Exhibit 1.10
AMENDED AND RESTATED 2/8/01
DEL WEBB CORPORATION
1993 EXECUTIVE LONG-TERM INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Del Webb Corporation, an Arizona corporation
(hereinafter referred to as the "Company"), hereby establishes an incentive
compensation plan to be known as the "Del Webb Corporation 1993 Executive
Long-Term Incentive Plan" (hereinafter referred to as the "Plan"), as set forth
in this document. The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Restricted Stock, and Performance Units.
Upon approval by the Board of Directors of the Company and subject to
shareholder ratification, the Plan shall become effective as of October 26, 1993
(the "Effective Date"), as amended June, 20, 1996, as amended April 13, 2000, as
amended and restated February 8, 2001, and shall remain in effect as provided in
Section 1.3 herein.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the success,
and enhance the value, of the Company by linking the personal interests of
participants to those of Company shareholders, and by providing Participants
with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants upon whose
judgment, interest, and special effort the successful conduct of its operation
largely is dependent.
1.3 DURATION OF THE PLAN. Subject to approval by the Board of Directors of
the Company and ratification by the shareholders of the Company, the Plan shall
commence on the Effective Date, as described in Section 1.1 herein, and shall
remain in effect, subject to the right of the Board of Directors to terminate
the Plan at any time pursuant to Article 13 herein, until all Shares subject to
it shall have been purchased or acquired according to the Plan's provisions.
However, in no event may an Award be granted under the Plan on or after October
25, 2003.
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
2.1 DEFINITIONS. Whenever used in the Plan, the following terms shall have
the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
(a) "Award" means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Restricted
Stock, or Performance Units.
(b) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(c) "Board" or "Board or Directors" means the Board of Directors of
Del Webb Corporation.
(d) "Cause" means: (i) willful and gross misconduct on the part of a
Participant that is materially and demonstrably detrimental to the Company;
or (ii) the commission by a Participant of one or more acts which
constitute an indictable crime under United States Federal, state, or local
law. "Cause" under either (i) or (ii) shall be determined in good faith by
a written resolution duly adopted by the affirmative vote of not less than
two-thirds (2/3rds) of all the Directors at a meeting duly called and held
for that purpose after reasonable notice to the Participant and opportunity
for the Participant and his or her legal counsel to be heard.
(e) A "Change in Control" of Company shall be deemed to have occurred
in any or all of the following instances:
(1) Any "person" as such term is used in Sections 13(d) and 14(d)
of the Exchange Act, other than a trustee or other fiduciary holding
securities under an employee benefit plan of Company or a corporation
owned directly or indirectly by the stockholders of Company in
substantially the same proportions as their ownership of stock of
Company, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
of Company representing 20% or more of the total voting power
represented by Company's then outstanding Voting Securities (as
defined below); or
(2) During any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of Directors of
Company and any new Director whose election by the Board of Directors
or nomination for election by Company's stockholders was approved by a
vote of at least two-thirds of the Directors then still in office who
either were Directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
(3) The stockholders of Company approve a merger or consolidation
of Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of Company
outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into Voting Securities
of the surviving entity) at least 80% of the total voting power
represented by the Voting Securities of Company or such surviving
entity outstanding immediately after such merger or consolidation; or
(4) The stockholders of Company approve a plan of complete
liquidation of Company or an agreement for the sale or disposition by
Company of (in one transaction or a series of transactions) all or
substantially all Company's assets.
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For purposes of this Section, the term "Voting Securities" shall mean
and include any securities of Company which vote generally for the election
of directors.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means the committee, as specified in Article 3,
appointed by the Board to administer the Plan with respect to grants of
Awards.
(h) "Company" means Del Webb Corporation, an Arizona corporation
(including any and all Subsidiaries), or any successor thereto as provided
in Article 16 herein.
(i) "Director" means any individual who is a member of the Board of
Directors of the Company.
(j) "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 sufficient competent medical advice from one or more
individuals, selected by the Committee, who are qualified to give
professional medical advice.
(k) "Employee" means any full-time, nonunion employee of the Company.
Directors who are not otherwise employed by the Company shall not be
considered Employees under this Plan.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
(m) "Fair Market Value" means the average of the highest and lowest
quoted selling prices for Shares on the relevant date, or (if there were no
sales on such date) the weighted average of the means between the highest
and lowest quoted selling prices on the nearest day before and the nearest
day after the relevant date, as prescribed by Treasury Regulation Section
20.203l-2(b)(2), as reported in the Wall Street Journal or a similar
publication selected by the Committee.
(n) "Incentive Stock Option" or "IS0" means an option to purchase
Shares, granted under Article 6 herein, which is designated as an Incentive
Stock Option and is intended to meet the requirements of Section 422 of the
Code.
(o) "Insider" shall mean an Employee who is, at the time an Award is
made under this Plan, an insider pursuant to Section 16 of the Exchange
Act.
(p) "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares, granted under Article 6 herein, which is not intended to be an
Incentive Stock Option.
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(q) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
(r) "Option Price" means the price at which a Share may be purchased
by a Participant pursuant to an Option, as determined by the Committee.
(s) "Parent" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
(t) "Participant" means an Employee of the Company who has outstanding
an Award granted under the Plan.
(u) "Performance Unit" means an Award granted to an Employee pursuant
to Article 8 herein.
(v) "Period of Restriction" means the period during which the transfer
of Shares of Restricted Stock 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, at its discretion), and the
Shares are subject to a substantial risk of forfeiture, as provided in
Article 7 herein.
(w) "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).
(x) "Restricted Stock" means an Award granted to a Participant
pursuant to Article 7 herein.
(y) "Retirement" means a voluntary termination of employment by a
Participant who has less than ten (10) years of service with Company at or
after age sixty-five (65), or voluntary termination at or after age
fifty-five (55) for Participants who have at least ten (10) years of
service with Company as of the date of employment termination, or any other
criteria determined by such methods or procedures as may be established
from time to time by the Committee
(z) "Shares" means the shares of common stock of Del Webb Corporation.
(aa) "Subsidiary" means any corporation in which the Company owns
directly, or indirectly through subsidiaries, at least fifty percent (50%)
of the total combined voting power of all classes of stock, or any other
entity (including, but not limited to, partnerships and joint ventures) in
which the Company owns at least fifty percent (50%) of the combined equity
thereof.
2.2 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.
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2.3 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Human Resources
Committee of the Board, or by any other Committee appointed by the Board
consisting of not less than two (2) Directors who are not Employees. The members
of the Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board of Directors.
Except as permitted under Section 16b-3(c)(2)(i)(A), (B), (C), and (D), no
member of the Committee shall have received a grant of an Award under the Plan
or any similar Plan of the Company or any of its Subsidiaries while serving on
the Committee, or shall have so received such a grant at any time within one (l)
year prior to his or her service on the Committee, or, if different, for the
time period just necessary to fulfill the then current Rule 16b-3 requirements
under the Exchange Act. However, if for any reason the Committee does not
qualify to administer the Plan, as contemplated by Rule 16b-3 of the Exchange
Act, the Board of Directors may appoint a new Committee so as to comply with
Rule 16b-3.
3.2 AUTHORITY OF THE COMMITTEE. The Committee shall have full power except
as limited by law or by the Articles of Incorporation or Bylaws of the Company,
and subject to the provisions herein, to determine the size and types of Awards;
to determine the terms and conditions of such Awards in a manner consistent with
the Plan; to cancel and reissue any Awards granted hereunder in the event the
Award lapses for any reason (provided that the Committee shall not have the
authority to reprice previously issued and currently outstanding Awards without
shareholder approval); to construe and interpret the Plan and any agreement or
instrument entered into under the Plan; to establish, amend, or waive rules and
regulations for the Plan's administration; and (subject to the provisions of
Article 13 herein) to amend the terms and conditions of any outstanding Award to
the extent such terms and conditions are within the discretion of the Committee
as provided in the Plan. Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration of the
Plan. As permitted by law, the Committee may delegate its authorities as
identified hereunder.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive, and binding on
all persons, including the Company, its stockholders, Employees, Participants,
and their estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3
herein, the total number of Shares available for grant under the Plan may not
exceed one million two hundred thousand (1,200,000). These one million two
hundred thousand (1,200,000) Shares may be either authorized but unissued or
reacquired Shares.
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4.2 LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason, any Shares subject to such Award
again shall be available for the grant of an Award under the Plan.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares, such adjustment shall be made in
the number and class of Shares which may be delivered under the Plan, and in the
number and class of and/or price of Shares subject to outstanding Options and
Restricted Stock granted under the Plan, as may be determined to be appropriate
and equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; and provided that the number of Shares subject to any
Award shall always be a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include all
officers and key Employees of the Company, as determined by the Committee,
including Employees who are members of the Board, but excluding Directors who
are not Employees
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award. No Employee shall have any right to be granted an Award under this Plan.
In addition, nothing in this Plan shall interfere with or limit in any way the
right of the Company to terminate any Participant's employment at any time, nor
confer upon any Participant any right to continue in the employ of the Company.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Employees at any time and from time to time as shall
be determined by the Committee. The Committee shall have discretion in
determining the number of Shares subject to Options granted to each Participant.
The Committee may grant ISOs, NQSOs, or a combination thereof. Nothing in this
Article 6 shall be deemed to prevent the grant of NQSOs in excess of the maximum
established by Section 422 of the Code.
6.2 OPTION AGREEMENT OR NOTIFICATION FORM. Each Option grant shall be
evidenced by an Option Agreement or Notification Form that shall specify the
Option Price, the duration of the Option, the number of Shares to which the
Option pertains, and such other provisions as the Committee shall determine. The
Option Agreement or Notification Form also shall specify whether the Option is
intended to be an ISO within the meaning of Section 422 of the Code, or a NQSO
whose grant is intended not to fall under the provisions of Section 422 of the
Code. The Agreement or Notification Form may be delivered electronically. If the
Optionee elects not to accept the award, they must notify the Company in writing
within 90 days of the grant date.
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6.3 OPTION PRICE. The Option Price for each grant of an Option shall not be
less than one hundred percent (100%) of the Fair Market Value of such Share on
the date the Option is granted.
6.4 DURATION OF OPTIONS. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
Option shall be exercisable later than the tenth (10th) anniversary date of its
grant.
6.5 EXERCISE OF OPTIONS. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant. However, in no event may any Option granted
under this Plan become exercisable prior to six (6) months following the date of
its grant.
6.6 PAYMENT. Options shall be exercised by the delivery of a written notice
of exercise to the Secretary of 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.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having a Fair Market Value at the time of exercise
equal to the total Option Price (provided that the Shares which are tendered
must have been held by the Participant for at least six (6) months prior to
their tender to satisfy the Option Price), or (c) by a combination of (a) and
(b).
The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purpose and applicable law. The proceeds from such a payment shall be
added to the general funds of the Company and shall be used for general
corporate purposes.
As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee shall impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under
the Plan, as it may deem advisable, including, without limitation, restrictions
under applicable Federal securities laws, under the requirements of any stock
exchange or market upon which such Shares are then listed and/or traded, and
under any blue sky or state securities laws applicable to such Shares.
6.8 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.
(a) TERMINATION BY DEATH. In the event the employment of a Participant
is terminated by reason of death, any outstanding Options granted to that
Participant which are vested as of the date of death shall remain
exercisable at any time prior to their expiration date, or for one (1) year
after the date that employment was terminated, whichever period is shorter,
by such person or persons as shall have been named as the Participant's
beneficiary, or by such persons that have acquired the Participant's rights
under the Option by will or by the laws of descent and distribution.
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The portion of any outstanding Option which is deemed vested under this
Plan as of the date of employment termination shall be determined according to
the following guidelines:
(i) The portion of the Option which is exercisable as of the date of
employment termination shall remain exercisable;
(ii) The percentage vesting of the portion of the Option which
otherwise would have vested at the end of the year in which employment
termination occurs, will equal a fraction, the numerator of which is the
number of full weeks of employment during the year in which employment
termination occurs, and the denominator of which is fifty-two (52); and
(iii) The portion of the Option which is scheduled to vest in a year
which begins after the end of the year in which employment termination
occurs, shall be forfeited by the Participant and returned to the Company
(and shall once again be available for grant under the Plan).
Any Options which are not vested as of the date of employment termination
shall expire immediately, and may not be exercised following such time.
(b) TERMINATION BY DISABILITY. In the event the employment of a
Participant is terminated by reason of Disability, any outstanding Options
granted to that Participant which are vested as of the date the Committee
determines the definition of Disability to have been satisfied, shall
remain exercisable at any time prior to their expiration date, or for one
(l) year after the date that the Committee determines the definition of
Disability to have been satisfied, whichever period is shorter.
The portion of any outstanding Option which is deemed vested as of the date
the definition of Disability is determined to have been satisfied by the
Committee shall be determined pursuant to the guidelines set forth in
Subparagraphs (a)(i) through (a)(iii) of this Section 6.8.
Any Options that are not vested as of the date that the Committee
determines the definition of Disability to have been satisfied, shall expire
immediately, and may not be exercised following such date.
(c) TERMINATION BY RETIREMENT. In the event the employment of a
Participant is terminated by reason of Retirement, any outstanding Options
granted to that Participant which are vested as of the effective date of
Retirement, shall remain exercisable at any time prior to their expiration
date, or for three (3) years after the effective date of Retirement,
whichever period is shorter.
The portion of any outstanding Option which is deemed vested as of the
effective date of Retirement shall be determined pursuant to the guidelines set
forth in Subparagraphs a(i) through a(iii) of this Section 6.8.
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Any Options which are not vested as of the effective date of Retirement
shall expire immediately, and may not be exercised following such date.
(d) EXERCISE LIMITATIONS ON ISOS. In the case of ISOs, the tax
treatment prescribed under Section 422 of the Internal Revenue Code of
1986, as amended, may not be available if the Options are not exercised
within the Section 422 prescribed time periods after each of the various
types of employment termination.
Notwithstanding the exercise periods described in Subparagraphs (a), (b),
and (c) above, the Committee shall have the authority, in its sole discretion,
to accelerate the vesting of Options which are outstanding as of the date of
employment termination for one of the reasons described in this Section 6.8.
6.9 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment of a
Participant shall terminate for any reason (other than the reasons set forth in
Section 6.8 or for Cause), all Options held by the Participant which are not
vested as of the effective date of employment termination immediately shall be
forfeited to the Company (and shall once again become available for grant under
the Plan). However, the Committee, in its sole discretion, shall have the right
to immediately vest all or any portion of such Options, subject to such terms as
the Committee, in its sole discretion, deems appropriate.
Options which are vested as of the effective date of employment termination
may be exercised by the Participant within the period beginning on the effective
date of employment termination, and ending three (3) months after such date.
If the employment of a Participant shall terminate for Cause, all
outstanding Options held by the Participant immediately shall be forfeited to
the Company and no additional exercise period shall be allowed, regardless of
the vested status of the Options.
6.10 NONTRANSFERABILITY OF OPTIONS. An ISO may not be sold, transferred, or
otherwise alienated or hypothecated, other than by will or the laws of descent
and distribution. A NQSO may be transferable subject to terms and conditions
established by the Committee. All Options shall be exercisable during his or her
lifetime only by Participant or an authorized transferee.
ARTICLE 7. RESTRICTED STOCK
7.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to eligible Employees in such amounts as the Committee shall
determine; provided that the total number of Shares of Restricted Stock granted
under this Plan shall not exceed 450,000 Shares of Restricted Stock.
7.2 RESTRICTED STOCK AGREEMENT OR NOTIFICATION FORM. Each Restricted Stock
grant shall be evidenced by a Restricted Stock Agreement or Notification Form
that shall specify the Period of Restriction, or Periods, the number of
Restricted Stock Shares granted, and such other provisions as the Committee
shall determine. The Agreement or Notification Form may be delivered
electronically. If the Recipient elects not to accept the award, they must
notify the Company in writing within 90 days of the grant date.
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7.3 TRANSFERABILITY. A Participant who has been granted Shares of
Restricted Stock under the Plan may assign or otherwise transfer all or a
portion of the rights under the Shares of Restricted Stock to a family member or
members, or to a trust or similar entity (including a family limited
partnership) benefiting such family member or members, subject to such
restrictions, limitations, or conditions as the Human Resources Committee deems
to be appropriate.
7.4 OTHER RESTRICTIONS. The Committee shall impose such other restrictions
on any Shares of Restricted Stock granted pursuant to the Plan as it may deem
advisable including, without limitation, restrictions based upon the achievement
of specific performance goals (Company-wide, divisional, and/or individual),
and/or restrictions under applicable Federal or state securities laws; and may
legend the certificates representing Restricted Stock to give appropriate notice
of such restrictions.
7.5 CERTIFICATE LEGEND. In addition to any legends placed on certificates
pursuant to Section 7.4 herein, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan shall bear the following legend:
"The sale or other transfer of the Shares of Stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the Del Webb
Corporation 1993 Executive Long-Term Incentive Plan, and in a Restricted
Stock Agreement or Notification Form. A copy of the Plan and such
Restricted Stock Agreement or Notification Form may be obtained from the
Secretary of Del Webb Corporation."
7.6 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this Article
7, Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall become freely transferable by the Participant after the last day
of the Period of Restriction. Once the Shares are released from the
restrictions, the Participant shall be entitled to have the legend required by
Section 7.5 removed from his or her Share certificate.
7.7 VOTING RIGHTS. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.
7.8 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those Shares while they are so held. If any such dividends or distributions are
paid in Shares, the Shares shall be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with
respect to which they were paid.
7.9 TERMINATION OF EMPLOYMENT. If the employment of a Participant shall
terminate for any reason, all nonvested Shares of Restricted Stock held by the
Participant upon the effective date of employment termination immediately shall
be forfeited and returned to the Company (and shall once again become available
for grant under the Plan). The number of Shares of Restricted Stock which are
deemed vested as of the effective date of employment termination shall be
determined pursuant to the guidelines set forth with respect to the vesting of
Options, as specified in Sections 6.8 and 6.9 herein.
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7.10 COMMITTEE DISCRETION REGARDING RESTRICTIONS. With the exception of a
termination of employment for Cause, the Committee, in its sole discretion,
shall have the right to provide for lapsing of the restrictions on Restricted
Stock following employment termination, upon such terms and provisions as it
deems proper; provided that, no such lapsing of restrictions shall occur after
the expiration date of the Restricted Stock.
ARTICLE 8. PERFORMANCE UNITS
8.1 GRANT OF PERFORMANCE UNITS. Subject to the terms of the Plan,
Performance Units may be granted to eligible Employees at any time and from time
to time, as shall be determined by the Committee. The Committee shall have
complete discretion in determining the number of Performance Units granted to
each Participant.
8.2 VALUE OF PERFORMANCE UNITS. Each Performance Unit shall have an initial
value that is established by the Committee at the time of grant. The Committee
shall set performance goals in its discretion which, depending on the extent to
which they are met, will determine the number and/or value of Performance Units
that will be paid out to the Participants. The time period during which the
performance goals must be met shall be called a "Performance Period."
Performance Periods shall, in all cases, exceed six (6) months in length.
8.3 EARNING OF PERFORMANCE UNITS. After the applicable Performance Period
has ended, the holder of Performance Units shall be entitled to receive payout
on the number of Performance Units earned by the Participant over the
Performance Period, to be determined as a function of the extent to which the
corresponding performance goals have been achieved.
8.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS. Payment of earned
Performance Units shall be made in a single lump sum, within forty-five (45)
calendar days following the close of the applicable Performance Period. The
Committee, in its sole discretion, may pay earned Performance Units in the form
of cash or in Options (or in a combination thereof) which have an aggregate Fair
Market Value equal to the value of the earned Performance Units at the close of
the applicable Performance Period.
Prior to the beginning of each Performance Period, Participants may elect
to defer the receipt of Performance Unit payout upon such terms as the Committee
deems appropriate.
8.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, RETIREMENT, OR
INVOLUNTARY TERMINATION (WITHOUT CAUSE). In the event the employment of a
Participant is terminated by reason of death, Disability, Retirement, or
involuntary termination without Cause during a Performance Period, the
Participant shall receive a prorated payout of the Performance Units. The
prorated payout shall be determined by the Committee, in its sole discretion,
based upon the guidelines set forth with respect to the vesting of Options, as
specified in Sections 6.8 and 6.9 herein, and further adjusted based on the
achievement of the preestablished performance goals.
Payment of earned Performance Units shall be made at the same time payments
are made to Participants who did not terminate employment during the applicable
Performance Period.
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8.6 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that a
Participant terminates employment with the Company for any reason other than
those reasons set forth in Section 8.5, all Performance Units shall be forfeited
by the Participant to the Company, and shall once again be available for grant
under the Plan.
8.7 A Participant who has been granted Performance Units under the Plan may
assign or otherwise transfer all or a portion of the rights under the
Performance Units to a family member or members, or to a trust or similar entity
(including a family limited partnership) benefiting such family member or
members, subject to such restrictions, limitations, or conditions as the Human
Resources Committee deems to be appropriate.
ARTICLE 9. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his 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 Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Human Resource Department of the Company during
the Participant's lifetime. In the absence of any such designation, benefits
remaining unpaid at the Participant's death shall be paid to the Participant's
estate.
ARTICLE 10. DEFERRALS
The Committee may permit a Participant to defer such Participant's receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant by virtue of the exercise of an Option, the lapse or waiver of
restrictions with respect to Restricted Stock, or the satisfaction of any
requirements or goals with respect to Performance Units. If any such deferral
election is required or permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals.
ARTICLE 11. RIGHTS OF EMPLOYEES
11.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Company.
For purposes of the Plan, transfer of employment of a Participant between
the Company and any one of its Subsidiaries (or between Subsidiaries) shall not
be deemed a termination of employment.
11.2 PARTICIPATION. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
ARTICLE 12. CHANGE IN CONTROL
Upon the occurrence of a Change in Control, unless otherwise specifically
prohibited by the terms of Article 17 herein:
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(a) Any and all Options granted hereunder shall become immediately
exercisable;
(b) Any restriction periods and restrictions imposed on Restricted
Shares shall lapse, and within ten (10) business days after the occurrence
of a Change in Control, the stock certificates representing Shares of
Restricted Stock, without any restrictions or legend thereon, shall be
delivered to the applicable Participants;
(c) The target value attainable under all Performance Units shall be
deemed to have been fully earned for the entire Performance Period as of
the effective date of the Change in Control, except that all Performance
Units which shall have been outstanding less than six (6) months on the
effective date of the Change in Control shall not be deemed to have earned
the target value; and
(d) Subject to Article 13 herein, the Committee shall have the
authority to make any modifications to the Awards as determined by the
Committee to be appropriate before the effective date of the Change in
Control.
ARTICLE 13. AMENDMENT, MODIFICATION, AND TERMINATION
13.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend, or
modify the Plan. However, without the approval of the stockholders of the
Company (as may be required by the Code, by the insider trading rules of Section
l6 of the Exchange Act, by any national securities exchange or system on which
the Shares are then listed or reported, or by a regulatory body having
jurisdiction with respect hereto) no such termination, amendment, or
modification may:
(a) Increase the total amount of Shares which may be issued under this
Plan, except as provided in Section 4.3 herein; or
(b) Change the class of Employees eligible to participate in the Plan;
or
(c) Materially increase the cost of the Plan or materially increase
the benefits to Participants; or
(d) Extend the maximum period after the date of grant during which
Options may be exercised.
13.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification
of the Plan shall in any manner adversely affect any Award previously granted
under the Plan, without the written consent of the Participant holding such
Award.
ARTICLE 14. WITHHOLDING
14.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment made under or as a result of this Plan.
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14.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options, upon the lapse of restrictions on Restricted Stock, or upon
any other taxable event, Participants shall satisfy all federal, state and local
tax withholding requirements by having the Company withhold Shares (to the
extent that Shares are issued pursuant to the Award) having a Fair Market Value
on the date the tax is to be determined equal to the maximum marginal total tax
which would be imposed on the transaction.
ARTICLE 15. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
ARTICLE 16. SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 17. REQUIREMENTS OF LAW
17.1 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 national securities
exchanges as may be required.
Notwithstanding any other provision set forth in the Plan, if required by
the then current Rule 16b-3 of the Exchange Act, any "derivative security or
equity security" offered pursuant to the Plan to any Insider may not be sold or
transferred for at least six (6) months after the date of grant of such Award,
except in the case of the death, disability, or termination of employment of the
Participant. The terms "equity security" and "derivative security" shall have
the meanings ascribed to them in the then current Rule 16b-3 of the Exchange
Act.
17.2 GOVERNING LAW. To the extent not preempted by Federal law, the Plan,
and all agreements or instruments hereunder, shall be construed in accordance
with and governed by the laws of the State of Arizona.
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