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Exhibit 4(k)
Russell Corporation
2000 Stock Option Plan
TABLE OF CONTENTS
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ARTICLE 1. ESTABLISHMENT, EFFECTIVE DATE, OBJECTIVES AND DURATION.................................................1
1.1 Establishment of the Plan................................................................................1
1.2 Objectives of the Plan...................................................................................1
1.3 Duration of the Plan.....................................................................................1
ARTICLE 2. DEFINITIONS............................................................................................1
ARTICLE 3. ADMINISTRATION.........................................................................................7
3.1 Committee................................................................................................7
3.2 Powers of Committee......................................................................................7
ARTICLE 4. SHARES SUBJECT TO THE PLAN.............................................................................8
4.1 Number of Shares Available...............................................................................8
4.2 Adjustments in Authorized Shares.........................................................................9
4.3 Treasury Shares Only.....................................................................................9
ARTICLE 5. ELIGIBILITY AND GENERAL CONDITIONS OF AWARDS...........................................................9
5.1 Eligibility..............................................................................................9
5.2 Grant Date...............................................................................................9
5.3 Maximum Term.............................................................................................9
5.4 Award Agreement..........................................................................................9
5.5 Restrictions on Share Transferability....................................................................9
5.6 Termination of Affiliation...............................................................................9
5.7 Nontransferability of Awards............................................................................11
ARTICLE 6. STOCK OPTIONS.........................................................................................12
6.1 Grant of Options........................................................................................12
6.2 Award Agreement.........................................................................................12
6.3 Option Price............................................................................................12
6.4 Grant of Reload Options.................................................................................13
6.5 Conditions on Reload Options............................................................................13
6.6 Payment.................................................................................................13
ARTICLE 7. STOCK APPRECIATION RIGHTS.............................................................................14
7.1 Grant of SARs...........................................................................................14
7.2 Exercise of Tandem SARs.................................................................................14
7.3 Payment of SAR Amount...................................................................................14
ARTICLE 8. RESTRICTED SHARES.....................................................................................15
8.1 Grant of Restricted Shares..............................................................................15
8.2 Award Agreement.........................................................................................15
8.3 Consideration...........................................................................................15
8.4 Effect of Forfeiture....................................................................................15
8.5 Escrow; Legend..........................................................................................15
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ARTICLE 9. PERFORMANCE UNITS AND PERFORMANCE SHARES..............................................................15
9.1 Grant of Performance Units and Performance Shares.......................................................15
9.2 Value/Performance Goals.................................................................................15
9.3 Earning of Performance Units and Performance Shares.....................................................16
9.4 Form and Timing of Payment of Performance Units and Performance Shares..................................16
ARTICLE 10. BONUS SHARES AND DEFERRED SHARES.....................................................................16
10.1 Bonus Shares............................................................................................16
10.2 Deferred Shares.........................................................................................16
ARTICLE 11. BENEFICIARY DESIGNATION..............................................................................17
ARTICLE 12. DEFERRALS............................................................................................17
ARTICLE 13. RIGHTS OF EMPLOYEES AND CONSULTANTS..................................................................17
13.1 Employment..............................................................................................17
13.2 Participation...........................................................................................17
ARTICLE 14. CHANGE OF CONTROL....................................................................................17
14.1 Change of Control.......................................................................................17
14.2 Pooling of Interests Accounting.........................................................................18
ARTICLE 15. AMENDMENT, MODIFICATION, AND TERMINATION.............................................................19
15.1 Amendment, Modification, and Termination................................................................19
15.2 Adjustments Upon Certain Unusual or Nonrecurring Events.................................................19
15.3 Awards Previously Granted...............................................................................19
ARTICLE 16. WITHHOLDING..........................................................................................19
16.1 Withholding.............................................................................................19
16.2 Notification under Code Section 83(b)...................................................................20
ARTICLE 17. ADDITIONAL PROVISIONS................................................................................20
17.1 Successors..............................................................................................20
17.2 Gender and Number.......................................................................................20
17.3 Severability............................................................................................20
17.4 Requirements of Law.....................................................................................21
17.5 Securities Law Compliance...............................................................................21
17.6 No Rights as a Stockholder..............................................................................21
17.7 Nature of Payments......................................................................................22
17.8 Governing Law...........................................................................................22
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Russell Corporation
2000 Stock Option Plan
ARTICLE 1. ESTABLISHMENT, OBJECTIVES AND DURATION
1.1. Establishment of the Plan. Russell Corporation, an Alabama
corporation (the "Company"), hereby establishes an incentive compensation plan
to be known as the Russell Corporation 2000 Stock Option Plan (the "Plan"). The
Plan has been adopted by the Board of Directors of the Company (the "Board").
The Plan is effective as of January 18, 2000 (the "Effective Date").
1.2. Objectives of the Plan. The Plan is intended to allow
employees and consultants of the Company and its Subsidiaries to acquire or
increase equity ownership in the Company, thereby strengthening their commitment
to the success of the Company and stimulating their efforts on behalf of the
Company, and to assist the Company and its Subsidiaries in attracting new
employees and consultants and retaining existing employees and consultants. The
Plan is also intended to optimize the profitability and growth of the Company
through incentives which are consistent with the Company's goals; to provide
incentives for excellence in individual performance; and to promote teamwork.
1.3. Duration of the Plan. The Plan shall commence on the Effective
Date and shall remain in effect, subject to the right of the Board to amend or
terminate the Plan at any time pursuant to Article 15 hereof, until all Shares
subject to it shall have been purchased or acquired according to the Plan's
provisions.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings
set forth below:
2.1. "Article" means an Article of the Plan.
2.2. "Award" means Options (including Reload Options), Restricted
Shares, Bonus Shares, Deferred Shares, stock appreciation rights (SARs),
Performance Units or Performance Shares granted under the Plan.
2.3. "Award Agreement" means a written agreement by which an Award
is evidenced.
2.4. "Beneficial Owner" has the meaning specified in Rule 13d-3 of
the SEC under the Exchange Act.
2.5. "Board" has the meaning set forth in Section 1.1.
2.6. "Bonus Shares" means Shares that are awarded to a Grantee
without cost and without restrictions in recognition of past performance
(whether determined by reference to another employee benefit plan of the Company
or otherwise) or as an incentive to become an employee or consultant of the
Company or a Subsidiary.
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2.7. "Cause" means, unless otherwise defined in an Award Agreement,
(i) a Grantee's conviction of a felony or other
crime involving fraud, dishonesty or moral turpitude;
(ii) a Grantee's willful or reckless material
misconduct in the performance of the Grantee's duties; or
(iii) a Grantee's habitual neglect of duties;
provided, however, that for purposes of clauses (ii) and (iii), Cause shall not
include any one or more of the following: bad judgment, negligence or any act or
omission believed by the Grantee in good faith to have been in or not opposed to
the interest of the Company (without intent of the Grantee to gain, directly or
indirectly, a profit to which the Grantee was not legally entitled). A Grantee
who agrees to resign from his affiliation with the Company or a Subsidiary in
lieu of being terminated for Cause may be deemed to have been terminated for
Cause for purposes of this Plan.
2.8. "Change of Control" means, unless otherwise defined in an
Award Agreement, any one or more of the following:
(a) any person (as such term is used in Rule 13d-5 of the
SEC under the Exchange Act) or group (as such term is defined in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other than a
Subsidiary, any employee benefit plan (or any related trust) of the
Company or any of its Subsidiaries or any Excluded Person, becomes the
Beneficial Owner of 20% or more of the common stock of the Company or
of Voting Securities representing 20% or more of the combined voting
power of the Company (such a person or group, a "20% Owner"), except
that (i) no Change of Control shall be deemed to have occurred solely
by reason of such beneficial ownership by a corporation with respect to
which both more than 70% of the common stock of such corporation and
Voting Securities representing more than 70% of the aggregate voting
power of such corporation are then owned, directly or indirectly, by
the persons who were the direct or indirect owners of the common stock
and Voting Securities of the Company immediately before such
acquisition in substantially the same proportions as their ownership,
immediately before such acquisition, of the common stock and Voting
Securities of the Company, as the case may be and (ii) such corporation
shall not be deemed a 20% Owner; or
(b) the Incumbent Directors (determined using the
Effective Date as the baseline date) cease for any reason to constitute
at least two-thirds of the directors of the Company then serving; or
(c) approval by the stockholders of the Company of a
merger, reorganization, consolidation, or similar transaction, or a
plan or agreement for the sale or other disposition of all or
substantially all of the consolidated assets of the Company or a plan
of liquidation of the Company (any of the foregoing transactions, a
"Reorganization Transaction") which, based on information included in
the proxy and other written materials distributed to the Company's
stockholders in connection with the solicitation by the Company of such
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stockholder approval, is not expected to qualify as an Exempt
Reorganization Transaction; or
(d) the consummation by the Company of a Reorganization
Transaction that for any reason fails to qualify as an Exempt
Reorganization Transaction as of the date of such consummation,
notwithstanding the fact that such Reorganization Transaction was
expected to so qualify as of the date of such stockholder approval.
Notwithstanding the occurrence of any of the foregoing events, a Change of
Control shall not occur with respect to a Grantee if, in advance of such event,
the Grantee agrees in writing that such event shall not constitute a Change of
Control.
2.9. "Change of Control Value" means the Fair Market Value of a
Share on the date of a Change of Control.
2.10. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and regulations and rulings thereunder. References to a
particular section of the Code include references to successor provisions of the
Code or any successor statute.
2.11. "Committee" has the meaning set forth in Article 3.
2.12. "Common Stock" means the common stock, $0.01 par value, of the
Company.
2.13. "Company" has the meaning set forth in Section 1.1.
2.14. "Deferred Shares" means Shares that are awarded to a Grantee
on a deferred basis pursuant to Section 10.2.
2.15. "Disability" means a permanent and total disability, within
the meaning of Code Section 22(e)(3), as determined by the Committee in good
faith, upon receipt of medical advice from one or more individuals, selected by
the Committee, who are qualified to give professional medical advice.
2.16. "Effective Date" has the meaning set forth in Section 1.1.
2.17. "Eligible Person" means (i) any employee (including any
officer) of the Company or any Subsidiary, including any such employee who is on
an approved leave of absence, layoff, or has been subject to a disability which
does not qualify as a Disability and (ii) any person performing services for the
Company or a Subsidiary in the capacity of a consultant.
2.18. "Exchange Act" means the Securities Exchange Act of 1934, as
amended. References to a particular section of the Exchange Act include
references to successor provisions.
2.19. "Excluded Person" means any Person who, along with such
Person's Affiliates and Associates (as such terms are defined in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act) is the Beneficial
Owner of 15% or more of the Shares outstanding as of the Effective Date,
provided that such Person, including such Person's Affiliates and Associates,
does not acquire, after the Effective Date hereof, additional Shares in excess
of 1% of the then
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outstanding Shares, exclusive of (i) Shares acquired by such Person and such
Person's Affiliates and Associates as a result of stock dividends, stock splits,
recapitalizations or similar transactions in which the Company did not receive
any consideration for issuing the Shares in question or as a result of
repurchases of stock by the Company; (y) Shares acquired by such Person and such
Person's Affiliates and Associates as a result of gifts, devises, bequests and
intestate succession; and (z) Shares acquired by such Person and such Person's
Affiliates and Associates as a result of participation by such Person and such
Person's Affiliates and Associates in any dividend reinvestment plan, stock
option plan or other similar plan or arrangement of the Company.
2.20. "Exempt Reorganization Transaction" means a Reorganization
Transaction which results in the Persons who were the direct or indirect owners
of the outstanding common stock and Voting Securities of the Company immediately
before such Reorganization Transaction becoming, immediately after the
consummation of such Reorganization Transaction, the direct or indirect owners
of both more than 70% of the then-outstanding common stock of the Surviving
Corporation and Voting Securities representing more than 70% of the aggregate
voting power of the Surviving Corporation, in substantially the same respective
proportions as such Persons' ownership of the common stock and Voting Securities
of the Company immediately before such Reorganization Transaction.
2.21. "Fair Market Value" means (A) 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 (B) with respect to Shares, as of any date, (i) the average of
the high and low trading prices on such date on the New York Stock Exchange
Composite Transactions Tape (or, if no sale of Shares was reported for such
date, on the next preceding date on which a sale of Shares was reported), (ii)
if the Shares are not listed on the New York Stock Exchange, the average of the
high and low trading prices of the Shares on such other national exchange on
which the Shares are principally traded or as reported by the NASDAQ Stock
Market, or similar organization, or if no such quotations are available, the
average of the high bid and low asked quotations in the over-the-counter market;
or (iii) in the event that there shall be no public market for the Shares, the
fair market value of the Shares as determined by the Committee.
2.22. "Freestanding SAR" means an SAR that is granted independently
of any other Award.
2.23. "Grant Date" has the meaning set forth in Section 5.2.
2.24. "Grantee" means an individual who has been granted an Award.
2.25. "including" or "includes" mean "including, without
limitation," or "includes, without limitation", respectively.
2.26. "Incumbent Directors" means, as of any specified baseline
date, individuals then serving as members of the Board who were members of the
Board as of the date immediately preceding such baseline date; provided that any
subsequently-appointed or elected member of the Board whose election, or
nomination for election by stockholders of the Company or the Surviving
Corporation, as applicable, was approved by a vote or written consent of at
least two-thirds
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of the directors then comprising the Incumbent Directors shall also thereafter
be considered an Incumbent Director, unless the initial assumption of office of
such subsequently-elected or appointed director was in connection with (i) an
actual or threatened election contest, including a consent solicitation,
relating to the election or removal of one or more members of the Board, (ii) a
"tender offer" (as such term is used in Section 14(d) of the Exchange Act),
(iii) a proposed Reorganization Transaction, or (iv) a request, nomination or
suggestion of any Beneficial Owner of Voting Securities representing 15% or more
of the aggregate voting power of the Voting Securities of the Company or the
Surviving Corporation, as applicable.
2.27. "Mature Shares" means Shares for which the holder thereof has
good title, free and clear of all liens and encumbrances, and which such holder
either (i) has held for at least six months or (ii) has purchased on the open
market.
2.28. "Option" means an option granted under Article 6 of the Plan.
2.29. "Option Price" means the price at which a Share may be
purchased by a Grantee pursuant to an Option.
2.30. "Option Term" means the period beginning on the Grant Date of
an Option and ending on the expiration date of such Option, as specified in the
Award Agreement for such Option and as may, consistent with the provisions of
the Plan, be extended from time to time by the Committee prior to the expiration
date of such Option then in effect.
2.31. "Performance Period" has the meaning set forth in Section 9.2.
2.32. "Performance Share" or "Performance Unit" has the meaning set
forth in Article 9.
2.33. "Period of Restriction" means the period during which the
transfer of Restricted Shares is limited in some way (based on the passage of
time, the achievement of performance goals, or upon the occurrence of other
events as determined by the Committee) or the Shares are subject to a
substantial risk of forfeiture, as provided in Article 8.
2.34. "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d) thereof.
2.35. "Plan" has the meaning set forth in Section 1.1.
2.36. "Reload Option" has the meaning set forth in Section 6.4.
2.37. "Reorganization Transaction" has the meaning set forth in
Section 2.7(c).
2.38. "Required Withholding" has the meaning set forth in Article
16.
2.39. "Restricted Shares" means Shares that are subject to transfer
restrictions and are subject to forfeiture if conditions specified in the Award
Agreement applicable to such Shares are not satisfied.
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2.40. "Rule 16b-3" means Rule 16b-3 promulgated by the SEC under the
Exchange Act, together with any successor rule, as in effect from time to time.
2.41. "SAR" means a stock appreciation right.
2.42. "SEC" means the United States Securities and Exchange
Commission, or any successor thereto.
2.43. "Section" means, unless the context otherwise requires, a
Section of the Plan.
2.44. "Section 16 Person" means a person who is subject to
obligations under Section 16 of the Exchange Act with respect to transactions
involving equity securities of the Company.
2.45. "Share" means a share of Common Stock.
2.46. "Strike Price" of any SAR shall equal, for any Tandem SAR
(whether granted at the same time as or after the grant of the related Option),
the Option Price of such Option, or for any other SAR, 100% of the Fair Market
Value of a Share on the Grant Date of such SAR; provided that the Committee may
specify a higher Strike Price in the Award Agreement.
2.47. "Subsidiary" means with respect to any Person (a) any
corporation of which more than 50% of the Voting Securities are at the time,
directly or indirectly, owned by such Person, and (b) any partnership or limited
liability company in which such Person has a direct or indirect interest
(whether in the form of voting power or participation in profits or capital
contribution) of more than 50%.
2.48. "Substitute Option" has the meaning set forth in Section 6.3.
2.49. "Surviving Corporation" means the corporation resulting from a
Reorganization Transaction or, if Voting Securities representing at least 50% of
the aggregate voting power of such resulting corporation are directly or
indirectly owned by another corporation, such other corporation.
2.50. "Tandem SAR" means an SAR that is granted in connection with a
related Option, the exercise of which shall require cancellation of the right to
purchase a Share under the related Option (and when a Share is purchased under
the related Option, the Tandem SAR shall similarly be canceled).
2.51. "Termination of Affiliation" occurs on the first day on which
an individual is for any reason no longer providing services to the Company or
any Subsidiary in the capacity of an employee or consultant, or with respect to
an individual who is an employee of, or consultant to, a Person which is a
Subsidiary, the first day on which such Person ceases to be a Subsidiary.
2.52. "Voting Securities" of a corporation means securities of such
corporation that are entitled to vote generally in the election of directors,
but not including any other class of securities of such corporation that may
have voting power by reason of the occurrence of a contingency.
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ARTICLE 3. ADMINISTRATION
3.1. Committee. Subject to Article 15, and to Section 3.2, the
Plan shall be administered by the Board, or a committee of the Board appointed
by the Board to administer the Plan ("Plan Committee"). To the extent the Board
considers it desirable for transactions relating to Awards to qualify for an
exemption under Rule 16b-3, the Plan Committee shall consist of two or more
directors of the Company, all of whom qualify as "non-employee directors"
within the meaning of Rule 16b-3. The number of members of the Plan Committee
shall from time to time be increased or decreased, and shall be subject to such
conditions, in each case as the Board deems appropriate to permit transactions
in Shares pursuant to the Plan to satisfy such conditions of Rule 16b-3 as then
in effect. Any references herein to "Committee" are references to the Board or
the Plan Committee, as applicable.
3.2. Powers of Committee. Subject to the express provisions of the
Plan, the Committee has full and final authority and sole discretion as follows:
(a) to determine when, to whom and in what types and
amounts Awards should be granted and the terms and conditions
applicable to each Award, including the Option Price, the Option Term,
the benefit payable under any SAR, Performance Unit or Performance
Share, and whether or not specific Awards shall be granted in
connection with other specific Awards, and if so whether they shall be
exercisable cumulatively with, or alternatively to, such other specific
Awards;
(b) to determine the amount, if any, that a Grantee shall
pay for Restricted Shares, whether and on what terms to permit or
require the payment of cash dividends thereon to be deferred, when
Restricted Shares (including Restricted Shares acquired upon the
exercise of an Option) shall be forfeited and whether such shares shall
be held in escrow;
(c) to construe and interpret the Plan and to make all
determinations necessary or advisable for the administration of the
Plan;
(d) to make, amend, and rescind rules relating to the
Plan, including rules with respect to the exercisability and
nonforfeitability of Awards upon the Termination of Affiliation of a
Grantee;
(e) to determine the terms and conditions of all Award
Agreements (which need not be identical) and, with the consent of the
Grantee, to amend any such Award Agreement at any time, among other
things, to permit transfers of such Awards to the extent permitted by
the Plan; provided that the consent of the Grantee shall not be
required for any amendment which (A) does not adversely affect the
rights of the Grantee, or (B) is necessary or advisable (as determined
by the Committee) to carry out the purpose of the Award as a result of
any new or change in existing applicable law;
(f) to cancel, with the consent of the Grantee,
outstanding Awards and to grant new Awards in substitution therefor;
(g) to accelerate the exercisability (including
exercisability within a period of less than six months after the Grant
Date) of, and to accelerate or waive any or all of the terms
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and conditions applicable to, any Award or any group of Awards for any
reason and at any time, including in connection with a Termination of
Affiliation;
(h) subject to Section 5.3, to extend the time during
which any Award or group of Awards may be exercised;
(i) to make such adjustments or modifications to Awards
to Grantees who are working outside the United States as are advisable
to fulfill the purposes of the Plan or to comply with applicable local
law;
(j) to delegate to the Chief Executive Officer of the
Company the power to grant Options and Restricted Shares from time to
time to specified categories of Eligible Persons in amounts and on
terms to be specified by the Committee; provided that no such grants
shall be made to individuals who are then Section 16 Persons;
(k) to delegate to officers, employees or independent
contractors of the Company matters involving the routine administration
of the Plan and which are not specifically required by any provision of
this Plan of to be performed by the Committee;
(l) to impose such additional terms and conditions upon
the grant, exercise or retention of Awards as the Committee may, before
or concurrently with the grant thereof, deem appropriate, including
limiting the percentage of Awards which may from time to time be
exercised by a Grantee; and
(m) to take any other action with respect to any matters
relating to the Plan for which it is responsible.
All determinations on any matter relating to the Plan or any Award
Agreement may be made in the sole and absolute discretion of the Committee, and
all such determinations of the Committee shall be final, conclusive and binding
on all Persons. No member of the Committee shall be liable for any action or
determination made with respect to the Plan or any Award.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1. Number of Shares Available. Subject to Section 4.3 and to
adjustment as provided in Section 4.2, the number of Shares hereby reserved for
delivery under the Plan is 1,500,000. If any Shares subject to an Award granted
hereunder are forfeited or an Award or any portion thereof otherwise terminates
or is settled without the issuance of Shares, the Shares subject to such Award,
to the extent of any such forfeiture, termination or settlement, shall again be
available for grant under the Plan. If any Shares (whether subject to or
received pursuant to an Award granted hereunder, purchased on the open market,
or otherwise obtained, and including Shares that are deemed (by attestation or
otherwise) to have been delivered to the Company as payment for all or any
portion of the Option Price of an Option pursuant to the next following
sentence) are withheld or applied as payment by the Company in connection with
the exercise of an Award or the withholding of taxes related thereto, such
Shares, to the extent of any such withholding or payment, shall again be
available or shall increase the number of Shares available, as applicable, for
grant under the Plan. The Committee may from time to time determine the
appropriate methodology for calculating the number of Shares issued pursuant to
the Plan.
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4.2. Adjustments in Authorized Shares. In the event that the
Committee determines that any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), recapitalization,
stock split, reverse stock split, subdivision, consolidation or reduction of
capital, reorganization, merger, scheme of arrangement, split-up, spin-off or
combination involving the Company or repurchase or exchange of Shares or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event that occurs at any time after the Effective Date
affects the Shares such that any 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 of the
Company or any Person that is a party to a Reorganization Transaction with the
Company) with respect to which Awards may be granted, (ii) the number and type
of Shares (or other securities or property of the Company or any Person that is
a party to a Reorganization Transaction with the Company) subject to outstanding
Awards, and (iii) the grant 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 or the substitution of other property for Shares subject to an
outstanding Award; provided, that the number of Shares subject to any Award
denominated in Shares shall always be a whole number.
4.3. Treasury Shares Only. All Shares delivered in connection with
Awards shall be treasury shares. No Shares shall be newly-issued in connection
with any Awards hereunder.
ARTICLE 5. ELIGIBILITY AND GENERAL CONDITIONS OF AWARDS
5.1. Eligibility. The Committee may grant Awards to any Eligible
Person, whether or not he or she has previously received an Award.
5.2. Grant Date. The Grant Date of an Award shall be the date on
which the Committee grants the Award or such later date as specified by the
Committee in the Award Agreement.
5.3. Maximum Term. Subject to the following proviso, the Option
Term or other period during which an Award may be outstanding shall not extend
more than 10 years after the Grant Date, and shall be subject to earlier
termination as herein specified; provided, that any deferral of a cash payment
or of the delivery of Shares that is permitted or required by the Committee
pursuant to Article 12 may, if so permitted or required by the Committee, extend
more than 10 years after the Grant Date of the Award to which the deferral
relates.
5.4. Award Agreement. To the extent not set forth in the Plan, the
terms and conditions of each Award (which need not be the same for each grant or
for each Grantee) shall be set forth in an Award Agreement.
5.5. Restrictions on Share Transferability. The Committee may
include in the Award Agreement such restrictions on any Shares acquired pursuant
to the exercise or vesting of an Award as it may deem advisable, including
restrictions under applicable federal securities laws.
5.6. Termination of Affiliation. Except as otherwise provided in an
Award Agreement (including an Award Agreement as amended by the Committee
pursuant to Section 3.2), and subject to the provisions of Section 14.1, the
extent to which the Grantee shall have the right to
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exercise, vest in, or receive payment in respect of an Award following
Termination of Affiliation shall be determined in accordance with the following
provisions of this Section 5.6.
(a) For Cause. If a Grantee has a Termination of
Affiliation for Cause:
(i) the Grantee's Restricted Shares and Deferred
Shares that are forfeitable immediately before such Termination
of Affiliation shall automatically be forfeited on such date,
subject in the case of Restricted Shares to the provisions of
Section 8.4 regarding repayment of certain amounts to the
Grantee;
(ii) the Grantee's Deferred Shares that were
vested immediately before such Termination of Affiliation shall
promptly be settled by delivery to such Grantee of a number of
unrestricted Shares equal to the aggregate number of such
vested Deferred Shares, and
(iii) any unexercised Option or SAR, and any
Performance Share or Performance Unit with respect to which the
Performance Period has not ended immediately before such
Termination of Affiliation, shall terminate effective
immediately upon such Termination of Affiliation.
(b) On Account of Death or Disability. If a Grantee has
a Termination of Affiliation on account of death or Disability:
(i) the Grantee's Restricted Shares that were
forfeitable immediately before such Termination of Affiliation
shall thereupon become nonforfeitable;
(ii) the Grantee's Deferred Shares that were
forfeitable immediately before such Termination of Affiliation
shall thereupon become nonforfeitable and the Company shall,
unless otherwise provided in an Award Agreement, promptly
settle all Deferred Shares, whether or not forfeitable, by
delivery to the Grantee (or, after his or her death, to his or
her personal representative or beneficiary designated in
accordance with Article 11) of a number of unrestricted Shares
equal to the aggregate number of the Grantee's Deferred Shares;
(iii) any unexercised Option or SAR, whether or
not exercisable immediately before such Termination of
Affiliation, may be exercised, in whole or in part, at any time
after such Termination of Affiliation (but in either case only
during the Option Term) by the Grantee or, after his or her
death, by (A) his or her personal representative or the person
to whom the Option or SAR, as applicable, is transferred by
will or the applicable laws of descent and distribution, or (B)
the Grantee's beneficiary designated in accordance with Article
11; and
(iv) the benefit payable with respect to any
Performance Share or Performance Unit with respect to which the
Performance Period has not ended immediately before such
Termination of Affiliation on account of death or Disability
shall be equal to the product of the Fair Market Value of a
Share as of the date of such Termination of Affiliation or the
value of the Performance Unit specified in the Award Agreement
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(determined as of the date of such Termination of Affiliation), as
applicable, multiplied successively by each of the following:
(1) a fraction, the numerator of which is the
number of months (including as a whole month any partial
month) that have elapsed since the beginning of such
Performance Period until the date of such Termination of
Affiliation and the denominator of which is the number of
months (including as a whole month any partial month) in the
Performance Period; and
(2) a percentage determined by the Committee
that would be earned under the terms of the applicable Award
Agreement assuming that the rate at which the performance
goals have been achieved as of the date of such Termination of
Affiliation would continue until the end of the Performance
Period, or, if the Committee elects to compute the benefit
after the end of the Performance Period, the Performance
Percentage, as determined by the Committee, attained during
the Performance Period.
(c) Any Other Reason. If a Grantee has a Termination of
Affiliation for any reason other than for Cause, death or Disability,
then:
(i) the Grantee's Restricted Shares and Deferred
Shares, to the extent forfeitable immediately before such
Termination of Affiliation, shall thereupon automatically be
forfeited, subject in the case of Restricted Shares to the
provisions of Section 8.4 regarding repayment of certain
amounts to the Grantee;
(ii) the Grantee's Deferred Shares that were not
forfeitable immediately before such Termination of Affiliation
shall, unless otherwise provided in an Award Agreement,
promptly be settled by delivery to the Grantee of a number of
unrestricted Shares equal to the aggregate number of the
Grantee's vested Deferred Shares;
(iii) any unexercised Option or SAR, to the extent
exercisable immediately before such Termination of
Affiliation, shall remain exercisable in whole or in part for
three months after such Termination of Affiliation (but only
during the Option Term) by the Grantee or, after his or her
death, by (A) his or her personal representative or the person
to whom the Option or SAR, as applicable, is transferred by
will or the applicable laws of descent and distribution, or
(B) the Grantee's beneficiary designated in accordance with
Article 11; and
(iv) any Performance Shares or Performance Units
with respect to which the Performance Period has not ended as
of the date of such Termination of Affiliation shall terminate
immediately upon such Termination of Affiliation.
5.7. Nontransferability of Awards.
(a) Except as provided in Section 5.7(c) below, each
Award, and each right under any Award, shall be exercisable only by the
Grantee during the Grantee's lifetime, or, if permissible under
applicable law, by the Grantee's guardian or legal representative or by
a
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transferee receiving such Award pursuant to a qualified domestic
relations order (a "QDRO") as defined in the Code or Title I of the
Employee Retirement Income Security Act of 1974 or the rules
thereunder.
(b) Except as provided in Section 5.7(c) below, no Award
(prior to the time, if applicable, Shares are issued in respect of such
Award), and no right under any Award, may be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by a
Grantee otherwise than by will or by the laws of descent and
distribution (or in the case of Restricted Shares, to the Company) or
pursuant to a QDRO, and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Subsidiary; provided, that the
designation of a beneficiary shall not constitute an assignment,
alienation, pledge, attachment, sale, transfer or encumbrance.
(c) To the extent and in the manner permitted by the
Committee, and subject to such terms and conditions as may be
prescribed by the Committee, a Grantee may transfer an Award to (i) a
spouse, sibling, parent or lineal descendant (including a lineal
descendant by adoption) (any of the foregoing, an "Immediate Family
Member") of the Grantee; (ii) a trust, the primary beneficiaries of
which consist exclusively of the Grantee or Immediate Family Members,
or (iii) a corporation, partnership or similar entity, the owners of
which consist exclusively of the Grantee or Immediate Family Members of
the Grantee.
ARTICLE 6. STOCK OPTIONS
6.1. Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to any Eligible Person in such number, and upon
such terms, and at any time and from time to time as shall be determined by the
Committee. Without limiting the generality of the foregoing, the Committee may
grant to any Eligible Person, or permit any Eligible Person to elect to receive,
an Option in lieu of or in substitution for any other compensation (whether
payable currently or on a deferred basis, and whether payable under this Plan or
otherwise) which such Eligible Person may be eligible to receive from the
Company or a Subsidiary, which Option may have a value (as determined by the
Committee under Black-Scholes or any other option valuation method) that is
equal to or greater than the amount of such other compensation.
6.2. Award Agreement. Each Option grant shall be evidenced by an
Award Agreement that shall specify the Option Price, the Option Term, the number
of shares to which the Option pertains, the time or times at which such Option
shall be exercisable and such other provisions as the Committee shall determine.
6.3. Option Price. The Option Price of an Option under this Plan
shall be determined by the Committee, and shall be no less than 100% of the Fair
Market Value of a Share on the Grant Date; provided, however, that any Option
("Substitute Option") that is (x) granted to a Grantee in connection with the
acquisition ("Acquisition"), however effected, by the Company of another
corporation or entity ("Acquired Entity") or the assets thereof, (y) associated
with an option to purchase shares of stock or other equity interest of the
Acquired Entity or an affiliate thereof ("Acquired Entity Option") held by such
Grantee immediately prior to such Acquisition, and (z) intended to preserve for
the Grantee the economic value of all or a portion of such Acquired
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Entity Option, may be granted with such Option Price as the Committee determines
to be necessary to achieve such preservation of economic value.
6.4. Grant of Reload Options. The Committee may in connection with
the grant of an Option or thereafter provide that a Grantee who (i) is an
Eligible Person when he or she exercises an Option ("Exercised Option") and (ii)
satisfies the Option Price or Required Withholding applicable thereto with
Shares (including Shares that are deemed to have been delivered as payment for
all or any portion of the Option Price of an Exercised Option by attestation or
otherwise) shall automatically be granted, subject to Article 4, an additional
option ("Reload Option") in an amount equal to the sum ("Reload Number") of the
number of Shares tendered (including Shares that are deemed to have been
tendered) to exercise the Exercised Option plus, if so provided by the
Committee, the number of Shares, if any, retained by the Company in connection
with the exercise of the Exercised Option to satisfy any federal, state, local
or foreign tax withholding requirements.
6.5. Conditions on Reload Options. Reload Options shall be subject
to the following terms and conditions:
(a) the Grant Date for each Reload Option shall be the
date of exercise of the Exercised Option to which it relates;
(b) subject to Section 6.5(c), the Reload Option may be
exercised at any time during the Option Term of the Exercised Option
(subject to earlier termination thereof as provided in the Plan or in
the applicable Award Agreement); and
(c) the terms of the Reload Option shall be the same as
the terms of the Exercised Option to which it relates, except that,
unless otherwise provided in the Award Agreement, the Option Price for
the Reload Option shall be 100% of the Fair Market Value of a Share on
the Grant Date of the Reload Option.
6.6. Payment. Options granted under this Article 6 shall be
exercised by the delivery of a written notice of exercise to the Company,
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares made by cash, personal
check or wire transfer or, subject to the approval of the Committee, any one or
more of the following means:
(a) Mature Shares, valued at their Fair Market Value on
the date of exercise;
(b) Restricted Shares held by the Grantee for at least
six months prior to the exercise of the Option, each such share valued
at the Fair Market Value of a Share on the date of exercise; or
(c) pursuant to procedures approved by the Committee,
through the sale of the Shares acquired on exercise of the Option
through a broker-dealer to whom the Grantee has submitted an
irrevocable notice of exercise and irrevocable instructions to deliver
promptly to the Company the amount of sale or loan proceeds sufficient
to pay for such Shares, together with, if requested by the Company, the
amount of federal, state, local or foreign withholding taxes payable by
Grantee by reason of such exercise.
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If any Restricted Shares ("Tendered Restricted Shares") are used to pay the
Option Price, a number of Shares acquired on exercise of the Option equal to the
number of Tendered Restricted Shares shall be subject to the same restrictions
as the Tendered Restricted Shares, determined as of the date of exercise of the
Option.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1. Grant of SARs. Subject to the terms and conditions of the
Plan, SARs may be granted to any Eligible Person at any time and from time to
time as shall be determined by the Committee. The Committee may grant
Freestanding SARs, Tandem SARs, or any combination thereof. The Committee shall
determine the number of SARs granted to each Grantee (subject to Article 4), the
Strike Price thereof, and, consistent with Section 7.2 and the other provisions
of the Plan, the other terms and conditions pertaining to such SARs.
7.2. Exercise of Tandem SARs. Tandem SARs may be exercised for all
or part of the Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option. A Tandem SAR may
be exercised only with respect to the Shares for which its related Option is
then exercisable.
Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR, (i) the Tandem SAR will expire no later than the
expiration of the underlying Option; (ii) the value of the payout with respect
to the Tandem SAR may be for no more than 100% of the difference between the
Option Price of the underlying Option and the Fair Market Value of the Shares
subject to the underlying Option at the time the Tandem SAR is exercised; and
(iii) the Tandem SAR may be exercised only when the Fair Market Value of the
Shares subject to the Option exceeds the Option Price of the Option.
7.3. Payment of SAR Amount. Upon exercise of an SAR, the Grantee
shall be entitled to receive payment from the Company in an amount determined by
multiplying:
(a) the excess of the Fair Market Value of a Share on the
date of exercise over the Strike Price;
by
(b) the number of Shares with respect to which the SAR is
exercised;
provided that the Committee may provide in the Award Agreement that the benefit
payable on exercise of an SAR shall not exceed such percentage of the Fair
Market Value of a Share on the Grant Date as the Committee shall specify. As
determined by the Committee, the payment upon SAR exercise may be in cash, in
Shares which have an aggregate Fair Market Value (as of the date of exercise of
the SAR) equal to the amount of the payment, or in some combination thereof, as
set forth in the Award Agreement.
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ARTICLE 8. RESTRICTED SHARES
8.1. Grant of Restricted Shares. Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to time, may
grant Restricted Shares to any Eligible Person in such amounts as the Committee
shall determine.
8.2. Award Agreement. Each grant of Restricted Shares shall be
evidenced by an Award Agreement that shall specify the Period(s) of Restriction,
the number of Restricted Shares granted, and such other provisions as the
Committee shall determine. The Committee may impose such conditions or
restrictions on any Restricted Shares as it may deem advisable, including
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional, Subsidiary or individual), time-based restrictions on
vesting or restrictions under applicable securities laws.
8.3. Consideration. The Committee shall determine the amount, if
any, that a Grantee shall pay for Restricted Shares. Such payment shall be made
in full by the Grantee before the delivery of the shares and in any event no
later than 10 business days after the Grant Date for such shares.
8.4. Effect of Forfeiture. If Restricted Shares are forfeited, and
if the Grantee was required to pay for such shares or acquired such Restricted
Shares upon the exercise of an Option, the Grantee shall be deemed to have
resold such Restricted Shares to the Company at a price equal to the lesser of
(x) the amount paid by the Grantee for such Restricted Shares, or (y) the Fair
Market Value of a Share on the date of such forfeiture. The Company shall pay to
the Grantee the required amount as soon as is administratively practical. Such
Restricted Shares shall cease to be outstanding, and shall no longer confer on
the Grantee thereof any rights as a stockholder of the Company, from and after
the date of the event causing the forfeiture, whether or not the Grantee accepts
the Company's tender of payment for such Restricted Shares.
8.5. Escrow; Legends. The Committee may provide that the
certificates for any Restricted Shares (x) shall be held (together with a stock
power executed in blank by the Grantee) in escrow by the Secretary of the
Company until such Restricted Shares become nonforfeitable or are forfeited or
(y) shall bear an appropriate legend restricting the transfer of such Restricted
Shares. If any Restricted Shares become nonforfeitable, the Company shall cause
certificates for such shares to be issued without such legend.
ARTICLE 9. PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1. Grant of Performance Units and Performance Shares. Subject to
the terms of the Plan, Performance Units or Performance Shares may be granted to
any Eligible Person in such amounts and upon such terms, and at any time and
from time to time, as shall be determined by the Committee.
9.2. Value/Performance Goals. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. The Committee shall set performance goals which,
depending on the extent to which they are met, will determine the number or
value of Performance Units or Performance Shares that will be paid out to the
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Grantee. For purposes of this Article 9, the time period during which the
performance goals must be met shall be called a "Performance Period."
9.3. Earning of Performance Units and Performance Shares. Subject
to the terms of this Plan, after the applicable Performance Period has ended,
the holder of Performance Units or Performance Shares shall be entitled to
receive a payout based on the number and value of Performance Units or
Performance Shares earned by the Grantee over the Performance Period, to be
determined as a function of the extent to which the corresponding performance
goals have been achieved.
If a Grantee is promoted, demoted or transferred to a different business
unit of the Company during a Performance Period, then, to the extent the
Committee determines appropriate, the Committee may adjust, change or eliminate
the performance goals or the applicable Performance Period as it deems
appropriate in order to make them appropriate and comparable to the initial
performance goals or Performance Period.
9.4. Form and Timing of Payment of Performance Units and
Performance Shares. Payment of earned Performance Units or Performance Shares
shall be made in a lump sum following the close of the applicable Performance
Period. The Committee may pay earned Performance Units or Performance Shares in
cash or in Shares (or in a combination thereof) which have an aggregate Fair
Market Value equal to the value of the earned Performance Units or Performance
Shares at the close of the applicable Performance Period. Such Shares may be
granted subject to any restrictions deemed appropriate by the Committee. The
form of payout of such Awards shall be set forth in the Award Agreement
pertaining to the grant of the Award.
As determined by the Committee, a Grantee may be entitled to receive any
dividends declared with respect to Shares which have been earned in connection
with grants of Performance Units or Performance Shares but not yet distributed
to the Grantee. In addition, a Grantee may, as determined by the Committee, be
entitled to exercise his or her voting rights with respect to such Shares.
ARTICLE 10. BONUS SHARES AND DEFERRED SHARES
10.1. Bonus Shares. Subject to the terms of the Plan, the Committee
may grant Bonus Shares to any Eligible Person, in such amount and upon such
terms and at any time and from time to time as shall be determined by the
Committee.
10.2. Deferred Shares. Subject to the terms and provisions of the
Plan, Deferred Shares may be granted to any Eligible Person in such amounts and
upon such terms, and at any time and from time to time, as shall be determined
by the Committee. The Committee may impose such conditions or restrictions on
any Deferred Shares as it may deem advisable, including time-vesting
restrictions and deferred payment features. The Committee may cause the Company
to establish a grantor trust to hold Shares subject to Deferred Share Awards.
Without limiting the generality of the foregoing, the Committee may grant to any
Eligible Person, or permit any Eligible Person to elect to receive, Deferred
Shares in lieu of or in substitution for any other compensation (whether payable
currently or on a deferred basis, and whether payable under this
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Plan or otherwise) which such Eligible Person may be eligible to receive from
the Company or a Subsidiary.
ARTICLE 11. BENEFICIARY DESIGNATION
Each Grantee 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 or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Grantee, shall be in a form prescribed by the
Company, and will be effective only when filed by the Grantee in writing with
the Company during the Grantee's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Grantee's death shall be paid to
the Grantee's estate.
ARTICLE 12. DEFERRALS
The Committee may permit or require a Grantee to defer receipt of the
payment of cash or the delivery of Shares that would otherwise be due by virtue
of the exercise of an Option or SAR, the lapse or waiver of restrictions with
respect to Restricted Shares, the satisfaction of any requirements or goals with
respect to Performance Units or Performance Shares, the grant of Bonus Shares or
the expiration of the deferral period for Deferred Shares. If any such deferral
is required or permitted, the Committee shall establish rules and procedures for
such deferrals.
ARTICLE 13. RIGHTS OF EMPLOYEES AND CONSULTANTS
13.1. Employment. Nothing in the Plan shall interfere with or limit
in any way the right of the Company to terminate any Grantee's employment or
consultancy at any time, nor confer upon any Grantee the right to continue in
the employ or as consultant of the Company.
13.2. Participation. No employee or consultant shall have the right
to be selected to receive an Award, or, having been so selected, to be selected
to receive a future Award.
ARTICLE 14. CHANGE OF CONTROL
14.1. Change of Control. Except as otherwise provided in a Grantee's
Award Agreement, if a Change of Control occurs, then:
(a) the Grantee's Restricted Shares that were forfeitable
shall thereupon become nonforfeitable;
(b) the Grantee's Deferred Shares that were forfeitable
shall thereupon become nonforfeitable and the Company shall immediately
settle all Deferred Shares, whether or not forfeitable, by delivery to
such Grantee of a number of unrestricted Shares equal to the aggregate
number of the Grantee's Deferred Shares;
(c) any unexercised Option or SAR, whether or not
exercisable on the date of such Change of Control, shall thereupon be
fully exercisable and may be exercised, in whole or in part; and
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(d) the Company shall immediately pay to the Grantee,
with respect to any Performance Share or Performance Unit with respect
to which the Performance Period has not ended as of the date of such
Change of Control, a cash payment equal to the product of (A) in the
case of a Performance Share, the Change of Control Value or (B) in the
case of a Performance Unit, the value of the Performance Unit specified
in the Award Agreement, as applicable, multiplied successively by each
of the following:
(i) a fraction, the numerator of which is the
number of whole and partial months that have elapsed between
the beginning of such Performance Period and the date of such
Change of Control and the denominator of which is the number
of whole and partial months in the Performance Period; and
(ii) a percentage equal to a greater of (x) the
target percentage, if any, specified in the applicable Award
Agreement or (y) the maximum percentage, if any, that would be
earned under the terms of the applicable Award Agreement
assuming that the rate at which the performance goals have
been achieved as of the date of such Change of Control would
continue until the end of the Performance Period.
14.2. Pooling of Interests Accounting. If the Committee determines:
(a) that the consummation of a sale or merger of the
Company (a "Closing") is reasonably likely to occur but for the
circumstances described in this Section;
(b) that, based on the advice of the Company's
independent accountants and such other factors that the Committee deems
relevant, the grant of any Award or exercise of some or all outstanding
Options or SARs would preclude the use of pooling of interests
accounting ("pooling") after the Closing; and
(c) the preclusion of pooling can reasonably be expected
to have a material adverse effect on the terms of such sale or merger
or on the likelihood of a Closing (a "Pooling Material Adverse
Effect"),
then the Committee may:
(i) make adjustments to such Options, SARs or
other Awards (including the substitution, effective upon such
Closing, of Options, SARs or other Awards denominated in
shares or other equity securities of another party to such
proposed sale or merger transaction) prior to the Closing so
as to permit pooling after the Closing,
(ii) cause the Company to pay the benefits
attributable to such Options, SARs or other Awards (including
for this purpose not only the spread between the then Fair
Market Value of the Shares subject to such Options or SARs and
the Option Price or Strike Price applicable thereto, but also
the additional value of such Options or SARs in excess of such
spread, as determined by the Committee) in the form of Shares
if such payment would not cause the transaction to remain or
become ineligible for pooling; or
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(iii) provided that the Committee has determined,
based on the advice of the Company's independent accountants
and such other factors that the Committee deems relevant, that
no reasonable alternative is available to the Company to
prevent such a Pooling Material Adverse Effect, cancel any or
all such Options, SARs or other Awards without the consent of
any affected Grantee.
ARTICLE 15. AMENDMENT, MODIFICATION, AND TERMINATION
15.1. Amendment, Modification, and Termination. Subject to the terms
of the Plan, the Board may at any time and from time to time, alter, amend,
suspend or terminate the Plan in whole or in part without the approval of the
Company's stockholders.
15.2. Adjustments Upon Certain Unusual or Nonrecurring Events. The
Committee may make adjustments in the terms and conditions of Awards in
recognition of unusual or nonrecurring events (including the events described in
Section 4.2) affecting the Company or the financial statements of the Company 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 intended
to be made available under the Plan.
15.3. Awards Previously Granted. Notwithstanding any other provision
of the Plan to the contrary (but subject to Section 14.2), 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
Grantee of such Award.
ARTICLE 16. WITHHOLDING
16.1. Withholding
(a) Mandatory Tax Withholding.
(i) Whenever under the Plan, Shares are to be
delivered upon exercise or payment of an Award or upon
Restricted Shares becoming nonforfeitable, or any other event
with respect to rights and benefits hereunder, the Company
shall be entitled to require (x) that the Grantee remit an
amount in cash, or if determined by the Committee, Mature
Shares, sufficient to satisfy all federal, state, local and
foreign tax withholding requirements related thereto
("Required Withholding"), (y) the withholding of such Required
Withholding from compensation otherwise due to the Grantee or
from any Shares or other payment due to the Grantee under the
Plan or (z) any combination of the foregoing.
(ii) Any Grantee who makes an election under
Section 83(b) of the Code shall remit to the Company an amount
sufficient to satisfy all resulting Required Withholding;
provided that, in lieu of or in addition to the foregoing, the
Company shall have the right to withhold such Required
Withholding from compensation otherwise due to the Grantee or
from any Shares or other payment due to the Grantee under the
Plan.
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(b) Elective Share Withholding.
(i) Subject to subsection 16.1(b)(ii), a Grantee
may elect the withholding ("Share Withholding") by the Company
of a portion of the Shares subject to an Award upon the
exercise of such Award or upon Restricted Shares becoming
non-forfeitable or upon making an election under Section 83(b)
of the Code (each, a "Taxable Event") having a Fair Market
Value equal to (x) the minimum amount necessary to satisfy
Required Withholding liability attributable to the Taxable
Event; or (y) with the Committee's prior approval, a greater
amount, not to exceed the estimated total amount of such
Grantee's tax liability with respect to the Taxable Event.
(ii) Each Share Withholding election shall be
subject to the following conditions:
(1) any Grantee's election shall be
subject to the Committee's discretion to revoke the
Grantee's right to elect Share Withholding at any
time before the Grantee's election if the Committee
has reserved the right to do so in the Award
Agreement;
(2) the Grantee's election must be made
on or before the date (the "Tax Date") on which the
amount of tax to be withheld is determined; and
(3) the Grantee's election shall be
irrevocable.
16.2. Notification under Code Section 83(b). If the Grantee, in
connection with the exercise of any Option, or the grant of Restricted Shares,
makes the election permitted under Section 83(b) of the Code to include in such
Grantee's gross income in the year of transfer the amounts specified in Section
83(b) of the Code, then such Grantee shall notify the Company of such election
within 10 days of filing the notice of the election with the Internal Revenue
Service, in addition to any filing and notification required pursuant to
regulations issued under Section 83(b) of the Code. The Committee may, in
connection with the grant of an Award or at any time thereafter prior to such an
election being made, prohibit a Grantee from making the election described
above.
ARTICLE 17. ADDITIONAL PROVISIONS
17.1. 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 or assets of the Company.
17.2. 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.
17.3. Severability. If any part of the Plan is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any other part of the Plan. Any Section or part
of a Section so declared to be unlawful or invalid shall, if
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possible, be construed in a manner which will give effect to the terms of such
Section or part of a Section to the fullest extent possible while remaining
lawful and valid.
17.4. Requirements of Law. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or stock
exchanges as may be required. Notwithstanding any provision of the Plan or any
Award, Grantees shall not be entitled to exercise, or receive benefits under,
any Award, and the Company shall not be obligated to deliver any Shares or other
benefits to a Grantee, if such exercise or delivery would constitute a violation
by the Grantee or the Company of any applicable law or regulation.
17.5. Securities Law Compliance.
(a) If the Committee deems it necessary to comply with
any applicable securities law, or the requirements of any stock
exchange upon which Shares may be listed, the Committee may impose any
restriction on Shares acquired pursuant to Awards under the Plan as it
may deem advisable. All certificates for Shares 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 rules, regulations and other requirements of
the SEC, any stock exchange upon which Shares are then listed, any
applicable securities law, and the Committee may cause a legend or
legends to be placed on any such certificates to refer to such
restrictions. If so requested by the Company, the Grantee shall
represent to the Company in writing that he or she will not sell or
offer to sell any Shares unless a registration statement shall be in
effect with respect to such Shares under the Securities Act of 1933 or
unless he or she shall have furnished to the Company evidence
satisfactory to the Company that such registration is not required.
(b) If the Committee determines that the exercise of, or
delivery of benefits pursuant to, any Award would violate any
applicable provision of securities laws or the listing requirements of
any stock exchange upon which any of the Company's equity securities
are then listed, then the Committee may postpone any such exercise or
delivery, as applicable, but the Company shall use all reasonable
efforts to cause such exercise or delivery to comply with all such
provisions at the earliest practicable date.
17.6. No Rights as a Stockholder. A Grantee shall not have any
rights as a stockholder with respect to the Shares (other than Restricted
Shares) which may be deliverable upon exercise or payment of such Award until
such shares have been delivered to him or her. Restricted Shares, whether held
by a Grantee or in escrow by the Secretary of the Company, shall confer on the
Grantee all rights of a stockholder of the Company, except as otherwise provided
in the Plan or Award Agreement. Unless otherwise determined by the Committee at
the time of a grant of Restricted Shares, any cash dividends that become payable
on Restricted Shares shall be deferred and, if the Committee so determines,
reinvested in additional Restricted Shares. Except as otherwise provided in an
Award Agreement, any stock dividends and deferred cash dividends issued with
respect to Restricted Shares shall be subject to the same restrictions and other
terms as apply to the Restricted Shares with respect to which such dividends are
issued. The Committee may provide for payment of interest on deferred cash
dividends.
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17.7. Nature of Payments. Awards shall be special incentive payments
to the Grantee and shall not be taken into account in computing the amount of
salary or compensation of the Grantee for purposes of determining any pension,
retirement, death or other benefit under (a) any pension, retirement,
profit-sharing, bonus, insurance or other employee benefit plan of the Company
or any Subsidiary or (b) any agreement between (i) the Company or any Subsidiary
and (ii) the Grantee, except as such plan or agreement shall otherwise expressly
provide.
17.8. Governing Law. The Plan shall be construed in accordance with
and governed by the laws of the State of Alabama other than its laws respecting
choice of law.
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