EXHIBIT 10.5
NIPSCO INDUSTRIES, INC.
LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE FEBRUARY 1, 1998)
NIPSCO INDUSTRIES, INC.
LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE FEBRUARY 1, 1998)
TABLE OF CONTENTS
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PAGE
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1. Purpose.............................................................. -1-
2. Administration and Delegation........................................ -1-
3. Review and Approval.................................................. -1-
4. Shares Subject to Plan............................................... -2-
5. Participants......................................................... -2-
6. Awards Under the Plan................................................ -2-
7. Nonqualified Stock Options........................................... -2-
(a) Option Price.................................................. -2-
(b) Exercise at Option............................................ -2-
(c) Payment for Shares............................................ -3-
(d) Transferability............................................... -3-
(e) Rights Upon Termination at Employment......................... -4-
8. Incentive Stock Options.............................................. -4-
(a) Option Price.................................................. -4-
(b) Exercise of Option............................................ -4-
(c) Payment for Shares............................................ -5-
(d) Transferability............................................... -5-
(e) Rights Upon Termination of Employment......................... -5-
9. Stock Appreciation Rights............................................ -6-
(a) Award......................................................... -6-
(b) Term.......................................................... -6-
(c) Payment....................................................... -7-
10. Performance Units.................................................... -7-
(a) Performance Period............................................ -7-
(b) Valuation of Units............................................ -7-
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(c) Performance Targets........................................... -7-
(d) Adjustments................................................... -7-
(e) Payments of Units............................................. -8-
(f) Termination of Employment..................................... -8-
(g) Other Terms................................................... -8-
11. Restricted Stock Awards.............................................. -8-
(a) Restriction Period............................................ -8-
(b) Restrictions Upon Transfer.................................... -8-
(c) Certificates.................................................. -8-
(d) Lapse of Restrictions......................................... -9-
(e) Termination Prior to Lapse of Restrictions.................... -9-
12. Supplemental Cash Payments........................................... -9-
13. General Restrictions................................................. -9-
14. Rights of a Shareholder.............................................. -10-
15. Right to Terminate Employment........................................ -10-
16. Withholding.......................................................... -10-
17. Non-Assignability.................................................... -10-
18. Non-Uniform Determinations........................................... -11-
19. Adjustments.......................................................... -11-
20. Amendment or Termination............................................. -11-
21. Effect on Other Plans................................................ -12-
22. Duration of the Plan................................................. -12-
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NIPSCO INDUSTRIES, INC.
LONG-TERM INCENTIVE PLAN
------------------------
(AS AMENDED AND RESTATED EFFECTIVE FEBRUARY 1, 1998)
WHEREAS, NIPSCO Industries, Inc. (the "Company") adopted the NIPSCO
Industries, Inc. Long-Term Incentive Plan effective April 13, 1988, as last
amended effective December 16, 1997; and
WHEREAS, pursuant to Section 20 of the Plan, the Company wishes to amend
the Plan in certain respects and restate it in a single document;
NOW THEREFORE, the Plan is hereby amended and restated, effective
February 1, 1998, as follows:
1. PURPOSE. The purpose of the NIPSCO Industries, Inc., Long-Term
Incentive Plan (the "Plan") is to further the earnings of NIPSCO Industries,
Inc. (the "Company"), its subsidiaries and their subsidiaries. The Plan
provides long-term incentives to those officers and key executives who make
substantial contributions by their ability, loyalty, industry and invention.
The Company intends that the Plan will thereby facilitate securing, retaining,
and motivating management employees of high caliber and potential.
2. ADMINISTRATION AND DELEGATION. The Plan shall be administered by the
Nominating and Compensation Committee ("Committee") of the Board of Directors of
the Company ("Board"). The Committee shall be composed of not fewer than two
members of the Board who are "nonemployee directors" of the Company within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
("1934 Act"), and "outside directors" of the Company within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder. Subject to the express provisions of the Plan, the
Committee may interpret the Plan, prescribe, amend and rescind rules and
regulations relating to it, determine the terms and provisions of awards to
officers and other key executive employees under the Plan (which need not be
identical), and make such other determinations as it deems necessary or
advisable for the administration of the Plan. The decisions of the Committee
under the Plan shall be conclusive and binding. No member of the Board or of
the Committee shall be liable for any action taken, or determination made,
hereunder in good faith. Service on the Committee shall constitute service as a
director of the Company so that members of the Committee shall be entitled to
indemnification and reimbursement as directors of the Company, pursuant to its
by-laws.
3. REVIEW AND APPROVAL. Specific performance goals and details for an
award program shall be promulgated by the Committee after consideration of the
recommendations of the chief
executive officer and shall be submitted to the Board for approval by the
majority vote of directors who are not otherwise employed as officers or
employees.
4. SHARES SUBJECT TO PLAN. Subject to the provisions of section 19, the
shares of common stock of the Company that may be issued, or may be the measure
of stock appreciation rights granted, under the Plan shall not exceed in the
aggregate 2,500,000 (5,000,000 after January 30, 1998) of the common shares
without par value of the Company ("Shares"). Such Shares may be authorized and
unissued Shares or treasury Shares. Except as otherwise provided herein, any
Shares subject to an option or right which for any reason expires or is
terminated, unexercised as to such Shares, shall again be available under the
Plan.
5. PARTICIPANTS. Persons eligible to participate shall be limited to
those officers and other key executive employees who are in positions in which
their decisions, actions and counsel significantly impact upon profitability.
Directors who are not otherwise officers or employees shall not be eligible to
participate in the Plan.
6. AWARDS UNDER THE PLAN. Awards under the Plan may be in the form of
stock options (both options designed to satisfy statutory requirements necessary
to receive favorable tax treatment pursuant to any future legislation and
options not designed to so qualify under any such future legislation), incentive
stock options, stock appreciation rights, performance units or Shares, and
restricted Shares or such combinations of the above as the Committee may in its
discretion deem appropriate.
7. NONQUALIFIED STOCK OPTIONS. Options shall be evidenced by stock
option agreements in such form and not inconsistent with the Plan as the
Committee shall approve from time to time, which agreements shall contain in
substance the following terms and conditions:
(a) OPTION PRICE. The purchase price per Share deliverable upon the
exercise of an option shall not be less than 100% of the fair market value
of the Share on the day the option is granted, as determined by the
Committee. For purposes of the Plan, fair market value shall be the
average of the high and low prices on the New York Stock Exchange Composite
Transactions on the date of the grant.
(b) EXERCISE AT OPTION. Each stock option agreement shall state the
period or periods of time within which the option may be exercised by the
optionee, in whole or in part, which shall be such period or periods of
time as may be determined by the Committee, provided that the option period
shall not commence earlier than six months after the date of the grant of
the option nor end later than ten years after the date of the grant of the
option. The Committee shall have the power to permit in its discretion an
acceleration of the previously determined exercise terms, within the terms
of the Plan, under such circumstances and upon such terms and conditions as
it deems appropriate.
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(c) PAYMENT FOR SHARES. Except as otherwise provided in the Plan or
in any stock option agreement, the optionee shall pay the purchase price of
the Shares upon the exercise of any option (i) in cash, (ii) in cash
received from a broker-dealer to whom the optionee has submitted an
exercise notice consisting of a fully endorsed option (however in the case
of an optionee subject to Section 16 of the 1934 Act, this payment option
shall only be available to the extent such payment procedures comply with
Regulation T issued by the Federal Reserve Board), (iii) by delivering
Shares having an aggregate fair market value on the date of exercise equal
to the option exercise price, (iv) by directing the Company to withhold
such number of Shares otherwise issuable upon exercise of such option
having an aggregate fair market value on the date of exercise equal to the
option exercise price, (v) by such other medium of payment as the
Committee, in its discretion, shall authorize at the time of grant, or (vi)
by any combination of (i), (ii), (iii), (iv) and (v). In the case of an
election pursuant to (i) or (ii) above, cash shall mean cash or check
issued by a federally insured bank or savings and loan association, and
made payable to NIPSCO Industries, Inc. In the case of payment pursuant to
(ii), (iii) or (iv) above, the optionee's election must be made on or prior
to the date of exercise and shall be irrevocable. In lieu of a separate
election governing each exercise of an option, an optionee may file a
blanket election with the Committee which shall govern all future exercises
of options until revoked by the optionee. The Company shall issue, in the
name of the optionee, stock certificates representing the total number of
Shares issuable pursuant to the exercise of any option as soon as
reasonably practicable after such exercise, provided that any Shares
purchased by an optionee through a broker-dealer pursuant to clause (ii)
above, shall be delivered to such broker-dealer in accordance with
12 C.F.R.(S) 220.3(e)(4), or other applicable provision of law.
(d) TRANSFERABILITY. Each stock option agreement shall provide that
the option subject thereto is not transferable by the optionee otherwise
than by will or the laws of descent or distribution. Notwithstanding the
preceding sentence, an optionee, at any time prior to his death, may assign
all or any portion of the option to (i) his spouse or lineal descendant,
(ii) the trustee of a trust for the primary benefit of his spouse or lineal
descendant, or (iii) a tax-exempt organization as described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended. In such event
the spouse, lineal descendant, trustee or tax-exempt organization will be
entitled to all of the rights of the optionee with respect to the assigned
portion of such option, and such portion of the option will continue to be
subject to all of the terms, conditions and restrictions applicable to the
option 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 optionee does not receive any
consideration therefor, and (ii) the assignment is expressly approved by
the Committee or its delegate. Any such assignment shall be evidenced by an
appropriate written document executed by the optionee, and a copy thereof
shall be delivered to the Committee or its delegate on or prior to the
effective date of the assignment. This paragraph shall apply to all
nonqualified stock options granted under the Plan at any time.
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(e) RIGHTS UPON TERMINATION AT EMPLOYMENT. In the event that an
optionee ceases to be an employee for any reason other than death,
disability or retirement, the optionee shall have the right to exercise the
option during its term within a period of thirty days after such
termination to the extent that the option was exercisable at the date of
such termination of employment, or during such other period and subject to
such terms as may be determined by the Committee. In the event that an
optionee dies, retires, or becomes disabled prior to termination of his
option without having fully exercised his option, the optionee or his
successor shall have the right to exercise the option during its term
within a period of twelve months after the date of such termination due to
death, disability or retirement, to the extent that the option was
exercisable at the date of termination due to death, disability or
retirement, or during such other period and subject to such terms as may be
determined by the Committee. For purposes of the Plan, the term
"disability" shall mean the inability of an individual to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or which
has lasted or can be expected to last for a continuous period of not less
than twelve (12) months. The Committee, in its sole discretion, shall
determine the date of any disability. For purposes of the Plan, the term
"retirement" shall mean retirement as defined in the Company's pension
plan.
8. INCENTIVE STOCK OPTIONS. Incentive stock options shall be evidenced
by stock option agreements in such form and not inconsistent with the Plan as
the Committee shall approve from time to time, which agreements shall contain in
substance the following terms and conditions:
(a) OPTION PRICE. The purchase price per Share of stock deliverable
upon the exercise of an option shall not be less than 100% of the fair
market value (as defined in subsection 7(a)) of the stock on the day the
option is granted, as determined by the Committee except as provided in
Section 8(b).
(b) EXERCISE OF OPTION. Each stock option agreement shall state the
period or periods of time within which the option may be exercised by the
optionee, in whole or in part, which shall be such period or periods of
time as may be determined by the Committee, provided that the option period
shall not commence earlier than six months after the date of the grant of
the option nor end later than ten years after the date of the grant of the
option. The aggregate fair market value (determined with respect to each
incentive stock option at the time of grant) of the Shares with respect to
which incentive stock options are exercisable for the first time by an
individual during any calendar year (under all incentive stock option plans
of the Company and its parent and subsidiary corporations) shall not exceed
$100,000. If the aggregate fair market value (determined at the time of
grant) of the Shares subject to an option, which first becomes exercisable
in any calendar year exceeds the limitation of this Section 8(b), so much
of the option that does not exceed the applicable dollar limit shall be an
incentive stock option and the remainder shall be a nonqualified stock
option; but in all other respects, the original option agreement shall
remain in full force and effect. As used in this Section 8, the words
"parent" and "subsidiary" shall have the meanings given to them
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in Section 425(e) and 425(f) of the Internal Revenue Code of 1986, as
amended. Notwithstanding anything herein to the contrary, if an incentive
stock option is granted to an individual who owns stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of its parent or subsidiary corporations, within
the meaning of Section 422(b)(6) of the Internal Revenue Code of 1986, as
amended, (i) the purchase price of each Share subject to the incentive
stock option shall be not less than one hundred ten percent (110%) of the
fair market value of the Shares on the date the incentive stock option is
granted, and (ii) the incentive stock option shall expire and all rights to
purchase Shares thereunder shall cease no later than the fifth anniversary
of the date the incentive stock option was granted.
(c) PAYMENT FOR SHARES. Except as otherwise provided in the Plan or
in any stock option agreement, the optionee shall pay the purchase price of
the Shares upon the exercise of any option, (i) in cash, (ii) in cash
received from a broker-dealer to whom the optionee has submitted an
exercise notice consisting of a fully endorsed option (however in the case
of an optionee subject to Section 16 of the 1934 Act, this payment option
shall only be available to the extent such payment procedures comply with
Regulation T issued by the Federal Reserve Board), (iii) by delivering
Shares having an aggregate fair market value on the date of exercise equal
to the option exercise price, (iv) by directing the Company to withhold
such number of Shares otherwise issuable upon exercise of such option
having an aggregate fair market value on the date of exercise equal to the
option exercise price, (v) by such other medium of payment as the
Committee, in its discretion, shall authorize at the time of grant, or (vi)
by any combination of (i), (ii), (iii), (iv) and (v). In the case of an
election pursuant to (i) or (ii), cash shall mean cash or check issued by a
federally insured bank or savings and loan association, and made payable to
NIPSCO Industries, Inc. In the case of payment pursuant to (ii), (iii) or
(iv) above, the optionee's election must be made on or prior to the date of
exercise and shall be irrevocable. In lieu of a separate election
governing each exercise of an option, an optionee may file a blanket
election with the Committee which shall govern all future exercises of
options until revoked by the optionee. The Company shall issue, in the
name of the optionee, stock certificates representing the total number of
Shares issuable pursuant to the exercise of any option as soon as
reasonably practicable after such exercise, provided that any Shares
purchased by an optionee through a broker-dealer pursuant to clause (ii)
above, shall be delivered to such broker-dealer in accordance with
12 C.F.R. (S) 220.3(e)(4), or other applicable provision of law.
(d) TRANSFERABILITY. Each stock option agreement shall provide that
it is not transferable by the optionee otherwise than by will or the laws
of descent or distribution.
(e) RIGHTS UPON TERMINATION OF EMPLOYMENT. In the event that an
optionee ceases to be an employee for any reason, the optionee (or in the
case of his death, his beneficiary or personal representative) shall have
the right to exercise the option during the term within a period of ninety
days (or in the case of termination of employment because of disability,
within a period of one year) after such termination to the extent that the
option was
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exercisable at the date of such termination of employment, or during such
other period and subject to such terms as may be determined by the
Committee.
The provisions of this section 8 shall be construed and applied, and (subject to
the limitations of section 20) shall be amended from time to time so as to
comply with Section 422 of the Internal Revenue Code of 1986, as amended, or its
successors and regulations issued thereunder.
9. STOCK APPRECIATION RIGHTS. Stock appreciation rights shall be
evidenced by stock appreciation right agreements in such form and not
inconsistent with the Plan as the Committee shall approve from time to time,
which agreements shall contain in substance the following terms and conditions:
(a) AWARD. A stock appreciation right shall entitle the grantee to
receive upon exercise the excess of (i) the fair market value of a
specified number of Shares at the time of exercise over (ii) a specified
price which shall not be less than 100% of the fair market value of the
Shares at the time the stock appreciation right was granted, or, if
connected with a previously issued stock option, not less than 100% of the
fair market value of the Shares at the time such option was granted. A
stock appreciation right may be granted in connection with all or any
portion of a previously or contemporaneously granted stock option or not in
connection with a stock option.
(b) TERM. Stock appreciation rights shall be granted for a period
of not less than one year nor more than ten years, and shall be exercisable
in whole or in part, at such time or times and subject to such other terms
and conditions as shall be prescribed by the Committee at the time of
grant, subject to the following:
(i) No stock appreciation right shall be exercisable in whole
or in part, during the six month period starting with the date of
grant; and
(ii) Stock appreciation rights will be exercisable only during
a grantee's employment, except that in the discretion of the Committee
a stock appreciation right may be made exercisable for up to thirty
days after the grantee's employment is terminated for any reason other
than death, disability or retirement. In the event that a grantee
dies, retires, or becomes disabled without having fully exercised his
stock appreciation rights, the grantee or his successor shall have the
right to exercise the stock appreciation rights during their term
within a period of twelve months after the date of such termination
due to death, disability or retirement to the extent that the right
was exercisable at the date of such termination, or during such other
period and subject to such terms as may be determined by the
Committee.
The Committee shall have the power to permit in its discretion
an acceleration of previously determined exercise terms, within the
terms of the Plan,
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under such circumstances and upon such terms and conditions as it
deems appropriate.
(c) PAYMENT. Upon exercise of a stock appreciation right, payment
shall be made in cash, in the form of Shares at fair market value, or in a
combination thereof, as the Committee may determine.
10. PERFORMANCE UNITS. Performance Units ("Units") shall be evidenced by
performance unit agreements in such form and not inconsistent with the Plan as
the Committee shall approve from time to time, which agreements shall contain in
substance the following terms and conditions:
(a) PERFORMANCE PERIOD. At the time of award, the Committee shall
establish with respect to each Unit award a performance period of not less
than two, nor more than five years.
(b) VALUATION OF UNITS. At the time of award, the Committee shall
establish with respect to each such award a value for each Unit which shall
not thereafter change, or which may vary thereafter determinable from
criteria specified by the Committee at the time of award.
(c) PERFORMANCE TARGETS. At the time of award, the Committee shall
establish maximum and minimum performance targets to be achieved with
respect to each award during the performance period. The participant shall
be entitled to payment with respect to all Units awarded if the maximum
target is achieved during the performance period, but shall be entitled to
payment with respect to a portion of the Units awarded according to the
level of achievement of performance targets, as specified by the Committee,
for performance during the performance period which meets or exceeds the
minimum target but fails to meet the maximum target.
The performance targets established shall relate to corporate,
division, or unit performance and may be established in terms of growth in
gross revenue, earnings per share, ratio of earnings to shareholders'
equity or to total assets or such other performance standards as determined
by the Committee in its discretion. Multiple targets may be used and may
have the same or different weighting, and they may relate to absolute
performance or relative performance as measured against other institutions
or divisions or units thereof.
(d) ADJUSTMENTS. At any time prior to payment of the Units, the
Committee may adjust previously established performance targets and other
terms and conditions, including the corporation's, or division's or unit's
financial performance for Plan purposes, to reflect major unforeseen events
such as changes in laws, regulations or accounting practices, mergers,
acquisitions or divestitures or extraordinary, unusual or non-recurring
items or events.
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(e) PAYMENTS OF UNITS. Following the conclusion of each performance
period, the Committee shall determine the extent to which performance
targets have been attained for such period as well as the other terms and
conditions established by the Committee. The Committee shall determine
what, if any, payment is due on the Units. Payment shall be made in cash,
in the form of Shares at fair market value, or a combination thereof, as
the Committee may determine.
(f) TERMINATION OF EMPLOYMENT. In the event that a participant
holding a Unit award ceases to be an employee prior to the end of the
applicable performance period by reason of death, disability or retirement,
his Units, to the extent earned under the applicable performance targets,
shall be payable at the end of the performance period in proportion to the
active service of the participant during the performance period, as
determined by the Committee. Upon any other termination of employment,
participation shall terminate forthwith and all outstanding Units held by
the participant shall be cancelled.
(g) OTHER TERMS. The Unit agreements shall contain such other terms
and provisions and conditions not inconsistent with the Plan as shall be
determined by the Committee.
11. RESTRICTED STOCK AWARDS. Restricted Stock Awards under the Plan shall
be in the form of Shares of the Company, restricted as to transfer and subject
to forfeiture, and shall be evidenced by restricted stock agreements in such
form and not inconsistent with the Plan as the Committee shall approve from time
to time, which agreements shall contain in substance the following terms and
conditions:
(a) RESTRICTION PERIOD. Shares awarded pursuant to the Plan shall be
subject to such terms, conditions, and restrictions, including without
limitation: prohibitions against transfer, substantial risks of forfeiture,
attainment of performance objectives and repurchase by the Company or right
of first refusal, and for such period or periods as shall be determined by
the Committee at the time of grant. The Committee shall have the power to
permit in its discretion, an acceleration of the expiration of the
applicable restriction period with respect to any part or all of the Shares
awarded to a participant.
(b) RESTRICTIONS UPON TRANSFER. Shares awarded, and the right to
vote such Shares and to receive dividends thereon, may not be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered, except as herein provided, during the restriction period
applicable to such Shares. Subject to the foregoing, and except as
otherwise provided in the Plan, the participant shall have all the other
rights of a shareholder including, but not limited to, the right to receive
dividends and the right to vote such Shares.
(c) CERTIFICATES. Each certificate issued in respect of Shares
awarded to a participant shall be deposited with the Company, or its
designee, and shall bear the following legend:
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"This certificate and the shares represented hereby are subject to the
terms and conditions (including forfeiture and restrictions against
transfer) contained in the NIPSCO Industries, Inc. Long-Term Incentive Plan
and an Agreement entered into by the registered owner. Release from such
terms and conditions shall obtain only in accordance with the provisions of
the Plan and Agreement, a copy of each of which is on file in the office of
the Secretary of said Company."
(d) LAPSE OF RESTRICTIONS. The Agreement shall specify the terms
and conditions upon which any restrictions upon Shares awarded under the
Plan shall lapse, as determined by the Committee. Upon the lapse of such
restrictions, Shares, free of the foregoing restrictive legend, shall be
issued to the participant or his legal representative.
(e) TERMINATION PRIOR TO LAPSE OF RESTRICTIONS. In the event of a
participant's termination of employment, other than due to death or
retirement, prior to the lapse of restrictions applicable to any Shares
awarded to such participant, all Shares as to which there still remains
unlapsed restrictions shall be forfeited by such participant without
payment of any consideration to the participant, and neither the
participant nor any successors, heirs, assigns, or personal representatives
of such participant shall thereafter have any further rights or interest in
such Shares or certificates.
12. SUPPLEMENTAL CASH PAYMENTS. Subject to the Company's discretion,
stock option, incentive stock option, stock appreciation right, performance unit
or restricted stock agreements may provide for the payment of a supplemental
cash payment to a participant promptly after the exercise of an option or stock
appreciation right, or, at the time of payment of a performance unit or at the
end of a restriction period of a restricted stock award. Supplemental cash
payments shall be subject to such terms and conditions as shall be provided by
the Committee at the time of grant, provided that in no event shall the amount
of each payment exceed:
(a) In the case of an option, the excess of the fair market value of
a Share on the date of exercise over the option price multiplied by the
number of Shares for which such option is exercised, or
(b) In the case of a stock appreciation right, performance unit or
restricted stock award, the value of the Shares and other consideration
issued in payment of such award.
13. GENERAL RESTRICTIONS. Each award under the Plan shall be subject to
the requirement that, if at any time the Committee shall determine that (i) the
listing, registration or qualification of the Shares subject or related thereto
upon any securities exchange or under any state or federal law, or (ii) the
consent or approval of any government regulatory body, or (iii) an agreement by
the recipient of an award with respect to the disposition of Shares, is
necessary or desirable as a condition of, or in connection with, the granting of
such award or the issue or purchase of Shares thereunder, such award may not be
consummated in whole or in part unless such listing, registration,
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qualification, consent, approval or agreement shall have been effected or
obtained, free of any conditions not acceptable to the Committee.
14. RIGHTS OF A SHAREHOLDER. The recipient of any award under the Plan,
unless otherwise provided by the Plan, shall have no rights as a shareholder
with respect thereto unless and until certificates for Shares are issued to him.
15. RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan or in any
agreement entered into pursuant to the Plan shall confer upon any participant
the right to continue in employment or affect any right which his employer may
have to terminate the employment of such participant.
16. WITHHOLDING. Whenever the Company proposes or is required to issue
or transfer Shares to a participant under the Plan, the Company shall have the
right to require the participant to remit to the Company an amount sufficient to
satisfy all federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such Shares. If such
certificates have been delivered prior to the time a withholding obligation
arises, the Company shall have the right to require the participant to remit to
the Company an amount sufficient to satisfy all federal, state or local
withholding tax requirements at the time such obligation arises and to withhold
from other amounts payable to the participant, as compensation or otherwise, as
necessary. Whenever payments under the Plan are to be made to a participant in
cash, such payment shall be net of any amount sufficient to satisfy all federal,
state and local withholding tax requirements. In lieu of requiring a participant
to make a payment to the Company in an amount related to the withholding tax
requirement, the Committee may, in its discretion, provide that at the
participant's election, the tax withholding obligation shall be satisfied by the
Company's withholding a portion of the Shares otherwise distributable to the
participant, such Shares being valued at the fair market value at the date of
exercise, or by the participant's delivering to the Company a portion of the
Shares previously delivered by the Company, such Shares being valued at their
fair market value as of the date of delivery of such Shares by the participant
to the Company. For this purpose, the amount of required withholding shall be a
specified rate not less than the statutory minimum federal, state and local (if
any) withholding rate, and not greater than the maximum federal, state and local
(if any) marginal tax rate applicable to the participant and to the particular
transaction. Notwithstanding any provision of the Plan to the contrary, a
participant's election pursuant to the preceding sentences (a) must be made on
or prior to the date as of which income is realized by the recipient in
connection with the particular transaction, and (b) must be irrevocable. In lieu
of a separate election on each effective date of each transaction, a participant
may file a blanket election with the Committee which shall govern all future
transactions until revoked by the participant. 17. NON-ASSIGNABILITY. No award
under the Plan shall be assignable or transferable by the recipient thereof
except by will or by the laws of descent and distribution or except as set forth
in subsection 7(d). During the life of the recipient, such award shall be
exercisable only by such person or by such person's guardian or legal
representative.
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18. NON-UNIFORM DETERMINATIONS. The Committee's determinations under the
Plan (including, without limitation determinations of the persons to receive
awards, the form, amount and timing of such awards, the terms and provisions of
such awards and the agreements evidencing same, and the establishment of values
and performance targets) need not be uniform and may be made by it selectively
among persons who receive, or are eligible to receive, awards under the Plan,
whether or not such persons are similarly situated.
19. ADJUSTMENTS. (i) Appropriate adjustments in the aggregate number of
Shares issuable pursuant to the Plan, the number of Shares subject to each
outstanding award granted under the Plan, the option price with respect to
options and connected stock appreciation rights, the specified price of stock
appreciation rights not connected to options, and the value for Units, shall be
made to give effect to any increase or decrease in the number of issued Shares
resulting from a subdivision or consolidation of Shares, whether through
recapitalization, stock split, reverse stock split, spin-off, spin-out or other
distribution of assets to stockholders, stock distributions or combinations of
Shares, payment of stock dividends, other increase or decrease in the number of
such Shares outstanding effected without receipt of consideration by the
Company, or any other occurrence for which the Committee determines an
adjustment is appropriate.
(ii) In the event of any merger, consolidation or reorganization of the
Company with any other corporation or corporations, or an acquisition by the
Company of the stock or assets of any other corporation or corporations, there
shall be substituted on an equitable basis, as determined by the Committee in
its sole discretion, for each Share then subject to the Plan, and for each Share
then subject to an award granted under the Plan, the number and kind of shares
of stock, other securities, cash or other property to which the holders of
Shares of the Company are entitled pursuant to such transaction.
(iii) Without limiting the generality of the foregoing provisions of
this paragraph, any such adjustment shall be deemed to have prevented any
dilution or enlargement of a participant's rights, if such participant receives
in any such adjustment, rights that are substantially similar (after taking into
account the fact that the participant has not paid the applicable option price)
to the rights the participant would have received had he exercised his
outstanding award and become a shareholder of the Company immediately prior to
the event giving rise to such adjustment. Adjustments under this paragraph
shall be made by the Committee, whose decision as to the amount and timing of
any such adjustment shall be conclusive and binding on all persons.
20. AMENDMENT OR TERMINATION. The Board or the Committee may at any time
terminate, suspend or modify the Plan without the authorization of stockholders
to the extent allowed by law, including without limitation any rules issued by
the Securities and Exchange Commission under Section 16 of the 1934 Act, insofar
as shareholder approval thereof is required in order for the Plan to continue to
satisfy the requirements of Rule 16b-3 under the 1934 Act. No termination,
suspension or modification of the Plan shall adversely affect any right acquired
by any participant under an award granted before the date of such termination,
suspension or modification, unless such participant shall consent; but it shall
be conclusively presumed that any adjustment for changes in
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capitalization as provided for herein does not adversely affect any such right.
Any member of the Board who is an officer or employee of the Company shall be
without a vote on any proposed amendment to the Plan, or on any other matter
which might affect that member's individual interest under the Plan.
21. EFFECT ON OTHER PLANS. Unless otherwise specifically provided,
participation in the Plan shall not preclude an employee's eligibility to
participate in any other benefit or incentive plan and any awards made pursuant
to the Plan shall not be considered as compensation in determining the benefits
provided under any other plan.
22. DURATION OF THE PLAN. The Plan shall remain in effect until all
awards under the Plan have been satisfied by the issuance of Shares or the
payment of cash, but no award shall be granted more than ten years after the
date the Plan is approved by the shareholders, which shall be its effective date
of adoption.
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