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EXHIBIT 10.7
[UPR LOGO]
1995
STOCK OPTION AND RETENTION STOCK PLAN
OF
UNION PACIFIC RESOURCES GROUP INC.
AS AMENDED AND RESTATED
(EFFECTIVE DECEMBER 7, 1999)
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1995 STOCK OPTION AND RETENTION STOCK PLAN
OF UNION PACIFIC RESOURCES GROUP INC.
(AS AMENDED AND RESTATED EFFECTIVE DECEMBER 7, 1999)
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1. PURPOSE
This 1995 Stock Option and Retention Stock Plan of Union Pacific Resources Group
Inc. is to promote and closely align the interests of officers and employees
with those of the shareholders of Union Pacific Resources Group Inc. by
providing stock based compensation. The Plan is intended to strengthen Union
Pacific Resources Group Inc.'s ability to reward performance which enhances long
term shareholder value; to increase employee stock ownership through performance
based compensation plans; and to strengthen the company's ability to attract and
retain an outstanding employee and executive team.
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2. DEFINITIONS
The following terms shall have the following meanings:
"Act" means the Securities Exchange Act of 1934, as amended.
"Approved Leave of Absence" means a leave of absence of definite length
approved by the Vice President - People of the Company, or by any other officer
of the Company to whom the Committee delegates such authority.
"Award" means an award of Retention Shares pursuant to the Plan.
"Beneficiary" means any person or persons designated in writing by a
Participant to the Committee on a form prescribed by it for that purpose, which
designation shall be revocable at any time by the Participant prior to his or
her death, provided that, in the absence of such a designation or the failure of
the person or persons so designated to survive the Participant, "Beneficiary"
shall mean such Participant's estate; and further provided that no designation
of Beneficiary shall be effective unless it is received by the Company before
the Participant's death.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, or the
corresponding provisions of any successor statute.
"Committee" means the Committee designated by the Board to administer
the Plan pursuant to Section 3.
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"Common Stock" means the Common Stock of the Company.
"Company" means Union Pacific Resources Group Inc., a Utah corporation,
or any successor corporation.
"Option" means each non-qualified stock option, incentive stock option
and stock appreciation right granted under the Plan, including a Rollover
Option.
"Optionee" means the Chairman of the Board or any employee of the
Company or a Subsidiary (including directors who are also such employees) who is
granted an Option under the Plan.
"Participant" means the Chairman of the Board or any employee of the
Company or a Subsidiary (including directors who are also such employees) who is
granted an Award under the Plan.
"Plan" means this 1995 Stock Option and Retention Stock Plan of Union
Pacific Resources Group Inc., as amended from time to time.
"Retention Shares" means shares of Common Stock subject to an Award
granted under the Plan, including Rollover Retention Shares.
"Restriction Period" means the period defined in Section 9(a).
"Rollover Option" means an Option granted under the Plan in exchange
for UPC Stock Options.
"Rollover Retention Shares" means shares of Common Stock subject to an
Award granted under the Plan in exchange for UPC Retention Shares.
"Subsidiary" means any corporation, partnership, or limited liability
company of which the Company owns directly or indirectly at least a majority of
the outstanding shares of voting stock or other voting interest.
"UPC" means Union Pacific Corporation, a Utah corporation.
"UPC Plans" mean the 1993 Stock Option and Retention Stock Plan of
Union Pacific Corporation, the 1990 Retention Stock Plan of Union Pacific
Corporation, the 1988 Stock Option and Restricted Stock Plan of Union Pacific
Corporation and the 1982 Stock Option and Restricted Stock Plan of Union Pacific
Corporation.
"UPC Stock Option" means any option granted under any UPC Plan.
"UPC Retention Shares" means shares of common stock of UPC granted and
subject to restrictions under the UPC Plans.
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"Vesting Condition" means any condition to the vesting of Retention
Shares established by the Committee pursuant to Section 9.
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3. ADMINISTRATION
The Plan shall be administered by the Committee which shall comprise not less
than three persons, who shall be members of the Board, none of whom shall be
employees of the Company or any Subsidiary. Any actions taken with respect to a
"covered employee" within the meaning of Code section 162(m) shall be taken by
two or more "outside directors" as required by Code section 162(m). The
Committee shall (i) grant Options to Optionees and make Awards of Retention
Shares to Participants, and (ii) determine the terms and conditions of such
Options and Awards of Retention Shares, all in accordance with the provisions of
the Plan. The Committee shall have full authority to construe and interpret the
Plan, to establish, amend and rescind rules and regulations relating to the
Plan, to administer the Plan, and to take all such steps and make all such
determinations in connection with the Plan and Options and Awards granted
thereunder as it may deem necessary or advisable. The Committee may delegate its
authority under the Plan to one or more officers or employees of the Company or
a Subsidiary, provided, however, that no delegation shall be made of authority
to take an action which is required by Rule 16b-3 promulgated under the Act to
be taken by "non-employee directors" in order that the Plan and transactions
thereunder meet the requirements of such Rule. Each Option and grant of
Retention Shares shall, if required by the Committee, be evidenced by an
agreement to be executed by the Company and the Optionee or Participant,
respectively, and contain provisions not inconsistent with the Plan. All
determinations of the Committee shall be by a majority of its members and shall
be evidenced by resolution, written consent or other appropriate action, and the
Committee's determinations shall be final. Each member of the Committee, while
serving as such, shall be considered to be acting in his or her capacity as a
director of the Company.
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4. ELIGIBILITY
To be eligible for selection by the Committee to participate in the Plan an
individual must be an employee of the Company or a Subsidiary, provided, that
the Chairman of the Board shall be eligible to receive Rollover Options.
Directors other than the Chairman of the Board who are not full-time salaried
employees shall not be eligible. In granting Options or Awards of Retention
Shares to eligible persons, the Committee shall take into account their duties,
their present and potential contributions to the success of the Company or a
Subsidiary, and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan.
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5. STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 11 hereof, the maximum number and kind of
shares as to which Options or Retention Shares may at any time be granted under
the Plan are 23 million shares of Common Stock. No Participant may receive
Options (excluding Rollover Options) or Awards (excluding Rollover Retention
Shares) aggregating more than 25% of the shares of Common Stock available under
the Plan. Shares of Common Stock subject to Options or Awards under the Plan may
be either authorized but unissued shares or shares previously issued and
reacquired by the Company. Upon the expiration, termination or cancellation (in
whole or in part) of unexercised Options, shares of Common Stock subject thereto
shall again be available for option or grant as Retention Shares under the Plan.
Shares of Common Stock covered by an Option, or portion thereof, which is
surrendered upon the exercise of a stock appreciation right, shall thereafter be
unavailable for option or grant as Retention Shares under the Plan. Upon the
forfeiture (in whole or in part) of a grant of Retention Shares, the shares of
Common Stock subject to such forfeiture shall again be available for option or
grant as Retention Shares under the Plan if no dividends have been paid on the
forfeited shares, and otherwise shall be unavailable for such an option or
grant.
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6. TERMS AND CONDITIONS OF NON-QUALIFIED OPTIONS
All non-qualified options under the Plan shall be granted subject to the
following terms and conditions:
(a) OPTION PRICE. The option price per share with respect to each
option, other than Rollover Options, shall be determined by the Committee but
shall not be less than 100% of the fair market value of the Common Stock on the
date the option is granted, such fair market value to be determined in
accordance with the procedures to be established by the Committee. Rollover
Options shall each have an option price per share determined by the Committee,
provided that, unless the Committee determines otherwise in a specific case, the
aggregate gain or loss, as determined by the Committee, implicit in the Rollover
Options granted to each Optionee shall be equal to the aggregate gain or loss
implicit in the UPC Stock Options surrendered in exchange for such Rollover
Options.
(b) DURATION OF OPTIONS. Options shall be exercisable at such time or
times and under such conditions as set forth in the written agreement evidencing
such option, but in no event shall any option be exercisable subsequent to the
tenth anniversary of the date on which the option is granted or, in the case of
Rollover Options, of the date of grant of the UPC Stock Option for which such
Rollover Option was exchanged.
(c) EXERCISE OF OPTION. Except as provided in Section 6(h), 6(i) or
8(c), the shares of Common Stock covered by an option may not be purchased prior
to the first anniversary of the date on which the option is granted or, in the
case of Rollover Options, prior to the date of exercise of the UPC Stock Option
for which such Rollover Option was exchanged (unless the Committee shall
determine otherwise), or such longer period or periods, and subject to such
conditions, as the Committee may determine, but thereafter may be purchased at
one time or in such installments over the balance of the option period as may be
provided in the option,
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provided, however, that no option (other than Rollover Options) shall be
exercisable before the earlier of (i) December 31, 1997, or (ii) one year after
UPC no longer owns at least 50% of the voting power of all shares of the Company
entitled to vote generally in the election of directors. Any shares not
purchased on the applicable installment date may, unless the Committee shall
have determined otherwise, be purchased thereafter at any time prior to the
final expiration of the option. To the extent that the right to purchase shares
has accrued thereunder, options may be exercised from time to time by written
notice to the Company stating the number of shares with respect to which the
option is being exercised.
(d) PAYMENT. Shares of Common Stock purchased under options shall, at
the time of purchase, be paid for in full, unless the Committee shall otherwise
determine. All, or any portion, of the option exercise price may, at the
discretion of the Committee, be paid by the surrender to the Company, at the
time of exercise, of shares of previously acquired Common Stock owned by the
Optionee, to the extent that such payment does not require the surrender of a
fractional share of such previously acquired Common Stock. Such previously
acquired shares shall be valued at fair market value on the date the option is
exercised in accordance with the procedures to be established by the Committee.
A holder of an option shall have none of the rights of a stockholder. If an
amount is payable by an Optionee to the Company or a Subsidiary under applicable
withholding tax laws in connection with the exercise of non-qualified options,
the Committee may, in its discretion and subject to such rules as it may adopt,
permit the Optionee to make such payment, in whole or in part, by electing to
authorize the Company to withhold or accept shares of Common Stock having a fair
market value not exceeding the minimum applicable amount to be paid under such
withholding tax laws (based on the minimum applicable statutory withholding
rates for federal and state tax purposes, including payroll taxes).
(e) RESTRICTIONS. The Committee shall determine, with respect to each
option, the nature and extent of the restrictions, if any, to be imposed on the
shares of Common Stock which may be purchased thereunder including restrictions
on the transferability of such shares acquired through the exercise of such
option. Without limiting the generality of the foregoing, the Committee may
impose conditions restricting absolutely or conditionally the transferability of
shares acquired through the exercise of options for such periods, and subject to
such conditions, including continued employment of the Optionee by the Company
or a Subsidiary, as the Committee may determine.
(f) PURCHASE FOR INVESTMENT. The Committee shall have the right to
require that each Optionee or other person who shall exercise an option under
the Plan represent and agree that any shares of Common Stock purchased pursuant
to such option will be purchased for investment and not with a view to the
distribution or resale thereof or that such shares will not be sold except in
accordance with such restrictions or limitations as may be set forth in the
written agreement granting such option.
(g) NON-TRANSFERABILITY OF OPTIONS. During an Optionee's lifetime, the
option may be exercised only by the Optionee. Options shall not be transferable,
except for exercise by the Optionee's legal representatives or heirs. An officer
of the Company may, with prior approval from the Committee (or its designee) as
to form, transfer an exercisable non-qualified Option or Rollover Option to (a)
a member or members of the officer's immediate family (spouse, children and
grandchildren, including step and adopted children and grandchildren), (b) a
trust, the
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beneficiaries of which consist exclusively of members of the officer's immediate
family, (c) a partnership, the partners of which consist exclusively of members
of the officer's immediate family, or (d) any similar entity created for the
exclusive benefit of members of the officer's immediate family. The Committee or
its designee must approve the form of any transfer of a Grant to or for the
benefit of any immediate family member or members before such transfer shall be
recognized as valid hereunder. For purposes of the preceding sentence, any
remote, contingent interest of persons other than a member of the officer's
immediate family shall be disregarded. For purposes of this Section 6(g), the
term "officer" shall have the same meaning as that term is defined in Rule
16a-1(f) of the Act. A person's status as an officer shall be determined at the
time of the intended transfer.
(h) TERMINATION OF EMPLOYMENT. Upon the termination of an Optionee's
employment, for any reason other than death, the option shall be exercisable
only as to those shares of Common Stock which were then subject to the exercise
of such option, provided that (I) in the case of disability as described below,
any holding period required by Section 6(c) shall automatically be deemed to be
satisfied and (II) the Committee may determine that particular limitations and
restrictions under the Plan shall not apply, and such option shall expire
according to the following schedule (unless the Committee shall otherwise
determine):
(i) RETIREMENT. Option shall expire, unless exercised, five
(5) years after the Optionee's retirement from the Company or any
Subsidiary under the provisions of the Company's or a Subsidiary's
pension plan.
(ii) DISABILITY. Option shall expire, unless exercised, five
(5) years after the date the Optionee is eligible to receive disability
benefits under the provisions of the Company's or a Subsidiary's
long-term disability plan.
(iii) GROSS MISCONDUCT. Option shall expire upon receipt by
the Optionee of the notice of termination if he or she is terminated
for deliberate, willful or gross misconduct as determined by the
Company.
(iv) ALL OTHER TERMINATIONS. Option shall expire, unless
exercised, three (3) months after the date of such termination.
(i) DEATH OF OPTIONEE. Upon the death of an Optionee during his or her
period of employment, the option shall be exercisable only as to those shares of
Common Stock which were subject to the exercise of such option at the time of
his or her death, provided that (I) any holding period required by Section 6(c)
shall automatically be deemed to be satisfied and (II) the Committee may
determine that particular limitations and restrictions under the Plan shall not
apply, and such option shall expire, unless exercised by the Optionee's legal
representatives or heirs, five (5) years after the date of death (unless the
Committee shall provide for a shorter period at the time the option is granted).
In no event, however, shall any option be exercisable pursuant
to Sections 6(h) or (i) subsequent to the tenth anniversary of the date on which
it is granted or, in the case of a Rollover Option, of the date of grant of the
UPC Stock Option(s) for which such Rollover Option was exchanged.
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(j) ROLLOVER OPTIONS. Rollover Options may be granted only in exchange
for UPC Stock Options and only during the period prior to 90 days after UPC no
longer owns at least 50% of the voting power of all of the shares of the Company
entitled to vote generally in the election of directors. The ratio for such
exchange shall be determined by the Committee, provided that the requirements of
Section 6(a) are met.
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7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
(a) GENERAL. The Committee may also grant a stock appreciation right in
connection with a non-qualified option, either at the time of grant or by
amendment. Such stock appreciation right shall cover the same shares covered by
such option (or such lesser number of shares of Common Stock as the Committee
may determine) and shall, except for the provisions of Section 6(d) hereof, be
subject to the same terms and conditions as the related non-qualified option.
(b) EXERCISE AND PAYMENT. Each stock appreciation right shall entitle
the Optionee to surrender to the Company unexercised the related option, or any
portion thereof, and to receive from the Company in exchange therefor an amount
equal to the excess of the fair market value of one share of Common Stock over
the option price per share times the number of shares covered by the option, or
portion thereof, which is surrendered. Payment shall be made in shares of Common
Stock valued at fair market value, or in cash, or partly in shares and partly in
cash, all as shall be determined by the Committee. The fair market value shall
be the value determined in accordance with procedures established by the
Committee. Stock appreciation rights may be exercised from time to time upon
actual receipt by the Company of written notice stating the number of shares of
Common Stock with respect to which the stock appreciation right is being
exercised, provided that if a stock appreciation right expires unexercised, it
shall be deemed exercised on the expiration date if any amount would be payable
with respect thereto. No fractional shares shall be issued but instead cash
shall be paid for a fraction or, if the Committee should so determine, the
number of shares shall be rounded downward to the next whole share. If an amount
is payable by an Optionee to the Company or a Subsidiary under applicable
withholding tax laws in connection with the exercise of stock appreciation
rights, the Committee may, in its discretion and subject to such rules as it may
adopt, permit the Optionee to make such payment, in whole or in part, by
electing to authorize the Company to withhold or accept shares of Common Stock
having a fair market value equal to the amount to be paid under such withholding
tax laws.
(c) RESTRICTIONS. The obligation of the Company to satisfy any stock
appreciation right exercised by an Optionee subject to Section 16 of the Act
shall be conditioned upon the prior receipt by the Company of an opinion of
counsel to the Company that any such satisfaction will not create an obligation
on the part of such Optionee pursuant to Section 16(b) of the Act to reimburse
the Company for any statutory profit which might be held to result from such
satisfaction.
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8. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS
(a) GENERAL. The Committee may also grant incentive stock options as
defined under section 422 of the Code. All incentive stock options issued under
the Plan shall, except for the provisions of Sections 6(g) (to the extent it
allows the Committee to permit options to be transferred to, or for the benefit
of, the Optionee's immediate family members), 6(h) and (i) and Section 7 hereof,
be subject to the same terms and conditions as the non-qualified options granted
under the Plan, and may be Rollover Options subject to Section 6(j) hereof;
provided, however, that no incentive stock option which is a Rollover Option
shall confer additional benefits (within the meaning of section 424(h)(3) of the
Code) upon the Optionee which the Optionee did not have under the UPC Stock
Option surrendered in exchange therefor. In addition, incentive stock options
shall be subject to the conditions of Sections 8(b), (c), (d) and (e).
(b) LIMITATION OF EXERCISE. The aggregate fair market value (determined
as of the date the incentive stock option is granted) of the shares of stock
with respect to which incentive stock options are exercisable for the first time
by such Optionee during any calendar year, under this Plan or any other stock
option plans adopted by the Company, its Subsidiaries or any predecessor
companies thereof, other than Rollover Options issued in exchange for UPC
Options which were exercisable by the Optionee at the time of exchange, shall
not exceed $100,000. If any incentive stock options become exercisable in any
year in excess of the $100,000 limitation, options representing such excess
shall become non-qualified options exercisable pursuant to the terms of Section
6 hereof and shall not be exercisable as incentive stock options.
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(c) TERMINATION OF EMPLOYMENT. Upon the termination of an Optionee's
employment, for any reason other than death, his or her incentive stock option
shall be exercisable only as to those shares of Common Stock which were then
subject to the exercise of such option provided that (I) in the case of
disability as described below, any holding period required by Section 6(c) shall
automatically be deemed to be satisfied and (II) the Committee may determine
that particular limitations and restrictions under the Plan shall not apply, and
such option shall expire as an incentive stock option (but shall become a
non-qualified option exercisable pursuant to the terms of Section 6 hereof less
the period already elapsed under such Section), according to the following
schedule (unless the Committee shall provide for shorter periods at the time the
incentive stock option is granted):
(i) RETIREMENT. An incentive stock option shall expire, unless
exercised, three (3) months after the Optionee's retirement from the
Company or any Subsidiary under the provisions of the Company's or a
Subsidiary's pension plan.
(ii) DISABILITY. In the case of an Optionee who is disabled
within the meaning of section 22(e)(3) of the Code, an incentive stock
option shall expire, unless exercised, one (1) year after the earlier
of the date the Optionee terminates employment or the date the Optionee
is eligible to receive disability benefits under the provisions of the
Company's or a Subsidiary's long-term disability plan.
(iii) GROSS MISCONDUCT. An incentive stock option shall expire
upon receipt by the Optionee of the notice of termination if he or she
is terminated for deliberate, willful or gross misconduct as determined
by the Company.
(iv) ALL OTHER TERMINATIONS. An incentive stock option shall
expire, unless exercised, three (3) months after the date of such
termination.
(d) DEATH OF OPTIONEE. Upon the death of an Optionee during his or her
period of employment, the incentive stock option shall be exercisable as an
incentive stock option only as to those shares of Common Stock which were
subject to the exercise of such option at the time of death, provided that (I)
any holding period required by Section 6(c) shall automatically be deemed to be
satisfied, and (II) the Committee may determine that particular limitations and
restrictions under the Plan shall not apply, and such option shall expire,
unless exercised by the Optionee's legal representatives or heirs, five (5)
years after the date of death (unless the Committee shall provide for a shorter
period at the time the option is granted).
(e) LEAVE OF ABSENCE. A leave of absence, whether or not an Approved
Leave of Absence, shall be deemed a termination of employment for purposes of
Section 8.
In no event, however, shall any incentive stock option be
exercisable pursuant to Sections 8(c) or (d) subsequent to the tenth anniversary
of the date on which it was granted or, in the case of a Rollover Option, of the
date of grant of the UPC Stock Option(s) for which such Rollover Option was
exchanged.
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9. TERMS AND CONDITIONS OF AWARDS OF RETENTION STOCK
(a) GENERAL. Retention Shares (other than Rollover Retention Shares)
may be granted to reward the attainment of individual, Company or Subsidiary
goals, or to attract or retain officers or other employees of the Company or any
Subsidiary. With respect to each grant of Retention Shares under the Plan, the
Committee shall determine the period or periods, including any conditions for
determining such period or periods, during which the restrictions set forth in
Section 9(b) shall apply, provided that in no event, other than as provided in
Section 9(c) or unless the Committee shall determine otherwise, shall such
restrictions terminate prior to 1 year after the date of grant, except for
Rollover Retention Shares, in which case such restrictions shall not terminate
prior to 3 years after the date of grant of the UPC Retention Shares for which
such Rollover Retention Shares are exchanged (the "Restriction Period"), and may
also specify any other terms or conditions to the right of the Participant to
receive such Retention Shares ("Vesting Conditions"). Subject to Section 9(c)
and any such Vesting Condition, a grant of Retention Shares shall be effective
for the Restriction Period and may not be revoked.
(b) RESTRICTIONS. At the time of grant of Retention Shares to a
Participant, a certificate representing the number of shares of Common Stock
granted shall be registered in the Participant's name but shall be held by the
Company for his or her account. The Participant shall have the entire beneficial
ownership interest in, and all rights and privileges of a stockholder as to,
such Retention Shares, including the right to vote such Retention Shares and,
unless the Committee shall determine otherwise, the right to receive dividends
thereon, subject to the following: (i) subject to Section 9(c), the Participant
shall not be entitled to delivery of the stock certificate until the expiration
of the Restriction Period and the satisfaction of any Vesting Conditions; (ii)
none of the Retention Shares may be sold, transferred, assigned, pledged, or
otherwise encumbered or disposed of during the Restriction Period or prior to
the satisfaction of any Vesting Conditions; and (iii) all of the Retention
Shares shall be forfeited and all rights of the Participant to such Retention
Shares shall terminate without further obligation on the part of the Company
unless the Participant remains in the continuous employment of the Company or a
Subsidiary for the entire Restriction Period, except as provided by Sections
9(a) and 9(c), and any applicable Vesting Conditions have been satisfied. Any
shares of Common Stock or other securities or property received as a result of a
transaction listed in Section 11 shall be subject to the same restrictions as
such Retention Shares unless the Committee shall determine otherwise.
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(c) TERMINATION OF EMPLOYMENT.
(i) DISABILITY AND RETIREMENT. Unless the Committee shall
determine otherwise at the time of grant of Retention Shares, if (A) a
Participant ceases to be an employee of the Company or a Subsidiary
prior to the end of a Restriction Period, by reason of disability under
the provisions of the Company's or a Subsidiary's long-term disability
plan or retirement under the provisions of the Company's or a
Subsidiary's pension plan either (i) at age 65 or (ii) prior to age 65
at the request of the Company or a Subsidiary, and (B) all Vesting
Conditions have been satisfied, the Retention Shares granted to such
Participant shall immediately vest and all restrictions applicable to
such shares shall lapse. A certificate for such shares shall be
delivered to the Participant in accordance with the provisions of
Section 9(d).
(ii) DEATH. Unless the Committee shall determine otherwise at
the time of grant of Retention Shares, if (A) a Participant ceases to
be an employee of the Company or a Subsidiary prior to the end of a
Restriction Period by reason of death, and (B) all Vesting Conditions
have been satisfied, the Retention Shares granted to such Participant
shall immediately vest in his or her Beneficiary, and all restrictions
applicable to such shares shall lapse. A certificate for such shares
shall be delivered to the Participant's Beneficiary in accordance with
the provisions of Section 9(d).
(iii) ALL OTHER TERMINATIONS. If a Participant ceases to be an
employee of the Company or a Subsidiary prior to the end of a
Restriction Period for any reason other than death, disability or
retirement as provided in Section 9(c)(i) and (ii), the Participant
shall immediately forfeit all Retention Shares then subject to the
restrictions of Section 9(b) in accordance with the provisions thereof,
except that the Committee may, if it finds that the circumstances in
the particular case so warrant, allow a Participant whose employment
has so terminated to retain any or all of the Retention Shares then
subject to the restrictions of Section 9(b) and all restrictions
applicable to such retained shares shall lapse. A certificate for such
retained shares shall be delivered to the Participant in accordance
with the provisions of Section 9(d).
(iv) VESTING CONDITIONS. Unless the Committee shall determine
otherwise at the time of grant of Retention Shares, if a Participant
ceases to be an employee of the Company or a Subsidiary for any reason
prior to the satisfaction of any Vesting Conditions, the Participant
shall immediately forfeit all Retention Shares then subject to the
restrictions of Section 9(b) in accordance with the provisions thereof,
except that the Committee may, if it finds that the circumstances in
the particular case so warrant, allow a Participant whose employment
has so terminated to retain any or all of the Retention Shares then
subject to the restrictions of Section 9(b) and all restrictions
applicable to such retained shares shall lapse. A certificate for such
retained shares shall be delivered to the Participant in accordance
with the provisions of Section 9(d).
(d) PAYMENT OF RETENTION SHARES. At the end of the Restriction Period
and after all Vesting Conditions have been satisfied, or at such earlier time as
provided for in Section 9(c) or as the Committee, in its sole discretion, may
otherwise determine, all restrictions applicable to the Retention Shares shall
lapse, and a stock certificate for a number of shares of Common Stock
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equal to the number of Retention Shares, free of all restrictions, shall be
delivered to the Participant or his or her Beneficiary, as the case may be. If
an amount is payable by a Participant to the Company or a Subsidiary under
applicable withholding tax laws in connection with the lapse of such
restrictions, the Committee, in its sole discretion, may permit the Participant
to make such payment, in whole or in part, by authorizing the Company
to transfer to the Company Retention Shares otherwise deliverable to the
Participant having a fair market value not exceeding the minimum applicable
amount to be paid under such withholding tax laws (based on the minimum
applicable statutory withholding rates for federal and state tax purposes,
including payroll taxes).
(e) ROLLOVER RETENTION SHARES. Rollover Retention Shares may be granted
only in exchange for shares of UPC Retention Stock granted and subject to
restrictions under a UPC Plan and only during the period prior to 90 days after
UPC no longer owns at least 50% of the voting power of all of the shares of the
Company entitled to vote generally in the election of directors. Unless the
Committee shall determine otherwise in a specific case, the Rollover Retention
Shares shall, on the date of exchange, have the same value, as determined by the
Committee, as the shares of UPC surrendered in exchange for such Rollover
Retention Shares.
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10. REGULATORY APPROVALS AND LISTING
The Company shall not be required to issue to an Optionee, Participant or a
Beneficiary, as the case may be, any certificate for any shares of Common Stock
upon exercise of an option or for any Retention Shares granted under the Plan
prior to (i) the obtaining of any approval from any governmental agency which
the Company, in its sole discretion, shall determine to be necessary or
advisable, (ii) the admission of such shares to listing on any stock exchange on
which the Common Stock may then be listed, and (iii) the completion of any
registration or other qualification of such shares under any state or Federal
law or rulings or regulations of any governmental body which the Company, in its
sole discretion, shall determine to be necessary or advisable.
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11. ADJUSTMENT IN EVENT OF CHANGES IN CAPITALIZATION
In the event of a recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation, rights offering, separation,
spin-off, reorganization or liquidation, or any other change in the corporate
structure or shares of the Company, the Board, upon recommendation of the
Committee, may make such equitable adjustments as it may deem appropriate in the
number and kind of shares authorized by the Plan, in the option price of
outstanding Options, and in the number and kind of shares or other securities or
property subject to Options or covered by outstanding Awards.
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12. TERM OF THE PLAN
No Options or Retention Shares shall be granted pursuant to the Plan after
September 27, 2005 but grants of Options and Retention Shares theretofore
granted may extend beyond that date and the terms and conditions of the Plan
shall continue to apply thereto.
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13. TERMINATION OR AMENDMENT OF THE PLAN
The Board may at any time terminate the Plan with respect to any shares of
Common Stock not at that time subject to outstanding Options or Awards, and may
from time to time alter or amend the Plan or any part thereof (including, but
without limiting the generality of the foregoing, any amendment deemed necessary
to ensure that the Company may obtain any approval referred to in Section 10 or
to ensure that the grant of Options or Awards, the exercise of Options or
payment of Retention Shares or any other provision or the Plan complies with
Section 16(b) of the Act), provided that no change with respect to any Options
or Retention Shares theretofore granted may be made which would impair the
rights of an Optionee or Participant without the consent of such Optionee or
Participant and, further, that without the approval of stockholders, no
alteration or amendment may be made which would (i) increase the maximum number
of shares of Common Stock subject to the Plan as set forth in Section 5 (except
by operation of Section 11), (ii) extend the term of the Plan, (iii) change the
class of eligible persons who may receive Options or Awards of Retention Shares
under the Plan or (iv) increase the limitation set forth in Section 5 on the
maximum number of shares that any Participant may receive under the Plan.
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14. LEAVE OF ABSENCE
Unless the Committee shall determine otherwise, a leave of absence other than an
Approved Leave of Absence shall be deemed a termination of employment for
purposes of the Plan. An Approved Leave of Absence shall not be deemed a
termination of employment for purposes of the Plan (except for purposes of
Section 8), but the period of such Leave of Absence shall not be counted toward
satisfaction of any Restriction Period or any holding period described in
Section 6(c).
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15. GENERAL PROVISIONS
(a) Neither the Plan nor the grant of any Option or Award nor any
action by the Company, any Subsidiary or the Committee shall be held or
construed to confer upon any person any right to be continued in the employ of
the Company or a Subsidiary. The Company and each Subsidiary expressly reserve
the right to discharge, without liability but subject to his or her rights under
the Plan, any Optionee or Participant whenever in the sole discretion of the
Company or a Subsidiary, as the case may be, its interest may so require.
(b) All questions pertaining to the construction, regulation, validity
and effect of the Plan shall be determined in accordance with the laws of the
State of Utah, without regard to conflict of laws doctrine.
(c) Notwithstanding any provision herein to the contrary, the
Committee, under terms and conditions as it may prescribe, may permit certain
Optionees (with respect to Non-Qualified Options and Stock Appreciation Rights)
and certain Participants (with respect to Awards of Retention Shares) to make
elections, engage in transactions or take any other action intended to defer the
receipt of compensation for federal income tax purposes with respect to such
Non-Qualified Options, Stock Appreciation Rights or Retention Shares. This
provision shall be effective on and after September 5, 1997.
(d) With respect to any amendment to the Plan which becomes effective
on or after January 21, 1999, if the Company, at any time, desires to engage in
a transaction which is intended to be accounted for as a pooling of interests
under Accounting Principles Board Opinion No. 16 (or any successor thereto), and
if the existence and/or operation of any such amendment would violate Paragraph
47(c) thereof (or any successor thereto), then any such amendment shall (in
whole or in part to the minimum extent necessary to avoid a violation) be deemed
to have no force or effect under law; provided, however, that this subsection
(d) shall apply only if the transaction is otherwise eligible to be accounted
for as a pooling of interests.
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