Exhibit 10.28
1998 KEY EMPLOYEE STOCK PERFORMANCE PLAN
OF CONOCOPHILLIPS
(AS AMENDED AND RESTATED EFFECTIVE AUGUST 30, 2002)
RECITALS
Conoco Inc. ("Conoco") established the 1998 Key Employee Stock
Performance Plan of Conoco Inc. (the "Plan") effective October 16, 1998.
Paragraph 5 specifies the number of shares of Common Stock with respect to which
Awards may be granted under the Plan. Paragraph 13 reserves to the Board the
right to amend the Plan. Paragraph 15 provides that in the event of certain
transactions, including a reorganization, the Board is authorized to (a) issue
or assume Awards by means of substitution of new Awards, as appropriate, for
previously issued Awards or an assumption of previously issued Awards as part of
such adjustment or (b) cancel Awards that are Options or SARs and give
Participants who are holders of such Awards notice and opportunity to exercise
for 30 days prior to such cancellation.
Effective October 8, 2001, Conoco reclassified its Class A Common
Stock and Class B Common Stock into a single class of new common stock ("Common
Stock") by merging Conoco Delaware I, Inc., a wholly owned subsidiary of Conoco
("Merger Sub"), with and into Conoco (the "Merger"), pursuant to an Agreement
and Plan of Merger, dated as of July 17, 2001, between Conoco and Merger Sub. In
connection with the Merger and pursuant to their authority under Paragraph 13,
the Board authorized the amendment and restatement of the Plan to provide for
the issuance of Awards with respect to the new class of Common Stock, effective
October 8, 2001 (the effective time of the Merger). In addition, in connection
with the Merger and effective October 8, 2001, pursuant to its authority under
Paragraph 15, the Board substituted a new Award for each previously issued
outstanding Award. The new Award applied to a number of shares of Common Stock
equal to the total number of shares of Conoco Class A Common Stock and Class B
Common Stock for which the previously issued outstanding Award had not been
exercised, and provides for the same exercise price and the same other terms and
conditions as those applicable under the previously issued outstanding Award.
On September 21, 2001, the stockholders of Conoco approved a Plan
amendment to increase the number shares of Common Stock available for Awards
under the Plan, which increase was included in the October 8, 2001 amendment and
restatement of the Plan.
On October 30, 2001, the Board of Directors of Conoco approved
certain stock award and Plan amendment limitations to the Plan.
Effective November 18, 2001, Conoco entered into the Agreement and
Plan of Merger by and among Phillips Petroleum Company, Corvette Porsche Corp.,
Porsche Merger Corp., Corvette Merger Corp. and Conoco (the "Phillips Merger
Agreement"), which provides for a series of transactions including the formation
of ConocoPhillips, a Delaware corporation, and the merger of Conoco into and
with a subsidiary of ConocoPhillips (collectively, the "Phillips Merger"). In
connection with and effective upon the closing of the Phillips Merger, the Board
of Directors of Conoco approved the amendment and restatement of the Plan to
reflect the
transfer of sponsorship to ConocoPhillips, the renaming of the Plan as the "1998
Key Employee Stock Performance Plan of ConocoPhillips," and to make certain
changes related thereto.
1. Plan. The Plan was adopted by the Company to reward certain Employees
of the Company by enabling them to acquire shares of Common Stock of the Company
or receive payments determined by reference to such Common Stock.
2. Objectives. The purpose of this Amended and Restated 1998 Key Employee
Stock Performance Plan of ConocoPhillips is to further the interests of the
Company, its Subsidiaries and its shareholders by providing incentives in the
form of Awards to Employees and to provide for issuance of Awards in connection
with the "Option Program" under which certain existing DuPont awards were
canceled at the election of the holder. Such Awards will give Participants in
the Plan an interest in the Company parallel to that of the shareholders, thus
enhancing the proprietary and personal interest of such Participants in the
Company's continued success and progress.
3. Definitions. As used herein, the terms set forth below shall have the
following respective meanings:
"Authorized Officer" means the Chief Executive Officer of the
Company (or any other senior officer of the Company to whom either of them shall
delegate the authority to execute any Award Agreement, where applicable).
"Award" means any Option or SAR granted to a Participant pursuant to
such applicable terms, conditions and limitations as the Committee may establish
in order to fulfill the objectives of the Plan.
"Award Agreement" means a written agreement setting forth the terms,
conditions and limitations applicable to an Award.
"Board" means the Board of Directors of the Company.
"Change of Control" is defined in Attachment A.
"Class A Common Stock" means the Class A Common Stock, par value
$.01 per share, of Conoco.
"Class B Common Stock" means the Class B Common Stock, par value
$.01 per share, of Conoco.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means the Compensation Committee of the Board or such
other committee of the Board as is designated by the Board to administer the
Plan.
"Common Stock" means, from and after the effective time of the
Phillips Merger (as defined in the Recitals), ConocoPhillips common stock, par
value $.01 per share. Prior to the effective time of the Phillips Merger and
after the Merger (as defined in the Recitals), "Common
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Stock" means Conoco common stock, par value $.01 per share. Prior to the
effective time of the Merger, "Common Stock" means Class A Common Stock or Class
B Common Stock, as appropriate.
"Company" means ConocoPhillips, a Delaware corporation. Prior to the
effective time of the Phillips Merger, "Company" means Conoco.
"Conoco" means Conoco Inc., a Delaware corporation.
"Director" means an individual serving as a member of the Board.
"DuPont" means E.I. du Pont de Nemours and Company, a Delaware
corporation.
"DuPont Award" means an option or stock appreciation right granted
by DuPont pursuant to the DuPont Stock Performance Plan, the DuPont Variable
Compensation Plan, the DuPont Corporate Sharing Plan or the Conoco Unit Option
Plan.
"Employee" means an employee of the Company or any of its
Subsidiaries and an individual who has agreed to become an employee of the
Company or any of its Subsidiaries and is expected to become such an employee
within the following six months.
"Fair Market Value" of a share of Common Stock means, as of a
particular date, (i) if Common Stock is listed on a national securities
exchange, the mean between the highest and lowest sales price per share of such
Common Stock on the consolidated transaction reporting system for the principal
national securities exchange on which shares of Common Stock are listed on that
date, or, if there shall have been no such sale so reported on that date, on the
next succeeding date on which such a sale was so reported, or, at the discretion
of the Committee, the price prevailing on the exchange at the time of exercise,
(ii) if Common Stock is not so listed but is quoted on the Nasdaq National
Market, the mean between the highest and lowest sales price per share of Common
Stock reported by the Nasdaq National Market on that date, or, if there shall
have been no such sale so reported on that date, on the next succeeding date on
which such a sale was so reported, or, at the discretion of the Committee, the
price prevailing on the Nasdaq National Market at the time of exercise, (iii) if
Common Stock is not so listed or quoted, the mean between the closing bid and
asked price on that date, or, if there are no quotations available for such
date, on the next succeeding date on which such quotations shall be available,
as reported by the Nasdaq Stock Market, or, if not reported by the Nasdaq Stock
Market, by the National Quotation Bureau Incorporated or (iv) if Common Stock is
not publicly traded, the most recent value determined by an independent
appraiser appointed by the Company for such purpose.
"Grant Date" means the date an Award is granted to a Participant
pursuant to the Plan. The Grant Date for a substituted award is the Grant Date
of the original award.
"Grant Price" means the price at which a Participant may exercise
his or her right to receive cash or Common Stock, as applicable, under the terms
of an Award.
"Incentive Stock Option" means an Option that is intended to comply
with the requirements set forth in Section 422 of the Code.
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"Nonqualified Stock Option" means an Option that is not an Incentive
Stock Option.
"Option" means a right to purchase a specified number of shares of
Common Stock at a specified Grant Price, which may be an Incentive Stock Option
or a Nonqualified Stock Option.
"Option Program" means a program involving the cancellation of
certain existing DuPont Awards.
"Option Program Award" means an Option or SAR granted in connection
with the Option Program.
"Participant" means an Employee to whom an Award has been granted
under this Plan.
"Stock Appreciation Right" or "SAR" means a right to receive a
payment, in cash or in Common Stock, equal to the excess of the Fair Market
Value or other specified valuation of a specified number of shares of Common
Stock on the date the right is exercised over a specified Grant Price, in each
case, as determined by the Committee.
"Subsidiary" means (i) in the case of a corporation, any corporation
of which the Company directly or indirectly owns shares representing 50% or more
of the combined voting power of the shares of all classes or series of capital
stock of such corporation which have the right to vote generally on matters
submitted to a vote of the stockholders of such corporation and (ii) in the case
of a partnership or other business entity not organized as a corporation, any
such business entity of which the Company directly or indirectly owns 50% or
more of the voting, capital or profits interests (whether in the form of
partnership interests, membership interests or otherwise).
4. Eligibility. All Employees are eligible for the grant of Awards under
this Plan.
5. Common Stock Available for Awards.
(a) Subject to the provisions of paragraph 15 hereof, no Award shall
be granted if it shall result in the aggregate number of shares of Common
Stock issued under the Plan plus the number of shares of Common Stock
covered by or subject to Awards then outstanding (after giving effect to
the grant of the Award in question) to exceed 17,576,459. No more than
5,612,400 shares of Common Stock shall be available for Incentive Stock
Options. The number of shares of Common Stock that are the subject of
Awards under this Plan that are forfeited or terminated, expire
unexercised, are settled in cash in lieu of Common Stock or in a manner
such that all or some of the shares covered by an Award are not issued to
a Participant, shall again immediately become available for Awards
hereunder. The Committee may from time to time adopt and observe such
procedures concerning the counting of shares against the Plan maximum as
it may deem appropriate. The Board and the appropriate officers of the
Company shall from time to time take whatever actions are necessary to
file any required documents with
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governmental authorities, stock exchanges and transaction reporting
systems to ensure that shares of Common Stock are available for issuance
pursuant to Awards.
(b) Option Program Awards and awards assumed under the Plan or
issued as substitute Awards, each pursuant to paragraph 15(b) of the Plan,
(i) are not subject to the limitations in paragraph 8(b) and (ii) do not
count against the limitations on Common Stock available for Awards set
forth in paragraph 5(a).
6. Administration.
(a) The Plan shall be administered by the Committee.
(b) The Committee shall have full and exclusive power and authority
to administer this Plan and to take all actions that are specifically
contemplated hereby or are necessary or appropriate in connection with the
administration hereof. The Committee shall also have full and exclusive
power to interpret this Plan and to adopt such rules, regulations and
guidelines for carrying out this Plan as it may deem necessary or proper,
all of which powers shall be exercised in the best interests of the
Company and in keeping with the objectives of this Plan. The Committee
may, in its discretion, provide for the extension of the exercisability of
an Award, accelerate the vesting or exercisability of an Award, eliminate
or make less restrictive any restrictions applicable to an Award, waive
any restriction or other provision of this Plan or otherwise amend or
modify an Award in any manner that is either (i) not adverse to the
Participant to whom such Award was granted or (ii) consented to by such
Participant. The Committee may grant an Award to an Employee who it
expects to become an employee of the Company or any of its Subsidiaries
within the following six months, with such Award being subject to the
individual's actually becoming an employee within such time period, and
subject to such other terms and conditions as may be established by the
Committee. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in this Plan or in any Award in the manner and
to the extent the Committee deems necessary or desirable to further the
Plan purposes. Any decision of the Committee in the interpretation and
administration of this Plan shall lie within its sole and absolute
discretion and shall be final, conclusive and binding on all parties
concerned.
(c) No member of the Committee or officer of the Company to whom the
Committee has delegated authority in accordance with the provisions of
paragraph 7 of this Plan shall be liable for anything done or omitted to
be done by him or her, by any member of the Committee or by any officer of
the Company in connection with the performance of any duties under this
Plan, except for his or her own willful misconduct or as expressly
provided by statute.
7. Delegation of Authority. The Committee may delegate to the Chief
Executive Officer and to other senior officers of the Company its duties under
this Plan pursuant to such conditions or limitations as the Committee may
establish. The Committee may engage or authorize the engagement of a third party
administrator to carry out administrative functions under the Plan.
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8. Awards.
(a) The Committee shall determine the type or types of Awards to be
made under this Plan and shall designate from time to time the Employees
who are to be the recipients of Awards. Each Award shall be embodied in an
Award Agreement, which shall contain such terms, conditions and
limitations as shall be determined by the Committee in its sole discretion
and, if required by the Committee, shall be signed by the Participant to
whom the Award is granted and by an Authorized Officer for and on behalf
of the Company. Awards may consist of those listed in this paragraph 8(a)
and may be granted singly, in combination or in tandem. Awards may also be
granted in combination or in tandem with, in replacement of, or as
alternatives to, grants or rights under this Plan or any other employee
plan of the Company or any of its Subsidiaries, including the plan of any
acquired entity. An Award may provide for the grant or issuance of
additional, replacement or alternative Awards upon the occurrence of
specified events, including the exercise of the original Award granted to
a Participant. All or part of an Award may be subject to conditions
established by the Committee, which may include, but are not limited to,
continuous service with the Company and its Subsidiaries, achievement of
specific business objectives, increases in specified indices, attainment
of specified growth rates and other comparable measurements of
performance. Upon the termination of employment by a Participant, any
unexercised, deferred, unvested or unpaid Awards shall be treated as set
forth in the applicable Award Agreement.
(i) Options. An Award may be in the form of an Option, which
may be an Incentive Stock Option or a Nonqualified Stock Option. The
Grant Price of an Option shall be not less than the Fair Market
Value of the Common Stock subject to such Option on the Grant Date.
Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Options awarded to Employees pursuant
to this Plan, including the Grant Price, the term of the Options and
the date or dates upon which they become exercisable, shall be
determined by the Committee.
(ii) Stock Appreciation Rights. An Award may be in the form of
an SAR. The terms, conditions and limitations applicable to any SARs
awarded to Employees pursuant to this Plan, including the Grant
Price, the term of any SARs and the date or dates upon which they
become exercisable, shall be determined by the Committee.
(b) Notwithstanding anything to the contrary contained in this Plan
excluding paragraph 5(b), no Participant may be granted, during any
calendar year, Awards that are exercisable for more than 93,540 shares of
Common Stock.
(c) Stock Awards, other than those awards which are subject to
specific grant limitations under the Plan, shall be in lieu of, and have a
Fair Market Value on the Grant Date equal to, other compensation that the
Company would otherwise have awarded to the Participant.
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9. Change of Control. Notwithstanding the provisions of paragraph 8
hereof, unless otherwise expressly provided in the applicable Award Agreement,
in the event of a Change of Control during a Participant's employment with the
Company or one of its Subsidiaries, (i) each Award granted under this Plan to
the Participant shall be become immediately vested and fully exercisable
(regardless of the otherwise applicable vesting or exercise schedules or
performance goals provided for under the Award Agreement) and (ii) if the Award
is an Option or SAR, shall remain exercisable until the expiration of the term
of the Award or, if the Participant should die before the expiration of the term
of the Award, until the earlier of (a) the expiration of the term of the Award
or (b) two (2) years following the date of the Participant's death.
10. Payment of Awards.
(a) General. Payment made to a Participant pursuant to an Award may
be made in the form of cash or Common Stock, or a combination thereof, and
may include such restrictions as the Committee shall determine, including,
in the case of Common Stock, restrictions on transfer and forfeiture
provisions.
(b) Deferral. With the approval of the Committee, amounts payable in
respect of Awards may be deferred and paid either in the form of
installments or as a lump-sum payment. The Committee may permit selected
Participants to elect to defer payments of some or all types of Awards or
any other compensation otherwise payable by the Company in accordance with
procedures established by the Committee and may provide that such deferred
compensation may be payable in shares of Common Stock. Any deferred
payment pursuant to an Award, whether elected by the Participant or
specified by the Award Agreement or by the Committee, may be forfeited if
and to the extent that the Award Agreement so provides.
(c) Substitution of Awards. At the discretion of the Committee, a
Participant may be offered an election to substitute an Award for another
Award or Awards of the same or different type. Subject to Paragraph 15,
the Grant Price of any Option shall not be decreased, including by means
of issuance of a substitute Award with a lower Grant Price.
(d) Cash-out of Awards. At the discretion of the Committee, an Award
may be settled by a cash payment equal to the difference between the Fair
Market Value per share of Common Stock on the date of exercise and the
Grant Price of the Award, multiplied by the number of shares with respect
to which the Award is exercised.
11. Option Exercise. The Grant Price shall be paid in full at the time of
exercise in cash or, if permitted by the Committee and elected by the optionee,
the optionee may purchase such shares by means of tendering Common Stock or
surrendering another Award valued at Fair Market Value on the date of exercise,
or any combination thereof. The Committee shall determine acceptable methods for
Participants to tender Common Stock or other Awards. The Committee may provide
for procedures to permit the exercise or purchase of such Awards by use of the
proceeds to be received from the sale of Common Stock issuable pursuant to an
Award. The Committee may adopt additional rules and procedures regarding the
exercise of Options from time to time, provided that such rules and procedures
are not inconsistent with the
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provisions of this paragraph. An optionee desiring to pay the Grant Price of an
Option by tendering Common Stock using the method of attestation may, subject to
any such conditions and in compliance with any such procedures as the Committee
may adopt, do so by attesting to the ownership of Common Stock of the requisite
value, in which case the Company shall issue or otherwise deliver to the
optionee upon such exercise a number of shares of Common Stock subject to the
Option equal to the result obtained by dividing (a) the excess of the aggregate
Fair Market Value of the shares of Common Stock subject to the Option for which
the Option (or portion thereof) is being exercised over the Grant Price payable
in respect of such exercise by (b) the Fair Market Value per share of Common
Stock subject to the Option, and the optionee may retain the shares of Common
Stock the ownership of which is attested.
12. Taxes. The Company or its designated third party administrator shall
have the right to deduct applicable taxes from any payment hereunder and
withhold, at the time of delivery of cash or shares of Common Stock under this
Plan, an appropriate amount of cash or number of shares of Common Stock or a
combination thereof for payment of taxes or other amounts required by law or to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for withholding of such taxes. The Committee may also
permit withholding to be satisfied by the transfer to the Company of shares of
Common Stock theretofore owned by the holder of the Award with respect to which
withholding is required. If shares of Common Stock are used to satisfy tax
withholding, such shares shall be valued based on the Fair Market Value when the
tax withholding is required to be made. The Committee may provide for loans, on
either a short term or demand basis, from the Company to a Participant to permit
the payment of taxes required by law.
13. Amendment, Modification, Suspension or Termination of the Plan. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (i) no amendment or alteration that would
adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant and (ii) no amendment or alteration shall be effective prior to its
approval by the stockholders of the Company to the extent such approval is
required by applicable legal requirements. In addition, if an amendment would
(i) materially increase the benefits accruing to Participants under this Plan,
(ii) materially increase the aggregate number of securities that may be issued
under this Plan, or (iii) materially modify the requirements as to eligibility
for participation in this Plan, then to the extent required by applicable law,
or deemed necessary by the Committee, such amendment shall be subject to
shareholder approval.
14. Assignability. Unless otherwise determined by the Committee and
provided in the Award Agreement, no Award or any other benefit under this Plan
shall be assignable or otherwise transferable except by will, beneficiary
designation or the laws of descent and distribution. In the event that a
beneficiary designation conflicts with an assignment by will, the beneficiary
designation will prevail. The Committee may prescribe and include in applicable
Award Agreements other restrictions on transfer. Any attempted assignment of an
Award or any other benefit under this Plan in violation of this paragraph 14
shall be null and void.
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15. Adjustments.
(a) The existence of outstanding Awards shall not affect in any
manner the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the capital stock of the Company or its business or any
merger or consolidation of the Company, or any issue of bonds, debentures,
preferred or prior preference stock (whether or not such issue is prior
to, on a parity with or junior to the existing Common Stock) or the
dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or
proceeding of any kind, whether or not of a character similar to that of
the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of outstanding
shares of Common Stock, declaration of a dividend payable in shares of
Common Stock or other stock split, then (i) the number of shares of Common
Stock reserved under this Plan, (ii) the number of shares of Common Stock
covered by outstanding Awards, (iii) the Grant Price in respect of such
Awards, (iv) the appropriate Fair Market Value and other price
determinations for such Awards, and (v) the Award limitations shall each
be proportionately adjusted by the Board as appropriate to reflect such
transaction. In the event of any other recapitalization or capital
reorganization of the Company, any consolidation or merger of the Company
with another corporation or entity, the adoption by the Company of any
plan of exchange affecting any Common Stock or any distribution to holders
of Common Stock of securities or property (other than normal cash
dividends or dividends payable in Common Stock), the Board shall make
appropriate adjustments to (i) the number of shares of Common Stock
covered by Awards, (ii) the Grant Price in respect of such Awards, (iii)
the appropriate Fair Market Value and other price determinations for such
Awards, and (iv) the Award limitations to reflect such transaction;
provided that such adjustments shall only be such as are necessary to
maintain the proportionate interest of the holders of the Awards and
preserve, without increasing, the value of such Awards. In the event of a
corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board shall be authorized
(x) to assume under the Plan previously issued compensatory awards, or to
substitute new Awards for previously issued compensatory awards, including
Awards as part of such adjustment or (y) to cancel Awards that are Options
or SARs and give the Participants who are the holders of such Awards
notice and opportunity to exercise for 30 days prior to such cancellation.
16. Restrictions. No Common Stock or other form of payment shall be issued
with respect to any Award unless the Company shall be satisfied based on the
advice of its counsel that such issuance will be in compliance with applicable
federal and state securities laws. Certificates evidencing shares of Common
Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be placed upon
such certificates (if any) to make appropriate reference to such restrictions.
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17. Unfunded P1an. This Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants under this Plan, any
such accounts shall be used merely as a bookkeeping convenience. The Company
shall not be required to segregate any assets for purposes of this Plan or
Awards hereunder, nor shall the Company, the Board or the Committee be deemed to
be a trustee of any benefit to be granted under this Plan. Any liability or
obligation of the Company to any Participant with respect to an Award under this
Plan shall be based solely upon any contractual obligations that may be created
by this Plan and any Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. Neither the Company nor the Board nor the Committee
shall be required to give any security or bond for the performance of any
obligation that may be created by this Plan.
18. Governing Law. This Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by mandatory provisions of
the Code or the securities laws of the United States, shall be governed by and
construed in accordance with the laws of the State of Delaware.
19. Effectiveness. The Plan, as approved by the Board, was effective as of
October 16, 1998. This Plan was approved by the stockholders of the Company on
October 19, 1998. The amendments to the Plan to permit the grant of Awards
denominated in Class B Common Stock became effective on May 12, 1999 and were
conditioned upon the approval of the stockholders of the Company prior to
December 31, 1999, which approval was obtained on May 12, 1999. The amendment to
paragraph 11 of the Plan providing for option exercise payment by the
attestation method was effective on October 28, 1999. The Plan, as approved by
the Board for amendment and restatement in connection with the Merger (as
defined in the Recitals on page 1 of this Plan) was effective October 8, 2001,
and the increase of shares available for Awards included in the October 8, 2001
amendment and restatement was separately approved by the stockholders of the
Company on September 21, 2001. The amendment and restatement of the Plan to add
certain stock award and Plan limitations was approved by the Board of Directors
on October 30, 2001. This amendment and restatement of the Plan to reflect the
Phillips Merger, was approved by the Board of Directors on August 16, 2002 and
is effective as of the effective time of the Phillips Merger.
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ATTACHMENT "A"
"CHANGE IN CONTROL"
The following definitions apply to the Change of Control provision
in paragraph 9 of the foregoing Plan.
"Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in effect
on August 30, 2002.
"Associate" shall mean, with reference to any Person, (a) any
corporation, firm, partnership, association, unincorporated organization or
other entity (other than the Company or a subsidiary of the Company) of which
such Person is an officer or general partner (or officer or general partner of a
general partner) or is, directly or indirectly, the Beneficial Owner of 10% or
more of any class of equity securities, (b) any trust or other estate in which
such Person has a substantial beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity and (c) any relative or
spouse of such Person, or any relative of such spouse, who has the same home as
such Person.
"Beneficial Owner" shall mean, with reference to any securities, any
Person if:
(a) such Person or any of such Person's Affiliates and Associates,
directly or indirectly, is the "beneficial owner" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as in effect on August 30, 2002) such securities or
otherwise has the right to vote or dispose of such securities, including
pursuant to any agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under this
subsection (a) as a result of an agreement, arrangement or understanding
to vote such security if such agreement, arrangement or understanding: (i)
arises solely from a revocable proxy or consent given in response to a
public (i.e., not including a solicitation exempted by Rule 14a-2(b)(2) of
the General Rules and Regulations under the Exchange Act) proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act and
(ii) is not then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report);
(b) such Person or any of such Person's Affiliates and Associates,
directly or indirectly, has the right or obligation to acquire such
securities (whether such right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding (whether or
not in writing) or upon the exercise of conversion rights, exchange
rights, other rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
"beneficially own," (i) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange or (ii) securities issuable upon exercise of Exempt Rights; or
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(c) such Person or any of such Person's Affiliates or Associates (i)
has any agreement, arrangement or understanding (whether or not in
writing) with any other Person (or any Affiliate or Associate thereof)
that beneficially owns such securities for the purpose of acquiring,
holding, voting (except as set forth in the proviso to subsection (a) of
this definition) or disposing of such securities or (ii) is a member of a
group (as that term is used in Rule 13d-5(b) of the General Rules and
Regulations under the Exchange Act) that includes any other Person that
beneficially owns such securities;
provided, however, that nothing in this definition shall cause a Person engaged
in business as an underwriter of securities to be the Beneficial Owner of, or to
"beneficially own," any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition. For purposes hereof, "voting" a security
shall include voting, granting a proxy, consenting or making a request or demand
relating to corporate action (including, without limitation, a demand for a
stockholder list, to call a stockholder meeting or to inspect corporate books
and records) or otherwise giving an authorization (within the meaning of Section
14(a) of the Exchange Act) in respect of such security.
The terms "beneficially own" and "beneficially owning" shall have
meanings that are correlative to this definition of the term "Beneficial Owner."
"Board" shall have the meaning set forth in the foregoing Plan.
"Change of Control" shall mean any of the following occurring on or
after August 30, 2002:
(a) any Person (other than an Exempt Person) shall become the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding or 20% or more of the combined voting power of the Voting
Stock of the Company then outstanding; provided, however, that no Change
of Control shall be deemed to occur for purposes of this subsection (a) if
such Person shall become a Beneficial Owner of 20% or more of the shares
of Common Stock or 20% or more of the combined voting power of the Voting
Stock of the Company solely as a result of (i) an Exempt Transaction or
(ii) an acquisition by a Person pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation,
the conditions described in clauses (i), (ii) and (iii) of subsection (c)
of this definition are satisfied;
(b) individuals who, as of August 30, 2002, constitute 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 30, 2002 whose election, or nomination for
election by the Company's shareholders, 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;
provided, further, that there shall be excluded, for this purpose, any
such individual whose initial assumption of office occurs as a result of
any actual or threatened election contest that is
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subject to the provisions of Rule 14a-11 of the General Rules and
Regulations under the Exchange Act;
(c) the shareholders of the Company shall approve a reorganization,
merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (i) more than 70% of the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of
the then outstanding Voting Stock of such corporation beneficially owned,
directly or indirectly, by all or substantially all of the Persons who
were the Beneficial Owners of the outstanding Common Stock immediately
prior to such reorganization, merger or consolidation in substantially the
same proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the outstanding Common Stock,
(ii) no Person (excluding any Exempt Person or any Person beneficially
owning, immediately prior to such reorganization, merger or consolidation,
directly or indirectly, 20% or more of the Common Stock then outstanding
or 20% or more of the combined voting power of the Voting Stock of the
Company then outstanding) beneficially owns, directly or indirectly, 20%
or more of the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or the
combined voting power of the then outstanding Voting Stock of such
corporation and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of the
initial agreement or initial action by the Board providing for such
reorganization, merger or consolidation; or
(d) the shareholders of the Company shall approve (i) a complete
liquidation or dissolution of the Company unless such liquidation or
dissolution is approved as part of a plan of liquidation and dissolution
involving a sale or disposition of all or substantially all of the assets
of the Company to a corporation with respect to which, following such sale
or other disposition, all of the requirements of clauses (ii)(A), (B) and
(C) of this subsection (d) are satisfied, or (ii) the sale or other
disposition of all or substantially all of the assets of the Company,
other than to a corporation, with respect to which, following such sale or
other disposition, (A) more than 70% of the then outstanding shares of
common stock of such corporation and the combined voting power of the
Voting Stock of such corporation is then beneficially owned, directly or
indirectly, by all or substantially all of the Persons who were the
Beneficial Owners of the outstanding Common Stock immediately prior to
such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition, of
the outstanding Common Stock, (B) no Person (excluding any Exempt Person
and any Person beneficially owning, immediately prior to such sale or
other disposition, directly or indirectly, 20% or more of the Common Stock
then outstanding or 20% or more of the combined voting power of the Voting
Stock of the Company then outstanding) beneficially owns, directly or
indirectly, 20% or more of the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding
Voting Stock of such corporation and (C) at least a majority of the
members of the board of directors of such corporation were members of the
Incumbent Board at
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the time of the initial agreement or initial action of the Board providing
for such sale or other disposition of assets of the Company.
"Common Stock" shall have the meaning set forth in the foregoing
Plan.
"Company" shall have the meaning set forth in the foregoing Plan.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exempt Person" shall mean any of the Company, any subsidiary of the
Company, any employee benefit plan of the Company or any subsidiary of the
Company, and any Person organized, appointed or established by the Company for
or pursuant to the terms of any such plan.
"Exempt Rights" shall mean any rights to purchase shares of Common
Stock or other Voting Stock of the Company if at the time of the issuance
thereof such rights are not separable from such Common Stock or other Voting
Stock (i.e., are not transferable otherwise than in connection with a transfer
of the underlying Common Stock or other Voting Stock), except upon the
occurrence of a contingency, whether such rights exist as of August 30, 2002 or
are thereafter issued by the Company as a dividend on shares of Common Stock or
other Voting Securities or otherwise.
"Exempt Transaction" shall mean an increase in the percentage of the
outstanding shares of Common Stock or the percentage of the combined voting
power of the outstanding Voting Stock of the Company beneficially owned by any
Person solely as a result of a reduction in the number of shares of Common Stock
then outstanding due to the repurchase of Common Stock or Voting Stock by the
Company, unless and until such time as (a) such Person or any Affiliate or
Associate of such Person shall purchase or otherwise become the Beneficial Owner
of additional shares of Common Stock constituting 1% or more of the then
outstanding shares of Common Stock or additional Voting Stock representing 1% or
more of the combined voting power of the then outstanding Voting Stock, or (b)
any other Person (or Persons) who is (or collectively are) the Beneficial Owner
of shares of Common Stock constituting 1% or more of the then outstanding shares
of Common Stock or Voting Stock representing 1% or more of the combined voting
power of the then outstanding Voting Stock shall become an Affiliate or
Associate of such Person.
"Person" shall mean any individual, firm, corporation, partnership,
association, trust, unincorporated organization or other entity.
"Voting Stock" shall mean, with respect to a corporation, all
securities of such corporation of any class or series that are entitled to vote
generally in the election of directors of such corporation (excluding any class
or series that would be entitled so to vote by reason of the occurrence of any
contingency, so long as such contingency has not occurred).
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