360 COMMUNICATIONS COMPANY
1996 EQUITY INCENTIVE PLAN
(As amended and restated effective as of December 10, 1996)
TABLE OF CONTENTS
1. Purpose. ............................................................... 1
2. Definitions............................................................. 1
3. Scope of the Plan....................................................... 6
4. Administration.......................................................... 6
5. Eligibility............................................................. 8
6. Conditions to Grants.................................................... 8
7. Non-transferability..................................................... 14
8. Exercise ............................................................... 14
9. Loans and Guarantees.................................................... 17
10. Notification under Section 83(b)....................................... 18
11. Mandatory Tax Withholding.............................................. 18
12. Elective Share Withholding............................................. 18
13. Termination of Employment.............................................. 19
14. Plans of Foreign Subsidiaries.......................................... 22
15. Substituted Awards..................................................... 22
16. Securities Law Matters................................................. 23
17. No Employment Rights................................................... 23
18. No Rights as a Stockholder............................................. 23
19. Nature of Payments..................................................... 23
20. Non-uniform Determinations............................................. 23
21. Adjustments............................................................ 24
22. Amendment of the Plan.................................................. 24
23. Termination of the Plan................................................ 25
24. No Illegal Transactions................................................ 25
25. Controlling Law........................................................ 25
26. Severability........................................................... 25
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Introduction. The 360 Communications Company Equity Incentive Plan (the
"Plan"), as established by 360 Communications Company, a Delaware corporation
(the "Company"), effective as of March 7, 1996, as amended and restated
effective April 9, 1996, is hereby further amended and restated as set forth
below, effective as of December 10, 1996.
1. Purpose. The Plan is intended to allow employees to acquire or
increase equity ownership in the Company, thereby strengthening their commitment
to the success of the Company and stimulating their efforts on behalf of the
Company, and to assist the Company in attracting new employees and retaining
existing employees.
2. Definitions.
The terms set forth below have the following meanings (such meanings to
be applicable to both the singular and plural forms):
(a) "Award" means options, including incentive stock options and reload
options, Restricted Shares, Bonus Shares, stock appreciation rights (SARs),
LSARs, or performance shares granted under the Plan.
(b) "Award Agreement" means the written agreement by which an Award
shall be evidenced.
(c) "Board" means the Board of Directors of the Company.
(d) "Bonus Shares" means Shares that are awarded to a Grantee without
cost and without restrictions in recognition of past performance (whether
determined by reference to another employee benefit plan of the Company or
otherwise) or as an incentive to become an employee of the Company or a
Subsidiary.
(e) "Cause" means (I) before the occurrence of a Change of Control, any
one or more of the following, as determined by the Committee (in the case of a
Section 16 Grantee) or the Vice President, Human Resources of the Company (in
the case of any other Grantee):
(A) a Grantee's commission of a crime which is likely to result
in injury to the Company or a Subsidiary;
(B) the material violation by the Grantee of written policies of
the Company or a Subsidiary;
(C) the habitual neglect by the Grantee in the performance of his
or her duties to the Company or a Subsidiary; or
(D) the action or inaction in connection with his or her duties
to the Company or a Subsidiary resulting in a material injury to the
Company or a Subsidiary; and
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(ii) from and after the occurrence of a Change of Control, the
occurrence of any one or more of the following, as determined in the good faith
and reasonable judgment of the Committee (in the case of a Section 16 Grantee)
or the Vice President, Human Resources of the Company (in the case of any other
Grantee):
(A) Grantee's conviction for committing an act of fraud,
embezzlement, theft, or any other act constituting a felony involving
moral turpitude or causing material harm, financial or otherwise, to the
Company,
(B) a demonstrably willful and deliberate act or failure to act
which is committed in bad faith, without reasonable belief that such
action or inaction is in the best interests of the Company, which causes
material harm, financial or otherwise, to the Company (but only if such
act or inaction is not remedied within 15 business days of Grantee's
receipt of written notice from the Company which describes the act or
inaction in reasonable detail), or
(C) the consistent gross neglect of duties, or wanton negligence
by the Grantee in the performance of the Grantee's duties.
(f) "Change of Control" means any one or more of the following:
(i) the acquisition or holding by any person, entity or "group"
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), other than
by the Company or any Subsidiary or any employee benefit plan of the Company or
a Subsidiary, of beneficial ownership (within the meaning of Rule 13d-3 under
the 1934 Act) of 30% or more of the then-outstanding Common Stock or the
then-outstanding Voting Power of the Company; provided, however, that no Change
of Control shall occur solely by reason of any such acquisition by a corporation
with respect to which, after such acquisition, more than 60% of both the
then-outstanding common shares and the then-outstanding Voting Power of such
corporation are then-beneficially owned, directly or indirectly, by the persons
who were the beneficial owners of the Common Stock immediately before such
acquisition, in substantially the same proportions as their respective
ownership, immediately before such acquisition, of the then-outstanding Common
Stock and Voting Power of the Company; or
(ii) individuals who, as of the Effective Date, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided that any individual who becomes a director after
the Effective Date whose election or nomination for election by the Company's
stockholders was approved by at least a majority of the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company (as such terms are used in Rule
14a-11 under the 1934 Act)) shall be deemed to be a member of the Incumbent
Board; or
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(iii) approval by the stockholders of the Company of any one or
more of the following:
(A) a merger, reorganization or consolidation (an
"Extraordinary Transaction") with respect to which persons who were the
respective beneficial owners of the Common Stock immediately before such
Extraordinary Transaction would not, if such Extraordinary Transaction were to
be consummated immediately after such stockholder approval (but otherwise in
accordance with the terms presented in writing to the stockholders of the
Company for their approval), beneficially own, directly or indirectly, more than
60% of both the then-outstanding common shares and the then-outstanding Voting
Power of the corporation resulting from such Extraordinary Transaction, in
substantially the same proportions as their respective ownership, immediately
before such Extraordinary Transaction, of the then-outstanding Common Stock and
Voting Power of the Company,
(B) a liquidation or dissolution of the Company or
(C) the sale or other disposition of all or substantially
all of the assets of the Company in one transaction or a series of related
transactions.
Notwithstanding the foregoing, a Change in Control will not occur with respect
to any person who is, by agreement or understanding (written or otherwise), a
participant on such person's own behalf in a transaction which causes the Change
in Control to occur.
(g) "Change of Control Value" means the Fair Market Value of a Share on
the date of a Change of Control.
(h) "Code" means the Internal Revenue Code of 1986, as amended, and
regulations and rulings thereunder. References to a particular section of the
Code include references to successor provisions.
(i) "Committee" means the committee of the Board appointed pursuant to
Section 4(a).
(j) "Common Stock" means the common stock, $.01 par value, of the
Company.
(k) "Company" -- see the introductory paragraph.
(l) "Disability" means a mental or physical condition which qualifies
for benefits under the 360 Communications Company Basic Long-Term Disability
Plan and results in a duration of at least 24 months of continuous disability.
For purposes of this Plan, the Disability shall be deemed to have been incurred
at the end of such 24-month period.
(m) "Disqualifying Disposition" -- see Section 6(c)(vi);
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(n) "Effective Date" means March 7, 1996;
(o) "Eligible Employee" means any employee (including any officer) of
the Company or any Subsidiary, including any such employee who is on an approved
leave of absence or layoff, or has been subject to a disability which does not
qualify as a Disability;
(p) "Extraordinary Transaction" -- see Section 2(f)(iii).
(q) "Fair Market Value" of an equity security as of any date means the
average of the high and low sales price of such security on such date (or, if no
sale of such security was reported for such date, on the next preceding date on
which a sale of such security was reported) as reported in the principal
consolidated transaction reporting system for the New York Stock Exchange (or,
if such security is not listed on the New York Stock Exchange, on such other
national exchange or the over-the-counter market on which such security is
principally traded); provided that if such Fair Market Value as of any date
cannot be so determined, such Fair Market Value shall be determined by the
Committee by whatever means or method as it, in the good faith exercise of its
discretion, shall at such time deem appropriate.
(r) "Good Reason" means shall mean the occurrence after a Change of
Control, without a Grantee's prior written consent, of any one or more of the
following:
(I) the assignment to the Grantee of any duties which result in a
material adverse change in the Grantee's position (including status,
offices, titles, and reporting require ments), authority, duties, or
other responsibilities with the Company, or any other action of the
Company which results in a material adverse change in such position,
authority, duties, or responsibilities, other than an insubstantial and
inadvertent action which is remedied by the Company promptly after
receipt of notice thereof given by the Grantee,
(ii) any relocation of the Grantee of more than 35 miles from the
place where the Grantee was located at the time of the Change in
Control, or
(iii) a material reduction or elimination of any component of the
Grantee's rate of compensation, including (x) base salary, (y) the
annual incentive payment or (z) benefits or perquisites which the
Grantee was receiving immediately prior to a Change in Control.
(s) "Grant Date" -- see Section 6(a)(i).
(t) "Grantee" means an individual who has been granted an Award.
(u) "Immediate Family" means, with respect to a particular Grantee, such
Grantee's spouse, children and grandchildren.
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(v) "including" or "includes" means "including, without limitation," or
"includes, without limitation", respectively.
(w) "LSAR" means a limited stock appreciation right.
(x) "Mature Shares" means Shares for which the holder thereof has good
title, free and clear of all liens and encumbrances, and which such holder
either (I) has held for at least six months or (ii) has purchased on the open
market.
(y) "Minimum Consideration" means $.01 per Share or such other amount
that is from time to time considered to be capital for purposes of Section 154
of the Delaware General Corporation Law.
(z) "1934 Act" means the Securities Exchange Act of 1934. References to
a particular section of, or rule under, the 1934 Act include references to
successor provisions.
(aa) "Option Price" means the per share exercise price of an option.
(bb) "Option Term" means the period beginning on the Grant Date of an
option and ending on the expiration date of such option, as specified in the
Award Agreement for such option and as may, in the discretion of the Committee
and consistently with the provisions of the Plan, be extended from time to time
prior to the expiration date of such stock option then in effect.
(cc) "Performance Percentage" -- see Section 6(g)(i)(C).
(dd) "Performance Period" -- see Section 6(g)(i)(B).
(ee) "Plan" -- see the introductory paragraph.
(ff) "Reload Option" -- see Section 6(d).
(gg) "Required Withholding" -- see Section 11(a);
(hh) "Restricted Shares" means Shares that are that are subject to
forfeiture if the Grantee does not satisfy the conditions specified in the Award
Agreement applicable to such Shares.
(ii) "Rule 16b-3" means Rule 16b-3 of the SEC under the 1934 Act, as
amended from time to time, together with any successor rule.
(jj) "Retirement" means a termination of employment by a Grantee upon
attaining either (I) age 55 with 10 years of service as an employee of the
Company or a Subsidiary or (ii) age 65 with at least five years of service as an
employee of the Company or a Subsidiary.
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(kk) "SAR" means stock appreciation right.
(ll) "SEC" means the Securities and Exchange Commission.
(mm) "Section 16 Person" means a person who is subject to potential
liability under Section 16(b) of the 1934 Act with respect to transactions
involving equity securities of the Company.
(nn) "Share" means a share of Common Stock.
(oo) "Strike Price" -- see Section 6(e)(ii).
(pp) "Subsidiary" means, for purposes of grants of incentive stock
options, a corporation as defined in Section 424(f) of the Code (with the
Company being treated as the employer corporation for purposes of this
definition) and, for all other purposes, a United States or foreign corporation
with respect to which the Company owns, directly or indirectly, 50% or more of
the then-outstanding common stock.
(qq) "10% Owner" means a person who owns capital stock (including stock
treated as owned under Section 424(d) of the Code) possessing more than 10% of
the total combined voting power of all classes of capital stock of the Company
or any Subsidiary.
(rr) "Voting Power" means the combined voting power of the
then-outstanding securities of a corporation entitled to vote generally in the
election of directors
3. Scope of the Plan. Subject to adjustment as provided in Section 21,
the total number of Shares available for grant under the Plan in each calendar
year for which the Plan is in effect shall be one percent (1.0%) of the total
outstanding Shares as of the first day of such year; provided that such number
shall be increased in any year by the number of Shares available for grant
hereunder in previous years but not covered by Awards granted hereunder in such
years; and provided further, that, subject to adjustment as provided in Section
21), (I) no more than 1,500,000 Shares shall be cumulatively available for the
grant of Incentive Stock Options under the Plan and (ii) the number of Shares
for which Awards may be granted to any Grantee in any calendar year shall not
exceed 500,000.
If any Shares subject to any Award granted hereunder are forfeited or
such Award otherwise terminates without the issuance of such Shares or of other
consideration in lieu of such Shares, the Shares subject to such Award, to the
extent of any such forfeiture or termination, shall again be available for grant
under the Plan. If any outstanding Incentive Stock Options under the Plan for
any reason expire or are terminated, the Shares allocable to the unexercised
portion of all of such Incentive Stock Options may again be subject to an
Incentive Stock Option under the Plan. Shares awarded under the Plan may be
treasury shares or newly-issued shares.
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4. Administration.
(a) Subject to Section 4(b), the Plan shall be administered by a
committee (the "Committee") which shall consist of two or more directors of the
Company, all of whom qualify as "outside directors" as defined for purposes of
the regulations under Code Section 162(m) and satisfy one of the conditions of
Rule 16b-3 in respect of the exemption of grants to Section 16 Persons from
potential liability under Section 16(b) of the 1934 Act. The number of members
of the Committee shall from time to time be increased or decreased, and shall be
subject to such conditions, in each case as the Board deems appropriate to
permit transactions in Shares pursuant to the Plan to satisfy such conditions of
Rule 16b-3 and Section 162(m) as then in effect.
(b) The Board may reserve to itself or delegate to another committee of
the Board any or all of the authority of the Committee with respect to Awards
except, in the case of such other committee, with respect to Awards to Grantees
who are Section 16 Persons at the time any such delegated authority is
exercised. Such other committee (the "Management Committee") may consist of one
(or such greater number as may from time to time be required by the bylaws of
the Company) or more directors who may, but need not be, officers or employees
of the Company or a Subsidiary. To the extent that the Board has reserved to
itself or delegated to such Management Committee the authority of the Committee,
all references to the Committee in the Plan shall be to the Board or such
Management Committee. The Management Committee may not grant Awards relating to
an aggregate of more than 50,000 Shares in any calendar year unless the Board
gives its prior approval of a larger number of Shares.
(c) Subject to the express provisions of the Plan, the Committee has
full and final authority and sole discretion as follows:
(i) to determine when and to whom Awards should be granted and
the terms and conditions applicable to each Award, including the benefit payable
under any SAR or performance share, and whether or not specific Awards shall be
identified with other specific Awards, and if so whether they shall be
exercisable cumulatively with, or alternatively to, such other specific Awards;;
(ii) to determine the amount, if any, that a Grantee shall pay
for Restricted Shares, whether to permit or require the payment of cash
dividends thereon to be deferred and the terms related thereto, when Restricted
Shares (including Restricted Shares acquired upon the exercise of an option)
shall be forfeited and whether such shares shall be held in escrow;
(iii) to interpret the Plan and to make all determinations
necessary or advisable for the administration of the Plan;
(iv) to make, amend, and rescind rules relating to the Plan,
including rules with respect to the exercisability and nonforfeitability of
Awards upon the termination of employment of a Grantee;
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(v) to determine the terms and conditions of all Award Agreements
(which need not be identical) and, with the consent of the Grantee, to amend any
such Award Agreement at any time, among other things, to permit transfers of
such Awards to the extent permitted by the Plan; provided that the consent of
the Grantee shall not be required for any amendment which (A) does not adversely
affect the rights of the Grantee, or (B) is necessary or advisable (as
determined by the Committee) to carry out the purpose of the Award as a result
of any new or change in existing applicable law;
(vi) to cancel, with the consent of the Grantee, outstanding
Awards and to grant new Awards in substitution therefor;
(vii) to accelerate the exercisability (including exercisability
within a period of less than one year after the Grant Date) of, and to
accelerate or waive any or all of the terms and conditions applicable to, any
Award or any group of Awards for any reason and at any time, including in
connection with a termination of employment (other than for Cause);
(viii) subject to Section 6(a)(ii) and 6(c)(ii), to extend the
time during which any Award or group of Awards may be exercised;
(ix) to make such adjustments or modifications to Awards to
Grantees working outside the United States as are advisable to fulfill the
purposes of the Plan;
(x) to impose such additional terms and conditions upon the
grant, exercise or retention of Awards as the Committee may, before or
concurrently with the grant thereof, deem appropriate, including limiting the
percentage of Awards which may from time to time be exercised by a Grantee; and
(xi) to take any other action with respect to any matters
relating to the Plan for which it is responsible.
The determination of the Committee on all matters relating to the Plan
or any Award Agreement shall be final. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any Award.
5. Eligibility. The Committee may in its discretion grant Awards to any
Eligible Employee, whether or not he or she has previously received an Award.
6. Conditions to Grants.
(a) General Conditions.
(i) The Grant Date of an Award shall be the date on which the
Committee grants the Award or such later date as specified in advance by the
Committee.
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(ii) Any provision of the Plan to the contrary notwithstanding,
the Option Term shall under no circumstances extend more than 10 years after the
Grant Date, and shall be subject to earlier termination as herein provided.
(iii) To the extent not set forth in the Plan, the terms and
conditions of each Award shall be set forth in an Award Agreement.
(b) Grant of Options.
(i) No later than the Grant Date of any option, the Committee
shall determine the Option Price of such option. The Option Price of an option
shall not be less than 100% of the Fair Market Value of a Share on the Grant
Date. An option shall be exercisable for unrestricted Shares unless the Award
Agreement provides that it is exercisable for Restricted Shares.
(ii) The Committee may, in its discretion, permit an employee to
elect, before earning compensation, to be granted an Award in lieu of receiving
such compensation; provided that, in the judgment of the Committee, the value of
such Award on the Grant Date equals the amount of compensation foregone by such
employee.
(c) Grant of Incentive Stock Options. At the time of the grant of any
option, the Committee may in its discretion designate that such option shall be
made subject to additional restrictions to permit it to qualify as an "incentive
stock option" under the requirements of Section 422 of the Code. Any option
designated as an incentive stock option:
(i) shall, if granted to a 10% Owner, have an Option Price not
less than 110% of the Fair Market Value of a Share on the Grant Date;
(ii) shall be for a period of not more than 10 years (five years
in the case of an incentive stock option granted to a 10% Owner) from the Grant
Date, and shall be subject to earlier termination as provided herein or in the
applicable Award Agreement;
(iii) shall not have an aggregate Fair Market Value (determined
for each incentive stock option at its Grant Date) of the Shares with respect to
which incentive stock options are exercisable for the first time by such Grantee
during any calendar year (under the Plan and any other employee stock option
plan of the Grantee's employer or any parent or Subsidiary thereof ("Other
Plans")), determined in accordance with the provisions of Section 422 of the
Code, which exceeds $100,000 (the "$100,000 Limit");
(iv) shall, if the aggregate Fair Market Value of the Shares
(determined on the Grant Date) with respect to the portion of such grant which
is exercisable for the first time during any calendar year ("Current Grant") and
all incentive stock options previously granted under the Plan and any Other
Plans which are exercisable for the first time during a calendar year ("Prior
Grants") would exceed the $100,000 Limit, be exercisable as follows:
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(A) the portion of the Current Grant which would, when
added to any Prior Grants, be exercisable with respect to Shares which would
have an aggregate Fair Market Value (determined as of the respective Grant Date
for such options) in excess of the $100,000 Limit shall, notwithstanding the
terms of the Current Grant, be exercisable for the first time by the Grantee in
the first subsequent calendar year or years in which it could be exercisable for
the first time by the Grantee when added to all Prior Grants without exceeding
the $100,000 Limit; and
(B) if, viewed as of the date of the Current Grant, any
portion of a Current Grant could not be exercised under the preceding provisions
of this Section during any calendar year commencing with the calendar year in
which it is first exercisable through and including the last calendar year in
which it may by its terms be exercised, such portion of the Current Grant shall
not be an incentive stock option, but shall be exercisable as a separate option
at such date or dates as are provided in the Current Grant;
(v) shall be granted within 10 years from the earlier of the date
the Plan is adopted or the date the Plan is approved by the stockholders of the
Company;
(vi) shall require the Grantee to notify the Committee of any
disposition of any Shares issued pursuant to the exercise of the incentive stock
option under the circumstances described in Section 421(b) of the Code (relating
to certain disqualifying dispositions) (any such circumstance, a "Disqualifying
Disposition"), within 10 days of such Disqualifying Disposition; and
(vii) shall by its terms not be assignable or transferable other
than by will or the laws of descent and distribution and may be exercised,
during the Grantee's lifetime, only by the Grantee; provided, however, that the
Grantee may, to the extent provided in the Plan in any manner specified by the
Committee, designate in writing a beneficiary to exercise his or her incentive
stock option after the Grantee's death;
Notwithstanding the foregoing and Section 4(c)(v), the Committee may,
without the consent of the Grantee, at any time before the exercise of an option
(whether or not an incentive stock option), take any action necessary to prevent
such option from being treated as an incentive stock option.
(d) Grant of Reload Options. The Committee may in connection with the
grant of an option or thereafter provide that a Grantee who (I) is an employee
of the Company or a Subsidiary when he or she exercise an Option, (ii) exercises
such option for Shares which have a Fair Market Value equal to not less than
120% of the Option Price for such option ("Exercised Option") and (iii)
satisfies the Option Price or Required Withholding applicable thereto with
Shares shall automatically be granted, subject to Article 3, an additional
option ("Reload Option") in an amount equal to the sum ("Reload Number") of the
number of Shares tendered to exercise the Exercised Option plus, if so provided
by the Committee, the number of Shares, if any, retained by the Company in
connection with the exercise of the Exercised Option to satisfy any federal,
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state or local tax withholding requirements; provided that no Reload Option
shall be granted in connection with the exercise of an Option that has been
transferred by the initial Grantee thereof.
Reload Options shall be subject to the following terms and conditions:
(i) the Grant Date for each Reload Option shall be the date of
exercise of the Exercised Option to which it relates;
(ii) subject to Section 6(d)(iii), the Reload Option may be
exercised at any time during the Option Term of the Exercised Option (subject to
earlier termination thereof as provided in the Plan or in the applicable Award
Agreement); and
(iii) the terms of the Reload Option shall be the same as the
terms of the Exercised Option to which it relates, except that (A) the Option
Price shall be 100% of the Fair Market Value of a Share on the Grant Date of the
Reload Option, (B) subject to Section 4(c)(vii), no Reload Option may be
exercised within one year after its Grant Date, and (C) in no event shall a
second Reload Option be granted in connection with the exercise of such initial
Reload Option.
(e) Grant of SARs.
(i) When granted, SARs may, but need not, be identified with a
specific option, specific Restricted Shares, or specific performance shares of
the Grantee (including any option, Restricted Shares, or performance shares
granted on or before the Grant Date of the SARs) in a number equal to or
different from the number of SARs so granted. If SARs are identified with Shares
subject to an option, with Restricted Shares, or with performance shares, then,
unless otherwise provided in the applicable Award Agreement, the Grantee's
associated SARs shall terminate upon (x) the expiration, termination, forfeiture
or cancellation of such option, Restricted Shares, or performance shares, (y)
the exercise of such option or performance shares or (z) the date such
Restricted Shares become nonforfeitable.
(ii) The strike price ("Strike Price") of any SAR shall equal,
for any SAR that is identified with an option, the Option Price of such option,
or for any other SAR, 100% of the Fair Market Value of a Share on the Grant Date
of such SAR; provided that the Committee may (x) specify a higher Strike Price
in the Award Agreement, or (y) provide that the benefit payable upon exercise of
any SAR shall not exceed such percentage of the Fair Market Value of a Share on
such Grant Date as the Committee shall specify.
(f) Grant of LSARs. LSARs may in the discretion of the Committee be
granted to any Grantee upon the grant of any option or SAR under the Plan. Each
LSAR shall be identified with a Share subject to an option or a SAR of the
Grantee. The number of LSARs granted to a Grantee in respect of an option or SAR
shall equal the number of Shares subject to such option or SAR. The Committee
may also grant an LSAR with respect to any Share subject to an option or SAR
previously granted under this Plan. Upon the exercise, expiration, termination,
forfeiture, or
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cancellation of a Grantee's option or SARs, as the case may be, the Grantee's
associated LSARs shall terminate.
(g) Grant of Performance Shares.
(i) Before the grant of any performance share, the Committee
shall:
(A) determine objective performance goals (which may
consist of any one or more of the following: earnings (either in the aggregate
or on a per-share basis), operating income, cash flow, including EBITDA
(earnings before interest, taxes, depreciation and amortization), return on
equity, indices related to EVA (economic value added), per share rate of return
on the Common Stock (including dividends), general indices relative to levels of
general customer service satisfaction, as measured through various
randomly-generated customer service surveys, market share (in one or more
markets), customer retention rates, market penetration rates, revenues,
reductions in expense levels, and the attainment by the Common Stock of a
specified market value for a specified period of time, in each case where
applicable to be determined either on a Company-wide basis or in respect of any
one or more business units) and the amount of compensation under the goals
applicable to such grant;
(B) designate a period, of not less than one year nor more
than five years, for the measurement of the extent to which performance goals
are attained, which period may begin prior to the Grant Date (the "Performance
Period"); and
(C) assign a "Performance Percentage" to each level of
attainment of perfor mance goals during the Performance Period, with the
percentage applicable to minimum attainment being zero percent (0%) and the
percentage applicable to maximum attainment to be determined by the Committee
from time to time, but not in excess of 200%.
(ii) If a Grantee is promoted, demoted or transferred to a
different business unit of the Company during a Performance Period, then, to the
extent the Committee determines the performance goals or Performance Period are
no longer appropriate, the Committee may adjust, change or eliminate the
performance goals or the applicable Performance Period as it deems appropriate
in order to make them appropriate and comparable to the initial performance
goals or Performance Period.
(iii) When granted, performance shares may, but need not, be
identified with Shares subject to a specific option, specific Restricted Shares
or specific SARs of the Grantee granted under the Plan in a number equal to or
different from the number of the performance shares so granted. If performance
shares are so identified, then, unless otherwise provided in the applicable
Award Agreement, the Grantee's associated performance shares shall terminate
upon (A) the expiration, termination, forfeiture or cancellation of the option,
Restricted Shares or SARs with which the performance shares are identified, (B)
the exercise of such option or SARs or (C) the date Restricted Shares become
nonforfeitable.
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(iv) The Shares related to the performance shares awarded to any
Grantee for any Performance Period shall not have a Fair Market Value in excess
of 100% of the Grantee's base annual salary in effect at the time of the grant
of the Award multiplied by the number of years in the Performance Period.
(h) Grant of Restricted Shares.
(i) The Committee shall determine the amount, if any, that a
Grantee shall pay for Restricted Shares, subject to the following sentence.
Except with respect to Restricted Shares that are treasury shares, for which no
payment need be required, the Committee shall require the Grantee to pay at
least the Minimum Consideration for each Restricted Share. Such payment shall be
made in full by the Grantee before the delivery of the shares and in any event
no later than 10 days after the Grant Date for such shares. In the discretion of
the Committee and to the extent permitted by law, payment may also be made in
accordance with Section 9.
(ii) The Committee may, but need not, provide that all or any
portion of a Grantee's Restricted Shares, or Restricted Shares acquired upon
exercise of an option shall be forfeited:
(A) except as otherwise specified in the Plan or the Award
Agreement, upon the Grantee's termination of employment within a specified time
period after the Grant Date, or
(B) if the Company or the Grantee does not achieve
specified performance goals (if any) within a specified time period after the
Grant Date and before the Grantee's termination of employment, or
(C) upon failure to satisfy such other restrictions as the
Committee may specify in the Award Agreement.
(iii) If Restricted Shares are forfeited, then if the Grantee was
required to pay for such shares or acquired such Restricted Shares upon the
exercise of an option, the Grantee shall be deemed to have resold such
Restricted Shares to the Company at a price equal to the lesser of (x) the
amount paid by the Grantee for such Restricted Shares, or (y) the Fair Market
Value of a Share on the date of such forfeiture. The Company shall pay to the
Grantee the required amount as soon as is administratively practical. Such
Restricted Shares shall cease to be outstanding, and shall no longer confer on
the Grantee thereof any rights as a stockholder of the Company, from and after
the date the event causing the forfeiture, whether or not the Grantee accepts
the Company's tender of payment for such Restricted Shares.
(iv) The Committee may provide that the certificates for any
Restricted Shares (x) shall be held (together with a stock power executed in
blank by the Grantee) in escrow by the Secretary of the Company until such
Restricted Shares become nonforfeitable or are forfeited or (ii) shall bear an
appropriate legend restricting the transfer of such Restricted Shares. If any
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Restricted Shares become nonforfeitable, the Company shall cause certificates
for such shares to be issued without such legend.
(i) Grant of Stock Bonuses. The Committee may grant Bonus Shares to any
Eligible Employee.
7. Non-transferability. Each Award granted hereunder shall not be
assignable or transferable other than by will or the laws of descent and
distribution and may be exercised, during the Grantee's lifetime, only by the
Grantee or his or her guardian or legal representative, except that, subject to
Section 6(c)(vi) in respect of incentive stock options, a Grantee may in a
manner and to the extent permitted by the Committee in its discretion, (I)
designate in writing a beneficiary to exercise an Award after his or her death
(provided, however, that no such designation shall be effective unless received
by the office of the Company designated for that purpose prior to the Grantee's
death) and (ii) transfer the Award to a member of his or her immediate family.
8. Exercise.
(a) Exercise of Options.
(i) Subject to Section 4(c)(vii) and except as otherwise provided
in the applicable Award Agreement, each option shall become exercisable at such
time or times as may be specified by the Committee from time to time.
(ii) An option shall be exercised by the delivery to the Company
during the Option Term of (x) written notice of intent to purchase a specific
number of Shares subject to the option and (y) payment in full of the Option
Price of such specific number of Shares.
(iii) Payment of the Option Price may be made by any one or more
of the following means:
(A) cash, personal check or wire transfer;
(B) Mature Shares, valued at their Fair Market Value on
the date of exercise;
(C) with the approval of the Committee, Restricted Shares
held by the Grantee for at least six months prior to the exercise of the
option, each such share valued at the Fair Market Value of a Share on
the date of exercise;
(D) pursuant to procedures previously approved by the
Company, through the sale of the Shares acquired on exercise of the
Option through a broker-dealer to whom the Grantee has submitted an
irrevocable notice of exercise and irrevocable instructions to deliver
promptly to the Company the amount of sale or loan proceeds sufficient
to pay for
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such Shares, together with, if requested by the Company, the amount of
federal, state, local or foreign withholding taxes payable by Grantee by
reason of such exercise; or
(E) in the discretion of the Committee, payment may also
be made in accordance with Section 9.
The Committee may in its discretion specify that, if any Restricted Shares
("Tendered Restricted Shares") are used to pay the Option Price, (x) all the
Shares acquired on exercise of the option shall be subject to the same
restrictions as the Tendered Restricted Shares, determined as of the date of
exercise of the option, or (y) a number of Shares acquired on exercise of the
option equal to the number of Tendered Restricted Shares shall be subject to the
same restrictions as the Tendered Restricted Shares, determined as of the date
of exercise of the option.
(b) Exercise of SARs.
(i) Subject to Sections 4(c)(vii) and 8(f), and except as
otherwise provided in the applicable Award Agreement, (x) each SAR not
identified with any other Award shall become exercisable with respect to 25% of
the shares subject thereto on each of the first four anniversaries of the Grant
Date of such SAR unless the Committee provides otherwise in the Award Agreement
and (y) each SAR which is identified with any other Award shall become
exercisable as and to extent that the option or Restricted Shares with which
such SAR is identified may be exercised or becomes nonforfeitable, as the case
may be.
(ii) SARs shall be exercised by delivery to the Company of
written notice of intent to exercise a specific number of SARs. Unless otherwise
provided in the applicable Award Agreement, the exercise of SARs which are
identified with Shares subject to an option or Restricted Shares shall result in
the cancellation or forfeiture of such option or Restricted Shares, as the case
may be, to the extent of such exercise.
(iii) The benefit for each SAR exercised shall be equal to (x)
the Fair Market Value of a Share on the date of such exercise, minus (y) the
Strike Price of such SAR. Such benefit shall be payable in cash, except that the
Committee may provide in the Award Agreement that benefits may be paid wholly or
partly in Shares.
(c) Exercise of LSARs.
(i) Notwithstanding Section 9, each LSAR shall automatically be
exercised upon a Change of Control unless:
(A) otherwise provided in Sections 8(f), 13 or 21(b),
(B) at the time of such Change of Control, the Grantee is
not a Section 16 Person, or
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(C) the Change of Control relates to the approval by the
shareholders of the Company of an Extraordinary Transaction which, if
consummated as proposed, would result in persons who were the respective
beneficial owners of the Common Stock immediately before such Extraordinary
Transaction, if such Extraordinary Transaction were to be consummated
immediately after such stockholder approval (but otherwise in accordance with
the terms presented in writing to the stockholders of the Company for their
approval), beneficially owning, directly or indirectly, at least 60% of both the
then-outstanding common shares and the then-outstanding Voting Power of the
corporation resulting from such Extraordinary Transaction, in substantially the
same proportions as their respective ownership, immediately before such
Extraordinary Transaction, of the then-outstanding Common Stock and Voting Power
of the Company.
The exercise of LSARs shall result in the cancellation of the option or
SARs with which such LSARs are identified, to the extent of such exercise.
(ii) Within 10 business days after the exercise of any LSAR, the
Company shall pay the Grantee, in cash, an amount equal to the difference
between (x) the Change of Control Value and (y) in the case of an LSAR
identified with an option, the Option Price of such option, or, in the case of
an LSAR identified with a SAR, the Strike Price of such SAR; provided that the
amount determined under this Section shall not exceed any maximum benefit
provided in the applicable Award Agreement.
(d) Payment of Performance Shares. Unless otherwise provided in the
Award Agreement with respect to an Award of performance shares, if the minimum
performance goals applicable to such performance shares have been achieved
during the applicable Performance Period, then the Company shall pay to the
Grantee of such Award that number of Shares equal to the product of:
(I) the sum of (x) number of performance shares specified in the
applicable Award Agreement and (y) the number of Shares that would have been
issuable if such performance shares had been Shares outstanding throughout the
Performance Period and the stock dividends, cash dividends (except as otherwise
provided in the Award Agreement), and other property paid in respect of such
shares had been reinvested in additional Shares as of each dividend payment
date,
multiplied by
(ii) the Performance Percentage achieved during such Performance
Period.
The Committee may in its discretion determines that cash be paid in lieu of some
or all of such Shares. The amount of cash payable in lieu of a Share shall be
determined by valuing such share at its Fair Market Value on the business day
next preceding the date such cash is to be paid. Payments pursuant to this
Section shall be made as soon as administratively practical after the end of the
applicable Performance Period. Any performance shares with respect to which the
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performance goals shall not have been achieved by the end of the applicable
Performance Period shall expire.
(e) Change of Control. If, within 12 months after a Change of Control,
the employment of a Grantee shall be terminated by the Company without Cause or
by the Grantee for Good Reason, then (I) all unvested Awards shall immediately
become fully exercisable or payable, as applicable, except as otherwise provided
in Section 8(f); provided that the benefit payable with respect to any
performance share with respect to which the Performance Period has not ended as
of the date of such termination of employment shall be equal to the product of
the Change of Control Value multiplied successively by each of the following:
(i) a fraction, the numerator of which is the number of whole and
partial months that have elapsed between the beginning of such Performance
Period and the date of such Change of Control and the denominator of which is
the number of whole and partial months in the Performance Period; and
(ii) a percentage equal to the greater of (x) the target
percentage, if any, specified in the applicable Award Agreement or (y) the
maximum percentage, if any, that would be earned under the terms of the
applicable Award Agreement assuming that the rate at which the performance goals
have been achieved as of the date of such Change of Control would continue until
the end of the Performance Period.
(f) Pooling Considerations. Any provision of the Plan to the contrary
notwithstanding, if the Committee determines, in its discretion exercised prior
to a sale or merger of the Company that in the Committee's judgment is
reasonably likely to occur, that the exercise of SARs or LSARs would preclude
the use of pooling-of-interests accounting ("pooling") after the consumma tion
of such sale or merger and that such preclusion of pooling would have a material
adverse effect on such sale or merger, the Committee may either unilaterally
cancel such SARs and LSARs prior to the Change of Control or cause the Company
to pay the benefit attributable to such SARs or LSARs in the form of Shares if
the Committee determines that such payment would not cause the transaction to
become ineligible for pooling.
9. Loans and Guarantees. The Committee may in its discretion allow a
Grantee to defer payment to the Company of all or any portion of (I) the Option
Price of an option, (ii) the purchase price of Restricted Shares, or (iii) any
taxes associated with the exercise, nonforfeitability of, or payment of benefits
in connection with, an Award, or cause the Company to guarantee a loan from a
third party to the Grantee, in an amount equal to all or any portion of such
Option Price, or any related taxes. Any such payment deferral or guarantee by
the Company shall be on such terms and conditions as the Committee may
determine; provided that the interest rate applicable to any such payment
deferral shall not be more favorable to the Grantee than the terms applicable to
funds borrowed by the Company from time to time. Notwithstanding the foregoing,
a Grantee shall not be entitled to defer the payment of such Option Price,
purchase price or any related taxes unless the Grantee (I) enters into a binding
obligation to pay the deferred
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amount and (ii) except with respect to treasury shares, pays upon exercise of an
option or grant of Restricted Shares, as applicable, an amount at least equal to
the Minimum Consideration therefor. If the Committee has permitted a payment
deferral or caused the Company to guarantee a loan pursuant to this Section,
then the Committee may require the immediate payment of such deferred amount or
the immediate release of such guarantee upon the Grantee's termination of
employment or if the Grantee sells or otherwise transfers his or her Shares
purchased pursuant to such deferral or guarantee. The Committee may at any time
in its discretion forgive the repayment of any or all of the principal of, or
interest on, any such deferred payment obligation.
10. Notification under Section 83(b). If the Grantee, in connection with
the exercise of any option, or the grant of Restricted Shares, makes the
election permitted under Section 83(b) of the Code to include in such Grantee's
gross income in the year of transfer the amounts specified in Section 83(b) of
the Code, then such Grantee shall notify the Company of such election within 10
days of filing the notice of the election with the Internal Revenue Service, in
addition to any filing and notification required pursuant to regulations issued
under Section 83(b) of the Code. The Committee may, in connection with the grant
of an Award or at any time thereafter, prohibit a Grantee from making the
election described above.
11. Mandatory Tax Withholding.
(a) Whenever under the Plan, Shares are to be delivered upon exercise or
payment of an Award or upon Restricted Shares becoming nonforfeitable, or any
other event with respect to rights and benefits hereunder, the Company shall be
entitled to require (I) that the Grantee remit an amount in cash, or in the
Company's discretion, Mature Shares, sufficient to satisfy all federal, state,
and local tax withholding requirements related thereto ("Required Withholding"),
(ii) the withholding of such Required Withholding from compensation otherwise
due to the Grantee or from any Shares due to the Grantee under the Plan or (iii)
any combination of the foregoing.
(b) Any Grantee who makes a Disqualifying Disposition or an election
under Section 83(b) of the Code shall remit to the Company an amount sufficient
to satisfy all resulting Required Withholding; provided that, in lieu of or in
addition to the foregoing, the Company shall have the right to withhold such
Required Withholding from compensation otherwise due to the Grantee or from any
Shares or other payment due to the Grantee under the Plan.
12. Elective Share Withholding.
(a) Subject to the following subsection, a Grantee may elect the
withholding ("Share Withholding") by the Company of a portion of the Shares
otherwise deliverable to such Grantee upon the exercise of an Award or upon
Restricted Shares becoming non-forfeitable (each, a "Taxable Event") having a
Fair Market Value equal to (i) the minimum amount necessary to satisfy Required
Withholding liability attributable to the Taxable Event; or (ii) with the
Committee's prior approval, a greater amount, not to exceed the estimated total
amount of such Grantee's tax liability with respect to the Taxable Event.
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(b) Each Share Withholding election shall be subject to the following
conditions:
(i) any Grantee's election shall be subject to the Committee's
discretion to revoke the Grantee's right to elect Share Withholding at any time
before the Grantee's election if the Committee has reserved the right to do so
in the Award Agreement;
(ii) the Grantee's election must be made before the date (the
"Tax Date") on which the amount of tax to be withheld is determined; and
(iii) the Grantee's election shall be irrevocable.
13. Termination of Employment.
(a) For Cause. If a Grantee's employment is terminated for Cause, (I)
the Grantee's Restricted Shares that are forfeitable shall thereupon be
forfeited, subject to the provisions of Sec tion 6(h)(iii) regarding repayment
of certain amounts to the Grantee; and (ii) any unexercised option, SAR, LSAR,
or performance share shall terminate effective immediately upon such termination
of employment.
(b) On Account of Retirement. Except as otherwise provided by the
Committee in the Award Agreement, if a Grantee's employment terminates on
account of Retirement, then:
(i) the Grantee's Restricted Shares that were forfeitable shall
thereupon become nonforfeitable;
(ii) any unexercised option or SAR, whether or not exercisable on
the date of such termination of employment, may be exercised, in whole or in
part, within the first three (3) years after such termination of employment (but
only during the Option Term) by the Grantee; and
(iii) any unexercised performance share may be exercised in whole
or in part, at any time within six months after such termination of employment
on account of Retirement by the Grantee; provided that the benefit payable with
respect to any performance share with respect to which the Performance Period
has not ended as of the date of such termination of employment on account of
Retirement shall be equal to the product of the Fair Market Value of a Share
Value multiplied successively by each of the following:
(1) a fraction, the numerator of which is the number of
months (including as a whole month any partial month) that have elapsed since
the beginning of such Performance Period until the date of such termination of
employment and the denominator of which is the number of months (including as a
whole month any partial month) in the Performance Period; and
(2) a percentage determined in the discretion of the
Committee that would be earned under the terms of the applicable Award Agreement
assuming that the rate at which the
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performance goals have been achieved as of the date of such termination of
employment would continue until the end of the Performance Period, or, if the
Committee elects to compute the benefit after the end of the Performance Period,
the Performance Percentage, as determined by the Committee, attained during the
Performance Period for the performance share.
(c) On Account of Death. Except as otherwise provided by the Committee
in the Award Agreement, if a Grantee's employment terminates on account of
death, then:
(i) the Grantee's Restricted Shares that were forfeitable shall
thereupon become nonforfeitable;
(ii) any unexercised option or SAR, whether or not exercisable on
the date of such termination of employment, may be exercised, in whole or in
part, within the first 12 months after such termination of employment (but only
during the Option Term) by the Grantee or, after his or her death, by (A) his or
her personal representative or by the person to whom the option or SAR, as
applicable, is transferred by will or the applicable laws of descent and
distribution, or (B) the Grantee's beneficiary designated in accordance with
Sections 6(c)(vii) or 7; and
(iii) any unexercised performance share may be exercised in whole
or in part, at any time within six months after such termination of employment
on account of death by the Grantee or, after the Grantee's death, by (A) his
personal representative or by the person to whom the performance share is
transferred by will or the applicable laws of descent and distribution, or (B)
the Grantee's beneficiary designated in accordance with Section 7; provided that
the benefit payable with respect to any performance share with respect to which
the Performance Period has not ended as of the date of such termination of
employment on account of death shall be equal to the product of the Fair Market
Value of a Share Value multiplied successively by each of the following:
(1) a fraction, the numerator of which is the number of
months (including as a whole month any partial month) that have elapsed since
the beginning of such Performance Period until the date of such termination of
employment and the denominator of which is the number of months (including as a
whole month any partial month) in the Performance Period; and
(2) a percentage determined in the discretion of the
Committee that would be earned under the terms of the applicable Award Agreement
assuming that the rate at which the performance goals have been achieved as of
the date of such termination of employment would continue until the end of the
Performance Period, or, if the Committee elects to compute the benefit after the
end of the Performance Period, the Performance Percentage, as determined by the
Committee, attained during the Performance Period for the performance share.
(d) On Account of Disability. Except as otherwise provided by the
Committee in the Award Agreement, if a Grantee's employment terminates on
account of Disability, then:
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(i) the Grantee's Restricted Shares that were forfeitable shall
thereupon become nonforfeitable;
(ii) any unexercised option or SAR, whether or not exercisable on
the date of such termination of employment, may be exercised, in whole or in
part, within the first 12 months after such termination of employment (but only
during the Option Term) by the Grantee or, after his or her death, by (A) his or
her personal representative or by the person to whom the option or SAR, as
applicable, is transferred by will or the applicable laws of descent and
distribution, or (B) the Grantee's beneficiary designated in accordance with
Sections 6(c)(vii) or 7; and
(iii) any unexercised performance share may be exercised in whole
or in part, at any time within six months after such termination of employment
on account of Disability by the Grantee or, after the Grantee's death, by (A)
his personal representative or by the person to whom the performance share is
transferred by will or the applicable laws of descent and distribution, or (B)
the Grantee's beneficiary designated in accordance with Section 7; provided that
the benefit payable with respect to any performance share with respect to which
the Performance Period has not ended as of the date of such termination of
employment on account of Disability shall be equal to the product of the Fair
Market Value of a Share Value multiplied successively by each of the following:
(1) a fraction, the numerator of which is the number of
months (including as a whole month any partial month) that have elapsed since
the beginning of such Performance Period until the date of such termination of
employment and the denominator of which is the number of months (including as a
whole month any partial month) in the Performance Period; and
(2) a percentage determined in the discretion of the
Committee that would be earned under the terms of the applicable Award Agreement
assuming that the rate at which the performance goals have been achieved as of
the date of such termination of employment would continue until the end of the
Performance Period, or, if the Committee elects to compute the benefit after the
end of the Performance Period, the Performance Percentage, as determined by the
Committee, attained during the Performance Period for the performance share.
(e) Any Other Reason. Except as otherwise provided by the Committee in
the Award Agreement, if a Grantee's employment terminates for any reason other
than for Cause, Retirement, death, or Disability, then:
(i) the Grantee's Restricted Shares (and any SARs identified
therewith), to the extent forfeitable on the date of the Grantee's termination
of employment), shall be forfeited on such date;
(ii) any unexercised option or SAR (other than a SAR identified
with a Restricted Share or performance share), to the extent exercisable
immediately before the Grantee's termination of employment, Grantee's
termination of employment) may be exercised in whole or
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in part, not later than three months after such termination of employment (but
only during the Option Term); and
(iii) the Grantee's performance shares (and any SARs identified
therewith) shall become non-forfeitable and may be exercised in whole or in
part, but only if and to the extent determined by the Committee.
(f) Extended Exercisability. If the Grantee has entered into an
agreement with the Company not to sell any Shares (or the capital stock of a
successor to the Company) for a specified period after the consummation of a
business combination between the Company and another corporation or entity (the
"Specified Period"), such option may be exercised in whole or in part until the
later of the end of the post-termination period specified in subparagraph (b),
(C) or (d) of this Section, as applicable, or 10 business days after the end of
the Specified Period.
(g) Extension of Term. In the event of a termination of the Grantee's
employment other than for Cause, the term of any Award (whether or not
exercisable immediately before such termination) which would otherwise expire
after the Grantee's termination of employment but before the end of the period
following such termination of employment described in subparagraphs (b), (c),
and (d) of this Section for exercise of Awards may, in the Committee's
discretion, be extended so as to permit any unexercised portion thereof to be
exercised at any time within such period. The Committee may further extend the
period of exercisability to permit any unexercised portion thereof to be
exercised within a specified period provided by the Committee.
14. Plans of Foreign Subsidiaries. The Committee may authorize any
foreign Subsidiary to adopt a plan for granting Awards ("Foreign Plan"). All
Awards granted under such Foreign Plan shall be treated as grants under the
Plan. Such Foreign Plans shall have such provisions as the Committee permits not
inconsistent with the provisions of the Plan. Awards granted under a Foreign
Equity Incentive Plans shall be governed by the terms of the Plan, except to the
extent that the provisions of the Foreign Plan are more restrictive than the
provisions of the Plan, in which case the Foreign Plan shall control.
15. Substituted Awards. If the Committee cancels any Award (whether
granted under this Plan or any plan of any entity acquired by the Company or a
Subsidiary), the Committee may in its discretion substitute a new Award therefor
upon such terms and conditions consistent with the Plan as the Committee may
determine; provided, that (a) the Option Price of any new option, and the Strike
Price of any new SAR, shall not be less than 100% (110% in the case of an
incentive stock option granted to a 10% Owner) of the Fair Market Value of a
Share on the date of grant of the new Award; and (b) the Grant Date of the new
Award shall be the date on which such new Award is granted.
16. Securities Law Matters. If the Committee deems necessary to comply
with any applicable securities law, the Committee may require a written
investment intent representation by the Grantee and may require that a
restrictive legend be affixed to certificates for Shares. If,
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based upon the advice of counsel for the Company, the Committee determines that
the exercise or nonforfeitability of, or delivery of benefits pursuant to, any
Award would violate any applicable provision of (I) federal or state securities
laws or (ii) the listing requirements of any national securities exchange or
national market system on which are listed any of the Company's equity
securities, then the Committee may postpone any such exercise, nonforfeitability
or delivery, as applicable, but the Company shall use all reasonable efforts to
cause such exercise, nonforfeitability or delivery to comply with all such
provisions at the earliest practicable date.
17. No Employment Rights. Neither the establishment of the Plan, nor the
grant of any Award shall (a) give any Grantee the right to remain employed by
the Company or any Subsidiary or to any benefits not specifically provided by
the Plan or (b) modify the right of the Company or any Subsidiary to modify,
amend, or terminate any employee benefit plan.
18. No Rights as a Stockholder. A Grantee shall not have any rights as a
stockholder of the Company with respect to the Shares (other than Restricted
Shares) which may be deliverable upon exercise or payment of such Award until
such shares have been delivered to him or her. Restricted Shares, whether held
by a Grantee or in escrow by the Secretary of the Company, shall confer on the
Grantee all rights of a stockholder of the Company, except as otherwise provided
in the Plan. At the time of a grant of Restricted Shares, the Committee may
require the payment of cash dividends thereon to be deferred and, if the
Committee so determines, reinvested in additional Restricted Shares. Stock
dividends and deferred cash dividends issued with respect to Restricted Shares
shall be subject to the same restrictions and other terms as apply to the
Restricted Shares with respect to which such dividends are issued. The Committee
may in its discretion provide for payment of interest on deferred cash
dividends.
19. Nature of Payments. Awards shall be special incentive payments to
the Grantee and shall not be taken into account in computing the amount of
salary or compensation of the Grantee for purposes of determining any pension,
retirement, death or other benefit under (a) any pension, retirement,
profit-sharing, bonus, insurance or other employee benefit plan of the Company
or any Subsidiary or (b) any agreement between (I) the Company or any Subsidiary
and (ii) the Grantee, except as such plan or agreement shall otherwise expressly
provide.
20. Non-uniform Determinations. The Committee's determinations under the
Plan need not be uniform and may be made by the Committee selectively among
persons who receive, or are eligible to receive, Awards, whether or not such
persons are similarly situated. Without limiting the generality of the
foregoing, the Committee shall be entitled, to enter into non-uniform and
selective Award Agreements as to (a) the identity of the Grantees, (b) the terms
and provisions of Awards, and (C) the treatment of terminations of employment.
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21. Adjustments.
(a) The Committee shall make equitable adjustment of:
(i) the aggregate numbers and kind of Shares available under the
Plan for Awards in general and for the grant of incentive stock options,
(ii) the number and kind of Shares, SARs, or performance shares
covered by an Award, and
(iii) the Option Price of all outstanding options and the Strike
Price of all outstanding SARs,
to reflect a stock dividend, stock split, reverse stock split, share
combination, recapitalization, merger, consolidation, spin-off, split-off,
reorganization, rights offering, liquidation or similar event, of or by the
Company.
(b) Notwithstanding any provision in this Plan or any Award Agreement,
in the event of a Change in Control within the meaning of Section 2(f)(iii) in
connection with which the holders of Common Stock receive shares of common stock
of the surviving or successor corporation that are registered under Section 12
of the 1934 Act:
(I) there shall be substituted for each option and SAR
outstanding on the date of the consummation of corporate transaction relating to
such Change of Control, a new option or SAR, as the case may be, reflecting the
number and class of shares into which each outstanding Share shall be converted
pursuant to such Change in Control and providing each Grantee with rights that
are substantially identical to those under this Plan in all material respects;
and
(ii) no LSAR shall be exercised if the constituent documents
relating to the Change of Control provide for such a substitution of the option
or SAR with which such LSAR is identified.
In the event of any such substitution, the purchase price per share in the case
of an option and the Strike Price in the case of an SAR shall be appropriately
adjusted by the Committee, such adjustments to be made in the case of
outstanding options and SARs without a change in the aggregate purchase price or
Strike Price.
22. Amendment of the Plan. The Board may from time to time in its
discretion amend the Plan without the approval of the Company's stockholders,
except (I) as such stockholder approval may be required under the listing
requirements of any securities exchange or national market system on which are
listed the Company's equity securities and (ii) that to Board may not without
the approval of the Company's stockholders amend the Plan to (x) increase the
total
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number of shares reserved for the purposes of the Plan or (y) change the
employees or class of employees eligible to participate in the Plan.
23. Termination of the Plan. The Plan shall terminate on the tenth
(10th) anniversary of the Effective Date or at such earlier time as the Board
may determine. No termination shall affect any Award then outstanding under the
Plan.
24. No Illegal Transactions. The Plan and all Awards granted pursuant to
it are subject to all applicable laws and regulations. Notwithstanding any
provision of the Plan or any Award, Grantees shall not be entitled to exercise,
or receive benefits under, any Award, and the Company shall not be obligated to
deliver any Shares or deliver benefits to a Grantee, if such exercise or
delivery would constitute a violation by the Grantee or the Company of any
applicable law or regulation.
25. Controlling Law. The law of the State of Delaware, except its law
with respect to choice of law, shall control all matters relating to the Plan.
26. Severability. If any part of the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any other part of the Plan. Any Section or part
of a Section so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.
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