EXHIBIT 10(u)
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INCLUDES ALL AMENDMENTS ADOPTED THROUGH 9/28/00 AMENDMENT.
NIAGARA MOHAWK
LONG TERM INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan. Niagara Mohawk Power Corporation, a New
York corporation, established an incentive compensation plan, known as the
"Niagara Mohawk Power Corporation Long Term Incentive Plan," to permit grants of
SAR's, Stock Units and Dividend Equivalents. The plan became effective as of
September 25, 1996 ("Effective Date") and was amended and restated as of June
10, 1997.
Effective as of January 1, 1999, the name of the plan was changed to the
Niagara Mohawk Long Term Incentive Plan" ("Plan"). The plan shall remain in
effect as provided in Section 1.3.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the success
and enhance the value of the Company through the retention and continued
motivation of Participants, focusing their efforts toward the execution of
business strategies directed toward improving financial returns to shareholders.
1.3 Duration of the Plan. The Plan shall commence on the Effective Date,
as described in Section 1.1 herein, and shall remain in effect, subject to the
right of the Board of Directors to terminate the Plan at any time pursuant to
Article 14 herein, until September 24, 2006. The applicable terms of the Plan
and any terms and conditions applicable to SARs or Stock Units, including any
deferral elections, granted prior to such date shall survive the termination of
the Plan .
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when such meaning is intended, the initial letter of the word
is capitalized:
2.1 "Award" means, individually or collectively, a grant under the Plan of
SARs or Stock Units.
2.2 "Award Agreement" means an agreement entered into by each Participant
and the Company, setting forth the terms and provisions applicable to an Award
granted to a Participant under the Plan.
2.3 "Base Value" of an SAR shall have the meaning set forth in Section 6.2
herein.
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2.4 "Board" or "Board of Directors" means effective March 17, 1999, the
Board of Directors of Niagara Mohawk Holdings, Inc. Prior to March 17,
1999 references to "Board" mean the Board of Directors of Niagara Mohawk
Power Corporation.
2.5 "Cause" means: (i) a material default or other material breach by a
Participant of his obligations under any Employment Agreement he may have with
the Company, (ii) failure by a Participant diligently and competently to perform
his duties under any Employment Agreement he may have with the Company, or
otherwise, or (iii) misconduct, dishonesty, insubordination or other act by a
Participant detrimental to the good will of the Company or damaging the
Company's relationships with its customers, suppliers or employees. "Cause"
shall be determined in good faith by the Committee.
2.6 "Change in Control" of the Company shall be deemed to have occurred as
of the first day that any one or more of the following conditions shall have
been satisfied:
(1) The acquisition by any Person of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (i) the then outstanding Shares of the Company or
(ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from
the Company (excluding an acquisition by virtue of the exercise of a
conversion privilege), (ii) any acquisition by the Company, (iii)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled
by the Company or (iv) any acquisition by any corporation pursuant
to a reorganization, merger or consolidation, if, following such
reorganization, merger or consolidation, the conditions described in
clauses (i), (ii) and (iii) of subparagraph (3) below are satisfied;
or
(2) Individuals who, as of April 1, 1999, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the directors then
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comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(3) The consummation of a reorganization, merger or consolidation
involving the Company that requires the approval of the Company's
shareholders (whether for such transaction or the issuance of
securities in the transaction), in each case, unless, immediately
following such reorganization, merger or consolidation, (i) more
than 75 % of, the then outstanding shares of common stock of (A) the
corporation resulting from such reorganization, merger or
consolidation (the "Surviving Corporation") or (B) if applicable,
the ultimate parent corporation that directly or indirectly has
beneficial ownership of at least 95% of the outstanding shares of
common stock of the surviving corporation (the "Parent Corporation")
and more than 75% of the combined voting power of the then
outstanding voting securities of the Surviving Corporation (or, if
applicable, the Parent Corporation) entitled to vote generally in
the election of directors are then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Shares and Outstanding Company Voting Securities
immediately prior to such reorganization, merger or consolidation,
in substantially the same proportions as their ownership immediately
prior to such reorganization, merger or consolidation, of the
Outstanding Shares and Outstanding Company Voting Securities, as the
case may be, (ii) no Person (excluding the Company, any employee
benefit plan (or related trust) of the Company, the Surviving
Corporation (or, if applicable, the Parent Corporation) and any
Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly, 20%
or more of the Outstanding Shares or Outstanding Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common
stock of the Surviving Corporation (or, if applicable, the Parent
Corporation) or the combined voting power of the then outstanding
voting securities of the Surviving Corporation (or, if applicable,
the Parent Corporation) entitled to vote generally in the election
of directors and (iii) at least a majority of the members of the
board of directors of the Surviving Corporation (or, if applicable,
the Parent Corporation) were members of the Incumbent Board at the
time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
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(4) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company
or, on or after April 1, 1999, of Niagara Mohawk Power Corporation,
other than to a corporation, with respect to which following such
sale or other disposition, (A) more than 75% of, respectively, the
then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Shares and
Outstanding Company Voting Securities immediately prior to such sale
or other disposition in substantially the same proportion as their
ownership immediately prior to such sale or other disposition of the
Outstanding Shares and Outstanding Company Voting Securities, as the
case may be, (B) no Person (excluding the Company and any employee
benefit plan (or related trust) of the Company or such corporation
and any Person beneficially owning, immediately prior to such sale
or other disposition, directly or indirectly, 20% or more of the
Outstanding Shares or Outstanding Company Voting Securities, as the
case may be) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors and (C) at least a majority
of the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the
initial agreement or action of the Board providing for such sale or
other disposition of assets of the Company;
provided, however, that the implementation of the corporate restructuring
contemplated by the Company's PowerChoice proposal filed with the New York
Public Service Commission on October 6, 1995, or any substantially similar
corporate restructuring (as determined by the Committee) shall not be deemed to
be a "Change in Control".
2.7 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.8 "Committee" means the committee, as specified in Article 3, appointed
by the Board to administer the Plan with respect to grants of Awards.
2.9 "Company" means Niagara Mohawk Holdings, Inc. (effective as of March
17, 1999), Niagara Mohawk Power Corporation, and any other separate employer
that participates in this Plan with the consent of the Board (each of these
separate employers, as well as any other separate employer that participates in
this Plan with the consent of the Board, shall hereinafter be referred to as a
"Participating Employer"). Notwithstanding the foregoing, the term "Company"
means Niagara Mohawk Holdings, Inc. for the purposes of the administration of
the Plan and for
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purposes of Section 2.6. The term "Company" is being used solely for convenience
to make the Plan easier to read, and does not alter the fact that an Employee is
employed by the separate Participating Employer from which the Employee
regularly receives his paycheck. With respect to any Employee, the term
"Company" means such separate Participating Employer.
2.10 "Director" means any individual who is a member of the Board of
Directors of the Company.
2.11 "Disability" shall have the meaning ascribed to such term under
Section 22(e)(3) of the Code.
2.12 "Dividend Equivalent" means, with respect to Shares underlying a
Stock Unit, an amount equal to all cash and stock dividends declared on an equal
number of outstanding Shares on all common stock dividend payment dates
occurring during the Vesting Period.
2.13 "Eligible Employee" means an Employee who is eligible to participate
in the Plan, as set forth in Section 5.1 herein.
2.14 "Employee" means any full-time employee of the Company, who is not
covered by any collective bargaining agreement to which the Company is a party.
Directors who are not otherwise employed by the Company shall not be considered
Employees under the Plan. For purposes of the Plan, transfer of employment of a
Participant from the Company to any one of its Subsidiaries shall not be deemed
a termination of employment.
2.15 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.16 "Exercise Period" means the period during which an SAR is
exercisable, as set forth in the related Award Agreement.
2.17 "Fair Market Value" means the average of the daily opening and
closing sale prices as reported in the consolidated transaction reporting
system.
2.18 "Participant" means an Employee of the Company who has outstanding an
Award granted under the Plan.
2.19 "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act, as used in Sections 13(d) and 14(d) thereof,
including usage in the definition of a "group" in Section 13(d) thereof.
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2.20 "Retirement" means (i) ascribed to such term in the tax-qualified
defined benefit pension plan maintained by the Company for the benefit of some
or all of its non-represented employees and (ii) retirement from the Company or
its subsidiaries with the approval of the Committee.
2.21 "Shares" means, through March 17, 1999, the shares of common stock of
Niagara Mohawk Power Corporation, par value $1.00. After March 17, 1999, all
references to "Shares" mean the shares of common stock of Niagara Mohawk
Holdings, Inc., par value $1.00.
2.22 "Stock Appreciation Right" or "SAR" means a right, designated as an
SAR, to receive a payment on the day the right is exercised, pursuant to the
terms of Article 6 herein. Each SAR shall be denominated in terms of one Share.
2.23 "Stock Unit" means a right, designated as a Stock Unit, to receive a
payment as soon as practicable following the last day of a Vesting Period,
pursuant to the terms of Article 7 herein. Each Stock Unit shall be denominated
in terms of one Share.
2.24 "Subsidiary" means any corporation that is a "subsidiary corporation"
of the Company as that term is defined in Section 424(f) of the Code.
2.25 "Valuation Period" means the 12 trading day period ending on and
including the relevant date.
2.26 "Vesting Period" means the period during which Stock Units are not
yet payable, as set forth in the related Award Agreement.
ARTICLE 3. ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Compensation and
Succession Committee of the Board, or by any other Committee appointed by the
Board consisting of not less than two (2) non-employee Directors. The members of
the Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board of Directors.
3.2 Authority of the Committee. The Committee shall have full power except
as limited by law, the Articles of Incorporation and the Bylaws of the Company,
subject to such other restricting limitations or directions as may be imposed by
the Board and subject to the provisions herein, to determine the size and types
of Awards; to determine the terms and conditions of such Awards in a manner
consistent with the Plan; to construe and interpret the Plan
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and any agreement or instrument entered into under the Plan; to establish, amend
or waive rules and regulations for the Plan's administration; and (subject to
the provisions of Article 14 herein) to amend the terms and conditions of any
outstanding Award. Further, the Committee shall make all other determinations
that may be necessary or advisable for the administration of the Plan. As
permitted by law, the Committee may delegate its authorities as identified
hereunder.
3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its shareholders, Employees, Participants and their
estates and beneficiaries.
3.4 Costs. The Company shall pay all costs of administration of the Plan.
ARTICLE 4. ADJUSTMENTS IN AUTHORIZED SHARES
In the event of any merger, reorganization consolidation,
recapitalization, separation, liquidation, stock dividend, split-up, share
combination or other change in the corporate structure of the Company affecting
the Shares, such adjustment shall be made in the number of SARs and Stock Units
that may be granted under the Plan, and in the number and/or price of
outstanding Awards granted under the Plan, as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to prevent
dilution or enlargement of rights; provided, however, that the number of SARs
and Stock Units subject to an Award shall always be a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in the Plan include all
key Employees of the Company, as determined by the Committee.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees those to
whom Awards shall be granted and shall determine the nature and amount of each
Award.
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ARTICLE 6. STOCK APPRECIATION RIGHTS
6.1 Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be
granted to Eligible Employees at any time and from time to time, as shall be
determined by the Committee.
The Committee shall have complete discretion in determining the number of
SARs granted to each Participant (subject to Article 4 herein) and, consistent
with the provisions of the Plan, in determining the terms and conditions
pertaining to such SARs.
6.2 Base Value. The Base Value of an SAR shall equal the Fair Market Value
of a Share determined for the 12 trading day period immediately preceding the
date of the grant, or for such other period as the Compensation Committee, in
its sole discretion, shall determine at the time of grant.
6.3 Exercise and Payment of SARs. A Participant may exercise an SAR at any
time during the Exercise Period. SARs shall be exercised by the delivery of a
written notice of exercise to the Company, setting forth the number of SARs
being exercised. Upon exercise of an SAR, a Participant shall be entitled to
receive payment in cash from the Company in an amount equal to the product of:
(a) the excess of (i) the Fair Market Value of a Share on the date of
exercise over (ii) the Base Value of the SAR, multiplied by
(b) the number of Shares with respect to which the SAR is exercised.
6.4 SAR Award Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the number of SARs granted, the Base Value, the
Exercise Period, the expiration date and such other provisions as the Committee
shall determine.
6.5 Lapse of SARs. Subject to the provisions of Article 9, an SAR will
lapse upon the earlier of (i) fifteen (15) years from the date of grant and (ii)
the expiration of the Exercise Period as set forth in the grant.
ARTICLE 7. STOCK UNITS
7.1 Grant of Stock Units. Subject to the terms and conditions of the
Plan, Stock Units may be granted to Eligible Employees at any time and from time
to time, as shall be determined by the Committee.
The Committee shall have complete discretion in determining the number of
Stock Units granted to each Participant (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to such Stock Units.
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7.2 Vesting of Stock Units. The Vesting Period of Stock Units granted
under the Plan shall be determined by the Committee, in its sole discretion, as
set forth in the related Award Agreement .
7.3 Payment of Stock Units. After the applicable Vesting Period has ended,
the holder of Stock Units shall be entitled to receive, for each Stock Unit
held, payment in cash from the Company in an amount equal to the Fair Market
Value of one Share determined as of the Valuation Period ending on the last day
of the Vesting Period. Payment shall be made as soon as practicable following
the last day of the Vesting Period.
7.4 Stock Unit Award Agreement. Each Stock Unit grant shall be evidenced
by an Award Agreement that shall specify the number of Stock Units granted, the
Vesting Period and such other provisions as the Committee shall determine.
ARTICLE 8. DIVIDEND EQUIVALENTS
Simultaneously with the grant of Stock Units, the Participant shall be
granted Dividend Equivalents, to be credited to a bookkeeping entry account, on
each common stock dividend payment date with respect to the Shares subject to
such Award. In the case of cash dividends, the number of Dividend Equivalents
credited on each common stock dividend payment date shall equal the number of
Shares (including fractional Shares) that could be purchased on the dividend
payment date, based on the average of the opening and closing sale price, as
reported in the consolidated transaction reporting system on that date, with
cash dividends that would have been paid on Awards of Stock Units and on
Dividend Equivalents previously credited to such bookkeeping entry account, if
such Stock Units or Dividend Equivalents were Shares. In the case of stock
dividends, the number of Dividend Equivalents credited on each stock dividend
payment date shall be equal to the number of Shares (including fractional
Shares) that would have been issued as a stock dividend in respect of the
Participant's Stock Units and on Dividend Equivalents previously credited to
such bookkeeping entry account, if such Stock Units or Dividend Equivalents were
Shares.
Participants shall receive cash payment from the Company of the Fair
Market Value of the Dividend Equivalents, if and when they receive payment of
the related Stock Units, the Fair Market Value of such Dividend Equivalents to
be determined in the same manner as for the related Stock Units.
The Committee may, in its discretion, establish such rules and procedures
governing the crediting of Dividend Equivalents, including timing and payment
contingencies that apply to the Dividend Equivalents, as the Committee deems
necessary or appropriate in order to comply with applicable law.
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ARTICLE 9. TERMINATION OF EMPLOYMENT; TRANSFERABILITY
9.1 Disability; Involuntary Termination. In the event the employment of a
Participant is terminated by reason of Disability or involuntarily by the
Company (other than for Cause):
(i) during a Vesting Period for Stock Units, the Participant shall
receive a full payout of the Stock Units and related Dividend
Equivalents, as and when provided in Section 7.3 herein;
(ii) before the Exercise Period commences for SARs subject to an Award,
such SARs may be exercised in full at any time during the one year
period commencing on the day the Exercise Period begins; and
(iii) during the Exercise Period for SARs, but before exercise, such SARs
may be exercised in full at any time during the one year period
after such termination, but in no event after the Exercise Period
for such SARs has expired.
9.2 Death. In the event the employment of a Participant is terminated by
reason of death:
(i) during the Vesting Period for Stock Units, the Participant's
beneficiary or estate shall receive a full payout of the Stock Units
and related Dividend Equivalents. The payout shall be made promptly
based on the Fair Market Value of a Share on the date of death; and
(ii) before the Exercise Period commences for SARs subject to an Award or
during the Exercise Period, but before exercise, the Participant's
beneficiary or estate shall receive a full payout of all SARs
subject to an Award, to the extent the Fair Market Value of a Share
exceeds the Base Value of the SAR on the date of death.
9.3 Corporate Restructuring. In the event (i) the corporate restructuring
as contemplated by the Company's PowerChoice proposal filed with the New York
Public Service Commission on October 6, 1995, or any substantially similar
corporate restructuring (determined by the Committee), is implemented and (ii)
the employment of a Participant with the Company is terminated (other than for
Cause), then with respect to Awards granted prior to implementation of the
restructuring,
(i) during a Vesting Period for Stock Units, the Participant shall
receive a full payout of Stock Units and related Dividend
Equivalents, as and when provided in Section 7.3 herein;
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(ii) before the Exercise Period commences for SARs subject to an Award,
such SARs may be exercised in full at any time during the one year
period commencing on the day the Exercise Period begins; and
(iii) during the Exercise Period for SARs, but before exercise, such SARs
may be exercised in full at any time during the one year period
after such termination, but in no event after the Exercise Period
for such SARs has expired.
9.4 Retirement. In the event the employment of a Participant is terminated
by reason of Retirement:
(i) during a Vesting Period for Stock Units, the Participant shall
receive a prorated payout of the Stock Units and related Dividend
Equivalents. The prorated payout shall be determined by the
Committee, shall be based upon the length of time that the
Participant held the Stock Units during the Vesting Period and shall
be made as and when provided in Section 7.3 herein;
(ii) before the Exercise Period commences for SARs subject to an Award,
the number of SARs subject to an Award shall be prorated by the
Committee, based upon the length of time that the Participant held
the SARs before Retirement; after the Exercise Period commences, the
prorated SARs may be exercised at any time in full or in part from
time to time during the Exercise Period, and
(iii) during the Exercise Period for SARs, but before exercise, such SARs
may be exercised at any time in full or in part from time to time
during the Exercise Period.
Other than as set forth in Article 13, in the event that a Participant's
employment terminates for any reason other than as set forth in Sections 9.l,
9.2, 9.3 and 9.4, above, all Stock Units, SARs and Dividend Equivalents shall be
forfeited by the Participant to the Company .
9.5 Nontransferability of Awards. Notwithstanding the foregoing, the
Committee may in its discretion authorize a participant to transfer all or a
portion of any award to the participant's family members on such terms
prescribed by the Committee. No Award granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all Awards
granted to a Participant under the Plan shall be exercisable/payable during his
or her lifetime only by or to such Participant or his or her legal
representative.
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9.6 Right of Committee. Subject to the provisions of Section 14.2 herein,
all provisions in this Article 9 are subject to the Committee's right, at any
time, to make such other determinations as it may choose, in its sole
discretion. Furthermore, should more than one section of Article 9 and/or
Article 13 apply to a situation, the Committee shall have the right, in its sole
discretion, to determine which section and/or article to apply.
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his death before he
receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Committee during the Participant's lifetime. In the absence of any such
designation , benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate.
The spouse of a married Participant domiciled in a community property
jurisdiction shall join in any designation of beneficiary or beneficiaries other
than the spouse.
ARTICLE 11. DEFERRALS
The Committee may permit a Participant to defer such Participant's receipt
of the payment of cash that would otherwise be due to such Participant. If any
such deferral election is permitted, the Committee shall, in its sole
discretion, establish such rules and procedures as it deems necessary or
desirable for such payment deferrals.
ARTICLE 12. RIGHTS OF EMPLOYEES
12.1 Employment. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, for any reason or no reason, in the Company's sole discretion, nor confer
upon any Participant any right to continue in the employ of the Company.
12.2 Participation. No Employee shall have the right to be selected to
receive an Award under the Plan, or, having been so selected, to be selected to
receive a future Award.
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ARTICLE 13. CHANGE IN CONTROL
Upon the occurrence of a Change in Control, as defined herein, unless
otherwise specifically prohibited by the terms of Article 17 herein:
(a) If the Change in Control results solely in a cash payment for the
outstanding Shares and such Shares cease to be readily tradeable on a
national securities exchange which is registered under Section 6 of the
Exchange Act or on NASDAQ, then any and all SARs granted hereunder shall
be deemed to have been exercised on the date such Change in Control
occurs;
(b) If the Change in Control does not result solely in a cash payment for
the outstanding Shares or such Shares continue to be readily tradeable on
a national securities exchange which is registered under Section 6 of the
Exchange Act or on NASDAQ, then any and all SARs granted hereunder shall
be fully and immediately exercisable and may be exercised at any time in
full or in part from time to time until the end of the Exercise Period. In
such event, if the Shares are converted into the common stock, American
Depositary Share ("ADSs") or American Depositary Receipts ("ADRs") of the
Person referred to in subsection (1) of Section 2.6, the Surviving
Corporation or the Parent Corporation, then (i) payments for SARS shall be
based on the value of the common stock, ADRs or ADSs (as applicable) of
such Person Surviving Corporation or Parent Corporation and (ii) the Base
Value and number of SARs shall be appropriately adjusted to reflect the
per Share consideration received by the holders of the Shares. In the
event such Change in Control results in payment of a combination of cash
and other property (including common stock, ADRs or ADSs) for the
outstanding Shares, the per Share consideration shall be deemed to be the
change in control price (as such term is defined below).
(c) Any Vesting Period with respect to Stock Units shall be deemed to have
expired, and there shall be paid out in cash to Participants within thirty
(30) days following the effective date of the Change in Control the cash
payment due with respect to such Stock Units and related Dividend
Equivalents, with a Valuation Period ending on the effective date of the
Change in Control. Notwithstanding the foregoing and the provisions of
Section 7.3, if the Change in Control results in payment of a combination
of cash and other property for the outstanding Shares, the cash payment
for each of such Stock Units and related Dividend Equivalents shall be an
amount equal to the change in control price.
In addition, if the Change in Control occurs pursuant to the
transaction described in subsection (3) of Section 2.6, then any
Participant (i) who had an outstanding Award on the date of the approval
by the shareholders of the Corporation of such transaction, (ii) whose
employment is terminated after shareholder approval and prior to the date
of the occurrence of the Change in Control, by the Company other than for
cause, by the Participant for good reason (as such terms are defined
below), or by the acceptance by the participant of a
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position with the acquirer of Niagara Mohawk Power Corporation's nuclear
facilities, and (iii) who forfeited any Stock Units, Dividend Equivalents
or SARs as a result of such termination of employment, shall receive a
cash payment, within thirty (30) days following the date such Change in
Control occurs, equal to (i) with respect to each forfeited Stock Unit and
Dividend Equivalent, the change in control price and (ii) with respect to
each forfeited SAR, the result of multiplying (A) the excess of the change
in control price over the Base Value of the SAR by (B) the number of
Shares forfeited under such SAR.
For purposes of this Article:
(i) "cause" shall (A) have the meaning ascribed to such term in the
Participant's employment agreement or change in control severance
agreement with the Company or a subsidiary, if any, and (B) mean, in the
absence of an agreement referred to in clause (A), the Participant's
having (a) materially breached his obligations to the Company or any of
its subsidiaries, (b) failed in a willful and continued manner to
substantially perform his duties and responsibilities after a demand for
substantial performance is delivered to the Participant by a direct
supervisor or any more senior executive, which specifically identifies the
manner in which the direct supervisor or executive believes that the
Participant has not substantially performed his duties, (c) been convicted
of, or have entered a plea of guilty or nolo contendere to, a felony.
(ii) "change in control price" shall mean the greater of (A) the Fair
Market Value of one Share on the date of the Change in Control or (B) the
cash consideration per Share in such transaction (determined without
regard to any limits on the number of Shares for which a cash payment will
be made).
(iii) "good reason" shall (A) have the meaning ascribed to such term in
the Participant's employment agreement or change in control severance
agreement with the Company or a subsidiary, if any, and (B) mean, in the
absence of an agreement referred to in clause (A), the imposition of a
requirement that the Participant be based at an office or location other
than one within a 50-mile radius of the office or a location at which the
Participant was based immediately prior to approval by the Corporation's
shareholders of the transaction described in subsection (3) of Section
2.6, or a reduction in the Participant's base annual salary from the rate
in effect immediately prior to such shareholder approval.
ARTICLE 14. AMENDMENT, MODIFICATION AND TERMINATION
14.1 Amendment. Modification and Termination. The Board may, at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part.
14.2 Awards Previously Granted. No termination, amendment or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award, unless such termination, modification or amendment is required by
applicable law.
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ARTICLE 15. TAX WITHHOLDING
The Company shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
Federal, state and local taxes (including the Participant's FICA obligation)
required by law to be withheld with respect to any taxable event arising out of
or as a result of an Award made under the Plan.
ARTICLE 16. SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 17. LEGAL CONSTRUCTION
17.1 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular and the singular shall include the plural.
17.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
17.3 Requirements of Law. The granting of Awards under the Plan shall be
subject to all applicable laws, rules and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be required.
17.4 Governing Law. To the extent not preempted by Federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with, and
governed by, the laws of the State of New York, without regard to conflicts of
law provisions.
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