EXHIBIT 10.4
BORG-WARNER SECURITY CORPORATION
PERFORMANCE SHARE PLAN
(As amended through July 8, 1997)
TABLE OF CONTENTS
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I. GENERAL.................................................... 1
1.1 Purpose.............................................. 1
1.2 Effective Date....................................... 1
II. DEFINITIONS................................................ 1
2.1 "Beneficiary"........................................ 1
2.2 "Board of Directors"................................. 1
2.3 "Change in Control".................................. 1
2.4 "Code"............................................... 2
2.5 "Committee".......................................... 2
2.6 "Common Stock"....................................... 2
2.7 "Company"............................................ 3
2.8 "Covered Employee"................................... 3
2.9 "Disability"......................................... 3
2.10 "Disinterested Person"............................... 3
2.11 "Eligibility Period"................................. 3
2.12 "Fair Market Value".................................. 3
2.13 "Normal Retirement".................................. 3
2.14 "Participant"........................................ 3
2.15 "Performance Goals".................................. 3
2.16 "Performance Period"................................. 3
2.17 "Performance Share".................................. 4
2.18 "Plan"............................................... 4
2.19 "Pro-rated" or "Pro-rata"............................ 4
III. ELIGIBILITY AND PARTICIPATION.............................. 4
3.1 Eligibility.......................................... 4
3.2 Participation in Performance Share Awards............ 4
IV. PLAN DESIGN................................................ 5
4.1 Eligibility Period................................... 5
4.2 Performance Period................................... 5
4.3 Performance Share Awards............................. 5
4.4 Performance Goals.................................... 5
4.5 Available Common Stock............................... 6
4.6 Adjustment to Shares................................. 6
4.7 Maximum Award........................................ 6
4.8 Committee Discretion to Adjust Awards................ 7
V. PAYMENT.................................................... 7
5.1 Committee Determination of Common Stock Payable...... 7
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5.2 Timing and Form of Payment........................... 7
5.3 Distribution upon Termination of Employment.......... 8
5.4 Beneficiary Designation.............................. 9
5.5 Securities Exchange Act of 1934 Restrictions......... 9
VI. ADMINISTRATION............................................. 9
6.1 Committee............................................ 9
6.2 General Rights, Powers, and Duties of Committee...... 9
6.3 Information to be Furnished to Committee............. 10
6.4 Responsibility and Indemnification................... 10
VII. AMENDMENT AND TERMINATION.................................. 10
7.1 Amendment............................................ 10
7.2 Company's Right to Terminate......................... 11
VIII. MISCELLANEOUS.............................................. 11
8.1 No Implied Rights; Rights on Termination of Service.. 11
8.2 No Right to Company Assets........................... 11
8.3 No Employment Rights................................. 11
8.4 Other Benefits....................................... 11
8.5 Offset............................................... 11
8.6 Non-assignability.................................... 12
8.7 Notice............................................... 12
8.8 Governing Laws....................................... 12
8.9 Gender and Number.................................... 12
8.10 Severability......................................... 12
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I. GENERAL
1.1. Purpose. The purposes of the Plan are to retain officers and other key
employees, to support the achievement of the Company's strategic business
objectives, and to encourage increased ownership of Company stock by
officers and other key employees by providing to such persons competitive
long-term incentive opportunities that are linked to the profitability of
the Company's business and increases in stockholder value.
1.2. Effective Date. The Plan shall become effective as of January 1, 1996,
subject to its approval by the Company's stockholders.
II. DEFINITIONS
2.1 "Beneficiary" means the person or persons so designated by a Participant
pursuant to Section 5.4.
2.2 "Board of Directors" means the Board of Directors of the Company.
2.3 A "Change in Control" of the Company shall be deemed to have occurred upon
the happening of any of the following events:
(i) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of either (1) the then outstanding
shares of common stock of the Company (the "Outstanding Company
Common Stock") or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); excluding, however, the following: (1) any
acquisition directly from the Company, other than an acquisition by
virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the
Company, (2) any acquisition by the Company, (3) any acquisition by
any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the
Company or (4) any acquisition by any Person pursuant to a
transaction which complies with clauses (A), (B) and (C) of
subsection (iii) hereof; or
(ii) A change in the composition of the Board such that the individuals
who, as of July 8, 1997, constitute the Board (such Board shall be
hereinafter referred to as the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided,
however, for purposes of this definition, that any individual who
becomes a member of the Board subsequent to such date, whose
election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of those individuals
who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such
individual were a member of the Incumbent Board; but, provided
further, that any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board shall not be so considered as a
member of the Incumbent Board; or
(iii) The approval by the shareholders of the Company of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company ("Corporate Transaction"); excluding, however, such a
Corporate Transaction pursuant to which (A) all or substantially
all of the individuals and entities who are the beneficial owners,
respectively, of the outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares
of common stock, and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Corporate Transaction, of the outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (B) no Person (other than the Company, any employee benefit
plan (or related trust) sponsored or maintained by the Company or
any corporation controlled by the Company or such corporation
resulting from such Corporate Transaction) will beneficially own,
directly or indirectly, 20% or more of, respectively, the
outstanding shares of common stock of the corporation resulting
from such Corporate Transaction or the combined voting power of the
outstanding voting securities of such corporation entitled to vote
generally in the election of directors except to the extent that
such ownership existed with respect to the Company prior to the
Corporate Transaction and (C) individuals who were members of the
Incumbent Board will constitute at least a majority of the members
of the board of directors of the corporation resulting from such
Corporate Transaction; or
(iv) The approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
2.4 "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
2.5 "Committee" means the committee referred to in Section 6.1.
2.6 "Common Stock" means common stock, par value $.01 per share, of the
Company.
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2.7 "Company" means Borg-Warner Security Corporation, a Delaware corporation.
2.8 "Covered Employee" means any Participant who is or may be a "covered
employee," within the meaning of Section 162(m)(3) of the Code, in the
year in which the payment of any shares of Common Stock in satisfaction of
a Performance Share award will be taxable to such Participant.
2.9 "Disability" shall have the same meaning as under the Company-sponsored
long-term disability plan under which the applicable Participant is then
eligible to participate.
2.10 "Disinterested Person" means a member of the Board of Directors who
qualifies as (i) a "disinterested person," as defined in Rule 16b-3(c)(2),
as promulgated by the Securities Exchange Commission under the Exchange
Act, or any successor definition adopted by the Securities Exchange
Commission, and as (ii) an "outside director," as defined in Section
1.162-27(e)(3) of the Treasury Regulations issued under Section 162(m) of
the Code, or any successor definition adopted by the Department of the
Treasury.
2.11 "Eligibility Period" means a period, as determined by the Committee
pursuant to Section 4.1.
2.12 "Fair Market Value" means as of any given date the mean between the
highest and lowest reported sales prices of Common Stock on the New York
Stock Exchange Composite Tape or, if not listed on such exchange, on any
other national securities exchange on which such Common Stock is listed or
on NASDAQ. If there is no regular public trading market for such Common
Stock, the Fair Market Value of such Common Stock shall be determined by
the Committee in good faith.
2.13 "Normal Retirement" means termination of employment after attainment of
age 65. However, the Committee, within its discretion, may determine that
a Participant who terminates employment prior to age 65 has terminated by
virtue of Normal Retirement.
2.14 "Participant" means a person who is designated, pursuant to Article III,
to be eligible to receive benefits under the Plan.
2.15 "Performance Goals" means the performance standards established by the
Committee pursuant to Section 4.4.
2.16 "Performance Period" means a period of service, as determined pursuant to
Section 4.2, over which the extent of achievement of established
Performance Goals will be measured. For purposes of applying to Covered
Employees the various rules of the performance-based compensation
exemption under Section 162(m)(4)(C) of the Code and the Treasury
Regulations issued thereunder, the Performance Period shall be the "period
of service to which the Performance Goals relate" (as defined in Treasury
Regulation Section 1.162-27(e)(2)).
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2.17 "Performance Share" means an award, designated in terms of a share of
Common Stock, granted pursuant to the Plan.
2.18 "Plan" means this Borg-Warner Security Corporation Performance Share
Plan, as amended from time to time.
2.19 "Pro-rated" or "Pro-rata" means, for purposes of determining the amount of
Common Stock payable to a Participant whose eligibility to participate in
the Plan with respect to an Eligibility Period ceases prior to the end of
such Eligibility Period for any of the reasons described in Section 3.2 or
subsection (a), (b), or (c) of Section 5.3, the percentage to be applied
to the Common Stock that would have been payable at the end of the
Performance Period to such Participant if he had been eligible to
participate for the entire Eligibility Period. Such percentage shall equal
the number of months (rounded to the nearest whole month) of the
Eligibility Period during which the Participant was designated by the
Committee as eligible to participate in the Plan divided by the number of
months (rounded to the nearest whole month) in such Eligibility Period. A
Participant who, pursuant to Section 3.2, is designated as eligible to
participate in the Plan after the applicable Eligibility Period has
commenced, shall, for purposes of this Section 2.18, be deemed to have
been eligible as of the beginning of such Eligibility Period; provided,
however, that the Committee shall, in accordance with its authority under
Section 4.8, have the discretion to reduce the Pro-rated Common Stock
award that is otherwise payable to such Participant to account for such
late commencement of participation.
III. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. Participation in the Plan shall be limited to officers and
other key employees of the Company or any of its subsidiaries or other
affiliates who are designated to be eligible by the Committee.
3.2 Participation in Performance Share Awards. The Committee will determine
the persons who will participate for each Eligibility Period under the
Plan. Subject to Section 4.3, after an Eligibility Period has commenced,
persons may be designated as eligible to participate in the Plan with
respect to such Eligibility Period. Persons who have been selected for
participation in a given Eligibility Period may subsequently be designated
as ineligible to participate in the Plan for the remainder of such
Eligibility Period. Such persons may remain eligible to receive Pro-rated
distributions of Common Stock with respect to such Eligibility Period, as
determined by the Committee in its sole discretion. The grant of
Performance Shares with respect to a Performance Period contained in any
Eligibility Period does not guarantee participation in subsequent
Eligibility Periods.
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IV. PLAN DESIGN
4.1 Eligibility Period. An Eligibility Period is a certain period of time, as
determined by the Committee, over which eligibility to receive benefits
under the Plan shall be measured. The initial Eligibility Period under the
Plan shall begin on January 1, 1996 and terminate on December 31, 1998.
Subsequent Eligibility Periods under the Plans shall commence and
terminate as determined by the Committee in its sole discretion.
4.2 Performance Period. Each Eligibility Period under the Plan shall include a
Performance Period which shall be a specified period of service over which
the achievement of applicable Performance Goals will be measured. The
initial Performance Period under the Plan shall begin on January 1, 1998
and terminate on December 31, 1998. Subsequent Performance Periods shall
commence and terminate as determined by the Committee; provided that each
such Performance Period shall commence coincident with or after the
commencement of the corresponding Eligibility Period and shall terminate
coincident with or prior to the termination of the corresponding
Eligibility Period.
4.3 Performance Share Awards. On or about the commencement of each Eligibility
Period under the Plan, the Committee shall establish and grant Performance
Shares to each Participant in the Plan for such Eligibility Period. The
Committee may also grant Performance Shares to persons determined to be
eligible for participation after the commencement of any Eligibility
Period. Notwithstanding the foregoing, no Performance Shares shall be
granted to Covered Employees on or after the 90th day of the Performance
Period contained within the applicable Eligibility Period or, if earlier,
after 25% of such Performance Period has elapsed. Performance Shares must
be granted to Covered Employees at a time when the outcome of the
Performance Goals established or to be established for the applicable
Performance Period is substantially uncertain. The Performance Shares
granted to any Covered Employee and the terms and conditions applicable to
such Performance Shares must be finalized in writing by the Committee on
or prior to the applicable adjustment deadline described in the preceding
sentences. Each grant of Performance Shares under the Plan shall be
evidenced by a written "Notice of Award," which shall be signed by an
authorized officer of the Company and by the Participant and shall contain
such terms and conditions as are approved by the Committee. Such terms and
conditions need not be the same in all cases.
4.4 Performance Goals.
(a) Performance Goals with respect to each Performance Period shall be
established by the Committee. The Committee may in its discretion
adjust the terms of such Performance Goals; provided that Performance
Goals applied to Covered Employees ("Covered Employees' Performance
Goals") shall not be adjusted on or after the 90th day of the
applicable Performance Period or, if earlier, after 25% of the
applicable Performance Period has elapsed. No Covered Employees'
Performance Goals shall be adjusted at a time when the outcome of
such Performance Goals is no longer substantially uncertain.
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Covered Employees' Performance Goals must be finalized in writing by
the Committee on or prior to the applicable adjustment deadline
described in the preceding sentences.
(b) The Performance Goals set by the Committee shall be based on
specified criteria as determined by the Committee, which shall
specify the manner in which such Performance Goals shall be
calculated. Covered Employees' Performance Goals shall be based on
objective business criteria, which shall include one or more of the
following: earnings per share, total shareholder return, return on
equity, return on capital, market share, stock price, sales, costs,
net income, cash flow, retained earnings, results of customer
satisfaction surveys, customer retention, employee retention,
aggregate product price and other product price measures, safety
record, service reliability, and operating and maintenance cost
management. Performance Goals also may be based upon the attainment
of specified levels of performance of the Company under one or more
of the measures described above relative to the performance of other
corporations.
(c) All of the provisions of this Section 4.4 are subject to the
requirement that all Covered Employees' Performance Goals shall be
objective performance goals satisfying the requirement for
"performance-based compensation" within the meaning of Section
162(m)(4) of the Code and the Treasury Regulations issued thereunder.
(d) Nothwithstanding any other provision of the Plan to the contrary, in
the event of a Change in Control, any award of Performance Shares
outstanding as of the date such Change in Control is determined to
have occurred and not then exercisable and vested shall become fully
exercisable and vested to the fullest extent of the original grant as
though all Performance Goals had been satisfied.
4.5 Available Common Stock. The maximum number of shares of Common Stock which
shall be available for distribution in satisfaction of awards under the
Plan during its term shall not exceed 400,000, subject to adjustment as
provided in Section 4.6. The shares of Common Stock available for issuance
under the Plan may be authorized and unissued shares or treasury shares.
4.6 Adjustment to Shares. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split,
extraordinary distribution with respect to Common Stock or other change in
corporate structure affecting such Common Stock, the Committee may make
such substitution or adjustments in the aggregate number and kind of
shares reserved for issuance under the Plan or in the number and kind of
shares subject to outstanding Performance Share grants under the Plan. The
Committee shall make such substitutions or adjustments as in its
discretion it determines to be appropriate and equitable to prevent
dilution or enlargement of rights hereunder; provided, however, that the
number of shares of Common Stock subject to any Performance Share award
shall always be a whole number.
4.7 Maximum Award. The maximum number of shares of Common Stock that may be
issued to any Covered Employee with respect to any Eligibility Period
pursuant to any Performance
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Share award is 95,000 (subject to adjustment as provided in Section 4.6).
This limit includes any portion or amount of Common Stock that is withheld
for taxes (as described in Section 5.2).
4.8 Committee Discretion to Adjust Awards. At any time prior to the time the
Committee determines, pursuant to Section 5.1, the amount of shares of
Common Stock that are to be paid to any Participant in satisfaction of a
Performance Share award hereunder, the Committee shall have the authority
to modify, amend, or adjust the terms and conditions of such Performance
Share award, the terms and conditions of the corresponding Performance
Goals, and/or the amount of Common Stock payable. However, the Committee
shall have no authority to increase directly or indirectly or to otherwise
adjust upwards the amount of Common Stock payable to a Covered Employee
with respect to a particular Performance Share award or to take any other
action to the extent that such action or the Committee's ability to take
such action would cause any payment under the Plan to any Covered Employee
to fail to qualify as "performance-based compensation" within the meaning
of Code Section 162(m)(4) and the Treasury Regulations issued thereunder.
V. PAYMENT
5.1 Committee Determination of Common Stock Payable. After a Performance
Period has ended, each Participant who has been granted Performance Shares
and satisfied the Performance Goals with respect to such Performance
Period shall be entitled to receive a specified percentage of the value
thereof in shares of Common Stock as determined by the Committee. The
Committee shall determine the extent to which the Performance Goals set
pursuant to Section 4.4 have been met, the applicable percentage (which
may exceed 100%) to be applied, and applying such percentage, the number
of shares of Common Stock to be received by the Participant (as Pro-rated
in accordance with Sections 2.18, 3.2, and/or 5.3, if applicable). With
respect to Performance Shares granted to Covered Employees, no payment of
Common Stock shall be made hereunder prior to written certification by the
Committee that the applicable Performance Goal or Goals have been
satisfied to a particular extent for the Performance Period, and no Common
Stock shall be awarded unless a preestablished minimum level of
achievement of the Performance Goals has been met. The date on which the
Committee determines the number of shares of Common Stock payable to a
Participant shall be the date on which such Participant will become the
owner of such shares, regardless of when the underlying stock certificate
or certificates are actually delivered to such Participant, and such
Participant will enjoy all rights of ownership of such shares of Common
Stock as of that date (the "Ownership Date").
5.2 Timing and Form of Payment. Shares of Common Stock payable to Participants
pursuant to Section 5.1 shall be distributed as follows:
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(a) Shares of Common Stock to be distributed shall be converted to a
dollar amount equal to the number of such shares multiplied by the
Fair Market Value of Common Stock on the Ownership Date.
(b) The Company shall have the right to deduct from all Common Stock
distributions hereunder any federal, state, or local taxes required
by law to be withheld with respect to such distributions.
Accordingly, the amount of federal, state, and/or local taxes
required to be withheld by the Company with respect to the dollar
amount determined pursuant to subsection (a) above shall, for
purposes of satisfying these withholding obligations, be deducted
from this dollar amount and paid by the Company to the appropriate
taxing authorities.
(c) The remainder of this dollar amount shall be paid to the Participant
in shares of Common Stock as soon as practicable following the end of
the Performance Period. The number of shares distributed shall be
determined by dividing the remaining dollar amount by the Fair Market
Value of Common Stock on the Ownership Date.
5.3 Distribution upon Termination of Employment.
(a) Death. If a Participant in the Plan dies before the end of an
Eligibility Period for which Performance Shares have been granted to
him, such Participant's Beneficiary will be eligible for a Pro-rated
portion of the shares of Common Stock that would have otherwise been
payable to the Participant after the end of the applicable
Performance Period. This distribution, if any is payable, will be
made to the Beneficiary in the same form and at the same time that
all other Participants under the Plan receive their distributions
with respect to that Performance Period.
(b) Disability. If a Participant in the Plan, upon becoming Disabled,
terminates employment with the Company before the end of an
Eligibility Period for which Performance Shares have been granted to
him, the Participant will be eligible for a Pro-rated portion of the
shares of Common Stock that would have otherwise been payable to him
after the end of the applicable Performance Period. This
distribution, if any is payable, will be made to the Participant in
the same form and at the same time that all other Participants under
the Plan receive their distributions with respect to that Performance
Period.
(c) Normal Retirement. If a Participant in the Plan terminates employment
upon attaining Normal Retirement before the end of an Eligibility
Period for which Performance Shares have been granted to him, the
Participant will be eligible for a Pro-rated portion of the shares of
Common Stock that would have otherwise been payable to him after the
end of the applicable Performance Period. This distribution, if any
is payable, will be made to the Participant in the same form and at
the same time that all other Participants under the Plan receive
their distributions with respect to that Performance Period.
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(d) Other Termination of Employment. If, before the end of an Eligibility
Period for which Performance Shares have been granted to him, a
Participant in the Plan incurs a termination of employment for any
reason other than those specified in subsections (a)-(c) of this
Section 5.3, whether voluntary or involuntary, he shall forfeit all
rights to receive any payment of shares of Common Stock with respect
to such Eligibility Period.
5.4. Beneficiary Designation. A Participant may designate a Beneficiary who is
to receive, upon his death, the distributions that otherwise would have
been paid to him. All designations shall be in writing and shall be
effective only if and when delivered to the Director of the Compensation
Department of the Company during the lifetime of the Participant. If a
Participant designates a Beneficiary without providing in the designation
that the Beneficiary must be living at the time of each distribution, the
designation shall vest in all of the distribution whether payable before
or after the Beneficiary's death, and any distributions remaining upon the
Beneficiary's death shall be made to the Beneficiary's estate.
A Participant may from time to time during his lifetime change his
Beneficiary by a written instrument delivered to the Director of the
Compensation Department of the Company. In the event a Participant shall
not designate a Beneficiary as aforesaid, or if for any reasons such
designation shall be ineffective, in whole or in part, the distribution
that otherwise would have been paid to such Participant shall be paid to
his estate, and in such event the term "Beneficiary" shall include his
estate.
5.5. Securities Exchange Act of 1934 Restrictions. Notwithstanding any other
provisions of the Plan, to the extent necessary to exempt Common Stock
distributions under the Plan from the short-swing liability provisions of
Section 16(b) of the Securities Exchange Act of 1934 by complying with
Rule 16b-3 or any other applicable rule or regulation thereunder, Common
Stock acquired by Participants in satisfaction of Performance Share awards
hereunder must not be sold for at least six months after its acquisition,
except in the case of the acquisition of such Common Stock hereunder upon
the Disability or death of a Participant.
VI. ADMINISTRATION
6.1 Committee. The Plan shall be administered by the Compensation Committee of
the Board of Directors, or such other Committee of the Board of Directors,
composed exclusively of not less than two Disinterested Persons, each of
whom shall be appointed by and serve at the pleasure of the Board of
Directors. The Committee may designate person(s) who are Company employees
to oversee the day to day administration of the Plan.
6.2 General Rights, Powers, and Duties of Committee. The Committee shall be
responsible for the management, operation, and administration of the Plan.
Subject to the limitations contained in Section 4.8 and to the remaining
terms of the Plan, the Committee shall, in addition to those provided
elsewhere in the Plan, have the following powers, rights, and duties:
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(a) To maintain records concerning the Plan sufficient to prepare
reports, returns and other information required by the Plan or by
law;
(b) To direct the payment of benefits under the Plan, and to give such
other directions and instructions as may be necessary for the proper
administration of the Plan; and
(c) To be responsible for the preparation, filing and disclosure on
behalf of the Plan of such documents and reports as are required by
any applicable federal or state law.
The Committee shall also have the authority to adopt, alter, and repeal
such administrative rules, guidelines, and practices governing the Plan as
it shall, from time to time, deem advisable, to interpret the terms and
provisions of the Plan and any award issued under the Plan (and any Notice
of Award or other agreement relating thereto), and to otherwise supervise
the administration of the Plan.
Any determination made by the Committee pursuant to the provisions of the
Plan with respect to any grants, payments, or other transactions under the
Plan shall be made in the sole discretion of the Committee at the time of
the grant, payment, or other transaction or, unless in contravention of
any express term of the Plan, at any time thereafter. All decisions made
by the Committee pursuant to the provisions of the Plan shall be final and
binding on all persons, including the Company and Plan Participants.
6.3 Information to be Furnished to Committee. Participants and their
Beneficiaries shall furnish to the Committee such evidence, data, or
information and execute such documents as the Committee requests.
6.4 Responsibility and Indemnification. No member of the Committee or of the
Board of Directors or any person who is designated to oversee the day to
day administration of the Plan (as provided in Section 6.1) shall be
liable to any person for any action taken or omitted in connection with
the administration of this Plan unless attributable to his own fraud or
willful misconduct; nor shall the Company be liable to any person for any
such action unless attributable to fraud or willful misconduct on the part
of a director, officer, or employee of the Company within the scope of his
Company duties. Each member of the Committee shall be indemnified and held
harmless by the Company for any liability arising out of the
administration of the Plan, to the maximum extent permitted by law.
VII. AMENDMENT AND TERMINATION
7.1 Amendment. The Plan may be amended in whole or in part by the Company, by
action of the Board of Directors, at any time. The Committee reserves the
unilateral right to change any rule under the Plan if it deems such a
change necessary to avoid the application of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), to the Plan. No
amendment
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shall be made without the approval of the Company's stockholders to the
extent such approval is required by law or by agreement.
7.2 Company's Right to Terminate. The Company reserves the sole right to
terminate the Plan, by action of the Board of Directors, at any time.
VIII. MISCELLANEOUS
8.1 No Implied Rights; Rights on Termination of Service. Neither the
establishment of the Plan nor any amendment thereof shall be construed as
giving any Participant, Beneficiary, or any other person any legal or
equitable right unless such right shall be specifically provided for in
the Plan or conferred by specific action of the Committee in accordance
with the terms and provisions of the Plan. Except as expressly provided in
this Plan, the Company shall not be required or be liable to make any
payment under the Plan.
8.2 No Right to Company Assets. Neither the Participant nor any other person
shall acquire, by reason of the Plan, any right in or title to any assets,
funds or property of the Company whatsoever including, without limiting
the generality of the foregoing, any specific funds, assets, or other
property which the Company, in its sole discretion, may set aside in
anticipation of a liability hereunder. Any benefits which become payable
hereunder shall be paid from the general assets of the Company. The
Participant shall have only a contractual right to the amounts, if any,
payable hereunder unsecured by any asset of the Company. Nothing contained
in the Plan constitutes a guarantee by the Company that the assets of the
Company shall be sufficient to pay any benefit to any person.
8.3 No Employment Rights. Nothing herein shall constitute a contract of
employment or of continuing service or in any manner obligate the Company
to continue the services of the Participant, shall obligate the
Participant to continue in the service of the Company, or shall serve as a
limitation of the right of the Company to discharge any of its employees,
with or without cause. Nothing herein shall be construed as fixing or
regulating the compensation payable to the Participant.
8.4 Other Benefits. No Common Stock paid under the Plan shall be considered
compensation for purposes of computing benefits under any "employee
benefit plan" (as defined in Section 3(3) of ERISA) of the Company nor
affect any benefits or compensation under any other benefit or
compensation plan of the Company now or subsequently in effect (except as
provided to the contrary in such Company plan).
8.5 Offset. If, at the time payments are to be made hereunder, the
Participant or the Beneficiary or both are indebted or obligated to the
Company, then the payments under the Plan remaining to be made to the
Participant or the Beneficiary or both may, at the discretion of the
Company, be reduced by the amount of such indebtedness or obligation,
provided, however, that an
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election by the Company not to reduce any such payment or payments shall
not constitute a waiver of its claim for such indebtedness or obligation.
8.6 Non-assignability. Neither the Participant nor any other person shall
have any voluntary or involuntary right to commute, sell, assign, pledge,
anticipate, mortgage, or otherwise encumber, transfer, hypothecate, or
convey in advance of actual receipt the amounts, if any payable hereunder
or any part thereof, which are expressly declared to be unassignable and
non-transferable. No part of the amounts payable prior to actual payment
shall be subject to seizure or sequestration for the payment of any debts,
judgments, alimony, or separate maintenance owed by the Participant or any
other person, or be transferable by operation of law in the event of the
Participant's or any other person's bankruptcy or insolvency.
8.7 Notice. Any notice required or permitted to be given under the Plan shall
be sufficient if in writing and hand delivered, sent by registered or
certified mail, or sent by facsimile to the Company at its principal
office, directed to the attention of the Committee c/o the Director of the
Compensation Department of the Company. Such notice shall be deemed given
as of the date of delivery or, if delivery is made by mail or facsimile,
as of the date shown on the postmark, facsimile, or the receipt for
registration or certification.
8.8 Governing Laws. The Plan and all awards made and actions taken under the
Plan shall be governed and construed according to the laws of the State of
Delaware.
8.9 Gender and Number. Where appropriate, references in this Plan to the
masculine shall include the feminine, and references to the singular shall
include the plural.
8.10 Severability. In the event any provision of the Plan shall be held
legally invalid for any reasons, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed
and enforced as if the illegal or invalid provision had not been included.
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