EXHIBIT 10.2
TESORO PETROLEUM CORPORATION
Amended and Restated
1995 Non-Employee Director Stock Option Plan
1. PURPOSE. This Amended and Restated 1995 Non-Employee Director Stock
Option Plan (the "Plan") of Tesoro Petroleum Corporation, a Delaware
corporation (the "Company"), modified, effective March 15, 2000, to
increase the grant of options to non-employee directors after each
annual meeting of the Company's stockholders from 1,000 shares of
Common Stock to 3,000 shares of Common Stock. The Plan is adopted,
subject to stockholder approval to the extent required by Paragraph 16
hereof, for the benefit of the directors of the Company who at the time
of their service are not employees of the Company or any of its
subsidiaries ("Non-Employee Directors"), and is intended to advance the
interests of the Company by providing the Non-Employee Director with
additional incentive to serve the Company by increasing their
proprietary interest in the success of the Company through the issuance
by the Company of non-qualified stock options. No incentive stock
options will be granted under the Plan.
2. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company (the "Committee").
For the purposes of this Plan, a majority of the members of the
Committee shall constitute a quorum for the transaction of business,
and the vote of a majority of those members present at any meeting
shall decide any question brought before that meeting. In addition, the
Committee may take any action otherwise proper under the Plan by the
affirmative vote, taken without a meeting, of a majority of its
members. No member of the Committee shall be liable for any act or
omission of any other member of the Committee or for any act or
omission on his own part, including but not limited to the exercise of
any power or discretion given to him under the Plan, except those
resulting from his own gross negligence or willful misconduct. All
question of interpretation and application of the Plan, or as to
non-qualified options granted hereunder (the "Options"), shall be
subject to the determination, which shall be final and binding, of a
majority of the whole Committee. Notwithstanding the above, the
selection of Non-Employee Directors to whom Options are to be granted,
the number of shares subject to any Option, the exercise price of any
Option and the term of any Option shall be as hereinafter provided and
the Committee shall have no discretion as to such matters.
3. OPTION SHARES. The stock subject to the Options and other provisions of
the Plan shall be shares of the Company's Common Stock, $.16-2/3 par
value (or such other par value as may be designated by act of the
Company's stockholders) (the "Common Stock"). In addition, for purposes
of the Plan and
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the Options, the term Common Stock shall also be deemed to include any
rights to purchase ("Rights") the Participating Preferred Stock, no par
value, of the Company that may then be trading with the Common Stock as
provided in the Rights Agreement between the Company and Chemical Bank,
N.A., relating to the Rights. The total amount of the Common Stock with
respect to which Options may be granted shall not exceed in the
aggregate 150,000 shares; provided, that the class and aggregate number
of shares which may be subject to the options granted hereunder shall
be subject to adjustment in accordance with the provisions of Paragraph
12 hereof. Such shares may be treasury shares or authorized but
unissued shares.
In the event that any outstanding Option for any reason shall expire or
terminate by reason of the death of the optionee or the fact that the
optionee ceases to be a director, the surrender of any such Option, or
any other cause, the shares of Common Stock allocable to the
unexercised portion of such Option may again be subject to an Option
under the Plan.
4. GRANT OF OPTIONS. Subject to the provisions of Paragraph 16 and the
availability under the Plan of a sufficient number of shares of Common
Stock that may be issuable upon the exercise of outstanding Options,
there shall be granted under the Plan to each Non-Employee Director as
of February 23, 1995, and any director elected after such date, an
Option to purchase 5,000 shares of Common Stock at a price per share of
Common Stock (the "Option Price") equal to the fair market value of the
Common Stock (as defined in Paragraph 7 hereof) as of the date of
grant. In addition, after March 15, 2000, each Non-Employee Director,
while this Plan is in effect and shares are available for the grant of
Options hereunder, shall be granted on the next day after each annual
meeting of the Company's stockholders but no later than each June 1, if
no annual meeting is held, an Option to purchase 3,000 shares of the
Common Stock at an Option Price equal to the fair market value of the
Common Stock as of such date, provided that if such date is not a date
on which a closing price for the Common Stock is reported on the New
York Stock Exchange, then the Option Price shall be the fair market
value as of the first preceding date for which such a closing price is
reported.
5. DURATION OF OPTIONS. Each Option granted under the Plan shall be
exercisable for a term of ten years from the date of grant, subject to
earlier termination as provided in Paragraph 9 hereof.
6. AMOUNT EXERCISABLE. Each Option may be exercised in whole or in part at
any time commencing six months after the grant thereof.
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7. EXERCISE OF OPTIONS. An optionee may exercise such optionee's Option by
delivering to the Company a written notice stating (i) that such
optionee wishes to exercise such Option on the date such notice is so
delivered, (ii) the number of shares of stock with respect to which
such Option is to be exercised and (iii) the address to which the
certificate representing such shares of stock should be mailed. In
order to be effective, such written notice shall be accompanied by (i)
payment of the Option Price of such shares of stock and (ii) payment of
an amount of money necessary to satisfy any withholding tax liability
that may result from the exercise of such Option. Each such payment
shall be made by cash or check made payable to the order of the Company
in U.S. dollars.
If, at the time of receipt by the Company of such written notice, (i)
the Company has unrestricted surplus in an amount not less than the
Option Price of such shares of stock, (ii) all accrued cumulative
preferential dividends and other current preferential dividends on all
outstanding shares of preferred stock of the Company have been fully
paid, (iii) the acquisition by the Company of its own shares of stock
for the purpose of enabling such optionee to exercise such Option is
otherwise permitted by applicable law and without any vote or consent
of any stockholder of the Company, and (iv) there shall have been
adopted, and there shall be in full force and effect, a resolution of
the Board of Directors of the Company authorizing the acquisition by
the Company of its own shares of stock for such purpose, then such
optionee may deliver to the Company, in payment of the Option Price of
the shares of stock with respect to which such Option is exercised, (x)
certificates registered in the name of such optionee that represent a
number of shares of stock legally and beneficially owned by such
optionee (free of all liens, claims and encumbrances of every kind) and
having a fair market value on the date of receipt by the Company of
such written notice that is not greater than the Option Price of the
shares of stock with respect to which such Option is to be exercised,
such certificates to be accompanied by stock powers duly endorsed in
blank by the record holder of the shares of stock represented by such
certificates, with the signature of such record holder guaranteed by a
national banking association (or, in lieu of such certificates, other
arrangements for the transfer of such shares to the Company which are
satisfactory to the Company) and (y) if the Option Price of the shares
of stock with respect to which such Options are to be exercised exceeds
such fair market value, a cashier's check drawn on a national banking
association and payable to the order of the Company in an amount, in
U.S. dollars, equal to the amount of such excess plus the amount of
money necessary to satisfy any withholding tax liability that may
result from the exercise of such Option. Notwithstanding the provisions
of the immediately preceding sentence, the Committee, in its sole
discretion, may refuse to accept shares of stock in payment of the
Option Price of the shares of stock with respect to which such Option
is to be exercised and, in that event, any certificates representing
shares of stock that were received by the Company with such written
notice shall be returned to such optionee, together with notice by the
Company to such optionee of the refusal of the Committee to accept such
shares of stock. The Company, at its option, upon the request of the
optionee, may retain shares of Common Stock which would otherwise be
issued upon exercise of an Option to satisfy any withholding tax
liability that may result from the exercise of such Option, which
shares shall be valued for such purpose at their then fair market
value. If, at the expiration of seven business days after the delivery
to such optionee of such written notice from the Company, such optionee
shall not have delivered to the Company a check payable to the order of
the Company in an amount, in U.S. dollars, equal to the Option Price of
the shares of stock with respect to which such
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Option is to be exercised, such written notice from the optionee to the
Company shall be ineffective to exercise such Option.
As promptly as practicable after the receipt by the Company of (i) such
written notice from the optionee, (ii) payment, in the form required by
the foregoing provisions of this Paragraph 7, of the Option Price of
the shares of stock with respect to which such Option is to be
exercised, and (iii) payment, in the form required by the foregoing
provisions of this Paragraph 7, of an amount necessary to satisfy any
withholding tax liability that may result from the exercise of such
Option, a certificate representing the number of shares of stock with
respect to which such Option has been so exercised, reduced, to the
extent applicable by the number of shares retained by the Company to
pay any required withholding tax such certificate to be registered in
the name of such optionee, provided that such delivery shall be
considered to have been made when such certificate shall have been
mailed, postage prepaid, to such optionee at the address specified for
such purpose in such written notice from the optionee to the Company.
For purposes of this Paragraph 7, the "fair market value" of a share of
stock as of any particular date shall mean the closing price of a share
of stock on that date as reported in the New York Stock Exchange
Composite Transactions Listing, provided that if no closing price for
the stock was so reported on that date or if, in the discretion of the
Committee, another means of determining the fair market value of a
share of stock at such date shall be necessary or advisable, the
Committee may provide for another means for determining such fair
market value.
8. TRANSFERABILITY OF OPTIONS. Options shall not be transferable by the
optionee otherwise than by will or under the laws of descent and
distribution, and shall be exercisable, during his lifetime, only by
him.
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9. TERMINATION. Except as may be otherwise expressly provided herein, each
Option, to the extent it shall not previously have been exercised,
shall terminate on the earlier of the following:
(a) On August 22, 1995, in the event that approval of the Plan by
the stockholders of the Company is required by Paragraph 16
hereof and shall not have been obtained by such date;
(b) Except as may be otherwise expressly provided herein, all
Options shall terminate on the earlier of the date of the
expiration of the Option or the date that is three months
after the optionee ceases to be a member of the Company's
Board of Directors, for any reason other than the death,
permanent disability, or retirement of the optionee, during
which period the optionee shall be entitled to exercise the
Option in respect of the number of shares that the optionee
would have been entitled to purchase had the optionee
exercised the Option on the date the optionee ceased to be
a member of the Company's Board of Directors.
In the event the optionee ceases to be a member of the
Company's Board of Directors because of his death, permanent
disability or retirement from the Board of Directors of the
Company, before the date of expiration of his Option, such
Option shall continue fully in effect, including provisions
providing for subsequent vesting of such Option, and shall
terminate on the date of expiration of the Option
notwithstanding any provision to the contrary in the
optionee's option agreement. After the death of the optionee,
his executors, administrators or any person or persons to whom
his Option may be transferred by will or by the laws of
descent and distribution, shall have the right, at any time
prior to the termination of the Option to exercise the Option,
in respect to the number of shares that the optionee would
have been entitled to exercise if he were still alive.
For purposes of this Paragraph 9, an optionee will be treated
as having retired from the Company's Board of Directors if the
optionee shall, at the time the optionee ceases to be a member
of the Board of Directors of the Company, have served for at
least an aggregate of three full years (excluding service
while a full-time employee of the Company).
(c) Ten years after the date of grant of such Option.
10. REQUIREMENTS OF LAW. The Company shall not be required to sell or issue
any shares under any Option if the issuance of such shares shall
constitute a violation by the optionee or the Company of any provisions
of any law or regulation of any governmental authority. Each Option
granted under the Plan
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shall be subject to the requirements that, if at any time the Board of
Directors of the Company or the Committee shall determine that the
listing, registration or qualification of the shares subject thereto
upon any securities exchange or under any state or federal law of the
United States or of any other country or governmental subdivision
thereof, or the consent or approval of any governmental regulatory
body, or investment or other representations, are necessary or
desirable in connection with the issue or purchase of shares subject
thereto, no such Option may be exercised in whole or in part unless
such listing, registration, qualification, consent, approval or
representation shall have been effected or obtained free of any
conditions not acceptable to the Board of Directors. If required at any
time by the Board of Directors or the Committee, an Option may not be
exercised until the optionee has delivered an investment letter to the
Company. In addition, specifically in connection with the Securities
Act of 1933 (as now in effect or hereafter amended), upon exercise of
any Option, the Company shall not be required to issue the underlying
shares unless the Committee has received evidence satisfactory to it to
the effect that the holder of such Option will not transfer such shares
except pursuant to a registration statement in effect under such Act or
unless an opinion of counsel satisfactory to the Company has been
received by the Company to the effect that such registration is not
required. Any determination in this connection by the Committee shall
be final, binding and conclusive. In the event the shares issuable on
exercise of an Option are not registered under the Securities Act of
1933, the Company may imprint on the certificate for such shares the
following legend or any other legend which counsel for the Company
considers necessary or advisable to comply with the Securities Act of
1933.
"The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933 or under the
securities laws of any state and may not be sold or
transferred except upon such registration or upon receipt by
the Corporation of an opinion of counsel satisfactory, in form
and substance to the Corporation, that registration is not
required for such sale or transfer."
The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Securities Act of 1933 (as
now in effect or as hereafter amended) and, in the event any shares are
so registered, the Company may remove any legend on certificates
representing such shares. The Company shall not be obligated to take
any other affirmative action in order to cause the exercise of an
Option or the issuance of shares pursuant thereto to comply with any
law or regulation of any governmental authority; provided however,
that, if the Company shall decide to register Common Stock, the Company
will use reasonable efforts to cause the Common Stock provided for in
Paragraph 3 hereof to be so registered.
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11. NO RIGHTS AS STOCKHOLDER. No optionee shall have rights as a
stockholder with respect to shares covered by his Option until the date
of issuance of a stock certificate for such shares; and, except as
otherwise provided in Paragraph 16 hereof, no adjustment for dividends,
or otherwise, shall be made if the record date therefor is prior to the
date of issuance of such certificate.
12. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of
the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital adjustment of, or the payment of a dividend in capital
stock or other equity securities of the Company on, its Common Stock,
or other increase or reduction of the number of shares of the Common
Stock outstanding without receiving consideration therefor in money,
services, or property, or the reclassification of its Common Stock, in
whole or in part, into other equity securities of the Company, then (a)
the number, class and per share price of shares of stock subject to
outstanding Options hereunder shall be appropriately adjusted (or in
the case of the issuance of other equity securities as a dividend on,
or in a reclassification of, the Common Stock, the Options shall extend
to such other securities) in such a manner as to entitle an optionee to
receive, upon exercise of an Option, for the same aggregate cash
compensation, the same total number and class or classes of shares (or
in the case of a dividend of, or reclassification into, other equity
securities, such other securities) he would have held after such
adjustment if he had exercised his Option in full immediately prior to
the event requiring the adjustment, or, if applicable, the record date
for determining shareholders to be affected by such adjustment; and (b)
the number and class of shares then reserved for issuance under the
Plan (or in the case of a dividend of, or reclassification into, other
equity securities, such other securities) shall be adjusted by
substituting for the total number and class of shares of stock then
received, the number and class or classes of shares of stock (or in the
case of a dividend of, or reclassification into, other equity
securities, such other securities) that would have been received by the
owner of an equal number of outstanding shares of Common Stock as the
result of the event requiring the adjustment. Comparable rights shall
accrue to each optionee
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in the event of successive subdivisions, consolidations, capital
adjustment, dividends or reclassifications of the character described
above.
If the Company shall distribute to all holders of its shares of Common
Stock (including any such distribution made to non-dissenting
shareholders in connection with a consolidation or merger in which the
Company is the surviving corporation and in which holders of shares of
Common Stock continue to hold shares of Common Stock after such merger
or consolidation) evidences of indebtedness or cash or other assets
(other than cash dividends payable out of consolidated retained
earnings not in excess of, in any one year period the greater of (a)
$1.00 per share of Common Stock or (b) two times the aggregate amount
of dividends per share paid during the preceding calendar year and
dividends or distributions payable in shares of Common Stock or other
equity securities of the Company described in the immediately preceding
paragraph), then in each case the Option Price shall be adjusted by
reducing the Option Price in effect immediately prior to the record
date for the determination of stockholders entitled to receive such
distribution by the fair market value, as determined in good faith by
the Board of Directors of the Company (whose determination shall be of
an Option) of the portion of the evidence of indebtedness or cash or
other assets so to be distributed applicable to one share of Common
Stock; provided that in no event shall the Option Price be less than
the par value of a share of Common Stock. Such adjustment shall be made
whenever any such distribution is made, and shall become effective on
the date of the distribution retroactive to the record date for the
determination of the stockholders entitled to receive such
distribution. Comparable adjustments shall be made in the event of
successive distributions of the character described above.
If the Company shall make a tender offer for, or grant to all of its
holders of its shares of Common Stock the right to require the Company
or any subsidiary of the Company to acquire from such stockholders
shares, of Common Stock at a price in excess of the Current Market
Price (a "Put Right") or the Company shall grant to all of its holders
of its shares of Common Stock the right to acquire shares of Common
Stock for less than the Current Market Price (a "Purchase Right") then,
in the case of a Put Right, the Option Price shall
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be adjusted by multiplying the Option Price in effect immediately prior
to the record date for the determination of stockholders entitled to
receive such Put Right by a fraction, the numerator of which shall be
the number of shares of Common Stock then outstanding minus the number
of shares of Common Stock which could be purchased at the Current
Market Price for the aggregate amount which would be paid if all Put
Rights are exercised and the denominator of which is the number of
shares of Common Stock which would be outstanding if all Put Rights are
exercised; and, in the case of a Purchase Right, the Option Price shall
be adjusted by multiplying the Option Price in effect immediately prior
to the record date for the determination of the stockholders entitled
to receive such Purchase Right by a fraction, the numerator of which
shall be the number of shares of Common Stock then outstanding plus the
number of shares of Common Stock which could be purchased at the
Current Market Price for the aggregate amount which would be paid if
all Purchase Rights are exercised and the denominator of which is the
number of shares of Common Stock which would be outstanding if all
Purchase Rights are exercised. In addition, the number of shares
subject to the Option shall be increased by multiplying the number of
shares then subject to the Option by a fraction which is the inverse of
the fraction used to adjust the Option Price. Notwithstanding the
foregoing if any such Put Rights or Purchase Rights shall terminate
without being exercised, the Option Price and number of shares subject
to Option shall be appropriately readjusted to reflect the Option Price
and number of shares subject to the Option which would have been in
effect if such unexercised Rights had never existed. Comparable
adjustments shall be made in the event of successive transactions of
the character described above.
After the merger of one or more corporations into the Company, after
any consolidation of the Company and one or more corporations, or after
any other corporate transaction described in Section 425(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), in which the
Company shall be the surviving corporation, each optionee, at no
additional cost, shall be entitled to receive, upon any exercise of his
Option, in lieu of the number of shares as to which the Option shall
then be so exercised, the number and class of shares of stock or other
equity securities to which the optionee would have been entitled
pursuant to the terms of the agreement of merger or consolidation if at
the time of such merger or consolidation such optionee had been a
holder of a number of shares of Common Stock equal to the number of
shares as to which the Option shall then be so exercised and, if as a
result of such merger, consolidation or other transaction, the holders
of Common Stock are not entitled to receive any shares of Common Stock
pursuant to the terms thereof, each optionee, at no additional cost
shall be entitled to receive, upon exercise of his Option, such other
assets and property, including cash, to which he would have been
entitled if at the time of such merger, consolidation or other
transaction he had been the holder of the number of shares of Common
Stock equal to the number of shares as to which the Option shall then
be so exercised. Comparable rights shall accrue to each optionee in the
event of successive mergers or consolidations of the character
described above.
After a merger of the Company into one or more corporations, after a
consolidation of the Company and one or more corporations, or after any
other corporate transaction described in Section 425(a) of the Code in
which the
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Company is not the surviving corporation, each optionee shall, at no
additional cost, be entitled at the option of the surviving corporation
(i) to have his then existing Option assumed or have a new option
substituted for the existing Option by the surviving corporation to the
transaction which is then employing him, or a parent or subsidiary of
such corporation, on a basis where the excess of the aggregate fair
market value of the shares subject to the option immediately after the
substitution or assumption over the aggregate Option Price of such
option is equal to the excess of the aggregate fair market value of all
shares subject to the option immediately before such substitution or
assumption over the aggregate Option Price of such shares, provided
that the shares subject to the new option must be traded on the New
York or American Stock Exchange or quoted on the National Association
of Securities Dealers Automated Quotation System, or (ii) to receive,
upon any exercise of his Option, in lieu of the number of shares as to
which the Option shall then be so exercised, the securities, property
and other assets, including cash, to which the optionee would have been
entitled pursuant to the terms of the agreement of merger or
consolidation or the agreement giving rise to the other corporate
transaction if at the time of such merger, consolidation or other
transaction such optionee had been the holder of the number of shares
of Common Stock equal to the number of shares as to which the Option
shall then be so exercised.
If a corporate transaction described in Section 425(a) of the Code
which involves the Company is to take place and there is to be no
surviving corporation while an Option remains in whole or in part
unexercised, it shall be canceled by the Board of Directors as of the
effective date of any such corporate transaction but before that date
each optionee shall be provided with a notice of such cancellation and
each optionee shall have the right to exercise such Option in full
(without regard to any limitations set forth in or imposed pursuant to
Paragraph 9 of this Plan) to the extent it is then still unexercised
during a 30-day period preceding the effective date of such corporate
transaction.
For purposes of this Paragraph 12, Current Market Price per share of
Common Stock shall mean the last reported price for the Common Stock in
the New York Stock Exchange Composite Transaction listing on the
trading day immediately preceding the first trading day on which, as a
result of the establishment of a record date or otherwise, the trading
price reflects that an acquiror of Common Stock in the public market
will not participate in or receive the payment of any applicable
dividend or distribution.
Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of
stock of any class, for cash or property, or for labor or services
either upon direct sale or upon the
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exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into
such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of
shares of Common Stock then subject to outstanding Options.
13. AMENDMENT OR TERMINATION OF PLAN. The Board of Directors may modify,
revise or terminate this Plan at any time and from time to time;
provided, however, that without the further approval of the holders of
at least a majority of the outstanding shares of voting stock, or if
the provisions of the corporate charter, by-laws or applicable state
law prescribes a greater degree of stockholder approval for this
action, without the degree of stockholder approval thus required, the
Board of Directors may not (a) change the aggregate number of shares
which may be issued under Options pursuant to the provisions of the
Plan; (b) reduce the Option Price permitted for the options; or (c)
extend the term during which an option may be exercised or the
termination date of this Plan unless, in each such case, the Board of
Directors of the Company shall have obtained an opinion of legal
counsel to the effect that stockholder approval of the amendment is not
required (i) by law, (ii) by the rules and regulations of, or any
agreement with, the New York Stock Exchange or (iii) in order to make
available to the optionee with respect to any option granted under the
Plan, the benefits of Rule 16b-3 of the Rules and Regulations under the
Securities Exchange Act of 1934, or any similar or successor rule. In
addition, the terms of this Plan stating who may participate in the
Plan, the number of shares of stock subject to an option which may be
granted to any participant, the determination of the Option Price, the
time for vesting and the term of an Option may not be amended more
often than once every six months.
14. WRITTEN AGREEMENT. Each Option granted hereunder shall be embodied in a
written option agreement, which shall be subject to the terms and
conditions prescribed above, and shall be signed by the optionee and by
the appropriate officer of the Company for and in the name and on
behalf of the Company. Such an option agreement shall contain such
other provisions as the Committee in its discretion shall deem
advisable.
15. INDEMNIFICATION OF COMMITTEE. The Company shall indemnify each present
and future member of the Committee against, and each member of the
Committee shall be entitled without further act on his part to
indemnity from the Company for, all expenses (including the amount of
judgments and the amount of approved settlements made with a view to
the curtailment of costs of litigation, other than amounts paid to the
Company itself) reasonably incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be
involved by reason of his being or having been a member of the
Committee,
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whether or not he continues to be such member of the Committee at the
time of incurring such expenses; provided, however, that such indemnity
shall not include any expenses incurred by any such member of the
Committee (a) in respect of matters as to which he shall be finally
adjudged in any such action, suit or proceeding to have been guilty of
gross negligence or willful misconduct in the performance of his duty
as such member of the Committee, or (b) in respect of any matter in
which any settlement is effected, to an amount in excess of the amount
approved by the Company on the advice of its legal counsel; and
provided further, that no right of indemnification under the provisions
set forth herein shall be available to or enforceable by any such
member of the Committee unless, within 60 days after institution of any
such action, suit or proceeding, he shall have offered the Company, in
writing, the opportunity to handle and defend same at its own expense.
The foregoing right of indemnification shall inure to the benefit of
the heirs, executors or administrators of each such member of the
Committee and shall be in addition to all other rights to which such
member of the Committee may be entitled to as a matter of law,
contract, or otherwise. Nothing in this Section 15, shall be construed
to limit or otherwise affect any right to indemnification, or payment
of expense, or any provisions limiting the liability of any officer or
director of the Company or any member of the Committee, provided by
law, the Certificate of Incorporation of the Company or otherwise.
16. EFFECTIVE DATE OF PLAN. The Plan shall become effective and shall be
deemed to have been adopted on February 23, 1995, if within one year of
that date either (i) it shall have been approved by the holders of at
least a majority of the outstanding shares of voting stock of the
Company or if the provisions of the corporate charter, by-laws or
applicable state law prescribes a greater degree of stockholder
approval for this action, the approval by the holders of that
percentage, at a meeting of stockholders or (ii) the Committee shall
have received an opinion of legal counsel to the effect that such
approval is not required (a) by law, (b) by the rules and regulations
of, or any agreement with, the New York Stock Exchange or (c) in order
to make available to the optionee with respect to the Option the
benefits of Rule 16b-3 of the Rules and Regulations under the
Securities Exchange Act of 1934. No Option shall be granted pursuant to
the Plan after February 23, 2005.