EXHIBIT 10.28
ULTRAMAR DIAMOND SHAMROCK CORPORATION
AMENDED AND RESTATED 1996 LONG TERM INCENTIVE PLAN
ULTRAMAR DIAMOND SHAMROCK CORPORATION
AMENDED AND RESTATED 1996 LONG-TERM INCENTIVE PLAN
1. Purposes: Definitions. The purposes of the Plan are to further the
growth, development and financial success of the Company by providing
incentives to those officers and other key employees who have the
capacity for contributing in substantial measure toward the growth and
profitability of the Company and to assist the Company in attracting and
retaining employees with the ability to make such contributions. To
accomplish such purposes, the Plan provides that the Company may grant
Nonqualified Stock Options, Incentive Stock Options, and Restricted
Shares.
Whenever the following terms are used in the Plan, they shall have the
meaning specified below unless the context clearly indicates to the
contrary.
"Board" shall mean the Board of Directors of the Company.
"Bonus Award" shall mean a cash or Share-based award granted pursuant to
Section 7.1.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" shall mean the Compensation-Committee of the Board, appointed
as provided in Section 2.1.
"Company" shall mean Ultramar Diamond Shamrock Corporation, a Delaware
corporation, and any successor corporation.
"Effective Date" shall have the meaning set forth in Section 9.1.
"Employee" shall mean any employee (including any officer whether or not
a director) of the Company, or of any corporation which is then a
Subsidiary.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" of a Share as of a given date shall mean (a) the
closing sale price per Share as reported on the principal exchange on
which Shares are then trading, if any, on such date, or if there are no
sales on such date, on the next preceding trading day during which a sale
occurred, or (b) if clause (a) does not apply, the fair market value of
the Share as determined by the Committee from time to time in good faith.
"Incentive Stock Option" shall mean an Option intended to be and
designated as an "incentive stock option" within the meaning of section
422 of the Code.
"Nonqualified Stock Option" shall mean an Option that is not an Incentive
Stock Option.
"Option" shall mean an option to purchase Shares (including Restricted
Shares, if the Committee so determines) granted pursuant to Section 5.1.
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"Option Agreement" shall mean the written agreement pursuant to which an
Option is awarded.
"Optionee" shall mean an Employee to whom an Option has been granted
pursuant to the Plan.
"Participant" shall mean an Employee to whom an award is granted pursuant
to the Plan.
"Performance Criteria" shall have the meaning set forth in Section 8.
"Plan" shall mean this Ultramar Diamond Shamrock Corporation Amended and
Restated 1996 Long Term Incentive Plan, as hereinafter amended from time
to time.
"Restricted Shares" shall mean shares which are awarded to a Participant
that are subject to the restrictions described in Section 6.1.
"Rule 16b-3" shall mean Rule 16b-3 adopted by the Securities and Exchange
Commission under the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Share" shall mean a share of the Company's Common Stock, $.01 par value.
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company, if each such corporation (other
than the last corporation in the unbroken chain), or if each group of
commonly controlled corporations, then owns fifty percent (50%) or more
of the total combined voting power in one of the other corporations in
such chain.
2. Administration.
2.1 Compensation Committee. The Plan shall be administered by the
Committee, which shall consist of two or more individuals
appointed by the Board and holding office at the pleasure of the
Board. All Committee members shall be members of the Board and
must be "non-employee directors," as such term is described in
Rule 16b-3, if and as such Rule is in effect, and "outside
directors" within the meaning of Section 162(m) of the Code.
Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. The Board shall
fill vacancies in the Committee.
2.2 Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of the Plan in
accordance with its terms and provisions. The Committee shall have
the power to interpret the Plan and to adopt such rules for the
administration, interpretation, and application of the Plan as are
consistent therewith
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and to interpret, amend or revoke any such rules. All actions
taken and all interpretations and determinations made by the
Committee (and by the Company's executive officers in furtherance
of such interpretations and determinations) shall be binding upon
all affected persons. In addition to the authority otherwise
prescribed in the Plan, the Committee shall have the authority in
it sole discretion to prescribe such limitations, restrictions,
and conditions upon, provisions for vesting and acceleration of,
provisions prescribing the nature and amount of legal
consideration to be received upon the grant or exercise of, any
award made under the Plan and all other terms and conditions of
any such award as the Committee deems appropriate, provided that
none of the foregoing conflicts with any of the express terms or
limitations of the Plan and that the foregoing are set forth in
the instrument granting any such award or in the rules referred to
elsewhere in this Section 2.2.
2.3 Majority Rule. The Committee shall act by a majority of its
members in office. The Committee may act either by vote at a
telephonic or other meeting or by a memorandum or other written
instrument signed by a majority of the Committee.
2.4 Compensation: Professional Assistance: Good Faith Actions. Members
of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All
expenses and liabilities incurred by members of the Committee in
connection with the administration of the Plan shall be borne by
the Company. The Committee may, with the approval of Board, employ
attorneys, consultants, accountants, appraisers, or other persons.
The Committee, the Company and its officers and directors shall be
entitled to rely upon the advice, opinions or valuations of any
such persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in
good faith with respect to the Plan or the awards hereunder, and
all members of the Committee shall be fully protected by the
Company in respect to any such action, determination or
interpretation.
3. Shares Subject To The Plan.
3.1 Shares Subject to the Plan. Subject to adjustment pursuant to
Section 3.3. the number of Shares that may be the subject of or
related to awards under this Plan is 11,000.000. Such shares may
be treasury shares or shares of original issue or a combination of
the foregoing. In the event that (a) any Participant delivers
Shares (i) to pay the exercise price of an Option or any other
award granted hereunder, or (ii) in satisfaction of any tax
withholding requirement or (b) any other payment made or benefit
realized under the Plan is satisfied by the transfer or
relinquishment of Shares, the number of Shares available for
awards under the Plan shall be increased by the number of Shares
so surrendered, paid or relinquished. In the event that any award
under the Plan expires, terminates or is canceled for any reason
whatsoever without the Participant having received any benefit
therefrom, the Shares covered by such award shall again become
available for future awards under the Plan. For purposes of the
foregoing sentence, a Participant shall not be deemed to have
received any
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"benefit" in the case of forfeited Restricted Shares by reason of having
enjoyed voting rights and dividend rights prior to the date of
forfeiture.
3.2 Limitations. Subject to adjustment pursuant to Section 3.3.
(i) The maximum number of Shares that may be the subject of
Options under the Plan to any Participant shall not, in the
aggregate, exceed 600,000 per year;
(ii) No more than twenty percent (20%) of the maximum number of
Shares available for award under this Plan shall be granted
to Participants as Restricted Shares or Share-based Bonus
Awards, and the maximum number of Restricted Shares and
Share-based Bonus Awards granted under the Plan to any
Participant shall not exceed 200,000 Shares per year.
(iii) The number of Shares issued or transferred as Restricted
Shares that become nonforfeitable solely contingent upon
the Participant attaining a certain length of service with
the Company shall not in the aggregate exceed 400,000
Shares; and;
(iv) The aggregate number of Shares actually issued or
transferred by the Company upon the exercise of Incentive
Stock Options shall not exceed the total number of Shares
specified in Section 3.1.
3.3 Changes in Company's Shares. In the event of any stock dividend,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares,
warrants or rights offering to purchase Shares at a price substantially
below fair market value, or other similar corporate event that affects
the Shares or other awards granted or made available for issuance under
the Plan such that an adjustment is required in order to preserve the
benefits or potential benefits intended to be made available under this
Plan, then the Committee shall in such manner as the Committee may be
equitable, adjust any or all of (a) the number and kind of shares which
thereafter may be awarded or optioned and sold or made the subject of
other awards granted under the Plan in the aggregate or to any
Participant, (b) the number and kind of shares subject to outstanding
Options and other awards, and (c) the grant, exercise or conversion price
with respect to any of the foregoing; provided, however, that the number
of Shares subject to any Option or other award shall always be a whole
number.
Notwithstanding the above, in the event of any of the following:
A. the Company is merged or consolidated with another
corporation or entity and, in connection therewith,
consideration is received by shareholders of the Company in
a form other than stock or other equity interests of the
surviving entity;
B. all or substantially all of the assets of the Company are
acquired by another person.
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C. the reorganization or liquidation of the Company; or
D. the Company shall enter into a written agreement to undergo
an event described in clauses A, B, or C above.
then the Committee may, in its discretion and upon at least ten
days advance notice to the affected persons, cancel any
outstanding Options and/or other awards and pay to the holders
thereof, in cash or stock, or any combination thereof, the value
of such Options or awards based upon the price per Share received
or to be received by other stockholders of the Company in the
event. The Committee may vary the terms of this Section 3.3 in any
particular Option or other award agreement.
4. Eligibility.
Any Employee who is an officer or who is designated by the Committee as a
key Employee shall be eligible to receive awards under this Plan. In
general, an Employee may be designated as a key Employee if such Employee
is responsible for or contributes to the management, growth, and/or
profitability of the business of the Company and/or a Subsidiary.
5. Stock Options.
5.1 Grant. Subject to the provisions of the Plan, the Committee shall
have the sole and complete authority to determine the eligible
Employees to whom Options shall be granted the number of Shares to
be covered by each Option, the exercise price therefor and the
terms and conditions applicable to the exercise of the Option. The
Committee shall have the authority to grant Incentive Stock
Options. Nonqualified Stock Options, or both. In the case of
Incentive Stock Options, the terms and conditions of such grants
shall be subject to and comply with Section 422 of the Code and
any rules or regulations promulgated thereunder.
5.2 Terms. Options shall be granted only pursuant to a written Option
Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such
terms and conditions as the Committee shall determine, consistent
with the Plan, including the following:
(a) Price. The exercise price for the Shares subject to an
Option, or the manner in which such exercise price is to be
determined, shall be determined by the Committee, provided
that, the exercise price per Share shall not be less than
100% of the Fair Market Value of a Share as of the date the
Option is granted.
(b) Term. Options shall be for such term as the Committee shall
determine, provided that no Option shall be exercisable
after the expiration of ten years from the date it is
granted.
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(c) Vesting. Options shall be exercisable in such installments
(which need not be equal) and at such times as may be
designated by the Committee and set forth in the Option
Agreement. To the extent not exercised, installments shall
accumulate and may be exercised, in whole or in part, at
any time after becoming exercisable, but not later than the
date the Option expires. The Committee may accelerate the
exercisability of any Option or portion thereof at any
time. Notwithstanding the foregoing, the Committee may, in
its sole discretion, provide in the Option Agreement that
all or a part of the Shares received by an Optionee upon
the exercise of a Nonqualified Stock Option shall be
Restricted Shares subject to any or all of the restrictions
or conditions prescribed pursuant to Section 6.2(b).
(d) Incentive Stock Option Grants to 10% Stockholders.
Notwithstanding anything to the contrary in this Section 5,
if an Incentive Stock Option is granted to a Participant
who owns stock representing more than ten percent of the
voting power of all classes of stock of the Company or of a
Subsidiary, the term of the Option shall not exceed five
years from the date of grant of such Option and the
exercise price shall be at least 110 percent of the Fair
Market Value (on the date of grant) of the Shares subject
to the Option.
(e) $100,000 Per Year Limitation for Incentive Stock Options.
To the extent the aggregate Fair Market Value (determined
as of the date of grant) of Shares for which Incentive
Stock Options are exercisable for the first time by any
Participant during any calendar year (under all plans of
the Company) exceeds $100,000, such excess Incentive Stock
Options shall be treated as Nonqualified Stock Options.
5.3 Method of Exercise. The exercise of an Option shall be made only
by a written notice delivered in person or by first class mail to
the Secretary of the Company at the Company's principal executive
office, or by such other method approved by the Committee. Any
such notice shall specify the number of Shares to be purchased and
be accompanied by full payment therefor and shall otherwise be in
accordance with the Option Agreement pursuant to which the Option
was granted. The purchase price for any Shares purchased pursuant
to the exercise of an Option shall be paid in full upon such
exercise (i) in cash, (ii) by check, (iii) at the discretion of
the Committee and upon such terms and conditions as the Committee
shall approve, (A) by transferring Shares to the Company
(including by means of attestation of ownership of a sufficient
number of Shares in lieu of actual delivery of such Shares to the
Company); provided, however, that such Shares are not subject to
any pledge or other security interest and have either been held by
the Optionee for at least six months, previously acquired by the
Optionee on the open market or meet such other requirements as the
Committee may determine necessary in order to avoid an accounting
earnings charge in respect of the Option, or (B) by exercising
pursuant to a "cashless exercise" procedure, or (iv) any
combination thereof. Any Shares transferred to the Company, as
payment of the purchase price under an Option, shall be valued at
their Fair Market Value on the date of exercise of such Option. If
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requested by the Committee, the Optionee shall deliver the Option
Agreement evidencing the Option to the Secretary of the Company
who shall endorse thereon a notation of such exercise and return
such Option Agreement to the Optionee. Not less than one hundred
(100) Shares may be purchased at any time upon the exercise of an
Option unless the number of Shares so purchased constitutes the
total number of Shares then purchasable under the Option or the
Committee determines otherwise, in its sole discretion.
5.4 Reload Options. The Committee may provide for the grant to any
Optionee of additional Options ("Reload Options") upon the
exercise of Option, including Reload Options, through the delivery
of Shares; provided, however, that (i) Reload Options may be
granted only with respect to the same number of Shares as were
surrendered to exercise the Options, (ii) the exercise price per
Share of the Reload Options shall be not less than 100% of the
Fair Market Value of a Share as of the date the Reload Options are
granted, and (iii) the Reload Options shall not be exercisable
after the expiration of the terms of the Options, the exercise of
which resulted in the grant of the Reload Options.
6. Restricted Shares.
6.1 Grants. Subject to the provisions of the Plan, the Committee shall
have the sole and complete authority to determine the eligible
Employees to whom, and the time or times at which, grants of
Restricted Shares will be made, the number of Restricted Shares to
be awarded, the price (if any) to be paid by the recipient of
Restricted Shares, the time or times within which such awards may
be subject to forfeiture, and all other conditions of the awards.
Awards of Restricted Shares may be granted either alone or in
addition to other awards granted under the Plan. The Committee may
condition the grant or vesting of Restricted Shares upon the
attainment of Performance Criteria or such other factors as the
Committee may determine, it its sole discretion. The provisions of
Restricted Share awards need not be the same with respect to each
recipient.
6.2 Terms. Restricted Shares awards shall be granted only pursuant to
a written agreement, which shall be executed by the Participant
and a duly authorized officer of the Company and which shall
contain such terms and conditions as the Committee shall
determine, consistent with the Plan, including the following:
(a) Price. The purchase price of Restricted Shares shall be
determined by the Committee, in its sole discretion, and
may be zero.
(b) Restrictions and Conditions.
(i) The award may be subject to such restrictions as may
be imposed by the Committee in its sole discretion,
including, without limitation, Performance Criteria,
as a condition for the grant or vesting of the
Restricted Shares; provided, however, that any
restrictions based upon the
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Participant attaining a certain length of service
with the Company shall not exceed five years of
service after the date of grant of the Restricted
Shares; and provided further, that the period within
which Performance Criteria must be achieved shall
not exceed ten years after the date of grant of the
Restricted Shares. The Committee may provide for the
lapse of restrictions imposed on an award in
installments.
(ii) Except as provided in clause (i), the Participant
shall have, with respect to the Restricted Shares,
all of the rights of a stockholder of the Company,
including the right to vote the Shares and to
receive any cash dividends.
(iii) The Committee may, in its sole discretion, retain in
the applicable award agreement the authority to
waive in whole or in part any or all restrictions
with respect to a Participant's Restricted Shares,
based on such factors as the Committee may deem
appropriate.
(iv) The Committee may, in its sole discretion, provide
that Restricted Shares be held in escrow or trust
pending delivery to the Participant upon the
satisfaction of any applicable restrictions or
delivery to the Company upon forfeiture.
7. Bonus Awards.
7.1 Grant. Subject to the provisions of the plan, the Committee shall
have the sole and complete authority to determine eligible
Employees to whom Bonus Awards will be awarded. A Bonus Award
shall entitle a Participant to an award of cash or Shares under
such terms and conditions and shall be established by the
Committee.
7.2 162(m) Bonus Awards. The Committee may designate any particular
Bonus Award as being a 162(m) Bonus Award: provided that any Bonus
Award so designated will be subject to the following requirements,
notwithstanding any other provision of the Plan to the contrary:
No. 162(m) Bonus Award may be paid unless and until the
stockholders of the Company have approved the Plan in a manner
which complies with the stockholder approval requirement of
Section 162(m) of the code of the Treasury regulations promulgated
thereunder. The performance goals to which a 162(m) Bonus Award is
subject must be based solely on Performance Criteria described in
Section 8.2. Such Performance Criteria, and the Bonus Award
payable upon attainment thereof, must be established by the
Committee within the time limits required in order for the 162(m)
Bonus Award to qualify for the performance-based compensation
exception to Section 162(m) of the Code. No 162(m) Bonus Award may
be paid until the Committee has certified the level of attainment
of the applicable Performance Criteria. The maximum amount of any
single 162(m) Bonus Award is $7,000,000 (if denominated in
dollars) or 200,000 Shares (if denominated in Shares).
Notwithstanding the above, all "Intermediate Incentive Awards" and
"Excess Performance-Based Restricted Stock Award" granted under
the Company's
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Intermediate Incentive and Performance-Based Restricted Stock Plan
shall be 162(m) Bonus Awards.
8. Performance Criteria.
8.1 Grants Subject to Performance Criteria. Options, Restricted
Shares, and Bonus Awards, when so determined by the Committee, may
be subject to such financial or non-financial performance or other
criteria ("Performance Criteria") as may be adopted from time to
time by the Committee in its discretion. Performance Criteria
shall not include the attaining of a certain length of service
with the Company.
8.2 Performance Criteria. The Performance Criteria applicable to any
Participant who is, or who is determined by the Committee to be
likely to become, a "covered employee" within the meaning of
Section 162(m) of the Code (a "Covered Employee"), shall be
limited to growth, improvement or attainment of certain levels of:
(i) return on capital, equity, or operating costs;
(ii) economic value added;
(iii) margins;
(iv) total stockholder return or market value;
(v) operating profit or net income;
(vi) cash flow, earnings before interest and taxes, earnings
before interest, taxes and depreciation, or earnings before
interest, taxes, depreciation and amortization;
(vii) sales, throughput, or product volumes;
(viii) costs or expenses;
(ix) capital employed; or
(x) any combination of the foregoing.
Such Performance Criteria may be expressed either on an
absolute basis or relative to other companies selected by the
Committee. This Section 8.2 is intended to comply with the
exception from Section 162(m) of the Code for qualified
performance-based compensation, and shall be construed, applied
and administered accordingly.
8.3 Change in Circumstances. If the Committee determines that a change
in the business, operations, corporate structure or capital
structure of the Company, or the manner in
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which it conducts its business, or other events or circumstances
render the Performance Criteria to be unsuitable, the Committee
may modify such Performance Criteria or the related minimum
acceptable level of achievement, in whole or in part, as the
Committee deems appropriate and equitable; provided, however, that
no such modification shall be made in the case of any award to a
Participant who is, or is determined by the Committee to be likely
to become, a Covered Employee if the effect would be to cause the
award to fail to qualify for the performance-based exception to
Section 162(m) of the Code. In addition, at the time the award
subject to Performance Criteria is made and performance goals
established, the Committee is authorized to determine the manner
in which the Performance Criteria will be calculated or measured
to take into account certain factors over which Participants have
no or limited control including market related changes in
inventory value, changes in industry margins, changes in
accounting principles, and extraordinary charges to income.
9. Miscellaneous.
9.1 Effective Date. The Plan originally became effective as of October
22, 1996 (the "Effective Date") and was approved by the Company's
shareholders on December 3, 1996. The amendment and restatement of
the Plan is effective February 7, 2001, subject to approval of
such amendment and restatement by holders of a majority of the
securities of the Company present, or represented, and entitled to
vote at a meeting of stockholders duly held in accordance with the
laws of the State of Delaware no later than February 6, 2002. The
Plan shall expire on October 21, 2006.
9.2 Amendment, Suspension or Termination of the Plan. The Plan may be
wholly or partially amended or otherwise modified, suspended or
terminated at any time or from time to time by the Board;
provided, however, that, except as provided in Section 3.3, no
amendment shall be effective unless approved by the affirmative
vote of a majority of the votes eligible to be cast at a meeting
of stockholders of the Company held within twelve (12) months of
the date of adoption of such amendment, where such amendment will:
(a) increase the total number of Shares reserved for the
purposes of the Plan; or
(b) make such other change as may require stockholder approval
(i) under the rules of any exchange on which Shares are
traded, or (ii) in order for awards granted under the Plan
to qualify for an exception from Section 162(m) of the
Code.
Neither the amendment, suspension nor termination of the Plan
shall, without the consent of the Participant, alter or impair any
rights or obligations under any award therefore granted. No awards
may be granted during any period of suspension nor after
termination of the Plan, and in no event may any awards be granted
under the Plan after ten years from the Effective Date.
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9.3 Amendment of Award. The Committee may amend, modify or terminate
any outstanding award with the Participant's consent at any time
prior to payment or exercise in any manner not inconsistent with
the terms of the Plan, including without limitation, (a) to change
the date or dates as of which an Option becomes exercisable or
Restricted Shares become vested, or (b) to cancel and reissue an
award under such different terms and conditions as it determines
appropriate; provided, however, that, without stockholder
approval, (i) no such amendment or modification may reduce the
exercise price of an Option, and (ii) the Committee may not cancel
any outstanding Option and replace it with a new Option (with a
lower exercise price), in either case in a manner which would
either (X) be reportable in the Company's proxy statement as
Options which have been "repriced" (as such term is used in Item
402 of Regulation S-K promulgated under the Exchange Act), or (Y)
result in any Option being accounted for under the "variable"
method for financial statement reporting purposes.
9.4 Nontransferability:
(a) Each award shall be exercisable only by the Participant
during the Participant's lifetime, or, if permissible under
applicable law, by the Participant's legal guardian or
representative. No award may be assigned, alienated,
pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by
the laws of descent and distribution and any such purported
assignment, alienation, pledge, attachment, sale, transfer
or encumbrance shall be void and unenforceable against the
Company or a Subsidiary; provided that the designation of a
beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.
(b) Notwithstanding the foregoing, the Committee may in an
Option Agreement or at any time after the date of grant in
an amendment to an Option Agreement provide that Options
which are not intended to qualify as Incentive Stock
Options may be transferred by a Participant without
consideration, subject to such rules as the Committee may
adopt consistent with any applicable Option Agreement to
preserve the purposes of the plan, to:
(i) any person who is a "family member" of the
Participant, as such term is used in the
instructions to Form S-8 (collectively, the
"Immediate Family Members");
(ii) a trust solely for the benefit of the Participant
and his or her Immediate Family Members;
(iii) a partnership or limited liability company whose
only partners or shareholders are the Participant
and his or her Immediate Family Members; or
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(iv) any other transferee as may be approved either (a)
by the Board or the Committee in its sole
discretion, or (b) as provided in the applicable
Award agreement;
(each transferee described in clauses (i), (ii),
(iii) and (iv) above is hereinafter referred to as a
"Permitted Transferee"); provided that the
Participant give the Committee advance written notice
describing the terms and conditions of the proposed
transfer and the Committee notifies the Participant
in writing that such a transfer would comply with the
requirements of the Plan and any applicable Option
Agreement.
(c) The terms of any Option transferred in accordance with the
immediately preceding sentence shall apply to the Permitted
Transferee and any reference in the Plan or in an Option
Agreement to an Optionee or Participant shall be deemed to
refer to the Permitted Transferee, except that (a)
Permitted Transferees shall not be entitled to transfer any
Options, other than by will or by laws or descent and
distribution; (b) Permitted Transferees shall not be
entitled to exercise any transferred Options unless there
shall be in effect a registration statement on an
appropriate form covering the Shares to be acquired
pursuant to the exercise of such Option if the Committee
determines, consistent with any applicable Option
Agreement, that such registration statement is necessary or
appropriate, (c) the Committee or the Company shall not be
required to provide any notice to a Permitted Transferee,
whether or not such notice is or would otherwise have been
required to be given to the Participant under the Plan or
otherwise, and
(d) the consequences of termination of the Participant's
employment by, or services to, the Company or a Subsidiary
under the terms of the Plan and the applicable Option
Agreement shall continue to be applied with respect to the
Participant, following which the Options shall be
exercisable by the Permitted Transferee only to the extent,
and for the periods, specified in the Plan and the
applicable Option Agreement.
9.5 No Rights as Stockholder. Subject to the provisions of the
applicable award, no Participant shall be deemed for any purpose
to be or to have the rights and privileges of the owner of any
Shares subject to any Option or otherwise to be distributed under
the Plan until such Participant shall have become the holder
thereof. Notwithstanding the foregoing, in connection with each
grant of Restricted Shares, the applicable award agreement shall
specify if and to what extent the Participant shall not be
entitled to the rights of a stockholder in respect of such
Restricted Shares.
9.6 Deferral. The Committee shall have the authority to establish
rules governing the deferral of the delivery of Shares upon the
exercise of Nonqualified Stock Options for tax planning purposes.
Such rules shall be contained in the applicable Option Agreement
or in an amendment to such Option Agreement.
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9.7 Foreign Participants. Subject to the provisions of Section 9.3,
the Committee may, in order to fulfill the Plan purposes and
without amending the Plan, modify previously granted awards to
Participants who are foreign nationals or employed outside the
United States to recognize differences in local law, tax policy or
custom.
9.8 Effect of Plan Upon Other Compensation and Incentive Plans. The
adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company of any Subsidiary.
Nothing in the Plan shall be construed to limit the right of the
Company or any Subsidiary to establish any other forms of
incentives or compensation for Employees of the Company or any
Subsidiary.
9.9 Regulations and Other Approvals; Governing Law.
(a) The obligation of the Company to sell or deliver Shares
with respect to Options or any other award granted under
the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or
appropriate by the Committee.
(b) The Committee may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any
government authority or to obtain the tax benefits under
the applicable provisions of the Code and regulations
promulgated thereunder for Employees granted Incentive
Stock Options.
(c) Each Option and any other award payable in Shares is
subject to the requirement that, if at any time the
Committee determines, in its sole discretion, that the
listing, registration or qualification of Shares issuable
pursuant to the Plan is required by any securities exchange
or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary
or desirable as a condition of, or in connection with, the
grant of any Option or the issuance of Shares, no Options
shall be granted or payment made or Shares issued, in whole
or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of
any conditions as acceptable to the Committee.
(d) In the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current
registration statement under the Securities Act, and is not
otherwise exempt from such registration, such Shares shall
be restricted against transfer to the extent required by
the Securities Act or regulations thereunder, and the
Committee may require any individual receiving Shares
pursuant to the Plan, as a condition precedent to receipt
of such Shares, to represent to the Company in writing that
the Shares acquired by such individual are acquired for
investment only and not with a view to distribution. The
certificate for any Shares acquired pursuant to the plan
shall
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include any legend that he Committee deems appropriate to
reflect any restrictions on transfer.
9.10 Governing Law. The Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the
laws of the State of Delaware without giving effect to the choice
of law principles thereof.
9.11 Withholding of Taxes. No later than the date as to which an amount
first becomes includible in the gross income of a Participant for
federal income tax purposes with respect to any award granted
under the Plan, the Participant shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment of,
any federal, state, local or other taxes of any kind required by
the law of any applicable jurisdiction or the Company to be
withheld with respect to such amount. The obligations of the
Company under the Plan shall be conditional on such payment or
arrangements and the Company and its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Participant. In
its discretion, the Committee may permit Participants to satisfy
withholding obligations by delivering previously owned Shares or
by electing to have Shares withheld.
9.12 No Right To Continued Employment. Nothing in the Plan or in any
award agreement shall confer upon any Employee any right to
continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the right to the Company and
its Subsidiaries, which are hereby expressly reserved, to remove,
terminate or discharge any Employee at any time for any reason
whatsoever, with or without cause.
9.13 Titles: Construction. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or
construction of the Plan. The masculine pronoun shall include the
feminine and neuter and the singular shall include the plural,
when the context so indicates. Any reference to a section (other
than to a section of the Plan) shall also include a successor to
such section.
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