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Exhibit 10.9
CAPTEC NET LEASE REALTY, INC.
LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the Captec Net Lease Realty, Inc. Long-Term
Incentive Plan (the "Plan") is to enable Captec Net Lease Realty, Inc. (the
"Company") to attract, retain and reward key employees of the Company and its
Affiliates and to strengthen the mutuality of interests between such key
employees and the Company's shareholders by offering such key employees equity
or equity-based incentives.
For purposes of the Plan, the following terms shall be defined as
set forth below:
(a) "Affiliate" means any entity (other than the Company and its
Subsidiaries) that is designated by the Board as a participating employer
under the Plan.
(b) "Award" means any award of Stock Options, Restricted Shares,
Deferred Shares, Share Purchase Rights, Share Appreciation Rights or Other
Share-Based Awards under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Change in Control" has the meaning set forth in Section 11(b).
(e) "Change in Control Price" has the meaning set forth in Section
11(d).
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(g) "Committee" means the Committee referred to in Section 2 of the
Plan.
(h) "Company" means Captec Net Lease Realty, Inc., a Delaware
corporation, or any successor corporation.
(i) "Deferred Shares" means an award of the right to receive Shares
at the end of a specified period granted pursuant to Section 7.
(j) "Disability" means disability as determined under
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procedures established by the Committee for purposes of the Plan.
(k) "Disinterested Person" has the meaning set forth in Rule
16b-3(c)(2)(i) as promulgated by the Securities and Exchange Commission
(the "Commission") under the Exchange Act, or any successor definition
adopted by the Commission.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the mean between the
highest and lowest quoted selling price, regular way, of the Shares on
such date on the New York Stock Exchange or, if no such sale of the Shares
occurs on the New York Stock Exchange on such date, then such mean price
on the next preceding day on which the Shares were traded. If the Shares
are no longer traded on the New York Stock Exchange, or other national
securities exchange or interdealer quotation system, then the Fair Market
Value of the Shares shall be determined by the Committee in good faith.
(n) "Incentive Stock Option" means any Stock Option intended to be
and designated as an "Incentive Stock Option" within the meaning of
Section 422 of the Code or any successor section thereto.
(o) "Non-Qualified Stock Option", means any Stock Option that is not
an Incentive Stock Option.
(p) "Other Share-Based Award" means an award granted pursuant to
Section 10 that is valued, in whole or in part, by reference to, or is
otherwise based on, Shares.
(q) "Outside Director" has the meaning set forth in Section 162(m)
of the Code and the regulations promulgated thereunder.
(r) "Plan" means the Captec Net Lease Realty, Inc. Long-Term
Incentive Plan, as amended from time to time.
(s) "Potential Change in Control" has the meaning set forth in
Section 11(c).
(t) "Restricted Shares" means an award of shares that is granted
pursuant to Section 6 and is subject to restrictions.
(u) "Section 16 Participant", means a participant under the Plan who
is then subject to Section 16 of the Exchange Act.
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(v) "Shares" mean, the common shares, without par value, of the
Company.
(w) "Share Appreciation Right" means an award of a right to receive
an amount from the Company that is granted pursuant to Section 9.
(x) "Stock Option" or "Option" means any option to purchase Shares
(including Restricted Shares and Deferred Shares, if the Committee so
determines) that is granted Pursuant to Section 5.
(y) "Share Purchase Right" means an award of the right to purchase
Shares that is granted pursuant to Section 8.
(z) "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if each of
the corporations (other than the last corporation in the unbroken chain)
owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Compensation Committee of the
Board (the "Committee"). The Committee shall consist of _____________ directors
of the Company, as designated by the Board from time to time, all of whom shall
be Disinterested Persons and Outside Directors. Such directors shall be
appointed by the Board and shall serve as the Committee at the pleasure of the
Board. The functions of the Committee specified in the Plan shall be exercised
by the Board if and to the extent that no Committee exists which has the
authority to so administer the Plan.
The Committee shall have full power to interpret and administer the
Plan and full authority to select the individuals to whom Awards will be granted
and to determine the type and amount of Awards to be granted to each
participant, the consideration, if any, to be paid for such Awards, the timing
of such Awards, the terms and conditions of Awards granted under the Plan, the
terms and conditions of the related agreements which will be entered into with
participants and to certify that any performance goals are satisfied. As to the
selection of and grant of Awards to participants who are not Section 16
participants, the Committee may delegate its responsibilities to members of the
Company's management consistent with applicable law.
The Committee shall have the authority to adopt, alter
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and repeal such rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreements relating thereto);
to direct employees of the Company or other advisors to prepare such materials
or perform such analyses as the Committee deems necessary or appropriate; and
otherwise to supervise the administration of the Plan.
Any interpretation and administration of the Plan by the Committee,
and all actions and determinations of the Committee, shall be final, binding and
conclusive on the Company, its shareholders, Subsidiaries, Affiliates, all
participants in the Plan, their respective legal representatives, successors and
assigns, and all persons claiming under or through any of them. No member of the
Board or of the Committee shall incur any liability for any action taken or
omitted, or any determination made, in good faith in connection with the Plan.
SECTION 3. SHARES SUBJECT TO THE PLAN.
(a) Aggregate Shares Subject to the Plan. Subject to adjustment as
provided below in Section 3(c), the total number of Shares reserved and
available for Awards under the Plan is ________. Any Shares issued
hereunder may consist, in whole or in part, of authorized and unissued
shares or treasury shares.
(b) Forfeiture or Termination of Awards of Shares. If any Shares
subject to any Award granted hereunder are forfeited or an Award otherwise
terminates or expires without the issuance of Shares, the Shares subject
to such Award shall again be available for distribution in connection with
future Awards under the Plan as set forth in Section 3(a), unless the
participant who had been awarded such forfeited Shares or the expired or
terminated Award has theretofore received dividends or other benefits of
ownership with respect to such Shares. For purposes hereof, a participant
shall not be deemed to have received a benefit of ownership with respect
to such Shares by the exercise of voting rights or the accumulation of
dividends which are not realized because of the forfeiture of such Shares
or the expiration or termination of the related Award without issuance of
such Shares.
(c) Adjustment. In the event of any merger, reorganization,
consolidation, recapitalization, share dividend, share split, combination
of shares or other change in corporate structure of the Company affecting
the Shares, such substitution or adjustment shall be made in the aggregate
number of Shares reserved for issuance under the Plan, in the number and
option price of shares subject to
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outstanding options granted under the Plan, in the number and purchase
price of shares subject to outstanding Share Purchase Rights granted
under the Plan, and in the number of shares subject to Restricted Share
Awards, Deferred Share Awards and any other outstanding Awards granted
under the Plan as may be approved by the Committee, in its sole
discretion; provided that the number of shares subject to any Award shall
always be a whole number.
(d) Annual Award Limit. No Participant may be granted Stock Options
or Awards under the Plan with respect to an aggregate of more than
_________ Shares (subject to adjustment as provided in Section 3(c)
hereof) during any calendar year.
SECTION 4. ELIGIBILITY.
Officers and other key employees of the Company and its Subsidiaries and
Affiliates, if any, who are responsible for or contribute to the management,
growth or profitability of the business of the Company or its Subsidiaries or
Affiliates, if any, are eligible to be granted Awards under the Plan.
SECTION 5. STOCK OPTIONS.
(a) Grant. Stock Options may be granted alone, in addition to or in
tandem with other Awards granted under the Plan or cash awards made
outside the Plan. The Committee shall determine the individuals to whom,
and the time or times at which, grants of Stock Options will be made, the
number of Shares purchasable under each Stock Option and the other terms
and conditions of the Stock Option in addition to those set forth in
Sections 5(b) and 5(c). Any Stock Option granted under the Plan shall be
in such form as the Committee may from time to time approve.
Stock Options granted under the Plan may be of two types which shall
be indicated on their face: (i) Incentive Stock Options and (ii)
Non-Qualified Stock Options. Subject to Section 5(c) hereof, the Committee
shall have the authority to grant to any participant Incentive Stock
Options, Non-Qualified Stock Options or both types of Stock Options.
(b) Terms and Conditions. Options granted under the Plan shall be
evidenced by Option Agreements, shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem
desirable:
(1) Option Price. The option price per share of
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Shares purchasable under a Non-Qualified Stock Option or an
Incentive Stock Option shall be determined by the Committee at the
time of grant and shall be not less than 100% of the Fair Market
Value of the Shares at the date of grant (or, with respect to an
incentive stock option, 110% of the Fair Market Value of the Shares
at the date of grant in the case of a participant who at the date of
grant owns Shares possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or its
parent or Subsidiary corporations (as determined under Section
424(d), (e) and (f) of the Code)).
(2) Option Term. The term of each Stock Option shall be fixed
by the Committee and may not exceed ten years from the date the
Option is granted (or, with respect to Incentive Stock Options, five
years in the case of a participant who at the date of grant owns
Shares possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or its parent or
subsidiary corporations (as determined under Section 424(d), (e) and
(f) of the Code)).
(3) Exercise. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant; provided, however,
that, except as provided in Section 5(b)(6) and Section 11, unless
otherwise determined by the Committee at or after grant, no Stock
Option shall be exercisable prior to six months and one day
following the date of grant. If any Stock Option is exercisable only
in installments or only after specified exercise dates, the
Committee may waive, in whole on in part, such installment exercise
provisions, and may accelerate any exercise date or dates, at any
time at or after grant based on such factors as the Committee shall
determine, in its sole discretion.
(4) Method of Exercise. Subject to any installment exercise
provisions that apply with respect to such Stock Option, and the six
month and one day holding period set forth in Section 5(b)(3), Stock
Options may be exercised in whole or in part, at any time during the
option period, by giving to the Company written notice of exercise
specifying the number of Shares to be purchased.
Such notice shall be accompanied by payment in full of the
option price of the Shares for which the Option is exercised, in
cash or Shares or by check or
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such other instrument as the Committee may accept. The value of each
such Share surrendered or withheld shall be 100% of the Fair Market
Value of the Shares on the date the option is exercised.
No Shares shall be issued pursuant to an exercise of an Option
until full payment has been made. A participant shall not have
rights to dividends or any other rights of a shareholder with
respect to any Shares subject to an Option unless and until the
participant has given written notice of exercise, has paid in full
for such Shares, has given, if requested, the representation
described in Section 14(a) and such Shares have been issued to him.
(5) Non-Transferability of Options. No Stock Option shall be
transferable by the participant other than by will or by the laws of
descent and distribution, and all Stock Options shall be
exercisable, during the participant's lifetime, only by the
Participant or, subject to Sections 5(b)(3) and 5(c), by the
participant's authorized legal representative if the participant is
unable to exercise an option as a result of the participant's
Disability; provided, however, that if so provided in the instrument
evidencing the Option, the Committee may permit any optionee to
transfer the Option during his lifetime to one or more members of
his family, or to one or more trusts for the benefit of one or more
members of his family, provided that no consideration is paid for
the transfer and that such transfer would not result in the loss of
any exemption under Rule 16b-3 for any Option that the Committee
does not permit to be so transferred. The transferee of an Option
shall be subject to all restrictions, terms, and conditions
applicable to the Option prior to its transfer, except that the
Option shall not be further transferable inter vivos by the
transferee. The Committee may impose on any transferable Option and
on the Common Shares to be issued upon the exercise of the Option
such limitations and conditions as the Committee deems appropriate.
(6) Termination by Death. Subject to Section 5(c), if any
participant's employment by the Company or any Subsidiary or
Affiliate terminates by reason of death, any Stock Option held by
such Participant may thereafter be exercised, to the extent such
Option was exercisable at the time of death or would have become
exercisable within one year from the time of death had the
participant continued to fulfill all conditions of the Option during
such period (or on such accelerated basis as the Committee may
determine at or after
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grant), by the estate of the participant (acting through its
fiduciary), for a period of one year (or such other period as
the Committee may specify at or grant) from the date of such
death. The balance of the Stock Option shall be forfeited.
(7) Termination by Reason of Disability. Subject to
Sections 5(b)(3) and 5(c), if a participant's employment by
the Company or any Subsidiary or Affiliate terminates by
reason of Disability, any Stock Option held by such
participant may thereafter be exercised, to the extent such
Option was exercisable at the time of termination or would
have become exercisable within one year from the time of
termination had the participant continued to fulfill all
conditions of the Option during such period (or on such
accelerated basis as the Committee may determine at or after
grant), by the participant or by the participant's duly
authorized legal representative if the participant is unable
to exercise the Option as a result of the participant's
Disability, for a period of one year (or such other period as
the Committee may specify at or after grant), from the date of
such termination of employment; provided, however, that in no
event may any such Option be exercised prior to six months and
one day from the date of grant; and provided, further, that if
the participant dies within such one-year period (or such
other period as the Committee shall specify at or after
grant), any unexercised Stock Option held by such participant
shall thereafter be exercisable by the estate of the
participant (acting though its fiduciary) to the same extent
to which it was exercisable at the time of death for a period
of one year from the date of such termination of employment.
The balance of the Stock Option shall be forfeited.
(8) Other Termination. Unless otherwise determined by
the Committee at or after the time of granting any Stock
Option, if a participant's employment by the Company or any
Subsidiary or Affiliate is terminated for any reason other
than death or Disability, all Stock Options held by such
participant shall thereupon terminate 90 days after the date
of such termination.
(c) Incentive Stock Options. Notwithstanding Sections 5(b)(6)
and (7), an Incentive Stock Option shall be exercisable by (i) a
participant's authorized legal representative (if the participant is
unable to exercise the Incentive Stock Option as a result of the
participant's Disability) only if, and to the extent, permitted by
Section
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422 of the Code and Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder and (ii) by the participant's
estate, in the case of death, or authorized legal representative, in
the case of Disability, no later than 10 years from the date the
Incentive Stock Option was granted (in addition to any other
restrictions or limitations which may apply). Anything in the Plan
to the contrary notwithstanding, no term or provision of the Plan
relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the
Plan be exercised, so as to disqualify the Plan under Section 422 of
the Code, or, without the consent of the participants affected, to
disqualify any Incentive Stock Option under such Section 422 or any
successor section thereto.
(d) Buyout Provisions. The Committee may at any time buy out
for a payment in cash, Shares, Deferred Shares or Restricted Shares
an option previously granted, based on such terms and conditions as
the Committee shall establish and agree upon with the participant,
provided that no such transaction involving a Section 16 participant
shall be structured or effected in a manner that would violate, or
result in any liability on the part of the participant under,
Section 16 of the Exchange Act or the rules and regulations
promulgated thereunder.
SECTION 6. RESTRICTED SHARES.
(a) Grant. Restricted Shares may be issued alone, in addition
to or in tandem with other Awards under the Plan or cash awards made
outside of the Plan. The Committee shall determine the individuals
to whom, and the time or times at which, grants of Restricted Shares
will be made, the number of Restricted Shares to be awarded to each
Participant, the price (if any) to be paid by the participant
(subject to Section 6(b)), the date or dates upon which Restricted
Share Awards will vest and the period or periods within which such
Restricted Share Awards may be subject to forfeiture, and the other
terms and conditions of such Awards in addition to those set forth
in Section 6(b).
The Committee may condition the grant of Restricted Shares
upon the attainment of specified performance goals or such other
factors as the Committee may determine in its sole discretion.
(b) Terms and Conditions. Restricted Shares awarded under the
Plan shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall deem
desirable. A Participant
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who receives a Restricted Share Award shall not have any rights with
respect to such Award, unless and until such participant has
executed an agreement evidencing the Award in the form approved from
time to time by the Committee and has delivered a fully executed
copy thereof to the Company, and has otherwise complied with the
applicable terms and conditions of such Award.
(1) The purchase price (if any) for Restricted Shares
shall be determined by the Committee at the time of grant.
(2) Awards of Restricted Shares must be accepted by
executing a Restricted Share Award agreement and paying any
price required under Section 6(b)(1).
(3) Each participant receiving a Restricted Share Award
shall be issued a stock certificate in respect of such
Restricted Shares. Such certificate shall be registered in the
name of such participant, and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable
to such Award.
(4) The Committee shall require that the stock
certificates evidencing such Restricted Shares be held in
custody by the Company until the restrictions thereon shall
have lapsed, and that, as a condition of any Restricted Shares
Award the Participant shall have delivered to the Company a
stock power, endorsed in blank, relating to the Shares covered
by such Award.
(5) Subject to the provisions of this Plan and the
Restricted Share Award agreement, during a period set by the
committee commencing with the date of such Award (the
"Restriction Period"), the participant shall not be permitted
to sell, transfer, pledge, assign or otherwise encumber the
Restricted Shares awarded under the Plan. Subject to these
limitations, the Committee, in its sole discretion, may
provide for the lapse of such restrictions in installments and
may accelerate or waive such restrictions, in whole or in
part, based on service, performance or such other factors and
criteria as the Committee may determine, in its sole
discretion.
(6) Except as provided in this Section 6(b)(6), Section
6(b)(5) and Section 6(b)(7) the participant shall have, with
respect to the Restricted Shares awarded, all of the rights of
a shareholder of the Company, including the right to vote the
Shares, and the right to receive any dividends. The Committee,
in its sole discretion, as determined at the time of award,
may permit or require the payment of cash
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dividends to be deferred and, if the Committee so determines,
reinvested, subject to Section 14(f), in additional Restricted
Shares to the extent Shares are available under Section 3, or
otherwise reinvested. Unless the Committee or Board determines
otherwise, share dividends issued with respect to Restricted
Shares shall be treated as additional Restricted Shares that
are subject to the same restrictions and other terms and
conditions that apply to the Shares with respect to which such
dividends are issued.
(7) No Restricted Shares shall be transferable by a
participant other than by will or by the laws of descent and
distribution.
(8) If a participant's employment by the Company or any
Subsidiary or Affiliate terminates by reason of death, any
Restricted Shares held by such participant shall thereupon
vest and all restrictions thereon shall lapse, to the extent
such Restricted Shares would have become vested or no longer
subject to restriction within one year from the time of death
had the participant continued to fulfill all of the conditions
of the Restricted Share Award during such period (or on such
accelerated basis as the Committee may determine at or after
grant). The balance of the Restricted Shares shall be
forfeited.
(9) If a participant's employment by the Company or any
Subsidiary or Affiliate terminates by reason of Disability,
any Restricted Shares held by such participant shall thereupon
vest and all restrictions thereon shall lapse, to the extent
such Restricted Shares would have become vested or no longer
subject to restriction within one year from the time of
termination had the participant continued to fulfill all of
the conditions of the Restricted Share Award during such
period (or on such accelerated basis as the Committee may
determine at or after grant). The balance of the Restricted
Shares shall be forfeited.
(10) Unless otherwise determined by the Committee at or
after the time of granting any Restricted Shares, if a
participant's employment by the Company or any Subsidiary or
Affiliate terminates for any reason other than death or
Disability, the Restricted Shares held by such participant
which are unvested or subject to restriction at the time of
termination shall thereupon be forfeited.
(c) Minimum Value Provisions. In order to better ensure that
award payments actually reflect the performance
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of the Company and service of the participant, the Committee may
provide in its sole discretion for a tandem performance-based or
other award designed to guarantee a minimum value, payable in cash
or Shares to the recipient of a Restricted Share Award, subject to
such performance, future service, deferral and other terms and
conditions as may be specified by the Committee.
SECTION 7. DEFERRED SHARES.
(a) Grant. Deferred Shares may be awarded alone, in addition
to or in tandem with other Awards granted under the Plan or cash
awards made outside the Plan. The Committee shall determine the
individuals to whom, and the time or times at which, Deferred Shares
shall be awarded, the number of Deferred Shares to be awarded to any
participant, the duration of the period (the "Deferral Period")
during which, and the conditions under which, receipt of the Shares
will be deferred, and the other terms and conditions of the Award in
addition to those set forth in Section 7(b).
The Committee may condition the grant of Deferred Shares upon
the attainment of specified performance goals or such other factors
as the Committee shall determine, in its sole discretion.
(b) Terms and Conditions. Deferred Share Awards shall be
subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of
the Plan, as the Committee considers desirable:
(1) The purchase price for Deferred Shares shall be
determined at the time of grant by the Committee. Subject to
the provisions of the Plan and the Award agreement referred to
in Section 7(b)(9), Deferred Share Awards may not be sold,
assigned, transferred, pledged or otherwise encumbered during
the Deferral Period. At the expiration of the Deferral Period
(or the Elective Deferral Period referred to in Section
7(b)(8), when applicable), stock certificates shall be
delivered to the participant, or his legal representative, for
the shares covered by the Deferred Share Award. The Deferral
period applicable to any Deferred Share Award shall not be
less than six months and one day ("Minimum Deferral Period").
(2) Amounts equal to any dividends declared during the
Deferral Period with respect to the number of Shares covered
by a Deferred Share Award will be paid to the participant
currently, or deferred and
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deemed to be reinvested in additional Deferred Shares, or
otherwise reinvested, all as determined at or after the time
of the Award by the Committee, in its sole discretion.
(3) No Deferred Shares shall be transferable by a
participant other than by will or by the laws of descent and
distribution.
(4) If a participant's employment by the Company or any
Subsidiary or Affiliate terminates by reason of death, any
Deferred Shares awarded to by such participant shall
thereafter vest and all restrictions thereon shall lapse, to
the extent such Deferred Shares would have become vested or no
longer subject to restriction within one year from the time of
death had the participant continued to fulfill all of the
conditions of the Deferred Share Award during such period (or
on such accelerated basis as the Committee may determine at or
after grant). The balance of the Deferred Shares shall be
forfeited.
(5) If a participant's employment by the Company or any
Subsidiary or Affiliate terminates by reason of Disability,
any Deferred Shares awarded to such participant shall
thereafter vest and all restrictions thereon shall lapse, to
the extent such Deferred Shares would have become vested or no
longer subject to restriction within one year from the time of
termination had the participant continued to fulfill all of
the conditions of the Deferred Shares Award during such period
(or on such accelerated basis as the Committee may determined
at or after grant), subject in all cases to the Minimum
Deferral Period requirement. The balance of the Deferred
Shares shall be forfeited.
(6) Unless otherwise determined by the Committee at or
after the time of granting any Deferred Share Award, if a
participant's employment by the Company or any Subsidiary or
Affiliate terminates for any reason other than death or
Disability, all Deferred Shares held by such participant which
are unvested or subject to restriction shall thereupon be
forfeited.
(7) Based on service, performance or such other factors
or criteria as the Committee may determine, the Committee may,
at or after grant, accelerate the vesting of all or any part
of any Deferred Share Award or waive a portion of the Deferral
Period for all or any part of such Award, subject in all cases
to the Minimum Deferral Period requirement.
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(8) A participant may elect to further defer receipt of
a Deferred Share Award (or an installment of an Award) for a
specified period or until a specified event (the "Elective
Deferral Period"), subject in each case to the Committee's
approval and the terms of this Section 7 and such other terms
as are determined by the Committee, all in its sole
discretion. Subject to any exceptions approved by the
Committee, such election must be made at least 12 months prior
to completion of the Deferral Period for such Deferred Share
Award (or such installment).
(9) Each such Award shall be confirmed by, and subject
to the terms of, a Deferred Share Award agreement evidencing
the Award in the form approved from time to time by the
Committee.
(c) Minimum Value Provisions. In order to better ensure that
award payments actually reflect the performance of the Company and
service of the Participant, the Committee may provide, in its sole
discretion, for a tandem performance-based or other Award designed to
guarantee a minimum value, payable in cash or Shares to the recipient
of a Deferred Share Award, subject to such performance, future service,
deferral and other terms and conditions as may be specified by the
Committee.
SECTION 8. SHARE PURCHASE RIGHTS.
(a) Grant. Share Purchase Rights may be granted alone, in
addition to or in tandem with other Awards granted under the Plan or
cash awards made outside the Plan. The committee shall determine the
individuals to whom, and the time or times at which, grants of Share
Purchase Rights will be made, the number of Shares which may be
purchased pursuant to Share Purchase Rights, and the other terms and
conditions of the Share Purchase Rights in addition to those set forth
in Section 8(b). The Shares subject to the Share Purchase Rights may be
purchased at the Fair Market Value of such Shares on the date of grant;
Subject to Section 8(b) hereof, the Committee may also impose
such deferral, forfeiture or other terms and conditions as it shall
determine, in its sole discretion, on such Share Purchase Rights or the
exercise thereof.
Each Share Purchase Right Award shall be confirmed by, and be
subject to the terms of, a Share Purchase Rights Agreement which shall
be in form approved by the Committee.
(b) Terms and Conditions. Share Purchase Rights may
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contain such additional terms and conditions not inconsistent with the
terms of the Plan as the Committee shall deem desirable, and shall
generally be exercisable for such period as shall be determined by the
Committee. However, Share Purchase Rights granted to Section 16
participants shall not become exercisable earlier than six months and
one day after the grant date. Share Purchase Rights shall not be
transferable by a participant other than by will or by the laws of
descent and distribution.
SECTION 9. SHARE APPRECIATION RIGHTS.
(a) Grant. Share Appreciation Rights may be granted in
connection with all or any part of an Option, either concurrently with
the grant of the Option or, if the Option is a Non-Qualified Stock
Option, by an amendment to the Option at any time thereafter during the
term of the Option. Share Appreciation Rights may be exercised in whole
or in part at such times under such conditions as may be specified by
the Committee in the participant's Option Agreement.
(b) Terms and Conditions. The following terms and
conditions will apply to all Share Appreciation Rights:
(1) Share Appreciation Rights shall entitle the
participant, upon exercise of all or any part of the Share
Appreciation Rights, to surrender to the Company unexercised
that portion of the underlying Option relating to the same
number of Shares as is covered by the Share Appreciation
Rights (or the portion of the Share Appreciation Rights so
exercised) and to receive in exchange from the Company an
amount (paid as provided in Section 9(b)(5)) equal to the
excess of (x) the Fair Market Value, on the date of exercise,
of the Shares covered by the surrendered portion of the
underlying Option over (y) the exercise price of the Shares
covered by the surrendered portion of the underlying Option.
The Committee may limit the amount that the participant will
be entitled to receive upon surrender of a Share Appreciation
Right.
(2) Upon the exercise of the Share Appreciation Right
and surrender of the related portion of the underlying Option,
the Option, to the extent surrendered, will not thereafter be
exercisable. The underlying Option may provide that such Share
Appreciation Rights will be payable solely in cash. The terms
of the underlying Option shall provide a method by which an
alternative fair market value of the Shares on the date of
exercise shall be calculated based on one of the following:
(x) the closing price of the Shares on the national exchange
on which they
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are then traded on the business day immediately preceding the
day of exercise; (y) the highest closing price of the Shares
on the national exchange on which they have been traded,
during the 90 days immediately preceding the Change in
Control; or (z) the greater of (x) and (y).
(3) In addition to any further conditions upon
exercise that may be imposed by the Committee, the Share
Appreciation Rights shall be exercisable only to the extent
that the related Option is exercisable, except that in no
event will a Share Appreciation Right held by a Section 16
Participant be exercisable within the first six months after
it is awarded even though the related Option is or becomes
exercisable, and each Share Appreciation Right will expire no
later than the date on which the related Option expires. A
Share Appreciation Right may be exercised only at a time when
the Fair Market Value of the Shares covered by the Share
Appreciation Right exceeds the exercise price of the Shares
covered by the underlying Option. No Share Appreciation Right
held by a Section 16 Participant shall be exercisable by its
terms within the first six months after it is granted, and a
Section 16 Participant may exercise a Share Appreciation Right
only during a period beginning on the third business day and
ending on the twelfth business day following the release for
publication of quarterly or annual summary statements of the
Company's sales and earnings.
(4) Share Appreciation Rights may be exercised by the
participant giving written notice of the exercise to the
Company, stating the number of Share Appreciation Rights he
has elected to exercise and surrendering the portion of the
underlying Option relating to the same number of Shares as the
number of Share Appreciation Rights elected to be exercised.
(5) The manner in which the Company's obligation
arising upon the exercise of the Share Appreciation Right will
be paid will be determined by the Committee and shall be set
forth in the participant's Option Agreement. The Committee may
provide for payment in Shares or cash, or a fixed combination
of Shares or cash, or the Committee may reserve the right to
determine the manner of payment at the time the Share
Appreciation Right is exercised. Shares issued upon the
exercise of a Share Appreciation Right will be valued at their
Fair Market Value on the date of exercise.
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SECTION 10. OTHER SHARE-BASED AWARDS.
(a) Grant. Other Awards of Shares and other Awards that are
valued, in whole or in part, by reference to, or are otherwise based
on, Shares, including, without limitation, performance shares,
convertible preferred shares, convertible debentures, exchangeable
securities and Share Awards or options valued by reference to Book
Value or subsidiary performance, may be granted alone, in addition to
or in tandem with other Awards granted under the Plan or cash awards
made outside of the Plan.
At the time the Shares or Other Share-Based Award is granted,
the Committee shall determine the individuals to whom and the time or
times at which such Shares or other Share-Based Awards shall be
awarded, the number of Shares to be used in computing an Award or which
are to be awarded pursuant to such Awards, the consideration, if any,
to be paid for such Shares or other Share-Based Awards, and all other
terms and conditions of the Awards in addition to those set forth in
Section 10(b).
The provisions of other Share-Based Awards need not be the
same with respect to each participant.
(b) Terms and Conditions. Other Share-Based Awards shall be
subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable.
(1) Subject to the provisions of this Plan and the
Award agreement referred to in Section 10(b)(5) below, Shares
awarded or subject to Awards made under this Section 10 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, holding or deferral period or requirement is
satisfied or lapses. All Shares or Other Share-Based Awards
granted under this Section 10 shall be subject to a minimum
holding period (including any applicable restriction,
performance and/or deferral periods ) of six months and one
day ("Minimum Holding Period").
(2) Subject to the provisions of this Plan and the
Award agreement and unless otherwise determined by the
Committee at the time of grant, the recipient of an Other
Share-Based Award shall be entitled to receive, currently or
on a deferred basis, interest or dividends or interest or
dividend equivalents with respect to the number of Shares
covered by the Award, as determined at
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the time of the Award by the Committee, in its sole
discretion, and the Committee may provide that such amounts
(if any) shall be deemed to have been reinvested in additional
Shares or otherwise reinvested.
(3) Subject to the Minimum Holding Period, any Other
Share-Based Award and any Shares covered by any such Award
shall vest or be forfeited to the extent, at the times and
subject to the conditions, if any, provided in the Award
agreement, as determined by the Committee, in its sole
discretion.
(4) In the event of the participant's Disability or
death, or in cases of special circumstances, the Committee
may, in its sole discretion, waive, in whole or in part, any
or all of the remaining limitations imposed hereunder or under
any related Award agreement with respect to any part of all of
any Award under this Section 10, provided that the Minimum
Holding Period requirement may not be waived, except in case
of a participant's death.
(5) Each Award shall be confirmed by, and subject to
the terms of, an agreement or other instrument evidencing the
Award in the form approved from time to time by the Committee,
the Company and the participant.
(6) Shares (including securities convertible into
Shares) issued on a bonus basis under this Section 10 shall be
issued for no cash consideration. Shares (including securities
convertible into Shares) purchased pursuant to a purchase
right awarded under this Section 10 shall bear a price of at
least 85% of the Fair Market Value of the Shares on the date
of grant. The purchase price of such Shares, and of any Other
Share-Based Award granted hereunder, or the formula by which
such price is to be determined, shall be fixed by the
Committee at the time of grant.
(7) In the event that any "derivative security", as
defined in Rule 16a-1(c) (or any successor thereof)
promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act, is awarded pursuant to this
Section 10 to any Section 16 participant, such derivative
security shall not be transferrable other than by will or by
the laws of descent and distribution.
SECTION 11. CHANGE IN CONTROL PROVISION.
(a) Impact of Event. At any time during the 365
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days commencing with the date of either (1) a "Change in Control" as
defined in Section 11(b) or (2) a "Potential Change in Control" as
defined in Section 11(c), a majority of the "Continuing Directors" as
defined in Section 11(e) (or one of the two Continuing Directors if
only two Continuing Directors are then serving on the Board of
Directors or the sole Continuing Director if only one Continuing
Director is then serving on the Board of Directors) may cause the
following provisions to take effect as stated and as of the date set
forth in a Written Action (the "Written Action") adopted to that
effect (that date, the "Accelerated Vesting Date") and if there are no
Continuing Directors, the following provisions will automatically take
effect:
(1) Any Stock Options awarded under the Plan not
previously exercisable and vested shall become fully
exercisable and vested;
(2) Any Share Appreciation Rights shall become
immediately exercisable;
(3) The restrictions applicable to any Restricted
Shares, Deferred Shares Awards, Share Purchase Rights Awards
and Other Share Based Awards shall lapse and such shares and
awards shall be deemed fully vested; and
(4) The value of all outstanding Awards, in each case
to the extent vested, shall, unless otherwise determined by
the Committee in its sole discretion at or after grant but
prior to any Change in Control or Potential Change in Control,
be paid to the participant in cash in exchange for the
surrender of those Awards on the basis of the "Change in
Control Price" as defined in Section 11(d) as of the
Accelerated Vesting Date;
but the provisions of Sections 11(a)(1) through (3) shall not apply
with respect to Awards granted to any Section 16 Participant which have
been held by such participant for less than six months and one day as
of the Accelerated Vesting Date.
(b) Definition of Change in Control. For purposes of Section
11(a), a "Change in Control" means the occurrence of any of the
following: (i) the Board or shareholders of the Company approve a
consolidation or merger that results in the shareholders of the Company
immediately prior to the transaction giving rise to the consolidation
or merger owning less than 50% of the total combined voting power of
all classes of stock entitled to vote of the surviving
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entity immediately after the consummation of the transaction giving
rise to the merger or consolidation; (ii) the Board or shareholders of
the Company approve the sale of substantially all of the assets of the
Company or the liquidation or dissolution of the Company; (iii) any
person or other entity (other than the Company or a Subsidiary or any
Company employee benefit plan (including any trustee of any such plan
acting in its capacity as trustee)) purchases any Shares (or securities
convertible into Shares) pursuant to a tender or exchange offer without
the prior consent of the Board of Directors, or becomes the beneficial
owner of securities of the Company representing 25% or more of the
voting power of the Company's outstanding securities; or (iv) during
any two-year period, individuals who at the beginning of such period
constitute the entire Board of Directors cease to constitute a majority
of the Board of Directors, unless the election or the nomination for
election of each new director is approved by at least two-thirds of the
directors then still in office who were directors at the beginning of
that period.
(c) Definition of Potential Change in Control. For purposes of
Section 11(a), a "Potential Change in Control" means the happening of
any one of the following:
(1) The approval by the shareholders of the Company
of an agreement by the Company, the consummation of which
would result in a Change in Control of the Company as defined
in Section 11(b); or
(2) The acquisition of beneficial ownership, directly
or indirectly, by any entity, person or group (other than the
Company or a Subsidiary or any Company employee benefit plan
(including any trustee of any such plan acting in its capacity
as trustee)) of securities of the Company representing [15%]
or more of the combined voting power of the Company's
outstanding securities and the adoption by the Board of a
resolution to the effect that a Potential Change in Control of
the Company has occurred for purposes of this Plan.
(d) Change in Control Price. For purposes of this Section 11,
"Change in Control Price", means the greater of: (a) the highest price
per share paid in any transaction reported on the New York Stock
Exchange Composite Index (or, if the Shares are not then traded on the
New York Stock Exchange, the highest price paid as reported for any
national exchange on which the Shares are then traded) or paid or
offered in any bona fide transaction related to a Change in Control or
Potential Change in Control of the
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Company, at any time during the 60-day period immediately preceding the
occurrence of the Change in Control (or, when applicable, the
occurrence of the Potential Change in Control event), and (b) the
highest price per share paid in any transaction reported on the New
York Stock Exchange Composite Index (or, if the Shares are not then
traded on the New York Stock Exchange, the highest price paid as
reported for any national exchange on which the Shares are then
traded), at any time during the 60-day period immediately preceding the
date on which the Continuing Directors execute a Written Action
relating to that Change in Control or Potential Change in Control, in
each case as determined by the Committee.
(e) Definition of Continuing Director. For purposes of this
Section 11, a "Continuing Director" means an individual who was a
member of the Board of Directors immediately prior to the date of a
Change in Control or a Potential Change in Control and is a member of
the Board of Directors at the time a Written Action relating to that
Change in Control or Potential Change in Control is taken.
SECTION 12. AMENDMENTS AND TERMINATION.
The Board may at any time, in its sole discretion, amend,
alter or discontinue the Plan, but no such amendment, alteration or
discontinuation shall be made which would impair the rights of a participant
under an Award theretofore granted, without the participant's consent. The
Company shall submit to the shareholders of the Company for their approval any
amendments to the Plan which are required by Section 16 of the Exchange Act or
the rules and regulations thereunder, or Section 162(m) of the Code, to be
approved by the shareholders.
The Committee may at any time, in its sole discretion, amend
the terms of any Award, but no such amendment shall be made which would impair
the rights of a participant under an Award theretofore granted, without the
participant's consent; nor shall any such amendment be made which would make the
applicable exemptions provided by Rule 16b-3 under the Exchange Act unavailable
to any Section 16 participant holding the Award without the participant's
consent.
Subject to the above provisions, the Board shall have all
necessary authority to amend the Plan to make into account changes in applicable
securities and tax laws and accounting rules, as well as other developments.
SECTION 13. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any
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payments not yet made to a participant by the Company, nothing contained herein
shall give any such participant any rights that are greater than those of a
general creditor of the Company.
SECTION 14. GENERAL PROVISIONS.
(a) The Committee may require each Participant acquiring
Shares pursuant to an Award under the Plan to represent to and agree
with the Company in writing that the participant is acquiring the
Shares without a view to distribution thereof. The certificates for
such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.
All Shares or other securities delivered under the Plan shall
be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock
exchange upon which the Shares is then listed, and any applicable
federal or state securities laws, and the Committee may cause a legend
or legends to be put on any certificates for such shares to make
appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases.
(c) Neither the adoption of the Plan, nor its operation, nor
any document describing, implementing or referring to the Plan, or any
part thereof, shall confer upon any participant under the Plan any
right to continue in the employ, or as a director, of the Company or
any Subsidiary or Affiliate, or shall in any way affect the right and
power of the Company or any Subsidiary or Affiliate to terminate the
employment, or service as a director, of any participant under the Plan
at any time with or without assigning a reason therefor, to the same
extent as the Company or any Subsidiary or Affiliate might have done if
the Plan had not been adopted.
(d) For purposes of this Plan, a transfer of a participant
between the Company and its Subsidiaries and Affiliates shall not be
deemed a termination of employment.
(e) No later than the date as of which an amount first becomes
includable in the gross income of the participant for federal income
tax purposes with respect to any award under the Plan, the Participant
shall pay to the Company, or make arrangements satisfactory to the
Committee regarding
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the payment, of, any federal, state or local taxes or other items of
any kind required by law to be withheld with respect to such amount.
Subject to the following sentence, unless otherwise determined by the
Committee, withholding obligations may be settled with Shares,
including unrestricted Shares previously owned by the participant or
Shares that are part of the Award that gives rise to the withholding
requirement. Notwithstanding the foregoing, any election by a Section
16 participant to settle such tax withholding obligation with Shares
that is part of such Award shall be subject to approval by the
Committee, in its sole discretion. The obligations of the Company under
the Plan shall be conditional on such payment or arrangements and the
Company and its Subsidiaries and Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
(f) The actual or deemed reinvestment of dividends or dividend
equivalents in additional Restricted Shares (or in Deferred Shares or
other types of Awards) at the time of any dividend payment shall only
be permissible if sufficient Shares are available under Section 3 for
such reinvestment (taking into account then outstanding Stock Options,
Share Purchase Rights and other Plan Awards).
(g) The Plan, all Awards made and actions taken thereunder and
any agreements relating thereto shall be governed by and construed in
accordance with the laws of the State of Delaware.
(h) All agreements entered into with participants pursuant to
the Plan shall be subject to the Plan.
(i) The provisions of Awards need not be the same with respect
to each participant.
SECTION 15. SHAREHOLDER APPROVAL; EFFECTIVE DATE OF PLAN.
The Plan was adopted by the Board on ________, 1997 and is
subject to approval by the holders of the Company's outstanding Shares, in
accordance with applicable law. The Plan will become effective on the date of
such approval.
SECTION 16. TERM OF PLAN.
No Award shall be granted pursuant to the Plan on or after
_______________, 2007, but Awards granted prior to such date may extend beyond
that date.
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