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Exhibit 99b
10-11-94
CENTERIOR ENERGY CORPORATION
DIRECTORS RESTRICTED STOCK PLAN
1. Purpose. The purpose of the Centerior Energy Corporation
("Corporation") Directors Restricted Stock Plan ("Plan") is to promote the
long-term interests of the Corporation and its share owners by annually
granting to non-employee directors of the Corporation shares of the
Corporation's common stock, without par value, ("Common Stock") as a part of,
and not in addition to, their annual retainer compensation and, thereby, to (a)
attract and retain highly qualified individuals to serve as non-employee
directors of the Corporation, (b) increase non-employee directors' common
stock ownership in the Corporation and (c) further align each non-employee
director's interests with those of the Corporation's share owners.
2. Administration. This Plan shall be self-effectuating. Except as
provided in Sections 6 (iv), 9 and 10 hereof, administrative determinations
necessary or advisable for the administration or interpretation of this Plan in
order to carry out its provisions and purposes shall be made by the
Corporation.
3. Participation. Each non-employee director of the Corporation
shall participate in this Plan. The term "non-employee director" means a
member of the Board of Directors of the Corporation ("Board") at the time of
grant of restricted shares of Common Stock pursuant to this Plan who is not
then an employee of the Corporation or any parent or subsidiary thereof.
4. Grant of Awards. Provided that this Plan has not been terminated,
on January 1, 1995 and each January 1 thereafter each non-employee director
shall automatically be granted 500 shares of Common Stock with the restrictions
set forth in Section 5(a) hereof ("Restricted Stock") at no cost to such
non-employee directors. If the number of shares available pursuant to Section
8(a) hereof is less than the total number that otherwise would be granted
pursuant to this Section 4, each non-employee director shall receive a
proportionately reduced number of shares.
5. Restrictions.
(a) While serving as a director, a director may not,
voluntarily or involuntarily, sell, assign, encumber, pledge or
otherwise transfer any shares of Restricted Stock, or any interest
therein, otherwise than by will or the law of descent and
distribution. Said restrictions shall terminate upon termination of
service as a director, subject to Section 6 hereof. Any attempted
sale, assignment, encumbrance, pledge or other transfer of such
shares, or any interest therein, in derogation of these restrictions
shall result in a forfeiture to the Corporation of all such shares
subject to such attempted transfer. Certificates for Common Stock
delivered pursuant to Sections 4 and 5 hereof may contain a legend
stating any restrictions appertaining thereto.
(b) During the period in which any shares of Restricted Stock are
subject to the restrictions imposed under Section 5(a) hereof, the
director shall have all rights of a Common Stock share owner, except
as specified in Section 5(a) hereof.
(c) All shares of Restricted Stock shall be deposited in the
Corporation's dividend reinvestment plan, if any, in an account for
the benefit of the non-employee director. All dividends paid on such
stock shall be reinvested in Common Stock pursuant to the provisions
of said plan and those shares of Common Stock shall be subject to the
same restrictions and forfeiture provisions set forth in Section 5(a)
and Section 6, respectively, hereof.
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(d) If the Corporation does not have a dividend reinvestment
plan, certificates for all shares of Restricted Stock shall be
registered in the name of the non-employee director and shall be
deposited by and on behalf of such director, together with a stock
power properly endorsed in blank, with the Corporation. The
Corporation shall hold and retain such share certificates in a
custodial capacity until the restrictions provided in Section 5(a)
hereof terminate, at which time certificates shall be delivered
promptly to such director.
6. Forfeiture. Upon termination of service as a director for any
reason other than (a) retirement pursuant to any director retirement policy,
(b) retirement due to the director's taking a position with or providing
services to a governmental, charitable or educational institution whose
policies prohibit continued service on the Board, (c) death, (d) disability as
determined by 80% of the Board excluding the affected director or (e) a Change
in Control as defined in Section 11 hereof, all Restricted Stock, including
stock purchased with dividends on said Stock through any dividend reinvestment
plan of the Corporation by such director, shall be forfeited as of the date of
such termination by such director and returned to the Corporation.
7. Source of Common Stock. All shares of the Common Stock of the
Corporation to be used for the purposes of this Plan shall be either (a)
authorized and unissued shares of Common Stock or (b) treasury shares of the
Corporation, including shares of Common Stock previously issued by the
Corporation and outstanding which have been reacquired by the Corporation (and
which have not been cancelled).
8. Limitations and Conditions.
(a) The total number of shares of Common Stock available for
issuance to non-employee directors under this Plan shall be 100,000
shares. The foregoing number may be increased or decreased in
accordance with Section 9 hereof. Any shares of Restricted Stock
granted under this Plan which are subsequently forfeited by any
non-employee director pursuant to Sections 5 and 6 hereof shall again
be available for issuance under this Plan.
(b) Nothing contained in this Plan shall be deemed to
create any right in any non-employee director (i) to remain a member
of the Board, or to be nominated for reelection or to be reelected as
such or (ii) after ceasing to be such a member, to receive any shares
of Common Stock under this Plan to which such non-employee director is
not entitled to under the express provisions of this Plan.
(c) The granting of Restricted Stock and issuance of
shares of Common Stock shall be subject to all applicable rules and
regulations and to such approvals by any governmental agencies or
national securities exchanges as may be required. This Plan shall be
construed in accordance with and governed by the laws of the State of
Ohio.
9. Adjustments.
In the event of any merger, consolidation, stock or other non-cash
dividend, split up, spin off, stock split, stock consolidation, reverse stock
split, issuance of rights or warrants to purchase securities, combination or
exchange of shares or recapitalization or change in capitalization, or any
other similar corporate event, the Board shall, unless doing so would cause or
result in (a) any of the grants or stock deliveries pursuant to this Plan
failing to be exempt from Section 16(b) of the Securities Exchange Act of 1934
("Exchange Act") or (b) any non-employee director failing to qualify as a
"disinterested administrator", within the meaning of Rule 16b-3, with respect
to any plan of the Corporation, automatically make such mathematically
proportionate (or, in the case of Section 9 (iii) hereof only, qualitative)
adjustments in (i) the aggregate number of shares of Common Stock available for
issuance under this Plan, (ii) the number of
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shares of Restricted Stock to be granted annually and (iii) the kind of shares
that may be issued pursuant to this Plan. The determination by the Board as to
the terms of any of the foregoing permissible adjustments shall be, absent
manifest error, conclusive and binding on all persons, as is reasonably
appropriate and equitable.
10. Amendment and Termination.
(a) The Board shall have the power to suspend, amend or
terminate this Plan at any time; provided, however, that to be
effective, any such amendment or termination shall comply with the
requirements of the rules and regulations promulgated under Section
16(b) of the Exchange Act, including, without limitation, share owner
approval where required to maintain Rule 16b-3 status, to the extent
necessary to insure that the receipt of the Restricted Stock by a
non-employee director under this Plan shall be exempt from Section
16(b) of the Exchange Act; and provided, further, that no suspension,
termination or amendment of this Plan shall materially adversely
affect the rights of a non-employee director with respect to any
grants under this Plan granted prior to such suspension, termination
or amendment, without the consent of such director.
(b) Notwithstanding any provision in this Plan to the contrary or
otherwise, the terms and provisions of this Plan shall not be amended
more than once every six months, other than to comport with changes in
the Internal Revenue Code of 1986, as amended, and the rules
thereunder.
11. Change in Control. A "Change in Control" shall be deemed to have
occurred if at any time:
(a) any person (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 20% or more of the combined
voting power of the Corporation's then outstanding securities;
(b) during any period of 24 consecutive calendar months,
individuals who at the beginning of such period constitute the Board
cease for any reason to constitute at least a majority thereof unless
the election of each new director of the Corporation was approved or
recommended by the vote of at least two-thirds of the directors of the
Corporation then still in office who were directors of the Corporation
at the beginning of any such period;
(c) the Corporation merges with or into, or consolidates with,
another corporation following approval of the share owners of the
Corporation of such merger or consolidation and, after giving effect
to such merger or consolidation, less than 60% of the then outstanding
voting securities of the surviving or resulting corporation represent
or were issued in exchange for voting securities of the Corporation
outstanding immediately prior to such merger or consolidation;
(d) there is a sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or
substantially all the assets of the Corporation following approval of
the share owners of the Corporation of such transaction or series of
transactions; or
(e) the share owners of the Corporation shall approve any plan or
proposal for the liquidation or dissolution of the Corporation.
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