Exhibit Number (10)(iii)
To 3/31/97 Form 10-Q
NORTHERN TRUST CORPORATION
AMENDED 1992 INCENTIVE STOCK PLAN
1. Purpose. The Northern Trust Corporation Amended 1992 Incentive Stock Plan
(the "Plan") is intended to provide a sense of recognition and managerial
participation among key officers of Northern Trust Corporation (the
"Corporation") and its subsidiaries, by providing them with opportunities to
acquire shares of Common Stock of the Corporation ("Common Stock") and cash
payments based on the value or increase in the value of such shares as
described herein, and to allow the Corporation to compensate directors under
the Plan for their services in a manner that aligns their interests with
those of stockholders. Benefits granted under the Plan are referred to as
"Awards."
2. Administration. The Plan will be administered by the Compensation and
Benefits Committee (the "Committee") of the Board of Directors of the
Corporation. The Committee shall consist of at least two (2) of such
Directors as the Board may designate from time to time. Notwithstanding
anything to the contrary contained herein, membership of the Committee
shall be limited to Board members who meet the "non-employee director"
definition in Rule 16b-3 under Section 16 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the "outside director" definition
under Section 162(m) of the Internal Revenue Code (the "Code") and the
regulations thereunder.
3. Participants. Participants will consist of (a) directors of the
Corporation, and (b) key officers of the Corporation or its subsidiaries as
the Committee in its sole discretion determines to be mainly responsible
for the success and future growth and profitability of the Corporation and
whom the Committee may designate from time to time to receive Awards under
the Plan. Awards may be granted to participants who are or were previously
participants under this or other plans of the Corporation or any subsidiary
and, with the agreement of the participant, may be granted in substitution,
exchange or cancellation of any rights or benefits then or theretofore held
under this or other plans of the Corporation or any subsidiary. The
Corporation may continue to award bonuses and other compensation to
participants under other programs now in existence or hereafter
established.
4. Types of Awards. Awards under the Plan may be granted in any one or a
combination of (a) Stock Options, (b) Stock Appreciation Rights, (c)
Performance Shares, (d) Stock Awards, and (e) Stock Equivalents, all as
described below.
5. Shares Issuable Under the Plan. An aggregate of 16,000,000 shares of Common
Stock, $1.66-2/3 par value per share, consisting of authorized but unissued
shares or treasury shares, may be issued under the Plan from and after the
date of its initial adoption. Such total number of shares shall be adjusted
in accordance with the provisions of Section 11 hereof, and a share subject
to a Stock Option and its related Stock Appreciation Right shall only be
counted once. The maximum number of shares of Common Stock as to which a
participant may receive Stock Options and Stock Appreciation Rights during
the term of the Plan is 1,200,000, as such number may be adjusted in
accordance with the provisions of Section 11 hereof. The maximum number of
Performance Shares that may be granted to any participant in any year after
1997 is 75,000, as such number may be adjusted in accordance with the
provisions of Section 11 hereof. Any shares subject to Stock Options or
Stock Appreciation Rights, issued as Performance Shares or Stock Awards or
allotted as Stock Equivalents may thereafter be subject to new Stock
Options or Stock Appreciation Rights, issued as Performance Shares or Stock
Awards or allotted as Stock Equivalents under this Plan if there is a
lapse, cancellation, forfeiture, surrender, expiration or termination of
any such Stock Options, Stock Appreciation Rights, Performance Shares,
Stock Awards or Stock Equivalents, or if shares are issued under such Stock
Options or Stock Appreciation Rights or as such Performance Shares, Stock
Awards or Stock Equivalents, and thereafter are reacquired by the
Corporation pursuant to rights reserved by the Corporation upon issuance
thereof.
6. Stock Options. The Committee may, in its discretion, grant Stock Options
under the Plan to any participant hereunder. Each Stock Option granted
hereunder shall be subject to such terms and conditions as the Committee
may determine at the time of grant, the general provisions of the Plan, the
terms and conditions of the applicable Stock Option Agreement, and the
following specific rules:
(a) Stock Options granted to a participant under the Plan shall be
governed by a Stock Option Agreement, which shall specify such terms
and conditions, not inconsistent with the terms and conditions of the
Plan, as the Committee shall determine.
(b) Except as provided in subsection (d) below, Stock Options will consist
of options to purchase Common Stock at purchase prices not less than
100% of the fair market value thereof on the date the Stock Options
are granted.
(c) Stock Options will be exercisable not earlier than six months after
the date they are granted and will terminate not later than three
years after termination of employment for any reason other than death.
Notwithstanding the preceding sentence, Stock Options granted on or
after April 18, 1995, which are not Incentive Stock Options, will
terminate not later than five years from the date of the participant's
termination of employment on account of retirement, disability or
death (but in no event beyond the expiration of ten years from the
date of grant).
(d) Stock Options may, but need not, be "Incentive Stock Options" under
Section 422 of the Code; provided, however, that (i) the exercise
price of each Incentive Stock Option shall be at least 100% of the
fair market value of the Common Stock subject to such Incentive Stock
Option on the date of grant; (ii) Incentive Stock Options will be
exercisable not later than ten years after the date of grant; and
(iii) in the case of an Incentive Stock Option granted to a
participant who, at the time of grant, owns (as defined in Section
425(d) of the Code) stock of the Corporation or its subsidiaries
possessing more than 10% of the total combined voting power of all
classes of stock of any such corporation, the exercise price shall be
at least 110% of the fair market value of the Common Stock subject to
the Incentive Stock Option at the time it is granted and the Incentive
Stock Option, by its terms, shall not be exercisable after the
expiration of five (5) years from the date of its grant. The aggregate
fair market value (determined with respect to each Incentive Stock
Option as of the time such Incentive Stock Option is granted) of the
shares of capital stock with respect to which Incentive Stock Options
are exercisable for the first time by a participant during any
calendar year (under all Incentive Stock Option plans of the
Corporation and subsidiary corporations) shall not exceed $100,000.
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(e) Leaves of absence for military service or illness, and transfers of
employment between the Corporation and any subsidiary thereof or
between subsidiaries, shall not constitute termination of employment.
(f) Stock Options may provide that they may be exercised by payment of the
purchase price (i) in cash, (ii) by the Corporation's withholding a
portion of the shares of Common Stock otherwise distributable to the
participant, and/or (iii) by the participant's delivering to the
Corporation shares of Common Stock of the Corporation. In the event
that the exercise price of a Stock Option is paid in whole or in part
by the withholding or delivery of shares of Common Stock pursuant to
clause (ii) or (iii) above, the number of shares so withheld or
delivered shall be the number of shares having an aggregate fair
market value on the date of such withholding or delivery equal to such
Stock Option exercise price, or portion thereof, so paid.
(g) Notwithstanding any other provision of the Plan to the contrary, a
Stock Option Agreement may provide that a Stock Option will become
exercisable as of the date of a Change in Control of the Corporation.
For purposes of the Plan, a "Change in Control" of the Corporation
shall be deemed to occur on the earliest of:
(i) The receipt by the Corporation of a Schedule 13D or other
statement filed under Section 13(d) of the Exchange Act,
indicating that any entity, person, or group has acquired
beneficial ownership, as that term is defined in Rule 13d-3
under the Exchange Act, of more than 30% of the outstanding
capital stock of the Corporation entitled to vote for the
election of directors ("voting stock");
(ii) The commencement by an entity, person, or group (other than the
Corporation or a subsidiary of the Corporation) of a tender
offer or an exchange offer for more than 20% of the outstanding
voting stock of the Corporation;
(iii) The effective time of (1) a merger or consolidation of the
Corporation with one or more other corporations as a result of
which the holders of the outstanding voting stock of the
Corporation immediately prior to such merger or consolidation
hold less than 60% of the voting stock of the surviving or
resulting corporation, or (2) a transfer of substantially all of
the property of the Corporation other than to an entity of which
the Corporation owns at least 80% of the voting stock; or
(iv) The election to the Board of Directors of the Corporation,
without the recommendation or approval of the incumbent Board of
Directors of the Corporation, of the lesser of (1) three
directors or (2) directors constituting a majority of the number
of directors of the Corporation then in office.
(h) The Committee may prescribe such other terms and conditions applicable
to Stock Options granted to a participant under the Plan that are
neither inconsistent with nor prohibited by the Plan or any Stock
Option Agreement.
7. Stock Appreciation Rights. The Committee may, in its discretion, grant a
Stock Appreciation Right under the Plan to the holder of any Stock Option
granted hereunder.
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Each Stock Appreciation Right granted hereunder shall be subject to such
terms and conditions as the Committee may determine at the time of grant,
the general provisions of the Plan, the terms and conditions of the
applicable Stock Appreciation Right Agreement, and the following specific
rules:
(a) Stock Appreciation Rights granted to a participant under the Plan
shall be governed by a Stock Appreciation Right Agreement, which shall
specify such terms and conditions, not inconsistent with the terms and
conditions of the Plan, as the Committee shall determine.
(b) A Stock Appreciation Right may be granted in connection with a Stock
Option at the time of the grant of the Stock Option or at any time
thereafter up to six months prior to the expiration of the Stock
Option.
(c) Each Stock Appreciation Right will entitle the holder to elect to
receive, in lieu of exercising the Stock Option to which it relates,
an amount (payable in cash or in shares of Common Stock of the
Corporation, or a combination thereof, determined by the Committee and
set forth in the related Stock Appreciation Right Agreement) of up to
100% (or such lesser percentage as determined by the Committee and set
forth in the related Stock Appreciation Right Agreement) of the excess
of (i) the fair market value per share of Common Stock on the date of
exercise of such Stock Appreciation Right, multiplied by the number of
shares of the Common Stock with respect to which the Stock
Appreciation Right is being exercised, over (ii) the aggregate
exercise price under the terms of the related Stock Option for such
number of shares.
(d) Each Stock Appreciation Right will be exercisable at the time and to
the extent that the Stock Option to which it relates is exercisable,
provided that no Stock Appreciation Right shall be exercisable during
the first six months following the date of its grant.
(e) Upon exercise of a Stock Appreciation Right, the Stock Option (or
portion thereof) with respect to which such Stock Appreciation Right
is exercised and any other Stock Appreciation Rights with respect to
such Stock Option (or portion thereof) shall be surrendered to the
Corporation and shall not thereafter be exercisable.
(f) Exercise of a Stock Appreciation Right will reduce the number of
shares of Common Stock purchasable pursuant to the related Stock
Option and available under the Plan to the extent of the total number
of shares of Common Stock with respect to which the Stock Appreciation
Right is exercised.
(g) The Committee may, in its discretion, grant Limited Stock Appreciation
Rights, which shall be exercisable only for cash automatically upon a
Change in Control of the Corporation (as defined in Section 6(g)).
Except as provided in this subsection (g) hereof, a Limited Stock
Appreciation Right shall be subject to the same terms and conditions
as other Stock Appreciation Rights.
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(h) The Committee may prescribe such other terms and conditions applicable
to Stock Appreciation Rights and Limited Stock Appreciation Rights
that are neither inconsistent with nor prohibited by the Plan or any
Stock Appreciation Right Agreement.
8. Performance Shares. The Committee may, in its discretion, grant Performance
Shares under the Plan to any participant hereunder. Each Performance Share
granted hereunder shall be subject to such terms and conditions as the
Committee may determine at the time of grant, the general provisions of the
Plan, the terms and conditions of the related Performance Share Agreement,
and the following specific rules:
(a) Performance Shares granted to a participant under the Plan shall be
governed by a Performance Share Agreement, which shall specify such
terms and conditions, not inconsistent with the terms and conditions
of the Plan, as the Committee shall determine.
(b) With respect to each performance period (each of which shall be no
less than one year in duration), the Committee shall establish such
performance goals relating to one or more of the following:
(i) return-on-equity, (ii) earnings per share and (iii) Common Stock
price. Corporate performance goals may be absolute in their terms or
measured against or in relationship to the performance of other
companies or indices selected by the Committee. In addition, corporate
performance goals may be adjusted for any events or occurrences
(including extraordinary charges, losses from discontinued operations,
restatements and accounting charges and other unplanned special
charges such as restructuring expenses, acquisition expenses and
strategic loan loss provisions) as may be determined by the Committee.
Corporate performance goals may be particular to one or more business
units, lines of business or subsidiaries or may be based on the
performance of the Corporation as a whole. The corporate performance
goals and the performance targets established thereunder by the
Committee may be identical for all participants for a given
performance period or, at the discretion of the Committee, may differ
among such participants.
(c) With respect to each performance period, the Committee shall establish
targets for participants for achievement of performance goals. All
targets so established shall be stated as numbers of Performance
Shares, each of which shall represent the right, subject to the terms
and conditions of the Plan and the Performance Share Agreement
governing its grant, to the distribution of a share of Common Stock of
the Corporation plus dividends, as adjusted, accruing from the
effective date of the credit (as described in subsection (d) below) of
such Performance Share.
(d) Following the completion of each performance period, the Committee
shall determine the extent to which performance goals for that
performance period have been achieved and shall authorize credit as of
the end of such performance period of Performance Shares, in
accordance with the terms of the applicable Performance Share
Agreements, to the Accounts of participants for whom targets were
established, which Accounts shall be maintained by the Corporation for
each
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participant who is credited with Performance Shares under the Plan and
remains eligible for any distribution therefrom.
(e) Each Performance Share credited to a participant's Account, along with
dividends accruing from the effective date of credit of such
Performance Share, shall be distributed to him, or in the event of his
death to his beneficiary, upon the first to occur during his
employment of (i) his retirement, disability or death, (ii) the third
anniversary of the date on which such Performance Share was credited
to the participant's Account, or (iii) for any other reason deemed
appropriate by the Committee in its sole discretion. Notwithstanding
clause (ii) of the preceding sentence, a participant may elect, in
writing, to have a Performance Share and related dividends distributed
to him on a date later than on the third anniversary of the date on
which such Performance Share was credited to his Account; provided,
however, that in such event, distribution of the Performance Share and
related dividends shall be distributed on the first to occur during
the participant's employment of the events specified in clause (i) or
(iii) above or, if earlier, upon the first to occur of the date
specified by the participant or the date his employment with the
Corporation terminates for any reason following the third anniversary
of the date on which such Performance Share was credited to his
Account.
(f) Notwithstanding any other provision of the Plan to the contrary, a
Performance Share Agreement may provide that Performance Shares
credited to participants' Accounts, as well as Performance Shares
targeted with respect to any performance period, will become
immediately distributable to participants, in whole or in part, upon a
Change in Control (as defined in Section 6(g)).
(g) The Committee may prescribe such other terms and conditions applicable
to Performance Shares granted to a participant under the Plan that are
neither inconsistent with nor prohibited by the Plan or any
Performance Share Agreement.
9. Stock Awards. The Committee may, in its discretion, grant, or sell for such
amount of cash, Common Stock or such other consideration as the Committee
deems appropriate (which amount may be less than the fair market value of
the Common Stock on the date of grant or sale), shares of Common Stock
under the Plan to any participant hereunder. Each share of Common Stock
granted or sold hereunder shall be subject to such restrictions, conditions
and other terms as the Committee may determine at the time of grant or
sale, the general provisions of the Plan, the restrictions, terms and
conditions of the related Stock Award Agreement, and the following specific
rules:
(a) Shares of Common Stock issued to a participant under the Plan shall be
governed by a Stock Award Agreement, which shall specify whether the
shares of Common Stock are granted or sold to the participant and such
other provisions, not inconsistent with the terms and conditions of
the Plan, as the Committee shall determine.
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(b) The Corporation shall issue, in the name of the participant, stock
certificates representing the total number of shares of Common Stock
granted or sold to the participant, as soon as may be reasonably
practicable after such grant or sale, which shall be held by the
Secretary of the Corporation as provided in subsection (g) hereof.
(c) Subject to the provisions of subsections (b) and (d) hereof, and the
restrictions set forth in the related Stock Award Agreement, the
participants receiving a grant of or purchasing Common Stock shall
thereupon be a stockholder with respect to all of the shares
represented by such certificate or certificates and shall have the
rights of a stockholder with respect to such shares, including the
right to vote such shares and to receive dividends and other
distributions paid with respect to such shares.
(d) The Committee may prescribe, in its discretion, that any share of
Common Stock granted to a participant pursuant to the Plan shall be
forfeited, and any share of Common Stock sold to a participant
pursuant to the Plan shall, at the Corporation's option, be resold to
the Corporation for an amount equal to the value of the cash and/or
property paid therefor, and, in either case, such shares shall revert
to the Corporation, if (i) the participant violates a noncompetition
or confidentiality agreement or other condition set forth in the Stock
Award Agreement, or (ii) the participant's employment with the
Corporation or its subsidiaries terminates prior to a date or dates
for expiration of the forfeiture or resale provisions set forth in his
Stock Award Agreement, which date shall not be earlier than the first
anniversary of such grant or sale. The Corporation shall exercise its
right to require a forfeiture, and may exercise its right to require a
resale, of Common Stock pursuant to this subsection by giving written
notice to the participant at any time within the thirty-day period
following (i) the date that the Corporation acquires knowledge of his
violation of a non-competition or confidentiality agreement or other
condition, or (ii) the participant's termination of employment with
the Corporation or its subsidiaries prior to such date set forth in
the related Stock Award Agreement. Upon receipt of such notice, the
Secretary of the Corporation shall promptly cancel shares of Common
Stock that are forfeited or resold to the Corporation, and the
Corporation shall make payment therefor, if applicable, as soon as
reasonably practicable following the date of such resale.
(e) The Committee, in its discretion, shall have the power to accelerate
the date on which the restrictions contained in any Stock Award
Agreement shall lapse with respect to any or all shares of Common
Stock granted or sold under the Plan that have been outstanding for at
least one year.
(f) Notwithstanding any provision of the Plan to the contrary, a Stock
Award Agreement may provide that (i) upon the participant's
termination of employment because of his retirement, death or
disability (as determined by the Committee), or (ii) upon a Change in
Control of the Corporation (as described in Section 6(g)), any
restrictions of this Section 9 or in any Stock Award Agreement shall
lapse.
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(g) The Secretary of the Corporation shall hold the certificate or
certificates representing shares of Common Stock issued under this
Section 9 of the Plan on behalf of each participant who holds such
shares, whether by grant or sale, until such time as the Common Stock
is forfeited, resold to the Corporation, or the restrictions lapse.
(h) The Committee may prescribe such other restrictions, terms and
conditions applicable to the shares of Common Stock issued to a
participant under this Section 9 of the Plan that are neither
inconsistent with nor prohibited by the Plan or any Stock Award
Agreement, including, without limitation, terms providing for a lapse
of the restrictions of this Section 9 or in any Stock Award Agreement,
in installments.
10. Stock Equivalents. The Committee may, in its discretion, award Stock
Equivalents under the Plan to participants hereunder. Each Stock Equivalent
granted hereunder shall be subject to such terms and conditions as the
Committee may determine at the time of grant, the general provisions of the
Plan, the terms and conditions of the applicable Stock Equivalent Agreement
and the following specific rules:
(a) Grants of Stock Equivalents to a participant under the Plan shall be
governed by a Stock Equivalent Agreement, which shall specify such
terms and conditions, not inconsistent with the terms and conditions
of the Plan, as the Committee shall determine.
(b) Any participant who is awarded a Stock Equivalent shall be entitled to
receive a payment, in cash or in shares of Common Stock of the
Corporation, as provided in the Stock Equivalent Agreement, equal to
(i) the fair market value or book value, at a specified date or dates,
of a designated number of shares of Common Stock; (ii) the
appreciation in the fair market value or the book value, occurring
during a specified period of time, of a designated number of shares of
Common Stock; or (iii) the fair market value or book value, at the
date of the Award, payable at a specified date or dates, of a
designated number of shares of Common Stock.
(c) The date or dates for determining fair market value or book value, or
for payment, or the period of time over which the appreciation in fair
market value or book value shall be measured, as the case may be,
shall be established by the Committee and shall be specified in the
applicable Stock Equivalent Agreement, provided that such date, dates
or period of time shall not include any dates or period occurring
later than ten years after the date of the Award.
(d) Stock Equivalents may be subject to such terms and conditions, not
inconsistent with the terms and conditions of the Plan, as the
Committee determines appropriate, which may include, without
limitation, requirements for the achievement of performance goals.
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(e) Any Stock Equivalent may provide that the participant shall receive,
on the date of payment of any dividend on Common Stock occurring
during the period preceding payment of the Award, an amount in cash
equal in value to the dividends that the participant would have
received had he been the actual owner of the number of shares of
Common Stock designated by the Committee at the time of the Award.
(f) The Corporation's obligation to make payments or distributions with
respect to Stock Equivalents shall not be funded or secured in any
manner.
(g) Notwithstanding any provision of the Plan to the contrary, a Stock
Equivalent Agreement may provide that a Stock Equivalent will become
immediately vested and payable, in whole or in part, upon a Change in
Control (as defined in Section 6(g)).
(h) The Committee may prescribe such other terms and conditions applicable
to Stock Equivalents granted to a participant under the Plan that are
neither inconsistent with nor prohibited by the Plan or any Stock
Equivalent Agreement.
11. Adjustment Provisions.
(a) The aggregate number of shares of Common Stock with respect to which
Awards may be granted, the aggregate number of shares of Common Stock
subject to each outstanding Award, and, where applicable, the exercise
price per share of each Award, may all be appropriately adjusted as
the Board of Directors of the Corporation may determine for any
increase or decrease in the number of shares of issued Common Stock
resulting from a subdivision or consolidation of shares, whether
through reorganization, recapitalization, stock split-up, stock
distribution or combination of shares, or the payment of a share
dividend or other increase or decrease in the number of such shares
outstanding effected without receipt of consideration by the
Corporation. Adjustments under this Section 11 shall be made according
to the sole discretion of the Board of Directors of the Corporation,
and its decision shall be binding and conclusive.
(b) Notwithstanding any other provisions of the Plan, and without
affecting the number of shares reserved or available hereunder, the
Committee may authorize the issuance or assumption of benefits in
connection with any merger, consolidation, acquisition of property or
stock, or reorganization upon such terms and conditions as it may deem
appropriate.
(c) If the shares of Common Stock shall be changed into another kind of
stock of the Corporation or into securities of another corporation,
whether through reorganization, sale of assets, merger, consolidation,
or similar transaction, the Corporation shall cause adequate provision
to be made whereby participants shall thereafter be entitled to
receive, upon distribution of their Awards, the securities that they
would have been entitled to receive for shares distributed pursuant to
the Plan immediately prior to the effective date of the transaction.
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12. Nontransferability. Except as provided below, each Award granted under the
Plan to an employee shall not be transferable by him other than by will or
the laws of descent and distribution and shall be exercisable, during his
lifetime, only by him. In the event of the death of a participant during
employment or prior to the termination, expiration, cancellation or
forfeiture of any Award held by him hereunder, each Award theretofore
granted to him shall be exercisable or payable to the extent provided
therein but no later than five years after his death and then only:
(a) by or to the executor or administrator of the estate of the deceased
participant or the person or persons to whom the deceased
participant's rights under the Award shall pass by will or the laws of
descent and distribution; and
(b) to the extent set forth in the Agreement.
Notwithstanding the foregoing, a Stock Option Agreement for an Award of
Stock Options that are not Incentive Stock Options (including a Stock
Option Agreement for an Award made prior to the January 1, 1995 effective
date of the amendment to this Section 12), may permit the participant who
received the Award, at any time prior to his death, to assign all or any
portion of the Stock Option granted to him to: (i) his spouse or lineal
descendants; (ii) the trustee of a trust for the primary benefit of his
spouse or lineal descendants; or (iii) a partnership of which his spouse
and lineal descendants are the only partners. In such event, the spouse,
lineal descendant, trustee or partnership will be entitled to all of the
rights of the participant with respect to the assigned portion of such
Stock Option, and such portion of the Stock Option will continue to be
subject to all of the terms, conditions and restrictions applicable to the
Award, as set forth herein and in the related Stock Option Agreement
immediately prior to the effective date of the assignment. Any such
assignment will be permitted only if: (i) the participant does not receive
any consideration therefor; and (ii) the assignment is expressly permitted
by the applicable Stock Option Agreement (as such Stock Option Agreement
may be amended) as approved by the Committee. Any such assignment shall be
evidenced by an appropriate written document executed by the participant,
and a copy thereof shall be delivered to the Committee on or prior to the
effective date of the assignment.
13. Other Provisions. Any Award under the Plan shall be subject to other
provisions as the Committee determines, including, without limitation,
provisions for the installment purchase of Common Stock under Stock
Options, provisions to assist the participant in financing the acquisition
of Common Stock, provisions for the forfeiture of, or restrictions on
resale or other disposition of shares acquired under any Award, provisions
to comply with Federal and state securities laws, provisions permitting
acceleration of exercise in the event of death or disability,
understandings or conditions as to the participant's employment in addition
to those specifically provided for under the Plan, provisions giving the
Corporation the right to repurchase shares acquired under any Award in the
event the participant elects to dispose of such shares, provisions
requiring the achievement of specified performance goals, and provisions
permitting acceleration of exercise upon the occurrence of specified events
or otherwise in the discretion of the Committee.
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14. Taxes. The Corporation shall be entitled, if necessary or desirable, to pay
or withhold the amount of any tax attributable to any amounts payable under
any benefit after giving the person entitled to receive such amount notice
as far in advance as practicable, and the Corporation may defer making
payment as to any benefit if any such tax, charge or assessment may be
pending until indemnified to its satisfaction. In connection with an Award
under the Plan in the form of shares of Common Stock, and in lieu of
requiring a participant to make a cash payment to the Corporation in an
amount related to the tax resulting from such benefit, the Committee may,
in its discretion, provide that, at the participant's election, the tax
withholding obligation in connection with such benefit shall be satisfied
by the Corporation's withholding a portion of the shares otherwise
distributable to the participant or by the participant's delivering to the
Corporation the shares previously delivered by the Corporation in respect
of such Award, such shares being valued in either event at their fair
market value as of the date of such withholding or delivery, as the case
may be. Notwithstanding any provision of the Plan to the contrary, a
participant's election pursuant to the preceding sentence must be made on
or prior to the date as of which income is realized by the participant in
connection with such Award and must be irrevocable.
15. Amendment, Suspension or Termination of Plan. The Board of Directors of the
Corporation may at any time suspend or terminate the Plan or amend the Plan
as it deems advisable and in the best interests of the Corporation. No
amendment, without approval of the stockholders of the Corporation, shall
(i) except as provided in Section 11, materially increase the total number
of shares that may be issued under the Plan, or increase the amount or type
of benefits that may be granted under the Plan, provided that,
notwithstanding the foregoing, in no event shall the number of shares
issuable under the Plan as Incentive Stock Options exceed 16,000,000, as
such number may be adjusted in accordance with the provisions of Section
11; (ii) materially change the class of eligible employees; or (iii)
materially increase benefits to any participant who is subject to the
restrictions of Section 16 of the 1934 Act. All benefits in effect at the
time of termination of the Plan shall remain in effect according to their
original terms.
16. No Contract of Employment. Neither the adoption of the Plan nor the grant
of any Award hereunder shall be deemed to obligate the Corporation or any
subsidiary thereof to continue the employment of any participant for any
particular period, nor shall the granting of an Award constitute a request
or consent to postpone the retirement date of any participant.
17. Stockholder Approval. The Plan was adopted by the Board of Directors of the
Corporation as of May 1, 1992, and approved by the stockholders of the
Corporation. Amendments to the Plan have been adopted, including amendments
approved by the stockholders at the 1995 annual meeting of stockholders.
The Plan was further amended on February 18, 1997, with certain amendments
adopted subject to approval by the stockholders of the Corporation at the
1997 annual meeting of stockholders. These amendments shall be null and
void if stockholder approval is not obtained.
18. Duration of the Plan. This Plan shall be effective for the ten-year period
commencing May 1, 1992 and no benefits shall be granted hereunder after
April 30, 2002.
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19. Applicable Law. All questions pertaining to the validity, construction and
administration of the Plan and all Awards hereunder shall be determined in
conformity with the laws of the State of Illinois and, in the case of
Incentive Stock Options, Section 422 of the Code and regulations issued
thereunder.
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