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Exhibit 99c
Centerior Energy Corporation
Equity Compensation Plan
1. PURPOSE
The purpose of the Plan is to advance the long-term interests of the
Corporation by (i) motivating executive personnel by means of equity-based
incentives, (ii) furthering the identity of interests of Participants with
those of the share owners of the Corporation through the ownership and
performance of the Common Stock and (iii) enhancing the ability of the
Corporation to attract and retain management personnel upon whose judgment the
successful conduct of the business of the Corporation largely depends. Toward
this objective, the Committee or the Board of Directors may grant Stock
Options, Stock Appreciation Rights, Restricted Stock, Performance Shares and
Deferred Incentive Units to selected Employees on the terms and subject to the
conditions set forth in the Plan.
2. DEFINITIONS
2.1 "Administrative Policies" means the administrative policies and
procedures adopted and amended from time to time by the Committee to administer
the Plan.
2.2 "Award" means any form of Stock Option, Stock Appreciation Right,
Restricted Stock, Performance Share or Deferred Incentive Unit granted under
the Plan, whether singly, in combination, or in tandem, to a Participant by
the Committee pursuant to such terms, conditions, restrictions and
limitations, if any, as the Committee may establish by the Award Agreement or
otherwise.
2.3 "Award Agreement" means a written agreement with respect to an Award
between the Corporation and a Participant establishing the terms, conditions,
restrictions and limitations applicable to an Award. To the extent an Award
Agreement is inconsistent with the terms of the Plan, the Plan shall govern the
rights of the Participant thereunder.
2.4 "Board of Directors" means the Board of Directors of the Corporation.
2.5 "Change in Control" shall be deemed to have occurred if at any time or
from time to time after the date of adoption of the Plan:
(a) there is a report filed on Schedule 13D or Schedule 14D-1, each as
adopted under the Exchange Act, disclosing the acquisition of 20% or more of
the voting stock of the Corporation in one transaction or a series of
transactions by any person (as the term "person" is used in Section 13(d) and
Section 14(d)(2) of the Exchange Act);
(b) during any period of 24 consecutive calendar months, individuals who
at the beginning of such period constitute the Directors of the Corporation
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;
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(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.
2.6 "Code'' means the Internal Revenue Code of 1986, as amended from time
to time.
2.7 "Committee" means the Human Resources Committee of the Board, or such
other committee designated by the Board, authorized to administer the Plan
under Section 3 hereof.
2.8 "Common Stock" means Common Stock of the Corporation.
2.9 "Corporation" means Centerior Energy Corporation and its successors,
including the surviving or resulting corporation of any merger of Centerior
Energy Corporation with or into, or any consolidation of Centerior Energy
Corporation with, any other corporation or corporations.
2.10 "Deferred Incentive Unit" shall have the meaning set forth in Section
11(a) hereof.
2.11 "Director" means a member of the Board of Directors.
2.12 "Employee" means any individual employed by the Corporation or a
Subsidiary.
2.13 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.14 "Fair Market Value" means the average of the high and low sale prices
of the Common Stock as reported in THE WALL STREET JOURNAL report of
NYSE-Composite Transactions for the date on which the determination of fair
market value is made or, if there are no sales of Common Stock on that date,
then on the next preceding date on which there were any sales of Common Stock.
2.15 "Freestanding SAR'' has the meaning set forth in Section 8(a) hereof.
2.16 "Incentive Stock Option" means an Option intended to meet the
requirements of Section 422 of the Code.
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2.17 "Nonqualified Stock option" means an option which is not intended to
meet the requirements of Section 422 of the Code.
2.18 "Option" or "Stock Option" means an option to purchase Common Stock
pursuant to an Award.
2.19 "Participant" means any individual to whom an Award has been granted
by the Committee.
2.20 "Performance Period" shall have the meaning set forth in Section
10(b) hereof.
2.21 "Performance Shares" shall have the meaning set forth in Section
10(a) hereof.
2.22 "Performance Target" shall have the meaning set forth in Section
10(b) hereof.
2.23 "Plan" means the Centerior Energy Corporation Equity Compensation
Plan.
2.24 "Restricted Stock" means shares of Common Stock awarded under Section
9(a) hereof.
2.25 "Restricted Stock Award" means an Award of shares of Common Stock under
Section 9 hereof.
2.26 "SARS" or "Stock Appreciation Right" shall have the meaning set forth
in Section 8(a) hereof.
2.27 "Subsidiary" means a corporation at least 50% of the voting stock of
which is directly or indirectly owned by the Corporation, Centerior Service
Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company
or any other Subsidiary of the Corporation.
2.28 "Tandem SARS" shall have the meaning set forth in Section 8(a) hereof.
3. ADMINISTRATION
The Plan shall be administered under the supervision of the Committee.
Subject to the express provisions of the Plan, the Committee shall have
conclusive authority to construe and interpret the Plan and any Award
Agreement entered into hereunder, to establish, amend and rescind
Administrative Policies for the administration of the Plan, to determine the
Employees who are eligible for an Award and to determine the type, size,
terms, conditions, restrictions and limitations of Awards to be granted to any
Employee and shall have such additional authority as the Board of Directors
may from time to time determine to be necessary or desirable. Decisions of
the Committee shall be binding and conclusive on all persons for all purposes.
The Committee may authorize any one or more of its members or any officer of
the Corporation or its Subsidiaries to
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execute and deliver documents on behalf of the Committee and the Committee may
delegate to one or more employees, agents or officers of the Corporation or
its Subsidiaries, or to one or more third party consultants, accountants,
lawyers or other advisors, such ministerial duties related to the operation of
the Plan as it may deem appropriate. Notwithstanding the foregoing, the Board
of Directors may exercise any authority granted herein to the Committee;
provided, however, that to the extent required by Rule 16b-3 of the Exchange
Act with respect to specific grants of Awards, such power or authority shall
only reside in and such actions or determinations shall only be made by an
administrator or administrators satisfying the disinterested administration
standard contained in Rule 16b-3 of the Exchange Act. The right of
indemnification granted to each Director, Employee and officer of the
Corporation and its Subsidiaries under applicable law and the Regulations of
the Corporation and its Subsidiaries, as from time to time may be in effect,
shall apply to any act or failure to act by the Board of Directors or the
Committee, any of their respective members and any person to whom either of
them may have delegated any authority in connection with administration of the
Plan. Any party performing services with respect to the Plan shall receive
such compensation, in addition to any compensation received as an Employee, as
the Board of Directors shall authorize and such party also shall receive
reimbursement from the Corporation or its Subsidiaries for reasonable expenses
incurred in connection therewith.
4. ELIGIBILITY
Any Employee is eligible to become a Participant.
5. SHARES AVAILABLE
(a) Shares of Common Stock available for issuance under the Plan may be
authorized and unissued shares, treasury shares or shares acquired on the open
market specifically for distribution under the Plan as the Chief Financial
officer of the Corporation may from time to time determine. Subject to the
adjustments provided for in Section 16 hereof, the maximum number of shares of
Common Stock available for grant of Awards under the Plan during any calendar
year shall be equal to the sum of:
(i) 0.5% of the total number of issued and outstanding shares of
Common Stock as of the December 31st of the immediately preceding calendar
year;
(ii) Any unused portion of the limit in (i) above from prior calendar
years during the term of the Plan; and
(iii) Any shares of Common Stock related to Awards which terminated
during prior calendar years during the term of the Plan by expiration,
forfeiture, cancellation or otherwise without the issuance of such shares or
cash in lieu thereof.
Notwithstanding the foregoing, not more than 3,000,000 shares of Common
Stock shall be available for the award of Incentive Stock Options under the
Plan.
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Notwithstanding the foregoing, at no time shall the number of shares deemed
to be available for grant in a calendar year exceed 1% of the total number of
issued and outstanding shares of Common Stock.
(b) For purposes of calculating the number of shares of Common Stock deemed
to be granted hereunder during any calendar year, each Award, whether
denominated in Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares or Deferred Incentive Units, shall be deemed to be a grant
of a number of shares of Common Stock equal to the number of shares (i)
represented by the Stock Options and (ii) shares of Restricted Stock,
Performance Shares, Stock Appreciation Rights or Deferred Incentive Units set
forth in the Award; provided, however,
(i) in the case of any Award as to which the exercise of one right
nullifies the exercisability of another, the number of shares deemed to have
been granted shall be the maximum number of shares (and/or cash equivalents)
that could have been acquired upon the maximum exercise or settlement of the
Award and
(ii) in the case of Performance Share Awards providing for payments in
excess of 100% of the number of shares set forth in the Award Agreement, the
number of shares granted shall be deemed to be the maximum number of shares
(and/or the cash equivalent) thereof issuable under the Award at the highest
level of performance.
(c) For purposes of calculating the number of shares available for grant in
any calendar year, the portion of any Award that has been settled by the
payment of cash or the issuance of shares of Common Stock, or a combination
thereof, shall not be available for regrant under the Plan, irrespective of the
value of the settlement or the method of its payment. The settlement of an
Award shall not be deemed to be the grant of an Award hereunder.
6. TERM
The Plan shall become effective upon adoption by the Board of Directors, but
Awards thereunder shall be conditioned upon approval of the Plan by the share
owners of the Corporation, and the Plan shall remain in effect thereafter until
terminated by the Board of Directors.
7. STOCK OPTIONS
(a) GRANTS. Awards may be granted in the form of Options. Options may be
Incentive Stock Options or Nonqualified Stock Options or a combination of both,
or any particular type of option authorized by the Code from time to time. No
Incentive Stock Option may be granted on a date more than 10 years from the
earlier of (i) the date the share owners of the Corporation approve the Plan or
(ii) the date of adoption of the Plan by the Board of Directors; or such other
date as may be authorized by the Code from time to time. The maximum number of
shares of Common Stock subject to options that may be granted to any Employee
in any calendar year shall be 100,000, subject to adjustment as provided in
Section 16 hereof.
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(b) TERMS AND CONDITIONS OF OPTIONS. An option shall be exercisable in
whole or in such installments and at such times as may be determined by the
Committee; provided, however, that no option shall be exercisable more than 10
years after the date of grant thereof. The Option exercise price shall be
established by the Committee. The exercise price for an Incentive Stock Option
shall not be less than the Fair Market Value of the Common Stock on the grant
date of the Incentive Stock Option.
(c) RESTRICTIONS RELATING TO INCENTIVE STOCK OPTIONS. Options issued in
the form of Incentive Stock Options shall, in addition to being subject to all
applicable terms, conditions, restrictions and limitations established by the
Committee, comply with Section 422 of the Code. Incentive Stock Options shall
be granted only to full-time Employees within the meaning of Section 424 of the
Code. The aggregate Fair Market Value (determined as of the date the Incentive
Stock Option is granted) of shares with respect to which Incentive Stock
Options are exercisable for the first time by an individual during any calendar
year (under this Plan or any other plan of the Corporation or any Subsidiary
which provides for the granting of Incentive Stock Options) may not exceed
$100,000 or such other number as may be authorized under the Code from time to
time. Any Incentive Stock Option that is granted to any Employee who is, at
the time said option is granted, deemed for purposes of Section 422 of the Code
to own shares of the Corporation aggregating more than 10% of the total
combined voting power of all classes of shares of the Corporation or of a
parent or Subsidiary of the Corporation shall have an exercise price that is at
least 110% of the Fair Market Value of the shares at the date of grant and
shall not be exercisable after the expiration of five years from the date it is
granted.
(d) ADDITIONAL TERMS AND CONDITIONS. The Committee may, by way of the
Award Agreement or otherwise, establish such other terms, conditions,
restrictions and limitations, if any, on any Option Award, provided they are
not inconsistent with the Plan.
(e) PAYMENT. Upon exercise, a Participant may pay the exercise price of an
option in cash, in shares of Common Stock (including in the case of the
exercise of Nonqualified Stock Options shares of Common Stock acquired upon the
exercise of a portion of said Option), in exercisable SARs, by delivery by the
Participant of irrevocable instructions to a broker registered under the
Exchange Act to promptly deliver to the Corporation the amount of sale or loan
proceeds to pay the exercise price or a combination of the foregoing, or such
other consideration as the Committee may deem appropriate. If the exercise
price of an option is paid by delivery of shares of Restricted Stock, the
restrictions applicable to such Restricted Stock shall apply to the number of
shares Of Common Stock received upon exercise equal to the number of shares of
Restricted Stock delivered as payment. The Committee may impose such
conditions as it deems appropriate on the use of Common Stock to exercise an
Option.
8. STOCK APPRECIATION RIGHTS
(a) GRANTS. Awards may be granted in the form of stock appreciation
rights ("SARs"). SARs shall entitle the recipient to receive a payment, in
cash, shares of Common Stock or a combination thereof as the Committee
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determines, equal to the appreciation in Fair Market Value of a stated number
of shares of Common Stock from the price stated in the Award Agreement to the
Fair Market Value of the Common Stock on the date of exercise or surrender. An
SAR may be granted in tandem with all or a portion of a related Option under
the Plan ("Tandem SARs") or may be granted separately ("Freestanding SARs"). A
Tandem SAR may be granted either at the time of the grant of the related
Nonqualified Stock Option or at any time thereafter during the term of the
Nonqualified Stock Option. A Tandem SAR related to an Incentive Stock Option
may only be granted at the same time such Option is granted. The base price of
a Tandem SAR shall be the same as the exercise price of the related Option. The
maximum number of shares of Common Stock or equivalents thereof subject to SARs
granted to any Employee in any calendar year shall be 100,000, subject to
adjustment as provided in Section 16 hereof.
(b) TERMS AND CONDITIONS OF TANDEM SARS. A Tandem SAR shall be
exercisable only to the extent that the related Option is exercisable and shall
expire on a date not later than the date on which the related Option expires.
Upon exercise of an Option, the related Tandem SAR shall be cancelled
automatically to the extent of the number of Options exercised, and such shares
shall not thereafter be eligible for grant under Section 5 hereof. Upon
exercise of a Tandem SAR, the related Option shall be cancelled automatically
to the extent of the number of SARs exercised, and such shares shall not
thereafter be eligible for grant under Section 5 hereof.
Tandem SARs may be exercised only after the expiration of six months from
the date of grant of the Tandem SAR. Also, Tandem SARs may be exercised only
(i) on a date when the Fair Market Value exceeds the exercise price stated in
the option related to that SAR, (ii) at the time and to the same extent as the
related Option is exercisable and (iii) by surrender to the Corporation,
unexercised, of the related Option or any applicable portion thereof.
(c) TERMS AND CONDITIONS OF FREESTANDING SARS. Freestanding SARs shall
be exercisable in whole or in such installments and at such times as may be
determined by the Committee; provided that they may be exercised only after the
expiration of six months from the date of grant. The base price of a
Freestanding SAR shall also be determined by the Committee; provided, however,
that such price shall not be less than the Fair Market Value of the Common
Stock on the date of the award of the Freestanding SAR.
(d) DEEMED EXERCISE. The Committee may provide that an SAR shall be
deemed to be exercised at the close of business on the scheduled expiration
date of such SAR, if at such time the SAR by its terms is otherwise exercisable
and, if so exercised, would result in a payment to the Participant.
(e) ADDITIONAL TERMS AND CONDITIONS. The Committee may, consistent
with the Plan, by way of the Award Agreement or otherwise, determine such other
terms, conditions, restrictions and limitations, if any, on any SAR Award.
9. RESTRICTED STOCK AWARDS
(a) GRANTS. Awards may be granted in the form of Restricted Stock
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Awards. The maximum number of shares of Common Stock subject to Restricted
Stock Awards granted to any Employee in any calendar year shall be 100,000,
subject to adjustment as provided in Section 16 hereof.
(b) RESTRICTIONS. Restricted Stock shall be subject to such terms,
conditions, restrictions and limitations, if any, as the Committee deems
appropriate including, but not limited to, restrictions on transferability,
requirements of continued employment or individual performance or the financial
performance of the Corporation. The Committee may modify, or accelerate the
termination of, the restrictions applicable to Restricted Stock under such
circumstances as it deems appropriate. Certificates for Common Stock delivered
pursuant to this Section 9 may contain a legend stating any restrictions
appertaining thereto.
(c) FORFEITURE. Any attempted sale, assignment, encumbrance, pledge or
other transfer of Restricted Stock, or any interest therein, during the
restriction period in derogation of the restrictions on such shares shall
result in a forfeiture to the Corporation of all such shares subject to such
attempted transfer. Except as otherwise determined by the Committee, upon
termination of employment of the Participant for any reason except retirement,
death, permanent disability or a Change in Control during the restriction
period, all shares still subject to restriction shall be forfeited by the
Participant to the Corporation; provided, that, in cases of special
circumstances, the Committee may, in its sole discretion, when it finds that a
waiver would be in the best interests of the Corporation, waive in whole or in
part any or all remaining restrictions with respect to such Participant's
shares. The effect of termination of employment by reason of retirement, death,
permanent disability or Change in Control shall be set forth in the applicable
Award Agreement.
(d) CERTIFICATES. Immediately upon the grant of a Restricted Stock
Award a certificate or certificates for the number of shares of Common Stock
represented by the Award shall be registered in the name of the Participant but
such certificate or certificates shall be held by the Corporation or a
custodian designated by the Corporation until the restrictions on such shares
shall lapse or be waived.
(e) RIGHTS AS SHARE OWNERS. During the period in which any Restricted
Stock held by a Participant is subject to the restrictions imposed under
Section 9(b) hereof, the Committee may, in its discretion, grant to the
Participant all or any of the rights of a share owner with respect to such
shares, including, but not limited to, the right to vote such shares and to
receive dividends.
10. PERFORMANCE SHARES
(a) GRANTS. Awards may be granted in the form of Performance Shares.
Performance Shares means interests the entitlement to which is based upon the
attainment of Performance Targets during a Performance Period. At the end of
the Performance Period, Performance Shares shall be converted into Common Stock
(or the cash equivalent thereof, as determined by the Award Agreement) and
distributed to Participants based upon such entitlement. The maximum number of
shares of Common Stock or equivalents thereof subject to Performance Shares
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granted to any Employee in any calendar year shall be 100,000, subject to
adjustment as provided in Section 16 hereof.
(b) PERFORMANCE CRITERIA. The Committee may grant an Award of
Performance Shares to Participants as of the first day of each Performance
Period. As used herein, the term Performance Period means the period during
which a Performance Target is measured and the term Performance Target means
the goals established by the Committee as of the beginning of each Performance
Period. If at the end of the Performance Period, the Performance Target is
fully met, the Performance Shares will be converted 100% into shares of Common
Stock (or the cash equivalent thereof, as determined by the Award Agreement)
and issued to the Participant. Award payments in excess of 100% shall be
permitted based upon an attainment in excess of 100% of the Performance
Target. If the Performance Target has not been fully met, Performance Shares
will be converted and delivered only to the extent, if any, provided in the
Award Agreement for conversion based upon partial attainment of the
Performance Target and the balance of the Performance Shares will be forfeited
to the Corporation and become available for regrant pursuant to Section 5
hereof. Award payments made in cash rather than the issuance of Common Stock
shall not, by reason of such payment in cash, result in additional shares
being available for regrant pursuant to Section 5 hereof.
(c) ADDITIONAL TERMS AND CONDITIONS. The Committee may, consistent
with the terms of the Plan, by way of the Award Agreement or otherwise,
determine the manner of payment of Awards of Performance Shares and other
terms, conditions, restrictions and limitations, if any, on any Award of
Performance Shares.
11. DEFERRED INCENTIVE UNITS
(a) GRANTS. Awards may be granted in the form of Deferred Incentive
Units. Deferred Incentive Units shall entitle the Participant to receive in
cash the Fair Market Value or the appreciation in value of an equivalent
number of shares of Common Stock on a settlement date determined by the
Committee. The maximum number of Deferred Incentive Units subject to Deferred
Incentive Unit Awards made to any Employee in any calendar year shall be
100,000, subject to adjustment as provided in Section 16 hereof.
(b) TERMS AND CONDITIONS OF DEFERRED INCENTIVE UNITS. The Committee
may, consistent with the Plan, by way of Award Agreement or otherwise,
determine such terms, conditions, restrictions and limitations, if any, on any
Deferred Incentive Unit Award.
12. PERFORMANCE STANDARDS
Performance-based Restricted Stock Awards, Performance Share Awards and
Deferred Incentive Unit Awards may be based upon achievement of performance
targets established in terms of:
(a) return on equity;
(b) return on assets;
(c) growth rates or absolute levels of unit sales, revenues, net income,
operation and maintenance expenses, production costs or capital
expenditures;
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in each case with respect to the Corporation or any business unit thereof and
(d) growth rate of market value of shares of Common Stock;
or various combinations of the foregoing.
13. PAYMENT OF AWARDS
Except as otherwise provided herein, Award Agreements may provide that,
at the discretion of the Committee, payment of Awards may be made in cash,
Common Stock, or a combination of cash and Common Stock as the Committee shall
determine. Payments in the form of Common Stock shall be in whole shares and
cash in lieu of a fractional share, if any. Further, the terms of Award
Agreements may provide for payment of Awards in the form of a lump sum or
installments, as determined by the Committee.
14. DIVIDENDS AND DIVIDEND EQUIVALENTS
If an Award is granted in the form of Restricted Stock, Performance
Shares, Deferred Incentive Units or a Freestanding SAR, the Committee may
choose, at the time of the grant of the Award, to include as part of
such Award an entitlement to receive dividends or dividend equivalents,
subject to such terms, conditions, restrictions and limitations, if any, as
the Committee may establish. Dividends and dividend equivalents shall be paid
in such form and manner and at such time as the Committee shall determine.
All dividends or dividend equivalents which are not paid currently may, at the
Committee's discretion, accrue interest or be reinvested into additional
shares of Common Stock.
15. ASSIGNMENT AND TRANSFER
The rights and interests of a Participant under the Plan may not be
assigned, encumbered or transferred except, in the event of the death of a
Participant, by will or the laws of descent and distribution and during the
lifetime of the Participant may be exercised only by such Participant or
guardian or legal representative; provided, however, that the Committee is
authorized to amend the Plan or outstanding Awards to permit assignment,
encumbrance and transfer if and to the extent that such amendment would not
produce adverse consequences under tax or securities laws.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of any change in the outstanding shares of Common Stock by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
shares issuable pursuant to, and the related exercise prices, if applicable,
then outstanding Awards shall be appropriately adjusted by the Committee to the
extent necessary and in such manner to maintain the benefits of the Participant
under all outstanding Awards substantially as before the occurrence of such
event.
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17. AWARDS IN SUBSTITUTION FOR AWARDS GRANTED BY OTHER COMPANIES
Awards, whether Incentive Stock Options, Nonqualified Stock Options,
SARs, Restricted Stock, Performance Shares or Deferred Incentive Units, may be
granted under the Plan in substitution for awards held by employees of a
company who become Employees of the Corporation or a Subsidiary as a result of
the merger or consolidation of the employer company with the Corporation or a
Subsidiary, or the acquisition by the Corporation or a Subsidiary of the assets
of the employer company, or the acquisition by the Corporation or a Subsidiary
of stock of the employer company as a result of which it becomes a Subsidiary.
The terms, provisions and benefits of the substitute Awards so granted may vary
from the terms, provisions and benefits set forth in or authorized by the Plan
to such extent as the Committee at the time of the grant may deem appropriate
to conform, in whole or in part, to the terms, provisions and benefits of the
awards in substitution for which they are granted.
18. WITHHOLDING TAXES
The Corporation or the applicable Subsidiary shall be entitled to
deduct from any payment under the Plan, regardless of the form of such payment,
the amount needed to satisfy all applicable Federal, state and local
withholding tax obligations with respect to such payment or may require the
Participant to pay to it such tax obligations prior to and as a condition of
the making of such payment. In accordance with any applicable Administrative
Policies it establishes, the Committee may allow a Participant to pay any
portion of such tax obligations by withholding from any payment of Common Stock
due as a result of such Award or by permitting the Participant to deliver to
the Corporation shares of Common Stock. The Fair Market Value of the shares to
be so held back or delivered to the Corporation shall be determined as of the
date on which the obligation to withhold first arose.
19. NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS
Participation in the Plan shall not give any Employee any right to
remain in the employ of the Corporation or any Subsidiary. The Corporation or,
in the case of employment with a Subsidiary, the Subsidiary, reserves the right
to terminate the employment of any Employee at any time. The adoption of the
Plan shall not be deemed to give any Employee or any other individual any right
to be selected as a Participant, to be granted any Awards hereunder or, if
granted an Award in any year, to receive Awards in any subsequent year.
20. AMENDMENT
The Board of Directors or the Committee may suspend or terminate the
Plan at any time or may, from time to time, amend the Plan in any manner, but
may not without share owner approval adopt any amendment which would (a)
materially increase the benefits accruing to Participants under the Plan, (b)
materially increase the number of shares of Common Stock which may be issued
under the Plan (except as specified in Section 16 hereof) or (c) materially
modify the requirements as to eligibility for participation in the Plan. The
Board of Directors or the Committee may amend the terms and conditions
applicable to the
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outstanding Awards (a) in any case where expressly permitted by the terms of
the Plan or an Award Agreement, (b) with the consent of the Participant or (c)
without the consent of the Participant if the amendment is not adverse to the
interests of the Participant. Except as expressly provided in the Plan or the
Award Agreement, the Board of Directors or the Committee may not, without the
consent of the Participant, amend the terms and conditions applicable to an
Award in a manner adverse to the interests of the Participant; provided,
however, that the Board of Directors or the Committee may amend the, or provide
additional, terms and conditions in order to satisfy any provision of any
current or future Federal, state or local tax or other law, regulation or
ruling without the consent of the Participant.
21. GOVERNING LAW
The Plan shall be governed by and construed in accordance with the laws
of the State of Ohio, except as pre-empted by applicable Federal law.
22. CHANGE IN CONTROL
Unless otherwise specified in the Award Agreement, upon the occurrence
of a Change in Control of the Corporation, each Award theretofore granted to an
Employee that then remains outstanding shall, subject to the next succeeding
sentence, be modified as follows: (a) any outstanding Option and SAR shall
become immediately exercisable in full, (b) all restrictions on Restricted
Stock and Deferred Incentive Units shall terminate immediately and (c) the
restrictions, conditions and contingencies on any Performance Shares shall be
deemed to have been satisfied in full. Upon occurrence of a Change in Control
of the Corporation, Participants shall be entitled to receive Common Stock in
satisfaction of their rights under Deferred Incentive Unit Awards in accordance
with the amounts otherwise payable by the Corporation pursuant to the Award
Agreement. In no event, however, shall an Employee subject to Section 16(b) of
the Exchange Act sell or exercise any equity security or derivative security,
as defined in said Act or the rules and regulations promulgated thereunder,
acquired pursuant to an Award before the earliest date on which the sale or
exercise is eligible for exemption under Rule 16(b)-3 of said Act.
23. NO RIGHT, TITLE OR INTEREST IN CORPORATION ASSETS
No Participant shall have any rights as a share owner as a result of
participation in the Plan until the date of issuance of a stock certificate in
the Participant's name except, in the case of Restricted Stock, to the extent
provided in Sections 9(d) and 9(e) hereof. To the extent any person acquires a
right to receive payments from the Corporation under the Plan, such rights
shall be no greater than the rights of an unsecured creditor of the
Corporation.
24. PAYMENT BY SUBSIDIARIES
Settlement of Awards to Employees of Subsidiaries shall be made by and
at the expense of such Subsidiary. Except as prohibited by law, if any portion
of an Award is to be settled in shares of Common Stock, the Corporation shall
sell and transfer to the Subsidiary, and the Subsidiary shall purchase, the
number of shares necessary to settle such portion of the Award.
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25. MISCELLANEOUS
References to particular rules, regulations, schedules, forms or
reports of or pursuant to the Exchange Act or the Code include any successor
rules, regulations, schedules, forms or reports.
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