Exhibit 10.1
JLG INDUSTRIES, INC.
LONG TERM INCENTIVE PLAN
1. PURPOSE
The JLG Industries, Inc. Long Term Incentive Plan (the "Plan"), is
designed to enable key personnel and Outside Directors of JLG
Industries, Inc. (the "Company") and its Subsidiaries to acquire or
increase a proprietary interest in the Company, and thus to share in
the future success of the Company's business. In addition, the Plan is
designed to motivate key personnel by means of growth-related
incentives to achieve long-range goals. Accordingly, the Plan is
intended as a further means not only of attracting and retaining
outstanding personnel and directors, but also of promoting a closer
identity of interests between management, Outside Directors, and
shareholders. This Plan reflects the consolidation of the Company's
prior plans, the JLG Industries, Inc. Stock Incentive Plan (for
employees) and the JLG Industries, Inc. Directors Stock Option Plan
(for Outside Directors).
2. DEFINITIONS
In this Plan document, unless the context clearly indicates otherwise,
words in the masculine gender shall be deemed to refer to females as
well as males, any term used in the singular also shall refer to the
plural, and the following capitalized terms shall have the following
meanings set forth in this Section 2:
(a) "Award" means an Option, Restricted Share, Right, Bonus Share,
Performance Unit, or Performance Share. Unless the context
clearly indicates otherwise, the term "Awards" shall include
Options, Restricted Shares, Rights, Bonus Shares, Performance
Units, or Performance Shares. "Equity Award" means any Option,
Restricted Share, Bonus Share, Performance Unit, Performance
Share, or other Award that is settled in Shares; "Cash Award"
means any Right, Performance Unit, Performance Share, or other
Award that is settled in cash.
(b) "Beneficiary" means the person or persons designated in
writing by the Grantee as his beneficiary in respect of an
Award; or, in the absence of an effective designation or if
the designated person or persons predecease the Grantee, the
Grantee's Beneficiary shall be the person or persons who
acquire by bequest or inheritance the Grantee's rights in
respect of an Award. In order to be effective, a Grantee's
designation of a Beneficiary must be on file with the Company
before the Grantee's death. Any such designation may be
revoked and a new designation substituted for it at any time
before the Grantee's death.
(c) "Board of Directors" or "Board" means the Board of Directors
of the Company.
(d) "Bonus Share" means a Share granted pursuant to Section 12(g)
hereof without restriction.
(e) "Change in Control" means the first to occur of the following
events:
(1) an acquisition (other than directly from the Company)
of securities of the Company by any person,
immediately after which such person, together with
all securities law affiliates and associates of such
person, becomes the beneficial owner of securities of
the Company representing 25 percent or more of the
voting power; provided that, in determining whether a
Change in Control has occurred, the acquisition of
securities of the Company in a non-control
acquisition will not constitute an acquisition that
would cause a Change in Control; or
(2) three or more directors, whose election or nomination
for election is not approved by a majority of the
members of the Incumbent Board, are elected within
any single 12-month period to serve on the Board of
Directors; provided that an individual whose election
or nomination for election is approved as a result of
either an actual or threatened election contest or
proxy contest, including by reason of any agreement
intended to avoid or settle any election contest or
proxy contest, will be deemed not to have been
approved by a majority of the incumbent Board for
purposes of this definition; or
(3) members of the Incumbent Board cease for any reason
to constitute at least a majority of the Board of
Directors; or
(4) approval by shareholders of the Company of:
(i) a merger, consolidation, or reorganization
involving the Company, unless
(A) the shareholders of the Company,
immediately before the merger,
consolidation, or reorganization,
own, directly or indirectly
immediately following such merger,
consolidation, or reorganization,
at least 75 percent of the combined
voting power of the outstanding
voting securities of the
corporation resulting from such
merger, consolidation, or
reorganization in substantially the
same proportion as their ownership
of the voting securities
immediately before such merger,
consolidation, or reorganization;
(B) individuals who were members of the
incumbent Board immediately prior
to the execution of the agreement
providing for such merger,
consolidation, or reorganization
constitute at least a majority of
the board of directors of the
surviving corporation; and
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(C) no person (other than (I) the
Company or any Subsidiary thereof,
(II) any employee benefit plan (or
any trust forming a part thereof)
maintained by the Company, any
Subsidiary thereof, or the
surviving corporation, or (III) any
person who, immediately prior to
such merger, consolidation, or
reorganization, had beneficial
ownership of securities
representing 25 percent or more of
the voting power) has beneficial
ownership of securities
representing 25 percent or more of
the combined voting power of the
surviving corporation's then
outstanding voting securities;
(ii) a complete liquidation or dissolution of the
Company; or
(iii) an agreement for the sale or other
disposition of all or substantially all of
the assets of the Company to any person
(other than a transfer to a Subsidiary).
(f) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(g) "Committee" means a committee consisting of such number of
members of the Compensation Committee of the Board of
Directors with such qualifications as are required to qualify
as an outside director for purposes of (i) Rule 16b-3 under
the Securities Exchange Act of 1934, as in effect from time to
time (or any successor rule of similar import) and (ii)
Section 162(m) of the Code, and the regulations thereunder, as
in effect from time to time (or any successor provision of
similar import), to the extent that Awards made under the Plan
are intended to qualify as performance-based compensation
thereunder.
(h) "Company" means JLG Industries, Inc.
(i) "Covered Executive" means an individual who is determined by
the Committee to be reasonably likely to be a "covered
employee" under Section 162(m) of the Code, and to receive
compensation that would exceed the deductibility limits under
Section 162(m), as of the end of the Company's taxable year
for which an Award to the individual will be deductible.
(j) "Disability" or "Disabled" means having a total and permanent
disability as defined in Section 22(e)(3) of the Code.
(k) "Effective Date" means November 20, 2003, provided that the
Plan shall have been approved by the Company's shareholders.
(l) "Election Contest" means an election contest described in Rule
14a-11 promulgated under the Securities Exchange Act.
(m) "Employee" means any person who is an employee, as defined in
Section 3401(c) of the Code, of the Company, any Subsidiary,
or any Parent.
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(n) "Fair Market Value" means, when used in connection with the
Shares on a certain date, the fair market value of a Share as
determined by the Committee, and shall be deemed equal to the
closing price at which Shares are traded on such date (or on
the next preceding day for which such information is
ascertainable at the time of the Committee's determination) as
reported for such date by The Wall Street Journal (or if
Shares are not traded on such date, on the next preceding day
on which Shares are traded) (or if Shares are traded on such
date but no edition of The Wall Street Journal reporting such
prices for such date is published, the fair market value shall
be deemed equal to the closing price at which Shares are
traded on such date as reported through the National
Association of Securities Dealers Automated Quotations System
in any other newspaper).
(o) "Grantee" means a person to whom an Award has been granted
under the Plan.
(p) "Incentive Stock Option" means an Option granted in accordance
with Section 8 hereof that complies with the terms and
conditions set forth in Section 422(b) of the Code and is
designated by the Committee as an Incentive Stock Option.
(q) "Incumbent Board" means individuals who, as of the close of
business on the Effective Date, are members of the Board of
Directors; provided that, if the election, or nomination for
election by the Company's shareholders, of any new director
was approved by a vote of at least 75 percent of the Incumbent
Board, such new director shall, for purposes of the Plan, be
considered as a member of the Incumbent Board; provided
further that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as
a result of either an actual or threatened Election Context or
other actual or threatened Proxy Contest, including by reason
of any agreement intended to avoid or settle any Election
Contest or Proxy Contest.
(r) "Limited Stock Appreciation Right" means a right that provides
for payment in accordance with Section 11 hereof.
(s) "Non-qualified Stock Option" means an Option granted under the
Plan other than an Incentive Stock Option.
(t) "Option" means any option to purchase a Share or Shares
pursuant to the provisions of the Plan. Unless the context
clearly indicates otherwise, the term "Option" shall include
both Incentive Stock Options and Non-qualified Stock Options.
(u) "Option Agreement" means the written, or to the extent
permitted by law, electronic, agreement to be entered into by
the Company and the Grantee, as provided in Section 7 hereof.
(v) "Outside Director" means each member of the Board of Directors
who is not an Employee.
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(w) "Parent" means any parent corporation of the Company within
the meaning of Section 424(e) of the Code (or a successor
provision of similar import).
(x) "Performance Share" means an Award made pursuant to Section
14.
(y) "Performance Unit" means an Award made pursuant to Section 13.
(z) "Performance-Based Restricted Shares" means Restricted Shares
that are intended to qualify as performance-based compensation
under Section 162(m) of the Code, and the regulations
thereunder.
(aa) "Plan" means the JLG Industries, Inc. Long Term Incentive
Plan, as set forth herein and as amended from time to time
(except where the context makes clear that the reference is
either to the JLG Industries, Inc. Stock Incentive Plan or to
the JLG Industries, Inc. Directors Stock Option Plan, both as
in effect prior to the Effective Date).
(bb) "Prior Plans" shall mean the JLG Industries, Inc. Stock
Incentive Plan or the JLG Industries, Inc. Directors Stock
Option Plan, as the context requires, which were replaced by
the Plan as of the Effective Date.
(cc) "Proxy Contest" means a solicitation of proxies or consents by
or on behalf of a person or entity other than the Board of
Directors.
(dd) "Quota" means the portion of the total number of Shares
subject to an Option that the Grantee of the Option may
purchase during each of the several periods of the Term of the
Option (if the Option is subject to Quotas), as provided in
Section 17(a) hereof.
(ee) "Restricted Shares" means Shares granted pursuant to Section
12(a) through 12(f) hereof or purchased under a Non-qualified
Stock Option pursuant to Section 9(d) hereof and subject to
such restrictions and other terms and conditions as the
Committee shall determine in accordance with the Plan.
(ff) "Retirement" means retirement pursuant to the JLG Industries,
Inc. Employees' Retirement Savings Plan, as amended from time
to time.
(gg) "Right" means a Stock Appreciation Right or a Limited Stock
Appreciation Right.
(hh) "Shares" means shares of the Company's $.20 par value common
stock, or any security into which such shares may be converted
by reason of any event of the type referred to in Sections 22
or 23 of the Plan.
(ii) "Stock Appreciation Right" or "SAR" means a right that
provides payment in accordance with Section 10.
(jj) "Subsidiary" means a subsidiary corporation of the Company
within the meaning of Section 424(f) of the Code (or a
successor provision of similar import.)
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(kk) "Term" means the period during which a particular Option or
Right may be exercised.
3. EFFECTIVE DATE AND DURATION OF THE AMENDED AND RESTATED PLAN
(a) Upon adoption by the Company's Board of Directors and approval
by the Company's shareholders at the Company's annual meeting
on November 20, 2003, the Plan shall be effective as of the
Effective Date and shall continue in effect until December 31,
2013; provided, however, that no Incentive Stock Options shall
be granted under the Plan more than 10 years from the earlier
of the date the Plan is adopted or approved by shareholders.
The adoption of the Plan as of the Effective Date shall not
affect the terms of any Option or Award that was outstanding
prior to the Effective Date; all such Options and Awards shall
continue to be governed by the terms of the applicable Prior
Plan in effect immediately prior to the Effective Date.
(b) Awards may be granted at any time prior to the earlier of the
expiration of the term of the Plan, as described in subsection
(a) above, or the termination of the Plan pursuant to Section
24 hereof. For the purpose of commencing the ten-year period
specified in Section 422(b)(2) of the Code during which
Incentive Stock Options may be granted, the adoption of this
Plan as of the Effective Date shall constitute the adoption of
a new plan. An Award outstanding at the time the Plan is
terminated (either by expiration of the term of the Plan or by
termination of the Plan pursuant to Section 24 hereof) shall
not cease to be or cease to become exercisable pursuant to its
terms solely because of the termination of the Plan.
(c) No Awards of Performance-Based Restricted Shares, Performance
Shares, or Performance Units shall be made on any date to a
Covered Executive, unless the material terms of the
performance goals have been approved by shareholders within
the preceding five years.
4. NUMBER AND SOURCE OF SHARES SUBJECT TO THE PLAN
(a) The Company may grant Equity Awards under the Plan with
respect to not more than (i) 230,254 Shares with respect to
which Awards were authorized but not granted under the Prior
Plans, as of July 31, 2003, plus (ii) 2,920,000 additional
Shares, plus (iii) no more than 5,800,000 additional Shares
pursuant to subsection (d), below. The aggregate limit of
3,150,254 Shares available (plus no more than 5,800,000 Shares
available pursuant to subsection (d), below, if any) for
Equity Awards shall be subject to adjustment as provided in
Section 22 hereof. Shares available for Equity Awards shall be
provided from Shares in the treasury or by the issuance of
Shares authorized but unissued.
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(b) If an Option granted on or after the Effective Date is
surrendered before exercise, or lapses or is terminated
without being exercised, in whole or in part, for any reason
other than the exercise of a Limited Stock Appreciation Right,
the Shares subject to the Option shall be restored to the
aggregate maximum number of Shares (specified in subsection
(a) above) with respect to which Equity Awards may be granted
under the Plan, but only to the extent that the Option or any
related Right has not been exercised. Similarly, if any
Restricted Share is forfeited and returned to the Company,
such forfeited Share shall be restored to the aggregate
maximum number of Shares with respect to which Equity Awards
may be granted under the Plan. Shares surrendered in payment
of the exercise price of an Option also shall be restored to
the aggregate maximum number of Shares with respect to which
Equity Awards may be granted under the Plan.
(c) Awards of Restricted Shares, Bonus Shares, and Performance
Units or Performance Shares settled in stock shall not in the
aggregate exceed 850,000 Shares, and shall also count against
the overall limit on Shares available for Equity Awards under
subsection (a).
(d) If, on or after the Effective Date, any of the Equity Awards
granted under the Prior Plans before the Effective Date which
remain unexercised or unvested on the Effective Date is
surrendered before exercise, lapses or is terminated without
being exercised, or is forfeited, in whole or in part, for any
reason, the Company may grant Equity Awards under this Plan
with respect to the Shares subject to such Equity Awards in
addition to the maximum number of Shares specified in clauses
(i) and (ii) of subsection (a), above, provided that no more
than 5,800,000 shall be available for issuance under this Plan
pursuant to this subsection (d).
(e) The maximum number of Shares that can be the subject of Equity
Awards to any individual in any fiscal year of the Company is
400,000 Shares. For purposes of this subsection (e), if an
Equity Award is canceled, the Shares covered by the canceled
Award shall be counted against the maximum number of Shares
for which Equity Awards may be granted to the individual.
(f) The Plan replaces the Prior Plans as of the Effective Date.
Upon shareholder approval of the Plan, all remaining Shares
with respect to which additional Awards were authorized but
not granted under the Prior Plans will be cancelled and Shares
available for Equity Awards on or after the Effective Date
shall be provided solely in Section 4 hereof. Awards may be
made under the Prior Plans prior to the Effective Date of the
Plan; provided that no Awards may be made under the Prior Plan
with respect to the Shares described in clause (i) of
subsection (a). If shareholders do not approve the Plan, the
Prior Plans shall remain in effect in accordance with their
terms.
5. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Committee.
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(b) Except as provided in the following sentence, the Committee
may adopt, amend and rescind rules and regulations relating to
the Plan as it may deem proper, shall make all other
determinations necessary or advisable for the administration
of the Plan, and may provide for conditions and assurances
deemed necessary or advisable to protect the interests of the
Company, to the extent not contrary to the express provisions
of the Plan; provided, however, that the Committee may take
action only upon the agreement of a majority of its members
then in office. No action or determination by the Committee
may adversely affect any right acquired by any Grantee or
Beneficiary under the terms of any Award granted before the
date such action or determination is taken or made, unless the
affected Grantee or Beneficiary shall expressly consent; but
it shall be conclusively presumed that any adjustment pursuant
to Section 22 does not adversely affect any such right. Any
action that the Committee may take through a written
instrument signed by all of its members then in office shall
be as effective as though taken at a meeting duly called and
held.
(c) The powers of the Committee shall include plenary authority to
interpret the Plan, and, subject to the provisions hereof, the
Committee may determine (i) the persons to whom Awards shall
be granted; (ii) the number of Shares subject to each Award;
(iii) the Term of each Award; (iv) the frequency of Awards and
the date on which each Award shall be granted; (v) the type of
each Award; (vi) the Quotas (if any), exercise periods, and
other terms and conditions applicable to each Option and
Right, and the provisions of each Option Agreement; (vii) any
performance criteria pursuant to which Awards may be granted;
and (viii) the restrictions and other terms and conditions of
each grant of Restricted Shares and the provisions of any
instruments evidencing such grants. The Committee also may
accelerate at any time the exercisability of outstanding
Options, provided that no Option shall be exercisable prior to
the expiration of the mandatory six-month holding period
specified in Section 17(a) hereof.
(d) The determinations, interpretations, and other actions made or
taken by the Committee pursuant to the provisions of the Plan
shall be final, binding, and conclusive for all purposes and
upon all persons.
(e) Subject to the limits established by the Committee pursuant to
this Section 5(e), the Company's Chief Executive Officer is
authorized to grant Awards to key Employees (excluding those
Employees required to file ownership reports with the
Securities and Exchange Commission under Section 16(a) of the
Securities and Exchange Act of 1934) having such terms,
consistent with the terms of the Plan, as the Chief Executive
Officer shall determine. No later than 90 days after the
commencement of each fiscal year of the Company, the Committee
may establish (i) a maximum aggregate amount of Awards which
the Chief Executive Officer may grant during such fiscal year
and (ii) the maximum amount of Awards which the Chief
Executive Officer may grant to any one Grantee during such
fiscal year. Upon granting any Awards pursuant to the Plan,
the Chief Executive Officer, promptly, but in any event not
later than the next Committee meeting, shall inform the
Committee of the terms and number of Awards granted
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to any Grantee. The types of Awards that the Chief Executive
Officer may grant shall be limited to Restricted Shares, Bonus
Shares, and Non-qualified Stock Options which, in each case,
are not intended to qualify as performance-based compensation
for purposes of Section 162(m) of the Code. The exercise price
of any Options granted by the Chief Executive Officer pursuant
to the Plan shall not be less than the Fair Market Value of
the Shares on the date the Option is granted.
6. EMPLOYEES AND OUTSIDE DIRECTORS ELIGIBLE TO RECEIVE AWARDS
(a) Awards may be granted under the Plan to key Employees of the
Company or any Subsidiary (including employees who are
directors and/or officers). All determinations by the
Committee as to the identity of the persons to whom Awards
shall be granted hereunder shall be conclusive.
(b) Outside Directors may be granted Awards (excluding Incentive
Stock Options), subject to the provisions of Section 16
hereof.
(c) An individual Grantee may receive more than one Award.
7. OPTION AGREEMENT
(a) No Option or Right shall be exercised by a Grantee unless he
shall have executed and delivered an Option Agreement
evidencing the grant of such Option or Right. The Agreement
shall set forth the number of Shares subject to the Option or
Right and the terms, conditions, and restrictions applicable
thereto.
(b) Appropriate officers of the Company are hereby authorized to
execute and deliver Option Agreements in the name of the
Company as directed from time to time by the Committee.
8. INCENTIVE STOCK OPTIONS
(a) The Committee may authorize the grant of Incentive Stock
Options to officers and key Employees, subject to the terms
and conditions set forth in the Plan. The Option Agreement
relating to an Incentive Stock Option shall state that the
Option evidenced by the Option Agreement is intended to be an
"incentive stock option" within the meaning of Section 422(b)
of the Code.
(b) The Term of each Incentive Stock Option shall end (unless the
Option shall have terminated earlier under another provision
of the Plan) on a date fixed by the Committee and set forth in
the applicable Option Agreement. In no event shall the Term of
an Incentive Stock Option extend beyond ten years from the
date of grant. In the case of any Grantee who, on the date the
Option is granted, owns (within the meaning of Section 424(d)
of the Code) more than ten percent of the total combined
voting power of all classes of stock of the Company, a Parent,
or a
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Subsidiary, the Term of the Option shall not extend beyond
five years from the date of grant.
(c) To the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options
(determined without regard to this paragraph (c)) are
exercisable by any Grantee for the first time during any
calendar year (under all stock option plans of the Company,
its Parent and its Subsidiaries) exceeds $100,000 (excluding
any Options that do not qualify as Incentive Stock Options at
the time of grant), the portion of any such Option that
exceeds the $100,000 limit shall be a Non-qualified Stock
Option. For the purpose of this subsection (c), the Fair
Market Value of Shares shall be determined as of the time the
Option with respect to such stock is granted.
(d) For purposes of applying the limitation in subsection (c), the
following rules shall apply, except to the extent that final
regulations issued under Code Sections 421, 422, or 424
provide or require otherwise:
(1) The limitation in subsection (c) shall be applied by
taking Options into account in the order in which
they were granted.
(2) An Incentive Stock Option shall be considered to be
first exercisable at any time during a calendar year
if the Incentive Stock Option will become exercisable
during the year assuming that any condition on the
optionee's ability to exercise the Incentive Stock
Option related to performances of services is
satisfied. If the optionee's ability to exercise the
Incentive Stock Option in the year is subject to an
acceleration provision, then the Incentive Stock
Option is considered first exercisable in the
calendar year in which the acceleration provision is
triggered.
(3) After an acceleration provision is triggered, the
Options subject to such provision are then taken into
account in accordance with subsection (d)(1) for
purposes of applying the limitation in subsection (c)
to all Options first exercisable during a calendar
year.
(4) An Option (or portion thereof) is disregarded if,
prior to the calendar year during which it would
otherwise have become exercisable for the first time,
the Option (or portion thereof) is modified and
thereafter ceases to be an Incentive Stock Option, is
canceled, or is transferred in violation of the
nontransferability requirements of Code Section 421.
(5) If an Option (or portion thereof) is modified,
canceled, or transferred at any other time, such
Option (or portion thereof) is treated as outstanding
according to its original terms until the end of the
calendar year during which it would otherwise have
become exercisable for the first time.
(e) The Option price to be paid by the Grantee to the Company for
each Share purchased upon the exercise of an Incentive Stock
Option shall be equal to the
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Fair Market Value of a Share on the date the Option is
granted, except that with respect to any Incentive Stock
Option granted to a Grantee who, on the date the Option is
granted, owns (within the meaning of Section 424(d) of the
Code) more than ten percent of the total combined voting power
of all classes of stock of the Company, a Parent, or a
Subsidiary, the Option price for each Share purchased shall
not be less than 110 percent of the Fair Market Value of a
Share on the date the Option is granted. In no event may an
Incentive Stock Option be granted if the Option price per
Share is less than the par value of a Share.
(f) Any Grantee who disposes of Shares purchased upon the exercise
of an Incentive Stock Option either (i) within two years after
the date on which the Option was granted, or (ii) within one
year after the transfer of such Shares to the Grantee, shall
promptly notify the Company of the date of such disposition
and of the amount realized upon such disposition.
9. NON-QUALIFIED STOCK OPTIONS
(a) The Committee may authorize the grant of Non-qualified Stock
Options subject to the terms and conditions set forth in the
Plan. Unless an Option is designated by the Committee as an
Incentive Stock Option, it is intended that the Option will
not be an "incentive stock option" within the meaning of
Section 422(b) of the Code and, instead, will be a
Non-qualified Stock Option. The Option Agreement relating to a
Non-qualified Stock Option shall state that the Option
evidenced by the Option Agreement will not be treated as an
Incentive Stock Option.
(b) The Term of each Non-qualified Stock Option shall end (unless
the Option shall have terminated earlier under another
provision of the Plan) on a date fixed by the Committee and
set forth in the applicable Option Agreement. In no event
shall the Term of a Non-qualified Stock Option extend beyond
ten years from the date of grant of the Option.
(c) In no event may a Non-qualified Stock Option be granted if the
Option price per Share is less than the Fair Market Value at
the time of grant.
(d) At the time of the grant of a Non-qualified Stock Option, the
Committee shall specify whether the Shares purchased under the
Option shall or shall not be Restricted Shares (or whether
they shall be a specified combination of Shares that are, and
Shares that are not, Restricted Shares). Restricted Shares
purchased under an Option shall be subject to the terms,
conditions and restrictions set out in subsections (b) through
(e) of Section 12, and such additional terms, conditions and
restrictions as the Committee may determine. Subject to the
provisions of subsections (b) through (e) of Section 12, the
Committee, at the time of grant, shall determine (and the
Option Agreement shall specify) the terms and conditions of
any Restricted Shares that may be purchased under the
Non-qualified Stock Option, including the duration of the
restrictions that shall be imposed on the Restricted Shares,
and the dates on which, or circumstances in
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which, the restrictions shall expire, lapse or be removed or
the Restricted Shares shall be forfeited. Shares purchased
under an Option after the Company obtains actual knowledge
that a Change in Control has occurred shall not be subject to
any restrictions.
10. STOCK APPRECIATION RIGHTS
(a) The Committee may authorize the grant of Stock Appreciation
Rights subject to the terms and conditions set forth in the
Plan. SARs are rights that, on exercise, entitle the Grantee
to receive the excess of (i) the Fair Market Value of a Share
on the date of exercise over (ii) the Fair Market Value of a
Share on the date of grant, multiplied by the number of Shares
with respect to which the SAR is exercised.
(b) The amount to be paid to a Grantee upon the exercise of an SAR
shall be paid in cash.
11. LIMITED STOCK APPRECIATION RIGHTS
(a) The Committee may authorize the grant of Limited Stock
Appreciation Rights in connection with all or part of any
Option.
(b) A Limited Stock Appreciation Right may be exercised only at
such times, by such persons, and to such extent, as the
related Option is exercisable. Furthermore, a Limited Stock
Appreciation Right may be exercised only within the 60-day
period beginning on the date on which the Company obtains
actual knowledge that a Change in Control has occurred. As
soon as the Company obtains actual knowledge that a Change in
Control has occurred, the Company shall promptly notify each
Grantee in writing of the Change in Control, whether or not
the Grantee holds a Limited Stock Appreciation Right.
(c) The Shares that are subject to a Limited Stock Appreciation
Right shall not be used more than once to calculate the amount
to be received pursuant to the exercise of the Limited Stock
Appreciation Right. The right of a Grantee to exercise an
Option shall be canceled if and to the extent that the Shares
subject to the Option are used to calculate the amount to be
received upon the exercise of the related Limited Stock
Appreciation Right, and the right of a Grantee to exercise a
Limited Stock Appreciation Right shall be canceled if and to
the extent that the Shares with respect to which the Limited
Stock Appreciation Right may be exercised are purchased upon
the exercise of the related Option.
(d) A Limited Stock Appreciation Right may be granted coincident
with or after the grant of any related Option, provided that
the Committee shall consult with counsel before granting a
Limited Stock Appreciation Right after the grant of a related
Incentive Stock Option.
(e) The amount to be paid to the Grantee upon exercise of a
Limited Stock Appreciation Right that is related to a
Non-qualified Stock Option shall be paid in
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cash, and shall be equal to the number of Shares with respect
to which the Limited Stock Appreciation Right is exercised
multiplied by the excess of
(1) the higher of (i) the highest Fair Market Value of a
Share during the period commencing on the ninetieth
(90th) day preceding the exercise of the Limited
Stock Appreciation Right and ending on the date of
exercise; or (ii) if an event described in paragraph
(i) of the definition of "Change in Control", above,
has occurred, the highest price per Share (A) paid
for any Share in any transaction occurring during the
period described in clause (i) by any person or group
(as defined in the definition of "Change in Control",
above) whose acquisition of Shares caused the Change
in Control to occur, or (B) paid for any Share as
shown on Schedule 13D (or an amendment thereto) filed
pursuant to Section 13(d) of the Securities Exchange
Act of 1934 by any such person or group, over
(2) the Option price of the related Non-qualified Stock
Option.
(f) The amount to be paid to the Grantee upon exercise of a
Limited Stock Appreciation Right that is related to an
Incentive Stock Option shall be paid in cash, and shall be
equal to the number of Shares with respect to which the
Limited Stock Appreciation Right is exercised multiplied by
the excess of (i) the Fair Market Value (as of the exercise
date of the Limited Stock Appreciation Right) of a Share over
(ii) the Option price of the related Incentive Stock Option.
12. RESTRICTED SHARES AND BONUS SHARES
(a) The Committee may authorize the grant of Restricted Shares
subject to the terms and conditions set forth in the Plan. The
following terms, conditions and restrictions and such
additional terms, conditions and restrictions as may be
determined by the Committee shall apply to Restricted Shares.
Subject to the provisions of this Section 12 (including, in
the case of Performance-Based Restricted Shares, paragraph
(f)), the Committee shall determine at the time of grant the
size and the terms and conditions of each grant of Restricted
Shares, including the duration of the restrictions that shall
be imposed on the Restricted Shares, the dates on which, or
circumstances in which, the restrictions shall expire, lapse
or be removed or the Restricted Shares shall be forfeited, and
the price to be paid to the Company by the Grantee (and the
terms of payment thereof) for the Restricted Shares. In no
event, however, shall the price of a Restricted Share be less
than the par value of a Share on the date of grant. The
Committee may cause to be issued an instrument evidencing the
grant of the Restricted Shares to the Grantee, which
instrument may set forth the restrictions and other terms and
conditions of the grant.
(b) A Grantee who has acquired Restricted Shares (pursuant to
either a grant of Restricted Shares or the exercise of an
Option to purchase Restricted Shares) shall have beneficial
ownership of the Restricted Shares, including the right to
receive
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dividends on (subject, in the case of Performance-Based
Restricted Shares, to the provisions of paragraph (f)) and the
right to vote, the Restricted Shares. A certificate or
certificates representing the number of Restricted Shares
acquired shall be registered in the name of the Grantee. The
Committee, in its sole discretion, shall determine when the
certificate or certificates shall be delivered to the Grantee
(or, in the event of the Grantee's death, to his Beneficiary),
may provide for the holding of such certificate or
certificates in custody by a bank or other institution or by
the Company itself pending their delivery to the Grantee or
Beneficiary, and may provide for any appropriate legend to be
borne by the certificate or certificates referring to the
terms, conditions and restrictions applicable to the Shares.
Any attempt to dispose of the Shares in contravention of such
terms, conditions and restrictions shall be ineffective.
(c) While subject to the restrictions imposed by the Committee in
accordance with this Section 12, Restricted Shares
(1) shall not be sold, assigned, conveyed, transferred,
pledged, hypothecated, or otherwise disposed of, and
(2) shall be returned to the Company forthwith, and all
the rights of the Grantee to such Shares shall
immediately terminate, if the Grantee's continuous
employment with the Company or any Subsidiary shall
terminate for any reason, except as provided in
Section 12(d). The return of the Shares shall be
accomplished, if necessary, by the Grantee's
delivering or causing to be delivered to the Company
the certificate(s) for the Shares, accompanied by
such endorsement(s) and/or instrument(s) of transfer
as may be required by the Company. Upon the return of
Shares in accordance with this paragraph (2), the
Company shall pay to the Grantee an amount in cash
equal to the lesser of the aggregate price paid for
the Shares returned or the current fair market value
of the Shares returned.
(d) Subject to the following provisions of this Section 12(d), the
restrictions imposed on Restricted Shares shall lapse on such
date or dates as the Committee shall determine when the
Restricted Shares (or any Option to purchase them) are
granted. In addition, if a Grantee who has been in the
continuous employment of the Company or a Subsidiary since the
date on which he acquired the Restricted Shares becomes
Disabled or dies while in such employment, then the
restrictions imposed on the Restricted Shares shall lapse;
provided that, if such Restricted Shares are intended to
qualify as Performance-Based Restricted Shares, they shall
cease to qualify as performance-based compensation for
purposes of Section 162(m) of the Code if the restrictions
lapse on the account of the Disability or death of the
Grantee. All restrictions imposed on Restricted Shares shall
lapse immediately following the date on which the Company
obtains actual knowledge that a Change in Control has
occurred.
(e) If, after Restricted Shares are transferred to a Grantee
(pursuant to either a grant of Restricted Shares or the
exercise of an Option to purchase Restricted Shares),
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the Grantee properly elects, pursuant to section 83(b) of the
Code, to include in gross income for Federal income tax
purposes the amount determined under section 83(b) of the
Code, the Grantee shall furnish to the Company a copy of his
completed and signed election form, and shall pay (or make
arrangements satisfactory to the Company to pay) to the
Company any Federal, state or local taxes required to be
withheld with respect to the Shares. If the Grantee fails to
make such payments, the Company and its Subsidiaries shall, to
the extent permitted by law, have the right to deduct from any
payment of any kind otherwise due to the Grantee any Federal,
state or local taxes of any kind required by law to be
withheld with respect to the Shares.
(f) The Committee may authorize the grant of Performance-Based
Restricted Shares subject to the following terms and
conditions, in addition to all other applicable terms and
conditions set forth in the Plan:
(1) The restrictions imposed on Performance-Based
Restricted Shares shall expire, lapse or be removed
based solely on the account of the attainment of
performance targets established by the Committee
using one or more of the criteria set forth in
Section 15 hereof.
(2) Dividends shall be payable on Performance-Based
Restricted Shares only to the extent of the Shares
received based upon the attainment of the
pre-established performance target(s).
(3) Prior to the release of restrictions on any
Performance-Based Restricted Shares, the Committee
shall certify in writing (which may be set forth in
the minutes of the Committee) that the
pre-established performance target(s) have been
satisfied.
(g) The Committee may authorize the grant of Bonus Shares in
consideration for services rendered by a Grantee to the
Company or a Subsidiary subject to the terms and conditions
set forth in the Plan. Bonus Shares may be awarded pursuant to
an Award Agreement containing such terms and conditions as may
be established by the Committee. Notwithstanding the
foregoing, Bonus Shares may not be awarded to any Grantee
required to file ownership reports with the Securities and
Exchange Commission under Section 16(a) of the Securities and
Exchange Act of 1934, and no Grantee may receive more than
5,000 Bonus Shares during any fiscal year of the Company.
13. PERFORMANCE UNITS
(a) The Committee may authorize the grant of Performance Units
subject to the terms and conditions set forth in the Plan.
Performance Units are rights, denominated in cash or cash
units, to receive, at a specified future date, payment in cash
or Shares, as determined by the Committee of an amount equal
to all or a portion of the value of a unit granted by the
Committee.
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(b) At the time of the Award of Performance Units, the Committee
shall determine the performance factors applicable to the
determination of the ultimate payment value of the Performance
Units, using one or more of the criteria set forth in Section
15 hereof.
(c) Prior to the payment of any Performance Units, the Committee
shall certify in writing (which may be set forth in the
minutes of the Committee) that the pre-established performance
target(s) have been met.
(d) The maximum value of an Award of Performance Units granted to
any one Grantee in any fiscal year shall not exceed $5
million. The foregoing limitation shall be applied at the time
of settlement, regardless of whether such settlement is made
in cash or Shares.
14. PERFORMANCE SHARES
(a) The Committee may authorize the grant of Performance Shares
subject to the terms and conditions set forth in the Plan.
Performance Shares are rights, denominated in Shares or stock
units equivalent to Shares, to receive, at a specified future
date, payment in cash or Shares, as determined by the
Committee. Such payment shall be of an amount equal to all or
a portion of the Fair Market Value of Shares of the Company on
the last day of the specified performance period of a
specified number of Shares, based on performance during the
period.
(b) At the time of the Award of Performance Shares, the Committee
shall determine the performance factors applicable to the
determination of the ultimate payment value of the Performance
Shares, using one or more of the criteria set forth in Section
15 hereof.
(c) Prior to the payment of any Performance Shares, the Committee
shall certify in writing (which may be set forth in the
minutes of the Committee) that the pre-established performance
target(s) have been met.
(d) The maximum number of Shares (or the equivalent value in cash)
of any Award of Performance Shares granted to any one Grantee
in a fiscal year shall not exceed the limit set forth in
Section 4(d).
15. PERFORMANCE CRITERIA
(a) The Committee shall provide for the lapse or expiration of
restrictions on Performance-Based Restricted Shares, and shall
determine the extent to which Awards of Performance Units and
Performance Shares are earned, using one or more of the
following objectives: (i) increase in net sales; (ii) pretax
income before allocation of corporate overhead and/or bonus;
(iii) budget; (iv) earnings per share; (v) net income; (vi)
attainment of division, group or corporate financial goals;
(vii) return on stockholders' equity; (viii) return on assets;
(ix) attainment
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of strategic and operational initiatives; (x) appreciation in
or maintenance of the price of the common stock or any other
publicly-traded securities of the Company; (xi) increase in
market share; (xii) gross profits; (xiii) earnings before
interest and taxes; (xiv) earnings before interest, taxes,
depreciation and amortization; (xv) economic value-added
models; (xvi) comparisons with various stock market indices;
(xvii) comparisons with performance metrics of peer companies;
or (xviii) reductions in costs.
(b) The performance objective shall be sufficiently specific that
a third party having knowledge of the relevant facts could
determine whether the objective is met. The Committee shall,
at the time it establishes the performance target(s) for an
Award, specify the period over which the performance target(s)
relate. The establishment of the actual performance targets
and, if an Award is based on more than one of the foregoing
criteria, the relative weighting of such criteria, shall be at
the sole discretion of the Committee; provided, however, that
in all cases the performance targets must be established by
the Committee in writing no later than 90 days after the
commencement of the period to which the performance target(s)
relates (or, if less, no later than after 25 percent of the
period has elapsed) and when achievement of the performance
target(s) is substantially uncertain. Once established by the
Committee, the performance target(s) may not be changed to
increase the amount of compensation that otherwise would be
due upon the attainment of the performance target(s).
(c) If a Grantee who has been in the continuous employment of the
Company or a Subsidiary since the date on which he acquired
Performance Based-Restricted Shares becomes Disabled or dies
while in such employment, then the restrictions imposed on the
Restricted Shares shall lapse. All restrictions imposed on
Performance-Based Restricted Shares shall lapse immediately
following the date on which the Company obtains actual
knowledge that a Change in Control has occurred. The Committee
may, in its discretion, provide that the performance target(s)
under a Performance Unit or Performance Share shall be deemed
satisfied when (i) the Company obtains actual knowledge that
Change in Control has occurred, (ii) the Grantee becomes
Disabled or (iii) the Grantee dies. Performance-Based
Restricted Shares, Performance Units, and Performance Shares
that become fully payable on account of (i) the Grantee's
death, (ii) the Grantee becoming disabled, or (iii) a Change
in Control, shall cease to qualify as performance-based
compensation for purposes of Section 162(m) of the Code.
(d) The performance target(s) with respect to any
Performance-Based Restricted Share, Performance Share or
Performance Unit shall be measured over a period no greater
than five consecutive years.
16. GRANTS OF AWARDS TO OUTSIDE DIRECTORS
(a) In the discretion of the Committee, from time to time, Awards
may be granted to Outside Directors, excluding Incentive Stock
Options. Unless otherwise specified
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by the Committee, any Awards to Outside Directors for a year
shall be made on the date on which the results of the election
of directors held at the Company's annual meeting for that
year are certified by the judge of elections. Notwithstanding
the foregoing, no Awards shall be granted to any Outside
Director in a year unless the Company had a net profit before
extraordinary events (as determined by the Company's
independent auditors and reflected in the Company's annual
report) for the immediately preceding fiscal year.
(b) The Committee may, in its discretion, grant Awards, excluding
Incentive Stock Options, to any individual who is appointed to
the Board for the first time by action of the Board and not
action of the Company's shareholders. Unless otherwise
specified by the Committee, the date of such grant shall be
the date on which the Outside Director is appointed to the
Board for the first time.
17. TERMS AND QUOTAS OF OPTION
(a) Each Option and Right granted under the Plan shall be
exercisable only during a Term commencing at least six months
after the date on which the Option or Right was granted. The
Committee shall have authority to grant both Options
exercisable in full at any time during their Term and Options
exercisable in Quotas. In exercising an Option that is subject
to Quotas, the Grantee may purchase less than the full Quota
available under the Option during any period. Quotas or
portions thereof not purchased in earlier periods shall
accumulate and shall be available for purchase in later
periods within the Term of the Option.
(b) Upon the expiration of the mandatory six-month holding period
specified in subsection (a) above, any Option shall be
exercisable in full, notwithstanding the applicability of any
Quota or other limitation on the exercise of such Option,
immediately following the date on which the Company obtains
actual knowledge that a Change in Control has occurred.
(c) Repricing of Options, within the meaning of Section 303A(8) of
the New York Stock Exchange Listed Company Manual, shall not
be permitted under the Plan. For purposes of the preceding
sentence, the cancellation of an Option in exchange for
another Option, Restricted Shares, or other equity shall not
be considered a repricing of the original option if the
cancellation and exchange occurs in connection with a merger,
acquisition, spin-off, or other similar corporate transaction.
18. EXERCISE OF OPTION OR RIGHT
(a) Options or Rights shall be exercised by delivering or mailing
to the Committee:
(1) a notice, in the form and in the manner prescribed by
the Committee, specifying the number of Shares to be
purchased, or the number of Shares
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with respect to which a Limited Stock Appreciation
Right shall be exercised, and
(2) if an Option is exercised, payment in full of the
Option price for the Shares so purchased
(i) by money order, cashier's check,
certified check; or other cash equivalent
approved by the Committee
(ii) subject to paragraph (v), below, by the
tender of Shares to the Company, or by the
attestation to the ownership of the Shares
that otherwise would be tendered to the
Company in exchange for the Company's
reducing the number of Shares that it issues
to the Grantee by the number of Shares
necessary for payment in full of the Option
price for the Shares so purchased;
(iii) by money order, cashier's check, or
certified check and the tender of Shares to
the Company, or by money order, cashier's
check, or certified check and (subject to
paragraph (v), below) the attestation to the
ownership of the Shares that otherwise would
be tendered to the Company in exchange for
the Company's reducing the number of Shares
that it issues to the Grantee by the number
of Shares necessary for payment in full of
the Option price for the Shares so
purchased; or
(iv) unless the Committee expressly notifies
the Grantee otherwise (at the time of grant
in the case of an Incentive Stock Option or
at any time prior to full exercise in the
case of a Non-qualified Stock Option), and
except to the extent that the Option is an
Option to purchase Restricted Shares, by the
Grantee's (a) irrevocable instructions to
the Company to deliver the Shares issuable
upon exercise of the Option promptly to the
broker for the Grantee's account and (b)
irrevocable instruction letter to the broker
to sell Shares sufficient to pay the
exercise price and upon such sale to deliver
the exercise price to the Company, provided
that at the time of such exercise, such
exercise would not subject the Grantee to
liability under section 16(b) of the
Securities Exchange Act of 1934, or would be
exempt pursuant to Rule 16b-3 promulgated
under such Act or any other exemption from
such liability. The Company shall deliver an
acknowledgment to the broker upon receipt of
instructions to deliver the Shares. The
Company shall deliver the Shares to the
broker upon the settlement date. The broker
shall deliver to the Company cash sale
proceeds sufficient to cover the exercise
price upon receipt of the Shares from the
Company.
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(v) Shares tendered or attested to in
exchange for Shares issued under the Plan
must be held by the Grantee for at least six
months prior to their tender or their
attestation to the Company, and may not be
Restricted Shares at the time they are
tendered or attested to. The Committee shall
determine acceptable methods for tendering
or attesting to Shares to exercise an Option
under the Plan, and may impose such
limitations and prohibitions on the use of
Shares to exercise Options as it deems
appropriate. For purposes of determining the
amount of the Option price satisfied by
tendering or attesting to Shares, such
Shares shall be valued at their Fair Market
Value on the date of tender or attestation,
as applicable. Except as provided in this
paragraph, the date of exercise shall be
deemed to be the date that the notice of
exercise and payment of the Option price are
received by the Committee. For exercise
pursuant to Section 18(a)(2)(iv) of the
Plan, the date of exercise shall be deemed
to be the date that the notice of exercise
is received by the Committee.
(b) Subject to subsection (c) below, upon receipt of the notice of
exercise and, if an Option is exercised, upon payment of the
Option price, the Company shall promptly deliver to the
Grantee (or Beneficiary) a certificate or certificates for the
Shares purchased, without charge to him for issue or transfer
tax, and if a Limited Stock Appreciation Right is exercised,
shall promptly distribute cash to be paid upon the exercise of
the Right.
(c) The exercise of each Option and Right and the grant or
distribution of Restricted Shares under the Plan shall be
subject to the condition that if at any time the Company shall
determine (in accordance with the provisions of the following
sentence) that it is necessary as a condition of, or in
connection with, such exercise (or the delivery or purchase of
Shares thereunder), grant or distribution
(i) to satisfy tax withholding or other withholding
liabilities,
(ii) to effect the listing, registration, or
qualification on any securities exchange or under any
state or Federal law of any Shares otherwise
deliverable in connection with such exercise, grant
or distribution, or
(iii) to obtain the consent or approval of any
regulatory body,
then in any such event such exercise, grant or distribution
shall not be effective unless such withholding, listing,
registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not
acceptable to the Company in its reasonable and good faith
judgment. Any such determination (described in the preceding
sentence) by the Company must be reasonable, must be made in
good faith, and must be made without any intent to postpone or
limit such exercise, grant or distribution beyond the minimum
extent necessary and without any intent otherwise to deny or
frustrate any Grantee's rights in respect of
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any Award. In seeking to effect or obtain any such
withholding, listing, registration, qualification, consent or
approval, the Company shall act with all reasonable diligence.
Any such postponement or limitation affecting the right to
exercise an Option or Right or the grant or distribution of
Restricted Shares shall not extend the time within which the
Option or Right may be exercised or the Restricted Shares may
be granted or distributed, unless the Company and the Grantee
choose to amend the terms of the Award to provide for such an
extension; and neither the Company nor its directors or
officers shall have any obligation or liability to the Grantee
or to a Beneficiary with respect to any Shares with respect to
which the Award shall lapse, or with respect to which the
grant or distribution shall not be effected, because of a
postponement or limitation that conforms to the provisions of
this subsection (c).
(d) Except as provided in Section 18(e) below, Options and Rights
granted under the Plan shall be nontransferable other than by
will or by the laws of descent and distribution in accordance
with Section 19(a) hereof, and an Option or Right may be
exercised during the lifetime of the Grantee only by the
Grantee.
(e) Subject to the approval of the Committee in its sole
discretion, Non-qualified Stock Options, Limited Stock
Appreciation Rights that are granted in connection with
Non-qualified Stock Options, and Restricted Shares may be
transferable to members of the immediate family of the Grantee
and to one or more trusts for the benefit of such family
members, partnerships in which such family members are the
only partners, or corporations in which such family members
are the only stockholders. "Members of the immediate family"
means the Grantee's spouse, children, stepchildren,
grandchildren, parents, grandparents, siblings (including half
brothers and sisters), and individuals who are family members
by adoption.
(f) Upon the purchase of Shares under an Option, the stock
certificate or certificates may, at the request of the
purchaser, be issued in his name and the name of another
person as joint tenants with right of survivorship.
19. EXERCISE OF OPTION OR RIGHT AFTER DEATH, DISABILITY, RETIREMENT, OTHER
TERMINATION OF EMPLOYMENT, OR CHANGE IN CONTROL
(a) Death
If a Grantee's employment with the Company and its Subsidiaries or
status as a member of the Board shall cease due to the Grantee's death,
or if the Grantee shall die within three months after cessation of
employment or Board membership while an Option or Right is exercisable
pursuant to subsection (d) or (e) below, any Option or Right held by
the Grantee on the date of his death may be exercised only within
twelve months after the Grantee's death, and only by the Grantee's
Beneficiary, to the extent that the Option or Right could have been
exercised immediately before the Grantee's death.
-21-
(b) Disability
If a Grantee's employment with the Company and its Subsidiaries or
status as a member of the Board shall cease due to his Disability,
after at least six months of continuous employment with the Company
and/or a Subsidiary immediately following the date on which an Option
or Right was granted (with respect to Grantees other than Outside
Directors), the Grantee may exercise the Option or Right, to the extent
that the Option or Right could be exercised at the cessation of
employment or termination of membership on the Board, at any time
within two years after the Grantee shall so cease to be an employee or
Outside Director.
(b) Retirement
If a Grantee's employment with the Company and its Subsidiaries or
status as a member of the Board ceases due to his Retirement, after at
least six months of continuous employment with the Company and/or a
Subsidiary immediately following the date on which an Option or Right
was granted (with respect to Grantees other than Outside Directors),
the Grantee may exercise the Option or Right, to the extent the Option
or Right could be exercised at the cessation of employment, at any time
within five years after the Grantee's Retirement.
(c) Termination of Employment for Any Other Reason
The Option Agreement shall specify the period, if any, during which an
Option or Right may be exercised subsequent to the termination of a
Grantee's employment with the Company and its Subsidiaries, or
termination of status as a member of the Board at any time other than
within three months after the date on which the Company obtains actual
knowledge that a Change in Control has occurred and for any reason
other than those specified in subsections (a) through (c) above;
provided, however, that the Option Agreement shall not permit the
exercise of any Option or Right later than three months after such
termination; and provided further that the Option or Right may not be
exercised to an extent greater than the extent to which it could be
exercised at the cessation of employment or termination of membership
on the Board.
(d) Termination of Employment After a Change in Control
If, within three months after the Company obtains actual knowledge that
a Change in Control has occurred, a Grantee's employment with the
Company and its Subsidiaries or status as a member of the Board ceases
for any reason other than those specified in subsections (a) through
(c) above, the Grantee may exercise the Option at any time within three
months after such cessation of employment or termination of membership
on the Board.
(e) Notwithstanding any other provision of this Section 19, in no
event shall an Option be exercisable after the expiration date
specified in the Option Agreement.
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20. TAX WITHHOLDING
(a) The Company shall have the right to collect an amount
sufficient to satisfy any Federal, State and/or local tax
withholding requirements that might apply with respect to any
Award to a Grantee (including, without limitation, the
exercise of an Option or Right, the disposition of Shares, or
the grant or distribution of Restricted Shares or Bonus
Shares) in the manner specified in subsection (b) or (c)
below. Alternatively, a Grantee may elect to satisfy any such
tax withholding requirements in the manner specified in
subsection (d) or (e) below to the extent permitted therein.
(b) The Company shall have the right to require Grantees to remit
to the Company an amount sufficient to satisfy any such tax
withholding requirements. For purposes of determining the
amount withheld, the value of the Shares subject to an Award
generally shall be the Fair Market Value on the date the tax
becomes due. If Shares are sold in a broker-assisted cashless
exercise, however, the Company shall use the sale price as the
value of the Shares on the sale date.
(c) The Company and its Subsidiaries also shall, to the extent
permitted by law, have the right to deduct from any payment of
any kind (whether or not related to the Plan) otherwise due to
a Grantee any such taxes required to be withheld.
(d) If the Committee in its sole discretion approves, a Grantee
may irrevocably elect to have any tax withholding obligation
satisfied by (i) having the Company withhold Shares otherwise
deliverable to the Grantee, or (ii) delivering Shares (other
than Restricted Shares) to the Company, provided that the
Shares withheld or delivered have a Fair Market Value (on the
date that the amount of tax to be withheld is determined)
equal to the amount required to be withheld.
(e) A Grantee may elect to have any tax withholding obligation
satisfied in the manner described in Section 18(a)(2)(iv)
hereof, to the extent permitted therein.
(f) A Grantee who is eligible to participate in the JLG
Industries, Inc. Executive Deferred Compensation Plan or the
JLG Industries, Inc. Directors' Deferred Compensation Plan
(each a "Deferred Compensation Plan") may elect to surrender
Equity Awards prior to vesting and/or to forgo receipt of
Shares upon exercise of Options and to receive in lieu thereof
an equivalent number of Company Stock Units under the
applicable Deferred Compensation Plan, subject to the terms
and conditions prescribed from time to time in such Deferred
Compensation Plan.
21. SHAREHOLDER RIGHTS
No person shall have any rights of a shareholder by virtue of an Option
or Right except with respect to Shares actually issued to him, and the
issuance of Shares shall confer no retroactive right to dividends.
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22. ADJUSTMENT FOR CHANGES IN CAPITALIZATION
(a) Subject to the provisions of Section 23 hereof, in the event
that there is any change in the Shares through merger,
consolidation, reorganization, recapitalization or otherwise;
or if there shall be any dividend on the Shares, payable in
Shares; or if there shall be a stock split or a combination of
Shares, the aggregate number of shares available for Awards,
the number of Shares subject to outstanding Awards, and the
Option price per Share of each out standing Option may be
proportionately adjusted by the Board of Directors as it deems
equitable in its absolute discretion to prevent dilution or
enlargement of the rights of the Grantees; provided that any
fractional Shares resulting from such adjustments shall be
eliminated.
(b) Subject to the provisions of Section 23 hereof, any Shares to
which a Grantee shall become entitled as a result of a stock
dividend on Restricted Shares, or as a result of a stock
split, combination of Shares, merger, consolidation,
reorganization, recapitalization or other event affecting
Restricted Shares, shall have the same status, be subject to
the same restrictions, and bear the same legend (if any) as
the Shares with respect to which they were issued, except as
may be otherwise provided by the Board of Directors.
(c) The Board's determination with respect to any such adjustments
shall be conclusive.
23. EFFECTS OF MERGER OR OTHER REORGANIZATION
If the Company shall be the surviving corporation in a merger or other
reorganization, Awards shall extend to stock and securities of the
Company after the merger or other reorganization to the same extent
that a person who held, immediately before the merger or
reorganization, the number of Shares corresponding to the number of
Shares covered by the Award would be entitled to have or obtain stock
and securities of the Company under the terms of the merger or
reorganization.
24. TERMINATION, SUSPENSION, OR MODIFICATION OF PLAN
The Board of Directors may at any time terminate, suspend, or modify
the Plan, except that the Board shall not, without approval by the
affirmative votes of the holders of a majority of the securities of the
Company present, or represented, and entitled to vote, at a meeting
duly held in accordance with applicable law, change (other than through
adjustment for changes in capitalization as provided in Section 22
hereof) (a) the aggregate number of Shares for which Awards may be
granted; (b) the class of persons eligible for Awards; (c) the minimum
Option price, applicable to Options or Rights, that is provided for
under the terms of the Plan; (d) the maximum duration of the Plan; (e)
the Shares with respect to which Awards are granted; or (f) the
granting corporation for purposes of Awards under the Plan. In
addition, the Board shall seek shareholder approval for any "material
revision" of the Plan as defined in Section 303A(8) of the New York
Stock Exchange Listed Company Manual, or any successor provision. No
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termination, suspension or modification of the Plan shall adversely
affect any right acquired by any Grantee, or by any Beneficiary, under
the terms of any Award granted before the date of such termination,
suspension or modification, unless such Grantee or Beneficiary shall
expressly consent; but it shall be conclusively presumed that any
adjustment pursuant to Section 22 hereof does not adversely affect any
such right.
25. APPLICATION OF PROCEEDS
The proceeds received by the Company from the sale of Shares (including
Restricted Shares) under the Plan shall be used for general corporate
purposes.
26. GENERAL PROVISIONS
The grant of an Award in any year shall not give the Grantee any right
to similar grants in future years or any right to be retained in the
employ or on the Board of the Company or its Subsidiaries.
27. GOVERNING LAW
The Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the Commonwealth of
Pennsylvania except to the extent that such laws may be superseded by
any Federal law.
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