Exhibit 10(iii)(f)
As amended and restated
effective 4/20/99
HSB GROUP, INC.
1995 STOCK OPTION PLAN
ARTICLE I - PLAN ADMINISTRATION AND ELIGIBILITY
1.1 Purpose of Plan
The purpose of the 1995 Stock Option Plan is to attract and retain persons
eligible to participate in the Plan and to motivate such individuals to
exert their best efforts to contribute to the long-term growth of the
Company by encouraging ownership in the Company. The Plan is further
designed to promote a closer identity of interest between Participants and
the Company's shareholders.
1.2 Definitions
(a) "Appreciation" shall mean the excess of the Fair Market Value of a
share over the specified option price per share multiplied by the
number of shares subject to the option or portion thereof which is
surrendered.
(b) "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated
under Section 12 of the Exchange Act.
(c) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
under the Exchange Act.
(d) "Beneficiary" shall mean the legal representative of the estate of a
deceased Optionee or the person or persons who shall acquire the right
to exercise an option or Stock Appreciation Right by bequest or
inheritance or by reason of the death of the Optionee. In the case
where a Participant's right to shares of Restricted Stock vest as
provided in Section 2.5(d) on or prior to the Participant's date of
death, the term "Beneficiary" shall also mean the legal representative
of the estate of the Participant or the person or persons who shall
acquire the right to such vested shares of Stock by bequest or
inheritance or by reason of the death of such Participant.
(e) "Board" shall mean the Board of Directors of the Company.
(f) "Change in Control" shall be deemed to have occurred if the events set
forth in any one of the following paragraphs shall have occurred:
(I) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company or its affiliates) representing 25% or more
of the combined voting power of the Company's then outstanding
securities, excluding any Person who becomes such a Beneficial Owner
in connection with a transaction described in clause (i) of paragraph
(III) below; or
(II) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on
December 23, 1996, constitute the Board and any new director (other
than a director whose initial assumption of office is in connection
with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of
directors of the Company) whose appointment or election by the Board
or nomination for election by the Company's shareholders was approved
or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on December 23, 1996 or
whose appointment, election or nomination for election was previously
so approved or recommended; or
(III) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other
corporation, other than (i) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either
by remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof), in combination with
the ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any subsidiary of the
Company, at least 60% of the combined voting power of the securities
of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (ii) a
merger or consolidation effected to implement a recapitalization of
the Company (or similar transaction) in which no Person is or becomes
the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities Beneficially Owned by such
Person any securities acquired directly from the Company or its
Affiliates) representing 25% or more of the combined voting power of
the Company's then outstanding securities; or
(IV) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity, at least 60% of the combined voting
power of the voting securities of which are owned by shareholders of
the Company in substantially the same proportions as their ownership
of the Company immediately prior to such sale.
Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to have occurred by virtue of the consummation of any
transaction or series of integrated transactions immediately following
which the record holders of the common stock of the Company
immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership in an
entity which owns all or substantially all of the assets of the
Company immediately following such transaction or series of
transactions.
(g) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(h) "Committee" shall mean the Human Resources Committee of the Board or
any future committee of the Board performing similar functions.
(i) "Company" shall mean HSB Group,Inc. and, except in determining under
Section 1.2(f) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its business
and/or assets which assumes this Plan by operation of law, or
otherwise.
(j) "Disability" shall mean any condition which meets the definition of
Long-Term Disability under the Company's Long-Term Disability Plan.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" shall mean the average of the high and low prices
per share of the Company's Stock as reported by the New York Stock
Exchange Composite Transaction Reporting System (NYSE) on the date for
which the Fair Market Value is being determined, or if no quotations
are available for the Company's Stock, for the next preceding date for
which such a quotation is available. If shares of Company Stock are
not then listed on the NYSE, Fair Market Value shall be reasonably
determined by the Committee, in its sole discretion.
(m) "Incentive Stock Option" shall mean an option described in Section 422
of the Code.
(n) "Nonstatutory Stock Option" shall mean an option which does not
qualify as an Incentive Stock Option under Section 422 of the Code.
(o) "Optionee" shall mean an individual to whom an option is granted under
the Plan.
(p) "Participant" shall mean an individual to whom an option is granted or
to whom Restricted Stock is awarded under the Plan.
(q) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) the Company or
any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the
Company.
(r) "Plan" shall mean the HSB Group, Inc. 1995 Stock Option Plan, as
amended.
(s) "Related Company" shall mean any corporation, partnership, joint
venture or other entity during any period in which at least a fifty
percent voting or profits interest is owned, directly or indirectly,
by the Company.
(t) "Restricted Stock" shall mean one or more shares of Stock awarded to
an eligible Participant under Section 2.5 of the Plan and subject to
the terms and conditions set forth in Section 2.5.
(u) "Retirement" shall mean the termination of employment under
circumstances which entitle an employee to receive retirement benefits
under the Company's Employees' Retirement Plan.
(v) "Stock" shall mean the Common Stock of the Company.
(w) "Stock Appreciation Right" shall mean a right to surrender to the
Company all or any portion of an option and, as determined by the
Committee, to receive in exchange therefor cash or whole shares of
Stock (valued at current Fair Market Value) or a combination thereof
having an aggregate value equal to the excess of the current Fair
Market Value of one (1) share over the option price of one (1) share
specified in such option grant multiplied by the number of shares
subject to such option or the portion thereof which is surrendered.
1.3 Administration
The Plan shall be administered by the Committee as defined herein. No
member of the Committee shall be eligible to be granted an award under the
Plan. Each member of the Committee shall be a "disinterested director"
within the meaning of Rule 16b-3 of the General Rules and Regulations
promulgated under the Exchange Act and an "outside director" within the
meaning of Section 162(m) of the Code. The Committee shall have the
responsibility of interpreting the Plan and establishing and amending such
rules and regulations necessary or appropriate for the administration of
the Plan or for the continued qualification of any Incentive Stock Options
granted hereunder. In addition, the Committee shall have the authority to
designate the individuals who shall be granted options and awarded
Restricted Stock under the Plan and the amount and nature of the options,
related rights and awards to be granted to each such individual. All
interpretations of the Plan or of any options, related rights or awards
issued under it made by the Committee shall be final and binding upon all
persons having an interest in the Plan. No member of the Committee shall be
liable for any action or determination taken or made in good faith with
respect to this Plan or any option granted hereunder.
1.4 Eligibility
All employees of the Company or a Related Employer and any consultant or
other person providing key services to the Company or a Related Employer
shall be eligible to receive grants of stock options and awards of
Restricted Stock under the Plan.
1.5 Stock Subject to the Plan
(a) The maximum number of shares of Stock that may be delivered to
Participants and their beneficiaries under the Plan shall be equal to
the sum of (i) 4,200,000 shares of Stock; and (ii) any shares of Stock
that are represented by awards granted under the Company's 1985 Stock
Option Plan which are forfeited, expire or are canceled without
delivery of shares of Stock or which result in the forfeiture of
shares of Stock back to the Company. Preferred Stock may be used in
lieu of grants of Stock under the Plan subject to further
authorization of the Board of the Company. Notwithstanding the
foregoing, in no event shall the Committee grant any Participant
Incentive Stock Options, Nonstatutory Options, Nonstatutory Stock
Options, Stock Appreciation Rights or Restricted Stock in any single
calendar year for more than 250,000 shares of Stock. The limitation on
the number of shares which may be delivered under the Plan or granted
to an individual Participant shall be subject to adjustment under
Section 3.2 of this Plan.
(b) Any shares of Stock granted under the Plan that are forfeited back to
the Company because of the failure to meet an award contingency or
condition shall again be available for delivery pursuant to new awards
granted under the Plan. To the extent any shares of Stock covered by
an award are not delivered to a Participant because the award is
forfeited, canceled or expired, or the shares are not delivered
because the award is settled in cash or used to satisfy the applicable
tax withholding obligation, such shares shall not be deemed to have
been delivered for purposes of determining the maximum number of
shares of Stock available for delivery under the Plan.
(c) If the exercise price of any stock option granted under the Plan or
the Company's 1985 Stock Option Plan is satisfied by tendering shares
of Stock to the Company (by either actual delivery or by attestation),
only the number of shares of Stock issued net of the shares of Stock
tendered shall be deemed delivered for purposes of determining the
maximum number of shares of Stock available for delivery under the
Plan.
(d) Upon the exercise of an option or a Stock Appreciation Right, or
payment of a Restricted Stock award, the Company may distribute newly
issued shares or shares previously repurchased on behalf of the
Company through a broker or other independent agent designated by the
Committee. Such repurchases shall be subject to such rules and
procedures as the Committee may establish hereunder and shall be
consistent with such conditions as may be prescribed from time to time
by law or by the Securities and Exchange Commission ("SEC") in any
rule or regulation or in any exemptive order or no-action letter
issued by the SEC to the Company or the broker with respect to the
making of such purchase or otherwise.
ARTICLE II - OPTIONS, STOCK APPRECIATION RIGHTS AND RESTRICTED STOCK
2.1 Granting of Options
The Committee may grant Incentive Stock Options (ISOs), Nonstatutory Stock
Options or any combination thereof, provided that the aggregate Fair Market
Value (determined at the time the option is granted) of the shares of Stock
with respect to which ISOs are exercisable for the first time by an
individual during any calendar year (under this Plan and any other option
plan of the Company) shall not exceed $100,000. No such maximum limitation
shall apply to Nonstatutory Stock Options.
2.2 Terms and Conditions of Options
Each option granted under the Plan shall be authorized by the Committee and
shall be evidenced by an instrument delivered to the Participant, in a form
approved by the Committee, containing the following terms and conditions
and such other terms and conditions as the Committee may deem appropriate.
(a) Option Term - Each option shall specify the term for which the option
thereunder is granted and shall provide that the option shall expire
at the end of such term. In no event shall any option be exercisable
any earlier than one year after the date of such grant. The Committee
shall have authority to grant options exercisable in cumulative or
non-cumulative installments. No option shall be exercisable after the
expiration of ten years from the date upon which such option is
granted. Notwithstanding anything to the contrary contained herein, in
the event of a Change in Control, all outstanding options shall
immediately become exercisable.
(b) Option Price - The option price per share shall be determined by the
Committee at the time an option is granted, and shall not be less than
the Fair Market Value of one share of Stock on the date the option is
granted.
(c) Exercise of Option -
(1) Options may be exercised only by proper written notice to the
Company or its duly authorized agent accompanied by the proper
amount of payment for the shares, as provided under Section
2.2(d) hereunder.
(2) The Committee may postpone any exercise of an option or a Stock
Appreciation Right or the delivery of Stock following the lapse
of certain restrictions with respect to awards of Restricted
Stock for such time as the Committee in its discretion may deem
necessary, in order to permit the Company with reasonable
diligence (i) to effect or maintain registration of the Plan or
the shares issuable upon the exercise of the option or the Stock
Appreciation Right or the lapse of certain restrictions
respecting awards of Restricted Stock under the Securities Act of
1933, as amended, or the securities laws of any applicable
jurisdiction, or (ii) to determine that such shares and Plan are
exempt from such registration; the Company shall not be obligated
by virtue of any option or any provision of the Plan to recognize
the exercise of an option or the exercise of a Stock Appreciation
Right or the lapse of certain restrictions respecting awards of
Restricted Stock to sell or issue shares in violation of said Act
or of the law of the government having jurisdiction thereof. Any
such postponement shall not extend the term of an option; neither
the Company nor its directors or officers shall have any
obligation or liability to the Optionee of an option or Stock
Appreciation Right, or to the Optionee's Beneficiary with respect
to any shares as to which the option or Stock Appreciation Right
shall lapse because of such postponement.
(3) To the extent an option is not exercised for the total number of
shares with respect to which such options become exercisable, the
number of unexercised shares shall accumulate and the option
shall be exercisable, to such extent, at any time thereafter, but
in no event later than ten years from the date the option was
granted or after the expiration of such shorter period (if any)
which the Committee may have established with respect to such
option pursuant to Subsection (a) of this Section 2.2.
(d) Payment of Purchase Upon Exercise - Payment for the shares as to which
an option is exercised shall be made in one of the following ways:
(1) payment in cash or if permitted by the Committee, by tendering
shares of Stock of the Company (by either actual delivery of
shares or by attestation, with such shares valued at Fair Market
Value as of the day of exercise) held by the purchaser for at
least six months; or in any combination thereof, as determined by
the Committee; or
(2) if permitted by the Committee, a Participant may elect to
authorize a third party to sell shares of Stock (or a sufficient
portion of the shares) acquired upon exercise of the option and
remit to the Company a sufficient portion of the sales proceeds
to pay the entire exercise price and any tax withholding
resulting from such exercise.
(e) Nontransferability - No option granted under the Plan shall be
transferable other than by will or by the laws of descent and
distribution subject to Section 2.4 hereunder, unless the Committee
shall permit (on such terms and conditions as it shall establish) such
option to be transferred to a member of the Participant's immediate
family or to a trust or similar vehicle for the benefit of such
immediate family members, or to an "alternate participant" pursuant to
a Qualified Domestic Relations Order as defined in the Code. During
the lifetime of an Optionee, an option shall be exercisable only by
such Optionee, or if applicable, a transferee. For purposes of Section
2.4 hereunder, a transferred option may be exercised by the transferee
to the extent that the Participant would have been entitled had the
option not been transferred.
(f) Laws and Regulations - The Committee shall have the right to condition
any issuance of shares to any Optionee or Participant hereunder upon
such Optionee's or Participant's undertaking in writing to comply with
such restrictions on the subsequent disposition of such shares as the
Committee shall deem necessary or advisable as a result of any
applicable law or regulation. In the case of Stock issued or cash paid
upon exercise of options or associated Stock Appreciation Rights, or
the lapse of restrictions with respect to Restricted Stock awarded to
a Participant under the Plan, the Optionee, Participant or other
person receiving such Stock or cash shall be required to pay to the
Company or Related Company the amount of any taxes which the Company
or Related Company is required to withhold with respect to such Stock
or cash. The Company or Related Company may, in its sole discretion,
permit an Optionee or Participant or other person receiving such Stock
or cash to satisfy any Federal, state or local (if any) tax
withholding requirements, in whole or in part by (i) delivering to the
Company or Related Company shares of Stock held by such Optionee,
Participant or other person having a Fair Market Value equal to the
amount of the tax or (ii) directing the Company or Related Company to
retain Stock otherwise issuable to the Optionee, Participant or other
person under the Plan having a Fair Market Value equal to the amount
of the tax. If Stock is used to satisfy tax withholding, such Stock
shall be valued based on the Fair Market Value when the tax
withholding is required to be made.
(g) Modification - The Committee shall have authority to modify an option
without the consent of the Optionee, provided that such modification
does not affect the exercise price or otherwise materially diminish
the value of such option to the Optionee, and provided further, that
except in connection with an amendment to the Plan, the Committee
shall not have authority to make any modification to any particular
option that materially increases the value of the option to the
Optionee.
2.3 Stock Appreciation Rights
(a) The Committee may, but shall not be required to, grant a Stock
Appreciation Right to the Optionee either at the time an option is
granted or by amending the option at any time during the term of such
option. A Stock Appreciation Right shall be exercisable only during
the term of the option with which it is associated. The Stock
Appreciation Right shall be an integral part of the option with which
it is associated and shall have no existence apart therefrom. The
conditions and limitations of the Stock Appreciation Right shall be
determined by the Committee and shall be set forth in the option or
amendment thereto. An amendment granting a Stock Appreciation Right
shall not be deemed to be a grant of a new option for purposes of the
Plan.
(b) A Stock Appreciation Right may be exercised by:
(1) filing with the Secretary of the Company a written election,
which election shall be delivered by the Secretary to the
Committee specifying:
(i) the option or portion thereof to be surrendered; and
(ii) the percentage of the Appreciation which the Optionee
desires to receive in cash, if any; and
(2) surrendering such option for cancellation or partial
cancellation, as the case may be, provided, however, that any
election to receive any portion of the Appreciation in cash shall
be of no force or effect unless and until the Committee shall
have consented to such election.
(c) No election to receive any portion of the Appreciation in cash shall
be filed with the Secretary and no Stock Appreciation Right shall be
exercised to receive any cash unless such election and exercise shall
occur during the period (hereinafter referred to as the "Cash Window
Period") beginning on the third business day following the date of
release for publication by the Company of a regular quarterly or
annual statement of sales and earnings and ending on the twelfth
business day following such date. The Committee may consent to the
election of a holder to receive any portion of the Appreciation in
cash at any time after such election has been made. If such election
is consented to, the Stock Appreciation Right shall be deemed to have
been exercised during the Cash Window Period in which, or next
occurring after which, the Optionee completed all acts required of
such Optionee under the preceding paragraphs to exercise the Stock
Appreciation Right. Any Stock Appreciation Right exercised during said
Cash Window Period shall be valued and deemed exercised as of the date
during such Cash Window Period when the average of the high and low
prices for the shares of Stock as reported by the NYSE is the highest.
2.4 Exercise of Option or Stock Appreciation Right in the Event of Termination
of Employment or Death
(a) Options and associated Stock Appreciation Rights shall terminate
immediately upon the termination of the Optionee's employment (or
cessation of the provision of services) with the Company or a Related
Company unless the written option instrument of such Optionee provides
otherwise. The conditions established by the Committee in the
instrument for exercising options and Stock Appreciation Rights
following termination of employment (or cessation of the provision of
services) are limited by the following restrictions.
(1) If termination of employment (or cessation of the provision of
services) is by reason of the death of the Optionee, no exercise
by the Optionee's Beneficiary may occur more than two years after
the Optionee's death.
(2) If termination of employment (or cessation of the provision of
services) is the result of Disability or Retirement, no exercise
by the Optionee or his Beneficiary may occur more than two years
following such termination of employment (or cessation of the
provision of services).
(3) If termination of employment (or cessation of the provision of
services) is for a reason other than death, Disability,
Retirement or "involuntary termination for cause", no exercise by
the Optionee may occur more than three months following such
termination of employment (or cessation of the provision of
services). As used herein "involuntary termination for cause"
shall mean termination of employment (or cessation of the
provision of services) by reason of the Optionee's commission of
a felony, fraud or willful misconduct which has resulted, or is
likely to result, in substantial and material damage to the
Company or a Related Company. Whether an involuntary termination
is for "cause" will be determined in the sole discretion of the
Committee.
(b) If the Optionee should die after termination of employment (or
cessation of provision of services), such termination (or cessation of
provision of services) being for a reason other than Disability,
Retirement or involuntary termination for cause, but while the option
is still exercisable, the option or associated Stock Appreciation
Right, if any, may be exercised by the Beneficiary of the Optionee no
later than one year from the date of termination of employment (or
cessation of provision of services) of the Optionee.
(c) Under no circumstances may an option or Stock Appreciation Right be
exercised by an Optionee or Beneficiary after the expiration of the
term specified for the option.
2.5 Awarding of Restricted Stock
(a) The Committee shall from time to time in its absolute discretion
select the Participants to whom awards of Restricted Stock shall be
granted and the number of shares subject to such awards. Each award of
Restricted Stock under the Plan shall be evidenced by an instrument
delivered to the Participant in such form as the Committee shall
prescribe from time to time in accordance with the Plan. The
Restricted Stock subject to such award shall be registered in the name
of the Participant and held in escrow by the Committee during the
Restricted Period (as defined herein).
(b) Upon the award to a Participant of shares of Restricted Stock pursuant
to Section 2.5(a), the Participant shall, subject to Subsection (c) of
this Section 2.5, possess all incidents of ownership of such shares,
including the right to receive dividends with respect to such shares
and to vote such shares.
(c) Shares of Restricted Stock awarded to a Participant may not be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed of,
except by will or the laws of descent and distribution, for a period
of five years, or such shorter period as the Committee shall
determine, from the date on which the award is granted (the
"Restricted Period"). The Committee may also impose such other
restrictions and conditions on the shares as it deems appropriate and
any attempt to dispose of any such shares of Restricted Stock in
contravention of such restrictions shall be null and void and without
effect. In determining the Restricted Period of an award, the
Committee may provide that the foregoing restrictions shall lapse with
respect to specified percentages of the awarded shares on successive
anniversaries of the date of such award. In no event shall the
Restricted Period end with respect to awarded shares prior to the
satisfaction by the Participant of any liability arising under Section
2.2(f).
(d) The restrictions described in Section 2.5(c) shall lapse upon the
completion of the Restricted Period with respect to specific shares of
Restricted Stock and the Participant's right to such shares shall vest
on such date or, if earlier, on the date of the Participant's
termination of employment (or cessation of the provision of services)
on account of the death, Disability or Retirement of the Participant.
The Company shall deliver to the Participant, or the Beneficiary of
such Participant, if applicable, within 30 days of the termination of
the Restricted Period, the number of shares of Stock that were awarded
to the Participant as Restricted Stock and with respect to which the
restrictions imposed under Section 2.5(c) have lapsed, less any stock
returned by the Company to satisfy tax withholding pursuant to Section
2.2(f), if applicable.
(e) Except as provided in Sections 2.5(d) and (f), if the Participant's
continuous employment (or other provision of services) with the
Company or a Related Employer shall terminate for any reason prior to
the expiration of the Restricted Period of an award, any shares
remaining subject to restrictions shall thereupon be forfeited by the
Participant and transferred to, and reacquired by, the Company at no
cost to the Company.
(f) The Committee shall have the authority (and the instrument evidencing
an award of Restricted Stock may so provide) to cancel all or any
portion of any outstanding restrictions prior to the expiration of the
Restricted Period with respect to any or all of the shares of
Restricted Stock awarded to a Participant hereunder on such terms and
conditions as the Committee may deem appropriate.
(g) In the event of a Change in Control, all restrictions on any
outstanding shares of Restricted Stock shall lapse as of the date of
such Change in Control.
ARTICLE III - GENERAL PROVISIONS
3.1 Authority
Appropriate officers of the Company designated by the Committee are
authorized to execute and deliver written instruments evidencing awards
hereunder, and amendments thereto, in the name of the Company, as directed
from time to time by the Committee.
3.2 Adjustments in the Event of Change in Common Stock of the Company
In the event of any change in the Stock of the Company by reason of any
stock dividend, stock split, recapitalization, reorganization, merger,
consolidation, split-up, combination, or exchange of shares, or rights
offering to purchase Stock at a price substantially below Fair Market
Value, or of any similar change affecting the Stock, the number and kind of
shares which thereafter may be obtained and sold under the Plan and the
number and kind of shares subject to options in outstanding option
instruments and the purchase price per share thereof and the number of
shares of Restricted Stock awarded pursuant to Section 2.5(a) with respect
to which all restrictions have not lapsed, shall be appropriately adjusted
consistent with such change in such manner as the Board in its discretion
may deem equitable to prevent substantial dilution or enlargement of the
rights granted to, or available for, Participants in the Plan. Any
fractional shares resulting from such adjustments shall be eliminated.
However, without the consent of the Optionee, no adjustment shall be made
in the terms of an ISO which would disqualify it from treatment under
Section 421(a) of the Code or would be considered a modification, extension
or renewal of an option under Section 425(h) of the Code.
3.3 Rights of Participants
The Plan and any option or award granted under the Plan shall not confer
upon any Optionee or Participant any right with respect to continuance of
employment (or other provision of services) by the Company or any Related
Employer nor shall they interfere in any way with the right of the Company
or Related Employer by which an Optionee or Participant is employed to
terminate his employment (or other provision of services) at any time. The
Company shall not be obligated to issue Stock pursuant to an option or an
award of Restricted Stock for which the restrictions hereunder have lapsed
if such issuance would constitute a violation of any applicable law. No
Optionee shall have any rights as a shareholder with respect to any shares
subject to option prior to the date of issuance to such Optionee of a
certificate or certificates for such shares. Except as provided herein, no
Participant shall have any rights as a shareholder with respect to any
shares of Restricted Stock awarded to such Participant.
3.4 Amendment, Suspension and Discontinuance of the Plan
The Board may from time to time amend, suspend or discontinue the Plan,
provided that the Board may not, without shareholder approval, take any of
the following actions unless such actions fall within the provisions of
Section 3.2 herein:
(a) increase the number of shares reserved for options pursuant to Section
1.5;
(b) alter in any way the class of persons eligible to participate in the
Plan;
(c) permit the granting of any option at an option price less than that
provided under Section 2.2(b) hereof; or
(d) extend the term of the Plan or the term during which any option may be
granted or exercised.
No amendment, suspension or discontinuance of the Plan shall impair an
Optionee's rights under an option previously granted to an Optionee
without the Optionee's consent.
3.5 Governing Law
This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Connecticut.
3.6 Effective Date of the Plan
The Plan shall be effective on April 18, 1995, subject to the requisite
approval of shareholders. No option shall be granted pursuant to this Plan
later than April 17, 2005, but options granted before such date may extend
beyond it in accordance with their terms and the terms of the Plan.