EXHIBIT 10.6
ALLEGHENY TECHNOLOGIES INCORPORATED
2000 INCENTIVE PLAN
(AS AMENDED)
ARTICLE I.
PURPOSE AND ADOPTION OF THE PLAN
1.1. PURPOSE. The purpose of the Allegheny Technologies Incorporated 2000
Incentive Plan (hereinafter referred to as the "Plan") is to assist in
attracting and retaining highly competent employees, to act as an incentive in
motivating selected officers and other key employees of Allegheny Technologies
Incorporated and its Subsidiaries to achieve long-term corporate objectives and
to enable cash incentive awards to qualify as performance-based for purposes of
the tax deduction limitations under Section 162(m) of the Code.
1.2. ADOPTION AND TERM. The Plan was approved by the Board of Directors of
Allegheny Technologies Incorporated, to be effective as of January 1, 2000 (the
"Effective Date"), and approved by the stockholders of the Company on May 11,
2000. The Plan shall remain in effect until the tenth anniversary of the date
the stockholders of the Company approve the Plan, unless terminated by action of
the Board prior to that date, and the provisions of Articles VII, VIII, IX and X
with respect to performance-based awards to "covered employees" under Section
162(m) of the Code shall expire as of the fifth anniversary of the date the
stockholders of the Company approved the Plan, until and unless reapproved by
the stockholders of The Company.
1.3. THE PRIOR PLAN. The Company previously adopted the Allegheny Teledyne
Incorporated 1996 Incentive Plan (the "Prior Plan"). Awards granted under the
Prior Plan prior to the date the stockholders of the Company approve the Plan
shall not be affected by the adoption of this Plan, and the Prior Plan shall
remain the effect following the date the stockholders of the Company approve the
Plan to the extent necessary to administer such awards, but no new Awards shall
be granted under the Prior Plan after the date the stockholders of the Company
approve the Plan.
ARTICLE II.
DEFINITIONS
For the purpose of this Plan, capitalized terms shall have the
following meanings:
2.1. AWARD means any one or a combination of Non-Qualified Stock Options
or Incentive Stock Options described in Article VI, Stock Appreciation Rights
described in Article VI, Restricted Shares described in Article VII, Performance
Awards described in Article VIII, Awards of cash or any other Award made under
the terms of the Plan.
2.2. AWARD AGREEMENT means a written agreement between the Company and a
Participant or a written acknowledgment from the Company to a Participant
specifically setting forth the terms and conditions of an Award granted under
the Plan.
2.3. AWARD PERIOD means, with respect to an Award, the period of time set
forth in the Award Agreement during which specified target performance goals
must be achieved or other conditions set forth in the Award Agreement must be
satisfied.
2.4. BENEFICIARY means an individual, trust or estate who or which, by a
written designation of the Participant filed with the Company or by operation of
law, succeeds to the rights and obligations of the Participant under the Plan
and the Award Agreement upon the Participant's death.
2.5. BOARD means the Board of Directors of the Company.
2.6. CHANGE IN CONTROL means, and shall be deemed to have occurred upon
the occurrence of, any one of the following events:
(a) The acquisition in one or more transactions, other than from the
Company, by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a number
of Company Voting Securities in excess of 25% of the Company Voting
Securities unless such acquisition has been approved by the Board;
(b) Any election has occurred of persons to the Board that causes
two-thirds of the Board to consist of persons other than (i) persons who
were members of the Board on the Effective Date and (ii) persons who were
nominated for elections as members of the Board at a time when two-thirds
of the Board consisted of persons who were members of the Board on the
Effective Date; provided, however, that any person nominated for election
by a Board at least two-thirds of whom constituted persons described in
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clauses (i) and/or (ii) or by persons who were themselves nominated by
such Board shall, for this purpose, be deemed to have been nominated by a
Board composed of persons described in clause (i);
(c) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, unless, following such reorganization, merger or
consolidation, all or substantially all of the individuals and entities
who were the respective beneficial owners of the Outstanding Common Stock
and Company Voting Securities immediately prior to such reorganization,
merger or consolidation, following such reorganization, merger or
consolidation beneficially own, directly or indirectly, more than seventy
five (75%) of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors or trustees, as
the case may be, of the entity resulting from such reorganization, merger
or consolidation in substantially the same proportion as their ownership
of the Outstanding Common Stock and Company Voting Securities immediately
prior to such reorganization, merger or consolidation, as the case may be;
or
(d) Approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) a sale or other
disposition of all or substantially all the assets of the Company.
2.7. CODE means the Internal Revenue Code of 1986, as amended. References
to a section of the Code shall include that section and any comparable section
or sections of any future legislation that amends, supplements or supersedes
said section.
2.8. COMMITTEE means the Committee defined in Section 3.1.
2.9. COMPANY or CORPORATION means Allegheny Technologies Incorporated, a
Delaware corporation, and its successors.
2.10. COMMON STOCK means Common Stock of the Company, par value $.10 per
share.
2.11. COMPANY VOTING SECURITIES means the combined voting power of all
outstanding voting securities of the Company entitled to vote generally in the
election of directors to the Board.
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2.12. DATE OF GRANT means the date designated by the Committee as the date
as of which it grants an Award, which shall not be earlier than the date on
which the Committee approves the granting of such Award.
2.13. EFFECTIVE DATE shall have the meaning given to such term in Section
1.2.
2.14. EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
2.15. EXERCISE PRICE means, with respect to a Stock Appreciation Right,
the amount established by the Committee in the Award Agreement which is to be
subtracted from the Fair Market Value on the date of exercise in order to
determine the amount of the payment to be made to the Participant, as further
described in Section 6.2(b).
2.16. FAIR MARKET VALUE means, on any date, the average of the high and
low quoted sales prices of a share of Common Stock, as reported on the Composite
Tape for New York Stock Exchange Listed Companies, on such date or, if there
were no sales on such date, on the last date preceding such date on which a sale
was reported.
2.17. INCENTIVE STOCK OPTION means a stock option within the meaning of
Section 422 of the Code.
2.18. MERGER means any merger, reorganization, consolidation, exchange,
transfer of assets or other transaction having similar effect involving the
Company.
2.19. NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.
2.20. OPTIONS means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under the Plan.
2.21. OUTSTANDING COMMON STOCK means, at any time, the issued and
outstanding shares of Common Stock.
2.22. PARTICIPANT means a person designated to receive an Award under the
Plan in accordance with Section 5.1.
2.23. PERFORMANCE AWARDS means Awards granted in accordance with Article
VIII.
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2.24. PERFORMANCE GOALS means operating income, operating profit, income
before taxes, earnings per share, return on investment or working capital,
return on stockholders' equity, economic value added (the amount, if any, by
which net operating profit after tax exceeds a reference cost of capital),
balanced scorecard, cash flow, reductions in inventory, inventory turns and
on-time delivery performance, any one of which may be measured with respect to
the Company or any one or more of its Subsidiaries or business units and either
in absolute terms or as compared to another company or companies, and safety
measures and other quantifiable, objective measures of individual performance
relevant to the particular individual's job responsibilities.
2.25. PLAN means the Allegheny Technologies Incorporated 2000 Incentive
Plan as described herein, as the same may be amended from time to time.
2.26. PRIOR PLAN shall have the meaning given to such term in Section 1.3.
2.27. PURCHASE PRICE, with respect to Options, shall have the meaning set
forth in Section 6.1(b).
2.28. RESTORATION OPTION means a Non-Qualified Stock Option granted
pursuant to Section 6.1(f).
2.29. RESTRICTED SHARES means Common Stock subject to restrictions imposed
in connection with Awards granted under Article VII.
2.30. RETIREMENT means early or normal retirement under a pension plan or
arrangement of the Company or one of its Subsidiaries in which the Participant
participates.
2.31. RULE 16b-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as the same may be
amended from time to time, and any successor rule.
2.32. STOCK APPRECIATION RIGHTS means Awards granted in accordance with
Article VI.
2.33. SUBSIDIARY means a subsidiary of the Company within the meaning of
Section 424(f) of the Code.
2.34. TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment with the Company or a Subsidiary for
any reason, including death, disability, retirement or as the result of the
divestiture
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of the Participant's employer or any similar transaction in which the
Participant's employer ceases to be the Company or one of its Subsidiaries.
Whether entering military or other government service shall constitute
Termination of Employment, or whether a Termination of Employment shall occur as
a result of disability, shall be determined in each case by the Committee in its
sole discretion.
ARTICLE III.
ADMINISTRATION
3.1. COMMITTEE. The Plan shall be administered by a committee of the Board
("Committee") comprised of at least two persons. The Committee shall have
exclusive and final authority in each determination, interpretation or other
action affecting the Plan and its Participants. The Committee shall have the
sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate and to cancel Awards (including those made
pursuant to other plans of the Company), and to take such steps in connection
with the Plan and Awards granted hereunder as it may deem necessary or
advisable. The Committee shall not, however, have or exercise any discretion
that would disqualify amounts payable under Article X as performance-based
compensation for purposes of Section 162(m) of the Code. The Committee may
delegate such of its powers and authority under the Plan as it deems appropriate
to designated officers or employees of the Company. In addition, the full Board
may exercise any of the powers and authority of the Committee under the Plan. In
the event of such delegation of authority or exercise of authority by the Board,
references in the Plan to the Committee shall be deemed to refer, as
appropriate, to the delegate of the Committee or the Board. The selection of
members of the Committee or any subcommittee thereof, and any delegation by the
Committee to designated officers or employees, under this Section 3.1 shall
comply with Section 16(b) of the Exchange Act, the performance-based provisions
of Section 162(m) of the Code, and the regulations promulgated under each of
such statutory provisions, or the respective successors to such statutory
provisions or regulations, as in effect from time to time, except to the extent
that the Board determines that such compliance is not necessary or desirable.
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ARTICLE IV.
SHARES
4.1. NUMBER OF SHARES ISSUABLE. The total number of shares authorized to
be issued under the Plan shall equal 10% of the outstanding shares of the Common
Stock as of the Effective Date. If the number of outstanding shares of Common
Stock is increased after the Effective Date, the total number of shares
available under the Plan will be increased by 10% of such increase. The number
of shares available for issuance under the Plan shall be further subject to
adjustment in accordance with Section 11.7. The shares to be offered under the
Plan shall be authorized and unissued Common Stock, or issued Common Stock which
shall have been reacquired by the Company. Of the total number of shares
authorized for grant under the Plan, the Company may issue no more than one
million shares as awards of restricted stock, subject to adjustment in
accordance with Section 11.7.
4.2. SHARES SUBJECT TO TERMINATED AWARDS. Common Stock covered by any
unexercised portions of terminated Options (including canceled Options) granted
under Article VI, Common Stock forfeited as provided in Section 7.2(a) and
Common Stock subject to any Awards which are otherwise surrendered by the
Participant may again be subject to new Awards under the Plan. Common Stock
subject to Options, or portions thereof, which have been surrendered in
connection with the exercise of Stock Appreciation Rights shall not be available
for subsequent Awards under the Plan, but Common Stock issued in payment of such
Stock Appreciation Rights shall not be charged against the number of shares of
Common Stock available for the grant of Awards hereunder. Common Stock covered
by awards granted under the Prior Plan that after the Effective Date are
terminated unexercised, forfeited or otherwise surrendered shall be available
for subsequent Awards under this Plan.
ARTICLE V.
PARTICIPATION
5.1. ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such
officers and other key employees of the Company and its Subsidiaries, whether or
not members of the Board, as the Committee, in its sole discretion, may
designate from time to time. The Committee's designation of a Participant in any
year shall not require the Committee to designate such person to receive Awards
or grants in any other year. The designation of a Participant to receive awards
or grants under one portion of the Plan does not require the Committee to
include such Participant under other portions of the Plan. The Committee shall
consider such factors as it
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deems pertinent in selecting Participants and in determining the type and amount
of their respective Awards. Notwithstanding any provision herein to the
contrary, the Committee may grant Awards under the Plan, other than Incentive
Stock Options, to non-employees who, in the judgment of the Committee, render
significant services to the Company or any of its Subsidiaries, on such terms
and conditions as the Committee deems appropriate and consistent with the intent
of the Plan. Subject to adjustment in accordance with Section 11.7, in any
calendar year, no Participant shall be granted Awards in respect of more than 1
million shares of Common Stock (whether through grants of Options or Stock
Appreciation Rights or other grants of Common Stock or rights with respect
thereto) and $5 million in cash; provided, however, that any Award payable over
a period of more than one year shall be pro-rated over the applicable period in
determining the amount of the Award granted in any calendar year.
ARTICLE VI.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
6.1. OPTION AWARDS.
(a) GRANT OF OPTIONS. The Committee may grant, to such Participants
as the Committee may select, Options entitling the Participant to purchase
shares of Common Stock from the Company in such number, at such price, and
on such terms and subject to such conditions, not inconsistent with the
terms of this Plan, as may be established by the Committee. The terms of
any Option granted under this Plan shall be set forth in an Award
Agreement.
(b) PURCHASE PRICE OF OPTIONS. The Purchase Price of each share of
Common Stock which may be purchased upon exercise of any Option granted
under the Plan shall be determined by the Committee; provided, however,
that the Purchase Price of the Common Stock purchased pursuant to Options
designated by the Committee as Incentive Stock Options shall be equal to
or greater than the Fair Market Value on the Date of Grant as required
under Section 422 of the Code.
(c) DESIGNATION OF OPTIONS. Except as otherwise expressly provided
in the Plan, the Committee may designate, at the time of the grant of each
Option, the Option as an Incentive Stock Option or a Non-Qualified Stock
Option.
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(d) INCENTIVE STOCK OPTION SHARE LIMITATION. No Participant may be
granted Incentive Stock Options under the Plan (or any other plans of the
Company and its Subsidiaries) which would result in shares with an
aggregate Fair Market Value (measured on the Date of Grant) of more than
$100,000 first becoming exercisable in any one calendar year.
(e) RIGHTS AS A STOCKHOLDER. A Participant or a transferee of an
Option pursuant to Section 11.4 shall have no rights as a stockholder with
respect to Common Stock covered by an Option until the Participant or
transferee shall have become the holder of record of any such shares, and
no adjustment shall be made for dividends in cash or other property or
distributions or other rights with respect to any such Common Stock for
which the record date is prior to the date on which the Participant or a
transferee of the Option shall have become the holder of record of any
such shares covered by the Option; provided, however, that Participants
are entitled to share adjustments to reflect capital changes under Section
11.7.
(f) RESTORATION OPTIONS UPON THE EXERCISE OF A NON-QUALIFIED STOCK
OPTION. In the event that any Participant delivers to the Company, or has
withheld from the shares otherwise issuable upon the exercise of a
Non-Qualified Stock Option, shares of Common Stock in payment of the
Purchase Price of any Non-Qualified Stock Option granted hereunder in
accordance with Section 6.4, the Committee shall have the authority to
grant or provide for the automatic grant of a Restoration Option to such
Participant. The grant of a Restoration Option shall be subject to the
satisfaction of such conditions or criteria as the Committee in its sole
discretion shall establish from time to time. A Restoration Option shall
entitle the holder thereof to purchase a number of shares of Common Stock
equal to the number of such shares so delivered or withheld upon exercise
of the original Option and, in the discretion of the Committee, the number
of shares, if any, delivered or withheld to the Company to satisfy any
withholding tax liability arising in connection with the exercise of the
original Option. A Restoration Option shall have a per share Purchase
Price of not less than 100% of the per share Fair Market Value of the
Common Stock on the date of grant of such Restoration Option, a term not
longer than the remaining term of the original Option at the time of
exercise thereof, and such other terms and conditions as the Committee in
its sole discretion shall determine.
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6.2. STOCK APPRECIATION RIGHTS.
(a) STOCK APPRECIATION RIGHT AWARDS. The Committee is authorized to
grant to any Participant one or more Stock Appreciation Rights. Such Stock
Appreciation Rights may be granted either independent of or in tandem with
Options granted to the same Participant. Stock Appreciation Rights granted
in tandem with Options may be granted simultaneously with, or, in the case
of Non-Qualified Stock Options, subsequent to, the grant to such
Participant of the related Option; provided, however, that: (i) any Option
covering any share of Common Stock shall expire and not be exercisable
upon the exercise of any Stock Appreciation Right with respect to the same
share, (ii) any Stock Appreciation Right covering any share of Common
Stock shall expire and not be exercisable upon the exercise of any related
Option with respect to the same share, and (iii) an Option and Stock
Appreciation Right covering the same share of Common Stock may not be
exercised simultaneously. Upon exercise of a Stock Appreciation Right with
respect to a share of Common Stock, the Participant shall be entitled to
receive an amount equal to the excess, if any, of (A) the Fair Market
Value of a share of Common Stock on the date of exercise over (B) the
Exercise Price of such Stock Appreciation Right established in the Award
Agreement, which amount shall be payable as provided in Section 6.2(c).
(b) EXERCISE PRICE. The Exercise Price established under any Stock
Appreciation Right granted under this Plan shall be determined by the
Committee, but in the case of Stock Appreciation Rights granted in tandem
with Options shall not be less than the Purchase Price of the related
Option. Upon exercise of Stock Appreciation Rights granted in tandem with
Options, the number of shares subject to exercise under any related Option
shall automatically be reduced by the number of shares of Common Stock
represented by the Option or portion thereof which are surrendered as a
result of the exercise of such Stock Appreciation Rights.
(c) PAYMENT OF INCREMENTAL VALUE. Any payment which may become due
from the Company by reason of a Participant's exercise of a Stock
Appreciation Right may be paid to the Participant as determined by the
Committee (i) all in cash, (ii) all in Common Stock, or (iii) in any
combination of cash and Common Stock. In the event that all or a portion
of the payment is made in Common Stock, the number of shares of Common
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Stock delivered in satisfaction of such payment shall be determined by
dividing the amount of such payment or portion thereof by the Fair Market
Value on the Exercise Date. No fractional share of Common Stock shall be
issued to make any payment in respect of Stock Appreciation Rights; if any
fractional share would be issuable, the combination of cash and Common
Stock payable to the Participant shall be adjusted as directed by the
Committee to avoid the issuance of any fractional share.
6.3. TERMS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
(a) CONDITIONS ON EXERCISE. An Award Agreement with respect to
Options and/or Stock Appreciation Rights may contain such waiting periods,
exercise dates and restrictions on exercise (including, but not limited
to, periodic installments) as may be determined by the Committee at the
time of grant.
(b) DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options and
Stock Appreciation Rights shall terminate after the first to occur of the
following events:
(i) Expiration of the Option or Stock Appreciation Right as
provided in the Award Agreement; or
(ii) Termination of the Award following the Participant's
disability, Retirement, death or other Termination of Employment as
provided in the Award Agreement; or
(iii) In the case of an Incentive Stock Option, ten years from
the Date of Grant; or
(iv) Solely in the case of a Stock Appreciation Right granted
in tandem with an Option, upon the expiration of the related Option.
(c) ACCELERATION OR EXTENSION OF EXERCISE TIME. The Committee may
(but shall not be obligated to) permit the exercise of an Option or Stock
Appreciation Right (i) prior to the time such Option or Stock Appreciation
Right would become exercisable under the terms of the Award Agreement,
(ii) after the termination of the Option or Stock Appreciation Right under
the terms of the Award Agreement, or (iii) after the expiration of the
Option or Stock Appreciation Right.
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6.4. EXERCISE PROCEDURES. Each Option and Stock Appreciation Right granted
under the Plan shall be exercised by written or electronic notice to the Company
or by such other exercise procedures as may be provided in the Award Agreement
which notice or other form of exercise must be received by the officer or
employee of the Company designated in the Award Agreement on or before the close
of business on the expiration date of the Award. The Purchase Price of shares
purchased upon exercise of an Option granted under the Plan shall be paid in
full in cash by the Participant pursuant to the Award Agreement; provided,
however, that the Committee may (but shall not be required to) permit payment to
be made by delivery to the Company of either (a) Common Stock (which may, in the
sole discretion of the Committee, include Restricted Shares or shares otherwise
issuable in connection with the exercise of the Option, subject to such rules as
the Committee deems appropriate) or (b) any combination of cash and Common
Stock, or (c) such other consideration as the Committee deems appropriate and in
compliance with applicable law (including payment in accordance with a cashless
exercise program under which, if so instructed by the Participant, Common Stock
may be issued directly to the Participant's broker or dealer upon receipt of an
irrevocable written or electronic notice of exercise from the Participant). In
the event that any Common Stock shall be transferred to the Company to satisfy
all or any part of the Purchase Price, the part of the Purchase Price deemed to
have been satisfied by such transfer of Common Stock shall be equal to the
product derived by multiplying the Fair Market Value as of the date of exercise
times the number of shares of Common Stock transferred to the Company. The
Participant may not transfer to the Company in satisfaction of the Purchase
Price any fractional share of Common Stock. Any part of the Purchase Price paid
in cash upon the exercise of any Option shall be added to the general funds of
the Company and may be used for any proper corporate purpose. Unless the
Committee shall otherwise determine, any Common Stock transferred to the Company
as payment of all or part of the Purchase Price upon the exercise of any Option
shall be held as treasury shares.
6.5. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Options
outstanding on the date of such Change in Control, and all Stock Appreciation
Rights shall become immediately and fully exercisable. The provisions of this
Section 6.5 shall not be applicable to any Options or Stock Appreciation Rights
granted to a Participant if any Change in Control results from such
Participant's beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of Common Stock or Company Voting Securities.
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ARTICLE VII.
RESTRICTED SHARES
7.1. RESTRICTED SHARE AWARDS. The Committee may grant to any Participant
an Award of Common Stock in such number of shares, and on such terms, conditions
and restrictions, whether based on performance standards, periods of service,
retention by the Participant of ownership of purchased or designated shares of
Common Stock or other criteria, as the Committee shall establish. With respect
to performance-based Awards of Restricted Shares to "covered employees" (as
defined in Section 162(m) of the Code), performance targets will be limited to
specified levels of one or more of the Performance Goals. The terms of any
Restricted Share Award granted under this Plan shall be set forth in an Award
Agreement which shall contain provisions determined by the Committee and not
inconsistent with this Plan.
(a) ISSUANCE OF RESTRICTED SHARES. As soon as practicable after the
Date of Grant of a Restricted Share Award by the Committee, the Company
shall cause to be transferred on the books of the Company, or its agent,
Common Stock, registered on behalf of the Participant, evidencing the
Restricted Shares covered by the Award, but subject to forfeiture to the
Company as of the Date of Grant if an Award Agreement with respect to the
Restricted Shares covered by the Award is not duly executed by the
Participant and timely returned to the Company. All Common Stock covered
by Awards under this Article VII shall be subject to the restrictions,
terms and conditions contained in the Plan and the Award Agreement entered
into by the Participant. Until the lapse or release of all restrictions
applicable to an Award of Restricted Shares the share certificates, if
any, representing such Restricted Shares may be held in custody by the
Company, its designee, or, if the certificates bear a restrictive legend,
by the Participant; provided, however, that if the Restricted Shares are
uncertificated, other arrangements may be made, in the discretion of the
Committee, to ensure the enforcement of the restrictions on such
Restricted Shares. Upon the lapse or release of all restrictions with
respect to an Award as described in Section 7.1(d), one or more share
certificates, registered in the name of the Participant, for an
appropriate number of shares as provided in Section 7.1(d), free of any
restrictions set forth in the Plan and the Award Agreement shall be
delivered to the Participant.
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(b) STOCKHOLDER RIGHTS. Beginning on the Date of Grant of the
Restricted Share Award and subject to execution of the Award Agreement as
provided in Section 7.1(a), the Participant shall become a stockholder of
the Company with respect to all shares subject to the Award Agreement and
shall have all of the rights of a stockholder, including, but not limited
to, the right to vote such shares and the right to receive dividends;
provided, however, that any Common Stock distributed as a dividend or
otherwise with respect to any Restricted Shares as to which the
restrictions have not yet lapsed, shall be subject to the same
restrictions as such Restricted Shares and held or restricted as provided
in Section 7.1(a).
(c) RESTRICTION ON TRANSFERABILITY. None of the Restricted Shares
may be assigned or transferred (other than by will or the laws of descent
and distribution, or to an inter vivos trust with respect to which the
Participant is treated as the owner under Sections 671 through 677 of the
Code), pledged or sold prior to lapse of the restrictions applicable
thereto.
(d) DELIVERY OF SHARES UPON VESTING. Upon expiration or earlier
termination of the forfeiture period without a forfeiture and the
satisfaction of or release from any other conditions prescribed by the
Committee, or at such earlier time as provided under the provisions of
Section 7.3, the restrictions applicable to the Restricted Shares shall
lapse. As promptly as administratively feasible thereafter, subject to the
requirements of Section 11.5, the Company shall deliver to the Participant
or, in case of the Participant's death, to the Participant's Beneficiary,
one or more share certificates for the appropriate number of shares of
Common Stock, free of all such restrictions, except for any restrictions
that may be imposed by law.
7.2. TERMS OF RESTRICTED SHARES.
(a) FORFEITURE OF RESTRICTED SHARES. Subject to Sections 7.2(b) and
7.3, all Restricted Shares shall be forfeited and returned to the Company
and all rights of the Participant with respect to such Restricted Shares
shall terminate unless the Participant continues in the service of the
Company or a Subsidiary as an employee until the expiration of the
forfeiture period for such Restricted Shares and satisfies any and all
other conditions set forth in the Award Agreement. The Committee shall
determine the forfeiture period (which may, but need not, lapse in
installments) and any other terms and conditions applicable with respect
to any Restricted Share Award.
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(b) WAIVER OF FORFEITURE PERIOD. Notwithstanding anything contained
in this Article VII to the contrary, the Committee may, in its sole
discretion, waive the forfeiture period and any other conditions set forth
in any Award Agreement under appropriate circumstances (including the
death, disability or Retirement of the Participant or a material change in
circumstances arising after the date of an Award) and subject to such
terms and conditions (including forfeiture of a proportionate number of
the Restricted Shares) as the Committee shall deem appropriate.
7.3. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all
restrictions applicable to the Restricted Share Award shall terminate fully and
the Participant shall immediately have the right to the delivery of share
certificate or certificates for such shares in accordance with Section 7.1(d).
ARTICLE VIII.
PERFORMANCE AWARDS
8.1. PERFORMANCE AWARDS.
(a) AWARD PERIODS AND CALCULATIONS OF POTENTIAL INCENTIVE AMOUNTS.
The Committee may grant Performance Awards to Participants. A Performance
Award shall consist of the right to receive a payment (measured by the
Fair Market Value of a specified number of shares of Common Stock,
increases in such Fair Market Value during the Award Period and/or a fixed
cash amount) contingent upon the extent to which certain predetermined
performance targets have been met during an Award Period. Performance
Awards may be made in conjunction with, or in addition to, Restricted
Share Awards made under Article VII. The Award Period shall be two or more
fiscal or calendar years as determined by the Committee. The Committee, in
its discretion and under such terms as it deems appropriate, may permit
newly eligible employees, such as those who are promoted or newly hired,
to receive Performance Awards after an Award Period has commenced.
(b) PERFORMANCE TARGETS. The performance targets may include such
goals related to the performance of the Company or, where relevant, any
one or more of its Subsidiaries or divisions and/or the performance of a
Participant as may be established by the Committee in its discretion. In
the case of Performance Awards to "covered employees" (as defined in
Section 162(m) of the Code), the targets will be limited to specified
levels of
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one or more of the Performance Goals. The performance targets established
by the Committee may vary for different Award Periods and need not be the
same for each Participant receiving a Performance Award in an Award
Period. Except to the extent inconsistent with the performance-based
compensation exception under Section 162(m) of the Code, in the case of
Performance Awards granted to employees to whom such section is
applicable, the Committee, in its discretion, but only under extraordinary
circumstances as determined by the Committee, may change any prior
determination of performance targets for any Award Period at any time
prior to the final determination of the Award when events or transactions
occur to cause the performance targets to be an inappropriate measure of
achievement.
(c) EARNING PERFORMANCE AWARDS. The Committee, at or as soon as
practicable after the Date of Grant, shall prescribe a formula to
determine the percentage of the Performance Award to be earned based upon
the degree of attainment of performance targets.
(d) PAYMENT OF EARNED PERFORMANCE AWARDS. Subject to the
requirements of Section 11.5, payments of earned Performance Awards shall
be made in cash or Common Stock, or a combination of cash and Common
Stock, in the discretion of the Committee. The Committee, in its sole
discretion, may define such terms and conditions with respect to the
payment of earned Performance Awards as it may deem desirable.
8.2. TERMS OF PERFORMANCE AWARDS.
(a) TERMINATION OF EMPLOYMENT. Unless otherwise provided below or in
Section 8.3, in the case of a Participant's Termination of Employment
prior to the end of an Award Period, the Participant will not have earned
any Performance Awards.
(b) RETIREMENT. If a Participant's Termination of Employment is
because of Retirement prior to the end of an Award Period, the Participant
will not be paid any Performance Awards, unless the Committee, in its sole
and exclusive discretion, determines that an Award should be paid. In such
a case, the Participant shall be entitled to receive a pro-rata portion of
his or her Award as determined under Subsection (d).
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(c) DEATH OR DISABILITY. If a Participant's Termination of
Employment is due to death or disability (as determined in the sole and
exclusive discretion of the Committee) prior to the end of an Award
Period, the Participant or the Participant's personal representative shall
be entitled to receive a pro-rata share of his or her Award as determined
under Subsection (d).
(d) PRO-RATA PAYMENT. The amount of any payment made to a
Participant whose employment is terminated by Retirement, death or
disability (under circumstances described in Subsections (b) and (c)) will
be the amount determined by multiplying the amount of the Performance
Award which would have been earned, determined at the end of the Award
Period, had such employment not been terminated, by a fraction, the
numerator of which is the number of whole months such Participant was
employed during the Award Period, and the denominator of which is the
total number of months of the Award Period. Any such payment made to a
Participant whose employment is terminated prior to the end of an Award
Period under this Section 8.2 shall be made at the end of the respective
Award Period, unless otherwise determined by the Committee in its sole
discretion. Any partial payment previously made or credited to a deferred
account for the benefit of a Participant as provided under Section 8.1(d)
of the Plan shall be subtracted from the amount otherwise determined as
payable as provided in this Section.
(e) OTHER EVENTS. Notwithstanding anything to the contrary in this
Article VIII, the Committee may, in its sole and exclusive discretion,
determine to pay all or any portion of a Performance Award to a
Participant who has terminated employment prior to the end of an Award
Period under certain circumstances (including the death, disability or
Retirement of the Participant or a material change in circumstances
arising after the Date of Grant) and subject to such terms and conditions
as the Committee shall deem appropriate.
8.3. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Performance
Awards for all Award Periods shall immediately become fully payable to all
Participants and shall be paid to Participants in accordance with Section 8.2(d)
within 30 days after such Change in Control.
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ARTICLE IX.
OTHER STOCK-BASED AWARDS
8.4. GRANT OF OTHER STOCK-BASED AWARDS. Other stock-based awards,
consisting of stock purchase rights (with or without loans to Participants by
the Company containing such terms as the Committee shall determine), Awards of
cash, Awards of Common Stock, or Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock, may be granted either alone or in
addition to or in conjunction with other Awards under the Plan. Subject to the
provisions of the Plan, the Committee shall have sole and complete authority to
determine the persons to whom and the time or times at which such Awards shall
be made, the number of shares of Common Stock to be granted pursuant to such
Awards, and all other conditions of the Awards. Any such Award shall be
confirmed by an Award Agreement executed by the Company and the Participant,
which Award Agreement shall contain such provisions as the Committee determines
to be necessary or appropriate to carry out the intent of this Plan with respect
to such Award.
8.5. TERMS OF OTHER STOCK-BASED AWARDS. In addition to the terms and
conditions specified in the Award Agreement, Awards made pursuant to this
Article 10 shall be subject to the following:
(a) Any Common Stock subject to Awards made under this Article IX
may not be sold, assigned, transferred, pledged or otherwise encumbered
prior to the date on which the shares are issued, or, if later, the date
on which any applicable restriction, performance or deferral period
lapses; and
(b) If specified by the Committee in the Award Agreement, the
recipient of an Award under this Article IX shall be entitled to receive,
currently or on a deferred basis, interest or dividends or dividend
equivalents with respect to the Common Stock or other securities covered
by the Award; and
(c) The Award Agreement with respect to any Award shall contain
provisions dealing with the disposition of such Award in the event of a
Termination of Employment prior to the exercise, realization or payment of
such Award, whether such termination occurs because of Retirement,
disability, death or other reason, with such provisions to take account of
the specific nature and purpose of the Award.
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8.6. FOREIGN QUALIFIED AWARDS. Awards under the Plan may be granted to
such employees of the Company and its Subsidiaries who are residing in foreign
jurisdictions as the Committee in its sole discretion may determine from time to
time. The Committee may adopt such supplements to the Plan as may be necessary
or appropriate to comply with the applicable laws of such foreign jurisdictions
and to afford Participants favorable treatment under such laws; provided,
however, that no Award shall be granted under any such supplement with terms or
conditions inconsistent with the provision set forth in the Plan.
ARTICLE IX.
SHORT-TERM CASH INCENTIVE AWARDS
9.1. ELIGIBILITY. Executive officers of the Company who are from time to
time determined by the Committee to be "covered employees" for purposes of
Section 162(m) of the Code will be eligible to receive short-term cash incentive
awards under this Article X.
9.2. AWARDS.
(a) PERFORMANCE TARGETS. For each fiscal year of the Company, the
Committee shall establish objective performance targets based on specified
levels of one or more of the Performance Goals. Such performance targets
shall be established by the Committee on a timely basis to ensure that the
targets are considered "preestablished" for purposes of Section 162(m) of
the Code.
(b) AMOUNTS OF AWARDS. In conjunction with the establishment of
performance targets for a fiscal year, the Committee shall adopt an
objective formula (on the basis of percentages of Participants' salaries,
shares in a bonus pool or otherwise) for computing the respective amounts
payable under the Plan to Participants if and to the extent that the
performance targets are attained. Such formula shall comply with the
requirements applicable to performance-based compensation plans under
Section 162(m) of the Code and, to the extent based on percentages of a
bonus pool, such percentages shall not exceed 100% in the aggregate.
(c) PAYMENT OF AWARDS. Awards will be payable to Participants in
cash each year upon prior written certification by the Committee of
attainment of the specified performance targets for the preceding fiscal
year.
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(d) NEGATIVE DISCRETION. Notwithstanding the attainment by the
Company of the specified performance targets, the Committee shall have the
discretion, which need not be exercised uniformly among the Participants,
to reduce or eliminate the award that would be otherwise paid.
(e) GUIDELINES. The Committee may adopt from time to time written
policies for its implementation of this Article X. Such guidelines shall
reflect the intention of the Company that all payments hereunder qualify
as performance-based compensation under Section 162(m) of the Code.
(f) NON-EXCLUSIVE ARRANGEMENT. The adoption and operation of this
Article X shall not preclude the Board or the Committee from approving
other short-term incentive compensation arrangements for the benefit of
individuals who are Participants hereunder as the Board or Committee, as
the case may be, deems appropriate and in the best interests of the
Company.
ARTICLE X.
TERMS APPLICABLE GENERALLY TO AWARDS
GRANTED UNDER THE PLAN
10.1. PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Committee
have the power to grant any Award under the Plan which is contrary to any of the
provisions of the Plan. In the event any provision of any Award granted under
the Plan shall conflict with any term in the Plan as constituted on the Date of
Grant of such Award, the term in the Plan as constituted on the Date of Grant of
such Award shall control. Except as provided in Section 11.3 and Section 11.7,
the terms of any Award granted under the Plan may not be changed after the Date
of Grant of such Award so as to materially decrease the value of the Award
without the express written approval of the holder.
10.2. AWARD AGREEMENT. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award.
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10.3. MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan
to a Participant may be modified (unless such modification does not materially
decrease the value of the Award) after the Date of Grant except by express
written agreement between the Company and the Participant, provided that any
such change (a) shall not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Committee.
10.4. LIMITATION ON TRANSFER. Except as provided in Section 7.1(c) in the
case of Restricted Shares, a Participant's rights and interest under the Plan
may not be assigned or transferred other than by will or the laws of descent and
distribution, and during the lifetime of a Participant, only the Participant
personally (or the Participant's personal representative) may exercise rights
under the Plan. The Participant's Beneficiary may exercise the Participant's
rights to the extent they are exercisable under the Plan following the death of
the Participant. Notwithstanding the foregoing, the Committee may grant
Non-Qualified Stock Options that are transferable, without payment of
consideration, to immediate family members of the Participant or to trusts or
partnerships for such family members, and the Committee may also amend
outstanding Non-Qualified Stock Options to provide for such transferability.
10.5. TAXES. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares issuable under such Participant's Award, or with respect to any income
recognized upon a disqualifying disposition of shares received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer payment or
issuance of the cash or shares upon exercise or vesting of an Award unless
indemnified to its satisfaction against any liability for any such tax. The
amount of such withholding or tax payment shall be determined by the Committee
and shall be payable by the Participant at such time as the Committee determines
in accordance with the following rules:
(a) The Participant shall have the right to elect to meet his or her
withholding requirement (i) by having withheld from such Award at the
appropriate time that number of shares of Common Stock, rounded up to the
next whole share, whose Fair Market Value is equal to the amount of
withholding taxes due, (ii) by direct payment to the Company in cash of
the amount of any taxes required to be withheld with respect to such Award
or (iii) by a combination of shares and cash.
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(b) The Committee shall have the discretion as to any Award, to
cause the Company to pay to tax authorities for the benefit of any
Participant, or to reimburse such Participant for the individual taxes
which are due on the grant, exercise or vesting of any share Award, or the
lapse of any restriction on any share Award (whether by reason of a
Participant's filing of an election under Section 83(b) of the Code or
otherwise), including, but not limited to, Federal income tax, state
income tax, local income tax and excise tax under Section 4999 of the
Code, as well as for any such taxes as may be imposed upon such tax
payment or reimbursement.
(c) In the case of Participants who are subject to Section 16 of the
Exchange Act, the Committee may impose such limitations and restrictions
as it deems necessary or appropriate with respect to the delivery or
withholding of shares of Common Stock to meet tax withholding obligations.
10.6. SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Committee and
the holder approve.
10.7. ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
(a) RECAPITALIZATION. The number and kind of shares subject to
outstanding Awards, the Purchase Price or Exercise Price for such shares,
the number and kind of shares available for Awards subsequently granted
under the Plan and the maximum number of shares in respect of which Awards
can be made to any Participant in any calendar year shall be appropriately
adjusted to reflect any stock dividend, stock split, combination or
exchange of shares, merger, consolidation or other change in
capitalization with a similar substantive effect upon the Plan or the
Awards granted under the Plan. The Committee shall have the power and sole
discretion to determine the amount of the adjustment to be made in each
case.
(b) MERGER. After any Merger in which the Company is the surviving
corporation, each Participant shall, at no additional cost, be entitled
upon any exercise of all Options or receipt of other Award to receive
(subject to any required action by stockholders), in lieu of the number of
shares of Common Stock receivable or exercisable pursuant to such Award,
the number and class of shares or other securities to which such
Participant would have been entitled pursuant to the terms of the Merger
if, at the time
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of the Merger, such Participant had been the holder of record of a number
of shares equal to the number of shares receivable or exercisable pursuant
to such Award. Comparable rights shall accrue to each Participant in the
event of successive Mergers of the character described above. In the event
of a Merger in which the Company is not the surviving corporation, the
surviving, continuing, successor, or purchasing corporation, as the case
may be (the "Acquiring Corporation"), shall either assume the Company's
rights and obligations under outstanding Award Agreements or substitute
awards in respect of the Acquiring Corporation's stock for such
outstanding Awards. In the event the Acquiring Corporation fails to assume
or substitute for such outstanding Awards, the Board shall provide that
any unexercisable and/or unvested portion of the outstanding Awards shall
be immediately exercisable and vested as of a date prior to such Merger,
as the Board so determines. The exercise and/or vesting of any Award that
was permissible solely by reason of this Section 11.7(b) shall be
conditioned upon the consummation of the Merger. Any Options which are
neither assumed by the Acquiring Corporation nor exercised as of the date
of the Merger shall terminate effective as of the effective date of the
Merger.
(c) OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES. After
any Merger in which the Company or a Subsidiary shall be a surviving
corporation, the Committee may grant substituted options under the
provisions of the Plan, pursuant to Section 424 of the Code, replacing old
options granted under a plan of another party to the Merger whose shares
or stock subject to the old options may no longer be issued following the
Merger. The foregoing adjustments and manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. Any such adjustments may provide for the elimination of any
fractional shares which might otherwise become subject to any Options.
10.8. NO RIGHT TO EMPLOYMENT. No employee or other person shall have any
claim of right to be granted an Award under this Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.
10.9. AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
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10.10. GOVERNING LAW. All determinations made and actions taken pursuant
to the Plan shall be governed by the laws of the State of Delaware and construed
in accordance therewith.
10.11. NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Committee, or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.
10.12. COMPLIANCE WITH RULE 16b-3. It is intended that unless the
Committee determines otherwise, Awards under the Plan be eligible for exemption
under Rule 16b-3. The Board is authorized to amend the Plan and to make any such
modifications to Award Agreements to comply with Rule 16b-3, as it may be
amended from time to time, and to make any other such amendments or
modifications as it deems necessary or appropriate to better accomplish the
purposes of the Plan in light of any amendments made to Rule 16b-3.
10.13. CAPTIONS. The captions (i.e., all Section headings) used in the
Plan are for convenience only, do not constitute a part of the Plan, and shall
not be deemed to limit, characterize or affect in any way any provisions of the
Plan, and all provisions of the Plan shall be construed as if no captions have
been used in the Plan.
10.14. SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Award at any time granted under the Plan shall remain
in full force and effect.
10.15. AMENDMENT AND TERMINATION.
(a) AMENDMENT. The Board shall have complete power and authority to
amend the Plan at any time; provided, however, that the Board shall not,
without the requisite affirmative approval of stockholders of the Company,
make any amendment which requires stockholder approval under the Code,
unless such compliance is no longer desired under the Code, or under any
other applicable law or rule of any stock exchange which lists
24
Common Stock or Company Voting Securities. No termination or amendment of
the Plan may, without the consent of the Participant to whom any Award
shall theretofore have been granted under the Plan, adversely affect the
right of such individual under such Award.
(b) TERMINATION. The Board shall have the right and the power to
terminate the Plan at any time. No Award shall be granted under the Plan
after the termination of the Plan, but the termination of the Plan shall
not have any other effect and any Award outstanding at the time of the
termination of the Plan may be exercised after termination of the Plan at
any time prior to the expiration date of such Award to the same extent
such Award would have been exercisable had the Plan not terminated.
* * * * * *
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