EXHIBIT 10.6
AK STEEL HOLDING CORPORATION
1994 STOCK INCENTIVE PLAN
(AS AMENDED THROUGH NOVEMBER 21, 1996)
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. AK Steel Holding Corporation, a Delaware
corporation (hereinafter referred to as the "Company"), hereby establishes an
incentive compensation plan to be known as the "AK Steel Holding Corporation
1994 Stock Incentive Plan" (hereinafter referred to as the "Plan"), as set forth
in this document. The Plan permits the grant of Nonqualified Stock Options and
awards of Restricted Stock to directors, executive officers and key employees of
the Company.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the success and
enhance the value of the Company by linking the personal interests of
Participants to those of the Company's shareholders, and by providing
Participants with an incentive for outstanding performance. The Plan is further
intended to enhance the Company's ability to motivate, attract, and retain the
services of Participants upon whose judgment, interest, and special effort the
successful conduct of its operation is largely dependent.
1.3 DURATION OF THE PLAN. The Plan shall remain in effect until all Shares
subject to it shall have been purchased or acquired or are no longer available
for Awards according to the Plan's provisions, subject to the right of the Board
to terminate the Plan at any time pursuant to Article 10 herein. In no event may
an Award be granted under the Plan on or after December 31, 2003. Termination of
the Plan shall not affect the rights of any person under an outstanding Award
Agreement unless otherwise specifically provided in such Award Agreement.
ARTICLE 2. DEFINITIONS. Whenever used in the Plan, the following terms shall
have the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
(a) "Award" means either or both of an Option Award or a Restricted Stock
Award.
(b) "Award Agreement" means either or both of an Option Award Agreement or
a Restricted Stock Award Agreement. A Participant is bound by the terms of an
Award Agreement and this Plan by reason of accepting the benefits of the
Award.
(c) "Beneficial Owner" shall have the meaning ascribed to such term in Rule
13d-3 of the General Rules and Regulations under the Exchange Act.
(d) "Beneficiary" means the person or persons named by a Participant to
succeed to the Participant's rights under any then unexpired Award Agreements.
Each such designation shall: (i) revoke all prior designations by the same
Participant; (ii) be in a form acceptable to the Committee; and (iii) be
effective only when delivered to the Committee by the Participant in writing
and during the Participant's lifetime. No beneficiary shall be entitled to any
notice of any change in a designation of beneficiary. In the absence of any
such designation, the Participant's estate shall be the beneficiary.
(e) "Board" means the Board of Directors of the Company.
(f) "Cause" means a willful engaging in gross misconduct materially and
demonstrably injurious to the Company or any subsidiary or affiliate thereof,
including AK Steel Corporation. "Willful" means an act or omission in bad
faith and without reasonable belief that such act or omission was in or not
opposed to the best interests of the Company or any subsidiary or affiliate
thereof, including AK Steel Corporation. "Cause" shall be determined in good
faith by the Committee.
(g) "Change in Control" shall be deemed to have occurred if:
(i) any person (other than a trustee or other fiduciary holding
securities under an employee benefit plan in which employees of the Company
participate) becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing forty percent (40%) or more of the
combined voting power of the Company's then outstanding voting securities;
or
(ii) during any period of two (2) consecutive years individuals who at
the beginning of such period constitute the Board, including for this
purpose any new Director of the Company (other than a Director designated
by a person who has entered into an agreement with the Company to effect a
transaction described in clauses (i) or (iii) of this Subsection (g)) whose
election by the Board or nomination for election by the shareholders of the
Company was approved by a vote of a least two-thirds (/2//3) of the
Directors then still in office who either were Directors at the beginning
of the period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority of the Board; or
(iii) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation (other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the combined voting power
of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation) or the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets.
(h) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
(i) "Committee" means the committee, as specified in Article 3, appointed
by the Board to administer the Plan.
(j) "Company" means AK Steel Holding Corporation, a Delaware corporation,
or any successor thereto, as provided in Article 13 herein.
(k) "Director" means any individual who is a member of the Board and who is
not an Employee.
(l) "Disability" means a physical or mental condition which, in the
judgment of the Committee, renders a Director unable to serve or an Employee
unable to perform the duties of his position with the Company or, in the case
of an Employee, the duties of another available position with the Company for
which the Employee is suited by education, background and training. Any
Employee found to be qualified for disability benefits under AK Steel Holding
Corporation's long term disability plan or by the Federal Social Security
Administration will be considered to be disabled under this Plan, but
qualification for such benefits shall not be required as evidence of
disability hereunder.
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(m) "Employee" means any common law employee of the Company or any
subsidiary or affiliate thereof, including AK Steel Corporation. A Director is
not an Employee solely by reason of his position as a Director and, unless
otherwise employed by the Company, shall not be considered to be an Employee
under this Plan.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
(o) "Fair Market Value" shall mean:
(i) if the Shares are traded on an established United States national
stock exchange or in the United States over-the-counter market with prices
reported on the NASDAQ, the average of the highest and lowest sales prices
for Shares on the relevant date (or, if there were no sales of Shares on
such date, the weighted average of the mean between the highest and lowest
sale prices for Shares on the nearest preceding trading day on which there
were sales of Shares); and
(ii) if the Shares are not traded as described in clause (i), the fair
market value of such Shares on the relevant date, as determined in good
faith by the Board.
(p) "Insider" shall mean an Employee who is, on the relevant date, an
executive officer or ten percent (10%) Beneficial Owner of the Company, as
defined under Section 16 of the Exchange Act, or a Director.
(q) "Nonqualified Stock Option" or "Option" means an option to purchase
Shares from the Company at a price established in an Option Award Agreement.
No incentive stock option within the meaning of Code Section 422 may be
granted under this Plan.
(r) "Option Award" means, individually or collectively, a grant under this
Plan of a Nonqualified Stock Option.
(s) "Option Award Agreement" means an agreement setting forth the terms and
provisions applicable to an Option Award granted to a Participant under this
Plan.
(t) "Option Price" means the price at which a Share may be purchased by a
Participant under the terms of an Option Award Agreement.
(u) "Par Value" shall mean the designated par value of one Share.
(v) "Participant" means any Director or Employee who possesses an unexpired
Award granted under the Plan.
(w) "Restricted Stock" means Shares granted to a Participant subject to
certain restrictions on the Participant's right to sell, transfer, assign,
pledge, encumber or otherwise alienate or hypothecate the Shares except in
accordance with the terms of this Plan.
(x) "Restricted Stock Award" means, individually or collectively, a grant
under this Plan of Shares of Restricted Stock.
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(y) "Restricted Stock Award Agreement" means an agreement setting forth the
terms and provisions applicable to a Restricted Stock Award of Shares under
this Plan.
(z) "Retirement" shall mean termination of employment with the Company and
any affiliate of the Company with eligibility to immediately commence to
receive a pension under the Company's non-contributory defined benefit pension
plan as in effect on the Employee's termination date. For a Participant who is
not participating in such plan, Retirement shall mean any termination of
employment with the Company which would have entitled such Participant to be
eligible to immediately commence to receive a pension under the Company's non-
contributory defined benefit pension plan had the Participant been a
participant.
(aa) "Shares" means the shares of voting common stock of the Company.
(bb) "Window Period" means the period beginning on the third business day
following the date of public release of the Company's quarterly sales and
earnings information, and ending on the twelfth business day following such
date.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board, or by any other Committee appointed by the Board
consisting of not less than two (2) Directors. The members of the Committee
shall be appointed from time-to-time by, and shall serve at the sole discretion
of, the Board. The Committee shall be comprised solely of Directors who (a) are
eligible to administer the Plan pursuant to Rule 16b-3(c)(2) under the Exchange
Act and, (b) from and after May 15, 1996, shall be "outside directors" within
the meaning of Section 162(m) of the Code.
The Committee may employ such legal or other counsel, consultants and agents
as it may deem desirable for the administration of the Plan and may rely upon
any opinion or computation received from any such counsel, consultant or agent.
Expenses incurred by the Committee in the engagement of such counsel, consultant
or agent shall be paid by the Company. No member or former member of the Board
or the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Option Award or Restricted Stock Award
granted hereunder.
3.2 AUTHORITY OF THE COMMITTEE. The Committee shall have full power, subject
to the provisions of this Plan, except as limited by law or by the Articles of
Incorporation or Bylaws of the Company: (i) to determine the size and types of
Awards (except as to Awards to Directors which shall be limited to the size and
shall be subject to the conditions expressly permitted by this Plan); (ii) to
determine the terms and conditions of each Award Agreement in a manner
consistent with the Plan; (iii) to construe and interpret the Plan and any
agreement or instrument entered into under the Plan; (iv) to establish, amend,
or waive rules and regulations for the Plan's administration; and, (v) subject
to the provisions of Article 10 herein, to amend the terms and conditions of any
outstanding Award Agreement to the extent such terms and conditions are within
the discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan. The Committee may delegate its authority hereunder
to the extent permitted by law. In no event shall a Director who is a
Participant vote in any matter related solely to such Director's Award under
this Plan.
3.3 DECISIONS BINDING. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan and all related orders or resolutions of
the Board shall be final, conclusive and binding on all persons,
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including the Company, its shareholders, Directors, Employees, Participants, and
their estates, beneficiaries or assignees. In all cases, Awards to Directors
shall be subject to the same terms, conditions and interpretations applicable
generally to Awards to non-Director Participants.
3.4 ARBITRATION. Each Participant who is granted an Award hereunder agrees as
a condition of the Award to submit to binding arbitration any dispute regarding
the Plan or any Award made under the Plan, including by way of illustration and
not limitation, any decision of the Committee or any action of the Company
respecting the Plan. Such arbitration shall be held in accordance with the rules
of the American Arbitration Association before an arbitrator selected by the
Company and acceptable to the Participant. If the Participant objects to the
Company's arbitrator, and the Company does not appoint an arbitrator acceptable
to the Participant, then the Company and the Participant shall each select an
arbitrator and those two arbitrators shall collectively appoint a third
arbitrator who shall alone hear and resolve the dispute. The Company and the
Participant shall share equally the cost of arbitration. No Company agreement of
indemnity, whether under the Articles of Incorporation, the bylaws or otherwise,
and no insurance purchased by the Company shall apply to pay or reimburse any
Participant's costs of arbitration.
ARTICLE 4. SHARES SUBJECT TO GRANT UNDER THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in this Section and in
Section 4.3, an aggregate of 3,900,000 Shares shall be available for the grant
of Option Awards and Restricted Stock Awards under the Plan (hereinafter called
the "Share Pool"); provided, however, that no Employee may be granted Awards
under the Plan during the period from May 15, 1996 through December 31, 1996 or
in any calendar year thereafter with respect to more than 300,000 Shares. The
Committee, in its sole discretion, shall determine the appropriate division of
the Share Pool as between Option Awards and Restricted Stock Awards. Shares
issued upon exercise of any Award may be either authorized and previously
unissued Shares or reacquired Shares.
The following rules will apply for purposes of the determination of the number
of Shares available for grant under the Plan:
(a) the grant of an Award to an Employee shall reduce the Shares available
in the Share Pool for grant under the Plan by the number of Shares subject to
the Award; and
(b) to the extent that an Option is settled in cash rather than by the
delivery of Shares, the Share Pool shall be reduced by the number of Shares
represented by the cash settlement of the Option (subject to the limitation
set forth in Section 4.2 herein).
4.2 LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires or lapses for any reason, any Shares then subject to such
Award again shall be available for grant under the Plan and shall return to the
Share Pool.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares, an appropriate adjustment shall
be made in the number and class of Shares which may be delivered under the Plan,
and in the number and class of and/or price of Shares subject to any then
unexercised and outstanding Awards, as determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights. The number of Shares subject to any Award shall always be
a whole number.
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4.4 RIGHTS AS A SHAREHOLDER. No person shall have any rights as a shareholder
with respect to Shares subject to an Option Award until the date the Company
receives full payment of the Option price, including any sum due for withholding
pursuant to Section 6.6. A person who has Restricted Shares shall have the
rights of an owner of Shares, except to the extent those rights are expressly
limited by then applicable restrictions on transfer contained in this Plan and
the Restricted Stock Award Agreement.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY OF DIRECTORS. A Director who is not employed by the Company
shall become a Participant upon becoming a Director and receiving an Award in
accordance with the terms of this Plan.
5.2 ELIGIBILITY OF EMPLOYEES. An Employee shall become a Participant upon
recommendation by the Chairman of the Board and approval by the Committee and
upon receipt of an Award in accordance with the terms of this Plan.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS.
(a) Options may be granted to an eligible Employee at any time and from
time to time as shall be determined by and in the sole discretion of the
Committee.
(b) Options with respect to five thousand (5,000) Shares shall be granted
to each Director who is not employed by the Company on the date of his or her
election to the Board, subject to the following terms and conditions:
(i) the option price described in Section 6.3 shall be the Fair Market
Value of the Shares on the date of grant;
(ii) the Options shall be exercisable in accordance with Section 6.4
until the tenth anniversary of the date of grant;
(iii) the restriction on the right to exercise the Options in accordance
with Section 6.5(a) shall lapse on the first anniversary of the date of the
Option Award;
(iv) for the purposes of this Plan, death shall be treated as death
while employed under Section 6.8(a)(i); Disability or Retirement from the
Board shall be subject to the provisions of Sections 6.8(b) and (c);
failure to be reelected shall be an involuntary termination subject to the
terms of Section 6.8(d)(i); and resignation or failure to stand for
reelection shall be deemed to be a voluntary termination subject to the
terms of Section 6.8(e); and
(v) the limited right of transferability shall be granted in accordance
with Section 6.7.
Except as above modified or interpreted, the provisions of this Section 6
shall apply to Directors in the same manner it applies to others.
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6.2 OPTION AWARD AGREEMENT. Each Option shall be granted pursuant to a written
Option Award Agreement, signed by the appropriate member of the Committee or its
designee, and specifying the terms and conditions applicable to the Options
granted including: the Option Price; the period during which the Option may be
exercised; the number of Shares to which the Option pertains; the conditions
under which the Option is exercisable; and such other provisions as the
Committee may from time to time determine. The Option Agreement also shall
specify that the Option is intended to be a Nonqualified Stock Option whose
grant is intended not to fall under the provisions of Code Section 422.
6.3 OPTION PRICE. The Option Price for each Share subject to purchase shall be
determined by the Committee and stated in the Option Award Agreement but in no
event shall be less than the Fair Market Value of the Shares on the date of
grant of the Award.
6.4 DURATION OF OPTIONS. Each Option shall be exercisable for such period as
the Committee shall determine at the time of grant. No Option shall be
exercisable later than the tenth (10th) anniversary of the date of its grant.
6.5 EXERCISE OF OPTIONS.
(a) Options granted under the Plan shall be exercisable at such times and
be subject to such restrictions and conditions as the Committee shall in each
instance approve, which need not be the same for each grant or for each
Participant. No Option shall be exercisable prior to six (6) months following
the date of its grant. The Committee may provide, by rule or regulation or in
any Option Award Agreement, that the exercisability of an Option may be
accelerated or extended under various circumstances to a date not later than
the latest expiration date permitted in accordance with Section 6.4.
(b) Each Option shall be exercisable only by delivery to the Committee in
care of the Secretary of the Company of a written notice of exercise in such
form as the Committee may require. A notice of exercise shall: specify the
number of shares to be purchased, shall be signed by the Participant or holder
of the Option and shall be dated the date the signature is affixed.
6.6 PAYMENT. A written notice of exercise shall be accompanied by full payment
for the Shares to be purchased. Subject to the provisions of Article 11, payment
shall include any income or employment taxes required to be withheld by the
Company from the employee's compensation with respect to the Shares so
purchased.
(a) The Option Price upon exercise of any Option shall be payable to the
Company in full either: (i) in cash or its equivalent, or (ii) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time
of exercise equal to the total Option Price (provided that the Shares so
tendered shall have been held by the Participant for at least six (6) months
prior to such tender), in proper form for transfer and accompanied by all
requisite stock transfer tax stamps or cash in lieu thereof, or (iii) by a
combination of (i) and (ii).
(b) The Committee also may allow cashless exercises as permitted under
Federal Reserve Board Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.
(c) As soon as practicable after receipt of a written notice of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased.
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6.7 RESTRICTIONS ON TRANSFERABILITY. Except to the extent permitted under this
Section 6.7, no Option granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, all Options granted to a Participant
under the Plan shall be exercisable during his or her lifetime only by such
Participant. Notwithstanding the foregoing, the right to purchase Shares subject
to an Option Award may be transferred, in whole or in part, by a Participant
during a Participant's lifetime, to a Participant's spouse, child or grandchild,
or to the trustee of a testamentary or other grantor trust established primarily
for the benefit of a Participant's spouse, child or grandchild; provided that:
(i) A transfer shall only be effective upon receipt by the Secretary of the
Company, on behalf of the Committee, of written notice of transfer in such
form as the Committee may require;
(ii) A notice of transfer shall: (A) identify the name, address and
relationship of the transferee to the Participant; (B) identify the Option
Award which is the subject of the transfer, the number of Shares transferred
and the consideration paid, if any, for the transfer; (C) in the case of a
transfer to a trustee, include evidence satisfactory to the Committee that
under the terms of the trust the transfer is for the exclusive benefit of a
Participant's spouse, child or grandchild; and (D) include a copy of the
authorized signature of each person who will have the right to exercise the
option to purchase and all information relevant to the rights transferred; and
(iii) A transferee may not transfer any rights. Upon the transferee's
death, all rights shall revert to the Participant.
The Committee may impose such additional restrictions on transferability as it
may deem advisable, including, without limitation, restrictions under applicable
Federal securities laws, under the requirements of any stock exchange or market
upon which such Shares are then listed and/or traded, and under any blue sky or
state securities laws applicable to such Shares.
6.8 TERMINATION OF EMPLOYMENT. Except as hereinafter provided, Options granted
under the Plan may not be exercised by any person, including a transferee of any
rights under an Option Award, unless the Participant is then in the employ of
the Company and unless the Participant has remained continuously so employed
since the date of grant of the Option. Unless otherwise provided by the
Committee and subject to the duration established in accordance with Section
6.4, Options shall be exercisable in the following circumstances:
(a) in the case of a Participant's death
(i) while employed by the Company, by the Beneficiary or representative
during a period of 3 years following the date of the Participant's death;
and in such a case may be exercised even before expiration of the 6-month
or longer period established in accordance with Section 6.5(a); or
(ii) after his Retirement, but before the third anniversary of his
Retirement, by the Beneficiary or representative on or before the third
anniversary of his Retirement;
(b) in the case of the Participant's Disability, by the Participant or by
the Participant's appointed representative during a period of 3 years
following the date of the Participant's last day worked;
(c) in the case of the Participant's Retirement, by the Participant during
a period of 3 years following the date of the Participant's last day worked;
(d) in the case of a Participant's involuntary termination of employment:
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(i) for reasons other than Cause, by the Participant during a period of
3 years following the date of the Participant's last day worked; or
(ii) for Cause, by the Participant on or before his last day worked
whether or not the Committee has made its final determination that there is
Cause for termination as of that last day worked; and
(e) in the case of a Participant's voluntary termination of employment, his
last day worked.
ARTICLE 7. RESTRICTED STOCK.
7.1 RESTRICTED STOCK AWARDS. Restricted Stock Awards may be made at any time
while the Plan is in effect. Such Awards may be made to any Director or Employee
whether or not prior Restricted Stock Awards have been made to said person.
7.2 NOTICE. The Committee shall promptly provide each Participant with written
notice setting forth the number of Shares covered by the Restricted Stock Award
and such other terms and conditions relevant thereto, including the purchase
price, if any, to be paid for the Shares by the Recipient of the Award, as may
be considered appropriate by the Compensation Committee.
7.3 RESTRICTIONS ON TRANSFER. The purpose of these restrictions is to provide
an incentive to each Participant to continue to provide services to the Company
and to perform his or her assigned tasks and responsibilities in a manner
consistent with the best interests of the Company and its stockholders. The
Shares awarded pursuant to the Plan shall be subject to the following
restrictions:
(a) Stock certificates evidencing shares shall be issued in the sole name
of the Participant (but may be held by the Company until the restrictions
shall have lapsed in accordance herewith) and shall bear a legend which, in
part, shall provide that:
"The shares of common stock evidenced by this certificate are subject to
the terms and restrictions of the AK Steel Holding Corporation 1994 Stock
Incentive Plan. These shares are subject to forfeiture or cancellation
under the terms of said Plan. These shares may not be sold, transferred,
assigned, pledged, encumbered or otherwise alienated or hypothecated except
pursuant to the provisions of said Plan, a copy of which Plan is available
from the Secretary of the Company upon request."
(b) No Restricted Stock may be sold, transferred, assigned, pledged,
encumbered or otherwise alienated or hypothecated unless, until and then only
to the extent that said restrictions shall have lapsed in accordance with
Section 7.4.
7.4 LAPSE OF RESTRICTIONS. The restrictions set forth in Section 7.3 will
lapse only if, on the date restrictions are to lapse in accordance with this
Section 7.4, the Participant has been continuously employed by the Company or
has been a Director from the time of the Restricted Stock Award to such date of
lapse. If the lapse schedule would result in the lapse of restrictions in a
fractional share interest, the number of shares will be rounded down to the next
lowest number of full shares for each of the first two lapse dates, with the
balance to relate to the final lapse date. Unless otherwise provided by the
Board:
(a) with respect to a Restricted Stock Award to an Employee, the
restrictions set forth in Section 7.3 shall lapse with respect to twenty-five
percent (25%) of the Shares subject thereto on the second anniversary
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of the date of the Award; and with respect to an additional twenty-five
percent (25%) of the Shares subject thereto on each of the third, fourth and
fifth anniversaries of the date of the Award; and
(b) with respect to a Restricted Stock Award to a Director, the
restrictions set forth in Section 7.3 shall lapse upon completion of the full
term for which the Director was elected to serve on the Board.
7.5 VESTING AND FORFEITURE. Upon the lapse of the restrictions set forth in
Section 7.3 with respect to Shares covered by a Restricted Stock Award,
ownership of the Shares with respect to which the restrictions have lapsed shall
vest in the holder of the Award. In the event of termination of an Employee's
employment, or in the event a Director fails to complete his or her full term on
the Board, all Shares then still subject to the restrictions described in
Section 7.3 shall be forfeited by the Participant and returned to the Company
for cancellation, except as follows:
(a) Restrictions with respect to Shares covered by an outstanding
Restricted Stock Award held by a Director shall lapse upon the date of his or
her mandatory retirement by reason of age. In the case of an Employee's
retirement, the Committee may in its sole discretion elect to waive all or any
portion of the restrictions remaining in respect of a Restricted Stock Award
held by that employee. Any outstanding restrictions shall lapse in case of
death or Disability of the holder of a Restricted Stock Award. Evidence of
Disability will be entitlement to disability income benefits under the Federal
Social Security Act; and
(b) The Committee may at any time in its sole discretion accelerate or
waive all or any portion of restrictions remaining in respect of the Shares
covered by an outstanding Restricted Stock Award (to the extent not waived
pursuant to paragraph (a) above). This authority may be exercised for any or
all Participants; provided that the waiver in any particular case shall not
bind the Committee in any other similar case, it being the intention of the
Company to grant the Committee the broadest possible discretion to act or to
refuse to act in this regard. Any such action taken on behalf of a Director
shall require the unanimous consent of all Directors (excluding the Director
for whose benefit the action is taken) then in office.
7.6 RIGHTS AS STOCKHOLDER. Upon issuance of the stock certificates evidencing
the Restricted Stock Award and subject to the restrictions set forth in Section
7.3 hereof, the Participant shall have all the rights of a stockholder of the
Company with respect to the Shares of Restricted Stock represented by that
Restricted Stock Award, including the right to vote the shares and receive all
dividends and other distributions paid or made with respect thereto.
7.7 AWARDS TO DIRECTORS. The Board may, during any calendar year, determine by
majority vote to pay all or a portion of a Director's fees to be earned in such
calendar year by means of an Award of Restricted Stock; provided that at least
fifty (50%) of the Director's fees shall be paid in the form of a Restricted
Stock Award, such Award to be made effective as of December 31 to Directors then
serving. Any Director who leaves the Board during the year shall be paid in cash
for services rendered.
ARTICLE 8. RIGHTS OF EMPLOYEES.
8.1 EMPLOYMENT. Nothing in the Plan shall: (i) interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time; (ii) confer upon any Participant any right to continue in the employ of
the Company or its subsidiaries; or (iii) be evidence of any agreement or
understanding, express or implied, that the Company will employ any Participant
in any particular position at a particular rate of compensation or for any
particular period of time.
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8.2 PARTICIPATION. Nothing in this Plan shall be construed to give any person
any right to be granted any Award other than at the sole discretion of the
Committee or as giving any person any rights whatsoever with respect to Shares
except as specifically provided in the Plan. No Participant shall have the right
to be selected to receive an Award under this Plan, or, having been so selected,
to be selected to receive a future Award.
ARTICLE 9. CHANGE IN CONTROL.
Upon the occurrence of a Change in Control, unless otherwise specifically
prohibited by the terms of Section 9 herein:
(a) any and all outstanding Options previously granted hereunder, if not
then exercisable, shall become immediately exercisable and any restrictions on
the transfer of Shares of Restricted Stock shall lapse and expire effective as
of the date of the Change in Control;
(b) subject to Article 10 herein, the Committee shall have the authority to
make any modifications to any Option Award determined by the Committee to be
appropriate before the effective date of the Change in Control; and
(c) if the Shares are no longer traded over a national public securities
exchange following a Change in Control:
(i) Participants holding Options shall have the right to require the
Company to make a cash payment to them in exchange for their Options. Such
cash payment shall be contingent upon the Participant's surrendering the
Option. The amount of the cash payment shall be determined by adding the
total "spread" on all outstanding Options. For this purpose, the total
"spread" shall equal the difference between: (1) the higher of (i) the
highest price per Share paid or offered in any transaction related to a
Change in Control of the Company; or (ii) the highest Fair Market Value per
Share at any time during the ninety (90) calendar day period preceding a
Change in Control; and (2) the Option Price applicable to each Share held
under Option; and
(ii) Participants holding Shares of Restricted Stock shall have the
right to require the Company to make a cash payment to them in exchange for
their Restricted Stock. Such cash payment shall be contingent upon the
Participant's surrendering the Restricted Stock. The amount of the cash
payment shall be not less than the higher of (i) the highest price per
Share paid or offered in any transaction related to a Change in Control of
the Company; or (ii) the highest Fair Market Value per Share at any time
during the ninety (90) calendar day period preceding a Change in Control.
ARTICLE 10. AMENDMENT, MODIFICATION, AND TERMINATION.
10.1 AMENDMENT, MODIFICATION, AND TERMINATION. The Board may at any time and
from time to time, alter, amend, suspend or terminate this Plan in whole or in
part; provided, that no amendment that (i) requires shareholder approval in
order for this Plan to continue to comply with Rule 16b-3 under the Exchange
Act, including any successor to such Rule, or (ii) would modify the provisions
of Section 3.1 or the first paragraph of Section 4.1 of this Plan, shall be
effective unless such amendment shall be approved by the requisite vote of
shareholders of the Company entitled to vote thereon.
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10.2 OPTION AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan without the written consent of the Participant
holding such Award. If consent is not given, the Award shall continue in force
in accordance with its terms without modification.
ARTICLE 11. WITHHOLDING.
11.1 TAX WITHHOLDING. The Company shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, (including the
Participant's FICA obligation, if any) required by law to be withheld with
respect to any taxable event arising or as a result of this Plan. Failure to
cooperate with the Company in paying any such withholding shall cause the
cancellation of the Shares subject to the taxable transaction without liability
for such cancellation.
11.2 SHARE WITHHOLDING. With respect to withholding required upon the exercise
of Options or the vesting of Shares under a Restricted Stock Award, Participants
may elect, subject to the approval of the Committee, to satisfy the withholding
requirement, in whole or in part, by having the Company withhold Shares having a
Fair Market Value on the date the tax is to be determined equal to the minimum
statutory total tax which could be imposed on the transaction. All elections
shall be irrevocable, made in writing, signed by the Participant.
In addition to the foregoing requirements, an Insider may elect Share
withholding only if
(a) written notice of such election is given at least six (6) months prior
to the date (i) at which the Option is exercised (in the case of an election
made with respect to an Option) or (ii) at which Shares covered by a
Restricted Stock Award cease to be subject to restrictions (in the case of an
election made with respect to a Restricted Stock Award); or
(b) in the case of an election made with respect to an Option, such
election is made in connection with the exercise of the Option during a Window
Period; or
(c) in the case of an election made with respect to a Restricted Stock
Award, such election is made during a Window Period.
ARTICLE 12. INDEMNIFICATION. The Company shall indemnify and hold harmless
each member of the Committee, or of the Board, against and from any loss, cost,
liability or expense, including reasonable attorney's fees and costs of suit,
that may be imposed upon or reasonably incurred by the member in connection with
or resulting from any claim, action, suit, or proceeding to which the member may
be a party defendant or in which the member may be involved as a defendant by
reason of any action taken or any failure to act under the Plan and against and
from any and all amounts paid in Settlement thereof or paid in satisfaction of
any judgment in any such action, suit, or proceeding against the member,
provided that the member shall give the Company an opportunity, at its own
expense, to handle and defend the same before the member undertakes to handle
and defend it or agrees to any settlement of the claim. The foregoing right of
indemnification shall be in addition to, and not exclusive of, any other rights
of indemnification to which the member may be entitled under the Company's
Articles of Incorporation or Bylaws, as a matter of law, or otherwise. This
right shall not extend to any action by a Director as a claimant of rights under
the Plan, whether on the Director's behalf or on behalf of a class of persons
which would include the Director, unless filed in the form of a declaratory
judgment seeking relief for the Company or the Plan.
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ARTICLE 13. SUCCESSORS. All obligations of the Company under the Plan, with
respect to Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.
ARTICLE 14. LISTING OF SHARES AND RELATED MATTERS. If at any time the
Committee shall determine that the listing, registration or qualification of the
Shares subject to any Award on any securities exchange or under any applicable
law, or the consent or approval of any governmental regulatory authority, is
necessary or desirable as a condition of, or in connection with, the granting of
an Option or the issuance of Shares thereunder or the granting of a Restricted
Stock Award, no Option that is the subject of such Award may be exercised in
whole or in part and no certificates may be issued or reissued in respect of any
Restricted Stock that is the subject of such Award unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
ARTICLE 15. LEGAL CONSTRUCTION.
15.1 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
15.2 SEVERABILITY. If any provision of the Plan shall be held by a court of
competent jurisdiction to be illegal, invalid or unenforceable for any reason,
the illegality, invalidity or unenforceability shall not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced as if the
illegal, invalid or unenforceable provision had not been included. Unless
otherwise specifically provided in a final order by a court of competent
jurisdiction, no such judicial determination shall deprive a Participant of the
economic advantage, if any, of unexpired Options under any Option Award
Agreement or of Shares of Restricted Stock then subject to restrictions under
the terms of the Plan or the Restricted Stock Award Agreement. If any such
judicial determination does or would have an adverse impact then the Company
shall assure the Participant of the right to receive cash in an amount equal to
the value of any Award under the Plan prior to the determination of its
invalidity in the same manner as if such Award was lawful and the benefit
granted thereunder could be enjoyed in accordance with the terms of the Award.
15.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
15.4 SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-13
or its successors under the Exchange Act. To the extent any provision of the
Plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee. The
obligations of the Company to issue or transfer Restricted Shares awarded
pursuant to the Plan or Option Shares upon exercise of an Option shall be
subject to: compliance with all applicable governmental rules and regulations,
and administrative action; the effectiveness of a registration statement under
the Securities Act of 1933, as amended, if deemed necessary or appropriate by
the Company; and the condition that listing requirements (or authority for
listing upon official notice of issuance) for each stock exchange on which
outstanding shares of the same class may then be listed shall have been
satisfied.
15.5 GOVERNING LAW. To the extent not preempted by Federal law, the Plan and
all agreements hereunder shall be construed in accordance with and governed by
the laws of the State of Delaware.
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