EXHIBIT (10)(xvi)
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Amended - January 25, 2001
Approved by the shareholders - April 18, 2001
THE STANLEY WORKS
2001 LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSE
The purposes of this Long-Term Incentive Plan (the "Plan") are to
encourage selected salaried employees of The Stanley Works (together with any
successor thereto, the "Company") and selected salaried employees and
non-employee directors of its Affiliates (as defined below) to acquire a
proprietary interest in the growth and performance of the Company, to generate
an increased incentive to contribute to the Company's future success and
prosperity, thus enhancing the value of the Company for the benefit of its
shareowners, and to enhance the ability of the Company and its Affiliates to
attract and retain exceptionally qualified individuals upon whom, in large
measure, the sustained progress, growth and profitability of the Company depend.
SECTION 2. DEFINITIONS
As used in the Plan, the following terms shall have the meanings set
forth below:
(A) "Affiliate" shall mean (i) any entity that, directly or through
one or more intermediaries, is controlled by the Company and (ii)
any entity in which the Company has a significant equity interest,
as determined by the Committee.
(B) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award,
Dividend Equivalent, or Other Stock-Based Award granted under the
Plan.
(C) "Award Agreement" shall mean any written agreement, contract, or
other instrument or document evidencing any Award granted under
the Plan.
(D) "Board of Directors" or "Board" shall mean the Board of Directors
of the Company.
(E) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(F) "Committee" shall mean the Compensation and Organization
Committee of the Board.
(G) "Dividend Equivalent" shall mean any right granted under Section
6(e) of the Plan.
(H) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(I) "Fair Market Value" shall mean, with respect to any property other
than Shares, the fair market value of such property determined by
such methods or procedures as shall be established from time to
time by the Committee, and with respect to Shares, shall mean the
mean average of the high and the low price of a Share as quoted on
the New York Stock Exchange Composite Tape on the date as of which
fair market value is to be determined or, if there is no trading
of Shares on such date, such mean average of the high and the low
price on the next preceding date on which there was such trading.
(J) "Immediate family members" of a Participant shall mean the
Participant's children, grandchildren and spouse.
(K) "Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to meet the requirements
of Section 422 of the Code, or any successor provision thereto.
(L) "1997 Plan" shall mean the Company's 1997 Long-Term Incentive
Plan.
(M) "Non-Employee Director" shall mean any non-employee director of an
Affiliate.
(N) "Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive
Stock Option.
(O) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
(P) "Other Stock-Based Award" shall mean any right granted under
Section 6(f) of the Plan.
(Q) "Participant" shall mean a Salaried Employee or non-employee
director designated to be granted an Award under the Plan.
(R) "Performance Award" shall mean any Award granted under Section
6(d) of the Plan.
(S) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated
organization, or government or political subdivision thereof.
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(T) "Released Securities" shall mean securities that were Restricted
Securities with respect to which all applicable restrictions have
expired, lapsed, or been waived.
(U) "Restricted Securities" shall mean securities covered by Awards of
Restricted Stock or other Awards under which issued and
outstanding Shares are held subject to certain restrictions.
(V) "Restricted Stock" shall mean any Share granted under Section 6(c)
of the Plan.
(W) "Restricted Stock Unit" shall mean any right granted under Section
6(c) of the Plan that is denominated in Shares.
(X) "Salaried Employee" shall mean any salaried employee of the
Company or of any Affiliate.
(Y) "Shares" shall mean shares of the common stock of the Company, par
value $2.50 per share, and such other securities or property as
may become the subject of Awards, or become subject to Awards,
pursuant to an adjustment made under Section 4(b) of the Plan.
(Z) "Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.
SECTION 3. ADMINISTRATION
Except as otherwise provided herein, the Plan shall be administered by
the Committee. Subject to the terms of the Plan and applicable law, the
Committee shall have full power and authority to: (i) designate Participants;
(ii) determine the type or types of Awards to be granted to each Participant
under the Plan; (iii) determine the number of Shares to be covered by or with
respect to which payments, rights, or other matters are to be calculated in
connection with Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards, or
other property, or canceled, forfeited, or suspended, and the method or methods
by which Awards may be settled, exercised, canceled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances cash,
Shares, other securities, other Awards, other property and other amounts payable
with respect to an Award under the Plan shall be deferred either automatically
or at the election of the holder thereof or of the Committee; (vii) interpret
and administer the Plan and any instrument or agreement relating to, or Award
made under, the Plan; (viii) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other determination and take any
other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly
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provided in the Plan, all designations, determinations, interpretations, and
other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time, and shall be
final, conclusive, and binding upon all Persons, including the Company, any
Affiliate, any Participant, any holder or beneficiary of any Award, any
shareowner, and any employee of the Company or of any Affiliate.
SECTION 4. SHARES AVAILABLE FOR AWARDS
(A) SHARES AVAILABLE. Subject to adjustment as provided in
Section 4(b):
(I) CALCULATION OF NUMBER OF SHARES AVAILABLE. The number of
Shares authorized to be issued in connection with the
granting of Awards under the Plan is ten million
(10,000,000). If any Shares covered by an Award granted
under the Plan or by an award granted under the 1997 Plan,
or to which such an Award or award relates, are forfeited,
or if an Award or award otherwise terminates without the
delivery of Shares or of other consideration, or if upon the
termination of the 1997 Plan there are Shares remaining that
were authorized for issuance under that Plan but with
respect to which no awards have been granted, then the
Shares covered by such Awards or award, or to which such
Award or award relates, or the number of Shares otherwise
counted against the aggregate number of Shares available
under the Plan with respect to such Award or award, to the
extent of any such forfeiture or termination, or which were
authorized for issuance under the 1997 Plan but with respect
to which no awards were granted as of the termination of the
1997 Plan shall again be, or shall become available for
granting Awards under the Plan. Notwithstanding the
foregoing but subject to adjustment as provided in Section
4(b), (A) no more than one million (1,000,000) Shares shall
be cumulatively available for delivery pursuant to the
exercise of Incentive Stock Options and (B) no more than one
million (1,000,000) Shares shall be cumulatively available
for granting as Restricted Stock or Restricted Stock Units.
(II) ACCOUNTING FOR AWARDS. For purposes of this Section 4,
(A) if an Award (other than a Dividend Equivalent) is
denominated in Shares, the number of Shares covered
by such Award, or to which such Award relates, shall
be counted on the date of grant of such Award against
the aggregate number of Shares available for granting
Awards under the Plan; and
(B) Dividend Equivalents and Awards not denominated in
Shares shall be counted against the aggregate number
of Shares available for granting Awards under the
Plan, if at all, only in such amount and at such time
as the Committee shall determine under procedures
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adopted by the Committee consistent with the purposes
of the Plan; provided, however, that Awards that
operate in tandem with (whether granted
simultaneously with or at a different time from), or
that are substituted for, other Awards or awards
granted under the 1997 Plan may be counted or not
counted under procedures adopted by the Committee in
order to avoid double counting. Any Shares that are
delivered by the Company, and any Awards that are
granted by, or become obligations of, the Company
through the assumption by the Company or an Affiliate
of, or in substitution for, outstanding awards
previously granted by an acquired company, shall not
be counted against the Shares available for granting
Awards under the Plan.
(iii) SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Any Shares
delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Shares or of treasury
Shares.
(b) ADJUSTMENTS. In the event that the Committee shall determine that
any dividend or other distribution (whether in the form of cash,
Shares, other securities, or other property), recapitalization,
stock split, reverse stock split, reorganization, merger,
consolidation split-up, spin-off, combination repurchase, or
exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of
the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the
number and type of Shares (or other securities or property) which
thereafter may be made the subject of Awards, (ii) the number and
type of Shares (or other securities or property) subject to
outstanding Awards, (iii) the number and type of Shares (or other
securities or property) specified as the annual per-participant
limitation under Section 6(g)(vi), and (iv) the grant, purchase,
or exercise price with respect to any Award, or, if deemed
appropriate, make provision for a cash payment to the holder of an
outstanding Award; provided, however, in each case, that with
respect to Awards of Incentive Stock Options no such adjustment
shall be authorized to the extent that such authority would cause
the Plan to violate Section 422(b)(1) of the Code or any successor
provision thereto; and provided further, however, that the number
of Shares subject to any Award denominated in Shares shall always
be a whole number.
SECTION 5. ELIGIBILITY
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Any Salaried Employee, including any officer or employee-director of the
Company or of any Affiliate, and any Non-Employee Director, who is not a member
of the Committee shall be eligible to be designated a Participant.
SECTION 6. AWARDS
(A) OPTIONS. The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such
additional terms and conditions, in either case not inconsistent
with the provisions of the Plan, as the Committee shall determine:
(I) EXERCISE PRICE. The purchase price per Share purchasable
under an Option shall be determined by the Committee;
provided, however, that such purchase price shall not be
less than the Fair Market Value of a Share on the date of
grant of such Option (or, if the Committee so determines, in
the case of any Option retroactively granted in tandem with
or in substitution for another Award or any outstanding
award granted under any other plan of the Company, on the
date of grant of such other Award or award).
(II) OPTION TERM. The term of each Option shall be fixed by the
Committee.
(III) TIME AND METHOD OF EXERCISE. The Committee shall determine
the time or times at which an Option may be exercised in
whole or in part, and the method or methods by which, and
the form or forms, including, without limitation, cash,
Shares, other Awards, or other property, or any combination
thereof, having a Fair Market Value on the exercise date
equal to the relevant exercise price, in which, payment of
the exercise price with respect thereto may be made or
deemed to have been made.
(IV) INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock
Option granted under the plan shall comply in all respects
with the provisions of Section 422 of the Code, or any
successor provision thereto, and any regulations promulgated
thereunder. No Incentive Stock Option shall be granted to
any Non-Employee Director who is not otherwise an employee
of the Company or any of its Affiliates.
(V) TRANSFERABILITY. An Option shall not be transferable other
than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order, as defined
in the Code, and, during the Participant's lifetime, shall
be exercisable only by the Participant, except that the
Committee may:
(A) permit exercise, during the Participant's lifetime,
by the Participant's guardian or legal
representative; and
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(B) permit transfer, upon the Participant's death, to
beneficiaries designated by the Participant in a
manner authorized by the Committee, provided that the
Committee determines that such exercise and such
transfer are consonant with requirements for
exemption from Section 16(b) of the Exchange Act and,
with respect to an Incentive Stock Option, the
requirements of Section 422(b)(5) of the Code; and
(C) grant Non-Qualified Stock Options that are
transferable, or amend outstanding Non-Qualified
Stock Options to make them so transferable, without
payment of consideration, to immediate family members
of the Participant or to trusts or partnerships for
such family members.
(B) STOCK APPRECIATION RIGHTS. The Committee is hereby authorized to
grant Stock Appreciation Rights to Participants. Subject to the
terms of the Plan and any applicable Award Agreement, a Stock
Appreciation Right granted under the Plan shall confer on the
holder thereof a right to receive, upon exercise thereof, the
excess of (i) the Fair Market Value of one Share on the date of
exercise or, if the Committee shall so determine in the case of
any such right other than one related to any Incentive Stock
Option, at any time during a specified period before or after the
date of exercise over (ii) the grant price of the right as
specified by the Committee, which shall not be less than the Fair
Market Value of one Share on the date of grant of the Stock
Appreciation Right (or, if the Committee so determines, in the
case of any Stock Appreciation Right retroactively granted in
tandem with or in substitution for another Award or any
outstanding award granted under any other plan of the Company, on
the date of grant of such other Award or award). Subject to the
terms of the Plan and any applicable Award Agreement, the grant
price, term, methods of exercise, methods of settlement, and any
other terms and conditions of any Stock Appreciation Right shall
be as determined by the Committee. The Committee may impose such
conditions or restrictions on the exercise of any Stock
Appreciation Right as it may deem appropriate.
(C) RESTRICTED STOCK AND RESTRICTED STOCK UNITS.
(I) ISSUANCE. The Committee is hereby authorized to grant
Awards of Restricted Stock and Restricted Stock Units to
Participants.
(II) RESTRICTIONS. Shares of Restricted Stock and Restricted
Stock Units shall be subject to such restrictions as the
Committee may impose (including, without limitation, any
limitation on the right to vote a Share of Restricted Stock
or the right to receive any dividend or other right or
property), which restrictions may lapse separately or in
combination at
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such time or times, in such installments or
otherwise, as the Committee may deem appropriate.
(III) REGISTRATION. Any Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry
registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued
in respect of Shares of Restricted Stock granted under the
Plan, such certificate shall be registered in the name of
the Participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions
applicable to such Restricted Stock.
(IV) FORFEITURE. Except as otherwise determined by the Committee,
upon termination of employment (as determined under criteria
established by the Committee) for any reason during the
applicable restriction period, all Shares of Restricted
Stock and all Restricted Stock Units still, in either case,
subject to restriction shall be forfeited and reacquired by
the Company; provided, however, that the Committee may, when
it finds that a waiver would be in the best interests of the
Company, waive in whole or in part any or all remaining
restrictions with respect to Shares of Restricted Stock or
Restricted Stock Units. Unrestricted Shares, evidenced in
such manner as the Committee shall deem appropriate, shall
be delivered to the holder of Restricted Stock promptly
after such Restricted Stock shall become Released
Securities.
(D) PERFORMANCE AWARDS. The Committee is hereby authorized to grant
Performance Awards to Participants. Subject to the terms of the
Plan and any applicable Award Agreement, a Performance Award
granted under the Plan (i) may be denominated or payable in cash,
Shares (including without limitation, Restricted Stock), other
securities, other Awards, or other property and (ii) shall confer
on the holder thereof rights valued as determined by the
Committee and payable to, or exercisable by, the holder of the
Performance Award, in whole or in part, upon the achievement of
such performance goals during such performance periods as the
Committee shall establish. Subject to the terms of the Plan and
any applicable Awards Agreement, the performance goals to be
achieved during any performance period, the length of any
performance period, the amount of any Performance Award granted,
and the amount of any payment or transfer to be made pursuant to
any Performance Award shall be determined by the Committee.
(E) DIVIDEND EQUIVALENTS. The Committee is hereby authorized to grant
to Participants Awards under which the holders thereof shall be
entitled to receive payments equivalent to dividends or interest
with respect to a number of Shares determined by the Committee,
and the Committee may provide that such amounts (if any) shall be
deemed to have been reinvested in additional Shares or otherwise
reinvested. Subject to the terms of the Plan
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and any applicable Awards Agreement, such Awards may have such
terms and conditions as the Committee shall determine.
(F) OTHER STOCK-BASED AWARDS. The Committee is hereby authorized to
grant to Participants such other Awards that are denominated or
payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares (including, without
limitation, securities convertible into Shares), as are deemed by
the Committee to be consistent with the purposes of the Plan,
provided, however, that such grants must comply with applicable
law. Subject to the terms of the Plan and any applicable Award
Agreement, the Committee shall determine the terms and conditions
of such Awards. Shares or other securities delivered pursuant to
a purchase right granted under this Section 6(f) shall be
purchased for such consideration, which may be paid by such
method or methods and in such form or forms, including, without
limitation, cash, Shares, other securities, other Awards, or
other property, or any combination thereof, as the Committee
shall determine, the value of which consideration, as established
by the Committee, shall not be less than the Fair Market Value of
such Shares or other securities as of the date such purchase
right is granted (or, if the Committee so determines, in the case
of any such purchase right retroactively granted in tandem with
or in substitution for another Award or any outstanding award
granted under any other plan of the Company, on the date of grant
of such other Award or award).
(G) GENERAL.
(I) NO CASH CONSIDERATION FOR AWARDS. Awards shall be granted
for no cash consideration or for such minimal cash
consideration as may be required by applicable law.
(II) AWARDS MAY BE GRANTED SEPARATELY OR TOGETHER. Awards may, in
the discretion of the Committee, be granted either alone or
in addition to, in tandem with, or in substitution for any
other Award or any awards granted under any other plan of
the Company or any Affiliate. Awards granted in addition to
or in tandem with other Awards, or in addition to or in
tandem with awards granted under any other plan of the
Company or any Affiliate, may be granted either at the same
time as or at a different time from the grant of such other
Awards or awards.
(III) FORMS OF PAYMENT UNDER AWARDS. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon the
grant, exercise, or payment of an Award may be made in such
form or forms as the Committee shall determine, including,
without limitation, cash, Shares, other securities, other
Awards, or other property, or any combination thereof, and
may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case in
accordance with
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rules and procedures established by the
Committee. Such rules and procedures may include, without
limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or
the grant or crediting of Dividend Equivalents in respect of
installment or deferred payments.
(IV) LIMITS ON TRANSFER OF AWARDS. Except as provided in Section
6(a) above regarding Options, no Award (other than Released
Securities), and no right under any such Award, shall be
assignable, alienable, saleable, or transferable by a
Participant otherwise than by will or by the laws of descent
and distribution or pursuant to a qualified domestic
relations order, as defined in the Code (or, in the case of
an Award of Restricted Securities, to the Company);
provided, however, that, if so determined by the Committee,
a Participant may, in the manner established by the
Committee, designate a beneficiary or beneficiaries to
exercise the rights of the Participant, and to receive any
property distributable, with respect to any Award upon the
death of the Participant. Each Award, and each right under
any Award, shall be exercisable, during the Participant's
lifetime, only by the Participant or, if permissible under
applicable law, by the Participant's guardian or legal
representative. No Award (other than Released Securities),
and no right under any such Award, may be pledged,
alienated, attached, or otherwise encumbered, and any
purported pledge, alienation, attachment, or encumbrance
thereof shall be void and unenforceable against the Company
or any Affiliate.
(V) TERMS OF AWARDS. The Term of each Award shall be for such
period as may be determined by the Committee; provided,
however, that in no event shall the term of any Incentive
Stock Option exceed a period of ten years from the date of
its grant.
(VI) PER-PERSON LIMITATION ON OPTIONS AND SARS. The number of
Shares with respect to which Options and SARs may be granted
under the Plan to an individual Participant in any
three-year period from January 24, 2001 through the end of
the term shall not exceed 4,000,000 Shares, subject to
adjustment as provided in Section 4(b).
(VII) SHARE CERTIFICATES. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer
orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and
other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares or
other securities are then listed, and any applicable Federal
or state securities laws, and the Committee may cause a
legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
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(VIII)MAXIMUM PAYMENT AMOUNT. The maximum fair market value of
payments to any executive officer made in connection with
any long-term performance awards (except for payments made
in connection with Options or Stock Appreciation Rights)
granted under the Plan shall not, during any three-year
period, exceed two percent of Stanley's shareowners' equity
as of the end of the year immediately preceding the
commencement of such three-year period.
SECTION 7. AMENDMENT AND TERMINATION
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(A) AMENDMENTS TO THE PLAN. The Board of Directors of the Company may
amend, alter, suspend, discontinue, or terminate the Plan,
including, without limitation, any amendment, alteration,
suspension, discontinuation, or termination that would impair the
rights of any Participant, or any other holder or beneficiary of
any Award theretofore granted, without the consent of any
shareowner, Participant, other holder or beneficiary of an Award,
or other Person; provided, however, that, notwithstanding any
other provision of the Plan or any Award Agreement, without the
approval of the shareowners of the Company no such amendment,
alteration, suspension, discontinuation, or termination shall be
made that would:
(I) increase the total number of Shares available for Awards
under the Plan, except as provided in Section 4 hereof; or
(II) permit Options, Stock Appreciation Rights, or other
Stock-Based Awards encompassing rights to purchase Shares to be granted with per
Share grant, purchase, or exercise prices of less than the Fair Market Value of
a Share on the date of grant thereof, except to the extent permitted under
Sections 6(a), 6(b), or 6(f) hereof.
(B) ADJUSTMENTS OF AWARDS UPON CERTAIN ACQUISITIONS. In the event the
Company or any Affiliate shall assume outstanding employee awards
or the right or obligation to make future such awards in
connection with the acquisition of another business or another
corporation or business entity, the Committee may make such
adjustments, not inconsistent with the terms of the Plan, in the
terms of Awards as it shall deem appropriate in order to achieve
reasonable comparability or other equitable relationship between
the assumed awards and the Awards granted under the Plan as so
adjusted.
(C) ADJUSTMENTS OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee shall be authorized to make
adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring
events (including, without
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limitation, the events described in Section 4(b) hereof) affecting
the Company, any Affiliate, or the financial statements of the
Company or any Affiliate, or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential
benefits to be made available under the Plan.
(D) CORRECTION OF DEFECTS, OMISSIONS AND INCONSISTENCIES. The
Committee may correct any defect, supply any omission, or
reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem desirable to carry the Plan into
effect.
SECTION 8. GENERAL PROVISIONS
(A) NO RIGHTS TO AWARDS. No Salaried Employee, Participant or other
Person shall have any claim to be granted any Award under the
Plan, and there is no obligation for uniformity of treatment of
Salaried Employees, Participants, or holders or beneficiaries of
Awards under the Plan. The terms and conditions of Awards need not
be the same with respect to each recipient.
(B) DELEGATION. The Committee may delegate to one or more officers or
managers of the Company or any Affiliate, or a committee of such
officers or managers, the authority, subject to such terms and
limitations as the Committee shall determine, to grant Awards to,
or to cancel, modify, waive rights with respect to, alter,
discontinue, suspend or terminate Awards held by, Salaried
Employees who are not officers of the Company for purposes of
Section 16 of the Exchange Act.
(C) WITHHOLDING. The Company or any Affiliate shall be authorized to
withhold from any Award granted or any payment due or transfer
made under any Award or under the Plan the amount (in cash,
Shares, other securities, other Awards, or other property) of
withholding taxes due in respect of an Award, its exercise, or any
payment or transfer under such Awards or under the Plan and to
take such other action as may be necessary in the opinion of the
Company or Affiliate to satisfy all obligations for the payment of
such taxes.
(D) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in
the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other or additional compensation
arrangements, and such arrangements may be either generally
applicable or applicable only in specific cases.
(E) NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the
employ of the Company or any Affiliate. Further, the Company or an
Affiliate may at any time dismiss a Participant from employment,
free from any liability, or any claim under the
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Plan, unless otherwise expressly provided in the Plan or in any
Award Agreement.
(F) GOVERNING LAW. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Connecticut
and applicable Federal law.
(G) SEVERABILITY. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in
any jurisdiction, or as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be so
construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the
Award, such provision shall be stricken as to such jurisdiction,
Person, or Award, and the remainder of the Plan and any such Award
shall remain in full force and effect.
(H) NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent
that any Person acquires a right to receive payments from the
Company or any Affiliate pursuant to an Award, such right shall be
no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(I) NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee
shall determine whether cash, other securities, or other property
shall be paid or transferred in lieu of any fractional Shares, or
whether such fractional Shares or any rights thereto shall be
canceled, terminated, or otherwise eliminated.
(J) HEADINGS. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to
the construction or interpretation of the Plan or any provision
thereof.
SECTION 9. CHANGE IN CONTROL
(A) Upon the occurrence of a Change in Control (as hereinafter
defined):
(I) all Options and Stock Appreciation Rights, whether granted
as performance awards or otherwise, shall become immediately
exercisable in full for the remainder of their terms, and
Grantees shall have the right to have the Company purchase
all or any number of such Options or Stock Appreciation
Rights for cash for a period of thirty (30)
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days following a Change in Control at the Option Acceleration
Price (as hereinafter defined); and
(II) all restrictions applicable to all Restricted Stock and
Restricted Stock Units, whether such Restricted Stock and
Restricted Stock Units were granted as performance awards or
otherwise, shall immediately lapse and have no effect, and
Grantees shall have the right to have the Company purchase
all or any number of such Restricted Stock Units and shares
of Restricted Stock for cash for a period of thirty (30)
days following a Change in Control at the Restricted Stock
Acceleration Price (as hereinafter defined).
(B) (I) The "Restricted Stock Acceleration Price" is the highest
of the following on the date of a Change in Control:
(A) the highest reported sales price of a share of the
Common Stock within the sixty (60) days preceding the
date of a Change in Control, as reported on any
securities exchange upon which the Common Stock is
listed,
(B) the highest price of a share of the Common Stock
reported in a Schedule 13D or an amendment thereto as
paid within the sixty (60) days preceding the date of
the Change in Control,
(C) the highest tender offer price paid for a share of
the Common Stock, and
(D) any cash merger or similar price paid for a share of
the Common Stock.
(II) The "Option Acceleration Price" is the excess of the
Restricted Stock Acceleration Price over the exercise price
of the award, except that for Incentive Stock Options, the
Option Acceleration Price is limited to the spread between
the Fair Market Value on the date of exercise and the option
price.
(C) A "Change in Control" is the occurrence of any one of the following
events:
(I) any "person," as such term is defined in Section 3(a)(9) and
modified and used in Sections 13(d) and 14(d) of the
Exchange Act (other than a Grantee, the Company, any trustee
or other fiduciary holding securities under an employee
benefit plan of the Company (or of any subsidiary of the
Company), or any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is
or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or
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indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then
outstanding securities;
(II) during any period of two consecutive years individuals who
at the beginning of such period constitute the Board, and
any new director (other than a director designated by a
person who has entered into an agreement with the Company to
effect a transaction described in clause (i), (iii), (iv) or
(v) of this definition) whose election by the Board or
nomination for election by the Company's shareowners 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, cease for any
reason to constitute at least a majority thereof;
(III) the shareowners of the Company approve a merger or
consolidation of the Company with any other corporation,
other than (A) a merger or consolidation which would result
in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) more than 75% of the
combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately
after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of
the Company (or similar transaction) in which no "person"
(with the exceptions specified in clause (i) of this
definition) acquires 25% or more of the combined voting
power of the Company's then outstanding securities;
(IV) the shareowners of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of
the Company's assets; or
(V) the Company consummates a merger, consolidation, stock
dividend, stock split or combination, extraordinary cash
dividend, exchange offer, issuer tender offer or other
transaction effecting a recapitalization of the Company (or
similar transaction) (the "Transaction") and, in connection
with the Transaction, a Designated Downgrading occurs with
respect to the unsecured general obligations of the Company
(the "Securities"), as described below:
(A) If the rating of the Securities by both Rating Agencies
(defined hereinafter) on the date 60 days prior to the
public announcement of the Transaction (a "Base Date")
is equal to or higher than BBB Minus (as hereinafter
defined), then a "Designated Downgrading" means that
the rating of the Securities by either Rating Agency on
the effective date of the Transaction (or, if later,
the earliest date on which the rating shall reflect the
effect of the Transaction) (as
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applicable, the "Transaction Date") is equal to or
lower than BB Plus (as hereinafter defined); if the
rating of the Securities by either Rating Agency on a
Base Date is lower than BBB Minus, then a "Designated
Downgrading" means that the rating of the Securities by
either Rating Agency on the Transaction Date has
decreased from the rating by such Rating Agency on the
Base Date. In determining whether the rating of the
Securities has decreased, a decrease of one gradation
(+ and - for S&P and 1, 2 and 3 for Moody's, or the
equivalent thereof by any substitute rating agency
referred to below) shall be taken into account;
(B) "Rating Agency" means either Standard & Poor's
Corporation or its successor ("S&P") or Moody's
Investor Service, Inc. or its successor ("Moody's");
(C) "BBB Minus" means, with respect to ratings by S&P, a
rating of BBB- and, with respect to ratings by Moody's,
a rating of Baa3, or the equivalent thereof by any
substitute agency referred to below;
(D) "BB Plus" means, with respect to ratings by S&P, a
rating of BB+ and, with respect to ratings by Moody's,
a rating of BBB3, or the equivalent thereof by any
substitute agency referred to below;
(E) The Company shall take all reasonable action necessary
to enable each of the Rating Agencies to provide a
rating for the Securities, but, if either or both of
the Rating Agencies shall not make such a rating
available, a nationally-recognized investment banking
firm shall select a nationally-recognized securities
rating agency or two nationally-recognized securities
rating agencies to act as substitute rating agency or
substitute rating agencies, as the case may be.
SECTION 10. EFFECTIVE DATE OF THE PLAN
The Plan shall be effective as of January 25, 2001.
SECTION 11. TERM OF THE PLAN
No Award shall be granted under the Plan after January 24, 2011. However,
unless otherwise expressly provided in the plan or in an applicable Award
Agreement, any Award theretofore granted may extend beyond such date, and the
authority of the Committee to amend, alter, or adjust any such Award, or to
waive any conditions or rights under any such Award, and the authority of the
Board of Directors of the Company to amend the Plan, shall extend beyond such
date.
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