[Exhibit 10(a)(18)]
COMPOSITE COPY
AS OF 11/15/94
VANGUARD CELLULAR SYSTEMS, INC.
1994 Long-Term Incentive Plan
VANGUARD CELLULAR SYSTEMS, INC.
1994 Long-Term Incentive Plan
Table of Contents
Page
ARTICLE 1. PURPOSE
1.1 Purpose 1
1.2 Grant of Awards 1
ARTICLE 2. DEFINITIONS
2.1 Award 1
2.2 Board 1
2.3 Code 1
2.4 Committee 1
2.5 Disinterested Person 1
2.6 Fair Market Value 1
2.7 Grantee 2
2.8 Incentive Stock Option 2
2.9 Nontandem Stock Appreciation Right 2
2.10 Nonqualified Stock Option 2
2.11 Performance-based Compensation Award 2
2.12 Performance Shares 2
2.13 Restricted Stock 2
2.14 Stock 2
2.15 Stock Appreciation Right 2
2.16 Stock Option 2
2.17 Subsidiary 3
2.18 Tandem Stock Appreciation Right 3
2.19 Unrestricted Stock 3
ARTICLE 3. ADMINISTRATION
3.1 Committee 3
3.2 Authority of Committee 3
3.3 Liability; Indemnification 3
ARTICLE 4. STOCK SUBJECT TO PLAN
4.1 Maximum Number of Shares Subject to Plan 4
4.2 Maximum Number of Shares For Any Individual 4
4.3 Reservation of Shares of Common Stock 4
ARTICLE 5 ELIGIBILITY 5
ARTICLE 6 STOCK OPTIONS
6.1 Grant of Stock Options 5
6.2 Stock Option Terms and Conditions 5
6.3 Purchase Price 5
6.4 Duration of Stock Options 6
6.5 Exercise of Stock Options 6
6.6 Written Notice Required 6
6.7 Maximum Amount of Incentive Stock Options
In Any Calendar Year 7
6.8 Cancellation of Stock Appreciation Rights 7
ARTICLE 7 STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights 7
7.2 Stock Appreciation Rights Terms and Conditions 7
7.3 Tandem Stock Appreciation Rights 7
7.3.1 Award of Tandem Stock Appreciation Rights 7
7.3.2 Limitations on Exercise of Tandem Stock
Appreciation Rights 7
7.3.3 Surrender or Exchange of Tandem Stock
Appreciation Rights 8
7.4 Nontandem Stock Appreciation Rights 8
7.4.1 Award of Nontandem Stock Appreciation Rights 8
7.4.2 Exercise of Nontandem Stock Appreciation Rights 8
7.5 Settlement of Stock Appreciation Rights 9
7.6 Cash Settlement 9
7.7 Written Notice Required 9
ARTICLE 8 UNRESTRICTED STOCK
8.1 Grant of Unrestricted Stock 9
8.2 Delivery of Unrestricted Stock 9
ARTICLE 9 RESTRICTED STOCK
9.1 Grant of Restricted Stock 9
9.2 Restrictions and Conditions 9
9.3 Duration of Awards 10
9.4 Restricted Stock Certificates 10
9.5 Rights of Holders of Restricted Stock 10
9.6 Delivery of Restricted Stock 11
ARTICLE 10 PERFORMANCE SHARES
10.1 Grant of Performance Shares 11
10.2 Terms and Conditions 11
10.3 Cash in Lieu of Stock 11
10.4 Performance Objective Period 12
ARTICLE 11 PERFORMANCE-BASED COMPENSATION AWARDS
11.1 Awards 12
11.2 Performance Goals 12
11.3 Limitations of Shares 12
ARTICLE 12 TERMINATION OF EMPLOYMENT
12.1 Termination of Employment 12
12.2 Disability 13
12.3 Death of Grantee 13
12.4 Termination as Nonemployee Director of
The Company 13
ARTICLE 13 TRANSFER RESTRICTIONS 13
ARTICLE 14 ADJUSTMENTS 14
ARTICLE 15 MISCELLANEOUS PROVISIONS
15.1 Tax Withholding 14
15.2 Termination, Amendment of Plan 14
15.3 Prior Rights and Obligations 15
15.4 Employment 15
15.5 Securities Laws 15
15.6 Compliance with Section 16(b) 15
15.7 Reorganization 16
15.8 Effective Date and Term of Plan 16
VANGUARD CELLULAR SYSTEMS, INC.
1994 LONG-TERM INCENTIVE PLAN
ARTICLE 1
PURPOSE
1.1 Purpose. This Vanguard Cellular Systems, Inc. 1994
Long-Term Incentive Plan (the "Plan") is intended to induce those
persons who are in a position to contribute materially to the success
of Vanguard Cellular Systems, Inc. (the "Company") to remain with the
Company, to offer them rewards in recognition of their contributions
to the Company's progress and to offer them incentives to continue to
promote the best interests of the Company.
1.2 Grant of Awards. In order to maintain flexibility in the
grant of incentive benefits, the Plan allows for the grant of Stock
Options (both Incentive Stock Options and Nonqualified Stock
Options), Stock Appreciation Rights, Unrestricted Stock, Restricted
Stock and Performance Shares.
ARTICLE 2
DEFINITIONS
2.1 "Award" means any grant of Stock Options, Stock Appreciation
Rights, Unrestricted Stock, Restricted Stock or Performance Shares
authorized by the Committee under this Plan.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
2.4 "Committee" means the Committee appointed by the Board
pursuant to Article 3 of the Plan for the purpose of administering
the Plan.
2.5 "Disinterested Person" means a person who is both a
"disinterested person" within the meaning of Rule 16b-3 as
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934 and an "outside director" within the
meaning of Section 162(m) of the Code and the regulations promulgated
thereunder.
2.6 "Fair Market Value" means, as of a given date, the closing
sales price per share of the Company's Stock, as reported on the
national securities exchange on which the Stock is principally traded
on the day preceding the day (or the most recent trading day
preceding the day) on which the stock is to be valued. For purposes
of this section, the term "national securities exchange" shall
include the National Association of Securities Dealers Automated
Quotation System. If at the time the determination of Fair Market
Value is made the Stock is not admitted to trading on a national
securities exchange for which sales prices are regularly reported,
Fair Market Value shall be determined by the Committee on the basis
of such factors as it deems appropriate; provided, however, that Fair
Market Value shall be determined without regard to any restriction
other than a restriction which, by its terms, shall never lapse.
2.7 "Grantee" means a person who receives an Award pursuant to
the Plan.
2.8 "Incentive Stock Option" means any Stock Option designated
as an Incentive Stock Option within the meaning of Section 422 of
Code. Any Stock Option so designated shall be construed to comply
in every respect with Section 422 of the Code.
2.9 "Nontandem Stock Appreciation Right" means any Stock
Appreciation Right granted pursuant to Article 7 of the Plan in a
manner not related to a grant of a Stock Option.
2.10 "Nonqualified Stock Option" means any Stock Option granted
pursuant to the Plan that is not designated as being an Incentive
Stock Option under Section 422 of the Code. Any Stock Option so
designated shall not be subject to Section 422 of the Code.
2.11 "Performance-based Compensation Award" means an Award
described in Article 11 of the Plan.
2.12 "Performance Shares" means shares of Stock that are subject
to an Award pursuant to Article 10 of the Plan.
2.13 "Restricted Stock" means shares of Stock that are issued
to a Grantee subject to restrictions under Article 9 of the Plan.
2.14 "Stock" means the Class A Common Stock, par value $.01 per
share, of the Company or any successor class of stock.
2.15 "Stock Appreciation Right" means the right to receive,
pursuant to an Award granted pursuant to Article 7 of the Plan,
shares of Stock equal in value to the excess, at the time the right
is exercised, of the Fair Market Value of the number of shares
subject to the Award over the Fair Market Value of such shares at the
time the Award was granted. A Stock Appreciation Right may be a
Tandem Stock Appreciation Right or a Nontandem Stock Appreciation
Right.
2.16 "Stock Option" means any Incentive Stock Option or
Nonqualified Stock Option to purchase shares of Stock granted to any
Grantee pursuant to Article 6 of the Plan.
2.17 "Subsidiary" means any person, firm, partnership, limited
liability company or corporation at least 50% of the total combined
voting power of which is owned directly or indirectly by the Company.
2.18 "Tandem Stock Appreciation Right" means any Stock
Appreciation Right granted pursuant to Article 7 of the Plan in
conjunction with all or part of any Stock Option granted under the
Plan pursuant to a Stock Option agreement which states that the
Grantee may, in lieu of exercising the Stock Option, surrender the
Stock Option and receive shares of Stock equal in value to the Stock
Appreciation Right.
2.19 "Unrestricted Stock" means an Award of shares of Stock
pursuant to Article 8 of the Plan.
ARTICLE 3
ADMINISTRATION
3.1 Committee. The Plan shall be administered by a Committee
appointed by the Board consisting of not less than two members, all
of whom must be Disinterested Persons. Any action of the Committee
shall be taken by majority vote at a meeting called in accordance
with procedures adopted by the Committee or by the unanimous written
consent of the Committee.
3.2 Authority of Committee. Subject to the other provisions of
this Plan, and with a view to effecting its purpose, the Committee
shall have sole authority in its absolute discretion: (i) to grant
Awards under the Plan; (ii) to determine the officers, employees and
directors to whom Awards shall be granted under the Plan; (iii) to
determine the number of shares of Stock subject to any Award under
the Plan; (iv) to establish the price, duration, performance measures
and any other term, restriction or condition of an Award under the
Plan; (v) to accelerate the time at which any outstanding Stock
Option or Stock Appreciation Right may be exercised or the time when
restrictions or conditions on any other Awards will lapse; (vi) to
construe and interpret the Plan; (vii) to prescribe, amend, and
rescind rules and regulations relating to the Plan; and (viii) to
make any other determinations necessary or advisable for the
administration of the Plan and to do everything necessary or
appropriate to administer the Plan.
3.3 Liability; Indemnification. No member of the Committee or
the Board shall be liable for any action or determination made in
good faith with respect to the Plan or to any Award granted
thereunder. In addition, directors and members of the Committee
shall be eligible for indemnification from the Company, pursuant to
the Company's Bylaws, with respect to any matter arising under the
Plan.
ARTICLE 4
STOCK SUBJECT TO PLAN
4.1 Maximum Number of Shares Subject to the Plan. The maximum
aggregate number of shares of Stock available pursuant to the Plan,
subject to adjustment as provided in Article 14 hereof, shall be
2,000,000 shares (3,000,000 shares after giving effect to the 50%
stock dividend paid August 24, l994) of the Stock. If any Stock
Option granted pursuant to the Plan expires or terminates for any
reason before it shall have been exercised in full, the unpurchased
shares subject to such expired or terminated Stock Option shall again
be available for the purposes of the Plan, except that any
unpurchased shares that have been subject to a Stock Option in
connection with which a Tandem Stock Appreciation Right has also been
granted shall be reduced by the number of shares issued in connection
with the Tandem Stock Appreciation Right. If any Nontandem Stock
Appreciation Right granted pursuant to the Plan expires or terminates
for any reason before all shares subject thereto have been issued,
the unissued shares associated with such Nontandem Stock Appreciation
Rights shall again be available for the purposes of the Plan. If any
shares issued pursuant to a Restricted Stock Award shall be
forfeited, such shares shall again be available for the purposes of
the Plan. If a Performance Share Award terminates for any reason
before all of the shares associated with such Performance Shares
Award shall have been issued pursuant thereto, such unissued shares
shall again be available for the purposes of the Plan. If any Stock
Appreciation Right or Performance Shares are paid in cash rather than
in shares, in whole or in part, the number of shares of Stock
available under the Plan will be reduced by the number of shares to
which the cash payment relates.
4.2 Maximum Number of Shares For Any Individual.
Notwithstanding any other term or provision of the Plan, the
aggregate number of shares of Stock with respect to which Awards
under the Plan may be granted to any individual shall not exceed
350,000 (525,000 shares after giving effect to the 50% stock dividend
paid August 24, 1994) shares of Stock of the Company. If a Stock
Option is cancelled, terminated or repriced, the cancelled,
terminated or repriced Stock Option shall be counted against the
maximum number of shares for which Awards may be granted to such
Grantee. If cash is paid to a Grantee in settlement of any Stock
Appreciation Right or Performance Shares Award, the number of shares
to which the cash payment relates shall be counted against the
maximum number of shares for which Awards may be granted to such
Grantee.
4.3 Reservation of Shares of Common Stock. The Company, during
the term of this Plan, will at all times reserve and keep available
such number of shares of the Stock as shall be sufficient to satisfy
the requirements of the Plan. In addition, the Company will from
time to time, as is necessary to accomplish the purposes of this
Plan, seek to obtain from any regulatory agency having jurisdiction
any requisite authority in order to issue and sell shares of Stock
hereunder. The inability of the Company to obtain from any
regulatory agency having jurisdiction the authority deemed by the
Company's counsel to be necessary to the lawful issuance and sale of
any shares of the Stock hereunder shall relieve the Company of any
liability in respect of the nonissuance or sale of the Stock as to
which the requisite authority shall not have been obtained.
ARTICLE 5
ELIGIBILITY
Awards under the Plan may be granted to persons identified by the
Committee who are executive or supervisory employees, officers or
directors of the Company or any Subsidiary. Notwithstanding the
foregoing, Incentive Stock Options to purchase shares of Stock may
be granted pursuant to the Plan only to executive or supervisory
employees of the Company or a Subsidiary that is a corporation,
including directors and officers who are also employees of the
Company or a Subsidiary that is a corporation.
ARTICLE 6
STOCK OPTIONS
6.1 Grant of Stock Options. The Committee may cause the Company
to grant Stock Options for the purchase of shares of Stock to
Grantees under the Plan in such amounts as the Committee, in its sole
discretion, shall determine. Such Stock Options may be granted
either alone or in addition to other Awards granted under the Plan.
The Stock Options granted under the Plan shall be designated as
either: (i) Incentive Stock Options or (ii) Nonqualified Stock
Options.
6.2 Stock Option Terms and Conditions. Stock Options granted
under the Plan shall be evidenced by written agreements in such form
as the Committee may from time to time approve. The terms and
conditions of Stock Options granted under the Plan, including the
satisfaction of corporate or individual performance objectives and
other vesting standards, may differ one from another as the Committee
shall, in its discretion, determine, as long as all Stock Options
granted under the Plan satisfy the requirements of the Plan.
6.3 Purchase Price. The purchase price for shares acquired
pursuant to the exercise, in whole or in part, of any Stock Option
shall be determined by the Committee at the time of grant, subject
to the limitations set forth in this Section 6.3. In no event shall
the purchase price of any Stock Option be less than the Fair Market
Value of the shares at the time of the grant of the Stock Option;
except that for any Grantee who owns more than 10% of the combined
voting power of all classes of stock of the Company, the purchase
price of any Incentive Stock Option shall not be less than 110% of
Fair Market Value. The applicable Stock Option agreement may provide
for adjustments to the purchase price, as the Committee shall
determine, provided that the purchase price shall never be less than
the initial purchase (except to the extent such adjustments are
pursuant to Article 14). The purchase price so determined shall also
be applicable in connection with the exercise of any Tandem Stock
Appreciation Right granted with respect to such Stock Option.
6.4 Duration of Stock Options. Each Stock Option and all rights
thereunder granted pursuant to the terms of the Plan shall expire on
the date in the applicable Stock Option agreement, but in no event
shall any Stock Option granted under the Plan expire later than 10
years from the date on which the Stock Option is granted; provided,
however, that any Incentive Stock Option granted to an employee who
owns more than 10% of the combined voting power of all classes of
stock of the Company, may not be exercisable after the date five
years from the date of the Award.
6.5 Exercise of Stock Options. Each Stock Option shall be
exercisable in one or more installments during its term, and the
right to exercise may be cumulative. No Stock Option may be
exercised for a fraction of a share of Stock. Unless otherwise
provided by the applicable Stock Option agreement, the purchase price
of any shares purchased shall be paid in full in cash or by certified
or cashier's check payable to the order of the Company or by shares
of Stock, or by a combination of cash, check, or shares of Stock. If
any portion of the purchase price is paid in shares of Stock, those
shares shall be valued at their Fair Market Value as of the day of
delivery. No Grantee, or Grantee's executor, administrator, legatee,
or distributee, shall be deemed to be a holder of any shares subject
to a Stock Option unless and until a stock certificate or
certificates for such are issued to such Grantee under the terms of
the Plan. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to
the date such stock certificate is issued, except as provided in
Article 14. The exercise of Stock Options under the Plan shall be
subject to the withholding requirements as set forth in Section 15.1.
6.6 Written Notice Required. A Stock Option shall be exercised
when written notice of that exercise, stating the number of shares
of Stock with respect to which the Stock Option is being exercised,
has been given to the Company at its principal office, to the
attention of the General Counsel, by the Grantee and full payment for
the shares with respect to which the Stock Option is exercised has
been received by the Company.
6.7. Maximum Amount of Incentive Stock Options in Any Calendar
Year. The aggregate Fair Market Value (determined as of the time the
option is granted) of the Stock with respect to which Incentive Stock
Options are first exercisable by any Grantee during any calendar year
under the terms of this Plan and all other such plans of the Company
and any parent and Subsidiary shall not exceed $100,000. Any Stock
Option in excess of the foregoing limitation shall be deemed a
Nonqualified Stock Option to the extent of such excess.
6.8 Cancellation of Stock Appreciation Rights. Upon exercise
of all or a portion of a Stock Option, any related Tandem Stock
Appreciation Rights shall be cancelled with respect to an equal
number of shares of Stock.
ARTICLE 7
STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights. The Committee may cause
the Company to grant Stock Appreciation Rights to Grantees under the
Plan in such amounts as the Committee, in its sole discretion, shall
determine. Such Stock Appreciation Rights may be granted either
alone or in addition to other Awards granted under the Plan. The
Stock Appreciation Rights granted under the Plan shall be designated
as either: (i) Tandem Stock Appreciation Rights or (ii) Nontandem
Stock Appreciation Rights.
7.2 Stock Appreciation Rights Terms and Conditions. Stock
Appreciation Rights granted under the Plan shall be evidenced by
written agreements in such form as the Committee may from time to
time approve. The terms and conditions of Stock Appreciation Rights
granted under the Plan, including the satisfaction of corporate or
individual performance objectives and other vesting standards, may
differ one from another as the Committee shall, in its discretion,
determine, as long as all Stock Appreciation Rights granted under the
Plan satisfy the requirements of the Plan.
7.3 Tandem Stock Appreciation Rights.
7.3.1 Award of Tandem Stock Appreciation Rights. Tandem
Stock Appreciation Rights may be granted by the Committee in
connection with any Stock Option granted under the Plan, either
at the time the Stock Option is granted or thereafter at any time
prior to the exercise, termination or expiration of the Stock
Option, except that in the case of an Incentive Stock Option,
such rights may be granted only at the time of the grant of such
Incentive Stock Option.
7.3.2 Limitations on Exercise of Tandem Stock Appreciation
Rights. A Tandem Stock Appreciation Right shall be exercisable
only to the extent that the related Stock Option is exercisable
and shall be exercisable only for such period as the Committee
may determine (which period may expire prior to the expiration
date of the related Stock Option). Upon the exercise of all or
a portion of Tandem Stock Appreciation Rights, the related Stock
Option shall be cancelled with respect to the shares of Stock to
which the exercised portion of the Tandem Stock Appreciation
Rights relates.
7.3.3 Surrender or Exchange of Tandem Stock Appreciation
Rights. A Tandem Stock Appreciation Right shall entitle the
Grantee to surrender to the Company unexercised the related Stock
Option, or any portion thereof, and to receive from the Company
in exchange therefor that number of shares of Stock having an
aggregate Fair Market Value equal to (i) the excess of (A) the
Fair Market Value of one (1) share of Common Stock at the time
the Tandem Stock Appreciation Right is exercised over (B) the
purchase price per share specified in such Stock Option,
multiplied by (ii) the number of shares of Stock subject to the
Stock Option, or portion thereof, which is surrendered. Cash
shall be delivered in lieu of any fractional shares.
7.4 Nontandem Stock Appreciation Rights.
7.4.1 Award of Nontandem Stock Appreciation Rights.
Nontandem Stock Appreciation Rights may be granted by the
Committee in a manner not related to a grant of a Stock Option.
At the time of grant of a Nontandem Stock Appreciation Right, the
Committee shall specify the number of shares of Stock covered by
such right and the base price of shares of Stock to be used in
connection with the calculation described in Section 7.4.2 below.
The base price of a Nontandem Stock Appreciation Right shall be
not less than 100% of the Fair Market Value of a share of Common
Stock on the date of grant. A Nontandem Stock Appreciation Right
shall be exercisable during such period as the Committee shall
determine.
7.4.2 Exercise of Nontandem Stock Appreciation Rights. The
exercise of a Nontandem Stock Appreciation Right shall entitle
the Grantee to receive from the Company that number of shares of
Stock having an aggregate Fair Market Value equal to (i) the
excess of (A) the Fair Market Value of one (1) share of Stock at
the time at which the Nontandem Stock Appreciation Right is
exercised over (B) the base price of the shares covered by the
Nontandem Stock Appreciation Right, multiplied by (ii) the number
of shares of Stock covered by the Nontandem Stock Appreciation
Right, or the portion thereof being exercised. Cash shall be
delivered in lieu of any fractional shares.
7.5 Settlement of Stock Appreciation Rights. As soon as is
reasonably practicable after the exercise of a Stock Appreciation
Right, the Company shall (i) issue, in the name of the Grantee, stock
certificates representing the total number of full shares of Stock to
which the Grantee is entitled pursuant to Section 7.3.3 or Section
7.4.2 hereof and cash in an amount equal to the Fair Market Value, as
of the date of exercise, of any resulting fractional shares, and (ii)
if the Committee causes the Company to elect to settle all or part of
its obligations arising out of the exercise of the Stock Appreciation
Right in cash pursuant to Section 7.6, deliver to the Grantee an
amount in cash equal to the Fair Market Value, as of the date of
exercise, of the shares of Stock it would otherwise be obligated to
deliver. The settlement of any Stock Appreciation Right under the
Plan shall be subject to the withholding requirements as set forth in
Section 15.1.
7.6 Cash Settlement. The Committee, in its discretion, may
cause the Company to settle all or any part of its obligation arising
out of the exercise of a Stock Appreciation Right by the payment of
cash in lieu of all or part of the shares of Stock it would otherwise
be obligated to deliver in an amount equal to the Fair Market Value
of such shares on the date of exercise.
7.7 Written Notice Required. A Stock Appreciation Right shall
be exercised when written notice of that exercise, stating the number
of shares of Stock with respect to which the Stock Appreciation Right
is being exercised, has been given to the Company at its principal
office, to the attention of the General Counsel, by the Grantee.
ARTICLE 8
UNRESTRICTED STOCK
8.1 Grant of Unrestricted Stock. The Committee may cause the
Company to award Unrestricted Stock to persons eligible under the
Plan in such amounts as the Committee, in its sole discretion, shall
determine. Such shares of Stock may be issued either alone or in
addition to other Awards granted under the Plan.
8.2 Delivery of Unrestricted Stock. The Company shall issue,
in the name of each Grantee to whom Unrestricted Stock has been
granted, stock certificates representing the total number shares of
Unrestricted Stock granted to the Grantee and shall deliver such
certificates to the Grantee as soon as reasonably practicable after
the date of the Award. The delivery of Unrestricted Stock under the
Plan shall be subject to the withholding requirements as set forth
in Section 15.1.
ARTICLE 9
RESTRICTED STOCK
9.1 Grant of Restricted Stock. The Committee may cause the
Company to grant Restricted Stock to Grantees under the Plan in such
amounts as the Committee, in its sole discretion, shall determine.
Such shares of Restricted Stock may be issued either alone or in
addition to other Awards granted under the Plan.
9.2 Restrictions and Conditions. Restricted Stock granted
under the Plan shall be evidenced by written agreements in such form
as the Committee may from time to time approve. The restrictions and
conditions imposed on Restricted Stock granted under the Plan,
including the satisfaction of corporate or individual performance
objectives, may differ from one Award to another as the Committee
shall, in its discretion, determine as long as all Awards satisfy the
requirements of the Plan; provided, however, that no grant shall
require any payment of cash consideration by the recipient. Each
Award of Restricted Stock shall be effective as of the date so stated
in the resolution of the Committee making the Award.
9.3 Duration of Awards. The restrictions and conditions imposed
upon any Restricted Stock shall lapse, in whole or in part, as
provided in the agreement pursuant to which the Award is made, but in
no event later than 10 years from the date of the Award.
9.4. Restricted Stock Certificates. Each certificate issued for
shares of Restricted Stock shall be registered in the name of the
Grantee and shall be deposited by him or her with the Company, to the
attention of the General Counsel, together with a stock power
endorsed in blank. The shares shall be subject to restrictions as
to transferability as provided in Article 13 and to such other
restrictions and conditions as may be imposed by the Committee at the
time of making the Award (the "restrictions and conditions"), which
shall be referenced by a conspicuous legend on the reverse side of
the stock certificate representing the shares.
9.5 Rights of Holders of Restricted Stock. Subject to the
restrictions and conditions, the Grantee shall be the owner of the
Restricted Stock and shall have all of the rights of a shareholder,
including, but not limited to, the right to receive all dividends
paid on the Restricted Stock and the right to vote the shares. In
the event there is a change in the Stock as described in Article 14,
any shares or other securities issued with respect to shares subject
to restrictions and conditions under the Plan shall be subject to the
same restrictions and conditions, and the certificates therefor,
together with a stock power endorsed in blank, shall be delivered to
the Company, to the attention of the General Counsel.
9.6 Delivery of Restricted Stock. Following the lapse of the
restrictions and conditions imposed on any Restricted Stock, the
certificate or certificates evidencing such shares shall be reissued
by the Company in the name of the Grantee without legend (except to
the extent that a legend may be necessary for compliance with
applicable securities laws) and shall be delivered to the Grantee.
The delivery of Restricted Stock under the Plan shall be subject to
the withholding requirements as set forth in Section 15.1.
ARTICLE 10
PERFORMANCE SHARES
10.1 Grant of Performance Shares. The Committee may cause the
Company to grant Performance Shares to Grantees under the Plan in
such amounts as the Committee, in its sole discretion, shall
determine. Such Performance Shares may be issued either alone or in
addition to other Awards under the Plan. Each Performance Share
grant shall confer upon the Grantee the right to receive a specified
number of shares of Stock contingent upon the achievement of
specified corporate or individual performance objectives within a
specified period.
10.2 Terms and Conditions. Performance Shares granted under
the Plan shall be evidenced by written agreements in such form as the
Committee may from time to time approve. The Committee shall specify
the performance objectives and the period of duration of the
Performance Shares Award at the time that such Award is granted. Any
Performance Share Award granted under this Plan shall constitute an
unfunded promise to issue shares of Stock to the Grantee in the
future upon the completion of specified conditions. No Grantee shall
be deemed to be a holder of any Shares subject to a Performance
Shares Award unless and until a stock certificate or certificates for
such are issued to such Grantee under the terms of the Plan. No
adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or
other rights for which the record date is prior to the date stock
certificates are issued pursuant to any Performance Shares Award,
except as provided in Article 14. The settlement of any Performance
Shares Award shall be subject to the withholding requirements as set
forth in Section 15.1.
10.3 Cash in Lieu of Stock. In lieu of some or all of the
shares earned by achievement of the specified performance objectives
within the specified period, the Committee may distribute cash in an
amount equal to the Fair Market Value of the Stock at the time that
the performance objective is achieved within the specified period
multiplied by the number of Performance Shares.
10.4 Performance Objective Period. The duration of the period
within which to achieve the performance objectives is to be
determined by the Committee, but in no event shall the duration be
later than ten years from the date of the Award.
ARTICLE 11
PERFORMANCE-BASED COMPENSATION AWARDS
11.1 Awards. All Stock Options and Stock Appreciation Rights
granted to key executive and supervisory employees under the Plan are
Performance-based Compensation Awards because they are required by
the terms of the Plan to have an exercise price that is not less than
Fair Market Value at the time of the Award. Restricted Stock and
Performance Shares awarded to key executive and supervisory employees
are also Performance-based Compensation Awards under this Article if
granted subject to a written agreement between the Company and the
Grantee setting forth one or more objective performance goals based
on the criteria set forth in Section 11.2 that are required to be met
in order for an Award to vest in the Grantee. The performance goals
must be established in writing by the Committee prior to the
employee's performance of the relevant services and while the outcome
under the goal or goals is substantially uncertain.
11.2 Performance Goals. The performance goals established
by the Committee with respect to a specific Performance-based
Compensation Award must be based on one or more of the following
criteria: net gains in the number of Company subscribers; achieving
targeted revenues per subscriber; achieving targeted marketing costs
per net new subscriber; increases in service revenue; control of
operating expenses; increases in operating cash flow; increases in
operating income; reduction in net loss; and achieving and increasing
net income.
11.3 Limitations of Shares. The maximum number of shares
that may be subject to Awards under the Plan contained in Section 4.1
and the maximum number of shares for any individual contained in
Section 4.2 include Performance-based Compensation Awards.
ARTICLE 12
TERMINATION OF EMPLOYMENT
12.1 Termination of Employment. If a Grantee ceases to be
employed by the Company or a Subsidiary for any reason other than
death or disability, any Award granted to such Grantee that is
unexercised or still subject to any restrictions or conditions shall
be terminated or forfeited, unless otherwise provided in the
applicable Award agreement.
12.2 Disability. If a Grantee becomes disabled within the
meaning of Section 22(e)(3) of the Code while employed by the
Company, or a Subsidiary, any Stock Option or Stock Appreciation
Right granted to such Grantee shall expire one year after the date
of termination of employment due to disability, unless a longer or
shorter period of exercise is provided in the applicable Award
agreement. Any Restricted Stock or Performance Shares granted to
such Grantee shall be terminated or forfeited, unless otherwise
provided in the applicable Award agreement.
12.3 Death of Grantee. If a Grantee dies while employed by the
Company, or a Subsidiary, any Stock Option or Stock Appreciation
Right granted to such Grantee shall expire one year after the date
of death, unless a longer or shorter period of exercise is provided
in the applicable Award agreement. During the exercise period after
death, the Stock Option or Stock Appreciation Right may be exercised,
to the extent provided in the applicable Award agreement, by the
person or persons to whom the Grantee's rights under the Award Right
shall pass by will or by the laws of descent and distribution but in
no event may the Stock Option or Stock Appreciation Right be
exercisable more than ten years from the date of grant. Any
Restricted Stock or Performance Shares granted to such Grantee shall
be terminated or forfeited, unless otherwise provided in the
applicable Award agreement.
12.4 Termination as Nonemployee Director of the Company. If a
nonemployee director ceases to serve the Company in that capacity,
the Grantee's rights upon such termination shall be governed in the
manner of an Grantee's rights upon termination of employment as set
forth above.
ARTICLE 13
TRANSFER RESTRICTIONS
Stock Options and Stock Appreciation Rights that have not been
exercised by the Grantee and Restricted Stock and Performance Shares
that are subject to restrictions and conditions shall not be subject
in any manner to alienation, sale, transfer, assignment, pledge,
attachment or encumbrance of any kind. Any attempt to alienate,
sell, transfer, assign, pledge or otherwise encumber any such Awards
shall be void, except for a transfer by will or by the laws of
descent and distribution. Notwithstanding the foregoing, the
Committee may grant Nonqualified Stock Options that are transferable,
without payment of consideration, to immediate family members of the
Grantee or to trusts or partnerships of such family members, or, to
the extent such transfers may be made in compliance with Rule 16b-3
and applicable tax laws, limited liability companies of such family
members. For purposes of this Article 13, the phrase "immediate
family member" shall mean spouse, children or grandchildren of the
Grantee.
ARTICLE 14
ADJUSTMENTS
If the shares of Stock of the Company are increased, decreased,
changed into, or exchanged for a different number or kind of shares
or securities through merger, consolidation, combination, exchange
of shares, other reorganization, recapitalization, reclassification,
stock dividend, stock split or reverse stock split in which the
Company is the surviving entity, an appropriate and proportionate
adjustment shall be made in the maximum number and kind of shares as
to which Awards may be granted under this Plan. A corresponding
adjustment changing the number or kind of shares allocated to
unexercised or unvested Awards, or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Any
such adjustment in outstanding Awards shall be made without change in
the aggregate purchase price applicable to the unexercised portion of
any such Award, but with a corresponding adjustment in the price for
each share or other unit of any security covered by the Award. In
making any adjustment pursuant to this Article 14, any fractional
shares shall be disregarded.
ARTICLE 15
MISCELLANEOUS PROVISIONS
15.1 Tax Withholding. With respect to any Award under the Plan,
the Company shall have the right to require Grantees or their
beneficiaries or legal representatives to remit to the
Company an amount sufficient to satisfy federal, state and local
withholding requirements, or to deduct from all payments under the
Plan amounts sufficient to satisfy all withholding tax requirements.
Within the discretion of the Committee, the Company may withhold the
tax required to be withheld from any other cash compensation then or
thereafter payable to the Grantee, or, if deemed necessary by the
Company, the Company may sell or withhold a portion of shares of Stock
to be delivered to the Grantee pursuant to the Plan to provide
sufficient funds for withholding tax and delivery of the proceeds to
the Company.
15.2 Termination, Amendment of Plan. The Board may at any time
terminate, amend or revise the terms of the Plan; provided that no
amendment or revision shall, without the approval of the Company's
shareholders, (i) increase the maximum aggregate number of shares that
may be sold or distributed pursuant to Awards granted under this Plan,
except as permitted under Article 13; (ii) change the minimum purchase
price for shares of Stock that may be received by exercise of Stock
Option or Stock Appreciation Right under the Plan; (iii) increase the
maximum duration established under the Plan for any Award; or
(iv) permit the granting of an Award to anyone other than specified in
Article 5.
15.3 Prior Rights and Obligations. No amendment, suspension, or
termination of the Plan shall, without the consent of the Grantee or
other person who has received an Award, alter or impair any of that
Grantee's rights or obligations under any Award granted under the Plan
prior to such amendment, suspension, or termination.
15.4 Employment. Nothing in the Plan or in any Award shall
confer upon any eligible employee any right to continued employment
by the Company, or a Subsidiary, or limit in any way the right of the
Company or a Subsidiary at any time to terminate or alter the terms
of that employment.
15.5 Securities Laws. Shares of Stock issuable pursuant to this
Plan may, at the option of the Company, be registered under applicable
federal and state securities laws, but the Company shall have no
obligation to undertake such registrations and may, in lieu thereof,
issue shares hereunder only pursuant to applicable exemptions from
such registrations. In the event that no such registrations are
undertaken, the shares shall be issued only to persons who qualify to
receive such shares in accordance with the exemption from registration
on which the Company relies. In connection with any Award of shares
or the reissuance of certificates under the Plan, the Committee may
require appropriate representations from the recipient of such shares
and take such other action as the Committee may deem necessary,
including but not limited to placing restrictive legends on
certificates evidencing such shares and placing stop transfer
instructions in the Company's stock transfer records, or delivering
such instructions to the Company's transfer agent, in order to assure
compliance with any such exemptions. Notwithstanding any other
provision of the Plan, no shares will be issued pursuant to the Plan
unless such shares have been registered under all applicable federal
and state securities laws or unless, in the opinion of counsel
satisfactory to the Company, exemptions from such registrations are
available.
15.6 Compliance with Section 16(b). In the case of Grantees who
are or may be subject to Section 16 of the Securities Exchange Act of
1934, it is the intent of the Company that the Plan and any Award
granted hereunder satisfy and be interpreted in a manner that
satisfies the applicable requirements of Rule 16b-3, so that such
Grantees will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 and will not be subjected to
liability thereunder. Accordingly, any Awards to such Grantee shall
be subject to the following conditions: (i) Stock or Stock
Appreciation Rights acquired pursuant to the Plan must be held at
least six months from the date the Award is granted, and (ii) an
election to receive cash in full or partial settlement of a Stock
Appreciation Right must be made during the period beginning on the
third business day following the Company's release of its quarterly
or annual summary statements of earnings to the public and ending on
the twelfth business day following such date (provided however, this
condition shall not apply to any exercise of a Stock Appreciation
Right for cash where the date of exercise is automatic or fixed in
advance under the Plan and is outside the control of the Grantee). If
any provision of the Plan or any Award would otherwise conflict with
the intent expressed herein, that provision, to the extent possible,
shall be interpreted and deemed amended so as to avoid such conflict.
To the extent of any remaining irreconcilable conflict with such
intent, such provision shall be deemed void as applicable to Grantees
who are or may be subject to Section 16.
15.7 Reorganization. Except as otherwise provided in the
applicable Award agreement, in the event of a consolidation or a
merger in which the Company is not the surviving corporation, or any
other merger in which the shareholders of the Company exchange their
shares of Stock in the Company for stock of another corporation, or
in the event of complete liquidation of the Company, or in the case
of a tender offer approved, all Awards that are unexercised or still
subject to any restrictions and conditions shall thereupon be
terminated or forfeited, provided that the Board may, prior to the
effective date of any such transaction, either (i) make all such Award
immediately vested or exercisable or (ii) arrange to have the
surviving corporation grant to the Grantees replacement Award on terms
which the Board shall determine to be fair and reasonable.
15.8 Effective Date and Term of Plan. The effective date of this
Plan is March 25, 1994; provided, however, that no Award granted
hereunder may be exercised or become vested unless and until the Plan
is approved by the shareholders of the Company. No Awards may be
granted under the Plan after March 24, 2004.