EXHIBIT 10.25
DEL WEBB CORPORATION
1995 EXECUTIVE LONG-TERM INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 Establishment of the Plan. Del Webb Corporation, a Delaware
corporation (hereinafter referred to as the "Company"), hereby establishes an
incentive compensation plan to be known as the "Del Webb Corporation 1995
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, Performance Units, and
Performance-Based Awards.
Upon approval by the Board of Directors of the Company and subject to
shareholder ratification, the Plan shall become effective as of November 8, 1995
(the "Effective Date"), 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 14 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 November 7, 2005.
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, Performance Units, or Performance-Based Awards.
(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 of 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 the Committee in the exercise of its
discretion.
(e) "Change in Control" of the Company shall be deemed to have
occurred if (i) 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 the Company or a
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the total voting
power represented by the Company's then outstanding Voting Securities
(defined as any securities of the Company which vote generally in the
election of directors), or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the
Board of Directors of the Company and any new director whose election
by the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a
majority thereof, or (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the Voting
Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least 80%
of the total voting power represented by the Voting Securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation, or the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of (in one transaction or a series
of transactions) all or substantially all the Company's assets.
(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, a Delaware
corporation (including any and all Subsidiaries), or any successor
thereto as provided in Article 16 herein.
(i) "Covered Employee" means an Employee who is a "covered
employee" within the meaning of Section 162(m) of the Code.
(j) "Director" means any individual who is a member of the
Board of Directors of the Company.
(k) "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.
(l) "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.
(m) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor Act thereto.
(n) "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 20.2031-2(b)(2), as reported in the Wall
Street Journal or a similar publication selected by the Committee.
(o) "Incentive Stock Option" or "ISO" 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.
(p) "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.
(q) "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.
(r) "Option" means an Incentive Stock Option or a Nonqualified
Stock Option.
(s) "Option Price" means the price at which a Share may be
purchased by a Participant pursuant to an Option, as determined by the
Committee.
(t) "Parent" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(u) "Participant" means an Employee of the Company who has
outstanding an Award granted under the Plan.
(v) "Performance-Based Awards" means the Restricted Stock
Awards and Performance Unit Awards granted to selected Covered
Employees pursuant to Articles 7 and 8, but which are subject to the
terms and conditions set forth in Article 9. All Performance-Based
Awards are intended to qualify as "performance-based compensation"
under Section 162(m) of the Code.
(w) "Performance Criteria" means the criteria that the
Committee selects for purposes of establishing the Performance Goal or
Performance Goals for a Participant for a Performance Period. The
Performance Criteria that will be used to establish Performance Goals
are limited to the following: pre- or after-tax net earnings, revenue
growth, operating income, operating cash flow, return on net assets,
return on shareholders' equity, return on assets, return on capital,
Share price growth, shareholder returns, gross or net profit margin,
earnings per share, price per Share, and market share, any of which may
be measured either in absolute terms or as compared to any incremental
increase or as compared to results of a peer group. The Committee
shall, within the time prescribed by Section 162(m) of the Code, define
in an objective fashion the manner of calculating the Performance
Criteria it selects to use for such Performance Period for such
Participant.
(x) "Performance Goals" means, for a Performance Period, the
goals established in writing by the Committee for the Performance
Period based upon the Performance Criteria. Depending on the
Performance Criteria used to establish such Goal, the Goal may be
expressed in terms of overall Company performance or the performance of
an operating unit or community. The Committee, in its discretion, may,
within the time prescribed by Section 162(m) of the Code, adjust or
modify the calculation of Performance Goals for such Performance Period
in order to prevent the dilution or enlargement of the rights of
Participants, (i) in the event of, or in anticipation of, any unusual
or extraordinary corporate item, transaction, event, or development;
and (ii) in recognition of, or in anticipation of, any other unusual or
nonrecurring events affecting the Company, or the financial statements
of the Company, or in response to, or in anticipation of, changes in
applicable laws, regulations, accounting principles, or business
conditions.
(y) "Performance Period" means the one or more periods of
time, which may be of varying and overlapping durations, as the
Committee may select, over which the attainment of one or more
Performance Goals will be measured for the purpose of determining a
Participant's right to, and the payment of, a Performance-Based Award.
(z) "Performance Unit" means an Award granted to an Employee
pursuant to Article 8 herein.
(aa) "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.
(bb) "Restricted Stock" means an Award granted to a
Participant pursuant to Article 7 herein.
(cc) "Retirement" means a voluntary termination of employment
by a Participant who has less than ten (10) years of service with the
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 the Company as of the date of employment
termination.
(dd) "Shares" means the shares of common stock of Del Webb
Corporation.
(ee) "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.
2.3 Severability. In the event that a court of competent jurisdiction
determines that any portion of this Plan is in violation of any statute, common
law, or public policy, then only the portions of this Plan that violate such
statute, common law, or public policy shall be stricken. All portions of this
Plan that do not violate any statute or public policy shall continue in full
force and effect. Further, any court order striking any portion of this Plan
shall modify the stricken terms as narrowly as possible to give as much effect
as possible to the intentions of the parties under this Plan.
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)
of the Exchange Act, 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 14 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.
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.
4.4 Limitation on Number of Shares Subject to Award. Notwithstanding
any provision in the Plan to the contrary, the maximum number of shares of Stock
that may be subject to one or more Awards granted to any one Participant over
the term of the Plan shall be 400,000.
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(d) of the Code.
6.2 Option Agreement. Each Option grant shall be evidenced by an Option
Agreement 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 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.
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.
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 calendar
year in which employment termination occurs, will equal a fraction, the
numerator of which is the number of full weeks of employment during the
calendar 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 calendar year in which
employment termination occurs, and the portion of the Option that does
not vest in 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.
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 Code 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. Each Incentive Stock Option granted
under the Plan may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution; each other Option granted under the Plan may be transferable
subject to the terms and conditions as may be established by the Committee in
accordance with the regulations promulgated under the Exchange Act, or any other
applicable law or regulation. Further, all Options granted to a Participant
under the Plan shall be exercisable during his or her lifetime only by such
Participant.
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 One Hundred Thousand (100,000) Shares of
Restricted Stock.
7.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Agreement 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.
7.3 Transferability. Except as provided in this Article 7, the Shares
of Restricted Stock granted herein may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the end of the applicable
Period of Restriction established by the Committee and specified in the
Restricted Stock Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Agreement. However, in no event may any Restricted Stock
granted under the Plan become vested in a Participant prior to six (6) months
following the date of its grant. All rights with respect to the Restricted Stock
granted to a Participant under the Plan shall be available during his or her
lifetime only to such Participant.
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 may 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 1995 Executive Long-Term Incentive Plan, and in a
Restricted Stock Agreement. A copy of the Plan and such Restricted
Stock Agreement 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, except as determined by the Committee at the time of
such termination for any reason other than for Cause, 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.
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, in all cases, exceed six
(6) months in length.
8.3 Earning of Performance Units. After the applicable time period
during which the goals must be met, the holder of Performance Units shall be
entitled to receive payout on the number of Performance Units earned by the
Participant over such 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 time period during which the
goals must be met. The Committee, in its sole discretion, may pay earned
Performance Units in the form of 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 at the close of such period.
Prior to the beginning of each time period during which the goals must
be met, 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 time period during which the goals must be met.
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 Nontransferability. Performance Units may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. Further a Participant's rights under
the Plan shall be exercisable during the Participant's lifetime only by the
Participant or the Participant's legal representative.
ARTICLE 9. PERFORMANCE-BASED AWARDS
9.1 Purpose. The purpose of this Article 9 is to provide the Committee
the ability to qualify the Restricted Stock Awards under Article 7 and the
Performance Unit Awards under Article 8 as "performance-based compensation"
under Section 162(m) of the Code. If the Committee, in its discretion, decides
to grant a Performance-Based Award to a Covered Employee, the provisions of this
Article 9 shall control over any contrary provision contained in Articles 7 or
8.
9.2 Applicability. This Article 9 shall apply only to those Covered
Employees selected by the Committee to receive Performance-Based Awards. The
Committee may, in its discretion, grant Restricted Stock Awards or Performance
Unit Awards to Covered Employees that do not satisfy the requirements of this
Article 9. The designation of a Covered Employee as a Participant for a
Performance Period shall not in any manner entitle the Participant to receive an
Award for the period. Moreover, designation of a Covered Employee as a
Participant for a particular Performance Period shall not require designation of
such Covered Employee as a Participant in any subsequent Performance Period and
designation of one Covered Employee as a Participant shall not require
designation of any other Covered Employees as a Participant in such period or in
any other period.
9.3 Discretion of Committee with Respect to Performance Awards. With
regard to a particular Performance Period, the Committee shall have full
discretion to select the length of such Performance Period, the type of
Performance-Based Awards to be issued, the kind and/or level of the Performance
Goal, and whether the Performance Goal is to apply to the Company, a Subsidiary
or any division or business unit thereof.
9.4 Payment of Performance Awards. Unless otherwise provided in the
relevant Award Agreement, a Participant must be employed by the Company or a
Subsidiary on the last day of the Performance Period to be eligible for a
Performance Award for such Performance Period. Furthermore, a Participant shall
be eligible to receive payment under a Performance- Based Award for a
Performance Period only if the Performance Goals for such period are achieved.
In determining the actual size of an individual Performance-Based
Award, the Committee may reduce or eliminate the amount of the Performance-Based
Award earned for the Performance Period, if in its sole and absolute discretion,
such reduction or elimination is appropriate.
9.5 Maximum Award Payable. Notwithstanding any provision contained in
the Plan to the contrary, the maximum Performance-Based Award payable to any one
Participant under the Plan for a Performance Period is Seventy-five Thousand
(75,000) Shares, or in the event the Performance-Based Award is paid in cash,
such maximum Performance-Based Award shall be determined by multiplying
Seventy-five Thousand (75,000) by the Fair Market Value of one Share as of the
date of grant of the Performance-Based Award.
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his 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 11. 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 12. RIGHTS OF EMPLOYEES
12.1 Employment. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate any Participant's employment at
any time, 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.
12.2 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 13. CHANGE IN CONTROL
Upon the occurrence of a Change in Control, unless otherwise
specifically prohibited by the terms of Article 17 herein:
(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 14 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 14. AMENDMENT, MODIFICATION, AND TERMINATION
14.1 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
16 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.
14.2 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 15. WITHHOLDING
15.1 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.
15.2 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 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. The Plan, and all agreements hereunder, shall be
governed by the laws of the State of Delaware.