Exhibit 4.4
MILLENNIUM CHEMICALS INC.
2001 OMNIBUS INCENTIVE COMPENSATION PLAN
TABLE OF CONTENTS
ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN
1.2 OBJECTIVES OF THE PLAN
1.3 DURATION OF THE PLAN
ARTICLE 2. DEFINITIONS
2.1 "AFFILIATE"
2.2 "AWARD"
2.3 "AWARD AGREEMENT"
2.4 "BOARD" OR "BOARD OF DIRECTORS"
2.5 "CASH-BASED AWARD"
2.6 "CHANGE IN CONTROL"
2.7 "CODE"
2.8 "COMMITTEE"
2.9 "COMPANY"
2.10 "DIRECTOR"
2.11 "DISABILITY"
2.12 "EFFECTIVE DATE"
2.13 "EMPLOYEE"
2.14 "EXCHANGE ACT"
2.15 "FAIR MARKET VALUE"
2.16 "FREESTANDING SAR"
2.17 "INCENTIVE STOCK OPTION"
2.18 "INSIDER"
2.19 "NONQUALIFIED STOCK OPTION"
2.20 "OPTION"
2.21 "OPTION PRICE"
2.22 "PARTICIPANT"
2.23 "PERFORMANCE-BASED AWARD"
2.24 "PERFORMANCE-BASED-EXCEPTION"
2.25 "PERFORMANCE SHARE"
2.26 "PERFORMANCE UNIT"
2.27 "PERIOD OF RESTRICTION"
2.28 "PERSON"
2.29 "RESTRICTED STOCK"
2.30 "RETIREMENT"
2.31 "SHARES"
2.32 "STOCK APPRECIATION RIGHT"
2.33 "STOCK AWARD"
2.34 "SUBSIDIARY"
2.35 "TANDEM SAR"
ARTICLE 3. ADMINISTRATION
3.1 GENERAL
3.2 AUTHORITY OF THE COMMITTEE
3.3 DECISIONS BINDING
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES
4.2 ADJUSTMENTS IN AUTHORIZED SHARES
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY
5.2 ACTUAL PARTICIPATION
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS
6.2 AWARD AGREEMENT
6.3 OPTION PRICE
6.4 DURATION OF OPTIONS
6.5 EXERCISE OF OPTIONS
6.6 PAYMENT
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY
6.8 TERMINATION OF EMPLOYMENT/DIRECTORSHIP
6.9 POST-EMPLOYMENT EXERCISES
6.10 NONTRANSFERABILITY OF OPTIONS
6.11 REQUIREMENTS FOR INCENTIVE STOCK OPTIONS
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARs
7.2 SAR AGREEMENT
7.3 TERM OF SARS
7.4 EXERCISE OF FREESTANDING SARS
7.5 EXERCISE OF TANDEM SARS
7.6 PAYMENT OF SAR AMOUNT
7.7 TERMINATION OF EMPLOYMENT/DIRECTORSHIP
7.8 POST-EMPLOYMENT EXERCISES
7.9 NONTRANSFERABILITY OF SARs
ARTICLE 8. RESTRICTED STOCK
8.1 GRANT OF RESTRICTED STOCK
8.2 RESTRICTED STOCK AGREEMENT
8.3 TRANSFERABILITY
8.4 OTHER RESTRICTONS
8.5 VOTING RIGHTS
8.6 DIVIDENDS AND OTHER DISTRIBUTIONS
8.7 TERMIANTION OF EMPLOYENT/DIRECTORSHIP
ARTICLE 9. PERFORMANCE UNITS, PERFORMANCE SHARES AND CASH-
BASED AWARDS; STOCK AWARDS
9.1 GRANT OF PERFORMANCE UNITS/SHARES AND CASH-BASED
AWARDS
9.2 VALUE OF PERFORMANCE UNITS/SHARES AND CASH-BASED
AWARDS
9.3 EARNING OF PERFORMANCE UNITS/SHARES AND CASH-BASED
AWARDS
9.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE
UNITS/SHARES AND STOCK/CASH-BASED AWARDS
9.5 TERMINATION OF EMPLOYMENT/DIRECTORSHIP
9.6 NONTRANSFERABILITY
9.7 STOCK AWARDS
ARTICLE 10. PERFORMANCE-BASED AWARDS AND PERFORMANCE
MEASURES
10.1 PERFORMANCE-BASED AWARDS
10.2 PERFORMANCE MEASURES
ARTICLE 11. BENEFICIARY DESIGNATION
ARTICLE 12. DEFERRALS
ARTICLE 13. RIGHTS OF EMPLOYEES/DIRECTORS
13.1 EMPLOYMENT
13.2 PARTICIPATION
13.3 RIGHTS AS A STOCKHOLDER
ARTICLE 14. CHANGE IN CONTROL
14.1 TREATMENT OF OUTSTANDING AWARDS
14.2 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE
IN CONTROL PROVISIONS
14.3 POOLING OF INTERESTS ACCOUNTING
ARTICLE 15. AMENDMENT, MODIFICATION, AND TERMINATION
15.1 AMENDMENT, MODIFICATION, AND TERMINATION
15.2 AWARDS PREVIOUSLY GRANTED
ARTICLE 16. WITHHOLDING
16.1 TAX WITHHOLDING
16.2 SHARE WITHOLDING
ARTICLE 17. INDEMNIFICATION
ARTICLE 18. SUCCESSORS
ARTICLE 19. GENERAL PROVISIONS
19.1 LEGEND
19.2 GENDER AND NUMBER
19.3 SEVERABILITY
19.4 REQUIREMENTS OF LAW
19.5 SECURITIES LAW COMPLIANCE
19.6 LISTING
19.7 DELIVERY OF TITLE
19.8 INABILITY TO OBTAIN AUTHORITY
19.9 INVESTMENT REPRESENTATIONS
19.10 NO ADDITIONAL RIGHTS
19.11 EMPLOYEES BASED OUTSIDE OF THE UNITED STATES
19.12 UNCERTIFICATED SHARES
19.13 UNFUNDED PLAN
19.14 NO FRACTIONAL SHARES
19.15 GOVERNING LAW
ARTICLE 1
Establishment, Objectives, and Duration
1.1 ESTABLISHMENT OF THE PLAN. Millennium Chemicals
Inc., a Delaware corporation (hereinafter referred to
as the 'Company'), hereby establishes an incentive
compensation plan to be known as the 'Millennium
Chemicals Inc. Omnibus Incentive Compensation Plan'
(hereinafter referred to as the 'Plan'), as set forth
in this document. The Plan permits the grant of
Nonqualified Stock Options, Incentive Stock Options,
Stock Appreciation Rights, Restricted Stock,
Performance Shares, Performance Units, Stock Awards
and Cash-Based Awards.
Subject to approval by the Company's stockholders,
the Plan shall become effective as of January 26,
2001 (the 'Effective Date') and shall remain in
effect as provided in Section 1.3 hereof.
1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan
are to optimize the profitability and growth of the
Company through annual and long-term incentives that
are consistent with the Company's goals and that link
the personal interests of Participants to those of
the Company's stockholders; to provide Participants
with an incentive for excellence in individual
performance; and to promote teamwork among
Participants.
The Plan is further intended to provide flexibility
to the Company, its Affiliates, and Subsidiaries, in
their ability to motivate, attract, and retain the
services of Participants who make significant
contributions to the Company's success and to allow
Participants to share in such success.
1.3 DURATION OF THE PLAN. The Plan shall commence on the
effective Date, as described in Section 1.1 hereof,
and shall remain in effect, subject to the right of
the Board of Directors to amend or terminate the Plan
at any time pursuant to Article 15 hereof, until all
Shares subject to it shall have been purchased or
acquired according to the Plan's provisions.
However, in no event may an Award be granted under
the Plan on or after the tenth (10th) anniversary of
the Effective Date.
Article 2.
Definitions
Whenever used in the Plan, the following terms shall have
the meanings set forth below, and when the meaning is
intended, the initial letter of the word shall be
capitalized:
2.1 "AFFILIATE" shall have the meaning ascribed to such
term in Rule 12b-2 of the general Rules and
Regulations of the Exchange Act.
2.2 "AWARD" means, individually or collectively, a grant
under this Plan of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Performance Shares, Performance
Units, Stock Awards or Cash-Based Awards.
2.3 "AWARD AGREEMENT" means either an agreement entered
into by the Company and each Participant setting
forth the terms and provisions applicable to Awards
granted under this Plan or a statement issued by the
Company to a Participant describing the terms and
provisions of such Award.
2.4 "BOARD" OR "BOARD OF DIRECTORS" means the Board of
Directors of the Company.
2.5 "CASH-BASED AWARD" means an Award granted to a
Participant as described in Article 9 herein.
2.6 "CHANGE IN CONTROL" of the Company shall be deemed to
have occurred as of the first day that any one or
more of the following conditions shall have been
satisfied:
(a) any 'person' as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than the
Company, any trustee or other fiduciary holding
securities under any employee benefit plan of the
Company or any company owned, directly or indirectly,
by the stockholders of the Company in substantially
the same proportions as their ownership of Common
Stock of the Company), becoming the 'beneficial
owner' (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the
Company representing twenty-five percent (25%) or
more of the combined voting power of the Company's
then outstanding securities;
(b) during any period of two consecutive years (not
including any period prior to October 1, 1996),
individuals who at the beginning of such period
constitute the Board of Directors of the Company, and
any new director (other than a director designated by
a person who has entered into an agreement with the
Company to effect a transaction described in clause
(a), (c) or (d) of this Section 2.6 or a director
whose initial assumption of office occurs as a result
of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the
Board of Directors of the Company) 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 of the directors then still in
office who either were directors at the beginning of
the two-year period or whose election or nomination
for election was previously so approved, cease for
any reason to constitute at least a majority of the
Board of Directors;
(c) the merger or consolidation of the Company with
any other corporation, other than a merger or
consolidation which would result in the voting
securities of the Company outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into
voting securities of the surviving entity) more than
fifty percent (50%) of the combined voting power of
the voting securities of the Company or such
surviving entity outstanding immediately after such
merger of consolidation; provided, however, that a
merger or consolidation effected to implement a
recapitalization of the company (or similar
transaction) in which no person (other than those
covered by the exceptions in (a) above) acquires more
than twenty-five percent (25%) of the combined voting
power of the Company's then outstanding securities
shall not constitute a Change in Control; or
(d) the stockholders of the Company approve a plan of
complete liquidation of the Company or the closing of
the sale or disposition by the Company of all or
substantially all of the Company's assets other than
the sale or disposition of all or substantially all
of the assets of the Company to one or more
Subsidiaries (as defined below) of the Company or to
a person or persons who beneficially own, directly or
indirectly, at least (50%) or more of the combined
voting power of the outstanding voting securities of
the Company at the time of the sale or disposition.
'Subsidiary' has the meaning set forth in Section 424
of the Code, as amended or superseded, and the term
shall also include any partnership, limited liability
company or other business entity if the Company owns,
directly or indirectly, securities or other ownership
interest representing at least fifty percent (50%) of
the ordinary voting power or equity or capital
interests of such entity. Notwithstanding any of
the foregoing, the formation of Equistar Chemicals,
LP ('Equistar') and the contribution of assets by
Millennium Petrochemicals Inc. to Equistar on
December 1, 1997 shall not constitute a Change in
Control, and the sale or disposition of all or any
part of the Company's interest in Equistar shall not
constitute a Change in Control.
2.7 "CODE" means the Internal Revenue Code of 1986, as
amended from time to time
2.8 "COMMITTEE" means the committee appointed by the
Board of Directors of the Company from among its
members (which may be the Compensation Committee) and
shall be comprised, unless otherwise determined by
the Board of Directors, solely of not less than two
members who shall be (i) 'Non-Employee Directors'
within the meaning of Rule 16b-3(b)(3) (or any
successor rule) promulgated under the Exchange Act
and (ii) 'outside directors' within the meaning of
Treasury Regulation Section 1.162-27(e)(3) under
Section 162(m) of the Code.
2.9 "COMPANY" means Millennium Chemicals Inc., a Delaware
corporation, and any successor thereto as provided in
Article 18 herein.
2.10 "DIRECTOR" means any individual who is a member of
the Board of Directors of the Company, provided,
however, that any Director who is an Employee shall
not be considered to be a Director under the Plan.
2.11 "DISABILITY" shall have the meaning ascribed to such
term in the Participant's governing long-term
disability plan or if no such plan exists, at the
discretion of the Board.
2.12 "DISABILITY" "EFFECTIVE DATE" shall have the meaning
ascribed to such term in Section 1.1 hereof.
2.13 "EMPLOYEE" means any employee of the Company or its
Subsidiaries or Affiliates provided such Subsidiary
or Affiliate has been designated by the Committee as
eligible to receive Awards under the Plan.
2.14 "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended from time to time, or any successor
act thereto.
2.15 "FAIR MARKET VALUE" means, for purposes of this Plan
and any Awards hereunder, (i) the closing price of
the Company's Shares on the date of calculation (or
on the last preceding trading date if Shares were not
traded on such date) if the Company's Shares are
readily tradable on a national securities exchange or
other market system, (ii) if the Company's Shares are
not readily tradable, the amount determined in good
faith by the Committee as the fair market value of
the Shares of the Company and (iii) in connection
with a Change in Control of the Company or an event
specified in Section 4.2, the value of the
consideration paid to stockholders in connection with
such Change in Control or event or, if no
consideration is paid in respect thereof, the amount
determined pursuant to clause (i) above.
2.16 "FREESTANDING SAR" means an SAR that is granted
independently of any Options, as described in Article
7.
2.17 "INCENTIVE STOCK OPTION" or 'ISO' means an option to
purchase Shares granted under Article 6 herein and
that is designated as an Incentive Stock Option and
that is intended to meet the requirements of Code
Section 422.
2.18 "INSIDER" shall mean an individual who is, on the
relevant date, an officer, director or ten percent
(10%) beneficial owner of any class of the Company's
equity securities that is registered pursuant to
Section 12 of the Exchange Act, all as defined under
Section 16 of the Exchange Act.
2.19 "NONQUALIFIED STOCK OPTION" or "NQSO" means an option
to purchase Shares granted under Article 6 herein and
that is not intended to meet the requirements of Code
Section 422, or that otherwise does not meet such
requirements.
2.20 "OPTION" means an Incentive Stock Option or a
Nonqualified Stock Option, as described in Article 6
herein.
2.21 "OPTION PRICE" means the price at which a share may
be purchased by a Participant pursuant to an Option.
2.22 "PARTICIPANT" means an Employee or Director who has
been selected to receive an Award or who has
outstanding an Award granted under the Plan
2.23 "PERFORMANCE-BASED AWARD" means the Awards that
qualify for the Performance-Based-Exception.
2.24 "PERFORMANCE-BASED-EXCEPTION" means the performance-
based exception from the tax deductibility
limitations of Code Section 162(m).
2.25 "PERFORMANCE SHARE" means an Award granted to a
Participant, as described in Article 9 herein.
2.26 "PERFORMANCE UNIT" means an Award granted to a
Participant, as described in Article 9 herein.
2.27 "PERIOD OF RESTRICTION" means the period during which
the transfer of Shares of Restricted Stock is limited
in some way (based on the passage of time, the
achievement of performance goals, or upon the
occurrence of other events as determined by the
Committee, at its discretion), and the Shares are
subject to a substantial risk of forfeiture, as
provided in Article 8 herein.
2.28 "PERSON" shall have the meaning ascribed to such term
in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof, including a 'group'
as defined in Section 13(d) thereof.
2.29 "RESTRICTED STOCK" means an Award granted to a
Participant pursuant to Article 8 herein.
2.30 "RETIREMENT" means, unless otherwise determined by
the Committee or as specifically provided in an Award
Agreement, the Participant's termination of
employment after such Participant reaches age fifty
(50) with the accrual of fifteen (15) years of
service (as defined in the qualified retirement plan
applicable to such Participant).
2.31 "SHARES" means the common stock, $.01 par value, of
the Company.
2.32 "STOCK APPRECIATION RIGHT" or 'SAR' means an Award,
granted alone or in connection with a related Option,
designated as an SAR, pursuant to the terms of
Article 7 herein.
2.33 "STOCK AWARD" means an Award, granted pursuant to the
terms of Section 9.7 herein.
2.34 "SUBSIDIARY" means any corporation, partnership,
joint venture, or other entity in which the Company
has a majority voting interest.
2.35 "TANDEM SAR" means an SAR that is granted in
connection with a related Option pursuant to Article
7 herein, the exercise of which shall require
forfeiture of the right to purchase a Share under the
related Option (and when a Share is purchased under
the Option the Tandem SAR shall similarly be
canceled).
ARTICLE 3
ADMINISTRATION
3.1 GENERAL. Subject to the terms and conditions of
the Plan, the Plan shall be administered by the
Committee; provided, however, that the administration
of the Plan with respect to Awards granted to
Directors shall be administered by the Board. The
members of the Committee shall be appointed from time
to time by, and shall serve at the discretion of, the
Board of Directors. The Committee is authorized,
subject to the provisions of the Plan, to establish
such rules and regulations as it deems necessary for
the proper administration of the Plan and to make
such determinations and interpretations and to take
such action in connection with the Plan and any
Awards granted hereunder as it deems necessary or
advisable. All determinations and interpretations
made by the Committee shall be binding and conclusive
on all Participants and their legal representatives.
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
the Subsidiary or Affiliate whose employees have
benefited from the Plan, as determined by the
Committee. No member of the Committee or the Board
and no employee of the Company or any of its
Subsidiaries shall be liable for any act or failure
to act hereunder except in circumstances involving
his or her bad faith or willful misconduct, or for
any act or failure to act hereunder by any other
member or employee or by any agent to whom duties in
connection with the administration of this Plan have
been delegated. The Company shall indemnify members
of the Committee and the Board and any agent of the
Committee or the Board who is an employee of the
Company, a Subsidiary or an Affiliate against any and
all liabilities or expenses to which they may be
subjected by reason of any act of failure to act with
respect to their duties on behalf of the Plan, except
in circumstances involving such person's bad faith or
willful misconduct.
3.2 AUTHORITY OF THE COMMITTEE. Authority of the
Committee. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the
Company, and subject to the provisions herein, the
Committee shall have full power to select Employees
who shall participate in the Plan; determine the
sizes and types of Awards; determine the terms and
conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any
agreement or instrument entered into under the Plan;
establish, amend, or waive rules and regulations for
the Plan's administration; and amend the terms and
conditions of any outstanding Award as provided in
the Plan. Further, the Committee shall make all
other determinations that may be necessary or
available for the administration of the Plan.
Notwithstanding anything else in this Plan to the
contrary, the Board shall make all such decisions and
determinations with respect to Directors, and
references in this Plan to the Committee shall be to
the Board with respect to Directors and Awards
granted to Directors, unless the context clearly
indicates otherwise.
3.3 DECISIONS BINDING. All determinations and decisions
made by the Committee pursuant to the provision of
the Plan and all related orders and resolutions of
the Committee shall be final, conclusive, and binding
on all people, including the Company, its
stockholders, Directors, Employees, Participants, and
their estates and beneficiaries.
ARTICLE 4.
SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES. Available for Grants. Subject to
adjustments as provided in Section 4.2 herein, the
number of Shares that may be subject o Awards,
including Options, under the Plan shall be 3,200,000
Shares, of which no more than 1,000,000 Shares may be
granted in the form of Restricted Shares, and the
maximum number of Shares with respect to which Awards
may be granted or measured to any individual
Participant under the Plan during the term of the
Plan shall not exceed 1,500,000 Shares. Any Shares
subject to an Option or stock Appreciation Right
which for any reason are cancelled or terminated
without having been exercised, any Shares subject to
Stock Awards, Performance Shares or Performance Units
which are forfeited, any Shares subject o Performance
Awards settled in cash or any Shares delivered to the
Company as part of full payment for the exercise of
an Option or Stock Appreciation Right shall again be
available for Awards under the Plan. The preceding
sentence shall apply only for purposes of determining
the aggregate number of Shares subject to Awards but
shall not apply for purposes of determining the
maximum number of Shares with respect to which Awards
(including the maximum number of Shares subject to
Options and Stock Appreciation Rights) that may be
granted to any individual Participant under the Plan.
The following rules shall apply to grants of such
Awards under the Plan:
(a) Stock Options: The maximum aggregate number of
Shares that may be granted in the form of Stock
Options, pursuant to any Award granted in any one
fiscal year to any one single Participant shall be
1,000,000 Shares.
(b) SARs: The maximum aggregate number of Shares that
may be granted in the form of Stock Appreciation
Rights, pursuant to any Award granted in any one
fiscal year to any one single Participant shall be
1,000,000 Shares.
(c) Restricted Stock: The maximum aggregate grant with
respect to Awards of Restricted Stock granted in any
one fiscal year to any one Participant shall be
500,000 Shares.
(d) Performance Shares/Performance Units and Cash-
Based Awards: The maximum aggregate grant with
respect to Awards of Performance Shares made in any
one fiscal year to any one Participant shall be equal
to the value of 500,000 Shares; the maximum aggregate
amount awarded or credited with respect to Cash-Based
Awards or Performance Units to any one Participant in
any one fiscal year may not exceed twelve million
dollars ($12,000,000).
(e) Stock Awards: The maximum grant with respect to
Awards of Stock Awards granted in any one fiscal year
to any one Participant shall be 500,000 Shares.
4.2 ADJUSTMENTS IN AUTHORIZED SHARES. If there shall be
any change in the Shares of the Company or the
capitalization of the Company through merger,
consolidation, reorganization, recapitalization,
stock dividend, stock split, reverse stock split,
split up, spin-off, combination of shares, exchange
of shares, dividend in kind or other like change in
capital structure or distribution (other than normal
cash dividends) to stockholders of the Company, the
Committee, in its sole discretion, in order to
prevent dilution or enlargement of Participants'
rights under the Plan, shall adjust, in an equitable
manner, as applicable, the number and kind of Shares
that may be issued under the Plan, the number and
kind of Shares subject to outstanding Awards, the
exercise price applicable to outstanding Awards, the
Fair Market Value of the Shares and other value
determinations applicable to outstanding Awards;
provided, however, that any such arithmetic
adjustment to a Performance-Based Awards shall not
cause the amount of compensation payable thereunder
to be increased from what otherwise would have been
due upon attainment of the unadjusted award.
Appropriate adjustments may also be made by the
Committee in the terms of any Awards under the Plan
to reflect such changes or distributions and to
modify any other terms of outstanding Awards on an
equitable basis, including modifications of
performance targets and changes in the length of
performance periods; provided, however, that any such
arithmetic adjustment to a Performance-Based Award
shall not cause the amount of compensation payable
there under to be increased from what otherwise would
have been due upon attainment of the unadjusted
award. In addition, other than with respect to
Options, Stock Appreciation Rights, and other awards
intended to constitute Performance-Based Awards, the
Committee is authorized to make adjustments to the
terms and conditions of, and the criteria included
in, Awards in recognition of unusual or nonrecurring
events affecting the Company or the financial
statements of the Company, or in response to changes
in applicable laws, regulations, or accounting
principles. Notwithstanding the foregoing, (i) each
such adjustment with respect to an Incentive Stock
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 refer any Incentive
Stock Option granted hereunder other than an
incentive stock option for purposes of section 422 of
the Code. The determination of the Committee as to
the foregoing adjustments, if any, shall be
conclusive and binding on Participants under the
Plan.
ARTICLE 5
ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this
Plan include all Employees and Directors.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of
the Plan, the Committee may, from time to time,
select from all eligible Employees and Directors,
those to whom Awards shall be granted and shall
determine the nature and amount of each Award.
ARTICLE 6
STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and
provisions of the Plan, Options may be granted to
Participants in such number, and upon such terms, and
at any time and from time to time as shall be
determined by the Committee.
6.2 AWARD AGREEMENT. Each Option grant shall be
evidenced by an Award Agreement that shall specify
the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and
such other provisions as the Committee shall
determine which are not inconsistent with the terms
of the Plan. The Award Agreement also shall specify
whether the Option is intended to be an ISO within
the meaning of Code Section 422, or an NQSO whose
grant is intended not to fall under the provisions of
Code Section 422. An outstanding Option may not be
modified to reduce the exercise price thereof nor may
a new Option at a lower price be substituted for a
surrendered Option (except in accordance with Section
4.2 of the Plan or Article 14)
6.3 OPTION PRICE. The Option Price for each grant of an
Option under this Plan shall be as determined by the
Committee; provided, however, subject to Section 6.11
below, that the per-share exercise price shall not be
less than 100% of the Fair Market Value of the Common
Stock on the date the Stock Option is granted.
6.4 DURATION OF OPTIONS. Each Option granted to a
Participant shall expire at such time as the
Committee shall determine at the time of grant;
provided, however, subject to Section 6.11 below, no
Option shall be exercisable later than the tenth
(10th) anniversary date of its grant.
6.5 EXERCISE OF OPTIONS. Options granted under this
Article 6 shall be exercisable at such times and be
subject to such restrictions and conditions as the
Committee shall in each instance approve, which need
not be the same for each grant or for each
Participant.
6.6 PAYMENT. Options granted under this Article 6
shall be exercised by the delivery of a written
notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is
to be exercised, accompanied by full payment for the
Shares.
The Option Price upon exercise of any Option shall be
payable to the Company in full either: (a) in cash or
its equivalent; or (b) at the discretion of the
Committee, by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price (provided
that the Shares that are tendered must have been held
by the Participant for at least six (6) months prior
to their tender to satisfy the Option Price); or (c)
by a combination of (a) and (b); or (d) any other
method approved by the Committee in its sole
discretion at the time of grant and as set forth in
the Award Agreement.
The Committee also may allow cashless exercise as
permitted under Federal Reserve Board's Regulation T,
subject to applicable securities law restrictions, or
by any other means which the Committee determines to
be consistent with the Plan's purpose and applicable
law.
Subject to any governing rules or regulations, as
soon as practicable after receipt of a written
notification of exercise and full payment, the
Company shall deliver to the Participant, in the
Participant's name, Share certificates in an
appropriate amount based upon the number of Shares
purchased under the Option(s).
Unless otherwise determined by the Committee, all
payments under all of the methods indicated above
shall be paid in United States dollars.
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee
may impose such restrictions on any Shares acquired
pursuant to the exercise of an Option granted under
this Article 6 as it may deem advisable, including
without limitation, restrictions under applicable
federal securities laws, under the requirements of
any stock exchange or market upon which such Shares
are then listed and/or traded, and under any blue sky
or state securities laws applicable to such Shares.
6.8 TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each
Participant's Award Agreement shall set forth the
extent to which the Participant shall have the right
to exercise the Option following termination of the
Participant's employment or directorship with the
Company. Such provisions shall be determined in the
sole discretion of the Committee, shall be included
in the Award Agreement entered into with each
Participant, need not be uniform among all Options
issued pursuant to this Article 6, and may reflect
distinctions based on the reasons for termination.
6.9 POST-EMPLOYMENT EXERCISES. The exercise of any
Option after termination of employment of an Employee
with the Company, its Subsidiaries or Affiliates
shall be subject to such conditions as imposed by the
Committee at the time of the Award Agreement and
satisfaction of the conditions precedent that the
Employee neither (i) competes with, or takes other
employment with or renders services to a competitor
of, the Company, its Subsidiaries or Affiliates
without the written consent of the Company, nor (ii)
conducts himself or herself in a manner adversely
affecting the Company; provided, however, that the
Committee, in its sole discretion, may waive any
conditions imposed in the Award Agreement or as set
forth in (i) and (ii) above relating to the exercise
of Options after the date of termination of
Employment during the term of the option.
6.10 NONTRANSFERABILITY OF OPTIONS.
(a) Incentive Stock Options. No ISO granted under the
Plan maybe sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution.
Further, all ISOs granted to a Participant under the
Plan shall be exercisable during his or her lifetime
only by such Participant.
(b) Nonqualified Stock Options. Except as provided
below, no NQSO granted under this Article 6 may be
sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by
the laws of descent and distribution and all NSQOs
granted to a Participant under this Article 6 shall
be exercisable during his or her lifetime only by
such Participant. Notwithstanding the foregoing, at
the discretion of the Committee, an Award Agreement
for the grant of NQSO may permit the transferability
of such an Award by a Participant solely to the
Participant's spouse, siblings, parents, children and
grandchildren or trusts for the benefit of such
persons or partnerships, corporations, limited
liability companies or other entitles owned solely by
such persons or partnerships, corporations, limited
liability companies or other entities owned solely by
such persons, including trusts for such persons,
subject to any restriction included in the Award
Agreement.
6.11 REQUIREMENTS FOR INCENTIVE STOCK OPTIONS. Incentive
Stock Options may be granted only to Participants who
are employees of the Company or one of its
subsidiaries (within the meaning of Section 424(f) of
the Code) at the date of grant. The aggregate Fair
Market Value (determined as of the time the Incentive
Stock Option is granted) of the Shares with respect
to which Incentive Stock Options are exercisable for
the first time by a Participant during any calendar
year (under all option plans for the Company and of
any parent corporation or subsidiary corporation (as
defined in Section 424(e) and (f) of the Code,
respectively)) shall not exceed $100,000. For
purposes of the preceding sentence, Incentive Stock
Options will be taken into account in the order in
which they are granted. The per-share exercise price
of an Incentive Stock Option shall not be less than
100% of the Fair Market value of the Shares on the
date of grant, and no Incentive Stock Option may be
exercised later than ten years after the date it is
granted; provided, however, Incentive Stock Options
may not be granted to any Participant who, at the
time of grant, owns Stock possessing (after the
application of the attribution rules of Section
424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the
Company or any parent or subsidiary corporation of
the Company, unless the exercise price is fixed at
not less than 110% of the Fair Market value of the
Shares on the date of grant and the exercise of such
option is prohibited by its terms after the
expiration date of five years from the date of grant
of such option. In addition, no Incentive Stock
Option may be issued to a Participant in tandem with
a Nonqualified Stock Option.
ARTICLE 7
STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARs. Subject to the terms and conditions
of the Plan, SARs may be granted to Participants at
any time and from time to time as shall be determined
by the Committee. The Committee may grant
Freestanding SARs, Tandem SARs, or any combination of
these forms of SAR.
Subject to the terms and conditions of the Plan, the
Committee shall have complete discretion in
determining the number of SARs granted to each
Participant and, consistent with the provisions of
the Plan, in determining the terms and conditions
pertaining to such SARs.
The xxxxx xxxxx of a Freestanding SAR shall equal the
Fair Market Value of a share on the date of grant of
the SAR. The xxxxx xxxxx of Tandem SARs shall equal
the Option Price of the related Option.
7.2 SAR AGREEMENT. Each SAR grant shall be evidenced by
an Award Agreement that shall specify the xxxxx
xxxxx, the term of the SAR, and such other provisions
as the Committee shall determine.
7.3 TERM OF SARS. The term of an SAR granted under the
Plan shall be determined by the Committee, in its
sole discretion, provided however, that no SAR shall
be exercisable later than then tenth (10th)
anniversary date of its grant.
7.4 EXERCISE OF FREESTANDING SARS. Free standing SARs
may be exercised upon whatever terms and conditions
the Committee, in its sole discretion, imposes upon
them.
7.5 EXERCISE OF TANDEM SARS. Tandem SARs may be
exercised for all or part of the Shares subject to
the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option
a Tandem SAR may be exercised only with respect to
the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to
the contrary, with respect to a Tandem SAR granted in
connection with an ISO: (a) the Tandem SAR will
expire no later than the expiration of the underlying
ISO; (b) the value of the payout with respect to the
Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option
Price of the underling ISO and the Fair Market value
of the Share subject to the underling ISO at the time
the Tandem SAR is exercised; and (c) the Tandem SAR
may be exercised only when the Fair Market value of
the Shares subject to the ISO exceeds the Option
Price of the ISO.
7.6 PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a
Participant shall be entitled to receive payment from
the Company in an amount determined by multiplying:
(a) The difference between the Fair Market Value of a
Share on the date of exercise over the xxxxx xxxxx;
by
(b) The number of Shares with respect to which the SAR
is exercised.
At the discretion of the Committee, the payment upon
SAR exercise may be in cash, in Shares of equivalent
value, in some combination thereof, or in any other
manner approved by the Committee at its sole
discretion. The Committee's determination regarding
the form of SAR payout shall be set forth in the Award
Agreement pertaining to the grant of the SAR.
7.7 TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Award
Agreement shall set forth the extent to which the
Participant shall have the right to exercise the SAR
following termination of the Participant's employment
or directorship with the Company, its Affiliates,
and/or its subsidiaries, as the case may be. Such
provisions shall be determined in the sole discretion
of the Committee, shall be included in the Award
Agreement entered into with Participants, need not be
uniform among all SARs issued pursuant to the Plan,
and may reflect distinctions based on the reasons for
termination.
7.8 POST-EMPLOYMENT EXERCISES. The exercise of any SAR
after termination of employment of an Employee with
the Company, its Subsidiaries or Affiliates shall be
subject to such conditions as imposed by the
Committee at the time of the Award Agreement and
satisfaction for the conditions precedent that the
Employee neither (i) competes with, or takes other
employment with or renders services to a competitor
of, the Company, its Subsidiaries or Affiliates
without the written consent of the Company, nor (ii)
conducts himself or herself in a manner adversely
affecting the Company; provided, however, that the
Committee, in its sole discretion, may waive any
conditions imposed in the Award Agreement or as set
forth in (i) and (ii) above relating to the exercise
of any SAR after the date of termination of
employment during the term of the option.
7.9 NONTRANSFERABILITY OF SARs. Except as provided
below, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by
the laws of descent and distribution, and all SARs
granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such
Participant. Notwithstanding the foregoing, at the
discretion of the Committee, an Award Agreement for
the grant of an SAR may permit the transferability of
such an Award by a Participant solely to the
Participant's spouse, siblings, parents, children and
grandchildren or trusts for the benefit of such
persons or partnerships, corporations, limited
liability companies or other entities owned solely by
such person, including trusts for such persons,
subject to any restriction included in the Award
Agreement.
ARTICLE 8
RESTRICTED STOCK
8.1 GRANT OF RESTRICTED STOCK. Subject to the terms and
provisions of the Plan, the Committee, at any time
and from time to time, may grant Shares of Restricted
Stock to Participants in such amounts as the
Committee shall determine.
8.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock
grant shall be evidenced by a Stock Award Agreement
that shall specify the Period(s) of Restriction, the
number of Shares of Restricted Stock granted, and
such other provisions as the Committee shall
determine.
8.3 TRANSFERABILITY. Except as provided in this Article
8, the Shares of Restricted Stock granted herein may
not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of
the applicable Period of Restriction established by
the Committee and specified in the Restricted Stock
Award Agreement, or upon earlier satisfaction of any
other conditions, as specified by the Committee in
its sole discretion and set forth in the Restricted
Stock Award Agreement and all rights with respect to
the Restricted Stock granted to a Participant under
the Plan shall be available during his or her
lifetime only to such Participant. Notwithstanding
the foregoing, at the discretion of the Committee, an
Award Agreement for the grant of Restricted Stock may
permit the transferability of such an Award by a
Participant solely to the Participant's spouse,
siblings, parents, children and grandchildren or
trusts for the benefit of such persons or
partnerships, corporations, limited liability
companies or other entitles owned solely by such
persons, including trusts for such persons, subject
to any restriction included in the Award Agreement.
8.4 OTHER RESTRICTONS. The Committee shall impose such
other conditions and/or restrictions on any Shares of
Restricted Stock granted pursuant to the Plan it may
deem advisable including, without limitation, a
requirement that Participants pay a stipulated
purchase price for each share of Restricted Stock,
restrictions based upon the achievement of specific
performance goals, time-based restrictions on vesting
following the attainment of the performance goals,
time-based restrictions, and/or restrictions under
applicable federal or state securities laws.
To the extent deemed appropriate by the Committee,
the Company may retain the certificates representing
Shares of Restricted Stock in the Company's
possession until such time as all conditions and/or
restrictors applicable to such Shares have been
satisfied.
Except as otherwise provided in this Article 8,
Shares of Restricted Stock covered by each Restricted
Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of
the applicable Period of Restriction.
8.5 VOTING RIGHTS. If the Committee so determines,
Participants holding Shares of Restricted Stock
granted hereunder may be granted the right to
exercise full voting rights with respect to those
Shares during the Period of Restriction.
8.6 DIVIDENDS AND OTHER DISTRIBUTIONS. During the
Period of Restriction, Participants holding Shares of
Restricted Stock granted hereunder may, if the
Committee so determines, be credited with dividends
paid with respect to the underlying Shares while they
are so held, in a manner determined by the Committee
in its sole discretion. The Committee may apply any
restrictions to the dividends that the Committee
deems appropriate. Without limiting the generality
for the preceding sentence, if the grant or vesting
of Restricted Shares is designed to comply with the
requirements of the Performance-Based Exception, the
Committee may apply any restrictions it deems
appropriate to the payment of dividends declared with
respect to such Restricted Shares, such that the
dividends and/or the Restricted Shares maintain
eligibility for the Performance-Based Exception.
8.7 TERMINATION OF EMPLOYENT/DIRECTORSHIP. Each Award
Agreement shall set forth the extent to which the
Participant shall have the right to receive unvested
Restricted Shares following termination for the
Participant's employment or directorship with the
Company. Such provisions shall be determined in the
sole discretion of the Committee, shall be included
in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of
Restricted Stock issued pursuant to the Plan, and may
reflect distinctions based on the reasons for
termination.
ARTICLE 9
PERFORMANCE UNITS, PERFORMANCE SHARES
AND CASH-BASED AWARDS; STOCK AWARDS
9.1 GRANT OF PERFORMANCE UNITS/SHARES AND CASH-BASED
AWARDS. Subject to the terms of the Plan, Performance
Units, Performance Shares, and/or Cash-Based Awards
may be granted to Participants in such amounts and
upon such terms, and at any time and from time to
time, as shall be determined by the Committee, and
Awards granted under this Article 9 may consist of
any combination of Performance Units, Performance
Shares and/or Cash-Based Awards.
9.2 VALUE OF PERFORMANCE UNITS/SHARES AND CASH-BASED
AWARDS. Each Performance Unit shall have an initial
value that is established by the Committee at the
time of grant. Each Performance Share shall have an
initial value equal to or greater than the Fair
Market Value of a Share on the date of grant. Each
Cash-Based Award shall have a value as may be
determined by the Committee. The Committee shall set
performance goals in its discretion which, depending
on the extent to which they are met, will determine
the number and/or value of Performance Units/Shares
and Cash-Based Awards that will be paid out to the
Participant. For purposes of this Article 9, the
time period during which the performance goals must
be met shall be called a 'Performance Period.'
9.3 EARNING OF PERFORMANCE UNITS/SHARES AND CASH-BASED
AWARDS. Subject to the terms of this Plan, after the
applicable Performance Period has ended (including
any period of deferral as provided in Section 9.4
hereof), the holder of Performance Units/Shares and
Cash-Based Awards shall be entitled to receive payout
on the number and value of Performance Units/Shares
and Cash-Based Awards earned by the Participant over
the Performance Period, to be determined as a
function of the extent to which the corresponding
performance goals have been achieved.
9.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE
UNITS/SHARES AND STOCK/CASH-BASED AWARDS. Payment of
earned Performance Units/Shares and Cash-Based Awards
shall be as determined by the Committee and as
evidenced in the Award Agreement. Subject to the
terms of the Plan, the Committee, in its sole
discretion, may pay earned Performance Units/Shares
and Cash-Based Awards in the form of cash or in
Shares (or in a combination thereof) that have an
aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares and Cash-Based Awards
at the close of the applicable Performance Period.
Such Shares may be granted subject to any
restrictions deemed appropriate by the Committee.
The determination of the Committee with respect to
the form of payout of such Awards shall be set forth
in the Award Agreement pertaining to the grant of the
Award.
At the discretion of the Committee, Participants
holding Performance Units/Shares may be entitled to
receive dividend units with respect to dividends
declared with respect to the Shares. Such dividends
may be subject to the same accrual, forfeiture, and
payout restrictions as apply to dividends earned with
respect to Shares of Restricted stock, as set forth
in Section 8.6 herein, as determined by the
Committee.
Notwithstanding the above, a Participant may elect to
defer, or the Committee may require or permit the
deferral of, the receipt of Awards under Article 9
upon such terms as the Committee deems appropriate.
9.5 TERMINATION OF EMPLOYMENT/DIRECTORSHIP. In the event
the employment or directorship terminates for any
reason, including by reason of death, disability, or
retirement, all Performance Units/Shares and Cash-
Based Awards shall be forfeited by the Participant to
the Company unless determined otherwise by the
Committee, as set forth in the Participant's Award
Agreement.
9.6 NONTRANSFERABILITY. Except as provided below,
Performance Units/Shares and Cash-Based Awards may
not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution and a
Participant's rights under the Plan shall be
exercisable during the Participant's lifetime only by
the Participant. Notwithstanding the foregoing, at
the discretion of the Committee, an Award Agreement
for the grant of Performance Units/Shares and Cash-
Based Awards may permit the transferability of any
such Awards by a Participant solely to the
Participant's spouse, siblings, parents, children and
grandchildren or trusts for the benefit of such
persons or partnerships, corporations, limited
liability companies or other entitles owned solely by
such persons, including trusts for such persons,
subject to any restriction included in the Award
Agreement.
9.7 STOCK AWARDS. The Committee may, in its discretion,
grant Stock Awards (which may include mandatory
payment of bonus incentive compensation in stock),
consisting of Shares issued or transferred to
Participants with or without other payments
therefore. Stock Awards may be subject to such terms
and conditions as the Committee determines
appropriate, including, without limitation,
restrictions on the sale or other disposition of such
Shares, the right of the Company to reacquire such
Shares for no consideration upon termination of the
Participant's employment within specified periods,
and may constitute Performance-Based Awards, as
described in Article 10 hereof. The Committee may
require the Participant to deliver a duly signed
stock power, endorsed in blank, relating to the
Shares covered by such an Award. The Committee may
also require that the stock certificates evidencing
such Shares be held in custody or bear restrictive
legends until the restrictions thereon shall have
lapsed. The Stock Award shall specify whether the
Participant shall have, with respect to the Shares
subject to a Stock Award, all of the rights of a
holder of Shares of the Company, including the right
to receive dividends and to vote the Shares.
Notwithstanding the foregoing, at the discretion of
the Committee, an Award Agreement for the grant of a
Stock Award may permit the transferability of such an
Award by a Participant solely to the Participant's
spouse, siblings, parents, children and grandchildren
or trusts of the benefit of such persons or
partnerships, corporations, limited liability
companies or other entitles owned solely by such
persons, including trusts for such persons, subject
to any restriction included in the Award Agreement.
ARTICLE 10
PERFORMANCE-BASED AWARDS AND PERFORMANCE MEASURES
10.1 PERFORMANCE-BASED AWARDS. Certain Awards granted
under the Plan may be granted in a manner such that
the Awards qualify as Performance-Based Awards. As
determined by the Committee in its sole discretion,
either the granting or vesting of such Performance-
Based Awards shall be based on achievement of hurdle
rates and/or growth rates in one or more business
criteria that apply to the individual Participant,
one or more business units or the Company as a whole.
The business criteria shall be as set forth in
Section 10.2 hereof. With respect to Performance-
Based Awards, (i) the Committee shall establish in
writing (x) the performance goals applicable to a
given period, and such performance goals shall state,
in terms of an objective formula or standard, the
method for computing the amount of compensation
payable to the Participant if such performance goals
are obtained and (y) the individual employees or
class of employees to which such performance goals
apply no later than 90 days after the commencement of
such period (but in no event after 25% of such period
has elapsed) and (ii) no Performance-Based Awards
shall be payable to or vest with respect to, as the
case may be, any Participant for a given period until
the Committee certifies in writing that the objective
performance goals (and any other material terms)
applicable to such period have been satisfied. With
respect to any Awards intended to qualify as
Performance-Based Awards, after establishment of a
performance goal, the Committee shall not revise such
performance goal or increase the amount of
compensation payable there under (as determined in
accordance with Section 162(m) of the Code) upon the
attainment of such performance goal. Notwithstanding
the preceding sentence, the Committee may reduce or
eliminate Awards payable upon the attainment of such
performance goal.
10.2 PERFORMANCE MEASURES. The performance measure(s) to
be used for purposes of Performance-Based Awards
shall be chosen from among:
(a) EVA(Registered Trademark)
(b) Net earnings;
(c) Earnings per share;
(d) Net sales growth;
(e) Net income (before or after taxes);
(f) Net operating profit;
(g) Return measures (including, but not limited to,
return on assets, equity, or sales);
(h) Cash flow (including, but not limited to,
operating cash flow and free cash flow);
(i) Cash flow return on investments, which equals net
cash flows divided by owner's equity;
(j) Earnings before or after taxes, interest,
depreciation and/or amortization;
(k) Internal rate of return or increase in net present
value;
(l) Dividend payments to parent;
(m) Gross revenues;
(n) Gross margins;
(o) Operating margin;
(p) Share price (including, but not limited to, growth
measures and total shareholder return);
(q) Expense targets;
(r) Working capital targets relating to inventory
and/or accounts receivable;
(s) Planning accuracy (as measured by comparing
planned results to actual results);
(t) Comparisons to various stock market indices; and
(u) Comparisons to the performance of other companies.
For purposes of this Plan, EVA(Registered Trademark)
means the positive or negative value determined by net
operating profits after taxes over charge for capital,
or any other financial measure, as determined by the
Committee in its sole discretion. (XXX is a registered
trademark of Xxxxx Xxxxxxx & Co.).
The Committee may provide in any such Award that any
evaluation of performance exclude any of the following
events that occurs during a performance period: (a)
asset write-downs; (b) litigation or claim judgments or
settlements; (c) the effect of changes in tax law,
accounting principles or other laws or provisions
affecting reported results; (d) accruals for
reorganization and restructuring programs; (e)
extraordinary non-recurring items as described in
Accounting Principles Board Opinion No.30 and/or in
management's discussion and analysis of financial
condition and results of operations appearing in the
Company's annual report to stockholders for the
applicable year; (f) acquisitions or divestitures; and
(g) foreign exchange gains and losses. To the extent
such exclusions affect Awards to executives covered by
Section 162(m); they will be prescribed in resolutions
that meet the requirements of Section 162(m) for
deductibility.
In the event that applicable tax and/or securities laws
change to permit Committee discretion to alter the
governing performance measures without obtaining
shareholder approval of such changes, the Committee
shall have sole discretion to make such changes without
obtaining shareholder approval. In addition, in the
event that the Committee determines that it is
advisable to grant Awards that shall not qualify for
the Performance-Based Exception; the Committee may make
such grants without satisfying the requirements of Code
Section 162(m).
ARTICLE 11
BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name
any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the
Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company,
and will be effective only when filed by the Participant in
writing with the Company during the Participant's lifetime.
In the absence of any such designation, benefits remaining
unpaid at the Participant's death shall be paid to the
Participant's estate.
ARTICLE 12.
DEFERRALS
The Committee may permit or require a Participant to defer
such Participant's receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such
Participant by virtue of the exercise of an Option or SAR,
the lapse or waiver of restrictions with respect to
Restricted Stock, or the satisfaction of any requirements or
goals with respect to Performance Units/Shares and Cash-
Based Awards. If any such deferral election is required or
permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals.
ARTICLE 13
RIGHTS OF EMPLOYEES/DIRECTORS
13.1 EMPLOYMENT. Nothing in the Plan shall interfere with
or limit in any way the right of the Company to
terminate any Participant's employment at any time,
nor confer upon any Participant any right to continue
in the employ of the Company.
13.2 PARTICIPATION. No Employee or Director shall have
the right to be selected to receive an Award under
this Plan, or, having been so selected, to be
selected to receive a future Award.
13.3 RIGHTS AS A STOCKHOLDER. A Participant shall have
none of the rights of a shareholder with respect to
shares of Common Stock covered by any Award until the
Participant becomes the record holder of such shares.
ARTICLE 14
CHANGE IN CONTROL
14.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence
of a Change in Control, unless otherwise specifically
prohibited under applicable laws, or by the rules and
regulations of any governing governmental agencies or
national securities exchanges, or unless the
Committee shall determine otherwise in the Award
Agreement.
(a) Any and all Options and SARs granted
hereunder shall become immediately
exercisable, and shall remain exercisable
throughout their entire term; Any restriction
periods and restrictions imposed on
Restricted Shares that are not performance-
based shall lapse; and
(b) The target payout opportunities attainable
under all outstanding Awards of performance-
based Restricted Stock, Performance Units,
Performance Shares, Stock Awards and Cash-
based Awards shall be deemed to have been
earned to the extent described below for the
entire Performance Period(s) as of the
effective date of the Change in Control. The
vesting of all Awards denominated in Shares
shall be accelerated as of the effective date
of the change in Control, and there shall be
paid out to Participants, within thirty (30)
days following the effective date of the
Change in Control, all Shares pursuant to
such Awards based upon an assumed achievement
of all targeted performance goals at the
target (or at such greater level if
achieved). Awards denominated in cash shall
also vest and be paid to participants in
cash, within thirty (30) days following the
effective date of the Change in Control, with
the amount of the cash award to be paid based
on an assumed achievement of all targeted
performance goals at the target (or at such
greater level if achieved.).
14.2 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE
IN CONTROL PROVISIONS. Notwithstanding any other
provision of this Plan (but subject to the
limitations of Section 15.2 hereof) or any Award
Agreement provision, the provisions of this Article
14 may not be terminated, amended, or modified on or
after the date of a Change in Control to affect
adversely any Award theretofore granted under the
Plan without the prior written consent of the
Participant with respect to said Participant's
outstanding Awards; provided, however, that the
Board may not take any such action within the six
months immediately prior to the date of a Change in
Control which would affect adversely any Award
theretofore granted under the Plan without the prior
written consent of the Participant with respect to
said Participant's outstanding Awards, and any such
purported action is null.
14.3 POOLING OF INTERESTS ACCOUNTING. Notwithstanding any
other provision of the Plan to the contrary, in the
event that the consummation of a Change in Control is
contingent on using pooling of interests accounting
methodology, the Board may take any action necessary
to preserve the use of pooling of interests
accounting.
ARTICLE 15
AMENDMENT, MODIFICATION, AND TERMINATION
15.1 AMENDMENT, MODIFICATION, AND TERMINATION. Subject to
the terms of the Plan and Article 14 the Board may at
any time and from time to time, alter, amend,
suspend, or terminate the Plan in whole or in part;
provided, however, that no amendment of the Plan may
be made without approval of the stockholders of the
Company if the amendment will: (i) disqualify any
Incentive Stock Options granted under the Plan; (ii)
increase the aggregate number of Shares that may be
delivered under the Plan; (iii) increase any of the
maximum amounts which can be paid to an individual
Participant under the Plan as set forth in Article 4
hereof; (iv) change the types of business criteria on
which Performance-Based Awards are to be based under
the Plan; or (v) modify the requirements as to
eligibility for participation in the Plan.
15.2 AWARDS PREVIOUSLY GRANTED. Notwithstanding any other
provision of the Plan to the contrary (but subject to
Section 14.3 hereof), no termination, amendment, or
modification of the Plan shall adversely affect in
any material way any Award previously granted under
the Plan, without the written consent of the
Participant holding such Award.
ARTICLE 16
WITHHOLDING
16.1 TAX WITHHOLDING. The Company shall have the power
and the right to deduct or withhold, or require a
Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local
taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable
event arising as a result of this Plan.
16.2 SHARE WITHOLDING. With respect to withholding
required upon the exercise of Options or SARs, upon
the lapse of restrictions on Restricted Stock, or
upon any other taxable event arising as a result of
Awards granted hereunder, Participants may elect,
subject to the approval of the Committee, to satisfy
the withholding requirement, in whole or in part, by
requesting the Company to purchase Shares having a
Fair Market Value on the date the tax is to be
determined equal to the minimum statutory tax that
could be imposed on the transaction and required to
be withheld by the Company. All such elections shall
be irrevocable, made in writing, signed by the
Participant, and shall be subject to any restrictions
or limitations that the Committee, in its sole
discretion, deems appropriate.
ARTICLE 17
INDEMNIFICATION
Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnified and held
harmless by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from
any claim, action, suit, or proceeding to which he or she
may be a party or in which he or she may be involved by
reason of any action taken or failure to act under the Plan
and against and form any and all amounts paid by him or her
in settlement thereof, with the Company's approval, or paid
by him or her and from any and all amounts paid by him or
her in settlement thereof, with the Company's approval, or
paid by him or her in satisfaction of any judgment in any
such action, suit, or proceeding against him or her,
provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or
she undertakes to handle and defend it on his or her own
behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which
such persons may be entitled under the Company's Articles of
Incorporation or Bylaws, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or
hold them harmless.
ARTICLE 18
SUCCESSORS
All obligations of the Company under the Plan with respect
to Awards granted hereunder shall be binding on any
successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.
ARTICLE 19
GENERAL PROVISIONS
19.1 LEGEND. The Committee may require each person
receiving Shares pursuant to an Award under this Plan
to represent to and agree with the Company in writing
that the Participant is acquiring the Shares without
a view to distribution thereof. In addition, to any
legend required by this Plan, the certificates for
such Shares may include any legend which the
Committee deems appropriate to reflect any
restrictions on transfer of such Shares.
19.2 GENDER AND NUMBER. Except where otherwise indicated
by the context, any masculine term used herein also
shall include the feminine; the plural shall include
the singular and the singular shall include the
plural.
19.3 SEVERABILITY. In the event any provision of the Plan
shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid
provision had not been included.
19.4 REQUIREMENTS OF LAW. The granting of Awards and the
issuance of Shares under the Plan shall be subject to
all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or
national securities exchanges as may be required.
The Company shall receive the consideration required
by law for the issuance of Awards under the Plan.
19.5 SECURITIES LAW COMPLIANCE. With respect to Insiders,
transactions under this Plan are intended to comply
with all applicable conditions of Rule 16b-3 or its
successors under the 1934 Act, unless determined
otherwise by the Board. To the extent any provision
of the Plan or action by the Board fails to so
comply, it shall be deemed null and void to the
extent permitted by law and deemed advisable by the
Board.
19.6 LISTING. The Company may use reasonable endeavors to
register Shares allotted pursuant to the exercise of
an Option with the United States Securities and
Exchange Commission or to the effect compliance with
the registration, qualification, and listing
requirements of any national securities laws, stock
exchange, or automated quotation system.
19.7 DELIVERY OF TITLE. The Company shall have no
obligation to issue or deliver evidence of title for
Shares under the Plan prior to:
(a) Obtaining any approvals from governmental agencies
that the Company determines are necessary or
advisable; and
(b) Completion of any registration or other
qualification of the Shares under any applicable
national or foreign law or ruling of any
governmental body that the Company determines to
be necessary or advisable.
19.8 INABILITY TO OBTAIN AUTHORITY. The inability of the
Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which
such requisite authority shall not have been
obtained.
19.9 INVESTMENT REPRESENTATIONS. As a condition to the
exercise of an Option, the Company may require the
person exercising such Option to represent and
warrant at the time of any such exercise that the
Shares are being purchased only for investment and
without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the
Company, such representation is required.
19.10 NO ADDITIONAL RIGHTS. Neither the Award nor any
benefits arising under this Plan shall constitute
part of a Participant's employment contract with the
Company or any Subsidiary or Affiliate, and
accordingly subject to Sections 14.2 and 15.2, this
Plan and the benefits hereunder may be terminated at
any time in the sole and exclusive discretion of the
Committee without giving rise to liability on the
part of the Company or any Affiliate for severance
payments.
19.11 EMPLOYEES BASED OUTSIDE OF THE UNITED STATES.
Notwithstanding any provision of the Plan to the
contrary, in order to comply with provisions of laws
in other countries in which the Company, its
Affiliates, and its Subsidiaries operate or have
Employees, the Board, in their sole discretion, shall
have the power and authority to:
(a) Determine which Affiliates and Subsidiaries will
be covered by the Plan;
(b) Determine which Employees employed outside the
United States are eligible to participate in the
Plan;
(c) Modify the terms and conditions of any Award
granted to Employees who are employed outside the
Untied States to comply with applicable foreign
laws;
(d) Establish sub plans, modify exercise procedures,
and other terms and procedures to the extent such
actions may be necessary or advisable. Any sub
plans and modifications to Plan terms and
procedures established under this Section 19.11 by
the Board or the Committee shall be attached to
this Plan document as Appendices; and
(e) Take any action, before or after an Award is made,
which it deems advisable to obtain approval or
comply with any necessary local government
regulatory exemptions or approvals.
Notwithstanding the above, the Committee may not take any
actions hereunder, and no Awards shall be granted, which
would violate the Exchange Act, the Code, any securities
law or governing statute or any other applicable law.
19.12 UNCERTIFICATED SHARES. To the extent that the Plan
provides for issuance of certificates to reflect the
transfer of Shares, the transfer of such Shares may
be affected on a non-certificated basis, to the extent
not prohibited by applicable law or the rules of
any stock exchange.
19.13 UNFUNDED PLAN. Participants shall have no right,
title, or interest whatsoever in or to any
investments which the Company may make to aid it in
meeting its obligations under the Plan. Nothing
contained in the Plan, and no action taken pursuant
to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary
relationship between the Company and any Participant,
beneficiary, legal representative or any other
person. To the extent that any person acquires a
right to receive payments from the Company under the
Plan, such right shall be no greater than the right
of an unsecured general creditor of the Company. All
payments to be made hereunder shall be paid from the
general funds of the Company and no special or
separate fund shall be established and no segregation
of assets shall be made to assure payment of such
amounts except as expressly set forth in the Plan.
The Plan is not intended to be subject to the
Employee Retirement Income Security Act of 1974, as
amended.
19.14 NO FRACTIONAL SHARES. No fractional Shares shall be
issued or delivered pursuant to the Plan or any
Award. The Committee shall determine whether cash,
or Awards, or other property shall be issued or paid
in lieu of fractional Shares or whether such
fractional Shares or any rights thereto shall be
forfeited or otherwise eliminated.
19.15 GOVERNING LAW. The Plan and each Award Agreement
shall be governed by the laws of the state of
Delaware, excluding any conflicts or choice of law
rule or principle that might otherwise refer
construction or interpretation of the Plan to the
substantive law of another jurisdiction. Unless
otherwise provided in the Award Agreement, recipients
of an Award under the Plan are deemed to submit to
the exclusive jurisdiction and venue of the federal
or state courts of New York, county of New York, to
resolve any and all issues that may arise out of or
relate to the Plan or any related Award Agreement.
