EXHIBIT 10.1
REPUBLIC SERVICES, INC.
1998 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED MARCH 6, 2002)
ARTICLE I
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
1.01 AGREEMENT means a written agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying the terms
and conditions of a Grant or an Award issued to such Participant.
1.02 AWARD means an award of Common Stock, Restricted Stock and/or Phantom
Stock.
1.03 BOARD means the Board of Directors of the Company.
1.04 CHANGE OF CONTROL means any change in control of the Company of a
nature which would be required to be reported (a) in response to Item 6(e) of
Schedule 14A of Regulation 14A, as in effect on the date of this Agreement,
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (b) in response to Item 1 of the Current Report on Form 8-K, as in effect
on the date of this Agreement, promulgated under the Exchange Act, or (c) in any
filing by the Company with the Securities and Exchange commission; provided,
however, that without limitation, a Change of Control of the Company shall be
deemed to have occurred if:
(i) Any "person" (as such term is defined in Sections 13(d)(3) and
Section 14(d)(3) of the Exchange Act), other than the Company, any
majority-owned subsidiary of the Company, or any compensation plan of the
Company or any majority-owned subsidiary of the Company, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the combined voting power of the Company;
(ii) During any period of three consecutive years during the term of
this Agreement, the individuals who at the beginning of such period
constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority of such Board of Directors, unless the
election of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the
beginning of such period; or
(iii) The shareholders of the Company approve (1) a reorganization,
merger, or consolidation with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization,
merger, or consolidation do not immediately thereafter own more than 50% of
the combined voting power entitled to vote generally in the election of the
directors of the reorganized, merged or consolidated entity; (2) a
liquidation or dissolution of the Company; or (3) the sale of all or
substantially all of the assets of the Company or of a subsidiary of the
Company that accounts for 30% of the
A-1
consolidated revenues of the Company, but not including a reorganization,
merger or consolidation of the Company.
1.05 CHANGE OF CONTROL DATE is the date on which an event described in
Section 1.04 occurs.
1.06 CODE means the Internal Revenue Code of 1986, as amended from time to
time. References to the Code shall include the valid and binding governmental
regulations, court decisions and other regulatory and judicial authority issued
or rendered thereunder.
1.07 COMMISSION means the Securities and Exchange Commission or any
successor agency.
1.08 COMMITTEE means the Compensation Committee of the Board.
1.09 COMMON STOCK means the Common Stock, par value $.01 per share, of the
Company.
1.10 COMPANY means Republic Services, Inc.
1.11 EFFECTIVE DATE means June 30, 1998.
1.12 EXCHANGE ACT means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
1.13 FAIR MARKET VALUE means, on any given date, the closing price of a
share of Common Stock as reported on the New York Stock Exchange composite tape
on such day or, if the Common Stock was not traded on the New York Stock
Exchange on such day, then on the next preceding day that the Common Stock was
traded on such exchange, all as reported by such source as the Committee may
select.
1.14 GRANT means the grant of an Option and/or an SAR.
1.15 INCENTIVE STOCK OPTION means an Option which qualifies and is
intended to qualify as an "incentive stock option" under Section 422 of the
Code.
1.16 INITIAL VALUE means, with respect to an SAR, the Fair Market Value of
one share of Common Stock on the date of grant, as set forth in an Agreement.
1.17 NON-QUALIFIED STOCK OPTION means an Option other than an Incentive
Stock Option.
1.18 OPTION means a stock option that entitles the holder to purchase from
the Company a stated number of shares of Common Stock at the price and on the
conditions set forth in an Agreement.
1.19 OPTION PRICE means the price per share for Common Stock purchased on
the exercise of an Option as provided in Article VI.
1.20 PARTICIPANT means an officer, director or employee of the Company or
of a Subsidiary who satisfies the requirements of Article IV and is selected by
the Committee to receive a Grant or an Award.
1.21 PHANTOM STOCK means a bookkeeping entry on behalf of a Participant by
which his account is credited (but not funded) as though Common Stock had been
transferred to such account.
A-2
1.22 PLAN means the Republic Services, Inc. 1998 Stock Incentive Plan, as
amended from time to time.
1.23 RESTRICTED STOCK means shares of Common Stock awarded to a
Participant under Article IX and designated as Restricted Stock. Shares of
Common Stock shall cease to be Restricted Stock when, in accordance with the
terms of the applicable Agreement, they become transferable and free of
substantial risk of forfeiture.
1.24 RULE 16B-3 means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time, or any
successor rule.
1.25 SAR means a stock appreciation right granted pursuant to this Plan
that entitles the holder to receive, with respect to each share of Common Stock
encompassed by the exercise of such SAR, the excess of the Fair Market Value at
the time of exercise over the Initial Value of the SAR; provided, that any
limited stock appreciation right granted by the Committee and exercisable upon a
Change of Control shall entitle the holder to receive, with respect to each
share of Common Stock encompassed by the exercise of such SAR, the higher of (x)
the highest sales price of a share of Common Stock as reported on the New York
Stock Exchange composite tape during the 60-day period prior to and including
the Change of Control Date, or (y) the highest price per share paid in a Change
of Control transaction, except that in the case of SARs related to Incentive
Stock Options, such price shall be based only on the Fair Market Value of the
Common Stock on the date that the Incentive Stock Option is exercised.
1.26 SECURITIES BROKER means the registered securities broker acceptable
to the Company who agrees to effect the cashless exercise of an Option pursuant
to Section 8.05 hereof.
1.27 SUBSIDIARY means, with respect to any corporation, a "subsidiary
corporation" of that corporation within the meaning of Code Section 424(f).
ARTICLE II
PURPOSES
The Plan is intended to assist the Company in recruiting and retaining
officers, directors, and key employees with ability and initiative by enabling
such persons who contribute significantly to the Company or a Subsidiary to
participate in its future success and to associate their interests with those of
the Company and its shareholders. The Plan is intended to permit the award of
Common Stock, Restricted Stock, and Phantom Stock, and the issuance of Options
qualifying as Incentive Stock Options or Non-Qualified Stock Options as
designated by the Committee at time of grant, and SARs. No Option that is
intended to be an Incentive Stock Option however, shall be invalid for failure
to qualify as an Incentive Stock Option under Section 422 of the Code but shall
be treated as a Non-Qualified Stock Option.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have
authority to issue Grants and Awards upon such terms (not inconsistent with the
provisions of this Plan) as the Committee may consider appropriate. The terms of
such Grants and Awards
A-3
may include conditions (in addition to those contained in this Plan) on (i) the
exercisability of all or any part of an Option or SAR and (ii) the
transferability or forfeitability of Restricted Stock or Phantom Stock. In
addition, the Committee shall have complete authority to interpret all
provisions of this Plan; to prescribe the form of Agreements; to adopt, amend,
and rescind rules and regulations pertaining to the administration of the Plan;
and to make all other determinations necessary or advisable for the
administration of this Plan. To fulfill the purposes of the Plan without
amending the Plan, the Committee may also modify any Grants or Awards issued to
Participants who are nonresident aliens or employed outside of the United States
to recognize differences in local law, tax policy or custom.
The express grant in the Plan of any specific power to the Committee shall
not be construed as limiting any power or authority of the Committee. Any
decision made, or action taken, by the Committee or in connection with the
administration of this Plan shall be final and conclusive. All expenses of
administering this Plan shall be borne by the Company.
ARTICLE IV
ELIGIBILITY
4.01 GENERAL. Any officer, director or key employee of the Company or of
any Subsidiary (including any corporation that becomes a Subsidiary of the
Company after the adoption of this Plan) may receive one or more Awards or
Grants, or any combination or type thereof. Employee and non-employee directors
of the Company are eligible to participate in this Plan.
4.02 GRANTS AND AWARDS. The Committee will designate the individuals to
whom Grants and/or Awards are to be made and will specify the number of shares
of Common Stock subject to each such Grant or Award. An Option may be granted
alone or in addition to other Grants and/or Awards under the Plan. The Committee
shall have the authority to grant Incentive Stock Options, Non-Qualified Stock
Options or both types of Options (in each case with or without a related SAR) to
any Participant; provided, however, that Incentive Stock Options may be granted
only to employees of the Company and its Subsidiaries. An SAR may be granted
with or without a related Option. All Grants or Awards under this Plan shall be
evidenced by Agreements which shall be subject to applicable provisions of this
Plan and to such other provisions as the Committee may determine. No Participant
may be granted Options that are Incentive Stock Options, or related SARs (under
all plans of the Company and its Subsidiaries which provide for the grant of
Incentive Stock Options) which are first exercisable in any calendar year for
Common Stock having an aggregate Fair Market Value (determined as of the date an
Option is granted) exceeding $100,000 or such other amount as shall be specified
in Code Section 422 and the rules and regulations thereunder from time to time.
The Committee may issue Awards and Grants under such conditions,
restrictions and contingencies as it may deem appropriate. The performance goals
that may be used by the Committee for such Awards or Grants to executive
officers covered by IRC Section 162(m) shall consist of:
<Table>
Revenue Return on Equity
Net Income Stockholder Return
Earnings Per Share
</Table>
A-4
Further, performance criteria may reflect absolute entity performance or a
relative comparison of entity performance to the performance of a peer group of
entities or other external measure of the selected performance criteria. Profit,
earnings and revenues used for any performance goal measurement shall exclude:
gains or losses on operating asset sales or dispositions; asset write-downs;
litigation or claim judgments or settlements; accruals for historic
environmental obligations; effect of changes in tax law or rate on deferred tax
liabilities; accruals for reorganization and restructuring programs; uninsured
catastrophic property losses; the cumulative effect of changes in accounting
principles; and any extraordinary non-recurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management's discussion and analysis
of financial condition and results of operation appearing in the Company's
annual report to stockholders for the applicable year.
4.03 DESIGNATION OF OPTION AS AN INCENTIVE STOCK OPTION OR NON-QUALIFIED
STOCK OPTION. The Committee will designate at the time an Option is granted
whether the Option is to be treated as an Incentive Stock Option or a
Non-Qualified Stock Option. In the absence, however, of any such designation,
such Option shall be treated as a Non-Qualified Stock Option.
4.04 QUALIFICATION OF INCENTIVE STOCK OPTION UNDER SECTION 422 OF THE
CODE. Anything in this Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised so as to disqualify the Plan under Section 422 of the Code or, without
the consent of the Participant so affected, to disqualify any Incentive Stock
Option under such Section 422. No Option that is intended to be an Incentive
Stock Option however, shall be invalid for failure to qualify as an Incentive
Stock Option under Section 422 of the Code but shall be treated as a
Non-Qualified Stock Option.
4.05 NON-EMPLOYEE DIRECTOR STOCK OPTIONS. Non-employee directors shall
receive Grants of Non-Qualified Stock Options. These Grants shall consist of
50,000 shares of Common Stock upon election to the Board at a specific price
equal to the closing price of the Common Stock on the date of election and
subsequent annual Grants of 10,000 shares of Common Stock at an exercise price
equal to the closing price of the Common Stock on the first full trading day
following the public announcement of fourth quarter earnings of the prior year.
Each option granted under this Section shall be immediately exercisable.
4.06 VESTING. The minimum vesting period for any Award or Grant shall be
one year, except for Awards or Grants made in lieu of cash compensation, which
may vest immediately. In addition, in its absolute discretion, the Committee may
waive the one-year vesting requirement in instances of termination of employment
or upon an extraordinary event.
ARTICLE V
STOCK SUBJECT TO PLAN
5.01 MAXIMUM NUMBER OF SHARES TO BE AWARDED.
(a) Subject to the adjustment provisions of Article XI and the provisions
of (i) and (ii) of this Article V, up to 27,000,000 shares of Common Stock may
be issued under the Plan. In addition to such authorization, the following
shares of Common Stock may be issued under the Plan:
A-5
(i) Shares of Common Stock that are forfeited under this Plan and shares
of Common Stock that are not issued under this Plan because of (x) a
payment of cash in lieu of shares of Common Stock, (y) the cancellation,
termination or expiration of Grants and Awards, and/or (z) other similar
events under this Plan shall be available for issuance under this Plan; and
(ii) If a Participant tenders (by physical delivery or attestation), or
has withheld, shares of Common Stock in payment of all or part of the
Option Price under an Option granted under this Plan or in satisfaction of
withholding tax obligations thereunder, the shares of Common Stock so
tendered by the Participant or so withheld shall become available for
issuance under this Plan.
(b) Subject to the adjustment provisions of Article XI:
(i) Not more than 1,000,000 shares of Common Stock shall be issued under
Awards to any one Participant in any year, and this limit shall be
cumulative over the life of the Plan;
(ii) Not more than 5,000,000 shares, in the aggregate, of Common Stock
shall be issued in Grants to any one Participant over the life of the Plan;
and
(iii) Not more than 27,000,000 shares, in the aggregate, of Common Stock
shall be issued in Grants of Incentive Stock Options to all Participants
over the life of the Plan.
Subject to the foregoing provisions of this Article V, if a Grant or an
Award may be paid only in shares of Common Stock, or in either cash or shares of
Common Stock, the shares of Common Stock shall be deemed to be issued hereunder
only when and to the extent that payment is actually made in shares of Common
Stock. However, the Committee may authorize a cash payment under a Grant or an
Award in lieu of shares of Common Stock if there are insufficient shares of
Common Stock available for issuance under the Plan.
5.02 INDEPENDENT SARS. Upon the exercise of an SAR granted independently
of an Option, the Company may deliver to the Participant authorized but
previously unissued Common Stock, cash, or a combination thereof as provided in
Section 8.03. The maximum aggregate number of shares of Common Stock that may be
issued pursuant to SARs that are granted independently of Options is subject to
the provisions of Section 5.01 hereof.
ARTICLE VI
OPTION PRICE
The price per share for Common Stock purchased on the exercise of an Option
shall be fixed by the Committee on the date of grant; provided, however, that
the price per share shall not be less than the Fair Market Value on such date.
ARTICLE VII
EXERCISE OF OPTIONS
7.01 MAXIMUM OPTION OR SAR PERIOD. The period in which an Option or SAR
may be exercised shall be determined by the Committee on the date of grant;
provided, however, that an Incentive Stock Option shall not be exercisable after
the expiration of 10 years (or 5 years in the case of an Incentive Stock Option
granted to a 10% shareholder as determined
A-6
under Section 422 of the Code) from the date the Incentive Stock Option was
granted. The date upon which any Option or SAR granted by the Committee becomes
exercisable may be accelerated by the Committee in its discretion. Subject to
the terms hereof, the term of exercisability for any Option or SAR granted by
the Committee may be extended by the Committee and may be made contingent upon
the continued employment of the Participant by the Company or Subsidiary.
7.02 TRANSFERABILITY OF OPTIONS AND SARS. Non-Qualified Stock Options and
SARs may be transferable by a Participant and exercisable by a person other than
a Participant, but only to the extent specifically provided in an Option or SAR
Agreement. Incentive Stock Options, by their terms, shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable, during the Participant's lifetime, only by the Participant. No
right or interest of a Participant in any Option or SAR shall be liable for, or
subject to, any lien, obligation or liability of such Participant.
7.03 EMPLOYEE STATUS. For purposes of determining the applicability of
Section 422 of the Code (relating to Incentive Stock Options), or in the event
that the terms of any Grant provide that it may be exercised only during
employment or within a specified period of time after termination of employment,
the Committee may decide to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be
deemed interruptions of continuous employment.
ARTICLE VIII
METHOD OF EXERCISE
8.01 EXERCISE. Subject to the provisions of Articles VII and XII, an
Option or SAR may be exercised in whole at any time or in part from time to time
at such times and in compliance with the applicable Agreement and such other
requirements as the Committee shall determine; provided, however, that an SAR
that is related to an Option may be exercised only to the extent that the
related Option is exercisable and when the Fair Market Value exceeds the Option
Price of the related Option. An Option or SAR granted under this Plan may be
exercised with respect to any number of whole shares less than the full number
for which the Option or SAR could be exercised. Such partial exercise of an
Option or SAR shall not affect the right to exercise the Option or SAR from time
to time in accordance with this Plan with respect to remaining shares subject to
the Option or related SAR. The exercise of an Option shall result in the
termination of the SAR to the extent of the number of shares with respect to
which the Option is exercised.
8.02 PAYMENT. Unless otherwise provided by the Agreement, payment of the
Option Price shall be made in cash. If the Agreement provides, payment of all or
part of the Option Price (and any applicable withholding taxes) may be made by
surrendering already owned shares of Common Stock to the Company (by physical
delivery or attestation) or by the Company withholding shares of Common Stock
from the Participant upon exercise, provided the shares surrendered or withheld
have a Fair Market Value (determined as of the day preceding the date of
exercise) that is not less than such price or part thereof and any such
withholding taxes. In addition, the Committee may establish such payment or
other terms as it may deem to be appropriate and consistent with these purposes.
8.03 DETERMINATION OF PAYMENT OF CASH AND/OR COMMON STOCK UPON EXERCISE OF
SAR. At the Committee's discretion, the amount payable as a result of the
exercise of an SAR may be settled in cash, Common Stock, or a combination of
cash and Common Stock.
A-7
No fractional shares shall be delivered upon the exercise of an SAR but a cash
payment will be made in lieu thereof.
8.04 SHAREHOLDER RIGHTS. No Participant shall have any rights as a
shareholder with respect to shares subject to his Option or SAR until the date
he exercises such Option.
8.05 CASHLESS EXERCISE. To the extent permitted under the applicable laws
and regulations, at the request of the Participant and with the consent of the
Committee, the Company agrees to cooperate in a "cashless exercise" of the
Option. The cashless exercise shall be effected by the Participant delivering to
the Securities Broker instructions to exercise all or part of the Option,
including instructions to sell a sufficient number of shares of Common Stock to
cover the costs and expenses associated therewith. The Committee may permit a
Participant to elect to pay any applicable withholding taxes by requesting that
the Company withhold the number of shares of Common Stock equivalent at current
Fair Market Value to the withholding taxes due.
8.06 CASHING OUT OF OPTION. The Committee may elect to cash out all or
part of the portion of any Option to be exercised by paying the optionee an
amount, in cash or Common Stock, equal to the excess of the Fair Market Value of
the Common Stock that is the subject of the portion of the Option to be
exercised over the Option Price times the number of shares of Common Stock
subject to the portion of the Option to be exercised on the effective date of
such cash out.
ARTICLE IX
COMMON STOCK AND RESTRICTED STOCK
9.01 AWARD. In accordance with the provisions of Article IV, the
Committee will designate the individuals to whom an Award of Common Stock and/or
Restricted Stock is to be made and will specify the number of shares of Common
Stock covered by such Award or Awards.
9.02 VESTING. In the case of Restricted Stock, on the date of the Award,
the Committee may prescribe that the Participant's rights in the Restricted
Stock shall be forfeitable or otherwise restricted in any manner in the
discretion of the Committee for such period of time as is set forth in the
Agreement. Subject to the provisions of Article XII hereof, the Committee may
award Common Stock to a Participant which is not forfeitable and is free of any
restrictions on transferability.
9.03 SHAREHOLDER RIGHTS. Prior to their forfeiture in accordance with the
terms of the Agreement and while the shares are Restricted Stock, a Participant
will have all rights of a shareholder with respect to Restricted Stock,
including the right to receive dividends and vote the shares; provided, however,
that (i) a Participant may not sell, transfer, pledge, exchange, hypothecate, or
otherwise dispose of Restricted Stock, (ii) the Company shall retain custody of
the certificates evidencing shares of Restricted Stock, and (iii) the
Participant will deliver to the Company a stock power, endorsed in blank, with
respect to each award of Restricted Stock.
A-8
ARTICLE X
PHANTOM STOCK
10.01 AWARD. Pursuant to this Plan or an Agreement establishing
additional terms and conditions, the Committee may designate employees to whom
Awards of Phantom Stock may be made and will specify the number of shares of
Common Stock covered by the Award.
10.02 VESTING. On the date of the Award, the Committee may prescribe that
the Participant's right to receive payment for Phantom Stock shall be
forfeitable or otherwise restricted in any manner in the discretion of the
Committee for such period of time set forth in the Agreement.
10.03 SHAREHOLDER RIGHTS. A Participant for whom Phantom Stock has been
credited generally shall have none of the rights of a shareholder with respect
to such Phantom Stock. However, a plan or Agreement for the use of Phantom Stock
may provide for the crediting of a Participant's Phantom Stock account with cash
or stock dividends declared with respect to Common Stock represented by such
Phantom Stock.
10.04 PAYMENT. At the Committee's discretion, the amount payable to a
Participant for Phantom Stock credited to his account shall be made in cash,
Common Stock or a combination of cash and Common Stock.
10.05 TRANSFERABILITY OF PHANTOM STOCK. Phantom Stock may be transferable
by a Participant, but only to the extent specifically provided in the Agreement.
No right or interest of a Participant in any Phantom Stock shall be liable for,
or subject to, any lien, obligation or liability of such Participant.
ARTICLE XI
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Should the Company effect one or more (x) stock dividends, stock split-ups,
subdivisions or consolidations of shares or other similar changes in
capitalization; (y) spin-offs, spin-outs, split-ups, split-offs, or other such
distribution of assets to shareholders; or (z) direct or indirect assumptions
and/or conversions of outstanding Options due to an acquisition of the Company,
then the maximum number of shares as to which Grants and Awards may be issued
under this Plan shall be proportionately adjusted and their terms shall be
adjusted as the Committee shall determine to be equitably required, provided
that the number of shares subject to any Grant or Award shall always be a whole
number. Any determination made under this Article XI by the Committee shall be
final and conclusive.
The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property or for labor
or services, either upon direct sale or upon the exercise of rights or warrants
to subscribe therefor, or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, shall not affect, and
no adjustment by reason thereof shall be made with respect to any Grant or
Award.
A-9
ARTICLE XII
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Grant shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements) and the rules of all domestic stock exchanges on which the
Company's shares may be listed. The Company may rely on an opinion of its
counsel as to such compliance. Any share certificate issued to evidence Common
Stock for which a Grant is exercised or an Award is issued may bear such legends
and statements as the Committee may deem advisable to assure compliance with
federal and state laws and regulations. No Grant shall be exercisable, no Common
Stock shall be issued, no certificate for shares shall be delivered, and no
payment shall be made under this Plan until the Company has obtained such
consent or approval as the Committee may deem advisable from regulatory bodies
having jurisdiction over such matters.
ARTICLE XIII
GENERAL PROVISIONS
13.01 EFFECT ON EMPLOYMENT. Neither the adoption of this Plan, its
operation, nor any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or a Subsidiary or in any way affect any right and power of the
Company or a Subsidiary to terminate the employment of any employee at any time
with or without assigning a reason therefor.
13.02 UNFUNDED PLAN. The Plan, insofar as it provides for a Grant or an
Award of Phantom Stock, is not required to be funded, and the Company shall not
be required to segregate any assets that may at any time be represented by a
Grant or an Award of Phantom Stock under this Plan.
13.03 CHANGE OF CONTROL. Notwithstanding any other provision of the Plan
to the contrary, in the event of a Change of Control:
(i) Unless otherwise provided by the Committee in an Agreement, any
outstanding Option, SAR (including any limited SAR) or Phantom Stock which
is not presently exercisable and vested as of a Change of Control Date
shall become fully exercisable and vested to the full extent of the
original Grant upon such Change of Control Date.
(ii) Unless otherwise provided by the Committee in an Agreement, the
restrictions applicable to any outstanding Restricted Stock shall lapse,
and such Restricted Stock shall become free of all restrictions and become
fully vested, nonforfeitable and transferable to the full extent of the
original Award. The Committee may also provide in an Agreement that a
Participant may elect, by written notice to the Company within 60 days
after a Change of Control Date, to receive, in exchange for shares that
were Restricted Stock immediately before the Change of Control Date, a cash
payment equal to the Fair Market Value of the shares surrendered on the
last business day the Common Stock is traded on the New York Stock Exchange
prior to receipt by the Company of such written notice.
(iii) The Committee may, in its complete discretion, cause the
acceleration or release of any and all restrictions or conditions related
to a Grant or Award, in such
A-10
manner, in the case of officers and directors of the Company who are
subject to Section 16(b) of the Exchange Act, as to conform to the
provisions of Rule 16b-3.
13.04 RULES OF CONSTRUCTION. Headings are given to the articles and
sections of this Plan solely for ease of reference and are not to be considered
in construing the terms and conditions of the Plan. The reference to any
statute, regulation, or other provision of law shall be construed to refer to
any amendment to or successor of such provision of law.
13.05 RULE 16B-3 REQUIREMENTS. Notwithstanding any other provisions of
the Plan, the Committee may impose such conditions on any Grant or Award, and
the Board may amend the Plan in any such respects, as they may determine, on the
advice of counsel, are necessary or desirable to satisfy the provisions of Rule
16b-3. Any provision of the Plan to the contrary notwithstanding, and except to
the extent that the Committee determines otherwise: (a) transactions by and with
respect to officers and directors of the Company who are subject to Section
16(b) of the Exchange Act shall comply with any applicable conditions of Rule
16b-3; and (b) every provision of the Plan shall be administered, interpreted
and construed to carry out the foregoing provisions of this sentence.
13.06 AMENDMENT, MODIFICATION AND TERMINATION. At any time and from time
to time, the Board may terminate, amend or modify the Plan. Such amendment or
modification may be without shareholder approval, except to the extent that (a)
such amendment (i) materially increases the aggregate number of shares of Common
Stock that may be issued under the Plan, (ii) materially increases the benefits
to Participants under the Plan, or (iii) materially changes the requirements for
eligibility to participate in the Plan, or (b) such approval is required by the
Code, pursuant to the rules under Section 16 of the Exchange Act, by any
national securities exchange or system on which the Common Stock is then listed
or reported, by any regulatory body having jurisdiction with respect thereto or
under any other applicable laws, rules, or regulations. In addition, except as
provided in Article XI, the Option Price of any outstanding Option may not be
adjusted or amended, whether through amendment, cancellation or replacement,
unless such adjustment or amendment is approved by the shareholders of the
Company.
No termination, amendment, or modification of the Plan, other than pursuant
to Section 13.05 herein, shall in any manner adversely affect any Grant or Award
theretofore issued under the Plan, without the written consent of the
Participant. The Committee may amend the terms of any Grant or Award theretofore
issued under this Plan, prospectively or retrospectively, but no such amendment
shall impair the rights of any Participant without the Participant's written
consent except an amendment provided for or contemplated in the terms of the
Grant or Award, an amendment made to cause the Plan, or Grant or Award, to
qualify for the exemption provided by Rule 16b-3, or an amendment to make an
adjustment under Article XI.
13.07 GOVERNING LAW. The validity, construction and effect of the Plan
and any actions taken or related to the Plan shall be determined in accordance
with the laws of the state of Delaware and applicable federal law.
13.08 SUCCESSORS AND ASSIGNS. All obligations of the Company under the
Plan, with respect to Grants and Awards issued hereunder, shall be binding on
any successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation or otherwise, of
all or substantially all of the business and/or assets of the Company. The Plan
shall be binding on all successors and permitted assigns of a Participant,
including, but not limited to, the estate of such Participant and the executor,
A-11
administrator or trustee of such estate, and the guardians or legal
representative of the Participant.
13.09 EFFECT ON PRIOR PLAN AND OTHER COMPENSATION ARRANGEMENTS. The
adoption of this Amended and Restated Plan shall have no effect on Grants and
Awards made pursuant to the Plan prior to amendment and restatement and the
Company's other compensation arrangements. Nothing contained in this Plan shall
prevent the Company from adopting other or additional compensation plans or
arrangements for its officers, directors or employees.
13.10 DURATION OF PLAN. No Grant or Award may be made under this Plan
after June 30, 2008. Grants or Awards made prior to such date shall continue to
vest and become exercisable according to their terms.
13.11 EFFECTIVE DATE. Options may be granted under this Plan, upon its
adoption by the Board, provided that no Option will be effective unless and
until this Plan is approved by the holders of a majority of the shares of the
Company's outstanding voting stock present in person, or represented by proxy,
and entitled to vote at a duly held meeting of the shareholders. No Option
granted prior to the Effective Date may be exercised before the requisite
shareholder approval is obtained.
A-12