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EXHIBIT 10.42
AMERICA WEST AIRLINES, INC.
1994 INCENTIVE EQUITY PLAN
EFFECTIVE AS OF DECEMBER 1, 1994
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AMERICA WEST AIRLINES, INC.
1994 INCENTIVE EQUITY PLAN
America West Airlines, Inc., a Delaware corporation (the "Company"), hereby
establishes this America West Airlines, Inc., 1994 Incentive Equity Plan (this
"Plan"), effective as of December 1, 1994, subject to stockholder approval.
1. Purpose. The purpose of the Plan is to promote the interests of the
Company by encouraging employees of the Company and its Subsidiaries and the
Nonemployee Directors of the Company to acquire or increase their equity
interests in the Company and to provide a means whereby employees may develop a
sense of proprietorship and personal involvement in the development and
financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company, thereby advancing the
interests of the Company and its stockholders. The Plan is also contemplated to
enhance the ability of the Company and its Subsidiaries to attract and retain
the services of individuals who are essential for the growth and profitability
of the Company.
2. Definitions. As used in this Plan:
(a) "Appreciation Right" means a right granted pursuant to Paragraph
5.
(b) "Award" means an Appreciation Right, an Option Right, a Director
Option, Phantom Shares, a Performance Unit, Bonus Stock, Restricted Stock
or a Cash Tax Right.
(c) "Board" means the Board of Directors of the Company.
(d) "Bonus Stock" means unrestricted shares of Common Stock granted
pursuant to Paragraph 9.
(e) "Cash Tax Right" means a right granted pursuant to Paragraph 10.
(f) "Change in Control" shall occur if:
(i) the individuals who, as of December 1, 1994, constitute the
Board (the "Incumbent Board"), cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to December 1, 1994 whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least two-thirds of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board; or
(ii) any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended), but not including David Bonderman or James G. Coulter or any
individual, entity or group which is controlled (whether directly or
indirectly and whether through ownership of voting securities, contract
or otherwise) by David Bonderman and/or James G. Coulter, acquires
(directly or indirectly) the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under such Act) of more than 50% of the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors ("Voting
Power"); or
(iii) any shares of Common Stock or any other voting securities of
the Company shall be purchased pursuant to a tender or exchange offer
(other than a tender or exchange offer made by the Company); or
(iv) the Company's stockholders shall approve a merger or
consolidation, sale or disposition of all or substantially all of the
Company's assets or a plan of liquidation or dissolution of the Company,
other than (A) a merger or consolidation in which the voting securities
of the Company outstanding immediately prior thereto will become (by
operation of law), or are to be converted into, voting securities of the
surviving corporation or its parent corporation immediately after such
merger or consolidation that are owned by the same person or entity or
persons or entities as immediately prior thereto and possess at least
75% of the Voting Power held by the voting securities of the surviving
corporation or its parent corporation, (B) a merger or consolidation
effected to implement a
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recapitalization of the Company (or similar transaction) in which no
person acquires more than 50% of the Voting Power or (C) a merger or
consolidation in which the Company is the surviving corporation and such
transaction was determined not to be a Change in Control, which
transaction and determination was approved by a majority of the Board in
actions taken prior to, and with respect to, such transaction.
(g) "Code" means the Internal Revenue Code of 1986, as in effect from
time to time.
(h) "Committee" means the Compensation/Human Resources Committee of
the Board.
(i) "Common Stock" means the Class B Common Stock, $0.01 par value, of
the Company or any security into which such Common Stock may be changed by
reason of any transaction or event of the type described in Paragraph 13.
(j) "Date of Grant" means (i) with respect to an Award other than a
Director Option, the date specified by the Committee on which such Award
will become effective (which date will not be earlier than the date on
which the Committee takes action with respect thereto) and (ii) with
respect to a Director Option, the automatic date of grant as provided in
Paragraph 11.
(k) "Director Option" means the right to purchase a share of Common
Stock upon exercise of an option granted pursuant to Paragraph 11.
(l) "Dividend Equivalent" means, with respect to a Phantom Share, an
amount equal to the amount of any dividends that are declared and become
payable after the Date of Grant for such Award and on or before the date
such Award is paid or forfeited, as the case may be.
(m) "Grant Price" means the price per share of Common Stock at which
an Appreciation Right not granted in tandem with an Option Right is
granted.
(n) "Management Objectives" means the objectives, if any, established
by the Committee that are to be achieved with respect to an Award granted
under this Plan, which may be described in terms of Company-wide
objectives, in terms of objectives that are related to performance of the
division, Subsidiary, department or function within the Company or a
Subsidiary in which the Participant receiving the Award is employed or in
individual or other terms, and which will relate to the period of time
(Performance Cycle) determined by the Committee. The Management Objectives
intended to qualify under Section 162(m) of the Code shall be with respect
to one or more of the following: (i) earnings before interest, taxes,
depreciation and amortization expenses ("EBITDA"); (ii) earnings before
interest and taxes ("EBIT"); (iii) EBITDA, EBIT or earnings before taxes
and unusual or nonrecurring items as measured either against the annual
budget or as a ratio to revenue; return on total capital; (iv) total
stockholder return; (v) stock price performance; (vi) revenue per average
seat mile; (vii) costs per average seat mile; and (viii) customer
satisfaction rating using the PLOG survey. Which objectives to use with
respect to an Award, the weighting of the objectives if more than one is
used, and whether the objective is to be measured against a
Company-established budget or target, an index or a peer group of airlines,
shall be determined by the Committee in its discretion at the time of grant
of the Award. A Management Objective need not be based on an increase or a
positive result and may include, for example, maintaining the status quo or
limiting economic losses. The Committee, in its sole discretion and without
the consent of the Participant, may amend an Award to reflect (1) a change
in corporate capitalization, such as a stock split or dividend, (2) a
corporate transaction, such as a corporate merger, a corporate
consolidation, any corporate separation (including a spinoff or other
distribution of stock or property by a corporation), any corporate
reorganization (whether or not such reorganization comes within the
definition of such term in section 368 of the Code), or (3) any partial or
complete corporate liquidation. With respect to an Award that is subject to
Management Objectives, the Committee must first certify that the Management
Objectives have been achieved before the Award may be paid.
(o) "Market Value per Share" means, at any date, the closing sale
price per share of the Common Stock on that date (or, if there are no sales
on that date, the last preceding date on which there was a sale) in the
principal market in which the Common Stock is traded.
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(p) "Nonemployee Director" means a director of the Company who is not
also an employee of the Company or a Subsidiary.
(q) "Option Price" means the purchase price per share payable on
exercise of an Option Right or Director Option.
(r) "Option Right" means the right to purchase a share of Common Stock
upon exercise of an option granted pursuant to Paragraph 4.
(s) "Participant" means an employee of the Company or any of its
Subsidiaries who is selected by the Committee to receive an Award under any
of Paragraphs 4 through 10 and shall also include a Nonemployee Director
who has received an automatic grant of Director Options pursuant to
Paragraph 11.
(t) "Performance Unit" means a unit equivalent to $100 (or such other
value as the Committee determines) awarded pursuant to Paragraph 8.
(u) "Phantom Shares" means notional shares of Common Stock awarded
pursuant to Paragraph 7.
(v) "Restricted Stock" means shares of Common Stock granted or sold
pursuant to Paragraph 6 as to which neither the ownership restrictions nor
the restriction on transfers referred to therein has expired.
(w) "Rule 16b-3" means Rule 16b-3 of the Securities and Exchange
Commission (or any successor rule to the same effect) as in effect from
time to time.
(x) "Spread" means the amount determined by multiplying (a) the excess
of the Market Value per Share on the date when an Appreciation Right is
exercised over the Option Price provided for in the related Option Right
or, if there is no tandem Option Right, the Grant Price provided for in the
Appreciation Right by (b) the number of shares of Common Stock in respect
of which the Appreciation Right is exercised.
(y) "Subsidiary" means, at any time, any corporation in which at the
time the Company then owns or controls, directly or indirectly, not less
than 50% of the total combined voting power represented by all classes of
stock issued by such corporation.
3. Shares Available Under Plan. Subject to adjustments as provided in
Paragraph 13, (i) 3,500,000 is the maximum number of shares of Common Stock
which may be issued or transferred and covered by all outstanding Awards under
this Plan, of which number no more than 1,500,000 shares will be issued or
transferred as Restricted Stock or Bonus Stock, and (ii) 350,000 is the maximum
number of shares of Common Stock which may be issued pursuant to or covered by
Option Rights and Appreciation Rights granted under this Plan to any one
Participant during any calendar year. Such shares may be shares of original
issuance or treasury shares or a combination of the foregoing. Upon exercise of
any Appreciation Rights or the payment of any Phantom Shares, there will be
deemed to have been delivered under this Plan for purposes of this Paragraph 3
the number of shares of Common Stock covered by the Appreciation Rights or equal
to the Phantom Shares, as applicable, regardless of whether such Appreciation
Rights or Phantom Shares were paid in cash or shares of Common Stock. Subject to
the provisions of the preceding sentence, any shares of Common Stock which are
subject to Option Rights, Appreciation Rights, or Phantom Shares awarded or sold
as Restricted Stock that are terminated, unexercised, forfeited or surrendered
or which expire for any reason will again be available for issuance under this
Plan, unless, with respect to Restricted Stock, the Participant has received
benefits of ownership with respect to such shares, such as dividends, but not
including voting rights.
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4. Option Rights. The Committee may from time to time authorize grants to
any Participant of options to purchase shares of Common Stock upon such terms
and conditions as it may determine in accordance with the following provisions:
(a) Each grant will specify the number of shares of Common Stock to
which it pertains.
(b) Each grant will specify its Option Price, which may not be less
than 100% of the Market Value per Share on the Date of Grant.
(c) Each grant will specify that the Option Price will be payable (i)
in cash by check acceptable to the Company, (ii) by the transfer to the
Company of shares of Common Stock already-owned by the optionee having an
aggregate Market Value per Share at the date of exercise equal to the
aggregate Option Price, (iii) from the proceeds of a sale through a broker
of some or all of the shares to which such exercise relates, or (iv) by a
combination of such methods of payment.
(d) Successive grants may be made to the same Participant whether or
not any Option Rights previously granted to such Participant remain
unexercised.
(e) Each grant will specify the required period or periods of
continuous service by the Participant with the Company and/or any
Subsidiary and/or the Management Objectives (if any) to be achieved before
the Option Rights or installments thereof will become exercisable, and any
grant may provide for the earlier exercise of the Option Rights in the
event of a Change in Control or other corporate transaction or event or
upon termination of the Participant's employment due to death, disability,
retirement or otherwise.
(f) Each grant the exercise of which, or the timing of the exercise of
which, is dependent, in whole or in part, on the achievement of Management
Objectives may specify a minimum level of achievement in respect of the
specified Management Objectives below which no Options Rights will be
exercisable and may set forth a formula or other method for determining the
number of Option Rights that will be exercisable if performance is at or
above such minimum but short of full achievement of the Management
Objectives.
(g) Option Rights granted under this Plan may be (i) options which are
intended to qualify as incentive stock options under Section 422 of the
Code, (ii) options which are not intended to so qualify or (iii)
combinations of the foregoing.
(h) Each grant shall specify the period during which the Option Right
may be exercised, but no Option Right will be exercisable more than ten
years from the Date of Grant.
(i) Each grant of Option Rights will be evidenced by an agreement
executed on behalf of the Company by any officer and delivered to the
Participant and containing such terms and provisions, consistent with this
Plan, as the Committee may approve.
5. Appreciation Rights. The Committee may also from time to time authorize
grants to any Participant of Appreciation Rights upon such terms and conditions
as it may determine in accordance with this Paragraph. Appreciation Rights may
be granted in tandem with Option Rights or separate and apart from a grant of
Option Rights. An Appreciation Right will be a right of the Participant granted
such Award to receive from the Company, upon exercise, an amount which will be
determined by the Committee at the Date of Grant and will be expressed as a
percentage of the Spread (not exceeding 100%) at the time of exercise. An
Appreciation Right granted in tandem with an Option Right may be exercised only
by surrender of the related Option Right. Each grant of an Appreciation Right
may utilize any or all of the authorizations, and will be subject to all of the
limitations, contained in the following provisions:
(a) Each grant will state whether it is made in tandem with Option
Rights and, if not made in tandem with any Option Rights, will specify the
number of shares of Common Stock in respect of which it is made.
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(b) Each grant made in tandem with Option Rights will specify the
Option Price and each grant not made in tandem with Option Rights will
specify the Grant Price, which in either case will not be less than 100% of
the Market Value per Share on the Date of Grant.
(c) Any grant may specify that the amount payable on exercise of an
Appreciation Right may be paid by the Company in (i) cash, (ii) shares of
Common Stock having an aggregate Market Value per Share equal to the Spread
or (iii) any combination thereof, as determined by the Committee in its
sole discretion.
(d) Any grant may specify that the amount payable on exercise of an
Appreciation Right may not exceed a maximum specified by the Committee at
the Date of Grant (valuing shares of Common Stock for this purpose at their
Market Value per Share at the date of exercise).
(e) Each grant will specify the required period or periods of
continuous service by the Participant with the Company and/or any
Subsidiary and/or Management Objectives to be achieved before the
Appreciation Rights or installments thereof will become exercisable, and
will provide that no Appreciation Right may be exercised except at a time
when the Spread is positive and, with respect to any grant made in tandem
with Option Rights, when the related Option Right is also exercisable. Any
grant may provide for the earlier exercise of the Appreciation Rights in
the event of a Change in Control or other corporate transaction or event or
upon the Participant's termination due to death, disability or retirement.
(f) Each grant the exercise of which, or the timing of the exercise of
which, is dependent, in whole or in part, on the achievement of Management
Objectives may specify a minimum level of achievement in respect of the
specified Management Objectives below which no Appreciation Rights will be
exercisable and may set forth a formula or other method for determining the
number of Appreciation Rights that will be exercisable if performance is at
or above such minimum but short of full achievement of the Management
Objectives.
(g) Each grant of an Appreciation Right will be evidenced by an
agreement executed on behalf of the Company by any officer and delivered to
and accepted by the Participant receiving the grant, which agreement will
describe such Appreciation Right, identify any Option Right granted in
tandem with such Appreciation Right, state that such Appreciation Right is
subject to all the terms and conditions of this Plan and contain such other
terms and provisions, consistent with this Plan, as the Committee may
approve.
6. Restricted Stock. The Committee may also from time to time authorize
grants or sales to any Participant of Restricted Stock upon such terms and
conditions as it may determine in accordance with the following provisions:
(a) Each grant or sale will constitute an immediate transfer of the
ownership of shares of Common Stock to the Participant in consideration of
the performance of services, entitling such Participant to voting and other
ownership rights, but subject to the restrictions hereinafter referred to.
Each grant or sale may limit the Participant's dividend rights during the
period in which the shares of Restricted Stock are subject to any such
restrictions.
(b) Each grant or sale will specify the Management Objectives, if any,
that are to be achieved in order for the ownership restrictions to lapse.
Each grant or sale that is subject to the achievement of Management
Objectives will specify a minimum acceptable level of achievement in
respect of the specified Management Objectives below which the shares of
Restricted Stock will be forfeited and may set forth a formula or other
method for determining the number of shares of Restricted Stock with
respect to which restrictions will lapse if performance is at or above such
minimum but short of full achievement of the Management Objectives.
(c) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is
less than the Market Value per Share at the Date of Grant.
(d) Each such grant or sale will provide that the shares of Restricted
Stock covered by such grant or sale will be subject, for a period to be
determined by the Committee at the Date of Grant, to one or more
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restrictions, including, without limitation, a restriction that constitutes
a "substantial risk of forfeiture" within the meaning of Section 83 of the
Code and the regulations thereunder, and any grant or sale may provide for
the earlier termination of such period in the event of a Change in Control
or other corporate transaction or event or upon termination of the
Participant's employment due to death, disability, retirement or otherwise.
(e) Each such grant or sale will provide that during the period for
which such restriction or restrictions are to continue, the transferability
of the Restricted Stock will be prohibited or restricted in a manner and to
the extent prescribed by the Committee at the Date of Grant (which
restrictions may include, without limitation, rights of repurchase or first
refusal in the Company or provisions subjecting the Restricted Stock to
continuing restrictions in the hands of any transferee).
(f) Each grant or sale of Restricted Stock will be evidenced by an
agreement executed on behalf of the Company by any officer and delivered to
and accepted by the Participant and containing such terms and provisions,
consistent with this Plan, as the Committee may approve.
(g) Unless otherwise approved by the Committee, certificates
representing shares of Common Stock transferred pursuant to a grant of
Restricted Stock will be held in escrow pursuant to an agreement
satisfactory to the Committee until such time as the restrictions on
transfer have expired or the shares have been forfeited.
(h) The maximum number of shares of Restricted Stock that may be
granted or sold to any one Participant in any calendar year is 150,000
shares.
7. Phantom Shares. The Committee may also from time to time authorize
grants to any Participant of Phantom Shares upon such terms and conditions as it
may determine in accordance with the following provisions:
(a) Each grant will specify the number of Phantom Shares to which it
pertains and the payment or crediting of any Dividend Equivalents with
respect to such Phantom Shares.
(b) Each grant will specify the Management Objectives, if any, that
are to be achieved in order for the Phantom Shares to be earned. Each grant
that is subject to the achievement of Management Objectives will specify a
minimum acceptable level of achievement in respect of the specified
Management Objectives below which the Phantom Shares will be forfeited and
may set forth a formula or other method for determining the number of
Phantom Shares to be earned if performance is at or above such minimum but
short of full achievement of the Management Objectives.
(c) Each grant will specify the time and manner of payment of Phantom
Shares which have been earned, which payment may be made in (i) cash, (ii)
shares of Common Stock or (iii) any combination thereof, as determined by
the Committee in its sole discretion.
(d) Each grant of Phantom Shares will be evidenced by an agreement
executed on behalf of the Company by any officer and delivered to and
accepted by the Participant and containing such terms and provisions,
consistent with this Plan, as the Committee may approve, including
provisions relating to a Change in Control or other corporate transaction
or event or upon the Participant's termination due to death, disability or
retirement.
(e) The maximum number of Phantom Shares that may be granted to any
one Participant in any calendar year is 150,000 shares.
8. Performance Units. The Committee may also from time to time authorize
grants to any Participant of Performance Units upon such terms and conditions as
it may determine in accordance with the following provisions:
(a) Each grant will specify the number of Performance Units to which
it pertains.
(b) Each grant will specify the Management Objectives that are to be
achieved in order for the Performance Units to be earned. Each grant will
specify a minimum acceptable level of achievement in
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respect of the specified Management Objectives below which no payment will
be made and may set forth a formula or other method for determining the
amount of payment to be made if performance is at or above such minimum but
short of full achievement of the Management Objectives.
(c) Each grant will specify the time and manner of payment of
Performance Units which have become payable, which payment may be made in
(i) cash, (ii) shares of Common Stock having an aggregate Market Value per
Share equal to the aggregate value of the Performance Units which have
become payable or (iii) any combination thereof, as determined by the
Committee in its sole discretion at the time of payment.
(d) Each grant of a Performance Unit will be evidenced by an agreement
executed on behalf of the Company by any officer and delivered to and
accepted by the Participant and containing such terms and provisions,
consistent with this Plan, as the Committee may approve, including
provisions relating to a Change in Control or other corporate transaction
or event or upon the Participant's termination of employment due to death,
disability, retirement or otherwise.
(e) The maximum amount of compensation that may be made subject to any
Performance Unit grant made to any one Participant in any calendar year is
$1.5 million.
9. Bonus Stock. The Committee may also from time to time authorize grants
to any Participant of Bonus Stock, which shall constitute a transfer of shares
of Common Stock, without other payment therefor, as additional compensation for
the Participant's services to the Company or its Subsidiaries.
10. Cash Tax Rights. (a) The Committee may also from time to time
authorize grants to any Participant of Cash Tax Rights upon such terms and
conditions as it may determine in accordance with this Paragraph. Cash Tax
Rights may be granted in tandem with any Award that is payable in shares of
Common Stock. A Cash Tax Right will be the right of the Participant granted such
Award to receive from the Company, upon receipt of shares of Common Stock
pursuant to the tandem Award, an amount of cash, which will be determined by the
Committee at the Date of Grant and will be expressed as a percentage of the
Market Value per Share (not exceeding 100%) of each share of Common Stock
received upon payment of the tandem Award.
(b) Each grant of a Cash Tax Right will (i) state the Award it is made in
tandem with and will specify the percentage of the Market Value per Share that
shall be payable in cash and (ii) be evidenced by an agreement extended on
behalf of the Company by any officer and delivered to and accepted, by the
Participant and containing such terms and provisions, consistent with this Plan,
as the Committee may approve, including provisions relating to a Change in
Control or other corporate transaction or event or upon the Participant's
termination of employment due to death, disability, retirement or otherwise.
11. Director Options. (a) Each Nonemployee Director who serves in such
capacity on December 31, 1994 shall automatically receive, on such date, a
Director Option for 3,000 shares of Common Stock. Each Nonemployee Director who
is elected or appointed to the Board for the first time after the effective date
of this Plan shall automatically receive, on the date of his or her election or
appointment, a Director Option for 3,000 shares of Common Stock.
(b) On the day following the regular annual meeting of the stockholders of
the Company in each year that this Plan is in effect (commencing with the 1995
annual meeting of stockholders), each Nonemployee Director who is in office on
that day and who was not elected for the first time at such annual meeting shall
automatically receive a Director Option for 3,000 shares of Common Stock.
(c) Each Director Option will be subject to all of the limitations
contained in the following provisions:
(i) Each Director Option shall become exercisable (vested) on the
first day that is more than six months following its Date of Grant;
provided that in no event shall any Director Option be exercisable prior to
the approval of this Plan by the Company's stockholders.
(ii) The Option Price of each Director Option shall be the Market
Value per Share on its Date of Grant.
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(iii) Each Director Option that is vested may be exercised in full at
one time or in part from time to time by giving written notice to the
Company, stating the number of shares of Common Stock with respect to which
the Director Option is being exercised, accompanied by payment in full of
the Option Price for such shares, which payment may be (i) in cash by check
acceptable to the Company, (ii) by the transfer to the Company of shares of
Common Stock already-owned by the optionee having an aggregate Market Value
per Share at the date of exercise equal to the aggregate Option Price,
(iii) from the proceeds of a sale through a broker of some or all of the
shares to which such exercise relates, or (iv) by a combination of such
methods of payment.
(iv) Each Director Option shall expire 10 years from the Date of Grant
thereof, but shall be subject to earlier termination as follows: Director
Options, to the extent exercisable as of the date a Nonemployee Director
ceases to serve as a director of the Company, must be exercised within
three months of such date unless such termination from the Board results
from the Nonemployee Director's death, disability or retirement, in which
case the Director Options may be exercised by the optionee or the
optionee's legal representative or the person to whom the Nonemployee
Director's rights shall pass by will or the laws of descent and
distribution, as the case may be, within three years from the date of
termination; provided however, that no such event shall extend the normal
expiration date of such Director Options.
(v) In the event that the number of shares of Common Stock available
for grants under this Plan is insufficient to make all automatic grants
provided for in this Paragraph 11 on the applicable date, then all
Nonemployee Directors who are entitled to a grant on such date shall share
ratably in the number of shares then available for grant under this Plan,
and shall have no right to receive a grant with respect to the deficiencies
in the number of available shares and all future grants under this
Paragraph 11 shall terminate.
(vi) Grants made pursuant to this Paragraph 11 shall be subject to all
of the terms and conditions of this Plan; however, if there is a conflict
between the terms and conditions of this Paragraph 11 and the terms and
conditions of any other Paragraph, then the terms and conditions of this
Paragraph 11 shall control. The Committee may not exercise any discretion
with respect to this Paragraph 11 which would be inconsistent with the
intent that this Plan meet the requirements of Rule 16b-3.
12. Transferability. No Award that has not become payable or earned will
be transferable by a Participant other than by will or the laws of descent and
distribution. Director Options, Option Rights or Appreciation Rights will be
exercisable during the Participant's lifetime only by the Participant or by the
Participant's guardian or legal representative.
13. Adjustments. The Board may make or provide for such adjustments in the
maximum number of shares specified in Paragraph 3, in the numbers of shares of
Common Stock covered by outstanding Director Options, Option Rights,
Appreciation Rights and Phantom Shares granted hereunder, in the Option Price or
Grant Price applicable to any such Director Options, Option Rights and
Appreciation Rights, and/or in the kind of shares covered thereby (including
shares of another issuer), as the Board, in its sole discretion exercised in
good faith, may determine is equitably required to prevent dilution or
enlargement of the rights of Participants that otherwise would result from any
stock dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Company, merger, consolidation,
reorganization, partial or complete liquidation, issuance of rights or warrants
to purchase securities or any other corporation transaction or event having an
effect similar to any of the foregoing.
14. Fractional Shares. The Company will not be required to issue any
fractional share of Common Stock pursuant to this Plan. The Committee may
provide for the elimination of fractions for the settlement of fractions in
cash.
15. Withholding of Taxes. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any grant or
payment made to a Participant or any other person under this Plan, or is
requested by a Participant to withhold additional amounts with respect to such
taxes, and the amounts available to the Company for such withholding are
insufficient, it will be a condition to the receipt of such grant or payment
that the Participant or such other person make arrangements satisfactory to the
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Company for the payment of balance of the such taxes required or requested to be
withheld, which arrangements in the discretion the Committee may include
relinquishment of a portion of such Award or payment. With respect to any
Participant who is subject to Rule 16b-3 at the time withholding is required
with respect to an Award payable in Common Stock, the Company shall
automatically withhold from such Award, to the extent such withholding is not
satisfied by a tandem Cash Tax Right, if any, a number of shares of Common Stock
having an aggregate Market Value per Share equal to the amount of taxes required
to be withheld.
16. Parachute Tax Gross-Up. To the extent that the acceleration of vesting
or any payment, distribution or issuance made to a Participant under the Plan (a
"Benefit") is subject to a golden parachute excise tax under Section 4999(a) of
the Code (a "Parachute Tax"), the Company shall pay such Participant an amount
of cash (the "Gross-up Amount") such that the "net" Benefit received by the
Participant under this Plan, after paying all applicable Parachute Taxes
(including those on the Gross-up Amount) and any federal or state income taxes
on the Gross-up Amount, shall be equal to the Benefit that such Participant
would have received if such Parachute Tax had not been applicable.
17. Administration of the Plan. (a) This Plan will be administered by the
Committee, which at all times will consist entirely of not less than three
directors appointed by the Board, each of whom will be a "disinterested person"
within the meaning Rule 16b-3 and an "outside director" within the meaning of
Section 162(m) of the Code. A majority of the Committee will constitute a
quorum, and the action of the members the Committee present at any meeting at
which a quorum is present, or acts unanimously approved writing, will be the
acts of the Committee.
(b) The interpretation and construction by the Committee of any provision
of this Plan or of any agreement, notification or document evidencing the grant
of an Award and any determination by the Committee pursuant to any provision of
this Plan or of any such agreement, notification or documentation will be final
and conclusive. No member of the Committee will be liable for any such action or
determination made in good faith or in the absence of gross negligence or
willful misconduct on the part of such member.
18. Amendments, Etc. (a) This Plan may be amended from time to time by the
Board but may not be amended by the Board without further approval by the
stockholders of the Company if such amendment would result in this Plan no
longer satisfying the requirements of Rule 16b-3; provided, however, that the
provisions of Paragraph 11 may not be amended more than once every six months
other than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
(b) The Committee may, in its sole discretion, take any action it deems to
be equitable under the circumstances or in the best interests of the Company
with respect to any Award (other than a Director Option), unless such Award is
intended to qualify as "performance based" compensation under Section 162(m) of
the Code and such action would cause the Award to fail to so qualify.
(c) This Plan will not confer upon any Participant any right with respect
to continuance of employment or other service with the Company or any
Subsidiary, nor will it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate such Participant's employment or
other service at any time.
19. Term. This Plan shall be effective as of December 1, 1994, subject to
approval by the Company's stockholders; provided, however, no Award shall be
exercisable or payable prior to the date of such stockholders' approval. In the
event that this Plan is not approved by the stockholders of the Company within
twelve months after the date of its adoption by the Board, this Plan and all
Awards made under this Plan shall be automatically null and void. Unless sooner
terminated, this Plan shall terminate on November 30, 2004, and no further
Awards shall be made, but all outstanding Awards on such date shall remain
effective in accordance with their terms and the terms of this Plan.