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Exhibit 10.7
OFFICEMAX, INC.
AMENDED AND RESTATED
EQUITY-BASED AWARD PLAN
2001
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the OfficeMax, Inc. Amended and Restated
Equity-Based Award (the "Plan") is to enable OfficeMax, Inc. (the "Company") to
attract, retain and reward members of the Board of Directors of the Company and
key employees of the Company and its Affiliates and to strengthen the mutuality
of interests among those directors and key employees and the Company's
shareholders by offering designated directors and employees equity or
equity-based incentives. For purposes of the Plan, the following terms are
defined as follows:
(a) "Affiliate" means any entity (other than the Company and
any Subsidiary) that is designated by the Board as a
participating employer under the Plan.
(b) "Award" means any award of Stock Options, Share
Appreciation Rights or Restricted Shares under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Change in Control" has the meaning set forth in Section
8(b).
(e) "Change in Control Price" has the meaning set forth in
Section 8(d).
(f) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(g) "Committee" means the Committee referred to in Section 2
of the Plan.
(h) "Company" means OfficeMax, Inc., an Ohio corporation, or
any successor corporation.
(i) "Disability" means disability as defined in Section
422(c)(6) of the Code.
(j) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(k) "Fair Market Value" means the closing selling price,
regular way, of the Shares on the New York Stock Exchange on
the trading date immediately preceding the date of grant (or,
if the Shares no longer trade on the New York Stock Exchange,
any other national exchange). If the Shares are no longer
traded on any national exchange, then the Fair
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Market Value of the Shares as of any date is the value
determined for that date by the Committee in good faith.
(l) "Incentive Stock Option" means any Stock Option intended
to be and designated as, and that otherwise qualifies as, an
"Incentive Stock Option," within the meaning of Section 422 of
the Code or any successor section thereto.
(m) "Non-Qualified Stock Option" means any Stock Option that
is not an Incentive Stock Option.
(n) "Plan" means the OfficeMax, Inc. Amended and Restated
Equity-Based Award Plan, as amended from time to time.
(o) "Potential Change in Control" has the meaning set forth in
Section 8(c).
(p) "Restricted Shares" means an award of shares that is
granted pursuant to Section 7 and is subject to restrictions.
(q) "Section 16 Participant" means a participant under the
Plan who is subject to Section 16 of the Exchange Act.
(r) "Share Appreciation Right" means an award of a right to
receive an amount from the Company that is granted pursuant to
Section 6.
(s) "Shares" means Common Shares, without par value, of the
Company and any other class of shares or series of a class of
shares of the Company now or hereafter authorized.
(t) "Stock Option" or "Option" means any option to purchase
Shares (including Restricted Shares, if the Committee so
determines) that is granted pursuant to Section 5.
(u) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with
the Company if each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing 50%
or more of the total combined voting power of all classes of
stock in one of the other corporations in that chain.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Compensation Committee
of the Board (the "Committee"). The Committee shall consist of not less than
three directors of the Company. Those directors shall be appointed by the Board
and shall serve as the Committee at the pleasure of the Board. The functions of
the Committee specified in the Plan shall be exercised by the Board if and to
the extent that no Committee exists that has the authority to so administer the
Plan.
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The Committee shall have full power to interpret and
administer the Plan and full authority to select the individuals to whom Awards
will be granted and to determine the type and amount of any Award to be granted
to each participant, the consideration, if any, to be paid for any Award, the
timing of each Award, the terms and conditions of any Award granted under the
Plan and the terms and conditions of the related agreements that will be entered
into with participants. As to the selection of and grant of Awards to
participants who are not Section 16 Participants, the Committee may delegate its
responsibilities to members of the Company's management in any manner consistent
with applicable law.
The Committee shall have the authority to adopt, alter and
repeal such rules, guidelines and practices governing the Plan as it shall, from
time to time, deem advisable; to interpret the terms and provisions of the Plan
and any Award issued under the Plan (and any agreement relating thereto); to
direct employees of the Company or other advisors to prepare such materials or
perform such analyses as the Committee deems necessary or appropriate; and
otherwise to supervise the administration of the Plan.
Any interpretation or administration of the Plan by the
Committee, and all actions and determinations of the Committee, shall be final,
binding and conclusive on the Company, its shareholders, Subsidiaries,
Affiliates, all participants in the Plan, their respective legal
representatives, successors and assigns, and all persons claiming under or
through any of them. No member of the Board or of the Committee shall incur any
liability for any action taken or omitted, or any determination made, in good
faith in connection with the Plan.
SECTION 3. SHARES SUBJECT TO THE PLAN.
(a) Aggregate Shares Subject to the Plan. Subject to
adjustment as provided in Section 3(c), the total number of
Shares reserved and available for Awards under the Plan is
26,000,000 (including Shares issued under either the Amended
and Restated Equity-Based Award Plan (1998) or the Year 2000
Equity Incentive Plan from the reserved and available Shares
under such plans). Any Shares issued hereunder may consist, in
whole or in part, of authorized and unissued shares or
treasury shares; provided, that no more than 17,000,000 shares
issued hereunder shall be newly issued Shares and any
remaining Shares issued hereunder shall be treasury shares.
(b) Forfeiture or Termination of Awards of Shares. If any
Shares subject to any Award granted hereunder are forfeited or
an Award otherwise terminates or expires without the issuance
of Shares, the Shares subject to that Award shall again be
available for distribution in connection with future Awards
under the Plan as provided in Section 3(a), unless the
participant who had been awarded those forfeited Shares or the
expired or terminated Award has theretofore received dividends
or other benefits of ownership with respect to those Shares.
For purposes hereof, a participant shall not be deemed to have
received a benefit of ownership with respect to those Shares
by the exercise of voting rights, or by the accumulation of
dividends that are not realized because of the forfeiture of
those Shares or the expiration or termination of the related
Award without issuance of those Shares.
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(c) Adjustment. In the event of any merger, reorganization,
consolidation, recapitalization, share dividend, share split,
combination of shares or other change in corporate structure
of the Company affecting the Shares, such substitution or
adjustment shall be made in the aggregate number of Shares
reserved for issuance under the Plan, in the number and option
price of shares subject to outstanding options granted under
the Plan, in the number of Share Appreciation Rights granted
under the Plan and in the number of shares subject to
Restricted Share Awards granted under the Plan as may be
approved by the Committee, in its sole discretion, but the
number of shares subject to any Award shall always be a whole
number. In addition, in the event of a merger or sale of the
Company, the Committee will have the authority to substitute
Awards with similar awards of equity of the surviving or
acquiring entity. Any fractional shares shall be eliminated.
(d) Annual Award Limit. No participant may be granted Stock
Options or other Awards under the Plan with respect to an
aggregate of more than 500,000 Shares (subject to adjustment
as provided in Section 3(c) hereof) during any calendar year.
(e) Awards to Members of the Board. Notwithstanding other
provisions of the Plan, any Shares issued hereunder to a
member of the Board shall be treasury shares.
SECTION 4. ELIGIBILITY.
Members of the Board of Directors of the Company and officers
and other key employees of the Company, and of its Subsidiaries and Affiliates,
if any, who are responsible for or contribute to the management, growth or
profitability of the business of the Company (or of its Subsidiaries or
Affiliates, if any), are eligible to be granted Awards under the Plan.
SECTION 5. STOCK OPTIONS.
(a) Grant. Stock Options may be granted alone, in addition to
or in tandem with other Awards granted under the Plan or cash
awards made outside the Plan. The Committee shall determine
the individuals to whom, and the time or times at which,
grants of Stock Options will be made, the number of Shares
purchasable under each Stock Option and the other terms and
conditions of the Stock Options in addition to those set forth
in Sections 5(b) and 5(c). Any Stock Option granted under the
Plan shall be in such form as the Committee may from time to
time approve.
Stock Options granted under the Plan may be of two
types which shall be indicated on their face: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options. Subject to
Section 5(c), the Committee shall have the authority to grant
to any participant Incentive Stock Options, Non-Qualified
Stock Options or both types of Stock Options; provided,
however, that no Incentive Stock Options shall be granted
under this Plan unless and until the Plan has been approved by
the Company's shareholders in a manner that complies with the
shareholder approval requirements of the Code relating to
Incentive Stock Options.
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(b) Terms and Conditions. Options granted under the Plan shall
be evidenced by Option Agreements, shall be subject to the
following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the
terms of the Plan, as the Committee shall deem desirable:
(1) Option Price. The option price per share of
Shares purchasable under a Non-Qualified Stock Option or an
Incentive Stock Option shall be determined by the Committee at
the time of grant and shall be not less than 100% of the Fair
Market Value of the Shares at the date of grant (or, with
respect to an Incentive Stock Option, 110% of the Fair Market
Value of the Shares at the date of grant in the case of a
participant who at the date of grant owns Shares possessing
more than ten percent of the total combined voting power of
all classes of stock of the Company or its parent or
subsidiary corporations (as determined under Sections 424(d),
(e) and (f) of the Code)).
(2) Option Term. The term of each Stock Option shall
be determined by the Committee and may not exceed ten years
from the date the Option is granted (or, with respect to an
Incentive Stock Option, five years in the case of a
participant who at the date of grant owns Shares possessing
more than ten percent of the total combined voting power of
all classes of stock of the Company or its parent or
subsidiary corporations (as determined under Sections 424(d),
(e) and (f) of the Code)).
(3) Exercise. Stock Options shall be exercisable at
such time or times and shall be subject to such terms and
conditions as shall be determined by the Committee at or after
grant; but, except as provided in Section 5(b)(6) and Section
8, unless otherwise determined by the Committee at or after
grant, no Stock Option shall be exercisable prior to six
months and one day following the date of grant. [If any Stock
Option is exercisable only in installments or only after
specified exercise dates, the Committee may waive, in whole or
in part, such installment exercise provisions, and may
accelerate any exercise date or dates, at any time at or after
grant based on such factors as the Committee shall determine,
in its sole discretion.]
(4) Method of Exercise. Subject to any installment
exercise provisions that apply with respect to any Stock
Option, and the six month and one day holding period set forth
in Section 5(b)(3), that Stock Option may be exercised in
whole or in part, at any time during the option period, by the
holder thereof giving to the Company written notice of
exercise specifying the number of Shares to be purchased.
That notice shall be accompanied by payment
in full of the option price of the Shares for which the Option
is exercised, in cash or Shares or by check or such other
instrument as the Committee may accept. The value of each such
Share surrendered or withheld shall be 100% of the Fair Market
Value of the Shares on the date the option is exercised.
No Shares shall be issued on an exercise of
an Option until full payment has been made. A participant
shall not have rights to dividends or any
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other rights of a shareholder with respect to any Shares
subject to an Option unless and until the participant has
given written notice of exercise, has paid in full for those
Shares, has given, if requested, the representation described
in Section 11(a), and those Shares have been issued to him.
(5) Non-Transferability of Options. No Stock Option
shall be transferable by any participant other than by will or
by the laws of descent and distribution or pursuant to a
qualified domestic relations order (as defined in the Code or
the Employment Retirement Income Security Act of 1974, as
amended) except that, if so provided in the Option Agreement,
the participant may transfer the Option during his lifetime to
one or more members of his family, to one or more trusts for
the benefit of one or more members of his family, or to a
partnership or partnerships of members of his family, provided
that no consideration is paid for the transfer and that the
transfer would not result in the loss of any exemption under
Rule 16b-3 of the Exchange Act with respect to any Option. The
transferee of an Option will be subject to all restrictions,
terms and conditions applicable to the Option prior to its
transfer, except that the Option will not be further
transferable by the transferee other than by will or by the
laws of descent and distribution.
(6) Termination by Death. Subject to Section 5(c), if
any participant's service as a director with the Company or
employment with the Company or any Subsidiary or Affiliate
terminates by reason of death, any Stock Option held by that
participant not previously exercised and vested will become
fully vested and exercisable by the estate of the participant
(acting through its fiduciary), for a period of one year from
the date of death (or such other period as the Committee may
specify at or after grant).
(7) Termination by Reason of Disability. Subject to
Sections 5(b)(3) and 5(c), if a participant's service as a
director with the Company or employment with the Company or
any Subsidiary or Affiliate terminates by reason of
Disability, any Stock Option held by that participant not
previously exercised and vested will become fully vested and
exercisable by the participant or by the participant's duly
authorized legal representative if the participant is unable
to exercise the Option as a result of the participant's
Disability, for a period of one year from the date of such
termination of service or employment (or such other period as
the Committee may specify at or after grant); and if the
participant dies within that one-year period (or such other
period as the Committee shall specify at or after grant), any
unexercised Stock Option held by that participant shall
thereafter be exercisable by the estate of the participant
(acting through its fiduciary) to the same extent to which it
was exercisable at the time of death, for a period of one year
from the date of that termination of service or employment.
(8) Other Termination. Unless otherwise determined by
the Committee at or after the time of granting any Stock
Option, if a participant's service as a director with the
Company or employment with the Company or any Subsidiary or
Affiliate terminates for any reason other than death or
Disability, all Stock Options held by that participant that
are then exercisable shall terminate 90 days after the date
service or employment terminates and all Stock Options that
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are not then exercisable shall terminate on the date the
service or employment terminates.
(c) Incentive Stock Options. Notwithstanding Sections 5(b)(6)
and (7), an Incentive Stock Option shall be exercisable by (i)
a participant's authorized legal representative (if the
participant is unable to exercise the Incentive Stock Option
as a result of the participant's Disability) only if, and to
the extent, permitted by Section 422 of the Code and (ii) by
the participant's estate, in the case of death, or authorized
legal representative, in the case of Disability, no later than
ten years from the date the Incentive Stock Option was granted
(in addition to any other restrictions or limitations that may
apply). Anything in the Plan to the contrary notwithstanding,
no term or provision of the 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 participants
affected, to disqualify any Incentive Stock Option under that
Section 422 or any successor Section thereto.
(d) Buyout Provisions. The Committee may at any time buy out
for a payment in cash, Shares or Restricted Shares an Option
previously granted, based on such terms and conditions as the
Committee shall establish and agree upon with the participant,
but no such transaction involving a Section 16 Participant
shall be structured or effected in a manner that would result
in any liability on the part of the participant under Section
16(b) of the Exchange Act or the rules and regulations
promulgated thereunder.
SECTION 6. SHARE APPRECIATION RIGHTS.
(a) Grant. Share Appreciation Rights may be granted in
connection with all or any part of an Option, either
concurrently with the grant of the Option or, if the Option is
a Non-Qualified Stock Option, by an amendment to the Option at
any time thereafter during the term of the Option. Share
Appreciation Rights may be exercised in whole or in part at
such times under such conditions as may be specified by the
Committee in the participant's Option Agreement.
(b) Terms and Conditions. The following terms and conditions
will apply to all Share Appreciation Rights that are granted
in connection with Options:
(1) Rights. Share Appreciation Rights shall entitle
the participant, upon exercise of all or any part of the Share
Appreciation Rights, to surrender to the Company unexercised
that portion of the underlying Option relating to the same
number of Shares as is covered by the Share Appreciation
Rights (or the portion of the Share Appreciation Rights so
exercised) and to receive in exchange from the Company an
amount (paid as provided in Section 6(b)(5)) equal to the
excess of (x) the Fair Market Value, on the date of exercise,
of the Shares covered by the surrendered portion of the
underlying Option over (y) the exercise price of the Shares
covered by the surrendered portion of the underlying Option.
The
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Committee may limit the amount that the participant will be
entitled to receive upon surrender of a Share Appreciation
Right.
(2) Surrender of Option. Upon the exercise of the
Share Appreciation Right and surrender of the related portion
of the underlying Option, the Option, to the extent
surrendered, will not thereafter be exercisable. The
underlying Option may provide that such Share Appreciation
Rights will be payable solely in cash. The terms of the
underlying Option shall provide a method by which an
alternative fair market value of the Shares on the date of
exercise shall be calculated based on one of the following:
(x) the closing price of the Shares on the national exchange
on which they are then traded on the business day immediately
preceding the day of exercise; (y) the highest closing price
of the Shares on the national exchange on which they have been
traded, during the 90 days immediately preceding the Change in
Control; or (z) the greater of (x) and (y).
(3) Exercise. In addition to any further conditions
upon exercise that may be imposed by the Committee, the Share
Appreciation Rights shall be exercisable only to the extent
that the related Option is exercisable, except that in no
event will a Share Appreciation Right held by a Section 16
Participant be exercisable within the first six months after
it is awarded even though the related Option is or becomes
exercisable, and each Share Appreciation Right will expire no
later than the date on which the related Option expires. A
Share Appreciation Right may only be exercised at a time when
the Fair Market Value of the Shares covered by the Share
Appreciation Right exceeds the exercise price of the Shares
covered by the underlying Option. No Share Appreciation Right
held by a Section 16 Participant shall be exercisable by its
terms within the first six months after it is granted, and a
Section 16 Participant may only exercise a Share Appreciation
Right during a period beginning on the third business day and
ending on the twelfth business day following the release for
publication of quarterly or annual summary statements of the
Company's sales and earnings.
(4) Method of Exercise. Share Appreciation Rights may
be exercised by the participant's giving written notice of the
exercise to the Company, stating the number of Share
Appreciation Rights he has elected to exercise and
surrendering the portion of the underlying Option relating to
the same number of Shares as the number of Share Appreciation
Rights elected to be exercised.
(5) Payment. The manner in which the Company's
obligation arising upon the exercise of the Share Appreciation
Right will be paid will be determined by the Committee and
shall be set forth in the participant's Option Agreement. The
Committee may provide for payment in Shares or cash, or a
fixed combination of Shares or cash, or the Committee may
reserve the right to determine the manner of payment at the
time the Share Appreciation Right is exercised. Shares issued
upon the exercise of a Share Appreciation Right will be valued
at their Fair Market Value on the date of exercise.
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SECTION 7. RESTRICTED SHARES.
(a) Grant. Restricted Shares may be issued alone, in addition
to or in tandem with other Awards under the Plan or cash
awards made outside of the Plan. The Committee shall determine
the individuals to whom, and the time or times at which,
grants of Restricted Shares will be made, the number of
Restricted Shares to be awarded to each participant, the price
(if any) to be paid by the participant (subject to Section
7(b)), the date or dates upon which Restricted Share Awards
will vest and the period or periods within which those
Restricted Share Awards may be subject to forfeiture, and the
other terms and conditions of those Awards in addition to
those set forth in Section 7(b).
The Committee may condition the grant of Restricted
Shares upon the attainment of specified performance goals or
such other factors as the Committee may determine in its sole
discretion.
(b) Terms and Conditions. Restricted Shares awarded under the
Plan shall be subject to the following terms and conditions
and such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall deem
desirable. A participant who receives a Restricted Share Award
shall not have any rights with respect to that Award, unless
and until the participant has executed an agreement evidencing
the Award in the form approved from time to time by the
Committee and has delivered a fully executed copy thereof to
the Company, and has otherwise complied with the applicable
terms and conditions of that Award.
(1) The purchase price (if any) for Restricted Shares
shall be determined by the Committee at the time of grant.
(2) Awards of Restricted Shares must be accepted by
executing a Restricted Share Award agreement and paying the
price (if any) that is required under Section 7(b)(1).
(3) Each participant receiving a Restricted Share
Award shall be issued a stock certificate in respect of those
Restricted Shares. The certificate shall be registered in the
name of the participant, and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable
to the Award.
(4) The Committee shall require that the stock
certificates evidencing the Restricted Shares be held in
custody by the Company until the restrictions thereon shall
have lapsed, and that, as a condition of any Restricted Shares
Award, the participant shall have delivered to the Company a
stock power, endorsed in blank, relating to the Shares covered
by that Award.
(5) Subject to the provisions of this Plan and the
Restricted Share Award agreement, during a period set by the
Committee commencing with the date of any Award (the
"Restriction Period"), the participant shall not be permitted
to sell, transfer, pledge, assign or otherwise encumber the
Restricted Shares covered by that Award. The Restriction
Period shall not be less than six
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months and one day in duration ("Minimum Restriction Period").
Subject to these limitations and the Minimum Restriction
Period requirement, the Committee, in its sole discretion, may
provide for the lapse of restrictions in installments and may
accelerate or waive restrictions, in whole or in part, based
on service, performance or such other factors and criteria as
the Committee may determine in its sole discretion.
(6) Except as provided in this Section 7(b)(6),
Section 7(b)(5) and Section 7(b)(7), the participant shall
have, with respect to the Restricted Shares awarded, all of
the rights of a shareholder of the Company, including the
right to vote the Shares, and the right to receive any
dividends. The Committee, in its sole discretion, as
determined at the time of award, may permit or require the
payment of cash dividends to be deferred and subject to
forfeiture and, if the Committee so determines, reinvested,
subject to Section 11(f), in additional Restricted Shares to
the extent Shares are available under Section 3, or otherwise
reinvested. Unless the Committee or Board determines
otherwise, share dividends issued with respect to Restricted
Shares shall be treated as additional Restricted Shares that
are subject to the same restrictions and other terms and
conditions that apply to the Shares with respect to which such
dividends are issued.
(7) No Restricted Shares shall be transferable by a
participant other than by will or by the laws of descent and
distribution.
(8) If a participant's service as a director with the
Company or employment with the Company or any Subsidiary or
Affiliate terminates by reason of death, any Restricted Shares
held by that participant shall thereafter vest and any
restriction shall lapse.
(9) If a participant's service as a director with the
Company or employment with the Company or any Subsidiary or
Affiliate terminates by reason of Disability, any Restricted
Shares held by that participant shall thereafter vest and any
restriction shall lapse.
(10) Unless otherwise determined by the Committee at
or after the time of granting any Restricted Shares, if a
participant's service as a director with the Company or
employment with the Company or any Subsidiary or Affiliate
terminates for any reason other than death or Disability, the
Restricted Shares held by that participant that are unvested
or subject to restriction at the time of termination shall
thereupon be forfeited.
(c) Minimum Value. In order to better ensure that award
payments actually reflect the performance of the Company and
service of the participant, the Committee may provide, in its
sole discretion, for a tandem performance-based or other award
designed to guarantee a minimum value, payable in cash or
Shares, to the recipient of a Restricted Share Award, subject
to such performance, future service, deferral and other terms
and conditions as may be specified by the Committee.
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SECTION 8. CHANGE IN CONTROL PROVISION.
(a) Impact of Event. At any time during the 365 days
commencing with the date of either (1) a "Change in Control"
as defined in Section 8(b) or (2) a "Potential Change in
Control" as defined in Section 8(c), a majority of the
"Continuing Directors" as defined in Section 8(e) (or one of
the two Continuing Directors if only two Continuing Directors
are then serving on the Board of Directors or the sole
Continuing Director if only one Continuing Director is then
serving on the Board of Directors) may cause the following
provisions to take effect as stated and as of the date set
forth in a Written Action (the "Written Action") adopted to
that effect (that date, the "Accelerated Vesting Date") and if
there are no Continuing Directors, the following provisions
will automatically take effect:
(1) Any Stock Options awarded under the Plan not
previously exercisable and vested shall become fully
exercisable and vested;
(2) Any Share Appreciation Rights shall become
immediately exercisable;
(3) The restrictions applicable to any Restricted
Shares Awards shall lapse and such shares and awards shall be
deemed fully vested; and
(4) The value of all outstanding Awards, in each case
to the extent vested, shall, unless otherwise determined by
the Committee in its sole discretion at or after grant but
prior to any Change in Control or Potential Change in Control,
be paid to the participant in cash in exchange for the
surrender of those Awards on the basis of the "Change in
Control Price" as defined in Section 8(d) as of the
Accelerated Vesting Date.
(b) Definition of Change in Control. For purposes of Section
8(a), a "Change in Control" means the occurrence of any of the
following: (i) the Board or shareholders of the Company
approve a consolidation or merger that results in the
shareholders of the Company immediately prior to the
transaction giving rise to the consolidation or merger owning
less than 50% of the total combined voting power of all
classes of stock entitled to vote of the surviving entity
immediately after the consummation of the transaction giving
rise to the merger or consolidation; (ii) the Board or
shareholders of the Company approve the sale of substantially
all of the assets of the Company or the liquidation or
dissolution of the Company; (iii) any person or other entity
(other than the Company or a Subsidiary or any Company
employee benefit plan (including any trustee of any such plan
acting in its capacity as trustee)) purchases any Shares (or
securities convertible into Shares) pursuant to a tender or
exchange offer without the prior consent of the Board of
Directors, or becomes the beneficial owner of securities of
the Company representing 25% or more of the voting power of
the Company's outstanding securities; or (iv) during any
two-year period, individuals who at the beginning of such
period constitute the entire Board of Directors cease to
constitute a majority of the Board of Directors, unless the
election or the
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nomination for election of each new director is approved by at
least two-thirds of the directors then still in office who
were directors at the beginning of that period.
(c) Definition of Potential Change in Control. For purposes of
Section 8(a), a "Potential Change in Control" means the
happening of any one of the following:
(1) The approval by the shareholders of the Company
of an agreement by the Company, the consummation of which
would result in a Change in Control of the Company as defined
in Section 8(b); or
(2) The acquisition of beneficial ownership, directly
or indirectly, by any entity, person or group (other than the
Company or a Subsidiary or any Company employee benefit plan
(including any trustee of any such plan acting in its capacity
as trustee)) of securities of the Company representing 25% or
more of the combined voting power of the Company's outstanding
securities and the adoption by the Board of a resolution to
the effect that a Potential Change in Control of the Company
has occurred for purposes of this Plan.
(d) Change in Control Price. For purposes of this Section 8,
"Change in Control Price", means the greater of: (a) the
highest price per share paid in any transaction reported on
the New York Stock Exchange Composite Index (or, if the Shares
are not then traded on the New York Stock Exchange, the
highest price paid as reported for any national exchange on
which the Shares are then traded) or paid or offered in any
bona fide transaction related to a Change in Control or
Potential Change in Control of the Company, at any time during
the 60-day period immediately preceding the occurrence of the
Change in Control (or, when applicable, the occurrence of the
Potential Change in Control event), and (b) the highest price
per share paid in any transaction reported on the New York
Stock Exchange Composite Index (or, if the Shares are not then
traded on the New York Stock Exchange, the highest price paid
as reported for any national exchange on which the Shares are
then traded), at any time during the 60-day period immediately
preceding the date on which the Continuing Directors execute a
Written Action relating to that Change in Control or Potential
Change in Control, in each case as determined by the
Committee.
(e) Definition of Continuing Director. For purposes of this
Section 8, a "Continuing Director" means an individual who was
a member of the Board of Directors immediately prior to the
date of a Change in Control or a Potential Change in Control
and is a member of the Board of Directors at the time a
Written Action relating to that Change in Control or Potential
Change in Control is taken.
SECTION 9. AMENDMENTS AND TERMINATION.
The Board may at any time, in its sole discretion, amend,
alter or discontinue the Plan, but no such amendment, alteration or
discontinuation shall be made that would impair the rights of a participant
under an Award theretofore granted, without the participant's consent.
Notwithstanding the foregoing, any amendment to Section 8 hereof requires the
affirmative vote
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of a majority of the Continuing Directors (or one of the two
Continuing Directors if only two Continuing Directors are then
serving on the Board of Directors or the sole Continuing
Director if only one Continuing Director is then serving on
the Board of Directors.
The Committee may at any time, in its sole discretion, amend
the terms of any Award, but no such amendment shall be made that would impair
the rights of a participant under an Award theretofore granted, without the
participant's consent.
Subject to the above provisions, the Board shall have all
necessary authority to amend the Plan to take into account changes in applicable
securities and tax laws and accounting rules, as well as other developments.
SECTION 10. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for
incentive compensation. With respect to any payment not yet made to a
participant by the Company, nothing contained herein shall give that participant
any rights that are greater than those of a general creditor of the Company.
SECTION 11. GENERAL PROVISIONS.
(a) The Committee may require each participant acquiring
Shares pursuant to an Award under the Plan to represent to and
agree with the Company in writing that the participant is
acquiring the Shares without a view to distribution thereof.
The certificates for any such Shares may include any legend
which the Committee deems appropriate to reflect any
restrictions on transfer.
All Shares or other securities delivered under the
Plan shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the
Shares are then listed, and any applicable federal or state
securities laws, and the Committee may cause a legend or
legends to be put on any certificate for any such Shares to
make appropriate reference to those restrictions.
(b) Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required,
and such arrangements may be either generally applicable or
applicable only in specific cases.
(c) Neither the adoption of the Plan, nor its operation, nor
any document describing, implementing or referring to the
Plan, or any part thereof, shall confer upon any participant
under the Plan any right to continue in the employ, or in
service as a director, of the Company or any Subsidiary or
Affiliate, or shall in any way affect the right and power of
the Company or any Subsidiary or Affiliate to terminate the
employment, or service as a director, of any participant under
the Plan at any time with or without assigning a reason
therefor, to the same extent as
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the Company or any Subsidiary or Affiliate might have done if
the Plan had not been adopted.
(d) For purposes of this Plan, except as otherwise required
with respect to Incentive Stock Options, a transfer of a
participant between the Company and any Subsidiary or
Affiliate shall not be deemed a termination of employment.
(e) No later than the date as of which an amount first becomes
includable in the gross income of the participant for federal
income tax purposes with respect to any Award under the Plan,
the participant shall pay to the Company, or make arrangements
satisfactory to the Committee regarding the payment of, any
federal, state or local taxes or other items of any kind
required by law to be withheld with respect to that amount.
Subject to the following sentence, unless otherwise determined
by the Committee, withholding obligations may be settled with
Shares, including unrestricted Shares previously owned by the
participant or Shares that are part of the Award that gives
rise to the withholding requirement. Notwithstanding the
foregoing, any election by a Section 16 Participant to settle
any tax withholding obligation with Shares that are part of an
Award shall be subject to approval by the Committee, in its
sole discretion. The obligations of the Company under the Plan
shall be conditional on those payments or arrangements and the
Company and its Subsidiaries and Affiliates shall, to the
extent permitted by law, have the right to deduct any such
taxes from any payment of any kind otherwise payable to the
participant.
(f) The actual or deemed reinvestment of dividends or dividend
equivalents in additional Restricted Shares at the time of any
dividend payment shall only be permissible if sufficient
Shares are available under Section 3 for reinvestment (taking
into account then outstanding Stock Options).
(g) The Plan, all Awards made and actions taken thereunder and
any agreements relating thereto shall be governed by and
construed in accordance with the laws of the State of Ohio.
(h) All agreements entered into with participants pursuant to
the Plan shall be subject to the Plan.
(i) The provisions of Awards need not be the same with respect
to each participant.
SECTION 12. TERM OF PLAN.
No Award shall be granted pursuant to the Plan on or after
March 5, 2008, but Awards granted prior to that date may extend beyond that
date.
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