DATED JANUARY 1, 1999 MEDIAONE GROUP
AMENDED MEDIAONE GROUP 1994 STOCK PLAN
I. PURPOSE.
This Amended MediaOne Group 1994 Stock Plan (the "Plan"), is intended to
promote the long term success of MediaOne Group, Inc. (the "Company") by
affording certain eligible employees, executive officers, non-employee directors
of the Company and its Subsidiaries (as defined below) and certain outside
consultants or advisors to the Company and its affiliates with an opportunity to
acquire a proprietary interest in the Company, in order to incentivize such
persons and to align the financial interests of such persons with the
stockholders of the Company.
II. DEFINITIONS.
The following defined terms are used in the Plan:
A. "Agreement" shall mean the agreement or grant letter accepted by the
Participant as described in Section VIII of the Plan between the Company and a
Participant under which the Participant receives an Award pursuant to this Plan.
B. "Award" shall mean individually, collectively or in tandem, an incentive
award granted under the Plan, whether in the form of Options, SARs, Stock Awards
or Phantom Units.
C. "Board" or "Board of Directors" shall mean the Board of Directors of the
Company.
D. "Change of Control" shall mean any of the following:
1. any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) is or becomes a beneficial owner of (or otherwise has the
authority to vote), directly or indirectly, securities representing twenty
percent (20%) or more of the total voting power of all of the Company's then
outstanding voting securities, unless through a transaction arranged by, or
consummated with the prior approval of the Board of Directors; or
2. any period of two (2) consecutive calendar years during which there
shall cease to be a majority of the Board of Directors comprised as follows:
individuals who at the beginning of such period constitute the Board of
Directors and any new director(s) whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds ( 2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved; or
3. the Company becomes a party to a merger or consolidation in which either
(i) the Company will not be the surviving corporation or (ii) the Company will
be the surviving corporation and any outstanding shares of Common Stock of the
Company will be converted into shares of any other company (other than a
reincorporation or the establishment of a holding company involving no change of
ownership of the Company) or other securities or cash or other property
(excluding payments made solely for fractional shares); or
4. any other event that a majority of the Board of Directors, in its sole
discretion, shall determine constitutes a Change of Control.
E. "Code" shall mean the Internal Revenue Code of 1986, as amended.
F. "Committee" shall mean the Human Resources Committee or the Sponsor
Committee or their delegates, as applicable, pursuant to provisions of Section
III of the Plan.
G. "Common Stock" shall mean the common stock, $.01 par value, of the
Company.
H. "Company" shall mean MediaOne Group, Inc., a Delaware corporation
(previously known as "U S WEST, Inc."), and any successor thereof.
I. "Director Compensation" shall mean all cash or stock remuneration
payable to an Outside Director for service to the Company as a director, other
than reimbursement for expenses or Common
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THIS DOCUMENT CONSTITUTES A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933.
Stock received upon exercise of an Option, and shall include retainer fees for
service on, and fees for attendance at meetings of, the Board and any committees
thereof.
J. "Disabled" or "Disability" shall mean such condition as would qualify
the individual as "disabled" for purposes of receiving a disability pension
under the MediaOne Group Pension Plan or long-term disability benefits under the
provisions of any MediaOne Group disability plan that provides long-term
disability benefits and is maintained for the benefit of eligible employees of
the Company or any Related Entity, provided, however, that in the case of an
Incentive Option, "disability" shall have the meaning specified in Section
22(e)(3) of the Code.
K. "Dividend Equivalent Rights" shall mean the right to receive the amount
of any dividends that are paid on an equivalent number of shares of Common Stock
underlying an Option or Phantom Unit, which shall be payable either in cash or
in the form of additional Phantom Units or Stock.
L. "Effective Date" shall mean the date on which the Plan was first
approved by the stockholders of the Company.
M. "Eligible Employee" shall mean any employee of the Company or any
Related Entity who is employed on the date of the grant of an Award.
N. "Eligible Non-Employee" shall mean any consultant or advisor to the
Company or any Related Entity.
O. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
P. "Executive Officers" shall mean any Officer of the Company or any
Related Entity who, at the time of an Award, is subject to the reporting
requirements of Section 16(a) of the Exchange Act.
Q. "Fair Market Value" shall mean the closing price of a share of Common
Stock as reported on the New York Stock Exchange for the applicable date, or
if there were no sales on such date, on the last day on which there were
sales.
R. "Human Resources Committee" shall mean the human resources committee
of the Board or any other committee of the Board appointed by the Board to
administer the Plan in lieu of the Human Resources Committee, which committee
shall consist of no fewer than three (3) persons, each of whom shall be a
Non-Employee Director.
S. "Incentive Option" shall mean an incentive stock option under the
provisions of Section 422 of the Code.
T. "Indexed" shall mean the periodic adjustment of an Option Price based
upon adjustment criteria determined by the Committee, but in no event shall
the Option Price be adjusted to an amount less than the original Option Price.
U. "Non-Employee Director" shall have the meaning set forth in Rule
16b-3(b)(3) and its successor promulgated under the Exchange Act.
V. "Nonqualified Option" shall mean an Option which does not qualify
under Section 422 of the Code.
W. "Officer" shall mean any executive of the Company or any Related
Entity who participates in the Company's executive compensation programs.
X. "Option" shall mean an option granted by the Company to purchase
Common Stock pursuant to the provisions of this Plan, including Incentive
Options, Nonqualified Options and Reload Options.
Y. "Optionee" shall mean a Participant to whom one or more Options have
been granted.
Z. "Option Price" shall mean the price per share payable to the Company
for shares of Common Stock upon the exercise of an Option.
AA. "Parent Corporation" shall mean any corporation within the meaning of
Section 424(e) of the Code.
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AB. "Participant" shall mean an Eligible Employee, Eligible Non-Employee,
Executive Officer or Non-Employee Director who is granted an Award.
AC. "Phantom Unit" shall mean a notional account representing a value
equivalent to one share of Common Stock on the Award date.
AD. "Plan" shall mean the Amended MediaOne Group 1994 Stock Plan.
AE. "Related Entity" shall mean any Parent Corporation or Subsidiary of
the Company.
AF. "Reload Option" shall mean the right to receive a further Option for
a number of shares equal to the number of shares of Common Stock surrendered
by the Optionee upon exercise of the original Option as provided in Section
IX.E of the Plan.
AG. "Restricted Period" shall mean the period of time from the date of
grant of Restricted Stock until the lapse of restrictions attached thereto
under the terms of the Agreement granting such Restricted Stock, pursuant to
the provisions of the Plan or by action of the Committee.
AH. "Restricted Stock" shall mean an Award made by the Committee
entitling the Participant to acquire, at no cost or for a purchase price
determined by the Committee at the time of grant, shares of Common Stock
which are subject to restrictions in accordance with the provisions of
Section XII hereof.
AI. "Retirement" shall mean with respect to any Eligible Employee, that
such person has terminated employment with the Company or any Related Entity
other than "for cause" (as defined in subsection IX.H.(v)) and (i) such
person specifically is treated as "retired" for purposes of the Plan under
any individually negotiated, custom, written agreement or arrangement between
the Company or any Related Entity and the Eligible Employee, or (ii) such
person has attained one of the following combinations of age and years of
service as of the date of such termination (measuring years of service for
this purpose in the same manner as "term of employment" is measured under the
MediaOne Group Pension Plan):
AGE YEARS OF SERVICE
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Any age At least 30 years
50 through 54 At least 25 years
55 through 59 At least 20 years
60 through 64 At least 15 years
65 and older At least 10 years
AJ. "Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
AK. "Sponsor Committee" shall mean a committee of the Company consisting
of employees of the Company or any Related Entity appointed by the Human
Resources Committee and which shall administer the Plan as provided in
Section III hereof.
AL. "Stock Appreciation Right" or "SAR" shall mean a grant entitling the
Participant to receive an amount in cash or shares of Common Stock or a
combination thereof having a value equal to (or if the Committee shall so
determine at the time of a grant, less than) the excess of the Fair Market
Value of a share of Common Stock on the date of exercise over the Fair Market
Value of a share of Common Stock on the date of grant (or over the Option
Price or such other price as the Committee shall determine, if the Stock
Appreciation Right was granted in tandem with an Option) multiplied by the
number of shares with respect to which the Stock Appreciation Right shall
have been exercised, with the Committee having sole discretion to determine
the form or forms of payment at the time of grant of the SAR.
AM. "Stock Awards" shall mean any Award which is in the form of
Restricted Stock and any outright grants of Common Stock approved by the
Committee pursuant to the Plan.
AN. "Subsidiary" shall mean with respect to any Award other than an
Incentive Option, any corporation, joint venture or partnership in which the
Company owns, directly or indirectly, (i) with respect to a corporation,
stock possessing twenty percent (20%) or more of the total combined voting
power of all classes of stock in the corporation or (ii) in the case of a
joint venture or partnership, the Company possesses a twenty percent (20%)
interest in the capital or profits of such joint venture or partnership. In
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the case of any Incentive Option, Subsidiary shall mean any corporation
within the meaning of Section 424(f) of the Code.
AO. "Vested" shall mean the status that results with respect to an Option
or other Award which may be immediately exercised under the terms of the
Agreement granting such Option or other Award, pursuant to the provisions of
the Plan or by action of the Committee.
III. ADMINISTRATION.
A. The Plan shall be administered by the Human Resources Committee with
respect to Officers, Executive Officers and Non-Employee Directors and by the
Sponsor Committee with respect to all other Eligible Employees and Eligible
Non-Employees. The Human Resources Committee may adopt such rules,
regulations and guidelines as it determines necessary for the administration
of the Plan. Subject to any such rules, regulations and guidelines adopted by
the Human Resources Committee, the Sponsor Committee shall have the power to
adopt rules, regulations and guidelines to permit such Committee to
administer the Plan with respect to Eligible Employees (other than Officers
and Executive Officers) and with respect to Eligible Non-Employees.
B. The Committee may delegate to one or more of its members, or to one
or more agents, such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may
employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. The
Committee may employ such legal or other counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon
any opinion or computation received from any such counsel, consultant or
agent. Expenses incurred by the Committee in the engagement of such counsel,
consultant or agent shall be paid by the Company or such Related Entity whose
employees have benefited from the Plan, as determined by the Committee. The
Company shall indemnify members of the Committee and any agent of the
Committee who is an employee of the Company or a Related Entity against any
and all liabilities or expenses to which they may be subjected by reason of
any act or failure to act with respect to their duties on behalf of the Plan,
except in circumstances involving such person's gross negligence or willful
misconduct.
C. In furtherance of and not in limitation of the Committee's
discretionary authority, subject to the provisions of the Plan, the Committee
shall have the authority to:
1. determine the Participants to whom Awards shall be granted and the
number of and terms and conditions upon which Awards shall be granted (which
need not be the same for all Awards or types of Awards);
2. establish, in its sole discretion, annual or long-term financial
goals of the Company, Related Entity, or division, department, or group of
the Company or Related Entity, or individual goals which the Committee shall
consider in granting Awards, if any;
3. determine the satisfaction of performance goals established by the
Committee based upon periods of time or any combinations thereof;
4. determine the time when Awards shall be granted, the Option Price of
each Option, the period(s) during which Options shall be exercisable (whether
in whole or in part), the restrictions to be applicable to Awards, and the
other terms and provisions of Awards;
5. modify grants of Awards pursuant to Paragraph D. of this Section III
or rescind grants of Awards pursuant to Section IX.H(v), respectively;
6. provide the establishment of a procedure whereby a number of shares
of Common Stock or other securities may be withheld from the total number of
shares of Common Stock or other securities to be issued upon exercise of an
Option, the lapse of restrictions on Restricted Stock and the vesting of
Phantom Units (other than an Incentive Option) to meet the obligation of
withholding for income, social security and other taxes incurred by a
Participant upon such exercise or required to be withheld by the Company in
connection with such exercise;
7. adopt, modify and rescind rules and regulations and guidelines
relating to the Plan;
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8. adopt modifications to the Plan and procedures, as may be necessary
to comply with provisions of the laws and applicable regulatory rulings of
countries in which the Company or a Related Entity operates in order to
assure the legality of Awards granted under the Plan to Participants who
reside in such countries;
9. obtain the approval of the stockholders of the Company with respect
to Awards consisting of Phantom Units or Restricted Stock; provided, however,
no action shall be proposed to stockholders without the approval of the Board
of Directors; and
10. make all determinations, perform all other acts, exercise all other
powers and establish any other procedures determined by the Committee to be
necessary, appropriate or advisable in administering the Plan and to maintain
compliance with any applicable law.
D. The Committee may at any time, in its sole discretion, accelerate the
exercisability of any Awards and waive or amend any and all restrictions and
conditions of any Awards.
E. Subject to and not inconsistent with the express provisions of the
Plan, the Code and Rule 16b-3 of the Exchange Act, the Committee shall have
the authority to require, as a condition to the granting of any Option, SAR
or other Award (to the extent applicable) to any Executive Officer of the
Company or any Related Entity that the Executive Officer receiving such
Option, SAR or other Award agree not to sell or otherwise dispose of such
Option, SAR or other Award or Common Stock acquired pursuant to such Option,
SAR or other Award (to the extent applicable) or any other "derivative
security" (as defined by Rule 16a-1(c) under the Exchange Act) for a period
of six (6) months following the later of (i) the date of the grant of such
Option, SAR or other Award (to the extent applicable) or (ii) the date when
the other Option Price of such Option, SAR or other Award is fixed, if such
Option Price is not fixed at the date of grant of such Option, SAR or other
Award.
IV. DECISIONS FINAL.
Any decision, interpretation or other action made or taken in good faith
by the Committee arising out of or in connection with the Plan shall be
final, binding and conclusive on the Company and all Participants and their
respective heirs, executors, administrators, successors and assigns.
V. ARBITRATION.
Any agreement may contain, among other things, provisions that require
arbitration of any and all disputes between a Participant and the Company or
any Related Entity, in a form or forms acceptable to the Committee, in its
sole discretion.
VI. DURATION OF THE PLAN.
The Plan shall remain in effect for a period of ten (10) years from the
Effective Date, unless terminated by the Board pursuant to Section XX.
VII. SHARES AVAILABLE; LIMITATIONS.
A. The maximum aggregate number of shares of Common Stock that may be
granted in any calendar year for all purposes under the Plan shall be one
percent (1.0%) of the shares outstanding (excluding shares held in the
Company's treasury) on the first day of such calendar year, provided,
however, that in the event that fewer than the full aggregate number of
shares available for issuance in any calendar year are issued in such year,
the shares not issued shall be added to the shares available for issuance in
any subsequent year or years. If, for any reason, any shares of Common Stock
as to which Options, SARs, Restricted Stock, or Phantom Units have been
granted cease to be subject to exercise or purchase hereunder (other than the
exercise of SARs for cash), the underlying shares of Common Stock shall
thereafter be available for grants to Participants under the Plan during any
calendar year. Awards granted under the Plan may be fulfilled in accordance
with the terms of the Plan with (i) authorized and unissued shares of the
Common Stock or (ii) issued shares of Common Stock reacquired by the Company,
in each situation, as the Board of Directors or the Committee may determine
from time to time at its sole discretion.
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B. The maximum number of shares of Common Stock that shall be subject to
the grant of an Award in any calendar year for Awards other than Options or
SARs shall not exceed one-third ( 1/3) of the total number of shares of
Common Stock subject to Awards granted under the Plan for such calendar year.
C. The maximum number of shares of Common Stock with respect to which
Awards may be granted to any individual Participant in any calendar year may
not exceed one million five hundred thousand (1,500,000).
D. The cumulative number of shares of Common Stock that may be issued
under this Plan in connection with the exercise of Incentive Options shall
not exceed ten million (10,000,000).
VIII. GRANT OF AWARDS.
A. The Committee shall determine the type or types of Award(s) to be
made to each Participant. Awards may be granted singly, in combination or in
tandem subject to restrictions set forth in Section IX.C for Incentive
Options. The types of Awards that may be granted under the Plan are Options,
with or without Reload Options, SARs, Stock Awards and Phantom Units, and
with respect to Phantom Units and Restricted Stock, with or without Dividend
Equivalent Rights.
B. Each grant of an Award under this Plan shall be evidenced by an
Agreement dated as of the date of the grant of the Award, other than Stock
Awards consisting of an outright grant of shares of Common Stock. This
Agreement shall set forth the terms and conditions of the Award, as may be
determined by the Committee, and if the Agreement relates to the grant of an
Option, shall indicate whether the Option that it evidences, is intended to
be an Incentive Option or a Nonqualified Option. Each grant of an Award is
conditioned upon the acceptance by the Participant of the terms of the
Agreement. Unless otherwise extended by the Committee, a Participant shall
have ninety (90) days from the date of the Agreement to accept its terms.
IX. OPTIONS.
The Committee, in its sole discretion, may grant Incentive Options or
Nonqualified Options to Eligible Employees, Officers, and Executive Officers,
and Nonqualified Options to Non-Employee Directors and Eligible
Non-Employees. Any Options granted to a Participant under predecessor plans
which remain outstanding as of the Effective Date shall be governed by the
terms and conditions of the Plan, except to the extent the provisions of the
Plan are inconsistent with the terms of the Options granted under the
predecessor plans, in which event the applicable provisions of the
predecessor plans shall govern; provided, however, that in no event shall
there be a modification of the terms of any Incentive Option granted under
the predecessor plans. The terms and conditions of the Options granted under
this Section IX shall be determined from time to time by the Committee, as
set forth in the Agreement granting the Option, and subject to the following
conditions:
A. NONQUALIFIED OPTIONS. The Option Price for each share of Common
Stock issuable pursuant to a Nonqualified Option may be an amount at or above
the Fair Market Value on the date such Option is granted, may be Indexed from
the original Option Price and may be granted with or without Dividend
Equivalent Rights; provided, however, that with respect to Nonqualified
Options granted to any Executive Officer, no Dividend Equivalent Rights may
be granted.
B. INCENTIVE OPTIONS. The Option Price for each share of Common Stock
issuable pursuant to an Incentive Option shall not be less than one hundred
percent (100%) of the Fair Market Value on the date such Option is granted
and may be Indexed from the original Option Price.
C. INCENTIVE OPTIONS; SPECIAL RULES. Options granted in the form of
Incentive Options shall be subject to the following provisions:
1. GRANT. No Incentive Option shall be granted pursuant to this Plan
more than ten (10) years after the Effective Date.
2. ANNUAL LIMIT. The aggregate Fair Market Value (determined at the
time the Option is granted) of the shares of Common Stock with respect to
which one or more Incentive Options are exercisable for the first time by any
Optionee during any calendar year under the Plan or under any other stock
plan of the Company or any Related Entity shall not exceed $100,000 or such
other maximum amount permitted
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under Section 422 of the Code. Any Option purporting to constitute an
Incentive Option in excess of such limitation shall constitute a Nonqualified
Option.
3. 10% STOCKHOLDER. If any Optionee to whom an Incentive Option is to
be granted pursuant to the provisions of the Plan is, on the date of grant,
an individual described in Section 422(b)(6) of the Code, then the following
special provisions shall be applicable to the Option granted to such
individual:
(a) the Option Price of shares subject to such Incentive Option shall not
be less than 110% of the Fair Market Value of Common Stock on the date of
grant; and
(b) the Option shall not have a term in excess of (5) years from the date
of grant.
D. OTHER OPTIONS. The Committee may establish rules with respect to,
and may grant to Eligible Employees, Options to comply with any amendment to
the Code made after the Effective Date providing for special tax benefits for
stock options.
E. RELOAD OPTIONS. Without in any way limiting the authority of the
Committee to make Awards hereunder, the Committee shall have the authority to
grant Reload Options. Any such Reload Option shall be subject to such other
terms and conditions as the Committee may determine. Notwithstanding the
above, (i) the Committee shall have the right, in its sole discretion, to
withdraw a Reload Option to the extent that the grant thereof will result in
any adverse accounting consequences to the Company and (ii) no additional
Reload Options shall be granted upon the exercise of a Reload Option.
F. TERM OF OPTION. No Option shall be exercisable after the expiration
of ten (10) years from the date of grant of the Option.
G. EXERCISE OF STOCK OPTION. Each Option shall be exercisable in one or
more installments as the Committee in its sole discretion may determine at
the time of the Award and as provided in the Agreement. The right to purchase
shares shall be cumulative so that when the right to purchase any shares has
accrued such shares or any part thereof may be purchased at any time
thereafter until the expiration or termination of the Option. The Option
Price shall be payable (i) in cash or by an equivalent means acceptable to
the Committee, (ii) by delivery (constructive or otherwise) to the Company of
shares of Common Stock owned by the Optionee or (iii) by any combination of
the above as provided in the Agreement. Shares delivered to the Company in
payment of the Option Price shall be valued at the Fair Market Value on the
date of the exercise of the Option.
H. VESTING. The Agreement shall specify the date or dates on which the
Optionee may begin to exercise all or a portion of his Option. Subsequent to
such date or dates, the Option shall be deemed vested and fully exercisable.
(i) DEATH. In the event of the death of any Optionee, all Options held by
such Optionee on the date of his death shall become Vested Options and the
estate of such Optionee, shall have the right, at any time and from time to
time within one year after the date of death, or such other period, if any,
as the Committee in its sole discretion may determine, to exercise the
Options of the Optionee (but not after the earlier of the expiration date of
the Option or, in the case of an Incentive Option, one (1) year from the date
of death).
(ii) DISABILITY. If the employment of any Optionee is terminated because
of Disability, all Options held by such Optionee on the date of his or her
termination shall be retained by such Optionee, and such Options that are not
yet Vested Options shall become Vested Options in accordance with the vesting
schedule established at the time such Options were issued. The Optionee shall
have the right to exercise Vested Options at any time and from time to time,
but not after the expiration date of the Option or, in the case of Incentive
Options where tax-advantaged treatment is desired, one year from the date of
termination of employment.
(iii) RETIREMENT. Upon an Optionee's Retirement, all Options held by such
Optionee on the date of his or her Retirement shall be retained by such
Optionee, and such Options that are not yet Vested Options shall become
Vested Options in accordance with the vesting schedule established at the
time such Options were issued, unless the Committee, in its sole discretion,
determines otherwise. Unless the Committee, in its sole discretion,
determines otherwise, the Optionee shall have the right to exercise Vested
Options at any time and from time to time, but not after the expiration date
of the Option. In the case of Incentive
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Options where tax-advantaged treatment is desired, the Optionee shall have
the right to exercise Vested Options three months from the date of Retirement.
(iv) OTHER TERMINATION. If the employment with the Company or a Related
Entity of an Optionee is terminated for any reason other than for death or
Disability and other than "for cause" as defined in subparagraph (v) below,
such Optionee shall have the right, in the case of a Vested Option, for a
period of three (3) months after the date of such termination or such longer
period as determined by the Committee, to exercise any such Vested Option,
but in any event not after the expiration date of any such Option.
(v) TERMINATION FOR CAUSE. Notwithstanding any other provision of the
Plan to the contrary, if the Optionee's employment is terminated by the
Company or any Related Entity "for cause" (as defined below), such Optionee
shall immediately forfeit all rights under his Options except as to the
shares of Common Stock already purchased prior to such termination.
Termination "for cause" shall mean (unless another definition is agreed to in
writing by the Company and the Optionee) termination by the Company because
of: (a) the Optionee's willful and continued failure to substantially perform
his duties (other than any such failure resulting from the Optionee's
incapacity due to physical or mental impairment) after a written demand for
substantial performance is delivered to the Optionee by the Company, which
demand specifically identifies the manner in which the Company believes the
Optionee has not substantially performed his duties, (b) the willful conduct
of the Optionee which is demonstrably and materially injurious to the Company
or Related Entity, monetarily or otherwise, or (c) the conviction of the
Optionee for a felony by a court of competent jurisdiction.
X. FOREIGN OPTIONS AND RIGHTS.
The Committee may make Awards of Options to Eligible Employees,
Officers, Executive Officers, Non-Employee Directors and Eligible
Non-Employees who are subject to the tax laws of nations other than the
United States, which Awards may have terms and conditions as determined by
the Committee as necessary to comply with applicable foreign laws. The
Committee may take any action which it deems advisable to obtain approval of
such Option by the appropriate foreign governmental entity; provided,
however, that no such Award may be granted pursuant to this Section X and no
action may be taken which would result in a violation of the Exchange Act,
the Code or any other applicable law.
XI. STOCK APPRECIATION RIGHTS.
The Committee shall have the authority to grant SARs to Eligible
Employees, Officers, Executive Officers, Non-Employee Directors and Eligible
Non-Employees either alone or in connection with an Option. SARs granted in
connection with an Option shall be granted either at the time of grant of the
Option or by amendment to the Option. The terms and conditions of all SARs,
whether granted individually or in connection with an Option, shall be
determined by the Committee and set forth in the Agreement granting the SARs,
provided, however, that no fractional shares of Common Stock shall be issued
upon exercise of any SAR.
XII. RESTRICTED STOCK.
The Committee may, in its sole discretion, grant Restricted Stock to
Eligible Employees, Eligible Non-Employees, Officers, Executive Officers or
Non-Employee Directors subject to the provisions below.
A. RESTRICTIONS. A stock certificate representing the number of shares
of Restricted Stock granted shall be held in custody by the Company for the
Participant's account. The Participant shall have all rights and privileges
of a stockholder as to such Restricted Stock, including the right to receive
dividends, if any, and the right to vote such shares, except that, subject to
the provisions of Paragraph B. below, the following restrictions shall apply:
(i) the Participant shall not be entitled to delivery of the certificate
until the expiration of the Restricted Period; (ii) none of the shares of
Restricted Stock may be sold, transferred, assigned, pledged, or otherwise
encumbered or disposed of during the Restricted Period; (iii) the Participant
shall, if requested by the Company, execute and deliver to the Company, a
stock power endorsed in blank. The Restricted Period shall lapse upon a
Participant becoming Disabled or the death of a Participant. If a Participant
ceases to be an employee of the Company or a Related Entity prior to the
expiration of the Restricted Period applicable to such shares, except as a
result of the death or Disability of the Participant, shares of Restricted
Stock still subject to restrictions shall be forfeited unless otherwise
determined by the Committee, and all rights of the Participant to such shares
shall terminate without
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further obligation on the part of the Company. Upon the forfeiture (in whole
or in part) of shares of Restricted Stock, such forfeited shares shall become
shares of Common Stock held in the Company's treasury without further action
by the Participant.
B. TERMS AND CONDITIONS. The Committee shall establish the terms and
conditions for Restricted Stock pursuant to Section III of the Plan,
including whether any shares of Restricted Stock shall have voting rights or
a right to any dividends that are declared. Terms and conditions established
by the Committee need not be the same for all grants of Restricted Stock. The
Committee may provide for the restrictions to lapse with respect to a portion
or portions of the Restricted Stock at different times or upon the occurrence
of different events, and the Committee may waive, in whole or in part, any or
all restrictions applicable to a grant of Restricted Stock. Restricted Stock
Awards may be issued for no cash consideration or for such minimum
consideration as may be required by applicable law or such other
consideration as may be determined by the Committee.
C. DELIVERY OF RESTRICTED SHARES. At the end of the Restricted Period
as herein provided, a stock certificate for the number of shares of
Restricted Stock with respect to which the restrictions have lapsed shall be
delivered (less any shares delivered pursuant to Section XIX.C in
satisfaction of any withholding tax obligation), free of all such
restrictions, except applicable securities law restrictions, to the
Participant or the Participant's estate, as the case may be. The Company
shall not be required to deliver any fractional share of Common Stock but
shall pay, in lieu thereof, the Fair Market Value (measured as of the date
the restrictions lapse) of such fractional share to the Participant or the
Participant's estate, as the case may be. Notwithstanding the foregoing, the
Committee may authorize the delivery of the Restricted Stock to a Participant
during the Restricted Period, in which event any stock certificates in
respect of shares of Restricted Stock thus delivered to a Participant during
the Restricted Period applicable to such shares shall bear an appropriate
legend referring to the terms and conditions, including the restrictions,
applicable thereto.
XIII. PHANTOM UNITS.
A. GENERAL. The Committee may, in its sole discretion, grant the right
to earn Phantom Units to Eligible Employees, Officers, Executive Officers and
Eligible Non-Employees. The Committee shall determine the criteria for the
earning of Phantom Units, pursuant to Section III of the Plan. Upon
satisfaction of such criteria, a Phantom Unit shall be deemed a Vested Award.
A Phantom Unit granted by the Committee shall provide for payment in shares
of Common Stock. A Phantom Unit shall become a Vested Award upon (i) a
Participant becoming Disabled, or (ii) the death of a Participant. Shares of
Common Stock issued pursuant to this Section XIII may be issued for no cash
consideration or for such minimum consideration as may be required by
applicable law or such other consideration as may be determined by the
Committee. The Committee shall determine whether a Participant granted a
Phantom Unit shall be entitled to a Dividend Equivalent Right.
B. UNFUNDED CLAIM. The establishment of Phantom Units under the Plan
are unfunded obligations of the Company. The interest of a Participant in any
such units shall be considered a general unsecured claim against the Company
to the extent that the conditions for the earning of the Phantom Units have
been satisfied. Nothing contained herein shall be construed as creating a
trust or fiduciary relationship between the Participant, the Company or the
Committee.
C. ISSUANCE OF COMMON STOCK. Upon a Phantom Unit becoming a Vested
Award, unless a Participant has elected to defer under Paragraph D. below,
shares of Common Stock representing the Phantom Units shall be distributed to
the Participant, unless the Committee, with the consent of the Participant,
provides for the payment of the Phantom Units in cash or partly in cash and
partly in shares of Common Stock equal to the value of the shares of Common
Stock which would otherwise be distributed to the Participant.
D. DEFERRAL OF PHANTOM UNITS. Prior to the year with respect to which
a Phantom Unit may become a Vested Award, the Participant may elect not to
receive Common Stock upon the vesting of such Phantom Unit and for the
Company to continue to maintain the Phantom Unit on its books of account. In
such event, the value of a Phantom Unit shall be payable in shares of Common
Stock pursuant to the agreement of deferral.
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E. FINANCIAL HARDSHIP. Notwithstanding any other provision hereof, at
the written request of a Participant who has elected to defer pursuant to
Paragraph D. above, the Committee, in its sole direction, upon a finding that
continued deferral will result in financial hardship to the Participant, may
authorize the payment of all or a part of a Participant's Vested Phantom
Units in a single installment or the acceleration of payment of any multiple
installments thereof; provided, however, that distributions will not be made
under this paragraph if such distribution would result in liability of an
Executive Officer under Section 16 of the Exchange Act.
F. DISTRIBUTION UPON DEATH. The Committee shall pay the Fair Market
Value of the Phantom Units of a deceased Participant to the estate of the
Participant, as soon as practicable following the death of the Participant.
The value of the Phantom Units for the purpose of such distribution shall be
based upon the Fair Market Value of shares of Common Stock underlying the
Phantom Units on the date of the Participant's death.
XIV. STOCK AWARDS TO NON-EMPLOYEE DIRECTORS.
On the date of his or her admission to the Board, or in the case of
existing Non-Employee directors, as of the first meeting of the Board that
follows the date of this Prospectus, each Non-Employee Director shall be
granted a Stock Award consisting of 1,000 shares of Common Stock, without
restrictions, and 5,000 shares of Restricted Stock, which shall become Vested
in 20% annual increments.
XV. OUTSIDE DIRECTOR'S COMPENSATION.
A. PAYMENT IN COMMON STOCK OR OPTIONS. Each Non-Employee Director may
elect to receive payment of all or any portion of Director Compensation
comprised of retainer fees for service on the Board and any committees
thereof in Common Stock or Options to purchase Common Stock. The amount of
Common Stock or Options then issuable shall be based on the Fair Market Value
of the Common Stock or the Company's standard Black-Scholes option pricing
model, as applicable, on the dates such retainer fees are otherwise due and
payable to the Non-Employee Director. When any fees are paid in Common Stock
under this Section XV.A, any fractional shares of Common Stock shall be paid
in cash. Certificates evidencing such Common Stock shall be delivered
promptly following such date.
B. DEFERRAL OF PAYMENT. Each Non-Employee Director may elect to defer
the receipt of Common Stock payable pursuant to Section XV.A, in which event
such Non-Employee Director shall receive an equivalent number of Phantom
Units with Dividend Equivalent Rights. Any such Phantom Units shall become
Vested Awards at such time as the Non-Employee Director no longer serves as a
member of the Board. If a Non-Employee Director elects to defer receipt of
Common Stock and receive Phantom Units pursuant to this Section XV.B, the
election shall be (i) in writing, (ii) delivered to the Secretary of the
Company in the year preceding the year in which the Director Compensation
would otherwise be paid (or, for a Director's initial calendar year of
service, delivered prior to the date for which such services are rendered)
and (iii) irrevocable.
C. DIRECTOR STOCK OPTIONS. On the date of his or her admission to the
Board, or in the case of existing Non-Employee Directors, as of the first
meeting of the Board that follows the date of this Prospectus, each
Non-Employee Director shall be granted an Option to purchase forty-two
thousand (42,000) shares Common Stock. When such Option has become a Vested
Option, the Non-Employee Director holding such Option shall be entitled, as
of the first day of each calendar year thereafter, to a further Option having
a value equal to $112,000 (as determined in accordance with the Company's
standard Black-Scholes option pricing model). Any Option issued pursuant to
this Section XV.C is (i) to become a Vested Option in annual one-third
increments following the date of grant or, if earlier, in full upon the
retirement of the Director, (ii) to remain exercisable notwithstanding the
retirement of the Director from the Board (but in no event after the
expiration date of the Option), and (iii) to expire ten years from the date
of grant.
XVI. FEDERAL SECURITIES LAW.
With respect to grants of Awards to Directors and Executive Officers,
the Company intends that the provisions of this Plan and all transactions
effected in accordance with Plan shall comply with Rule 16b-3 under the
Exchange Act. Accordingly, the Committee shall administer and interpret the
Plan to the extent practicable, to maintain compliance with such rule.
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XVII. CHANGE OF CONTROL; ACCELERATION.
Upon the occurrence of a Change of Control:
A. in the case of all outstanding Options and SARs, each such Option and
SAR shall automatically become immediately fully exercisable by the
Participant unless the Committee shall otherwise determine at the time such
Option or SAR is granted as set forth in the respective grant Agreement;
B. restrictions applicable to Restricted Stock shall automatically be
deemed lapsed and conditions applicable to Phantom Units shall automatically
be deemed waived, and the Participants who receive such grants shall become
immediately entitled to receipt of the Common Stock subject to such grants;
and
C. the Human Resources Committee, in its discretion, shall have the
right to accelerate payment of any deferrals of Vested Phantom Units.
XVIII. ADJUSTMENT OF SHARES.
A. In the event there is any change in the Common Stock by reason of
any consolidation, combination, liquidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares or other like change in capital
structure of the Company, the number or kind of shares or interests subject
to an Award and the per share price or value thereof shall be appropriately
adjusted by the Committee at the time of such event, provided that each
Participant's economic position with respect to the Award shall not, as a
result of such adjustment, be worse than it had been immediately prior to
such event. Any fractional shares or interests resulting from such adjustment
shall be rounded up to the next whole share of Common Stock. Notwithstanding
the foregoing, (i) each such adjustment with respect to an Incentive Option
shall comply with the rules of Section 424(a) of the Code, and (ii) in no
event shall any adjustment be made which would render any Incentive Option
granted hereunder other than an "incentive stock option" for purposes of
Section 422 of the Code.
B. In the event of an acquisition by the Company of another corporation
where the Company assumes outstanding stock options or similar obligations of
such corporation, the number of Awards available under the Plan shall be
appropriately increased to reflect the number of such options or other
obligations assumed.
XIX. MISCELLANEOUS PROVISIONS.
A. ASSIGNMENT OR TRANSFER. Except as otherwise permitted by this
Section, no grant of any "derivative security" (as defined in the rules
issued under Section 16 of the Exchange Act) made under the Plan or any
rights or interests therein shall be assignable or transferable except by
last will and testament or the laws of descent and distribution. No grant of
any such derivative security shall be assignable or transferrable pursuant to
a domestic relations order. An Optionee who is an Officer or a Non-Employee
Director may assign or transfer an Option (other than an Incentive Option) or
a SAR as a gift to one or more members of his or her immediate family or to
trusts maintained for the benefit of such immediate family members if such
assignment or transfer is not pursuant to a domestic relations order and (i)
such assignment or transfer is expressly approved in advance by the Committee
or its delegate(s) or (ii) such Option or SAR was granted to the Optionee on
or after August 15, 1996, and the Agreement pertaining to such Option or SAR
expressly permits the assignment or transfer of the Option or SAR.
B. INVESTMENT REPRESENTATION; LEGENDS. The Committee may require each
Participant acquiring shares of Common Stock pursuant to an Award to
represent to and agree with the Company in writing that such Participant is
acquiring the shares without a view to distribution thereof. No shares of
Common Stock shall be issued pursuant to an Award until all applicable
securities law and other legal and stock exchange requirements have been
satisfied. The Committee may require the placing of stop-orders and
restrictive legends on certificates for Common Stock as it deems appropriate.
C. WITHHOLDING TAXES. In the case of distributions of Common Stock or
other securities hereunder, the Company, as a condition of such distribution,
may require the payment (through withholding from the Participant's salary,
payment of cash by the Participant, reduction of the number of shares of
Common Stock or other securities to be issued (except in the case of an
Incentive Option), or otherwise) of any federal, state, local or foreign
taxes required by law to be withheld with respect to such distribution.
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D. COSTS AND EXPENSES. The costs and expenses of administering the
Plan shall be borne by the Company and shall not be charged against any Award
nor to any Participant receiving an Award.
E. OTHER INCENTIVE PLANS. The adoption of the Plan does not preclude
the adoption by appropriate means of any other incentive plan for employees.
F. EFFECT ON EMPLOYMENT. Nothing contained in the Plan or any
agreement related hereto or referred to herein shall affect, or be construed
as affecting, the terms of employment of any Participant except to the extent
specifically provided herein or therein. Nothing contained in the Plan or any
agreement related hereto or referred to herein shall impose, or be construed
as imposing, an obligation on (i) the Company or any Related Entity to
continue the employment of any Participant and (ii) any Participant to remain
in the employ of the Company or any Related Entity.
G. NONCOMPETITION. Any Agreement may contain, among other things,
provisions prohibiting Participants from competing with the Company or any
Related Entity in a form or forms acceptable to the Committee, in its sole
discretion.
H. GOVERNING LAW. This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws of the State of
Colorado.
XX. AMENDMENT OR TERMINATION OF PLAN.
The Board shall have the right to amend, modify, suspend or terminate
the Plan at any time, provided that, with respect to Incentive Options, no
amendment shall be made that (i) decreases the minimum Option Price in the
case of any Incentive Option, or (ii) modifies the provisions of the Plan
with respect to Incentive Options, unless such amendment is made by or with
the approval of the stockholders or unless the Board receives an opinion of
counsel to the Company that stockholder approval is not necessary with
respect to any modifications relating to Incentive Options; and provided
further that no amendment shall be made that (i) increases the number of
shares of Common Stock that may be issued under the Plan, (ii) permits the
Option Price for any Option to be less than Fair Market Value on the date
such Option is granted, or (iii) extends the period during which awards may
be granted under the Plan beyond ten (10) years from the Effective Date,
unless such amendment is made by or with the approval of stockholders. No
amendment, modification, suspension or termination of the Plan shall alter or
impair any Awards previously granted under the Plan, without the consent of
the holder thereof.
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