EXHIBIT 10.1
Final as approved at
Annual Meeting of Stockholders
on May 19, 2006
TIME WARNER INC.
2006 STOCK INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to aid the Company and its Affiliates in
recruiting and retaining employees, directors and advisors and to motivate
such employees, directors and advisors to exert their best efforts on
behalf of the Company and its Affiliates by providing incentives through
the granting of Awards. The Company expects that it will benefit from the
added interest which such employees, directors and advisors will have in
the welfare of the Company as a result of their proprietary interest in the
Company's success.
2. Definitions
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) "Act" means The Securities Exchange Act of 1934, as amended, or
any successor thereto.
(b) "Affiliate" means any entity that is consolidated with the
Company for financial reporting purposes or any other entity
designated by the Board in which the Company or an Affiliate has
a direct or indirect equity interest of at least twenty percent
(20%), measured by reference to vote or value.
(c) "Award" means an Option, Stock Appreciation Right, Restricted
Stock or Other Stock-Based Award granted pursuant to the Plan.
(d) "Board" means the Board of Directors of the Company.
(e) "Change in Control" means the occurrence of any of the following
events:
(i) any "Person" within the meaning of Section 13(d)(3) or
14(d)(2) of the Act (other than the Company or any company owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of
the Company) becomes the "Beneficial Owner" within the meaning of
Rule 13d-3 promulgated under the Act of 30% or more of the
combined voting power of the then outstanding securities of the
Company entitled to vote generally in the election of directors;
excluding, however, any circumstance in which such beneficial
ownership resulted from any acquisition by an employee benefit
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plan (or related trust) sponsored or maintained by the Company or
by any corporation controlling, controlled by, or under common
control with, the Company;
(ii) a change in the composition of the Board since the
Effective Date, such that the individuals who, as of such date,
constituted the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of such Board; provided
that any individual who becomes a director of the Company
subsequent to the Effective Date whose election, or nomination
for election by the Company's stockholders, was approved by the
vote of at least a majority of the directors then comprising the
Incumbent Board shall be deemed a member of the Incumbent Board;
and provided further, that any individual who was initially
elected as a director of the Company as a result of an actual or
threatened election contest, as such terms are used in Rule
14a-12 of Regulation 14A promulgated under the Act, or any other
actual or threatened solicitation of proxies or consents by or on
behalf of any person or Entity other than the Board shall not be
deemed a member of the Incumbent Board;
(iii) a reorganization, recapitalization, merger or
consolidation (a "Corporate Transaction") involving the Company,
unless securities representing 60% or more of the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors of the Company or the
corporation resulting from such Corporate Transaction (or the
parent of such corporation) are held subsequent to such
transaction by the person or persons who were the beneficial
holders of the outstanding voting securities entitled to vote
generally in the election of directors of the Company immediately
prior to such Corporate Transaction, in substantially the same
proportions as their ownership immediately prior to such
Corporate Transaction; or
(iv) the sale, transfer or other disposition of all or
substantially all of the assets of the Company.
(f) "Code" means The Internal Revenue Code of 1986, as amended, or
any successor thereto.
(g) "Committee" means the Compensation and Human Development
Committee of the Board or its successor, or such other committee
of the Board to which the Board has delegated power to act under
or pursuant to the provisions of the Plan or a subcommittee of
the Compensation and Human Development Committee (or such other
committee) established by the Compensation and Human Development
Committee or such other committee.
(h) "Company" means Time Warner Inc., a Delaware corporation.
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(i) "Effective Date" means the date the Board approved the Plan
(March 23, 2006).
(j) "Employment" means (i) a Participant's employment if the
Participant is an employee of the Company or any of its
Affiliates and (ii) a Participant's services as a non-employee
director, if the Participant is a non-employee member of the
Board or the board of directors of an Affiliate; provided,
however that unless otherwise determined by the Committee, a
change in a Participant's status from employee to non-employee
(other than a director of the Company or an Affiliate) shall
constitute a termination of employment hereunder.
(k) "Fair Market Value" means, on a given date, (i) if there should
be a public market for the Shares on such date, the average of
the high and low prices of the Shares on the New York Stock
Exchange, or, if the Shares are not listed or admitted on any
national securities exchange, the average of the per Share
closing bid price and per Share closing asked price on such date
as quoted on the National Association of Securities Dealers
Automated Quotation System (or such market in which such prices
are regularly quoted) (the "NASDAQ"), or, if no sale of Shares
shall have been reported on the New York Stock Exchange or quoted
on the NASDAQ on such date, then the immediately preceding date
on which sales of the Shares have been so reported or quoted
shall be used, and (ii) if there should not be a public market
for the Shares on such date, the Fair Market Value shall be the
value established by the Committee in good faith.
(l) "ISO" means an Option that is also an incentive stock option
granted pursuant to Section 6(d).
(m) "Option" means a stock option granted pursuant to Section 6.
(n) "Option Price" means the price for which a Share can be purchased
upon exercise of an Option, as determined pursuant to Section
6(a).
(o) "Other Stock-Based Awards" means awards granted pursuant to
Section 9.
(p) "Participant" means an employee, prospective employee, director
or advisor of the Company or an Affiliate who is selected by the
Committee to participate in the Plan.
(q) "Performance-Based Awards" means certain Other Stock-Based Awards
granted pursuant to Section 9(b).
(r) "Plan" means the Time Warner Inc. 2006 Stock Incentive Plan, as
amended from time to time.
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(s) "Restricted Stock" means any Share granted under Section 8.
(t) "Shares" means shares of common stock of the Company, $.01 par
value per share.
(u) "Stock Appreciation Right" means a stock appreciation right
granted pursuant to Section 7.
(v) "Subsidiary" means a subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section thereto), of
the Company.
3. Shares Subject to the Plan
The total number of Shares which may be issued under the Plan is
150,000,000, of which no more than 30% may be issued in the form of
Restricted Stock or Other Stock-Based Awards payable in Shares. The maximum
aggregate number of Shares with respect to which Awards may be granted
during a calendar year, net of any Shares which are subject to Awards (or
portions thereof) which, during such year, terminate or lapse without
payment of consideration, shall be equal to 1.5% of the number of Shares
outstanding on December 31 of the preceding calendar year. The maximum
number of Shares with respect to which Awards may be granted during a
calendar year to any Participant shall be 2,000,000; provided that the
maximum number of Shares that may be awarded in the form of Restricted
Stock or Other Stock-Based Awards payable in Shares during any calendar
year to any Participant shall be 600,000. The number of Shares available
for issuance under the Plan shall be reduced by the full number of Shares
covered by Awards granted under the Plan (including, without limitation,
the full number of Shares covered by any Stock Appreciation Right,
regardless of whether any such Stock Appreciation Right or other Award
covering Shares under the Plan is ultimately settled in cash or by delivery
of Shares); provided, however, that the number of Shares covered by Awards
(or portions thereof) that are forfeited or that otherwise terminate or
lapse without the payment of consideration in respect thereof shall again
become available for issuance under the Plan; and provided further that any
Shares that are forfeited after the actual issuance of such Shares to a
Participant under the Plan shall not become available for re-issuance under
the Plan.
4. Administration
(a) The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any
subcommittee thereof consisting solely of at least two
individuals who are intended to qualify as "independent
directors" within the meaning of the New York Stock Exchange
listed company rules, "Non-Employee Directors" within the meaning
of Rule 16b-3 under the Act (or any successor rule thereto) and,
to the extent required by Section 162(m) of the Code (or any
successor section thereto), "outside directors" within the
meaning thereof. In addition, the Committee may delegate the
authority to grant Awards under the Plan to any employee or group
of employees of the Company or an Affiliate; provided that such
grants are consistent with guidelines established by the
Committee from time to time.
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(b) The Committee shall have the full power and authority to make,
and establish the terms and conditions of, any Award to any
person eligible to be a Participant, consistent with the
provisions of the Plan and to waive any such terms and conditions
at any time (including, without limitation, accelerating or
waiving any vesting conditions). Awards may, in the discretion of
the Committee, be made under the Plan in assumption of, or in
substitution for, outstanding awards previously granted by the
Company or its affiliates or a company acquired by the Company or
with which the Company combines. The number of Shares underlying
such substitute awards shall be counted against the aggregate
number of Shares available for Awards under the Plan.
(c) The Committee is authorized to interpret the Plan, to establish,
amend and rescind any rules and regulations relating to the Plan,
and to make any other determinations that it deems necessary or
desirable for the administration of the Plan, and may delegate
such authority, as it deems appropriate. The Committee may
correct any defect or supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of the
Committee in the interpretation and administration of the Plan,
as described herein, shall lie within its sole and absolute
discretion and shall be final, conclusive and binding on all
parties concerned (including, but not limited to, Participants
and their beneficiaries or successors).
(d) The Committee shall require payment of any amount it may
determine to be necessary to withhold for federal, state, local
or other taxes as a result of the exercise, grant or vesting of
an Award. Unless the Committee specifies otherwise, the
Participant may elect to pay a portion or all of such withholding
taxes by (a) delivery of Shares or (b) having Shares withheld by
the Company with a Fair Market Value equal to the minimum
statutory withholding rate from any Shares that would have
otherwise been received by the Participant.
5. Limitations
(a) No Award may be granted under the Plan after the fifth
anniversary of the meeting of shareholders of the Company at
which the Plan is approved, but Awards granted prior to such
fifth anniversary may extend beyond that date.
(b) No Option or Stock Appreciation Right, once granted hereunder,
may be repriced.
(c) With respect to any Awards granted to a Participant who is a
non-employee member of the Board at the time of grant, such
Awards shall be made pursuant to formulas established by the
Board in advance of such grant. Any such Awards shall be made at
the time such a Participant first
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becomes a member of the Board and, thereafter, on an annual basis
at or following the annual meeting of stockholders. Such formulas
may include any one or more of the following: (i) a fixed number
of Options or Stock Appreciation Rights, (ii) a fixed number of
Shares of Restricted Stock or a number of Shares of Restricted
Stock determined by reference to a fixed dollar amount
(calculated based on the Fair Market Value of a Share on the date
of grant), and (iii) Other Stock-Based Awards determined either
by reference to a fixed number of Shares or to a fixed dollar
amount (calculated based on the Fair Market Value of a Share on
the date of grant).
6. Terms and Conditions of Options
Options granted under the Plan shall be, as determined by the
Committee, nonqualified or incentive stock options for federal income tax
purposes, as evidenced by the related Award agreements, and shall be
subject to the foregoing and the following terms and conditions and to such
other terms and conditions, not inconsistent therewith, as the Committee
shall determine, and as evidenced by the related Award agreement:
(a) Option Price. The Option Price per Share shall be determined by
the Committee, but shall not be less than 100% of the Fair Market
Value of a Share on the date an Option is granted.
(b) Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as
may be determined by the Committee, but in no event shall an
Option be exercisable more than ten years after the date it is
granted, except as may be provided pursuant to Section 15.
(c) Exercise of Options. Except as otherwise provided in the Plan or
in an Award agreement, an Option may be exercised for all, or
from time to time any part, of the Shares for which it is then
exercisable. For purposes of this Section 6, the exercise date of
an Option shall be the date a notice of exercise is received by
the Company, together with provision for payment of the full
purchase price in accordance with this Section 6(c). The purchase
price for the Shares as to which an Option is exercised shall be
paid to the Company, as designated by the Committee, pursuant to
one or more of the following methods: (i) in cash or its
equivalent (e.g., by check); (ii) in Shares having a Fair Market
Value equal to the aggregate Option Price for the Shares being
purchased and satisfying such other requirements as may be
imposed by the Committee; provided that such Shares have been
held by the Participant for no less than six months (or such
other period as established from time to time by the Committee in
order to avoid adverse accounting treatment applying generally
accepted accounting principles); (iii) partly in cash and partly
in such Shares or (iv) if there is a public market for the Shares
at such time, through the delivery of irrevocable instructions to
a broker to sell Shares obtained
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upon the exercise of the Option and to deliver promptly to the
Company an amount out of the proceeds of such Sale equal to the
aggregate Option Price for the Shares being purchased. No
Participant shall have any rights to dividends or other rights of
a stockholder with respect to Shares subject to an Option until
the Shares are issued to the Participant.
(d) ISOs. The Committee may grant Options under the Plan that are
intended to be ISOs. Such ISOs shall comply with the requirements
of Section 422 of the Code (or any successor section thereto). No
ISO may be granted to any Participant who at the time of such
grant, owns more than ten percent of the total combined voting
power of all classes of stock of the Company or of any
Subsidiary, unless (i) the Option Price for such ISO is at least
110% of the Fair Market Value of a Share on the date the ISO is
granted and (ii) the date on which such ISO terminates is a date
not later than the day preceding the fifth anniversary of the
date on which the ISO is granted. Any Participant who disposes of
Shares acquired upon the exercise of an ISO either (i) within two
years after the date of grant of such ISO or (ii) within one year
after the transfer of such Shares to the Participant, shall
notify the Company of such disposition and of the amount realized
upon such disposition. All Options granted under the Plan are
intended to be nonqualified stock options, unless the applicable
Award agreement expressly states that the Option is intended to
be an ISO. If an Option is intended to be an ISO, and if for any
reason such Option (or portion thereof) shall not qualify as an
ISO, then, to the extent of such nonqualification, such Option
(or portion thereof) shall be regarded as a nonqualified stock
option granted under the Plan; provided that such Option (or
portion thereof) otherwise complies with the Plan's requirements
relating to nonqualified stock options. In no event shall any
member of the Committee, the Company or any of its Affiliates (or
their respective employees, officers or directors) have any
liability to any Participant (or any other person) due to the
failure of an Option to qualify for any reason as an ISO.
(e) Attestation. Wherever in this Plan or any agreement evidencing an
Award a Participant is permitted to pay the exercise price of an
Option or taxes relating to the exercise of an Option by
delivering Shares, the Participant may, subject to procedures
satisfactory to the Committee, satisfy such delivery requirement
by presenting proof of beneficial ownership of such Shares, in
which case the Company shall treat the Option as exercised
without further payment and/or shall withhold such number of
Shares from the Shares acquired by the exercise of the Option, as
appropriate.
7. Terms and Conditions of Stock Appreciation Rights
(a) Grants. The Committee may grant (i) a Stock Appreciation Right
independent of an Option or (ii) a Stock Appreciation Right in
connection with an Option, or a portion thereof. A Stock
Appreciation Right granted
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pursuant to clause (ii) of the preceding sentence (A) may be
granted at the time the related Option is granted or at any time
prior to the exercise or cancellation of the related Option, (B)
shall cover the same number of Shares covered by an Option (or
such lesser number of Shares as the Committee may determine) and
(C) shall be subject to the same terms and conditions as such
Option except for such additional limitations as are contemplated
by this Section 7 (or such additional limitations as may be
included in an Award agreement).
(b) Terms. The exercise price per Share of a Stock Appreciation Right
shall be an amount determined by the Committee but in no event
shall such amount be less than the Fair Market Value of a Share
on the date the Stock Appreciation Right is granted; provided,
however, that notwithstanding the foregoing in the case of a
Stock Appreciation Right granted in conjunction with an Option,
or a portion thereof, the exercise price may not be less than the
Option Price of the related Option. Each Stock Appreciation Right
granted independent of an Option shall entitle a Participant upon
exercise to an amount equal to (i) the excess of (A) the Fair
Market Value on the exercise date of one Share over (B) the
exercise price per Share, times (ii) the number of Shares covered
by the Stock Appreciation Right. Each Stock Appreciation Right
granted in conjunction with an Option, or a portion thereof,
shall entitle a Participant to surrender to the Company the
unexercised Option, or any portion thereof, and to receive from
the Company in exchange therefor an amount equal to (i) the
excess of (A) the Fair Market Value on the exercise date of one
Share over (B) the Option Price per Share, times (ii) the number
of Shares covered by the Option, or portion thereof, which is
surrendered. Payment shall be made in Shares or in cash, or
partly in Shares and partly in cash (any such Shares valued at
such Fair Market Value), all as shall be determined by the
Committee. Stock Appreciation Rights may be exercised from time
to time upon actual receipt by the Company of written notice of
exercise stating the number of Shares with respect to which the
Stock Appreciation Right is being exercised. The date a notice of
exercise is received by the Company shall be the exercise date.
No fractional Shares will be issued in payment for Stock
Appreciation Rights, but instead cash will be paid for a fraction
or, if the Committee should so determine, the number of Shares
will be rounded downward to the next whole Share. No Participant
shall have any rights to dividends or other rights of a
stockholder with respect to Shares covered by Stock Appreciation
Rights until the Shares are issued to the Participant.
(c) Limitations. The Committee may impose, in its discretion, such
conditions upon the exercisability of Stock Appreciation Rights
as it may deem fit, but in no event shall a Stock Appreciation
Right be exercisable more than ten years after the date it is
granted, except as may be provided pursuant to Section 15.
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8. Restricted Stock
(a) Grant. Subject to the provisions of the Plan, the Committee shall
determine the number of Shares of Restricted Stock to be granted
to each Participant, the duration of the period during which, and
the conditions, if any, under which, the Restricted Stock may be
forfeited to the Company, and the other terms and conditions of
such Awards; provided that not less than 95% of the Shares of
Restricted Stock shall remain subject to forfeiture for at least
three years after the date of grant, subject to earlier
termination of such potential for forfeiture in whole or in part
in the event of a Change in Control or the death, disability or
other termination of the Participant's employment.
(b) Transfer Restrictions. Shares of Restricted Stock may not be
sold, assigned, transferred, pledged or otherwise encumbered,
except as provided in the Plan or the applicable Award agreement.
Certificates, or other evidence of ownership, issued in respect
of Shares of Restricted Stock shall be registered in the name of
the Participant and deposited by such Participant, together with
a stock power endorsed in blank, with the Company. After the
lapse of the restrictions applicable to such Shares of Restricted
Stock, the Company shall deliver such certificates, or other
evidence of ownership, to the Participant or the Participant's
legal representative.
(c) Dividends. Dividends paid on any Shares of Restricted Stock may
be paid directly to the Participant, withheld by the Company
subject to vesting of the Restricted Shares pursuant to the terms
of the applicable Award agreement, or may be reinvested in
additional Shares of Restricted Stock, as determined by the
Committee in its sole discretion.
(d) Performance-Based Grants. Notwithstanding anything to the
contrary herein, certain Shares of Restricted Stock granted under
this Section 8 may, at the discretion of the Committee, be
granted in a manner which is intended to be deductible by the
Company under Section 162(m) of the Code (or any successor
section thereto). The restrictions applicable to such Restricted
Stock shall lapse based wholly or partially on the attainment of
written performance goals approved by the Committee for a
performance period established by the Committee (i) while the
outcome for that performance period is substantially uncertain
and (ii) no more than 90 days after the commencement of the
performance period to which the performance goal relates or, if
less, the number of days which is equal to 25 percent of the
relevant performance period. The performance goals, which must be
objective, shall be based upon one or more of the criteria set
forth in Section 9(b) below. The Committee shall determine in its
discretion whether, with respect to a performance period, the
applicable performance goals have been met with respect to a
given Participant and,
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if they have, shall so certify prior to the release of the
restrictions on the Shares.
9. Other Stock-Based Awards
(a) Generally. The Committee, in its sole discretion, may grant or
sell Awards of Shares and Awards that are valued in whole or in
part by reference to, or are otherwise based on the Fair Market
Value of, Shares ("Other Stock-Based Awards"). Such Other
Stock-Based Awards shall be in such form, and dependent on such
conditions, as the Committee shall determine, including, without
limitation, the right to receive, or vest with respect to, one or
more Shares (or the equivalent cash value of such Shares) upon
the completion of a specified period of service, the occurrence
of an event and/or the attainment of performance objectives.
Other Stock-Based Awards may be granted alone or in addition to
any other Awards granted under the Plan. Subject to the
provisions of the Plan, the Committee shall determine the number
of Shares to be awarded to a Participant under (or otherwise
related to) such Other Stock-Based Awards; whether such Other
Stock-Based Awards shall be settled in cash, Shares or a
combination of cash and Shares; and all other terms and
conditions of such Awards (including, without limitation, the
vesting provisions thereof and provisions ensuring that all
Shares so awarded and issued shall be fully paid and
non-assessable). The maximum amount of Other Stock-Based Awards
that may be granted during a calendar year to any Participant
shall be: (x) with respect to Other Stock-Based Awards that are
denominated or payable in Shares, 600,000 Shares and (y) with
respect to Other Stock-Based Awards that are not denominated or
payable in Shares, $10 million. Notwithstanding any other
provision, with respect to (i) Other Stock-Based Awards settled
in Shares that are subject to time-based vesting, not less than
95% of such Other Stock Based Awards payable in Shares shall vest
and become payable at least three years after the date of grant,
subject to earlier vesting in whole or in part in the event of a
Change in Control or the death, disability or other termination
of the Participant's employment, and (ii) Other Stock-Based
Awards settled in Shares that are subject to vesting upon the
attainment of performance objectives, the minimum performance
period shall be one year.
(b) Performance-Based Awards. Notwithstanding anything to the
contrary herein, certain Other Stock-Based Awards granted under
this Section 9 may be granted in a manner which is intended to be
deductible by the Company under Section 162(m) of the Code (or
any successor section thereto) ("Performance-Based Awards"). A
Participant's Performance-Based Award shall be determined based
on the attainment of written performance goals approved by the
Committee for a performance period of not less than one year
established by the Committee (i) while the outcome for that
performance period is substantially uncertain and (ii) no more
than 90 days after the commencement of the performance period to
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which the performance goal relates or, if less, the number of
days which is equal to 25 percent of the relevant performance
period. The performance goals, which must be objective, shall be
based upon one or more of the following criteria: (i) operating
income before depreciation and amortization; (ii) operating
income; (iii) earnings per Share; (iv) return on shareholders'
equity; (v) revenues or sales; (vi) free cash flow; (vii) return
on invested capital and (viii) total shareholder return. The
foregoing criteria may relate to the Company, one or more of its
Affiliates or one or more of its or their divisions or units, or
any combination of the foregoing, and may be applied on an
absolute basis and/or be relative to one or more peer group
companies or indices, or any combination thereof, all as the
Committee shall determine. In addition, to the degree consistent
with Section 162(m) of the Code (or any successor section
thereto), the performance goals may be calculated without regard
to extraordinary items. The Committee shall determine whether,
with respect to a performance period, the applicable performance
goals have been met with respect to a given Participant and, if
they have, shall so certify and ascertain the amount of the
applicable Performance-Based Award. No Performance-Based Awards
will be paid for such performance period until such certification
is made by the Committee. The amount of the Performance-Based
Award actually paid to a given Participant may be less than the
amount determined by the applicable performance goal formula, at
the discretion of the Committee. The amount of the
Performance-Based Award determined by the Committee for a
performance period shall be paid to the Participant at such time
as determined by the Committee in its sole discretion after the
end of such performance period; provided, however, that a
Participant may, if and to the extent permitted by the Committee
and consistent with the provisions of Section 162(m) of the Code
and Section 19 below, elect to defer payment of a
Performance-Based Award.
10. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:
(a) Generally. In the event of any change in the outstanding Shares
(including, without limitation, the value thereof) after the
Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation,
spin-off, combination, combination or transaction or exchange of
Shares or other corporate exchange, or any distribution to
shareholders of Shares other than regular cash dividends or any
transaction similar to the foregoing, the Committee in its sole
discretion and without liability to any person shall make such
substitution or adjustment, if any, as it deems to be equitable
(subject to Section 19), as to (i) the number or kind of Shares
or other securities issued or reserved for issuance pursuant to
the Plan or pursuant to outstanding Awards, (ii) the maximum
number
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of Shares for which Awards (including limits established for
Restricted Stock or Other Stock-Based Awards) may be granted
during a calendar year to any Participant, (iii) the Option Price
or exercise price of any Stock Appreciation Right and/or (iv) any
other affected terms of such Awards.
(b) Change in Control. In the event of a Change in Control after the
Effective Date, the Committee may (subject to Section 19), but
shall not be obligated to, (A) accelerate, vest or cause the
restrictions to lapse with respect to, all or any portion of an
Award, (B) cancel Awards for fair value (as determined in the
sole discretion of the Committee) which, in the case of Options
and Stock Appreciation Rights, may equal the excess, if any, of
value of the consideration to be paid in the Change in Control
transaction to holders of the same number of Shares subject to
such Options or Stock Appreciation Rights (or, if no
consideration is paid in any such transaction, the Fair Market
Value of the Shares subject to such Options or Stock Appreciation
Rights) over the aggregate exercise price of such Options or
Stock Appreciation Rights, (C) provide for the issuance of
substitute Awards that will substantially preserve the otherwise
applicable terms of any affected Awards previously granted
hereunder as determined by the Committee in its sole discretion
or (D) provide that for a period of at least 30 days prior to the
Change in Control, such Options shall be exercisable as to all
shares subject thereto and that upon the occurrence of the Change
in Control, such Options shall terminate and be of no further
force and effect.
11. No Right to Employment or Awards
The granting of an Award under the Plan shall impose no obligation on
the Company or any Affiliate to continue the Employment of a Participant
and shall not lessen or affect the Company's or Subsidiary's right to
terminate the Employment of such Participant. No Participant or other
person shall have any claim to be granted any Award, and there is no
obligation for uniformity of treatment of Participants, or holders of
Awards. The terms and conditions of Awards and the Committee's
determinations and interpretations with respect thereto need not be the
same with respect to each Participant (whether or not such Participants are
similarly situated).
12. Successors and Assigns
The Plan shall be binding on all successors and assigns of the Company
and a Participant, including without limitation, the estate of such
Participant and the executor, administrator or trustee of such estate, or
any receiver or trustee in bankruptcy or representative of the
Participant's creditors.
13. Nontransferability of Awards
Unless otherwise determined by the Committee (and subject to the
limitation that in no circumstances may an Award may be transferred by the
Participant for consideration or
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value), an Award shall not be transferable or assignable by the Participant
otherwise than by will or by the laws of descent and distribution. An Award
exercisable after the death of a Participant may be exercised by the
legatees, personal representatives or distributees of the Participant.
14. Amendments or Termination
The Board or the Committee may amend, alter or discontinue the Plan,
but no amendment, alteration or discontinuation shall be made, (a) without
the approval of the shareholders of the Company, if such action would
(except as is provided in Section 10 of the Plan), increase the total
number of Shares reserved for the purposes of the Plan or increase the
maximum number of Shares of Restricted Stock or Other Stock-Based Awards
that may be awarded hereunder, or the maximum number of Shares for which
Awards may be granted to any Participant, (b) without the consent of a
Participant, if such action would diminish any of the rights of the
Participant under any Award theretofore granted to such Participant under
the Plan or (c) to Section 5(b), relating to repricing of Options or Stock
Appreciation Rights, to permit such repricing; provided, however, that the
Committee may amend the Plan in such manner as it deems necessary to permit
the granting of Awards meeting the requirements of the Code or other
applicable laws.
Without limiting the generality of the foregoing, to the extent
applicable, notwithstanding anything herein to the contrary, this Plan and
Awards issued hereunder shall be interpreted in accordance with Section
409A of the Code and Department of Treasury regulations and other
interpretative guidance issued thereunder, including without limitation any
such regulations or other guidance that may be issued after the Effective
Date. Notwithstanding any provision of the Plan to the contrary, in the
event that the Committee determines that any amounts payable hereunder will
be taxable to a Participant under Section 409A of the Code and related
Department of Treasury guidance, prior to payment to such Participant of
such amount, the Company may (a) adopt such amendments to the Plan and
Awards and appropriate policies and procedures, including amendments and
policies with retroactive effect, that the Committee determines necessary
or appropriate to preserve the intended tax treatment of the benefits
provided by the Plan and Awards hereunder and/or (b) take such other
actions as the Committee determines necessary or appropriate to avoid the
imposition of an additional tax under Section 409A of the Code.
15. International Participants
With respect to Participants who reside or work outside the United
States of America and who are not (and who are not expected to be) "covered
employees" within the meaning of Section 162(m) of the Code, the Committee
may, in its sole discretion, amend the terms of the Plan or Awards with
respect to such Participants in order to conform such terms with the
requirements of local law or to obtain more favorable tax or other
treatment for a Participant, the Company or an Affiliate.
16. Other Benefit Plans
All Awards shall constitute a special incentive payment to the
Participant and shall not be taken into account in computing the amount of
salary or compensation of the
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Participant for the purpose of determining any benefits under any pension,
retirement, profit-sharing, bonus, life insurance or other benefit plan of
the Company or under any agreement between the Company and the Participant,
unless such plan or agreement specifically provides otherwise.
17. Choice of Law
The Plan shall be governed by and construed in accordance with the
laws of the State of New York without regard to conflicts of laws, and
except as otherwise provided in the pertinent Award agreement, any and all
disputes between a Participant and the Company or any Affiliate relating to
an Award shall be brought only in a state or federal court of competent
jurisdiction sitting in Manhattan, New York.
18. Effectiveness of the Plan
The Plan shall be effective as of the Effective Date, subject to the
approval of the shareholders of the Company.
19. Section 409A
Notwithstanding other provisions of the Plan or any Award agreements
thereunder, no Award shall be granted, deferred, accelerated, extended,
paid out or modified under this Plan in a manner that would result in the
imposition of an additional tax under Section 409A of the Code upon a
Participant. In the event that it is reasonably determined by the Committee
that, as a result of Section 409A of the Code, payments in respect of any
Award under the Plan may not be made at the time contemplated by the terms
of the Plan or the relevant Award agreement, as the case may be, without
causing the Participant holding such Award to be subject to taxation under
Section 409A of the Code, the Company will make such payment on the first
day that would not result in the Participant incurring any tax liability
under Section 409A of the Code.