Exhibit 10.1
1999 EQUITABLE RESOURCES, INC.
LONG-TERM INCENTIVE PLAN
(As amended and restated May 17, 2001)
SECTION 1. PURPOSES
1.01 The purpose of the 1999 Equitable Resources, Inc. Long-Term
Incentive Plan (the "Plan") is to assist the Company in attracting, retaining
and motivating employees of outstanding ability and to align their interests
with those of the shareholders of the Company.
SECTION 2. DEFINITIONS; CONSTRUCTION
2.01 DEFINITIONS. In addition to the terms defined elsewhere in the
Plan, the following terms as used in the Plan shall have the following meanings
when used with initial capital letters:
2.01.1 "Award" means any Option, Restricted Stock, Performance
Award or Other Stock-Based Award, or any other right or interest
relating to Shares or cash granted under the Plan.
2.01.2 "Award Agreement" means any written agreement, contract
or other instrument or document evidencing an Award.
2.01.3 "Board" means the Company's Board of Directors.
2.02.4 "Cause," when used with respect to the termination of
employment of a Participant, means:
(a) the willful and continued failure by the
Participant to substantially perform his duties with the
Company or a Subsidiary (other than any such failure resulting
from the Participant's disability), after a written demand for
substantial performance is delivered to the Participant by the
Board which specifically identifies the manner in which the
Board believes that the Participant has not substantially
performed his duties, and which failure has not been cured
within 30 days after such written demand; or
(b) the willful and continued engaging by the
Participant in conduct which is demonstrably and materially
injurious to the Company or a Subsidiary, monetarily or
otherwise, or
(c) the breach by the Participant of any obligation
of confidentiality owed to the Company or a Subsidiary.
For purposes of this Section 2.02.4, no act, or failure to
act, on the Participant's part shall be considered "willful" unless
done, or omitted to be done, by the Participant in bad faith and
without reasonable belief that such action or omission was in the best
interest of the Company. Notwithstanding the foregoing, the Participant
shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to him a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and
held for that purpose (after reasonable notice to the Participant and
an opportunity for the Participant, together with his counsel, to be
heard before the Board) finding that in the good faith opinion of the
Board the Participant is guilty of the conduct set forth
above in clauses (a), (b) or (c) of this Section 2.02.4 and specifying
the particulars thereof in detail.
2.01.5 "Code" means the Internal Revenue Code of 1986, as
amended from time to time, together with rules, regulations and
interpretations promulgated thereunder. References to particular
sections of the Code shall include any successor provisions.
2.01.6 "Change of Control" has the meaning provided in Section
9.03.
2.01.7 "Committee" means the Compensation Committee or such
other Committee of the Board as may be designated by the Board to
administer the Plan, as referred to in Section 3.01 hereof; provided
however, that any member of the Committee participating in the taking
of any action under the Plan shall qualify as a "non-employee director"
as then defined under Rule 16b-3 and an "outside director" as then
defined under Section 162(m) of the Code.
2.01.8 "Common Stock" means shares of the common stock,
without par value, and such other securities of the Company as may be
substituted for Shares pursuant to Section 8.01 hereof.
2.01.9 "Covered Employee" shall have the meaning provided in
Section 162(m)(3) of the Code.
2.01.10 "Exchange Act" means the Securities Exchange Act of
1934, as amended.
2.01.11 "Fair Market Value" of shares of any stock, including
but not limited to Common Stock, or units of any other securities
(herein "shares"), shall be the closing price for the date as of which
Fair Market Value is to be determined in the principal market in which
such shares are traded, as quoted in The Wall Street Journal (or in
such other reliable publication as the Committee, in its discretion,
may determine to rely upon). If the Fair Market Value of shares on any
date cannot be determined on the basis set forth in the preceding
sentence, or if a determination is required as to the Fair Market Value
on any date of property other than shares, the Committee shall in good
faith determine the Fair Market Value of such shares or other property
on such date. Fair Market Value shall be determined without regard to
any restriction other than a restriction which, by its terms, will
never lapse.
2.01.12 "Incentive Stock Option" means an Option that is
intended to meet the requirements of Section 422 of the Code and is
designated as such in the Award Agreement relating thereto.
2.01.13 "Option" means a right, granted under Section 6.02
hereof, to purchase Shares at a specified price during specified time
periods. An Option may be either an Incentive Stock Option or a
nonstatutory stock option, which is an Option not intended to be an
Incentive Stock Option.
2.01.14 "Other Stock-Based Award" means an Award, granted
under Section 6.05 hereof, that is denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related to,
Shares.
2.01.15 "Participant" means an employee of the Company or any
Subsidiary, including, but not limited to, Covered Employees, who is
granted an Award under the Plan.
2.01.16 "Performance Award," "Performance Goal" and
"Performance Period" shall have the meanings provided in Section 6.04.
2.01.17 "Reload Option Rights" and "Reload Option" have the
meanings provided in Section 6.02(v).
2.01.18 "Restricted Stock" means Shares, granted under Section
6.03 hereof, that are subject to certain restrictions.
2.01.19 "Rule 16b-3" means Rule 16b-3 under the Exchange Act,
as amended from time to time, or any successor to such Rule promulgated
by the Securities and Exchange Commission under Section 16 of the
Exchange Act.
2.01.20 "Shares" means the common stock of the Company,
without par value, and such other securities of the Company as may be
substituted for Shares pursuant to Section 8.01 hereof.
2.01.21 "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 chain owns stock
possessing at least 50% of the total combined voting power of all
classes of stock in one of the other corporations in the chain.
2.02 CONSTRUCTION. For purposes of the Plan, the following rules of
construction shall apply:
2.02.1 The word "or" is disjunctive but not necessarily
exclusive.
2.02.2 Words in the singular include the plural; words in the
plural include the singular; words in the neuter gender include the
masculine and feminine genders, and words in the masculine or feminine
gender include the other and neuter genders.
SECTION 3. ADMINISTRATION
3.01 The Plan shall be administered by the Committee. The Committee
shall have full and final authority to take the following actions, in each case
subject to and consistent with the provisions of the Plan:
(i) to designate Participants;
(ii) to determine the type or types of Awards to be granted to
each Participant;
(iii) to determine the number of Awards to be granted, the
number of Shares or amount of cash or other property to which an Award
will relate, the terms and conditions of any Award (including, but not
limited to, any exercise price, grant price or purchase price, any
limitation or restriction, any schedule for lapse of limitations,
forfeiture restrictions or restrictions on exercisability or
transferability, and accelerations or waivers thereof, based in each
case on such considerations as the Committee shall determine), and all
other matters to be determined in connection with an Award;
(iv) to determine whether, to what extent and under what
circumstances an Award may be settled in, or the exercise price of an
Award may be paid in cash, Shares, other Awards or other property, or
an Award may be accelerated, vested, canceled, forfeited, exchanged or
surrendered;
(v) to determine whether, to what extent and under what
circumstances cash, Shares, other Awards, other property and other
amounts payable with respect to an Award shall be
deferred, whether automatically or at the election of the Committee or
at the election of the Participant;
(vi) to interpret and administer the Plan and any instrument
or agreement relating to, or Award made under, the Plan;
(vii) to prescribe the form of each Award Agreement, which
need not be identical for each Participant;
(viii) to adopt, amend, suspend, waive and rescind such rules
and regulations as the Committee may deem necessary or advisable to
administer the Plan;
(ix) to correct any defect or supply any omission or reconcile
any inconsistency, and to construe and interpret the Plan, the rules
and regulations, any Award Agreement or other instrument entered into
or Award made under the Plan;
(x) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan; and
(xi) to make such filings and take such actions as may be
required from time to time by appropriate state, regulatory and
governmental agencies.
Any action of the Committee with respect to the Plan shall be final,
conclusive and binding on all Persons, including the Company, Subsidiaries,
Participants, any Person claiming any rights under the Plan from or through any
Participant, employees and shareholders. The express grant of any specific power
to the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee may
delegate to officers or managers of the Company or any Subsidiary the authority,
subject to such terms as the Committee shall determine, to perform
administrative functions under the Plan and, with respect to Participants who
are not subject to Section 16 of the Exchange Act, to take such actions and
perform such functions under the Plan as the Committee may specify. Each member
of the Committee shall be entitled to, in good faith, rely or act upon any
report or other information furnished to him by an officer, manager or other
employee of the Company or a Subsidiary, the Company's independent certified
public accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.
SECTION 4. SHARES SUBJECT TO THE PLAN
4.01 The maximum net number of Shares which may be issued and in
respect of which Awards may be granted under the Plan shall be limited to (i)
6,000,000 shares (3,000,000 shares prior to the June 11, 2001 stock split) of
Common Stock, subject to adjustment as provided in Section 8.01, which may be
used for all forms of Awards, and (ii) 5,000,000 shares (2,500,000 shares prior
to the June 11, 2001 stock split) of Common Stock, subject to adjustment as
provided in Section 8.01, which may be used for all forms of Awards excluding
Incentive Stock Options. For purposes of determining the number of Shares
available under either of the foregoing categories, Shares issued with respect
to Awards granted on or after May 17, 2001, the amendment date, shall be deemed
to have been issued from category (ii) of the foregoing sentence unless such
Award is an Incentive Stock Option or as otherwise determined by the Committee.
For purposes of this Section 4.01, the number of Shares to which an
Award relates shall be counted against the number of Shares available under the
Plan at the time of grant of the Award, unless such number of Shares cannot be
determined at that time, in which case the number of Shares actually distributed
pursuant to the Award shall be counted against the number of Shares available
under the Plan at the time of distribution; provided, however, that Awards
related to or retroactively added to, or granted in tandem with, substituted for
or converted into, other Awards shall be counted or not counted against the
number of Shares reserved and available under the Plan in accordance with
procedures adopted by the Committee so as to ensure appropriate counting but
avoid double counting.
If any Shares to which an Award relates are forfeited, or payment is
made to the Participant in the form of cash, cash equivalents or other property
other than Shares, or the Award otherwise terminates without payment being made
to the Participant in the form of Shares, any Shares counted against the number
of Shares available under the Plan with respect to such Award shall, to the
extent of any such forfeiture, alternative payment or termination, again be
available for Awards under the Plan. If the exercise price of an Award is paid
by delivering to the Company Shares previously owned by the Participant, the
Shares covered by the Award equal to the number of Shares so delivered shall
again be available for Awards under the Plan. Any Shares distributed pursuant to
an Award, if granted pursuant to category (i) of the first sentence of this
Section, may consist, in whole or part, of authorized and unissued Shares or of
treasury Shares, including Shares repurchased by the Company for purposes of the
Plan and, if granted pursuant to category (ii) of the first sentence of this
Section, shall consist of treasury Shares.
SECTION 5. ELIGIBILITY
5.01 Awards may be granted only to individuals who are full-time
employees (including, without limitation, employees who also are directors or
officers and Covered Employees) of the Company or any Subsidiary; provided,
however, that no Award shall be granted to any member of the Committee.
SECTION 6. SPECIFIC TERMS OF AWARDS
6.01 GENERAL. Subject to the terms of the Plan and any applicable Award
Agreement, Awards may be granted as set forth in this Section 6. In addition,
the Committee may impose on any Award or the exercise thereof, at the date of
grant or thereafter (subject to the terms of Section 10.01), such additional
terms and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall determine, including separate escrow provisions and terms
requiring forfeiture of Awards in the event of termination of employment by the
Participant. Except as provided in Section 7.01, or as required by applicable
law, Awards may be granted for no consideration other than prior and/or future
services.
6.02 OPTIONS. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per Share of an Option
shall not be less than 100% of the Fair Market Value of a Share on the
date of grant of such Option, except as otherwise provided in Section
7.01.
(ii) Option Term. The term of each Option shall be determined
by the Committee, except that no Incentive Stock Option shall be
exercisable after the expiration of ten years from the date of grant.
(iii) Times and Methods of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part, the methods by which the exercise price
may be paid or deemed to be paid, and the form of such payment,
including, without limitation, cash (including notes or other
contractual obligations of Participants to make payment on a deferred
basis, to the extent permitted by law), Shares, other outstanding
Awards or other property or any combination thereof, having a Fair
Market Value on the date of exercise equal to the exercise price,
provided, however, that (1) in the case of a Participant who is at the
time of exercise subject to Section 16 of the Exchange Act, any portion
of the exercise price representing a fraction of a Share shall in any
event be paid in cash or in property other than any equity security (as
defined by the Exchange Act) of the Company and (2) except as otherwise
determined by the Committee, in its discretion, at the time the Option
is granted, no shares which have been held for less than six months may
be delivered in payment of the exercise price of an Option.
Delivery of Shares in payment of the exercise price of an Option, if
authorized by the Committee, may be accomplished through the effective
transfer to the Company of Shares held by a broker or other agent.
Unless otherwise determined by the Committee, the Company will also
cooperate with any person exercising an Option who participates in a
cashless exercise program of a broker or other agent under which all or
part of the Shares received upon exercise of the Option are sold
through the broker or other agent, or under which the broker or other
agent makes a loan to such person, for the purpose of paying the
exercise price of an Option. Notwithstanding the preceding sentence,
unless the Committee, in its discretion, shall otherwise determine, the
exercise of the Option shall not be deemed to occur, and no Shares will
be issued by the Company upon exercise of an Option, until the Company
has received payment in full of the exercise price.
Notwithstanding any other provision contained in the Plan or in any
Award Agreement, but subject to the possible exercise of the
Committee's discretion contemplated in the last sentence of this
Section 6.02(iii), the aggregate Fair Market Value, determined as of
the date of grant, of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by a Participant during any
calendar year under all plans of the corporation employing such
employee, any parent or subsidiary corporation of such corporation and
any predecessor corporation of any such corporation shall not exceed
$100,000. If the date on which one or more of such Incentive Stock
Options could first be exercised would be accelerated pursuant to any
provision of the Plan or any Award Agreement, and the acceleration of
such exercise date would result in a violation of the restriction set
forth in the preceding sentence, then, notwithstanding any such
provision, but subject to the provisions of the next succeeding
sentence, the exercise dates of such Incentive Stock Options shall be
accelerated only to the date or dates, if any, that do not result in a
violation of such restriction and, in such event, the exercise dates of
the Incentive Stock Options with the lowest option prices shall be
accelerated to the earliest such dates. The Committee may, in its
discretion, authorize the acceleration of the exercise date of one or
more Incentive Stock Options even if such acceleration would violate
the $100,000 restriction set forth in the first sentence of this
paragraph and even if such Incentive Stock Options are thereby
converted in whole or in part to nonstatutory stock options.
(iv) Termination of Employment. Unless otherwise determined by
the Committee and reflected in the Award Agreement:
(A) if a Participant shall die while employed by
the Company or a Subsidiary or during a period following
termination of employment during which an Option
otherwise remains exercisable under this Section
6.02(iv), Options granted to the Participant, to the
extent exercisable at the time of the Participant's
death, may be exercised within one year after the date
of the Participant's death, but not later than the
expiration date of the Option, by the executor or
administrator of the Participant's estate or by the
Person or
Persons to whom the Participant shall have transferred
such right by will, by the laws of descent and
distribution or, if permitted by the Committee, by inter
vivos transfer.
(B) if the employment of a Participant with the
Company or a Subsidiary shall be involuntarily
terminated under circumstances which would qualify the
Participant for benefits under the Company's Separation
Allowance Plan, or if a Participant shall retire under
the terms of any retirement plan of the Company or a
Subsidiary or shall terminate his or her employment with
the written consent of the Company or a Subsidiary
specifically permitting such exercise, Options granted
to the Participant, to the extent exercisable at the
date of the Participant's termination of employment, may
be exercised within 90 days after the date of
termination of employment, but not later than the
expiration date of the Option.
(C) except to the extent an Option remains
exercisable under paragraph (A) or (B) above or under
Section 9.02, any Option granted to a Participant shall
terminate immediately upon the termination of all
employment of the Participant with the Company or a
Subsidiary.
(v) Reload Option Rights. Reload Option Rights if
awarded with respect to an Option shall entitle the holder of
the Option, upon exercise of the Option or any portion thereof
through delivery of previously owned Shares, to automatically
be granted on the date of such exercise a new nonstatutory
stock option (a "Reload Option") (1) for a number of Shares
not exceeding the number of full Shares delivered in payment
of the option price of the original Option and any withholding
taxes related thereto, (2) having an option price not less
than 100% of the Fair Market Value per Share of the Common
Stock on such date of grant, (3) having an expiration date not
later than the expiration date of the original Option so
exercised and (4) otherwise having terms permissible for the
grant of an Option under the Plan. Subject to the preceding
sentence and the other provisions of the Plan, Reload Option
Rights and Reload Options shall have such terms and be subject
to such restrictions and conditions, if any, as shall be
determined, in its discretion, by the Committee. In granting
Reload Option Rights, the Committee, may, in its discretion,
provide for successive Reload Option grants upon the exercise
of Reload Options granted thereunder. Unless otherwise
determined, in its discretion, by the Committee, Reload Option
Rights shall entitle the holder of an Option to be granted a
Reload Option only if the underlying Option to which they
relate is exercised during employment with the Company or a
Subsidiary of the original grantee of the underlying Option.
Except as otherwise specifically provided herein or required
by the context, the term Option as used in this Plan shall
include Reload Options granted hereunder.
(vi) Individual Option Limit. The aggregate number of
Shares for which Options may be granted under the Plan to any
single Participant shall not exceed 750,000 Shares. The
limitation in the preceding sentence shall be interpreted and
applied in a manner consistent with Section 162(m) of the Code
and, to the extent consistent with Section 162(m) of the Code,
in accordance with Section 4.01 hereof. To the extent
consistent with Section 162(m) of the Code, in applying this
limitation a Reload Option shall not be deemed to increase the
number of Shares covered by the original underlying Option
grant.
6.03 RESTRICTED STOCK. The Committee is authorized to grant
Restricted Stock to Participants on the following terms and conditions:
(i) Issuance and Restrictions. Restricted Stock shall be
subject to such restrictions on transferability and other
restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote Restricted Stock
or the right to receive dividends thereon), which
restrictions may lapse separately or in combination at such
times, under such circumstances, in such installments or
otherwise, as the Committee shall determine at the time of
grant or thereafter.
(ii) Forfeiture. Except as otherwise determined by the
Committee at the time of grant or thereafter, upon termination
of employment (as determined under criteria established by the
Committee) during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions
shall be forfeited and reacquired by the Company; provided,
however, that the Committee may provide, by rule or regulation
or in any Award Agreement, that restrictions on Restricted
Stock shall be waived in whole or in part in the event of
terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part
restrictions on Restricted Stock.
(iii) Certificates for Shares. Restricted Stock granted
under the Plan may be evidenced in such manner as the
Committee shall determine, including, without limitation,
issuance of certificates representing Shares. Certificates
representing Shares of Restricted Stock shall be registered in
the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock.
6.04 PERFORMANCE AWARDS. The Committee is authorized to grant
Performance Awards to Participants on the following terms and conditions:
(i) Right to Payment. A Performance Award shall
represent a right to receive Shares, cash, other property or
any combination thereof based on the achievement, or the level
of achievement, during a specified Performance Period of one
or more Performance Goals established by the Committee at the
time of the Award.
(ii) Terms of Performance Awards. At the time a
Performance Award is granted, the Committee shall cause to be
set forth in the Award Agreement or otherwise in writing (1)
the Performance Goals applicable to the Award and the
Performance Period during which the achievement of the
Performance Goals shall be measured, (2) the amount which may
be earned by the Participant based on the achievement, or the
level of achievement, of the Performance Goals or the formula
by which such amount shall be determined and (3) such other
terms and conditions applicable to the Award as the Committee
may, in its discretion, determine to include therein. The
terms so established by the Committee shall be objective such
that a third party having knowledge of the relevant facts
could determine whether or not any Performance Goal has been
achieved, or the extent of such achievement, and the amount,
if any, which has been earned by the Participant based on such
performance. The Committee may retain the discretion to reduce
(but not to increase) the amount of a Performance Award which
will be earned based on the achievement of Performance Goals.
(iii) Performance Goals. "Performance Goals" shall mean
one or more preestablished, objective measures of performance
during a specified Performance Period by the Company, a
Subsidiary or Subsidiaries, any branch, department or other
portion thereof or the Participant individually, selected by
the Committee in its discretion to determine whether
Performance Award has been earned in whole or in part.
Performance Goals may be based on earnings per share, net
income, revenue growth, revenues, expenses, return on equity,
return on total capital or return on assets. Performance Goals
based on such performance measures may be based either on the
performance of the Company, Subsidiary or portion thereof
under such measure for the Performance Period and/or upon a
comparison of such performance with the performance of a peer
group of corporations selected or defined by the Committee at
the time of making a Performance Award. The Committee may in
its discretion also determine to use other objective
performance measures as Performance Goals.
(iv) Committee Certification. Following completion of
the applicable Performance Period, and prior to any payment of
a Performance Award to the Participant, the Committee shall
determine in accordance with the terms of the Performance
Award and shall certify in writing whether the applicable
Performance Goal or Goals were achieved, or the level of such
achievement, and the amount, if any, earned by the Participant
based upon such performance. For this purpose, approved
minutes of the meeting of the Committee at which certification
is made shall be sufficient to satisfy the requirement of a
written certification.
(v) Maximum Individual Performance Award Payments. With
respect to all Performance Periods ending in any one calendar
year, the maximum amount which may be earned by any single
Participant under all Performance Awards granted under the
Plan shall be limited to $1,000,000. In applying this limit,
the amount of any cash or the Fair Market Value of any Shares
or other property earned by a Participant shall be measured as
of the close of the applicable Performance Period, regardless
of the fact that certification by the Committee and actual
payment to the Participant may occur in a subsequent calendar
year or years.
6.05 OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to
limitations under applicable law, to 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, as deemed by the Committee to be
consistent with the purposes of the Plan, including, without limitation,
purchase rights, Shares awarded which are not subject to any restrictions or
conditions, convertible securities, exchangeable securities or other rights
convertible or exchangeable into Shares, as the Committee in its discretion may
determine. In the discretion of the Committee, such Other Stock-Based Awards,
including Shares, or other types of Awards authorized under the Plan, may be
used in connection with, or to satisfy obligations of the Company or a
Subsidiary under, other compensation or incentive plans, programs or
arrangements of the Company or any Subsidiary for eligible Participants,
including without limitation the Short-Term Incentive Compensation Plan, the
Deferred Compensation Plan and executive contracts.
The Committee shall determine the terms and conditions of Other
Stock-Based Awards. Except as provided in Section 7.01, Shares or securities
delivered pursuant to a purchase right granted under this Section 6.05 shall be
purchased for such consideration, paid for by such methods and in such forms,
including, without limitation, cash, Shares, outstanding Awards or other
property or any combination thereof, as the Committee shall determine, but the
value of such consideration shall not be less than the Fair Market Value of such
Shares or other securities on the date of grant of such purchase right. Delivery
of Shares or other securities in payment of a purchase right, if authorized by
the Committee, may be accomplished through the effective transfer to the Company
of Shares or other securities held by a broker or other agent. Unless otherwise
determined by the Committee, the Company will also cooperate with any person
exercising a purchase right who participates in a cashless exercise program of a
broker or other agent under which all or part of the Shares or securities
received upon exercise of a purchase right are sold through the broker or other
agent, or under which the broker or other agent makes a loan to such person, for
the purpose of paying the exercise price of a purchase right. Notwithstanding
the preceding sentence, unless the Committee, in its discretion, shall otherwise
determine, the exercise of the purchase right shall not be deemed to occur, and
no Shares or other securities will be issued by the Company upon exercise of a
purchase right, until the Company has received payment in full of the exercise
price.
6.06 EXCHANGE PROVISIONS. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Shares,
another Award or other property, based on such terms and conditions as the
Committee shall determine and communicate to the Participant at the time that
such offer is made.
SECTION 7. GENERAL TERMS OF AWARDS
7.01 STAND-ALONE, TANDEM AND SUBSTITUTE AWARDS. Awards granted under
the Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with or in substitution for, any other Award granted
under the Plan or any award granted under the Management Incentive Compensation
Plan, or any other plan, program or arrangement of the Company or any Subsidiary
(subject to the terms of Section 10.01) or any business entity acquired or to be
acquired by the Company or a Subsidiary, except that an Incentive Stock Option
may not be granted in tandem with other Awards or awards. If an Award is granted
in substitution for another Award or award, the Committee shall require the
surrender of such other Award or award in consideration for the grant of the new
Award. Awards granted in addition to or in tandem with other Awards or awards
may be granted either at the same time as or at a different time from the grant
of such other Awards or awards. The exercise price of any Option or the purchase
price of any other Award conferring a right to purchase Shares:
(i) granted in substitution for an outstanding Award or award
shall be not less than the Fair Market Value of Shares at the date such
substitute Award is granted; provided, however, that (1) except in the
case of (a) an Incentive Stock Option or (b) an Option granted to a
Covered Employee, the exercise, grant or purchase price per share of
the substituted Award may be reduced to reflect the Fair Market Value
of the Award or award required to be surrendered by the Participant as
a condition to receipt of such substitute Award, and (2) in the case of
any Participant, the Committee may, in lieu of such price reduction,
make an additional Award or payment to the Participant reflecting the
Fair Market Value of the Award or award required to be surrendered; or
(ii) retroactively granted in tandem with an outstanding Award
or award shall be not less than the lesser of the Fair Market Value of
Shares at the date of grant of the later Award or the Fair Market Value
of Shares at the date of grant of the earlier Award.
7.02 CERTAIN RESTRICTIONS UNDER RULE 16b-3. Upon the effectiveness of
any amendment to Rule 16b-3, this Plan and any Award Agreement for an
outstanding Award held by a Participant then subject to Section 16 of the
Exchange Act shall be deemed to be amended, without further action on the part
of the Committee, the Board or the Participant, to the extent necessary for
Awards under the Plan or such Award Agreement to qualify for the exemption
provided by Rule 16b-3, as so amended, except to the extent any such amendment
requires shareholder approval.
7.03 DECISIONS REQUIRED TO BE MADE BY THE COMMITTEE. Other provisions
of the Plan and any Award Agreement notwithstanding, if any decision regarding
an Award or the exercise of any right by a Participant, at any time such
Participant is subject to Section 16 of the Exchange Act, is required to be made
or approved by the Committee in order that a transaction by such Participant
will be exempt under Rule 16b-3, then the Committee shall retain full and
exclusive power and authority to make such decision or to approve or disapprove
any such decision by the Participant.
7.04 TERM OF AWARDS. The term of each Award shall be for such period as
may be determined by the Committee; provided, however, that in no event shall
the term of any Incentive Stock Option exceed a period of ten years from the
date of its grant.
7.05 FORM OF PAYMENT OF AWARDS. Subject to the terms of the Plan and
any applicable Award Agreement, payments or substitutions to be made by the
Company upon the grant, exercise or other payment or distribution of an Award
may be made in such forms as the Committee shall determine at the time of grant
or thereafter (subject to the terms of Section 10.01), including, without
limitation, cash, Shares, other Awards or other property or any combination
thereof, and may be made in a single payment or substitution, in installments or
on a deferred basis, in each case in accordance with rules and
procedures established, or as otherwise determined, by the Committee. Such rules
and procedures or determinations may include, without limitation, provisions for
the payment or crediting of reasonable interest on installment or deferred
payments or the grant or crediting of dividend equivalents in respect of
installment or deferred payments.
7.06 LIMITS ON TRANSFER OF AWARDS; BENEFICIARIES. No right or interest
of a Participant in any Award shall be pledged, encumbered or hypothecated to or
in favor of any Person other than the Company, or shall be subject to any lien,
obligation or liability of such Participant to any Person other than the Company
or a Subsidiary. Except to the extent otherwise determined by the Committee, no
Award and no rights or interests therein shall be assignable or transferable by
a Participant otherwise than by will or the laws of descent and distribution,
and any Option or other right to purchase or acquire Shares granted to a
Participant under the Plan shall be exercisable during the Participant's
lifetime only by such Participant. A beneficiary, guardian, legal representative
or other Person claiming any rights under the Plan from or through any
Participant shall be subject to all the terms and conditions of the Plan and any
Award Agreement applicable to such Participant as well as any additional
restrictions or limitations deemed necessary or appropriate by the Committee.
7.07 REGISTRATION AND LISTING COMPLIANCE. No Award shall be paid and no
Shares or other securities shall be distributed with respect to any Award in a
transaction subject to the registration requirements of the Securities Act of
1933, as amended, or any state securities law or subject to a listing
requirement under any listing agreement between the Company and any national
securities exchange, and no Award shall confer upon any Participant rights to
such payment or distribution until such laws and contractual obligations of the
Company have been complied with in all material respects. Except to the extent
required by the terms of an Award Agreement or another contract between the
Company and the Participant, neither the grant of any Award nor anything else
contained herein shall obligate the Company to take any action to comply with
any requirements of any such securities laws or contractual obligations relating
to the registration (or exemption therefrom) or listing of any Shares or other
securities, whether or not necessary in order to permit any such payment or
distribution.
7.08 STOCK CERTIFICATES. All certificates for Shares delivered under
the terms of the Plan shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under federal or state
securities laws, rules and regulations thereunder, and the rules of any national
securities exchange or automated quotation system on which Shares are listed or
quoted. The Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions or any other
restrictions or limitations that may be applicable to Shares. In addition,
during any period in which Awards or Shares are subject to restrictions or
limitations under the terms of the Plan or any Award Agreement, or during any
period during which delivery or receipt of an Award or Shares has been deferred
by the Committee or a Participant, the Committee may require any Participant to
enter into an agreement providing that certificates representing Shares issuable
or issued pursuant to an Award shall remain in the physical custody of the
Company or such other Person as the Committee may designate.
SECTION 8. ADJUSTMENT PROVISIONS
8.01 In the event that the Committee shall determine that any dividend
or other distribution (whether in the form of cash, Shares, other securities or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, exchange of Shares or other securities of the Company, or other
similar corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of Participants' rights under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of Shares which may thereafter be issued in connection
with Awards; (ii) the number and kind of Shares issued or issuable in
respect of outstanding Awards; and (iii) the exercise price, grant price or
purchase price relating to any Award or, if deemed appropriate, make provision
for a cash payment with respect to any outstanding Award; provided, however, in
each case, that (1) with respect to Incentive Stock Options, no such adjustment
shall be authorized to the extent that such authority would cause the Plan to
violate Section 422(b)(1) of the Code and (2) with respect to Options or
Performance Awards held by a Covered Employee, no such adjustment shall be
authorized to the extent that such authority would cause such Awards to fail to
qualify as "performance-based compensation" under Section 162(m)(4)(C) of the
Code. In addition, the Committee is authorized to make adjustments in the terms
and conditions of, and the criteria of, Awards in recognition of unusual or
nonrecurring events (including, without limitation, events described in the
preceding sentence) affecting the Company or the financial statements of the
Company, or in response to changes in applicable laws, regulations or accounting
principles; provided, however, that (1) with respect to Incentive Stock Options,
no such adjustment shall be authorized to the extent that such authority would
cause the Plan to violate Section 422(b)(1) of the Code and (2) with respect to
Options or Performance Awards held by a Covered Employee, no such adjustment
shall be authorized to the extent that such authority would cause such Awards to
fail to qualify as "performance-based compensation" under Section 162(m)(4)(C)
of the Code.
SECTION 9. CHANGE OF CONTROL PROVISIONS
9.01 ACCELERATION OF EXERCISABILITY AND LAPSE OF RESTRICTIONS. Unless
otherwise determined by the Committee at the time of grant of an Award or unless
otherwise provided in the applicable Award Agreement, if the shareholders of the
Company shall approve a transaction which upon consummation would constitute a
Change of Control of the Company, or if any Change of Control of the Company not
subject to shareholder approval shall occur:
(i) all outstanding Awards pursuant to which the Participant
may have rights, the exercise of which is restricted or limited, shall
become fully exercisable;
(ii) all restrictions or limitations (including risks of
forfeiture and deferrals) on outstanding Awards subject to restrictions
or limitations under the Plan shall lapse unless prior to such lapse
the right to lapse of restrictions or limitations is waived or deferred
by the Participant; and
(iii) all performance criteria and other conditions to payment
of Awards under which payments of cash, Shares or other property are
subject to conditions shall be deemed to be achieved or fulfilled and
shall be waived by the Company.
9.02 TERMINATION OF EMPLOYMENT FOLLOWING CHANGE OF CONTROL. If within
three years following the date of any Change of Control the employment of a
Participant shall be terminated voluntarily or involuntarily for any reason
other than for Cause, then unless otherwise provided in the applicable Award
Agreement, and in addition to any other rights of post-termination exercise
which the Participant (or other holder of the Award) may have under the Plan or
the applicable Award Agreement, any Option or other Award granted to the
Participant and outstanding on the date of the Change of Control, the payment or
receipt of which is dependent upon exercise by the Participant (or other holder
of the Award) shall be exercisable for a period of 90 days following the date of
such termination of employment but not later than the expiration date of the
Award.
9.03 DEFINITION OF CHANGE OF CONTROL. For purposes of this Section 9, a
"Change of Control" of the Company shall mean any of the following events:
(a) The sale or other disposition by the Company of all or
substantially all of its assets to a single purchaser or to a group of
purchasers, other than to a corporation with respect to which,
following such sale or disposition, more than eighty percent of,
respectively, the then outstanding shares of Common Stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of the Board is then owned
beneficially, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners,
respectively of the outstanding Common Stock and the combined voting
power of the then outstanding voting securities immediately prior to
such sale or disposition in substantially the same proportion as their
ownership of the outstanding Common Stock and voting power immediately
prior to such sale or disposition;
(b) The acquisition in one or more transactions by any person
or group, directly or indirectly, of beneficial ownership of twenty
percent or more of the outstanding shares of Common Stock or the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of the Board;
provided, however, that any acquisition by (x) the Company or any of
its Subsidiaries, or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its Subsidiaries or
(y) any person that is eligible, pursuant to Rule 13d-1(b) under the
Exchange Act (as in effect on the effective date of the Plan) to file a
statement on Schedule 13G with respect to its beneficial ownership of
Common Stock and other voting securities, whether or not such person
shall have filed a statement on Schedule 13G, unless such person shall
have filed a statement on Schedule 13D with respect to beneficial
ownership of fifteen percent or more of the Company's voting
securities, shall not constitute a Change of Control;
(c) The Company's termination of its business and liquidation
of its assets;
(d) There is consummated a merger, consolidation,
reorganization, share exchange, or similar transaction involving the
Company (including a triangular merger), in any case, unless
immediately following such transaction: (i) all or substantially all of
the persons who were the beneficial owners of the outstanding Commons
Stock and outstanding voting securities of the Company immediately
prior to the transaction beneficially own, directly or indirectly, more
than 60% of the outstanding shares of Commons Stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation resulting
from such transaction (including a corporation or other person which as
a result of such transaction owns the Company or all or substantially
all of the Company's assets through one or more subsidiaries (a "Parent
Company")) in substantially the same proportion as their ownership of
the Common Stock and other voting securities of the Company immediately
prior to the consummation of the transaction, (ii) no person (other
than the Company, any employee benefit plan sponsored or maintained by
the Company or, if reference was made to equity ownership of any Parent
Company for purposes of determining whether clause (i) above is
satisfied in connection with the transaction, such Parent Company)
beneficially owns, directly or indirectly, 20% or more of the
outstanding shares of Common Stock or the combined voting power of the
voting securities entitled to vote generally in the election of
directors of the corporation resulting from such transaction and (iii)
individuals who were members of the Board immediately prior to the
consummation of the transaction constitute at least a majority of the
members of the board of directors resulting from such transaction (or,
if reference was made to equity ownership of any Parent Company for
purposes of determining whether clause (i) above is satisfied in
connection with the transaction, such Parent Company); or
(e) The following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the entire Board and
any new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by
the Board or
nomination for election by the Company's shareholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors on the effective date of the Plan or whose
appointment, election or nomination for election was previously so
approved.
SECTION 10. AMENDMENTS TO AND TERMINATION OF THE PLAN
10.01 The Board may amend, alter, suspend, discontinue or terminate the
Plan without the consent of shareholders or Participants, except that, without
the approval of the shareholders of the Company, no amendment, alteration,
suspension, discontinuation or termination shall be made if shareholder approval
is required by any federal or state law or regulation or by the rules of any
stock exchange on which the Shares may then be listed, or if the Board in its
discretion determines that obtaining such shareholder approval is for any reason
advisable; provided, however, that except as provided in Section 7.02, without
the consent of the Participant, no amendment, alteration, suspension,
discontinuation or termination of the Plan may materially and adversely affect
the rights of such Participant under any Award theretofore granted to him. The
Committee may waive any conditions or rights under, amend any terms of, or
amend, alter, suspend, discontinue or terminate, any Award theretofore granted,
prospectively or retrospectively; provided, however, that except as provided in
Section 7.02, without the consent of a Participant, no amendment, alteration,
suspension, discontinuation or termination of any Award may materially and
adversely affect the rights of such Participant under any Award theretofore
granted to him; and provided further that, except as provided in Section 8.01 of
the Plan, the exercise price of any outstanding Option may not be reduced,
whether through amendment, cancellation or replacement, unless such reduction is
approved by the shareholders of the Company.
SECTION 11. GENERAL PROVISIONS
11.01 NO RIGHT TO AWARDS; NO SHAREHOLDER RIGHTS. No Participant or
employee shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity of treatment of Participants and employees,
except as provided in any other compensation arrangement. No Award shall confer
on any Participant any of the rights of a shareholder of the Company unless and
until Shares are in fact issued to such Participant in connection with such
Award.
11.02 WITHHOLDING. To the extent required by applicable Federal, state,
local or foreign law, the Participant or his successor shall make arrangements
satisfactory to the Company, in its discretion, for the satisfaction of any
withholding tax obligations that arise in connection with an Award. The Company
shall not be required to issue any Shares or make any cash or other payment
under the Plan until such obligations are satisfied.
The Company is authorized to withhold from any Award granted or any
payment due under the Plan, including from a distribution of Shares, amounts of
withholding taxes due with respect to an Award, its exercise or any payment
thereunder, and to take such other action as the Committee may deem necessary or
advisable to enable the Company and Participants to satisfy obligations for the
payment of such taxes. This authority shall include authority to withhold or
receive Shares, Awards or other property and to make cash payments in respect
thereof in satisfaction of such tax obligations.
11.03 NO RIGHT TO EMPLOYMENT. Nothing contained in the Plan or any
Award Agreement shall confer, and no grant of an Award shall be construed as
conferring, upon any Participant any right to continue in the employ of the
Company or to interfere in any way with the right of the Company to terminate
his employment at any time or increase or decrease his compensation from the
rate in existence at the time of granting of an Award, except as provided in any
Award Agreement or other compensation arrangement.
11.04 UNFUNDED STATUS OF AWARDS; CREATION OF TRUSTS. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant
pursuant to an Award, nothing contained in the Plan or any Award Agreement shall
give any such Participant any rights that are greater than those of a general
unsecured creditor of the Company; provided, however, that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Company's obligations under the Plan to deliver cash, Shares or other property
pursuant to any Award, which trusts or other arrangements shall be consistent
with the "unfunded" status of the Plan unless the Committee otherwise
determines.
11.05 NO LIMIT ON OTHER COMPENSATORY ARRANGEMENTS. Nothing contained in
the Plan shall prevent the Company from adopting other or additional
compensation arrangements (which may include, without limitation, employment
agreements with executives and arrangements which relate to Awards under the
Plan), and such arrangements may be either generally applicable or applicable
only in specific cases. Notwithstanding anything in the Plan to the contrary,
the terms of each Award shall be construed so as to be consistent with such
other arrangements in effect at the time of the Award.
11.06 NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.
11.07 GOVERNING LAW. The validity, interpretation, construction and
effect of the Plan and any rules and regulations relating to the Plan shall be
governed by the laws of the Commonwealth of Pennsylvania (without regard to the
conflicts of laws thereof), and applicable Federal law.
11.08 SEVERABILITY. If any provision of the Plan or any Award is or
becomes or is deemed invalid, illegal or unenforceable in any jurisdiction, or
would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
Award, it shall be deleted and the remainder of the Plan or Award shall remain
in full force and effect; provided, however, that, unless otherwise determined
by the Committee, the provision shall not be construed or deemed amended or
deleted with respect to any Participant whose rights and obligations under the
Plan are not subject to the law of such jurisdiction or the law deemed
applicable by the Committee.
SECTION 12. EFFECTIVE DATE AND TERM OF THE PLAN
12.01 The effective date and date of adoption of the Plan shall be
March 17, 1999, the date of adoption of the Plan by the Board, provided that
such adoption of the Plan is approved by a majority of the votes cast at a duly
held meeting of shareholders held on or prior to March 16, 2000 at which a
quorum representing a majority of the outstanding voting stock of the Company
is, either in person or by proxy, present and voting. Notwithstanding anything
else contained in the Plan or in any Award Agreement, no Option or other
purchase right granted under the Plan may be exercised, and no Shares may be
distributed pursuant to any Award granted under the Plan, prior to such
shareholder approval or prior to any required approval or consent from those
governmental agencies having jurisdiction in these matters. In the event such
shareholder or regulatory approval is not obtained, all Awards granted under the
Plan shall automatically be deemed void and of no effect. Absent additional
shareholder approval, (1) no Performance Award may be granted under the Plan
subsequent to the Company's Annual Meeting of Shareholders in 2004, (2) no
Performance Period for any Performance Award granted under the Plan may end
later than December 31, 2007 and (3) no other Award may be granted under the
Plan subsequent to March 16, 2009, except that Reload Options may be granted
pursuant to Reload Option Rights then outstanding.