Exhibit 10.26
BOARD OF DIRECTORS APPROVED
AUGUST 26, 2002
2002 OMNIBUS SECURITIES PLAN
OF
PHILLIPS PETROLEUM COMPANY
(2002-2006)
SECTION 1. PURPOSE AND ESTABLISHMENT
The purpose of the Omnibus Securities Plan of Phillips Petroleum Company (the
"Plan") is to benefit the Company's stockholders by encouraging high levels of
performance by individuals whose performance is a key element in achieving the
Company's continued financial and operational success, and to enable the Company
to recruit, reward, retain and motivate employees to work as a team to achieve
the Company's mission of being the top performer in each of our businesses by
rewarding the creation of shareholder value.
The 2002 Omnibus Securities Plan of Phillips Petroleum Company shall become
effective January 1, 2002, upon its adoption by the Company's stockholders at
the 2001 Annual Meeting.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms, as used herein, shall have the
meaning specified:
(a) "AWARD" or "AWARDS" means an award granted pursuant to Section 4 hereof.
(b) "AWARD AGREEMENT" means an agreement described in Section 5 hereof entered
into between the Company and a Participant, setting forth the terms,
conditions and any limitations applicable to the Award granted to the
Participant.
(c) "BENEFICIARY" means a person or persons designated by a Participant to
receive, in the event of death, any unpaid portion of an Award held by the
Participant. Any Participant may, subject to such limitations as may be
prescribed by the Committee, designate one or more persons primarily or
contingently as beneficiaries in writing upon forms supplied by and
delivered to the Company, and may revoke such designations in writing. If
a Participant fails effectively to designate a beneficiary, then the Award
will be paid in the following order of priority:
(i) Surviving spouse;
(ii) Surviving children in equal shares;
(iii) To the estate of the Participant.
(d) "BOARD" means the Board of Directors of the Company as it may be comprised
from time to time.
(e) "CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute.
(f) "COMMITTEE" means the Compensation Committee of the Board or any successor
committee with substantially the same responsibilities.
(g) "COMPANY" means ConocoPhillips, a Delaware corporation or any successor
corporation.
(h) "COVERED EMPLOYEE" means a Participant designated prior to the grant of
Restricted Stock or Performance Awards by the Committee as one who is or
may be a "covered employee" within the meaning of Section 162(m)(3) of the
Code in the year in which Restricted Stock or Performance Awards are
expected to be taxable to such Participant.
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(i) "DATE OF CHANGE OF CONTROL" shall mean the earliest date on which any of
the occurrences listed in Section 9 of this Plan should occur.
(j) "DISABILITY" shall mean the inability, in the opinion of the independent
third party who administers the Long Term Disability Plan for the Company
or as certified by a physician who is licensed as a Medical Doctor (M.D.)
or a Doctor of Osteopathy (D.O.) that the Participant, because of an
injury or sickness, is unable to work at a reasonable occupation which is
available with the Company or at any gainful occupation which the
Participant is or may become fitted.
(k) "EMPLOYEE" means any individual who is a salaried employee of the Company
or any Participating Subsidiary.
(l) "EXECUTIVE OFFICER" means the Chief Executive Officer (CEO) position and
those positions that report directly to the CEO and other positions so
designated by the Compensation Committee.
(m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended and
in effect from time to time, or any successor statute.
(n) "FAIR MARKET VALUE" in reference to the common stock of the Company means
(i) the average of the reported highest and lowest sales prices per
share of such Stock during regular business hours as reported on the
composite tape of New York Stock Exchange transactions (or such
other reporting system as shall be selected by the Committee) on the
relevant date; or
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(ii) in the absence of reported sales on that date, the average of the
reported highest and lowest sales prices per share during regular
business hours on the last previous day for which there was a
reported sale.
The Committee shall determine the Fair Market Value of any security that
is not publicly traded, using such criteria as it shall determine, in its
sole discretion, to be appropriate for such valuation.
(O) "INSIDER" means any person who is subject to Section 16 of the Exchange
Act.
(P) "INVOLUNTARY TERMINATION" of a Participant means:
(i) Termination of the Participant's employment with the Company for any
reason other than voluntary termination (except as provided in
clause (ii)), death, disability or termination for cause,
(ii) A termination of employment by the Participant within 60 days
following a reduction of ten percent or more of the Participant's
annual salary or a reduction in the Participant's job
responsibilities, or
(iii) A termination of the Participant's employment by the Company as a
consequence of refusing a transfer by the Company to a location in
excess of 50 miles from the Participant's work location upon the
Date of Change of Control, unless the move is covered by the
Company's moving policy.
In no event shall a Participant be considered Involuntarily Terminated if he or
she is retained in the employment of the Company, its subsidiaries or
affiliates.
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(q) "PARTICIPANT" means an Employee who has been designated by the Committee
to be eligible for an Award pursuant to this Plan.
(r) "PERFORMANCE GOAL" means a performance goal established by the Committee
in connection with the grant of a Qualified Performance-Based Award, which
is based on the attainment of specified levels of one or more of the
following measures on either absolute or relative basis: earnings per
share, sales, net profit after tax, gross profit, operating profit, cash
generation, unit volume, return on equity, economic profit, safety, growth
project achievement, change in working capital, return on capital, return
on investment, shareholder return, and is established in writing by the
Committee within the time period prescribed by Section 162(m) of the Code
and related regulations.
(s) "QUALIFIED PERFORMANCE-BASED AWARD" means an Award of Restricted Stock or
Performance Units or another type of Award designated as such by the
Committee at the time of grant, based upon a determination that (i) the
recipient is a Covered Employee with respect to such Award and (ii) the
Committee wishes such Award to qualify for the Section 162(m) Exemption.
(t) "PARTICIPATING SUBSIDIARY" means an entity of the Company, of which the
Company beneficially owns, directly or indirectly, more than 50% of the
aggregate voting power of all outstanding classes and series of stock or
membership interest, and in which one or more Employees are Participants,
or are eligible for Awards pursuant to this Plan.
(u) "RESTRICTED STOCK" means shares of Stock which have certain restrictions
attached to the ownership thereof, which may be issued under Section 4.3.
(v) "RETIREMENT" means termination of employment with the Company or a
Participating Subsidiary which qualifies the Employee for Retirement as
that term is defined in the
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Retirement Income Plan of Phillips Petroleum Company or of the applicable
retirement plan of a Participating Subsidiary.
(w) "RULE 16B-3" means Rule 16b-3 promulgated by the Securities and Exchange
Commission as now in force or as such regulation or successor regulation
shall be hereafter amended.
(x) "SECTION 16" means Section 16 of the Exchange Act or any successor
regulation and the rules promulgated thereunder as they may be amended
from time to time.
(y) "SECTION 162(m) EXEMPTION" means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in
Section 162(m)(4)(C) of the Code.
(z) "STOCK" means shares of common stock of the Company, par value $.01 or as
modified from time to time.
(aa) "STOCK APPRECIATION RIGHT" means a right, the value of which is determined
relative to the appreciation in value of shares of Stock, which may be
issued under Section 4.2.
(bb) "STOCK OPTION" means a right to purchase shares of Stock granted pursuant
to Section 4.1 and includes Incentive Stock Options and Non-Qualified
Stock Options as defined in Section 4.1.
SECTION 3. ELIGIBILITY
Awards may be granted only to Employees who are designated as Participants from
time to time by the Committee. The Committee shall determine which Employees
shall be Participants, the types of Awards to be made to Participants and the
terms, conditions and limitations applicable to the Awards.
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SECTION 4. AWARDS
Awards may include, but are not limited to, those described in this Section 4.
The Committee may grant Awards singly, in tandem or in combination with other
Awards, as the Committee may in its sole discretion determine. Subject to the
other provisions of this Plan, Awards may also be granted in combination or in
tandem with, in replacement of, or as alternatives to, grants or rights under
this Plan and any other employee plan of the Company. The Committee must approve
all grants made under this Plan to the Chief Executive Officer. The Committee
may also designate from time to time other classes of officers or employees for
whom Committee approval will be required for grants of equity under this Plan.
The Chief Executive Officer shall have authority to approve stock option grants,
restricted stock, or other forms of equity compensation, to Participants other
than those whose grant has been designated by the Committee for approval by the
Committee.
4.1 STOCK OPTIONS
A Stock Option is a right to purchase a specified number of shares of Stock at a
specified price during such specified time as the Committee shall determine.
(a) Options granted may be either of a type that complies with the
requirements of incentive stock options as defined in Section 422 of the
Code and is designated as such ("Incentive Stock Options") or of a type
that does not comply with such requirements or is designated as not being
an Incentive Stock Option ("Non-Qualified Options"). The maximum award
term for all Stock Options awarded under this Plan shall be ten (10)
years.
(b) The exercise price per share of any Stock Option shall be no less than the
Fair Market Value per share of the Stock subject to the option on the date
the Stock Option is granted.
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(c) A Stock Option may be exercised, in whole or in part, by giving written
notice of exercise to the Company specifying the number of shares of Stock
to be purchased.
(d) The exercise price of the Stock subject to the Stock Option may be paid in
cash or, at the discretion of the Committee, may also be paid by the
tender of Stock already owned by the Participant, or through a combination
of cash and Stock, or through such other means the Committee determines
are consistent with the Plan's purpose and applicable law. No fractional
shares of Stock will be issued or accepted.
(e) Notwithstanding any other provision of this Plan, other than Section 8, no
Participant may be granted Stock Options and Stock Appreciation Rights
covering in excess of 2,000,000 shares of Stock in any calendar year. If
Stock Appreciation Rights are granted in tandem with an equal number of
Stock Options, the total number of shares covered by such Stock
Appreciation Rights and Stock Options shall be deemed, for purposes of
this limitation, to equal the number of shares covered by such Stock
Options.
4.2 STOCK APPRECIATION RIGHTS
A Stock Appreciation Right is a right to receive, upon surrender of the right,
but without payment, an amount payable in cash and/or shares of Stock under the
terms and conditions as the Committee shall determine.
(a) A Stock Appreciation Right may be granted in tandem with part or all of,
in addition to, or completely independent of a Stock Option or any other
Award under this Plan. A Stock Appreciation Right issued in tandem with a
Stock Option may be granted at the time of grant of the related Stock
Option or at any time thereafter during the term of the Stock Option.
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(b) The amount payable in cash and/or shares of Stock with respect to each
right shall be equal in value to a percent of the amount by which the Fair
Market Value per share of Stock on the exercise date exceeds the exercise
price of the Stock Appreciation Right. The applicable percent shall be
established by the Committee. The amount payable in shares of Stock, if
any, is determined with reference to the Fair Market Value on the date of
exercise.
(c) Stock Appreciation Rights issued in tandem with Stock Options shall be
exercisable only to the extent that the Stock Options to which they relate
are exercisable. Upon exercise of the Stock Appreciation Right, the
Participant shall surrender to the Company the underlying Stock Option.
Stock Appreciation Rights issued in tandem with Stock Options shall
automatically terminate upon the exercise of such Stock Options.
(d) Grants of Stock Appreciation Rights are subject to the limitations set
forth in Section 4.1(e) above.
4.3 RESTRICTED STOCK
Restricted Stock is Stock that is issued to a Participant and is subject to such
terms, conditions and restrictions as the Committee deems appropriate, which may
include, but is not limited to, restrictions upon the sale, assignment, transfer
or other disposition of the Restricted Stock and the requirement of forfeiture
of the Restricted Stock upon termination of employment under certain specified
conditions. The Committee may provide for the lapse of any such term or
condition or waive any term or condition based on such factors or criteria as
the Committee may determine. Pursuant to this Section 4.3, an Award of
Restricted Stock may be either time-lapsed Restricted Stock or Performance-Based
Restricted Stock. The Participant shall have, with respect to awards of
Restricted Stock, all of the rights of a shareholder of the Company, including
the right to vote the Restricted Stock and the right to receive any cash or
stock dividends on such Stock.
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4.4 PERFORMANCE AWARDS
Performance Awards may be granted under this Plan from time to time based on the
terms and conditions as the Committee deems appropriate provided that such
Awards shall not be inconsistent with the terms and purposes of this Plan.
Performance Awards are Awards which are contingent upon the performance of all
or a portion of the Company and/or its Participating Subsidiaries or which are
contingent upon the individual performance of a Participant. Performance Awards
may be in the form of performance units, performance shares and such other forms
of performance Awards which the Committee shall determine. The Committee shall
determine the performance measurements and criteria for such Performance Awards.
4.5 OTHER AWARDS
The Committee may from time to time grant stock, other stock-based and non-stock
based Awards under the Plan including without limitations those Awards pursuant
to which shares of stock are or may in the future be acquired, Awards
denominated in stock units, securities convertible into stock, phantom
securities and dividend equivalents. The Committee shall determine the terms and
conditions of such other stock, stock-based and non-stock based Awards provided
that such Awards shall not be inconsistent with the terms and purposes of this
Plan.
4.6 QUALIFIED PERFORMANCE-BASED AWARDS
The provisions of this Section 4.6 shall apply to all Qualified
Performance-Based Awards, notwithstanding any other provision of this Plan,
other than Sections 8 and 9. No Participant may be granted Qualified
Performance-Based Awards covering in excess of 2,000,000 shares of Stock or
allowing for the payment of cash in excess of $10,000,000 in any calendar year.
Each Qualified Performance-Based Award shall be earned, vested and payable (as
applicable) only upon the achievement of one or more Performance Goals (together
with the satisfaction of any other
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conditions, such as continued employment, as the Committee may determine to be
appropriate); provided, that (i) the Committee may provide, either in connection
with the grant thereof or by amendment thereafter, that achievement of such
Performance Goals will be waived upon the death or disability of the
Participant, and (ii) the provisions of Sections 8 and 9 shall apply
notwithstanding this sentence. Except as specifically provided in the preceding
sentence, no Qualified Performance-Based Award may be amended, nor may the
Committee exercise any discretionary authority it may otherwise have under this
Plan with respect to a Qualified Performance-Based Award under this Plan, in any
manner to waive the achievement of the applicable Performance Goals or to
increase the amount payable pursuant thereto or the value thereof, or otherwise
in a manner that would cause the Qualified Performance-Based Award to cease to
qualify for the Section 162(m) Exemption. Under this Plan, a Qualified
Performance-Based Award may include Restricted Stock.
SECTION 5. AWARD AGREEMENTS
Each Award under this Plan shall be evidenced by an Award Agreement setting
forth the number of shares of Stock or other security, Stock Appreciation
Rights, or units subject to the Award and such other terms and conditions
applicable to the Award as determined by the Committee.
(a) Award Agreements shall include the following terms:
(i) NON-ASSIGNABILITY: A provision that the Awards under the Plan other
than Awards representing Non-Qualified Stock Options shall not be
assigned, pledged or otherwise transferred except by will or by the
laws of descent and distribution, and that during the lifetime of a
Participant, an Award other than an Award representing Non-Qualified
Stock Options shall be exercised only by such Participant or by the
Participant's legal guardian or legal representative.
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(ii) TERMINATION OF EMPLOYMENT: A provision describing the treatment of
an Award in the event of the Retirement, Disability, death or other
termination of a Participant's employment with the Company,
including but not limited to terms relating to the vesting, time for
exercise, forfeiture or cancellation of an Award in such
circumstances.
(iii) RIGHTS AS STOCKHOLDER: A provision that a Participant shall have no
rights as a stockholder with respect to any securities covered by an
Award until the date the Participant becomes the holder of record.
Except as provided in Section 8 hereof, no adjustment shall be made
for dividends or other rights, unless the Award Agreement
specifically requires such adjustment, in which case, grants of
dividend equivalents or similar rights shall not be considered to be
a grant of any other stockholder right.
(iv) WITHHOLDING: A provision requiring the withholding of applicable
taxes required by law from all amounts paid in satisfaction of an
Award. In the case of an Award paid in cash, the withholding
obligation shall be satisfied by withholding the applicable amount
and paying the net amount in cash to the Participant. In the case of
Awards paid in shares of Stock or other securities of the Company, a
Participant may satisfy the withholding obligation by paying the
amount of any taxes in cash or, with the approval of the Committee,
shares of Stock or other securities may be deducted from the payment
to satisfy the Company's minimum withholding obligation in full or
in part as long as such withholding of shares does not violate any
applicable laws, rules or regulations of Federal, state or local
authorities. The number of shares to be deducted shall be determined
by reference to the Fair Market Value of such shares of Stock on the
applicable date.
(b) Award Agreements may include the following terms:
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(i) REPLACEMENT AND SUBSTITUTION: Except as provided in Section 13 (b)
dealing with repricing of Stock Options, such provisions permitting
the surrender of outstanding Awards or securities held by the
Participant in order to exercise or realize rights under other
Awards, or in exchange for the grant of new Awards under similar or
different terms, may be included.
(ii) TRANSFERABILITY OF NON-QUALIFIED STOCK OPTIONS: Such provisions as
the Committee may, in its discretion, authorize in any particular
case, with respect to all or any portion of any Non-Qualified Stock
Options to be granted to Participant, the transfer by such
Participant of any of such Non-Qualified Stock Options to (a) the
spouse, children or grandchildren (including in each case
stepchildren or step grandchildren) of the Participant (all such
persons collectively "Immediate Family Members"), (b) a trust or
trusts for the exclusive benefit of persons all of whom are
Immediate Family Members, or (c) a partnership in which all partners
are Immediate Family Members, provided that following any such
permitted transfer, subsequent transfers of transferred
Non-Qualified Stock Options, except by will or the laws of descent
and distribution, are prohibited. Following any transfer
contemplated hereby, the transferred Non-Qualified Stock Options
shall continue to be subject to all of the terms hereof,
administrative procedures and the Award Agreement pursuant to which
it was originally granted, and the transferee shall be obliged to
comply in all respects with all of the terms and conditions hereof,
the administrative procedures and the Award Agreement in the same
manner as if the transferee were a Participant hereunder.
(iii) OTHER TERMS: Such other terms as are necessary and appropriate to
effect an Award to the Participant including but not limited to the
term of the Award, vesting provisions, deferrals, any requirements
for continued employment with the
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Company, any other restrictions or conditions (including performance
requirements) on the Award and the method by which restrictions or
conditions lapse, effect on the Award of a Change of Control as
defined in Section 9, the price, amount or value of Awards.
SECTION 6. SHARES OF STOCK SUBJECT TO THE PLAN
(a) Subject to the adjustment provisions of Section 8 hereof, the number of
shares of Stock for which Awards may be granted during the term of this
Plan shall be 12,500,000; provided, that immediately following the
Effective Time of the Merger (as those terms are defined in the next
sentence), the number of shares of Stock for which Awards may be granted
during the term of this Plan shall be increased by the product of (i) a
fraction, the numerator of which is 12,500,000 and the denominator of
which is the number of shares of Stock outstanding immediately before the
Effective Time times (ii) the number of shares of Stock issued by the
Company to stockholders of Tosco Corporation pursuant to the Merger; and
provided, further, that the numbers described in clauses (i) and (ii) of
the preceding proviso shall be adjusted as appropriate in the event there
is any adjustment made pursuant to Section 8 hereof before the Effective
Time of the Merger. The terms "Effective Time" and "Merger" shall have the
meanings given to them in the Agreement and Plan of Merger, dated as of
February 4, 2001, by and among the Company, Ping Acquisition Corp. and
Tosco Corporation, as the same may be amended from time to time.
Shares issued under the Plan which do not fall under Section 4.1 or 4.2
shall be limited to 2,000,000 shares during the term of the Plan;
provided, that immediately following the Effective Time of the Merger, the
2,000,000 share limitation shall be increased by the
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product of (i) a fraction, the numerator of which is 2,000,000 and the
denominator of which is the number of shares of Stock outstanding
immediately before the Effective Time times (ii) the number of shares of
Stock issued by the Company to stockholders of Tosco Corporation pursuant
to the Merger; and provided, further, that the numbers described in
clauses (i) and (ii) of the preceding proviso shall be adjusted as
appropriate in the event there is any adjustment made pursuant to Section
8 hereof before the Effective Time of the Merger.
(b) Any unexercised or undistributed portion of any terminated, expired,
exchanged, or forfeited Award or Awards settled in cash in lieu of shares
of Stock shall be available for further Awards in addition to those
available under Section 6(a) hereof.
(c) For the purposes of computing the total number of shares of Stock granted
under the Plan, the following rules shall apply to Awards payable in Stock
or other securities, where appropriate:
(i) except as provided in (v) of this Section, each Stock Option shall
be deemed to be the equivalent of the maximum number of shares that
may be issued upon exercise of the particular Stock Option;
(ii) except as provided in (v) of this Section, each other stock-based
Award payable in some other security shall be deemed to be equal to
the number of shares to which it relates;
(iii) except as provided in (v) of this Section, where the number of
shares available under the Award is variable on the date it is
granted, the number of shares shall be deemed to be the maximum
number of shares that could be received under that particular Award;
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(iv) where one or more types of Awards (both of which are payable in
shares of Stock or another security) are granted in tandem with each
other, such that the exercise of one type of Award with respect to a
number of shares cancels an equal number of shares of the other,
each joint Award shall be deemed to be the equivalent of the number
of shares under the other; and
(v) each share awarded or deemed to be awarded under the preceding
subsections shall be treated as shares of Stock, even if the Award
is for a security other than Stock.
Additional rules for determining the number of shares of Stock granted under the
Plan may be made by the Committee, as it deems necessary or appropriate.
(d) The Stock which may be issued pursuant to an Award under the Plan may be
treasury or authorized but unissued Stock or Stock may be acquired,
subsequently or in anticipation of the transaction, in the open market to
satisfy the requirements of the Plan.
SECTION 7. ADMINISTRATION
(a) A majority of the members of the Committee shall constitute a quorum. The
vote of a majority of a quorum shall constitute action by the Committee.
(b) The Committee shall periodically determine the Participants in the Plan
and the nature, amount, pricing, timing, and other terms of Awards to be
made to such individuals.
(c) The Committee shall have the power to interpret and administer the Plan.
All questions of interpretation with respect to the Plan, the number of
shares of Stock or other security, Stock Appreciation Rights, or units
granted, and the terms of any Award Agreements shall be
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determined by the Committee and its determination shall be final and
conclusive upon all parties in interest. In the event of any conflict
between an Award Agreement and the Plan, the terms of the Plan shall
govern.
(d) It is the intent of the Company that the Plan and Awards hereunder satisfy
and be interpreted in a manner, that, in the case of Participants who are
or may be Insiders, satisfies the applicable requirements of Rule 16b-3,
so that such persons will be entitled to the benefits of Rule 16b-3 or
other exemptive rules under Section 16 and will not be subjected to
avoidable liability thereunder. If any provision of the Plan or of any
Award would otherwise frustrate or conflict with the intent expressed in
this Section 7(d), that provision, to the extent possible, shall be
interpreted and deemed amended so as to avoid such conflict. To the extent
of any remaining irreconcilable conflict with such intent, the provision
shall be deemed void as applicable to Insiders.
(e) The Committee may delegate to the officers or employees of the Company the
authority to execute and deliver such instruments and documents, to do all
such acts and things, and to take all such other steps deemed necessary,
advisable or convenient for the effective administration of the Plan in
accordance with its terms and purpose, except that the Committee may not
delegate any discretionary authority with respect to substantive decisions
or functions regarding the Plan or Awards thereunder as these relate to
any Qualified Performance-Based Awards nor to Insiders including, but not
limited to, decisions regarding the timing, eligibility, pricing, amount
or other material term of such Awards.
SECTION 8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
Subject to any required action by the Company's stockholders, in the event of a
reorganization, recapitalization, Stock split, Stock dividend, exchange of
Stock, combination of Stock, merger, consolidation or any other change in
corporate structure of the Company affecting the Stock, or in
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the event of a sale by the Company of all or a significant part of its assets,
or any distribution to its stockholders other than a normal cash dividend, the
Committee may make appropriate adjustment in the number, kind, price and value
of Stock authorized by this Plan, in the limitations imposed by Sections 4.1(e)
and 4.6, and any adjustments to outstanding Awards as it determines appropriate
so as to prevent dilution or enlargement of rights; provided, that such
adjustments to the limitations imposed by Sections 4.1(e) and 4.6, and to
Qualified Performance-Based Awards shall be carried out in a manner complying
with the requirements for the Section 162(m) Exemption.
SECTION 9. CHANGE OF CONTROL
(a) In the event of a Change of Control, unless explicitly provided otherwise
in the applicable Award Agreement:
(i) Any Stock Options and Stock Appreciation Rights outstanding as of
the Date of Change of Control that are not then fully exercisable
and vested, shall become fully exercisable and vested to the full
extent of the original grant and shall remain exercisable following
any Involuntary Termination for a period not less than the lesser of
one year and the remainder of the original term of such Stock Option
or Stock Appreciation Right;
(ii) All restrictions and other limitations applicable to any Restricted
Stock shall lapse, and such Restricted Stock shall become free of
all restrictions and become fully vested and transferable to the
full extent of the original grant;
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(iii) All Performance Awards and other Awards outstanding as of the Date
of Change of Control shall be considered to be earned, at the higher
of the target level or the level earned based upon performance from
the beginning of the applicable performance period through the Date
of Change of Control, and shall be paid in full, and any deferral or
other restriction shall lapse and except as provided in subsection
(c) of this Section 9, such Performance Awards shall be settled in
cash as promptly as is practicable; and (iv) All noncompetition
covenants and other similar restrictive covenants applicable to any
outstanding Awards shall lapse and become null and void and of no
further effect.
(b) A "Change of Control" shall mean:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14 (d)(2) of the Exchange Act (a
"Person")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 15 percent or more of either
(a) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (b) the combined power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change of Control: (A) any acquisition directly from the Company,
(B) any acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or (D) any
acquisition pursuant to a transaction which complies with clauses
(A), (B) and (C) of subsection (iii) of this Section 9(b); or
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(ii) Individuals who, as of August 26, 2002, constituted the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to August 26, 2002, whose election,
or nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(iii) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another entity (a "Corporate
Transaction"), in each case, unless, following such Corporate
Transaction, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction
beneficially own, directly or indirectly, more than 60 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 directors, as the case
may be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction of the
Outstanding Company Common Stock and Outstanding Company
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Voting Securities, as the case may be, (B) no Person (excluding any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Corporate Transaction) beneficially
own, directly or indirectly, 15 percent or more of, respectively,
the then outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting
power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the
Corporate Transaction and (C) at least a majority of the members of
the board of directors of the corporation resulting from such
Corporate Transaction were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of
the Board, providing for such Corporate Transaction; or
(iv) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
(c) Notwithstanding the foregoing, if any right to receive cash granted
pursuant to this Section 9 would make a Change of Control transaction
ineligible for pooling-of-interests accounting under APB No. 16 that but
for the nature of such right would be eligible for such accounting
treatment, the Committee shall have the ability to substitute for the cash
payable pursuant to such right Stock or other securities with a Fair
Market Value equal to the cash that would otherwise be payable hereunder
and to make such other adjustments as may be necessary to preserve such
eligibility (so long as such other adjustments do not materially diminish
the value of the affected Awards).
SECTION 10. RIGHTS OF EMPLOYEES
(a) Status as an eligible Employee shall not be construed as a commitment that
any Award will be made under the Plan to such eligible Employee or to
eligible Employees generally.
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(b) Nothing contained in the Plan (or in any other documents related to this
Plan or to any Award) shall confer upon any Employee or Participant any
right to continue in the employ or other service of the Company or
constitute any contract or limit in any way the right of the Company to
change such person's compensation or other benefits or to terminate the
employment of such person with or without cause.
SECTION 11. AWARDS IN FOREIGN COUNTRIES
The Committee shall have the authority to adopt such modifications, procedures
and subplans as may be necessary or desirable to comply with provisions of the
laws of foreign countries in which the Company or its Participating Subsidiaries
may operate to assure the viability of the benefits of Awards made to
Participants employed in such countries and to meet the purpose of this Plan.
SECTION 12. COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS
No Stock certificate distributable pursuant to this Plan shall be issued and
delivered unless the issuance of such certificate complies with all applicable
legal requirements including, without limitation, compliance with the provisions
of applicable state securities laws, the Securities Act of 1933, as amended from
time to time, or any successor statute, the Exchange Act and the requirements of
the exchanges on which the Company's Stock may, at the time, be listed.
SECTION 13. AMENDMENT AND TERMINATION
(a) The Board of Directors may at any time amend, suspend or terminate the
Plan. The Committee may at any time alter or amend any or all Award
Agreements under the Plan, but no such alteration or amendment may
adversely affect the rights of the Participant in question without such
Participant's consent. However, no such action may, without further
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approval of the stockholders of the Company, be effective if such approval
is required in order that transactions in Company securities under the
Plan be exempt from the operation of Section 16(b) of the Securities
Exchange Act of 1934, nor may any such action amend the Plan so as to
(i) increase the number of shares of Stock which may be issued under the
Plan, except as provided for in Section 8; or
(ii) materially modify the requirements as to eligibility for
participation.
(b) In addition, except for adjustments pursuant to Section 8 hereof, in no
event may any Stock Option or Stock Appreciation Right granted under this
Plan be amended to decrease the exercise price thereof, cancelled in
conjunction with the grant of any new Stock Option or Stock Appreciation
Right with a lower price, or otherwise be subject to any action that would
be treated, for accounting purposes, as a repricing of such Stock Option
or Stock Appreciation Right.
SECTION 14. UNFUNDED PLAN
The Plan shall be unfunded. Neither the Company nor the Board of Directors shall
be required to segregate any assets that may at any time be represented by
Awards made pursuant to the Plan. Neither the Company, the Committee, nor the
Board of Directors shall be deemed to be a trustee of any amounts to be paid
under the Plan.
SECTION 15. LIMITS OF LIABILITY
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(a) Any liability of the Company to any Participant with respect to an Award
shall be based solely upon contractual obligations created by the Plan and
the Award Agreement.
(b) Neither the Company nor any member of the Board of Directors or of the
Committee, nor any other person participating in any determination of any
question under the Plan, or in the interpretation, administration or
application of the Plan, shall have any liability to any party for any
action taken or not taken, in good faith under the Plan.
SECTION 16. DURATION OF THE PLAN
This Plan shall become effective on January 1, 2002, upon the adoption by the
Company's stockholders at the 2001 Annual Meeting, and the Committee shall have
authority to grant Awards hereunder until December 31, 2006, subject to the
ability of the Board of Directors to terminate the Plan as provided in Section
13.
SECTION 17. TERMINATION OF OTHER PLANS
The Omnibus Securities Plan of 1993 ("1993 Plan") shall continue for its
duration or until December 31, 2002, and grants may be made from the 1993 Plan
until it expires by its terms or until shares of Stock are no longer awardable
under the 1993 Plan. Grants other than Incentive Stock Options, Non-qualified
Stock Options, and Stock Appreciation Rights that are made under the 1993 Plan,
following the approval by stockholders of the 2002 Omnibus Securities Plan,
shall not exceed 700,000 shares. All Stock Options granted under the 1993 Plan,
following the approval by stockholders of the 2002 Omnibus Securities Plan,
shall be granted at not less than the Fair Market Value of the Stock on the date
of the grant, and the term of such options shall not exceed ten (10) years.
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