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EXHIBIT 10q
U S WEST, INC.
1994 STOCK PLAN
I. Purpose.
This 1994 Stock Plan (the "Plan"), is intended to promote the long term
success of U S WEST, Inc. (the "Company") by affording certain eligible
employees, executive officers, non-employee directors of the Company and its
Subsidiaries (as defined below) and certain outside consultants or advisors to
the Company and its affiliates with an opportunity to acquire a proprietary
interest in the Company, in order to incentivize such persons and to align the
financial interests of such persons with the shareholders of the Company.
II. Successor Plan.
The Plan is a successor plan to the U S WEST, Inc. Stock Incentive Plan
and the U S WEST 1991 Stock Incentive Plan (the "Predecessor Plans"). No
further grants of options or restricted stock may be made under the Predecessor
Plans. Options outstanding under the Predecessor Plans and restricted stock
granted under the Predecessor Plans shall be administered pursuant to the
provisions of the Plan, to the extent not inconsistent with the grant of such
options and restricted stock under the Predecessor Plans.
III. Definitions.
The following defined terms are used in the Plan:
A. "Agreement" shall mean the agreement or grant letter accepted
by the Participant as described in Section IX. of the Plan between the Company
and a Participant under which the Participant receives an Award pursuant to
this Plan.
B. "Award" shall mean individually, collectively or in tandem, an
incentive award granted under the Plan, whether in the form of Options, SARs,
Stock Awards or Phantom Units.
C. "Board" or "Board of Directors" shall mean the Board of
Directors of the Company.
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D. "Change of Control" shall mean any of the following:
1. any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) who is or becomes a beneficial owner of (or
otherwise has the authority to vote), directly or indirectly, securities
representing twenty percent (20%) or more of the total voting power of all of
the Company's then outstanding voting securities, unless through a transaction
arranged by, or consummated with the prior approval of the Board of Directors;
2. any period of two (2) consecutive calendar years during which
there shall cease to be a majority of the Board of Directors comprised as
follows: individuals who at the beginning of such period constitute the Board
of Directors and any new director(s) whose election by the Board of Directors
or nomination for election by the Company's stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or nomination
for election was previously so approved; or
3. the Company becomes a party to a merger, consolidation or share
exchange in which either (i) the Company will not be the surviving corporation
or (ii) the Company will be the surviving corporation and any outstanding
shares of Common Stock of the Company will be converted into shares of any
other company (other than a reincorporation or the establishment of a holding
company involving no change of ownership of the Company) or other securities or
cash or other property (excluding payments made solely for fractional shares);
or
4. any other event that a majority of the Board of Directors, in
its sole discretion, shall determine constitutes a Change of Control.
E. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
F. "Committee" shall mean the Human Resources Committee or the
Employee Benefits Committee or their delegates, as applicable, pursuant to
provisions of Section IV. of the Plan.
G. "Common Stock" shall mean common stock, no par value, issued by
the Company.
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H. "Company" shall mean U S WEST, Inc., a Colorado corporation,
and any successor thereof.
I. "Director Compensation" shall mean all cash or stock
remuneration payable to an Outside Director for service to the Company as a
director, other than reimbursement for expenses, and shall include retainer
fees for service on, and fees for attendance at meetings of, the Board and any
committees thereof.
J. "Disabled" or "Disability" shall mean long-term disability as
determined under the provisions of any U S WEST disability plan maintained for
the benefit of eligible employees of the Company or any Related Entity,
provided, however, that in the case of an Incentive Option, "disability" shall
have the meaning specified in Section 22(e)(3) of the Code.
K. "Disinterested Person" shall have the meaning set forth in Rule
16b-3(c)(2)(i) and its successor promulgated under the Exchange Act.
L. "Dividend Equivalent Rights" shall mean the right to receive
the amount of any dividends that are paid on an equivalent number of shares of
Common Stock underlying an Option or Phantom Unit, which shall be payable
either in cash or in the form of additional Phantom Units or Stock.
M. "Effective Date" shall mean the date on which the Plan is
approved by the shareholders of the Company.
N. "Eligible Employee" shall mean any employee of the Company or
any Related Entity who the Committee selects to receive an Award and who is so
employed on the date of the grant of an Award.
O. "Eligible Non-Employee" shall mean any consultant or advisor to
the Company or any Related Entity, including any member of the State Executive
Board(s) of the Company or any Related Entity that the Committee selects to
receive an Award.
P. "Employee Benefits Committee" shall mean a committee of the
Company consisting of employees of the Company or any Related Entity appointed
by the Human Resources Committee and which shall administer the Plan as
provided in Section IV. hereof.
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Q. "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
R. "Executive Officers" shall mean any Officer of the Company or
any Related Entity who, at the time of an Award, is subject to the reporting
requirements of Section 16(a) of the Exchange Act.
S. "Fair Market Value" shall mean the closing price of a share of
Common Stock as reported on the New York Stock Exchange for the applicable
date, or if there were no sales on such date, on the last day on which there
were sales.
T. "Human Resources Committee" shall mean the human resources
committee of the Board or any other committee of the Board appointed by the
Board to administer the Plan in lieu of the Human Resources Committee, which
committee shall consist of no fewer than three (3) persons, each of whom shall
be a Disinterested Person.
U. "Incentive Option" shall mean an incentive stock option under
the provisions of Section 422 of the Code.
V. "Indexed" shall mean the periodic adjustment of an Option Price
based upon adjustment criteria determined by the Committee, but in no event
shall the Option Price be adjusted to an amount less than the original Option
Price.
W. "Nonqualified Option" shall mean an Option which does not
qualify under Section 422 of the Code.
X. "Officer" shall mean any executive of the Company or any
Related Entity who participates in the Company's executive compensation
programs.
Y. "Option" shall mean an option granted by the Company to
purchase Common Stock pursuant to the provisions of this Plan, including
Incentive Options, Nonqualified Options and Reload Options.
Z. "Optionee" shall mean a Participant to whom one or more Options
have been granted.
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AA. "Option Price" shall mean the price per share payable to the
Company for shares of Common Stock upon the exercise of an Option.
AB. "Outside Director" shall mean an individual not employed by the
Company or any Related Entity and who serves on the Board.
AC. "Parent Corporation" shall mean any corporation within the
meaning of Section 424(e) of the Code.
AD. "Participant" shall mean an Eligible Employee, Eligible
Non-Employee, Executive Officer or Outside Director who is granted an Award.
AE. "Phantom Unit" shall mean a notional account representing a
value equivalent to one share of Common Stock on the Award date.
AF. "Plan" shall mean the U S WEST, Inc. 1994 Stock Plan.
AG. "Predecessor Plan" shall mean the U S WEST, Inc. Stock
Incentive Plan and the U S WEST 1991 Stock Incentive Plan, as applicable.
AH. "Related Entity" shall mean any Parent Corporation or
Subsidiary of the Company.
AI. "Reload Option" shall mean the right to receive a further
Option for a number of shares equal to the number of shares of Common Stock
surrendered by the Optionee upon exercise of the original Option as provided in
Section X.E. of the Plan.
AJ. "Restricted Period" shall mean the period of time from the date
of grant of Restricted Stock until the lapse of restrictions attached thereto
under the terms of the Agreement granting such Restricted Stock, pursuant to
the provisions of the Plan or by action of the Committee.
AK. "Restricted Stock" shall mean an Award made by the Committee
entitling the Participant to acquire, at no cost or for a purchase price
determined by the Committee at the time of grant, shares of Common Stock which
are subject to restrictions in accordance with the provisions of Section XIII.
hereof.
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AL. "Retirement" shall mean (i) with respect to any Eligible
Employee, that such person has retired from the Company or any Related Entity
and such person is currently eligible to receive a service pension benefit
under the U S WEST Pension Plan or a pension benefit under any written
agreement or arrangement that the Company or any Related Entity may have
entered into with the Eligible Employee and (ii) with respect to any Eligible
Non-Employee, that such person no longer provides consulting or advisory
services to the Company or any Related Entity.
AM. "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
AN. "Stock Appreciation Right" or "SAR" shall mean a grant
entitling the Participant to receive an amount in cash or shares of Common
Stock or a combination thereof having a value equal to (or if the Committee
shall so determine at the time of a grant, less than) the excess of the Fair
Market Value of a share of Common Stock on the date of exercise over the Fair
Market Value of a share of Common Stock on the date of grant (or over the
Option Price, if the Stock Appreciation Right was granted in tandem with an
Option) multiplied by the number of shares with respect to which the Stock
Appreciation Right shall have been exercised, with the Committee having sole
discretion to determine the form or forms of payment at the time of grant of
the SAR.
AO. "Stock Awards" shall mean any Award which is in the form of
Restricted Stock and any outright grants of Common Stock approved by the
Committee pursuant to the Plan.
AP. "Subsidiary" shall mean with respect to any Award other than an
Incentive Option, any corporation, joint venture or partnership in which the
Company owns, directly or indirectly, (i) with respect to a corporation, stock
possessing twenty percent (20%) or more of the total combined voting power of
all classes of stock in the corporation or (ii) in the case of a joint venture
or partnership, the Company possesses a twenty percent (20%) interest in the
capital or profits of such joint venture or partnership. In the case of any
Incentive Option, Subsidiary shall mean any corporation within the meaning of
Section 424(f) of the Code.
AQ. "Vested" shall mean the status that results with respect to an
Option or other Award which may be immediately exercised under the terms of the
Agreement granting such Option or
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other Award, pursuant to the provisions of the Plan or by action of the
Committee.
IV. Administration.
A. The Plan shall be administered by the Human Resources Committee
with respect to Officers, Executive Officers and Outside Directors and by the
Employee Benefits Committee with respect to all other Eligible Employees and
Eligible Non-Employees. The Human Resources Committee may adopt such rules,
regulations and guidelines as it determines necessary for the administration of
the Plan. Subject to any such rules, regulations and guidelines adopted by the
Human Resources Committee, the Employee Benefits Committee shall have the power
to adopt rules, regulations and guidelines to permit such Committee to
administer the Plan with respect to Eligible Employees (other than Officers and
Executive Officers) and with respect to Eligible Non-Employees.
B. The Committee may delegate to one or more of its members, or to
one or more agents, such administrative duties as it may deem advisable, and
the Committee or any person to whom it has delegated duties as aforesaid may
employ one or more persons to render advice with respect to any responsibility
the Committee or such person may have under the Plan. The Committee may employ
such legal or other counsel, consultants and agents as it may deem desirable
for the administration of the Plan and may rely upon any opinion or computation
received from any such counsel, consultant or agent. Expenses incurred by the
Committee in the engagement of such counsel, consultant or agent shall be paid
by the Company or such Related Entity whose employees have benefitted from the
Plan, as determined by the Committee. The Company shall indemnify members of
the Committee and any agent of the Committee who is an employee of the Company
or a Related Entity against any and all liabilities or expenses to which they
may be subjected by reason of any act or failure to act with respect to their
duties on behalf of the Plan, except in circumstances involving such person's
gross negligence or willful misconduct.
C. In furtherance of and not in limitation of the Committee's
discretionary authority, subject to the provisions of the Plan, the Committee
shall have the authority to:
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1. determine the Participants to whom Awards shall be granted and
the number of and terms and conditions upon which Awards shall be granted
(which need not be the same for all Awards or types of Awards);
2. establish, in its sole discretion, annual or long-term
financial goals of the Company, Related Entity, or division, department, or
group of the Company or Related Entity, or individual goals which the Committee
shall consider in granting Awards, if any;
3. determine the satisfaction of performance goals established by
the Committee based upon periods of time or any combinations thereof;
4. determine the time when Awards shall be granted, the Option
Price of each Option, the period(s) during which Options shall be exercisable
(whether in whole or in part), the restrictions to be applicable to Awards, and
the other terms and provisions of Awards;
5. modify grants of Awards pursuant to Paragraph D. of this
Section IV. or rescind grants of Awards pursuant to Section X.H(v),
respectively;
6. provide the establishment of a procedure whereby a number of
shares of Common Stock or other securities may be withheld from the total
number of shares of Common Stock or other securities to be issued upon exercise
of an Option, the lapse of restrictions on Restricted Stock and the vesting of
Phantom Units (other than an Incentive Option) to meet the obligation of
withholding for income, social security and other taxes incurred by a
Participant upon such exercise or required to be withheld by the Company in
connection with such exercise;
7. adopt, modify and rescind rules and regulations and guidelines
relating to the Plan;
8. adopt modifications to the Plan and procedures, as may be
necessary to comply with provisions of the laws and applicable regulatory
rulings of countries in which the Company or a Related Entity operates in order
to assure the legality of Awards granted under the Plan to Participants who
reside in such countries; and
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9. obtain the approval of the shareholders of the Company with
respect to Awards consisting of Phantom Units or Restricted Stock; provided,
however, no action shall be proposed to shareholders without the approval of
the Board of Directors;
10. make all determinations, perform all other acts, exercise all
other powers and establish any other procedures determined by the Committee to
be necessary, appropriate or advisable in administering the Plan and to
maintain compliance with any applicable law.
D. The Committee may at any time, in its sole discretion,
accelerate the exercisability of any Awards and waive or amend any and all
restrictions and conditions of any Awards.
E. Subject to and not inconsistent with the express provisions of
the Plan, the Code and Rule 16b-3 of the Exchange Act, the Committee shall have
the authority to require, as a condition to the granting of any Option, SAR or
other Award (to the extent applicable) to any Executive Officer of the Company
or any Related Entity that the Executive Officer receiving such Option, SAR or
other Award agree not to sell or otherwise dispose of such Option, SAR or other
Award or Common Stock acquired pursuant to such Option, SAR or other Award (to
the extent applicable) or any other "derivative security" (as defined by Rule
16a-1(c) under the Exchange Act) for a period of six (6) months following the
later of (i) the date of the grant of such Option, SAR or other Award (to the
extent applicable) or (ii) the date when the other Option Price of such Option,
SAR or other Award is fixed, if such Option Price is not fixed at the date of
grant of such Option, SAR or other Award.
V. Decisions Final.
Any decision, interpretation or other action made or taken in good
faith by the Committee arising out of or in connection with the Plan shall be
final, binding and conclusive on the Company and all Participants and their
respective heirs, executors, administrators, successors and assigns.
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VI. Arbitration.
Any dispute that may arise in connection with the Plan or any Award
under the Plan shall be determined solely by arbitration in Denver, Colorado
under the rules of the American Arbitration Association. Any claim with respect
to an Award must be established by a preponderance of the evidence submitted to
the impartial arbitrator. The arbitrator shall have the authority to award the
prevailing party damages incurred as a result of any breach, costs, reasonable
attorneys' fees incurred in connection with the arbitration, and direct that
the non-prevailing party pay the expenses of arbitration. The decision of the
arbitrator (i) shall be final and binding; (ii) shall be rendered within ninety
(90) days after the impanelment of the arbitrator; and (iii) shall be kept
confidential by the parties to such arbitration. The arbitration award may be
enforced in any court of competent jurisdiction. The Federal Arbitration Act, 9
U.S.C. 1-15, not state law, shall govern the arbitrability of all claims.
VII. Duration of the Plan.
The Plan shall remain in effect for a period of ten (10) years from the
Effective Date, unless terminated by the Board pursuant to Section XXI.
VIII. Shares Available - Limitations.
A. The maximum aggregate number of shares of Common Stock of the
Company which may be granted in any calendar year for all purposes under the
Plan shall be three-quarters of one percent (0.75%) of the shares of Common
Stock outstanding (excluding shares of such Common Stock held in the Company's
treasury) on the first day of such calendar year, provided, however, that in
the event that fewer than the full aggregate number of shares of Common Stock
available for issuance in any calendar year are issued in such year, the shares
not issued shall be added to the shares available for issuance in any
subsequent year or years. If, for any reason, any shares of Common Stock as to
which Options, SARs, Restricted Stock, or Phantom Units have been granted cease
to be subject to exercise or purchase hereunder (other than the exercise of
SARs for cash), the underlying shares of Common Stock
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shall thereafter be available for grants to Participants under the Plan during
any calendar year. Awards granted under the Plan may be fulfilled in accordance
with the terms of the Plan with (i) authorized and unissued shares of the
Common Stock or (ii) issued shares of Common Stock reacquired by the Company,
in each situation, as the Board of Directors or the Committee may determine
from time to time at its sole discretion.
B. The maximum number of shares of Common Stock that shall be
subject to the grant of an Award in any calendar year for Awards other than
Options or SARs shall not exceed one-third (1/3) of the total number of shares
of Common Stock subject to Awards granted under the Plan for such calendar
year.
C. The maximum number of shares of Common Stock with respect to
which Awards may be granted to any individual Participant in any calendar year
may not exceed the lesser of 250,000 or five percent (5%) of the total number
of shares of Common Stock with respect to which Awards may be granted under the
Plan for the calendar year.
IX. Grant of Awards.
A. The Committee shall determine the type or types of Award(s) to
be made to each Participant. Awards may be granted singly, in combination or in
tandem subject to restrictions set forth in Section X.C. for Incentive Options.
The types of Awards that may be granted under the Plan are Options, with or
without Reload Options, SARs, Stock Awards and Phantom Units, and with respect
to Phantom Units and Restricted Stock, with or without Dividend Equivalent
Rights.
B. Each grant of an Award under this Plan shall be evidenced by an
Agreement dated as of the date of the grant of the Award, other than Stock
Awards consisting of an outright grant of shares of Common Stock. This
Agreement shall set forth the terms and conditions of the Award, as may be
determined by the Committee, and if the Agreement relates to the grant of an
Option, shall indicate whether the Option that it evidences, is intended to be
an Incentive Option or a Nonqualified Option. Each grant of an Award is
conditioned upon the acceptance by the Participant of the terms of the
Agreement. Unless otherwise extended by the
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Committee, a Participant shall have ninety (90) days from the date of the
Agreement to accept its terms.
X. Options.
The Committee, in its sole discretion, may grant Incentive Options or
Nonqualified Options to Eligible Employees, Officers and Executive Officers and
Nonqualified Options to Eligible Non-Employees. Any Options granted to a
Participant under the Predecessor Plan which remain outstanding as of the
Effective Date shall be governed by the terms and conditions of the Plan,
except to the extent the provisions of the Plan are inconsistent with the terms
of the Options granted under the Predecessor Plans, in which event the
applicable provisions of the Predecessor Plans shall govern; provided, however,
that in no event shall there be a modification of the terms of any Incentive
Option granted under the Predecessor Plan. The terms and conditions of the
Options granted under this Section X. shall be determined from time to time by
the Committee, as set forth in the Agreement granting the Option, and subject
to the following conditions:
A. Nonqualified Options. The Option Price for each share of Common
Stock issuable pursuant to a Nonqualified Option may be an amount at or above
the Fair Market Value on the date such Option is granted, may be Indexed from
the original Option Price and may be granted with or without Dividend
Equivalent Rights; provided, however, that with respect to Nonqualified Options
granted to any Executive Officer, no Dividend Equivalent Rights may be granted.
B. Incentive Options. The Option Price for each share of Common Stock
issuable pursuant to an Incentive Option shall not be less than one hundred
percent (100%) of the Fair Market Value on the date such Option is granted and
may be Indexed from the original Option Price.
C. Incentive Options - Special Rules. Options granted in the form of
Incentive Options shall be subject to the following provisions:
1. Grant. No Incentive Option shall be granted pursuant to this Plan
more than ten (10) years after the Effective Date.
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2. Annual Limit. The aggregate Fair Market Value (determined at the
time the Option is granted) of the shares of Common Stock with respect to which
one or more Incentive Options are exercisable for the first time by any
Optionee during any calendar year under the Plan or under any other stock plan
of the Company or any Related Entity shall not exceed $100,000 or such other
maximum amount permitted under Section 422 of the Code. Any Option purporting
to constitute an Incentive Option in excess of such limitation shall constitute
a Nonqualified Option.
3. 10% Stockholder. If any Optionee to whom an Incentive Option is to
be granted pursuant to the provisions of the Plan is, on the date of grant, an
individual described in Section 422(b)(6) of the Code, then the following
special provisions shall be applicable to the Option granted to such
individual:
(a) the Option Price of shares subject to such Incentive Option
shall not be less than 110% of the Fair Market Value of Common Stock on the
date of grant; and
(b) the Option shall not have a term in excess of (5) years from
the date of grant.
D. Other Options. The Committee may establish rules with respect to,
and may grant to Eligible Employees, Options to comply with any amendment to
the Code made after the Effective Date providing for special tax benefits for
stock options.
E. Reload Options. Without in any way limiting the authority of the
Committee to make Awards hereunder, the Committee shall have the authority to
grant Reload Options. Any such Reload Option shall be subject to such other
terms and conditions as the Committee may determine. Notwithstanding the above,
(i) the Committee shall have the right, in its sole discretion, to withdraw a
Reload Option to the extent that the grant thereof will result in any adverse
accounting consequences to the Company and (ii) no additional Reload Options
shall be granted upon the exercise of a Reload Option.
F. Term of Option. No Option shall be exercisable after the
expiration of ten (10) years from the date of grant of the Option.
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G. Exercise of Stock Option. Each Option shall be exercisable in
one or more installments as the Committee in its sole discretion may determine
at the time of the Award and as provided in the Agreement. The right to
purchase shares shall be cumulative so that when the right to purchase any
shares has accrued such shares or any part thereof may be purchased at any time
thereafter until the expiration or termination of the Option, subject to rules
on sequential exercise for Incentive Options pursuant to Paragraph C.2. of this
Section X. The Option Price shall be payable (i) in cash or by an equivalent
means acceptable to the Committee, (ii) by delivery (constructive or otherwise)
to the Company of shares of Common Stock owned by the Optionee or (iii) by any
combination of the above as provided in the Agreement. Shares delivered to the
Company in payment of the Option Price shall be valued at the Fair Market Value
on the date of the exercise of the Option.
H. Vesting. The Agreement shall specify the date or dates on which
the Optionee may begin to exercise all or a portion of his Option. Subsequent
to such date or dates, the Option shall be deemed vested and fully exercisable.
(i) Death. In the event of the death of any Optionee, all Options
held by such Optionee on the date of his death shall become Vested Options and
the estate of such Optionee, shall have the right, at any time and from time to
time within one year after the date of death, or such other period, if any, as
the Committee in its sole discretion may determine, to exercise the Options of
the Optionee (but not after the earlier of the expiration date of the Option
or, in the case of an Incentive Option, one (1) year from the date of death).
(ii) Disability. If the employment of any Optionee is terminated
because of Disability, all Options held by such Optionee on the date of his
Disability shall become Vested Options and such Optionee shall have the right,
at any time and from time to time within one year after the date of
termination, or such other period, if any, as the Committee in its sole
discretion may determine, to exercise the Options of the Optionee (but not
after the earlier of the expiration date of the Option or one (1) year from the
date of Disability in the case of an Incentive Option).
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(iii) Retirement. Upon an Optionee's Retirement (i) all Options held
by such Optionee that are not Vested Options shall terminate unless the
Committee, in its sole discretion, determines otherwise, and (ii) such Optionee
shall have the right, at any time and from time to time within five (5) years
after the date of his Retirement (but in no event after the expiration date of
the Option), to exercise the Vested Options held by such Optionee immediately
prior to the time of Retirement.
(iv) Other Termination. If the employment with the Company or a
Related Entity of an Optionee is terminated for any reason other than for death
or Disability and other than "for cause" as defined in subparagraph (v) below,
such Optionee shall have the right, in the case of a Vested Option, for a
period of three (3) months after the date of such termination or such longer
period as determined by the Committee, to exercise any such Vested Option, but
in any event not after the expiration date of any such Option.
(v) Termination For Cause. Notwithstanding any other provision of the
Plan to the contrary, if the Optionee's employment is terminated by the Company
or any Related Entity "for cause" (as defined below), such Optionee shall
immediately forfeit all rights under his Options except as to the shares of
Common Stock already purchased prior to such termination. Termination "for
cause" shall mean (unless another definition is agreed to in writing by the
Company and the Optionee) termination by the Company because of: (a) the
Optionee's willful and continued failure to substantially perform his duties
(other than any such failure resulting from the Optionee's incapacity due to
physical or mental impairment) after a written demand for substantial
performance is delivered to the Optionee by the Company, which demand
specifically identifies the manner in which the Company believes the Optionee
has not substantially performed his duties, (b) the willful conduct of the
Optionee which is demonstrably and materially injurious to the Company or
Related Entity, monetarily or otherwise, or (c) the conviction of the Optionee
for a felony by a court of competent jurisdiction.
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XI. Foreign Options and Rights.
The Committee may make Awards of Options to Eligible Employees,
Officers, Executive Officers and Eligible Non-Employees who are subject to the
tax laws of nations other than the United States, which Awards may have terms
and conditions as determined by the Committee as necessary to comply with
applicable foreign laws. The Committee may take any action which it deems
advisable to obtain approval of such Option by the appropriate foreign
governmental entity; provided, however, that no such Award may be granted
pursuant to this Section XI. and no action may be taken which would result in a
violation of the Exchange Act, the Code or any other applicable law.
XII. Stock Appreciation Rights.
The Committee shall have the authority to grant SARs to Eligible
Employees, Officers, Executive Officers and Eligible Non-Employees either alone
or in connection with an Option. SARs granted in connection with an Option
shall be granted either at the time of grant of the Option or by amendment to
the Option. SARs granted in connection with an Option shall be subject to the
same terms and conditions as the related Option and shall be exercisable only
at such times and to such extent as the related Option is exercisable. A SAR
granted in connection with an Option may be exercised only when the Fair Market
Value of the Common Stock of the Company exceeds the Option Price of the
related Option. A SAR granted in connection with an Option shall entitle the
Participant to surrender to the Company unexercised the related Option, or any
portion thereof and to receive from the Company cash and/or shares of Common
Stock equal to that number of shares of Common Stock having an aggregate value
equal to the excess of (i) the Fair Market Value of one share of Common Stock
on the day of the surrender of such Option over (ii) the Option Price per share
of Common Stock multiplied by (iii) the number of shares of Common Stock that
may be exercised under the Option, or surrendered; provided, however, that no
fractional shares shall be issued. A SAR granted singly shall entitle the
Participant to receive the excess of (i) the Fair Market Value of a share of
Common Stock on the date of exercise over (ii) the Fair Market Value of a share
of Common Stock on the date of the grant of the SAR multiplied by (iii) the
number of SARs exercised. Payment of any fractional shares of Common Stock
shall be made in cash. A SAR
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shall become a Vested Award upon (i) a Participant becoming Disabled, or (ii)
the death of a Participant.
XIII. Restricted Stock.
The Committee may, in its sole discretion, grant Restricted Stock to
Eligible Employees, Eligible Non-Employees, Officers or Executive Officers
subject to the provisions below.
A. Restrictions. A stock certificate representing the number of
shares of Restricted Stock granted shall be held in custody by the Company for
the Participant's account. The Participant shall have all rights and privileges
of a stockholder as to such Restricted Stock, including the right to receive
dividends and the right to vote such shares, except that, subject to the
provisions of Paragraph B. below, the following restrictions shall apply: (i)
the Participant shall not be entitled to delivery of the certificate until the
expiration of the Restricted Period; (ii) none of the shares of Restricted
Stock may be sold, transferred, assigned, pledged, or otherwise encumbered or
disposed of during the Restricted Period; (iii) the Participant shall, if
requested by the Company, execute and deliver to the Company, a stock power
endorsed in blank. The Restricted Period shall lapse upon a Participant
becoming Disabled or the death of a Participant. If a Participant ceases to be
an employee of the Company or a Related Entity prior to the expiration of the
Restricted Period applicable to such shares, except as a result of the death or
Disability of the Participant, shares of Restricted Stock still subject to
restrictions shall be forfeited unless otherwise determined by the Committee,
and all rights of the Participant to such shares shall terminate without
further obligation on the part of the Company. Upon the forfeiture (in whole or
in part) of shares of Restricted Stock, such forfeited shares shall become
shares of Common Stock held in the Company's treasury without further action by
the Participant.
B. Terms and Conditions. The Committee shall establish the terms and
conditions for Restricted Stock pursuant to Section IV. of the Plan, including
whether any shares of Restricted Stock shall have voting rights or a right to
any dividends that are declared. Terms and conditions established by the
Committee need not be the same for all grants of Restricted Stock. The
Committee may provide for the restrictions to lapse with respect to a portion
or portions of the Restricted Stock at different times or
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upon the occurrence of different events, and the Committee may waive, in whole
or in part, any or all restrictions applicable to a grant of Restricted Stock.
Restricted Stock Awards may be issued for no cash consideration or for such
minimum consideration as may be required by applicable law or such other
consideration as may be determined by the Committee.
C. Delivery of Restricted Shares. At the end of the Restricted Period
as herein provided, a stock certificate for the number of shares of Restricted
Stock with respect to which the restrictions have lapsed shall be delivered
(less any shares delivered pursuant to Section XX.C. in satisfaction of any
withholding tax obligation), free of all such restrictions, except applicable
securities law restrictions, to the Participant or the Participant's estate, as
the case may be. The Company shall not be required to deliver any fractional
share of Common Stock but shall pay, in lieu thereof, the Fair Market Value
(measured as of the date the restrictions lapse) of such fractional share to
the Participant or the Participant's estate, as the case may be.
Notwithstanding the foregoing, the Committee may authorize the delivery of the
Restricted Stock to a Participant during the Restricted Period, in which event
any stock certificates in respect of shares of Restricted Stock thus delivered
to a Participant during the Restricted Period applicable to such shares shall
bear an appropriate legend referring to the terms and conditions, including the
restrictions, applicable thereto.
XIV. Phantom Units.
A. General. The Committee may, in its sole discretion, grant the
right to earn Phantom Units to Eligible Employees, Officers, Executive Officers
and Eligible Non-Employees. The Committee shall determine the criteria for the
earning of Phantom Units, pursuant to Section IV. of the Plan. Upon
satisfaction of such criteria, a Phantom Unit shall be deemed a Vested Award. A
Phantom Unit granted by the Committee shall provide for payment in shares of
Common Stock. A Phantom Unit shall become a Vested Award upon (i) a Participant
becoming Disabled, or (ii) the death of a Participant. Shares of Common Stock
issued pursuant to this Section XIV. may be issued for no cash consideration or
for such minimum consideration as may be required by applicable law or such
other consideration as may be determined by the Committee. The Committee shall
determine whether a Participant granted a Phantom
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Unit shall be entitled to a Dividend Equivalent Right.
B. Unfunded Claim. The establishment of Phantom Units under the Plan
are unfunded obligations of the Company. The interest of a Participant in any
such units shall be considered a general unsecured claim against the Company to
the extent that the conditions for the earning of the Phantom Units have been
satisfied. Nothing contained herein shall be construed as creating a trust or
fiduciary relationship between the Participant, the Company or the Committee.
C. Issuance of Common Stock. Upon a Phantom Unit becoming a Vested
Award, unless a Participant has elected to defer under Paragraph D. below,
shares of Common Stock representing the Phantom Units shall be distributed to
the Participant, unless the Committee, with the consent of the Participant,
provides for the payment of the Phantom Units in cash or partly in cash and
partly in shares of Common Stock equal to the value of the shares of Common
Stock which would otherwise be distributed to the Participant.
D. Deferral of Phantom Units. Prior to the year with respect to which
a Phantom Unit may become a Vested Award, the Participant may elect not to
receive Common Stock upon the vesting of such Phantom Unit and for the Company
to continue to maintain the Phantom Unit on its books of account. In such
event, the value of a Phantom Unit shall be payable in shares of Common Stock
pursuant to the agreement of deferral.
E. Financial Hardship. Notwithstanding any other provision hereof, at
the written request of a Participant who has elected to defer pursuant to
Paragraph D. above, the Committee, in its sole direction, upon a finding that
continued deferral will result in financial hardship to the Participant, may
authorize the payment of all or a part of Participant's Vested Phantom Units in
a single installment or the acceleration of payment of any multiple
installments thereof; provided, however, that distributions will not be made
under this paragraph if such distribution would result in liability of an
Executive Officer under Section 16 of the Exchange Act.
F. Distribution upon Death. The Committee shall pay the Fair Market
Value of the Phantom Units of a deceased Participant to the
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estate of the Participant, as soon as practicable following the death of the
Participant. The value of the Phantom Units for the purpose of such
distribution shall be based upon the Fair Market Value of shares of Common
Stock underlying the Phantom Units on the date of the Participant's death.
XV. Stock Awards to Outside Directors.
Each Outside Director shall be granted a Stock Award consisting of 400
shares of Common Stock, without restrictions, on the date of the Annual Meeting
of the Company's stockholders following the first anniversary date of such
Outside Director's initial election to the Board, and a like amount on each of
the next four Annual Meeting dates for a total maximum Stock Award of 2,000
shares of Common Stock.
XVI. Outside Director's Compensation.
A. Payment in Common Stock. Each Outside Director may elect to
receive payment of all or any portion of Director Compensation comprised of
retainer fees for service on the Board and any committees thereof in Common
Stock. The amount of Common Stock then issuable shall be based on the Fair
Market Value of the Common Stock on the dates such retainer fees are otherwise
due and payable to the Outside Director. Certificates evidencing such Common
Stock shall be delivered promptly following such date. If an Outside Director
elects to receive payment of retainer fees in Common Stock as described in this
Section XVI.A, the election shall be (i) in writing, (ii) delivered to the
Secretary of the Company at least six months in advance of the payment date,
and (iii) irrevocable.
B. Deferral of Payment. Each Outside Director may elect to defer the
receipt of Common Stock payable pursuant to Section XVI.A, in which event such
Outside Director shall receive an equivalent number of Phantom Units with
Dividend Equivalent Rights. Any such Phantom Units shall become Vested Awards
at such time as the Outside Director no longer serves as a member of the Board.
If an Outside Director elects to defer receipt of Common Stock and receive
Phantom Units pursuant to this Section XVI.B, the election shall be (i) in
writing, (ii) delivered to the Secretary of the Company in the year preceding
the year in which the Director Compensation would otherwise be paid and at
least six
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months in advance of the date when Common Stock would otherwise be issued, and
(iii) irrevocable.
XVII. Federal Securities Law.
With respect to grants of Awards to Executive Officers, the Company
intends that the provisions of this Plan and all transactions effected in
accordance with Plan shall comply with Rule 16b-3 under the Exchange Act.
Accordingly, the Committee shall administer and interpret the Plan to the
extent practicable, to maintain compliance with such rule.
XVIII. Change of Control - Acceleration.
Upon the occurrence of a Change of Control:
A. in the case of all outstanding Options and SARs, each such
Option and SAR shall automatically become immediately fully exercisable by the
Participant;
B. restrictions applicable to Restricted Stock shall automatically
be deemed lapsed and conditions applicable to Phantom Units shall automatically
be deemed waived, and the Participants who receive such grants shall become
immediately entitled to receipt of the Common Stock subject to such grants; and
C. the Human Resources Committee, in its discretion, shall have
the right to accelerate payment of any deferrals of Vested Phantom Units.
XIX. Adjustment of Shares.
A. In the event there is any change in the Common Stock by reason
of any consolidation, combination, liquidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares or other like change in capital
structure of the Company, the number or kind of shares or interests subject to
an Award and the per share price or value thereof shall be appropriately
adjusted by the Committee at the time of such event, provided that each
Participant's economic position with respect to the Award shall not, as a
result of such adjustment, be worse than it had
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been immediately prior to such event. Any fractional shares or interests
resulting from such adjustment shall be rounded up to the next whole share of
Common Stock. Notwithstanding the foregoing, (i) each such adjustment with
respect to an Incentive Option shall comply with the rules of Section 424(a) of
the Code, and (ii) in no event shall any adjustment be made which would render
any Incentive Option granted hereunder other than an "incentive stock option"
for purposes of Section 422 of the Code.
B. In the event of an acquisition by the Company of another
corporation where the Company assumes outstanding stock options or similar
obligations of such corporation, the number of Awards available under the Plan
shall be appropriately increased to reflect the number of such options or other
obligations assumed.
XX. Miscellaneous Provisions.
A. Assignment or Transfer. No grant of any "derivative security" (as
defined by Rule 16a-1(c) under the Exchange Act) made under the Plan or any
rights or interests therein shall be assignable or transferable by a
Participant except by will or the laws of descent and distribution and except
to the extent it is otherwise permissible under the Exchange Act, it being
understood that no grant of any "derivative security" shall be assignable or
transferable pursuant to a domestic relations order. During the lifetime of a
Participant, Awards granted hereunder shall be exercisable only by the
Participant, the Participant's guardian or his legal representative.
B. Investment Representation; Legends. The Committee may
require each Participant acquiring shares of Common Stock pursuant to an Award
to represent to and agree with the Company in writing that such Participant is
acquiring the shares without a view to distribution thereof.
No shares of Common Stock shall be issued pursuant to an Award until
all applicable securities law and other legal and stock exchange requirements
have been satisfied. The Committee may require the placing of stop-orders and
restrictive legends on certificates for Common Stock as it deems appropriate.
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C. Withholding Taxes. In the case of distributions of Common Stock or
other securities hereunder, the Company, as a condition of such distribution,
may require the payment (through withholding from the Participant's salary,
payment of cash by the Participant, reduction of the number of shares of Common
Stock or other securities to be issued (except in the case of an Incentive
Option), or otherwise) of any federal, state, local or foreign taxes required
by law to be withheld with respect to such distribution.
D. Costs and Expenses. The costs and expenses of administering the
Plan shall be borne by the Company and shall not be charged against any Award
nor to any Participant receiving an Award.
E. Other Incentive Plans. The adoption of the Plan does not preclude
the adoption by appropriate means of any other incentive plan for employees.
F. Effect on Employment. Nothing contained in the Plan or any
agreement related hereto or referred to herein shall affect, or be construed as
affecting, the terms of employment of any Participant except to the extent
specifically provided herein or therein. Nothing contained in the Plan or any
agreement related hereto or referred to herein shall impose, or be construed as
imposing, an obligation on (i) the Company or any Related Entity to continue
the employment of any Participant and (ii) any Participant to remain in the
employ of the Company or any Related Entity.
G. Noncompetition. Any Agreement may contain, among other things,
provisions prohibiting Participants from competing with the Company or any
Related Entity in a form or forms acceptable to the Committee, in its sole
discretion.
H. Governing Law. This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws of the State of
Colorado.
XXI. Amendment or Termination of Plan.
The Board shall have the right to amend, modify, suspend or terminate
the Plan at any time, provided that no amendment shall be made which shall (i)
increase the total number of Awards with respect to Common Stock which may be
granted in total or to any single Participant, (ii) to decrease the minimum
Option Price in
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the case of an Incentive Option, or (iii) modify the provisions of the Plan
with respect to Incentive Options, unless such amendment is made by or with the
approval of the stockholders or unless the Board receives an opinion of counsel
to the Company that shareholder approval is not necessary with respect to any
modifications relating to Incentive Options. With respect to Awards made to
Executive Officers or Outside Directors, no amendment shall be made which
either (i) materially increases the benefits accruing to such Executive
Officers or Outside Directors, (ii) materially increases the number of such
Awards which may be issued under the Plan to Executive Officers or Outside
Directors, or (iii) materially modifies the requirements as to eligibility for
participation of Executive Officers or Outside Directors in the Plan unless
such amendment is made with the approval of stockholders. No amendment,
modification, suspension or termination of the Plan shall alter or impair any
Awards previously granted under the Plan, without the consent of the holder
thereof.
XXII. Adoption of the Plan.
The Plan shall become effective on the date on which the shareholders
approve the Plan by a majority of the votes cast at the 1994 Annual Meeting.