of Rule 16b-3, and all
interpretations of the Plan shall, to the extent permitted by law, regulations
and rulings, be made in a manner consistent with and so as to satisfy the
conditions of Rule 16b-3. The phrase "director or officer" as used in the Plan
means any director or officer who is subject to the provisions of Section
16(b) of the Exchange Act. Any provision of the Plan or the application of any
provision of the Plan inconsistent with Rule 16b-3 shall be inoperative and
shall not affect the validity of the Plan.
In interpreting and applying the provisions of the Plan, any Stock Option
granted as an Incentive Stock Option pursuant to the Plan shall to the extent
permitted by law, regulations and rulings be construed as, and any ambiguity
shall be resolved in favor of preserving its status as, an "incentive stock
option" within the meaning of Section 422 of the Code. Once an Incentive Stock
Option has been granted, no action by the Committee that would cause such
Stock Option to lose its status under the Code as an "incentive stock option"
shall be effective as to such Incentive Stock Option unless taken at the
request of or with the consent of the Optionee.
Notwithstanding any provision to the contrary in the Plan or in any
Incentive Stock Option granted pursuant to the Plan, if any change in law or
any regulation or ruling of the Internal Revenue Service shall have the effect
of disqualifying any Stock Option granted under the Plan which is intended to
be an "incentive stock option" within the meaning of Section 422 of the Code,
the Stock Option granted shall nevertheless continue to be outstanding as and
shall be deemed to be a Nonqualified Stock Option under the Plan.
(g) A Participant may elect, on or after the date of grant of any Award,
to defer receipt of all or any portion of the proceeds of such Award or any
Dividend Equivalents in connection therewith, whether in the form of cash or
shares of Stock, deliverable to such Participant upon the exercise, vesting or
payment of any such Award or Dividend Equivalents, in each case to the extent
permitted by and subject to the terms and
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conditions set forth in any deferral or similar plan or arrangement enacted
by the Board or the Committee in its sole discretion.
(h) Nothing in this Plan shall be interpreted to preclude the Corporation
from granting Awards under, or paying compensation outside the parameters of,
the Plan including, without limitation, base salaries, awards under any other
plan of the Corporation or its Subsidiaries (whether or not approved by
stockholders), incentive compensation (whether or not based on the attainment
of pre-established performance objectives) or retention or other special
payments, that is not deductible for Federal, State or local income tax
purposes by reason of Section 162(m) of the Code or otherwise, should the Board
or any committee thereof (including the Committee), whichever is applicable,
determine that such action is in the best interests of the Corporation and its
stockholders.
SECTION 14. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date it is approved by the affirmative
vote of the holders of a majority of the shares of Stock of the Company
present in person or by proxy at the Annual Meeting of Stockholders on May 16,
1991.
SECTION 15. TERM OF PLAN.
No Award shall be granted under the Plan on or after the tenth
anniversary of the date the Plan is approved by the Company's stockholders,
provided, however, that Awards granted prior to such tenth anniversary may
extend beyond that date; and provided, further, however, that Reload Options
may be granted on or after such tenth anniversary, but no Reload Option shall
be exercisable after any date which is later than the date on which a Stock
Option granted prior to such tenth anniversary could be exercised.
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