EXHIBIT 10.19
UIL HOLDINGS CORPORATION
NON-EMPLOYEE DIRECTORS COMMON STOCK AND
DEFERRED COMPENSATION PLAN
SECTION 1. ESTABLISHMENT OF THE PLAN
-------------------------
1.01 THE PLAN. This Non-Employee Directors Common Stock and Deferred
Compensation Plan (the "Plan") is established for the benefit of the
Eligible Directors of UIL Holdings Corporation (the "Company").
1.02 APPLICABILITY OF THE PLAN. The provisions set forth herein are
applicable only to Directors serving on the Board of the Company on or
after the Effective Date. The benefits of Directors terminating Service
prior to that date shall be governed by the terms of the Plan in effect
on the date each of them terminated Service.
1.03 PURPOSE OF THE PLAN. The purpose of the Plan is to provide for payment
to each Eligible Director of a portion of his or her compensation for
Service as a Director in shares of the Company's Stock, and to allow
each Eligible Director to defer the payment of part of the Fees payable
to him or her for Service as a Director of the Company, including Fees
payable to an Eligible Director for Service as the chairperson or a
member of one or more committees of the Board. It is also the purpose
of the Plan to provide an incentive for Eligible Directors to continue
to contribute to the growth and profitability of the Company by
enabling them to share in the appreciation of the value of the
Company's Stock.
SECTION 2. DEFINITIONS
-----------
2.01 Whenever used in the Plan, the following terms shall have the
respective meanings set forth below, unless otherwise expressly
provided in the Plan:
(a) "Beneficiary" or "Beneficiaries" shall mean the person or
persons designated by a Participant in accordance with
Subsection 6.02 hereof.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Cash Account" shall mean the unfunded memorandum sub-account
maintained by the Company to record that portion of an
Eligible Director's Fees that he or she has elected to have
deferred and credited with interest pursuant to Subsection
5.02(a) of the Plan, together with the amount of the interest
credited from time to time to such sub-account.
(d) "Change in Control" shall mean any of the following events:
(1) any merger or consolidation of the Company with any
corporate shareholder holding twenty-five percent
(25%) or more of the Stock of the Company or with any
other corporation that is, or after such merger or
consolidation would be, controlled by a shareholder
or group of shareholders owning at least twenty-five
percent (25%) of the Stock of the Company (an
"affiliate" of such shareholder or group of
shareholders); or
(2) any sale, lease, exchange, mortgage, pledge, transfer
or disposition, other than the payment of quarterly
cash dividends, to or with any shareholder or group
of shareholders holding twenty-five per cent (25%) or
more of the Stock of the Company, or any affiliate of
such shareholder or group of shareholders, of any
assets of the Company having an aggregate fair market
value of $40 million or more; or
(3) the issuance or sale by the Company of any securities
of the Company to any shareholder or group of
shareholders holding twenty-five per cent (25%) or
more of the Stock of the Company, or to any affiliate
of such shareholder or group of shareholders, in
exchange for cash, securities or other consideration
having an aggregate fair market value of $50 million
or more; or
(4) the implementation of any plan or proposal for the
liquidation or dissolution of the Company proposed by
or on behalf of any shareholder or group of
shareholders owning at least twenty-five per cent
(25%) of the Stock of the Company, or any affiliate
of such shareholder or group of shareholders; or
(5) any reclassification of securities (including a
reverse stock split) or recapitalization of the
Company, or any other transaction, which has the
effect, direct or indirectly, of increasing the
proportionate share of outstanding shares of any
class of equity securities, or securities convertible
into any equity securities, of the Company, that is
directly or indirectly owned by a shareholder or
group of shareholders owning at least twenty-five
percent (25%) of the Stock of the Company, or any
affiliate of such shareholder or group of
shareholders.
(e) "Committee" shall mean the Committee on Directors of the Board.
(f) "Company" shall mean UIL Holdings Corporation and any successor.
-2-
(g) "Deferred Compensation Account" shall mean the unfunded
memorandum account maintained by the Company to record that
portion of an Eligible Director's Stock Awards and Fees
deferred under the Plan, their hypothetical investment in
either a Cash Account, Phantom Stock Unit Account, or some
combination thereof, and the accretions to and payments from
each such Account.
(h) "Director" shall mean any person who is duly elected and
qualified to serve on the Board and renders Service to the
Company.
(i) "Eligible Director" shall mean a person who renders Service to
the Company or The United Illuminating Company on or after May
15, 1996 at a time when he or she is not an employee of the
Company or The United Illuminating Company.
(j) "Fair Market Value" shall mean the average on a particular
date of the high and low per share sale prices of shares of
Stock on the New York Stock Exchange, as reported on the
composite tape, or, if there is no sale on such date, then
such average price on the last previous date on which a sale
is reported.
(k) "Fees" shall mean amounts earned for Service as an Eligible
Director, including quarterly retainers, Board meeting fees
and Board committee chairperson and meeting fees.
(l) "Grant Date" shall mean a date, on or about March 1, in each
of the years 1997 through 2010, inclusive, on which the New
York Stock Exchange conducts business; and, unless another
date is designated as the Grant Date for such year by the
Secretary of the Company (the "Corporate Secretary") on or
before February 1 of such year, the Grant Date for such year
shall be the first day in March on which the New York Stock
Exchange conducts business.
(m) "Participant" shall mean a person for whom a Deferred
Compensation Account has been established and is being
maintained under the Plan.
(n) "Phantom Stock Unit" shall mean a unit of measurement
equivalent to one share of Common Stock of the Company, but
excluding all of the attendant rights of a shareholder of such
Stock (for example, the right to own, control and vote such
Stock) other than the right to be credited with dividends
thereon.
(o) "Phantom Stock Account" shall mean the unfunded memorandum
sub-account maintained by the Company pursuant to Subsection
5.02(b) of the Plan to record the number of Phantom Stock
Units resulting from Stock Awards and an election by an
Eligible Director to have some portion of all of his or her
deferred Fees invested in Phantom Stock Units, and shall
include all Phantom Stock Units credited as a result of the
reinvestment of dividends on Phantom Stock Units.
-3-
(p) "Service" shall mean service as a Director, including service
as a member of a committee or committees of the Board, and
service as a member of the Board of Directors, including
service as a member of a committee or committees of the Board
of Directors of The United Illuminating Company.
(q) "Stock" shall mean the Common Stock of the Company.
(r) "Stock Award" shall mean a number of whole and fractional
Phantom Stock Units, computed to three decimal places, equal
to the sum of 200 plus the quotient resulting from dividing
(a) the quarterly retainer Fee payable to an Eligible Director
for Service during the first quarter of each fiscal year of
the Company during the period commencing January 1, 1997 and
ending December 31, 2010, by (b) the Fair Market Value of the
Stock on the Grant Date of such year.
SECTION 3. STOCK AWARDS
------------
3.01 ANNUAL AWARDS. On each Grant Date, in lieu of the quarterly retainer
Fee payable to each Participant who has served as a Director for at
least six (6) months immediately preceding such Grant date, a Stock
Award shall be credited to the Phantom Stock Account of such
Participant.
3.02 ELECTION TO RECEIVE ANNUAL AWARD IN SHARES OF STOCK. With respect to
each Grant Date, each Eligible Director who would receive a Stock Award
pursuant to Subsection 3.01 of the Plan may elect to waive such Stock
Award and receive a whole number of shares of Stock, issued by the
Company or purchased by the Company for and in the name of such
Eligible Director, in lieu of such Stock Award. To the extent that the
formula for such Stock Award, as set forth in Subsection 2.01(r) of the
Plan does not result in a whole number of shares of Stock, the result
shall be rounded downwards to the next whole number, and the value of
the fractional share shall be distributed and paid to the Eligible
Director promptly in cash. The stock certificate for shares of Stock
issued to or purchased for and in the name of an Eligible Director
pursuant to this Subsection 3.02 shall be held by the Company for a
period of six (6) months following the Grant Date and shall be
distributed to him or her as soon as practicable following the
expiration of such period; and during such period he or she shall have
all the rights of a shareholder of the Company with respect to such
shares of Stock, except that such shares of Stock shall not be
transferrable other than by will or the laws of descent and
distribution. An election to waive a Stock Award pursuant to this
Subsection 3.02 shall be irrevocable and must be made at least six (6)
months in advance of the Grant Date.
3.03 RETIREMENT PROGRAM TERMINATION AWARDS. On and as of the Effective Date,
each Eligible Director serving as such on the Effective Date who makes
or has made an irrevocable election to waive participation in, and any
and all benefits under, any prior retirement program maintained by the
Company for Directors, shall have credited to the Phantom
-4-
Stock Account of such Participant a number of Phantom Stock Units as
follows: Ms. Albright 88; Mr. Breslawsky 127; Mr. Carson 717; Mr.
Croweak 1,343; Mr. Devlin 672; Ms. Henley-Cohn 326; Mr. Lahey 183; Mr.
McFadden 1,250; Mr. O'Keefe 2,059; Mr. Thomas 568.
SECTION 4. DEFERRAL OF FEES
----------------
4.01 GENERAL PARTICIPATION RULE. An Eligible Director may elect to defer
payment of all or a specific portion of all Fees (other than the
quarterly retainer Fee payable during the first quarter of a fiscal
year of the Company during the period commencing January 1, 1997 and
ending December 1, 2010) payable to the Eligible Director more than six
(6) months after the date of such election until he or she (i) elects
to revoke or alter such election with respect to such Fees payable more
than six (6) months after the date of such election to revoke, or (ii)
terminates Service, or (iii) is paid upon a Change in Control in
accordance with Subsection 6.01(d) of the Plan. Elections shall be made
by written notice delivered to the Corporate Secretary. Fees shall be
considered deferred on the date on which they would have been paid
absent the election to defer (the "Deferral Date"). Any Fees deferred
pursuant to the Plan shall not be affected by any revocation of a
Participant's election and shall be paid only in accordance with
Section 6 of the Plan, together with increments thereon determined in
accordance with Subsection 5.02 of the Plan.
4.02 ELECTION ALTERNATIVES. The election made pursuant to Subsection 4.01
shall designate some portion or all of such Fees treated as if invested
in the Participant's (a) Cash Account, or (b) Phantom Stock Account, or
some combination thereof. Investment elections shall be made in
multiples of twenty-five per cent (.25) (for example, seventy-five per
cent (.75) of such deferred Fees treated as being invested in a Cash
Account and twenty-five per cent (.25) treated as being invested in a
Phantom Stock Account).
4.03 PRE-EFFECTIVE DATE ELECTIONS. Each election by a Participant under and
pursuant to the Directors' Deferred Compensation Plan of the Company in
effect prior to the Effective Date, shall be and remain in effect under
the Plan until revoked in accordance with Subsection 4.01 of the Plan;
and each amount in such Participant's Cash Account and number of whole
and fractional Phantom Stock Units in such Participant's Phantom Stock
Account on the Effective date shall be and remain in such Participant's
Cash Account and Phantom Stock Account, respectively, on and as of the
Effective Date.
-5-
SECTION 5. ACCOUNTING FOR AWARDS AND DEFERRALS; HYPOTHETICAL
INVESTMENT OF DEFERRALS.
-----------------------
5.01 SEPARATE ACCOUNTS. The Company shall maintain a Deferred Compensation
Account for each Participant. Such Account shall be maintained with
enough specificity to enable the Company to determine the amounts
credited, at any particular point in time, to the Participant's Cash
Account and/or Phantom Stock Account.
5.02 HYPOTHETICAL INVESTMENT OF DEFERRED COMPENSATION ACCOUNTS.
(a) Credits to Cash Account. A Participant's Cash Account shall be
credited on each Deferral Date with the amount of Fees then
deferred and elected to be invested in a Cash Account. On the
first day of each calendar quarter, interest shall be credited
to the Cash Account of each Participant for each month of the
preceding quarter, calculated on the basis of 30-day months
and a 360-day year and the balance of such Account on the
first day of each month of the preceding quarter (including
interest for the preceding month) at the prime rate of
Citibank, N.A., its successor, or any other bank approved by
the Committee for such purpose, in effect on the first day of
each such month.
(b) Crediting of Phantom Stock Units; Reinvestment of Dividends in
Phantom Stock Account; Capital Adjustments. The number of
whole and fractional Phantom Stock Units, computed to three
decimal places, to be credited to the Phantom Stock Account of
a Participant on each Deferral Date shall be equal to the
amount of Fees then deferred and elected to be invested in a
Phantom Stock Account, divided by Fair Market Value on the
Deferral Date. On each dividend payment date with respect to
the Stock, the Phantom Stock Account of a Participant shall be
credited with an additional number of whole and fractional
Phantom Stock Units, computed to three decimal places, equal
to the product of the dividend per share then payable,
multiplied by the number of Phantom Stock Units then credited
to such account, divided by Fair Market Value on the dividend
payment date.
In the event that the number of outstanding shares of Common
Stock of the Company shall be increased or decreased by reason
of a stock split, stock dividend, recapitalization,
reclassification or other similar change in the Company's
capital structure, the number of Phantom Stock Units credited
to a Participant's Phantom Stock Account shall be adjusted
accordingly by and at the direction of the Board.
In the event of a Change of Control or of a termination of the
Plan pursuant to Subsection 8.03 of the Plan, the Phantom
Stock Units credited to a Participant's Phantom Stock Account
shall be converted immediately into a cash equivalent amount
and credited to, and shall thereafter be treated in all
respects as part of,
-6-
such Participant's Cash Account. The cash equivalent amount
added to the Cash Account pursuant to the preceding sentence
shall be determined by multiplying the number of Phantom
Stock units then standing to the Participant's credit by the
highest Fair Market Value on any day within the sixty (60)
calendar days preceding the Change in Control or termination
of the Plan.
SECTION 6. PAYMENT OF DEFERRED COMPENSATION ACCOUNT
----------------------------------------
6.01 BENEFITS FOLLOWING TERMINATION OF SERVICE, TERMINATION OF THE PLAN, OR
A CHANGE IN CONTROL. Upon termination of a Participant's Service
(other than by death) or termination of the Plan pursuant to Subsection
8.03 of the Plan:
(a) The amount of a Participant's Cash Account, together with
interest accrued thereon, shall be calculated and shall be
distributed in substantially equal annual installments
(together with interest on the undistributed amount, credited
in accordance with Subsection 5.02(a) of the Plan and payable
annually, in arrears, with each annual installment) over a
period of five or ten years, as elected by the Participant in
accordance with Subsection 6.01(c) of the Plan. The first
installment (or the lump sum payment) shall be distributed,
except in the event of a subsequent Change of Control,
promptly following the calendar year in which the
Participant's Service terminates or the Plan is terminated;
and subsequent installments shall, except in the event of a
subsequent Change of Control, be distributed promptly at the
beginning of each succeeding calendar year until the entire
amount credited to the Participant's Cash Account shall have
been distributed. All amounts distributed shall be paid in
cash.
(b) The number of Phantom Stock Units in a Participant's Phantom
Stock Account, including Phantom Stock Units credited as a
result of reinvested dividends, shall be calculated, and Stock
shall be distributed to the Participant, either in a single
distribution promptly after the date of such termination of
Service or in substantially equal annual installments
(together with additional Phantom Stock Units credited as a
result of reinvested dividends) over a period of five or ten
years, as elected by the Participant in accordance with
Subsection 6.01(c) of the Plan. In the event of a single
distribution of Stock, (i) the value of any fractional Phantom
Stock Unit, calculated by reference to the Fair Market Value
of a share of Stock on the date of termination of the
Participant's Service, shall be distributed and paid in cash
to the Participant, and (ii) the whole number of Phantom Stock
Units shall be and become payable in an equal number of shares
of Stock, issued by the Company or purchased by the Company
for and in the name of the Participant. In the event of
payment of Stock in installments, the first installment shall,
except in the event of a subsequent Change in Control, be
distributed promptly following the calendar year in which the
Participant's Service terminates, and subsequent installments
shall, except in the event of a subsequent
-7-
Change in Control, be distributed promptly at the beginning of
each succeeding calendar year until the entire amount credited
to the Participant's Phantom Stock Account shall have been
distributed. To the extent that an installment calculation
does not result in a whole number, the result shall be rounded
downwards to the next whole number and that number of shares
of Stock, issued by the Company or purchased by the Company
for and in the name of the Participant, shall be distributed
as and for that installment. Any fractional Phantom Stock
Unit payable as part of the final installment shall be valued
by reference to the Fair Market Value of a share of Stock on
the first business day of the calendar year of payment of the
installment and shall be distributed and paid in cash to the
Participant promptly. In the event of a single distribution
of Stock, or in connection with the first installment of a
distribution of Stock in installments, a stock certificate for
any shares of Stock distributable on account of Phantom Stock
Units credited to the Participant's Phantom Stock Account
pursuant to Section 3 or Section 4 of the Plan within six (6)
months prior to the date of such termination of Service shall
be held by the Company for a period of six (6) months
following such date and shall be distributed to the former
Director as soon as practicable following the expiration of
such period; and during such period the former Director shall
have all rights of a shareholder of the Company with respect
to such shares of Stock, except that such shares of Stock
shall not be transferrable by the former Director other than
by will or the laws of descent and distribution.
(c) An election pursuant to Subsection 6.01(a) or Subsection
6.01(b) of the Plan must be made by written notice delivered
to the Corporate Secretary on or before December 31 of the
calendar year prior to the date on which the Participant
terminates his or her Service or the date of the Plan's
termination. Upon written request of the Committee, and in
its absolute discretion, a Participant may receive a single
lump-sum distribution of his or her Cash Account. Such
request must be delivered to the Corporate Secretary prior to
the date on which the Participant's Service terminates or the
Plan is terminated. In the event that no timely filed payment
election is on record with respect to a Participant, and
except in the event of a Change of Control, payment of his or
her cash Account and Phantom Stock Account shall be made in
installments over a five-year period. Except in the event of
a Change of Control or the termination of the Plan, no portion
of a Deferred Compensation Account shall be distributed
to a Participant prior to his or her termination of Service.
(d) In the event of a Change of Control, whether the same occurs
before or after termination of the Participant's Service or
after termination of the Plan, all of the Phantom Stock Units
credited to a Participant's Phantom Stock Account, including
Phantom Stock Units credited as a result of reinvested
dividends, shall be converted into a cash equivalent amount,
in accordance with Subsection 5.02(b) of the Plan, and all
amounts credited to a Participant's Deferred Compensation
Account, including the amounts converted into cash equivalents
-8-
from the Participant's Phantom Stock Account, shall be
distributed and paid in cash to the Participant immediately in
a single lump sum.
6.02 DESIGNATION OF BENEFICIARIES. A Participant's spouse shall be the
Participant's Beneficiary under the Plan unless the Participant
designates a different Beneficiary and the Participant's spouse
consents to such designation. If a Participant leaves no surviving
spouse, his or her estate shall be the Beneficiary unless the
Participant had designated a different Beneficiary prior to his or her
death. A Participant may designate, on a form provided for that purpose
by the Corporate Secretary, a Beneficiary or Beneficiaries to receive
the cash distributions and/or Stock payments from the Participant's
Deferred Compensation Account in the event of his or her death, and the
period or periods of payment (not to exceed ten years); and a
Participant may direct that such payments be divided in specific
portions among two or more Beneficiaries; but no such designation shall
be effective until it has been filed by the Participant during his or
her lifetime with the Corporate Secretary. Each Participant may, from
time to time during his or her lifetime, on a form filed with the
Corporate Secretary, revoke or change such designation in any or all
respects; and the death of a designated Beneficiary prior to or
simultaneously with the death of the designating Participant shall
automatically revoke such designated Beneficiary's status as a
Beneficiary.
6.03 PAYMENTS UPON DEATH. Upon a Participant's death, the provisions of
Subsections 6.01(a) and 6.01(b) of the Plan shall become applicable to
the Participant's Deferred Compensation Account, except that
distributions and payments of cash and Stock shall be made to the
Beneficiary or Beneficiaries, at the time or times designated by the
Participant; provided, however, that in the event of a subsequent
Change of Control, or at the election of the executor or administrator
of the estate of such Participant, all of the Phantom Stock Units
remaining credited to the decedent's Phantom Stock Account, shall be
converted into a cash equivalent amount, in accordance with Subsection
5.02(b) of the Plan in the event of a Change in Control, or determined
by multiplying the number of such Phantom Stock Units by the Fair
Market Value of the Stock on the date of the election of the decedent's
executor or administrator, and distributed and paid in cash, together
with any amount remaining credited to the decedent's Cash Account on
such date, in a lump sum, to such Beneficiary or Beneficiaries.
6.04 PAYMENTS TO INCOMPETENTS. If a court of competent jurisdiction
determines that a person entitled to receive any cash amount or Stock
to be distributed or paid hereunder is under a legal disability or is
otherwise incapacitated so that he or she is unable to manage his or
her financial affairs to his or her own best interest and advantage,
the Company shall distribute or pay such cash amount or Stock (a) to
such person's spouse, (b) or his or her legal guardian or conservator,
or (c) to any person, to be held and/or used for such person's benefit,
with no responsibility on the part of the Committee or the Company to
monitor the application of the same. Distributions and/or payments made
pursuant to this Subsection 6.04 shall operate as a complete discharge
of the obligations under the Plan of the Company and the Committee in
respect of such Participant and all other persons.
-9-
6.05 PROCEDURE FOR CLAIMING A PAYMENT. Any person who believes himself or
herself to be entitled to a distribution or payment pursuant to the
Plan may request, in writing, a review by the Committee of such
person's entitlement under the Plan. Such a request must be sent to the
Corporate Secretary within one year after the Director's termination of
Service, or the termination of the Plan or a Change of Control, or, in
the case of a Beneficiary, within on year after a Participant's death.
After review, the Committee shall, within a reasonable period of time,
give, or cause to be given, to the requesting person written notice of
its decision. If distribution of any cash amount or payment of any
Stock claimed is denied, the decision shall set forth the specific
reason(s) for the denial.
6.06 UNCLAIMED BENEFITS. Neither the Company nor the Committee shall be
responsible for locating any person to whom cash amounts or Stock are
distributable or payable pursuant to the Plan.
6.07 SUSPENSION OF DISTRIBUTIONS UPON RE-ELECTION TO THE BOARD. If a
Participant receiving distributions under the Plan returns to Service,
distribution or payment of any undistributed or unpaid cash amounts or
Stock under the Plan shall be suspended until his or her Service
terminates again, or the Plan is terminated pursuant to Subsection
8.02, or a Change of Control occurs, at which time his or her Deferred
Compensation Account shall be recomputed and adjusted to give effect to
any additional cash amounts or Stock distributable or payable to him or
her and to the cash amounts or Stock previously distributed or paid.
SECTION 7. ADMINISTRATION OF THE PLAN
--------------------------
7.01 ACCOUNTS AND RECORDS. The accounts and all records necessary for the
administration of the Plan shall be maintained by the Corporate
Secretary and shall accurately disclose the history and status of each
Participant's Deferred Compensation Account and his or her Cash Account
and/or Phantom Stock Account, and all distributions and payments made
to each Participant or Beneficiary or other person under the Plan.
7.02 EXPENSES. The expenses of administering the Plan shall be paid out of
the general funds of the Company.
SECTION 8. AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
8.01 AMENDMENT. The Plan may, at any time and from time to time, be amended
or modified in whole or in part by action of the Board;
provided, however, that:
-------- -------
(a) no such amendment shall become effective without the approval
of the shareholders of the Company, if and to the extent
shareholder approval is required
-10-
in order to comply with Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Securities
Exchange Act of 1934; and
(b) the provisions of the Plan that set forth the amounts and the
formula for determining the amounts, pricing and timing of
Stock Awards may not be amended more than once every six (6)
months, other than to comport with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act, or
rules promulgated by the Internal Revenue Service thereunder;
and
(c) unless required by law, no such amendment or modification
shall deprive a Participant of any portion of those Stock
Awards and deferred Fees that have been credited to the
Participant's Deferred Compensation Account as of the date of
such amendment or modification; and
(d) notice of every such amendment shall be given to each Director
and Beneficiary of a deceased Director.
8.02 TERMINATION OF STOCK AWARDS. Unless the Plan is sooner terminated, no
Stock Award shall be made after March 5, 2010.
8.03 TERMINATION OF PLAN. The Plan may be terminated prospectively at any
time by action of the Board; provided, however, that:
-------- -------
(a) the amounts then credited to the Deferred Compensation
Accounts of the Participants shall be distributed to the
Participants as provided in Section 6 of the Plan; and
(b) unless required by law, no such termination shall deprive a
Participant of any portion of those Stock Awards and deferred
Fees that have been credited to the Participant's Deferred
Compensation Account as of the date of such termination; and
(c) the Board shall not terminate the Plan solely to accelerate
the payment of any amounts previously credited to a
Participant's Cash Account or Phantom Stock Account.
SECTION 9. MISCELLANEOUS PROVISIONS
------------------------
9.01 FUNDING. The Company's obligations under the Plan shall be unfunded;
and the Company is not, under any circumstances, required to fund its
obligations hereunder. The Company may, in its sole discretion,
purchase shares of Stock and/or set aside or invest funds to meet its
obligations hereunder in whole or in part. If the Company
-11-
determines to make such provisions, the manner of making it, and the
continuance or discontinuance of such provision is solely within the
discretion of the Company.
9.02 A PARTICIPANT'S RIGHT TO ASSETS; ASSIGNMENTS; ENCUMBRANCES. Except with
respect to Stock purchased by the Company for and in the name of a
Participant pursuant to Subsection 3.02 or Subsection 6.01(b) of the
Plan, the Plan confers on a Participant no right, title or interest
whatsoever in or to any shares of Stock, or any specific funds or
assets of the Company. The Participant has the rights solely of a
general, unsecured creditor with respect to the enforcement of and
payment from the Plan. Except as aforesaid, if any Stock funds or
assets are acquired by the Company in connection with its obligations
under this Plan, they shall not be deemed to be held in trust or
otherwise for the benefit of the Participant, and the Participant shall
have no property right or security interest in such funds or assets;
and any Stock funds or assets so acquired shall be, and remain, the
general, unpledged and unrestricted funds or assets of the Company. A
Participant's right to receive a Stock Award, a Retirement Program
Termination Award, shares of Stock in lieu of a Stock Award, and/or
payment with respect to Phantom Stock Units, under the Plan is not
assignable or transferrable and shall not be subject to any
encumbrances, liens, pledges or charges of the Participant or his or
her creditors. Any attempt to assign, transfer or hypothecate any such
Stock Award, Retirement Program Termination Award, shares of Stock or
right to receive payment shall be null and void and of no force or
effect whatsoever.
9.03 STOCK. The aggregate number of shares of Stock that may be issued by
the Company under the Plan shall not exceed 200,000; provided, however,
-------- -------
that in the event of a stock split, stock dividend, recapitalization,
reclassification or other similar change in the Company's capital
structure, the number of shares of Stock that may be issued by the
Company under the Plan shall be appropriately adjusted by and at the
direction of the Board. The grant of Stock Awards and the crediting of
Phantom Stock Units to Phantom Stock Accounts under the Plan shall not
affect in any way the right, power or authority of the Company to issue
additional Stocks or other securities, to make adjustments,
reclassifications, reorganizations or other changes in its corporate,
capital or other business structure, to participate in a merger,
consolidation or share exchange, or to transfer its assets, dissolve or
liquidate.
9.04 GOVERNMENT REGULATIONS.
----------------------
(a) The obligations of the Company to issue, or purchase, and
deliver any shares of Stock payable under the Plan shall be
subject to all applicable laws, rules and regulations, and to
the obtaining of all such approvals by governmental agencies
as may be deemed necessary or appropriate by the Board.
(b) Except as otherwise provided in Subsection 8.01 of the Plan,
the Board may make such changes in the Plan as may be
necessary or appropriate to comply with the rules and
regulations of any governmental authority.
-12-
9.05 EFFECT OF MISTAKE. In the event of a mistake or misstatement as to the
eligibility of any person, or the amount or kind of distributions or
payments made or to be made to a Participant or Beneficiary, the
Committee shall, to the extent it deems possible, make such adjustments
as will in its judgment accord to such Participant or Beneficiary the
distributions and payments to which he or she is properly entitled
under the Plan. No member of the Board and no officer or employee of
the Company shall be liable to any person for any action taken or
omitted in connection with the administration of the Plan, unless
attributable to his or her own fraud or wilful misconduct; and the
Company shall not be liable to any person for any such action, unless
attributable to fraud or wilful misconduct on the part of a Director,
officer or employee of the Company.
9.06 NON-EXPANSION OF RIGHTS. Nothing contained in the Plan shall afford any
Director the right to be retained on the Board of Directors of the
Company. Neither the provisions of this Plan nor any act of the
Committee or the Company hereunder shall be construed as giving to any
Director or other person any legal or equitable right or claim against
the Company for the payment of any Stock Award or deferred Fees
hereunder, except as otherwise specifically provided in the Plan.
9.07 HEADINGS OF SECTIONS AND SUBSECTIONS. The headings of Sections and
Subsections are included solely for convenience of reference, and if
there is any conflict between such headings and text of the Plan, the
text shall control.
9.08 ILLEGALITY OF PARTICULAR PROVISION. The illegality of any particular
provision of the Plan shall not affect the other provisions thereof,
but the Plan shall be construed in all respects as if such invalid
provision were omitted.
9.09 APPLICABLE LAW. The validity, interpretation and administration of the
Plan, and the rights of any and all persons having or claiming any
interest in or under the Plan, shall be governed by the law of the
State of Connecticut, except to the extent preempted by federal law.
-13-