EXHIBIT 10.15
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PROPOSED FORM OF
SCHOLASTIC CORPORATION
MANAGEMENT STOCK PURCHASE PLAN
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E-2
Table of Contents
Article 1 - Introduction.....................................................1
Article 2 - Definitions......................................................1
2.1 Affiliate........................................................1
2.2 Award Date.......................................................1
2.3 Award Value......................................................1
2.4 Beneficiary......................................................1
2.5 Bonus............................................................2
2.6 Board of Directors...............................................2
2.7 Cause............................................................2
2.8 Code.............................................................2
2.9 Committee........................................................2
2.10 Common Stock or Stock............................................3
2.11 Company..........................................................3
2.12 Cost.............................................................3
2.13 Deferral Period..................................................3
2.14 Disability.......................................................3
2.15 Exchange Act.....................................................3
2.16 Fair Market Value................................................3
2.17 Fiscal Year......................................................4
2.18 Foreign Jurisdiction.............................................4
2.19 Participant......................................................4
2.20 Plan.............................................................4
2.21 Plan Year........................................................4
2.22 Retirement.......................................................4
2.23 Rule 16b-3.......................................................4
2.24 RSU..............................................................4
2.25 Subscription Agreement...........................................5
Article 3 - Shares Reserved..................................................5
Article 4 - Administration...................................................5
Article 5 - Eligibility......................................................7
Article 6 - Purchases........................................................8
Article 7 - Vesting and Payment of RSUs.....................................10
Article 8 - Dividend Equivalent Amounts.....................................12
Article 9 - Designation of Beneficiary......................................12
Article 10 - Adjustments....................................................13
Article 11 - Amendment or Termination of Plan...............................13
Article 12 - Miscellaneous Provisions.......................................14
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SCHOLASTIC CORPORATION
MANAGEMENT STOCK PURCHASE PLAN
Article 1 - Introduction
The purpose of the Scholastic Corporation Management Stock Purchase Plan
(the "Plan") is to provide equity incentive compensation to selected management
employees of Scholastic Corporation and its Affiliates. Participants in the Plan
receive restricted stock units at a discount in lieu of a portion or all of
their bonus awards under the Company's annual incentive plan. Under certain
circumstances, the restricted stock units convert into shares of Common Stock.
The Company believes that the Plan creates a means to provide deferred
compensation to such selected management employees and to raise the level of
stock ownership in the Company by such employees thereby strengthening the
mutuality of interests between such employees and the Company's stockholders.
Article 2 - Definitions
2.1 Affiliate - (i) any corporation, partnership, limited liability company or
other entity as to which the Company possesses a direct or indirect
ownership interest of at least fifty (50) percent or which possesses a
direct or indirect ownership interest of at least 50% in the Company
including, without limitation, any subsidiary corporation (as defined in
Section 424(f) of the Code) and parent corporation (as defined in Section
424(e) of the Code) and (ii) any other entity in which the Company or any
of its Affiliates has a material equity interest, as determined by the
Committee.
2.2 Award Date - the date a Bonus for a year is paid or otherwise would be
paid.
2.3 Award Value - the Fair Market Value of a share of Common Stock on the
Award Date.
2.4 Beneficiary - a Beneficiary or Beneficiaries designated by the Participant
under Article 9.
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2.5 Bonus - a Participant's annual award for a Fiscal Year under the Company's
Annual Incentive Plan.
2.6 Board of Directors - the Board of Directors of the Company or the
Executive Committee of such Board of Directors.
2.7 Cause - any of the following: (i) any act or acts by the Participant
constituting a felony under the laws of the United States, any state,
thereof or any political subdivision thereof; (ii) the Participant's
willful and continued failure to perform the duties assigned to him or her
as an employee or consultant of the Company or Affiliate; (iii) any
material breach by the Participant of any employment or consulting
agreement with the Company or Affiliate; (iv) dishonesty, gross negligence
or malfeasance by the Participant in the performance of his or her duties
as an employee or consultant of the Company or Affiliate or any conduct by
the Participant which involves a material conflict of interest with any
business of the Company or Affiliate; or (v) the taking or knowingly
omitting to take any other action or actions in the performance of the
Participant's duties as an employee or consultant of the Company or
Affiliate without informing appropriate members of management to whom such
Participant reports, which action or actions, in the determination of the
Committee, have caused or substantially contributed to the material
deterioration in the business of the Company and its Affiliates, taken as
a whole.
2.8 Code - the Internal Revenue Code of 1986, as amended from time to time.
2.9 Committee - the committee of the Board of Directors authorized to
administer the Plan. To the extent that no Committee exists which has the
authority to administer the Plan, the functions of the Committee shall be
exercised by the Board of Directors. The Committee shall consist of two or
more non-employee directors, each of whom is intended to be, to the extent
required by Rule 16b-3, a "non-employee director" as defined in Rule
16b-3. If for any reason the appointed
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Committee does not meet the requirements of Rule 16b-3, such noncompliance
shall not affect the validity of any grants of RSUs hereunder,
interpretations or other actions of the Committee.
2.10 Common Stock or Stock - Common Stock of the Company, par value $.01 per
share.
2.11 Company - Scholastic Corporation, a corporation organized under the laws
of the State of Delaware (or any successor).
2.12 Cost - the cost of purchasing an RSU under the Plan as of an Award Date,
as determined by the Committee in its sole discretion, but in no event
less than eighty-five (85) percent of the Fair Market Value of a share of
Common Stock on the Award Date. The cost shall be established as of the
applicable Award Date and shall remain in effect unless modified by the
Committee at least thirty (30) days prior to the applicable Award Date.
Effective as of the effective date of the Plan until modified by the
Committee, the Cost shall be eighty-five (85) percent of the Fair Market
Value of a share of Common Stock on the Award Date.
2.13 Deferral Period - a period of time (expressed in whole years) not less
than three years beginning on an Award Date as specified by the
Participant in his or her Subscription Agreement with respect to RSUs
awarded on that Award Date, provided however, that the Committee may
establish, in its sole discretion, a fixed date as the end of the Deferral
Period or fixed period specified with respect to RSUs awarded on that
Award Date.
2.14 Disability - complete and permanent inability by reason of illness or
accident to perform the duties of the occupation at which the Participant
was employed when such disability commenced, as determined by the
Committee based on medical evidence available to it.
2.15 Exchange Act - the Securities Exchange Act of 1934, as amended.
2.16 Fair Market Value - unless otherwise required by any applicable provision
of the Code or any regulations issued thereunder, as of any date, the last
sales price reported for the Common Stock on the applicable date: (i) as
reported on the principal national securities exchange on which it is
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then traded or the Nasdaq Stock Market, Inc. or (ii) if not traded on any
such national securities exchange or the Nasdaq Stock Market, Inc. as
quoted on an automated quotation system sponsored by the National
Association of Securities Dealers, Inc. If the Common Stock is not readily
tradable on a national securities exchange, the Nasdaq Stock Market, Inc.
or any automated quotation system sponsored by the National Association of
Securities Dealers, Inc., its Fair Market Value shall be set in good faith
by the Committee.
2.17 Fiscal Year - the fiscal year of the Company.
2.18 Foreign Jurisdiction - any jurisdiction outside of the United States
including, without limitation, countries, states, provinces and
localities.
2.19 Participant - a management employee of the Company or any Affiliate who
satisfies the eligibility requirements under Article 5 of the Plan and
elects to participate in the Plan in accordance with its terms.
2.20 Plan - the Scholastic Corporation Management Stock Purchase Plan, as
amended from time to time.
2.21 Plan Year - the Fiscal Year, except that the first Plan Year shall be the
short year beginning on the effective date of the Plan and ending on May
31, 1999.
2.22 Retirement - termination of employment with the Company and all Affiliates
on or after age fifty-five (55).
2.23 Rule 16b-3 - means Rule 16b-3 promulgated under Section 16(b) of the
Exchange Act or any successor provision.
2.24 RSU - a unit of measurement equivalent to one share of Common Stock but
with none of the attendant rights of a stockholder of a share of Common
Stock, including the right to vote (if any); except that an RSU shall have
the dividend right described in Article 8. The fair market value of
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an RSU on any date shall be deemed to be the Fair Market Value of a share
of Common Stock on that date.
2.25 Subscription Agreement - an agreement executed by a Participant setting
forth his or her election to defer receipt of a portion or all of his or
her Bonus for the Deferral Period and to authorize the Company to credit
such amount to the Plan in order to purchase an award of RSUs. A
Subscription Agreement shall contain such provisions, consistent with the
provisions of the Plan, as may be established from time to time by the
Company or Committee.
Article 3 - Shares Reserved
The aggregate number of shares of Common Stock reserved for issuance
pursuant to the Plan or with respect to which RSUs may be granted shall be
150,000, subject to adjustment as provided in Article 10 hereof.
Such number of shares may be set aside out of the authorized but unissued
shares of Common Stock not reserved for any other purpose, or out of issued
shares of Common Stock acquired for and held in the treasury of the Company. If
any RSU awarded under the Plan is forfeited, terminated or canceled for any
reason, the share of Common Stock relating to such RSU shall again be available
under the Plan. If Common Stock has been exchanged by a Participant as full or
partial payment to the Company for withholding taxes or otherwise or if the
number of shares of Common Stock otherwise deliverable has been reduced for
withholding, the number of shares exchanged or reduced shall again be available
under the Plan.
Article 4 - Administration
4.1 The Plan shall be administered by the Committee. The Committee may select
an administrator or any other person to whom its duties and
responsibilities hereunder may be delegated. The
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Committee shall have full power and authority, subject to the provisions
of the Plan, to promulgate such rules and regulations as it deems
necessary for the proper administration of the Plan, to interpret the
provisions and supervise the administration of the Plan, and to take all
actions in connection therewith or in relation thereto as it deems
necessary or advisable. The Committee may adopt special guidelines and
provisions for persons who are residing in, or subject to the laws of,
Foreign Jurisdictions to comply with applicable tax and securities laws.
All interpretations and determinations of the Committee shall be made in
its sole and absolute discretion based on the Plan document and shall be
final, conclusive and binding on all parties with respect to all matters
relating to the Plan.
4.2 The Committee may employ such legal counsel, consultants, brokers and
agents as it may deem desirable for the administration of the Plan and may
rely upon any opinion received from any such counsel or consultant and any
computation received from any such consultant, broker or agent. The
Committee may, in its sole discretion, designate an agent to administer
the Plan, keep records, send statements of account to Participants and to
perform other duties relating to the Plan, as the Committee may request
from time to time. The Committee may adopt, amend or repeal any guidelines
or requirements necessary for the delivery of the Common Stock.
4.3 The Company shall, to the fullest extent permitted by law and the
Certificate of Incorporation and By-laws of the Company and, to the extent
not covered by insurance, indemnify each director, officer or employee of
the Company and its Affiliates (including the heirs, executors,
administrators and other personal representatives of such person) and each
member of the Committee against all expenses, costs, liabilities and
losses (including attorneys' fees, judgments, fines, excise taxes or
penalties, and amounts paid or to be paid in settlement) actually and
reasonably incurred by such person in connection with any threatened,
pending or actual suit, action or proceeding (whether civil, criminal,
administrative or investigative in nature or
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otherwise) in which such person may be involved by reason of the fact that
he or she is or was serving this Plan in any capacity at the request of
the Company, except in instances where any such person engages in willful
neglect or fraud. Such right of indemnification shall include the right to
be paid by the Company for expenses incurred or reasonably anticipated to
be incurred in defending any such suit, action or proceeding in advance of
its disposition; provided, however, that the payment of expenses in
advance of the settlement or final disposition of a suit, action or
proceeding, shall be made only upon delivery to the Company of an
undertaking by or on behalf of such person to repay all amounts so
advanced if it is ultimately determined that such person is not entitled
to be indemnified hereunder. Such indemnification shall be in addition to
any rights of indemnification the person may have as a director, officer
or employee or under the Certificate of Incorporation of the Company or
the By-Laws of the Company. Expenses incurred by the Committee or the
Board in the engagement of any such counsel, consultant or agent shall be
paid by the Company.
Article 5 - Eligibility
Management employees of the Company and its Affiliates as designated by
the Committee shall be eligible to participate in the Plan. Eligibility for
participation in the Plan shall be determined by the Committee in its sole
discretion. The Committee may, in its sole discretion, designate, on a
prospective basis, any Participant in the Plan as ineligible to receive awards
of RSUs pursuant to Article 6 of the Plan.
Article 6 - Purchases
6.1 General
Each Participant shall be entitled to elect to receive up to one hundred
(100) percent of his or her Bonus as an award of RSUs. As of the
applicable Award Date, RSUs shall be awarded to
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Participants and credited to accounts held under the Plan on behalf of
Participants on a book entry basis calculated in the manner provided under
Section 6.3.
6.2 Voluntary Purchases
No later than the last day of the first quarter of each Fiscal Year, each
Participant may elect to receive up to one hundred (100) percent of his or
her Bonus for that Fiscal Year as an award of RSUs by completing a
Subscription Agreement. Notwithstanding the foregoing, for the first Plan
Year, a Participant may elect to participate in the Plan for that Plan
Year no later than the date set by the Committee in its sole discretion
pursuant to procedures set by the Committee. If an employee of the Company
or an Affiliate first becomes eligible to participate hereunder during a
Plan Year, such employee may elect to participate in the Plan for that
Plan Year pursuant to procedures established by the Committee (solely with
respect to the pro rata portion of the Bonus earned after the Subscription
Agreement is executed and delivered to the Company). The Subscription
Agreement shall provide that the Participant elects to receive RSUs in
lieu of a specified portion of his or her Bonus. Such portion may be
expressed as either:
(a) a specified percentage of up to one hundred (100) percent (in whole
percentages) of the Participant's actual Bonus amount;
(b) a specified dollar amount, up to one hundred (100) percent of the
Participant's actual Bonus amount;
(c) the lesser of the amount specified in Section 6.2(a) or (b).
Amounts specified pursuant to any of the methods set forth herein are
entirely contingent on, and are limited to, the amount of Bonus actually
awarded. Each Subscription Agreement, in addition, shall specify a
Deferral Period with respect to the RSUs to which it pertains. The
Committee may, in its sole discretion, permit the Deferral Period with
respect to the RSUs to which it pertains to be changed upon one year's
notice to the Committee. Other than with respect to the
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first Plan Year or with respect to an employee of the Company or an
Affiliate who first becomes eligible to participate hereunder during a
Plan Year, Subscription Agreements must be received by the Company no
later than the last day of the first quarter of the Fiscal Year for which
such Bonus amount will be determined. With respect to any Plan Year, an
election to receive RSUs in lieu of a portion or all of a Bonus hereunder
pursuant to a Subscription Agreement is irrevocable on and after the date
the Subscription Agreement must be submitted to the Company and is valid
solely for the Plan Year to which the election relates. If no new
Subscription Agreement is timely made with respect to any subsequent Plan
Year, the Bonus earned in such Plan Year shall not be deferred under the
Plan.
6.3 Award of RSUs
The Company shall award RSUs to each Participant's account under the Plan
on the Award Date. Each Participant's account shall be credited with a
number of RSUs (in whole and fractional RSUs) determined by dividing (a)
the amount of the Participant's Bonus to be received as an award of RSUs
in accordance with the Participant's Subscription Agreement and the
methodology under Section 6.2 by (b) the Cost of a share of Common Stock
on the Award Date.
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Article 7 - Vesting and Payment of RSUs
7.1 Vesting
A Participant shall be fully vested in each RSU three years after the
Award Date pertaining to that RSU (provided that the Participant is
continuously employed (including any period during which the Participant
is on a leave of absence, either paid or unpaid, which is approved by the
Committee, or any other break in employment which is approved by the
Committee) by the Company or any Affiliate for such years) or, if earlier,
upon death while employed, Disability while employed or Retirement. The
Committee may, in its sole discretion, accelerate (in whole or part) the
time at which any such RSUs may be vested, based on such factors, if any,
as the Committee shall determine in its sole discretion.
7.2 Payment on or after Vesting
With respect to each vested RSU, the Company shall issue to the
Participant one share of Common Stock and/or cash in lieu of any
fractional RSU as soon as practicable after the end of the Deferral Period
specified in the Participant's Subscription Agreement pertaining to such
RSU, or, if earlier, the Participant's termination of employment with the
Company and its Affiliates or the termination of the Plan.
7.3 Payment Prior to Vesting
(a) Voluntary Termination. If a Participant voluntarily terminates his
or her employment with the Company and its Affiliates for reasons
other than death, Disability or is involuntarily terminated by the
Company or an Affiliate for Cause, the Participant's nonvested RSUs
shall be canceled, and he or she shall receive as soon as
practicable after his or her termination of employment with the
Company and its Affiliates a cash payment equal to the lesser of:
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i) an amount equal to the number of those nonvested RSUs awarded
on each Award Date multiplied by the respective Cost of those
RSUs; or
ii) an amount equal to the number of those nonvested RSUs awarded
on each Award Date multiplied by the Fair Market Value of a
share of Common Stock on the date of the Participant's
termination of employment with the Company and its Affiliates.
(b) Involuntary Termination. If a Participant's employment is terminated
by the Company or an Affiliate for any reason other than Cause, the
Participant's nonvested RSUs shall be canceled and he or she shall
receive payment as soon as practicable following his or her
termination of employment with the Company and its Affiliates as
described below:
i) The number of nonvested RSUs awarded on each Award Date shall
be multiplied by a fraction, the numerator of which that is
the number of full years that the Participant was employed by
the Company or any Affiliate after that Award Date and the
denominator of which is three; and the Participant shall
receive the resulting number of such RSUs in shares of Common
Stock, with any fractional RSU paid in cash.
ii) With respect to the Participant's remaining nonvested RSUs,
the Participant shall receive cash in an amount equal to the
lesser of: (A) the number of such nonvested RSUs awarded on
each Award Date multiplied by the respective Cost of those
RSUs; or (B) the number of those nonvested RSUs awarded on
each Award Date multiplied by the Fair Market Value of a share
of Common Stock on the date of the Participant's termination
of employment with the Company and its Affiliates.
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(c) Committee's Discretion. The Committee shall have complete discretion
to determine the circumstances of a Participant's termination of
employment with the Company and its Affiliates, including whether
the same results from voluntary termination, Disability, Retirement,
death or termination by the Company for or not for Cause, and the
Committee's determination shall be final and binding on all parties
and not subject to review or challenge by any Participant or other
person.
Article 8 - Dividend Equivalent Amounts
Whenever dividends (other than dividends payable only in shares of Common
Stock) are paid with respect to shares of Common Stock, each Participant shall
be paid an amount in cash equal to the number of his or her vested RSUs
multiplied by the dividend value per share. Dividends (other than dividends
payable only in shares of Common Stock) shall not be credited or paid with
respect to each Participant's nonvested RSUs.
Article 9 - Designation of Beneficiary
A Participant may designate one or more Beneficiaries to receive payments
or shares of Common Stock in the event of his or her death. A designation of
Beneficiary shall apply to a specified percentage of a Participant's entire
interest in the Plan. Such designation, or any change therein, must be in
writing in a form acceptable to the Company and shall be effective upon receipt
by the Company. If there is no effective designation of Beneficiary, or if no
Beneficiary survives the Participant, the Participant's estate shall be deemed
to be the Beneficiary.
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Article 10 - Adjustments
In the event of a stock dividend, stock split, reverse stock split,
combination or reclassification of shares, recapitalization, merger,
consolidation, exchange, spin-off or otherwise which affects Common Stock, the
Committee shall make appropriate equitable adjustments in:
(a) the number or kind of shares of Common Stock or securities with
respect to which RSUs shall thereafter be granted;
(b) the number and kind of shares of Common Stock remaining subject to
outstanding RSUs;
(c) the number of RSUs credited to each Participant; and
(d) the method of determining the value of RSUs.
Article 11 - Amendment or Termination of Plan
The Company reserves the right to amend, terminate or freeze the Plan at
any time, by action of its Board of Directors (or a duly authorized committee
thereof ) or the Committee, provided that no such action shall adversely affect
a Participant's rights under the Plan with respect to RSUs awarded and vested
before the date of such action. No amendment shall be effective unless approved
by the stockholders of the Company if stockholder approval of such amendment is
required to comply with any applicable law, regulation or stock exchange rule.
Upon termination of the Plan, any vested RSU shall be paid in accordance with
Section 7.2 of the Plan and any nonvested RSU shall be canceled and paid in
accordance with Section 7.3(b) of the Plan except that such amount shall be paid
as soon as administratively practicable following the Plan termination. Upon
freezing of the Plan, all vested RSUs awarded prior to freezing shall continue
to be held under the Plan until the Deferral Period expires and all nonvested
RSUs awarded prior to freezing shall vest or become canceled in accordance with
the terms of the Plan.
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Article 12 - Miscellaneous Provisions
12.1 No Distribution; Compliance with Legal Requirements
The Committee may require each person acquiring shares of Common Stock
under the Plan to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to distribution
thereof. No shares of Common Stock shall be issued until all applicable
securities law and other legal and stock exchange requirements have been
satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Common Stock as it deems
appropriate.
12.2 Withholding
Participation in the Plan is subject to any required tax withholding on
wages or other income of the Participant in connection with the Plan. Each
Participant agrees, by entering the Plan, that the Company or the
Affiliate employing the Participant shall have the right to deduct any
federal, state or local income taxes or other taxes, in its sole
discretion, from any amount payable to the Participant under the Plan or
from any payment of any kind otherwise due to the Participant. Upon the
vesting of the RSUs, prior to the issuance or delivery of shares of Common
Stock or the payment of any cash hereunder, a Participant shall pay all
required withholding to the Company and, if applicable, an Affiliate.
Without limiting the generality of the foregoing, any withholding
obligation with regard to any Participant may be satisfied by: (i)
reducing the number of shares of Common Stock otherwise deliverable to the
Participant, (ii) subject to the Committee's prior consent, any method
approved by the Committee which may include the Participant delivering
shares of Common Stock already owned for at least six months (or such
other period to avoid an accounting charge against the Company's earnings)
and held free and clear of all encumbrances to the Company; or (iii) by
the Participant paying cash directly to the Company.
12.3 Notices; Delivery of Stock Certificates
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Any notice required or permitted to be given by the Company or the
Committee pursuant to the Plan shall be deemed given when personally
delivered or deposited in the United States mail, registered or certified,
postage prepaid, addressed to the Participant at the last address shown
for the Participant on the records of the Company. Delivery of stock
certificates to persons entitled to receive them under the Plan shall be
deemed effected for all purposes when the Company or a share transfer
agent of the Company shall have deposited such certificates in the United
States mail, addressed to such person at his/her last known address on
file with the Company.
12.4 Nontransferability of Rights
During a Participant's lifetime, any payment or issuance of shares under
the Plan shall be made to him or her otherwise than by will or the laws of
descent and distribution. No RSU or other interest under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, garnishment, execution, levy or charge,
and any attempt by a Participant or any Beneficiary under the Plan to do
so shall be void. No interest under the Plan shall in any manner be liable
for or subject to the debts, contracts, liabilities, engagements or torts
or a Participant or Beneficiary entitled thereto.
12.5 Obligations Unfunded and Unsecured
The Plan shall at all times be entirely unfunded, and no provision shall
at any time be made with respect to segregating assets of the Company
(including Common Stock) for payment of any amounts or issuance of any
shares of Common Stock hereunder. No Participant or other person shall own
any interest in any particular assets of the Company or any Affiliate
(including Common Stock) by reason of the right to receive payment under
the Plan, and any Participant or other person shall have only the rights
of a general unsecured creditor of the Company with respect to any rights
under the Plan. Nothing contained in this Plan and no action taken
pursuant to the provisions of this Plan shall create or be construed to
create a trust of any kind, or a
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fiduciary relationship amongst the Company, any Affiliate, the Committee,
and the Participants, their designated Beneficiaries or any other person.
Any funds which may be invested under the provisions of this Plan shall
continue for all purposes to be part of the general funds of the Company
and no person other than the Company shall by virtue of the provisions of
this Plan have any interest in such funds. If the Company decides to
establish any accrued reserve on its books against the future expense of
benefits payable hereunder, or if the Company establishes a rabbi trust
under this Plan, such reserve or trust shall not under any circumstances
be deemed to be an asset of the Plan.
12.6 Governing Law
The Plan is established in order to provide deferred compensation to a
select group of management and highly compensated employees within the
meanings of Sections 201(2) and 301(a)(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). To the extent legally
required, the Code and ERISA shall govern the Plan and, if any provision
hereof is in violation of any applicable requirement thereof, the Company
reserves the right to retroactively amend the Plan to comply therewith. To
the extent not governed by the Code and ERISA, the terms of the Plan shall
be governed, construed, administered and regulated in accordance with the
laws of Delaware. In the event any provision of this Plan shall be
determined to be illegal or invalid for any reason, the other provisions
shall continue in full force and effect as if such illegal or invalid
provision had never been included herein.
12.7 Claims Procedure
A Participant or Beneficiary shall make any claim (and, in the case of the
denial of such claim, any appeal) in writing to the Committee or such
other person designated by the Committee in accordance with the claims
procedure established by the Committee, which is intended to comply
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with the claims procedure provided under ERISA and U.S. Department of
Labor Regulation ss. 2560.503-1.
12.8 Rule 16b-3
To the extent required, the Plan is intended to comply with Rule 16b-3 and
the Committee shall interpret and administer the provisions of the Plan in
a manner consistent therewith. If a management employee is designated by
the Committee to participate hereunder, any election to receive an award
of RSUs shall be deemed approved by such Committee and shall be deemed an
exempt purchase under Rule 16b-3. Any provisions inconsistent with Rule
16b-3 shall be inoperative and shall not affect the validity of the Plan.
12.9 No Employment Rights
The establishment and operation of this Plan shall not confer any legal
rights upon any Participant or other person for a continuation of
employment, nor shall it interfere with the rights of the Company or
Affiliate to discharge any employee and to treat him or her without regard
to the effect which that treatment might have upon him or her as a
Participant or potential Participant under the Plan.
12.10 Severability of Provisions
If any provision of the Plan shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions
hereof, and the Plan shall be construed and enforced as if such provisions
had not been included
12.11 Construction
The use of a masculine pronoun shall include the feminine, and the
singular form shall include the plural form, unless the context clearly
indicates otherwise. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.
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12.12 Effective Date of Plan
The Plan is adopted, effective upon January 1, 1999, subject to approval
of the stockholders of the Company as provided under applicable law,
regulation or stock exchange rule.
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