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EXHIBIT 10(b)
AMENDED AND RESTATED
1996 INCENTIVE PLAN
OF
ELECTRONIC DATA SYSTEMS CORPORATION
1. Plan. This 1996 Incentive Plan of Electronic Data Systems Corporation (the
"Plan") is a continuation of the 1984 Electronic Data Systems Corporation
Stock Incentive Plan (the "Existing Plan"), which was adopted by General
Motors Corporation, a Delaware corporation ("General Motors"), to reward
certain corporate officers and key employees of the predecessor of
Electronic Data Systems Corporation, a Delaware corporation (the
"Company"), and its subsidiaries by enabling them to acquire shares of
Class E Common Stock, par value $.10 per share ("GM Class E Common Stock"),
of General Motors. The Existing Plan was amended and restated and assumed
by the Company effective as of the Split-Off (as hereinafter defined),
following which neither General Motors nor the committee appointed by
General Motors to administer the Existing Plan (the "Predecessor
Committee") had any further rights or responsibilities thereunder. The
Existing Plan is further amended and restated in its entirety as set forth
herein effective as of June 1, 2000.
2. Objectives. This Plan is designed to attract and retain key employees of
the Company and its Subsidiaries (as hereinafter defined), to attract and
retain qualified directors of the Company, to encourage the sense of
proprietorship of such employees and Directors, and to stimulate the active
interest of such persons in the development and financial success of the
Company and its Subsidiaries. These objectives are to be accomplished by
making Awards (as hereinafter defined) under this Plan and thereby
providing Participants (as hereinafter defined) with a proprietary interest
in the growth and performance of the Company and its Subsidiaries.
3. Definitions. As used herein, the terms set forth below shall have the
following respective meanings:
"Annual Director Award Date" means, for each year beginning on or
after the Split-Off, the first business day of the month next succeeding
the date upon which the annual meeting of stockholders of the Company is
held in such year.
"Authorized Officer" means the Chairman of the Board or the Chief
Executive Officer of the Company (or any other senior officer of the
Company to whom either of them shall delegate the authority to execute any
Award Agreement).
"Award" means an Employee Award or a Director Award.
"Award Agreement" means any Employee Award Agreement or Director Award
Agreement.
"Board" means the Board of Directors of the Company.
"Cash Award" means an award denominated in cash.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means the Compensation and Benefits Committee of the Board
or such other committee of the Board as is designated by the Board to
administer the Plan.
"Common Stock" means the Common Stock, par value $.01 per share, of
the Company.
"Director" means an individual serving as a member of the Board.
"Director Award" means the grant of a Director Option or Director
Restricted Stock.
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"Director Award Agreement" means a written agreement between the
Company and a Participant who is a Nonemployee Director setting forth the
terms, conditions and limitations applicable to a Director Award.
"Director Options" means Nonqualified Options granted to Nonemployee
Directors pursuant to the applicable terms, conditions and limitations
specified in paragraph 9(a) hereof.
"Director Restricted Stock" means Common Stock granted to Nonemployee
Directors pursuant to the applicable terms, conditions and limitations
specified in paragraph 9(b) hereof.
"Disability" means, with respect to a Nonemployee Director, the
inability to perform the duties of a Director for a continuous period of
more than three months by reason of any medically determinable physical or
mental impairment.
"Dividend Equivalents" means, with respect to shares of Restricted
Stock that are to be issued at the end of the Restriction Period, an amount
equal to all dividends and other distributions (or the economic equivalent
thereof) which are payable to stockholders of record during the Restriction
Period on a like number of shares of Common Stock.
"Employee" means an employee of the Company or any of its
Subsidiaries.
"Employee Award" means the grant of any Option, SAR, Stock Award, Cash
Award or Performance Award, whether granted singly, in combination or in
tandem, to a Participant who is an Employee pursuant to such applicable
terms, conditions and limitations as the Committee may establish in order
to fulfill the objectives of the Plan.
"Employee Award Agreement" means a written agreement between the
Company and a Participant who is an Employee setting forth the terms,
conditions and limitations applicable to an Employee Award.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Fair Market Value" of a share of Common Stock means, as of a
particular date, (i) if shares of Common Stock are listed on a national
securities exchange, the mean between the highest and lowest sales price
per share of Common Stock on the consolidated transaction reporting system
for the principal national securities exchange on which shares of Common
Stock are listed on that date, or, if there shall have been no such sale so
reported on that date, on the last preceding date on which such a sale was
so reported, (ii) if shares of Common Stock are not so listed but are
quoted on the Nasdaq Stock Market, the mean between the highest and lowest
sales price per share of Common Stock reported by the Nasdaq Stock Market
on that date, or, if there shall have been no such sale so reported on that
date, on the last preceding date on which such a sale was so reported or
(iii) if the Common Stock is not so listed or quoted but are traded in the
over-the-counter market, the mean between the closing bid and asked price
on that date, or, if there are no quotations available for such date, on
the last preceding date on which such quotations shall be available, as
reported by the Nasdaq Stock Market, or, if not reported by the Nasdaq
Stock Market, by the National Quotation Bureau Incorporated; provided,
however, that, in the case of Awards made on the date of the Split-Off, if
as of such date trading in shares of Common Stock shall not have commenced
on the New York Stock Exchange, the "Fair Market Value" of a share of
Common Stock for purposes of such Awards shall be deemed to be equal to the
average of the closing prices of a share of GM Class E Common Stock on the
date of the Split-Off and the four consecutive trading days immediately
preceding such date, in each case as reported on the consolidated
transaction reporting system for the New York Stock Exchange on such date.
"Incentive Option" means an Option that is intended to comply with the
requirements set forth in Section 422 of the Code.
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"Noncompetition Provisions" has the meaning set forth in paragraph
8(c) hereof.
"Nonemployee Director" has the meaning set forth in paragraph 4(b)
hereof.
"Nonqualified Stock Option" means an Option that is not an Incentive
Option.
"Option" means a right to purchase a specified number of shares of
Common Stock at a specified price.
"Participant" means an Employee or Director to whom an Award has been
made under this Plan.
"Performance Award" means an award made pursuant to this Plan to a
Participant who is an Employee that is subject to the attainment of one or
more Performance Goals.
"Performance Goal" means a standard established by the Committee, to
determine in whole or in part whether a Performance Award shall be earned.
"Restricted Stock" means any Common Stock that is restricted or
subject to forfeiture provisions.
"Restriction Period" means a period of time beginning as of the date
upon which an Award of Restricted Stock is made pursuant to this Plan and
ending as of the date upon which the Common Stock subject to such Award is
no longer restricted or subject to forfeiture provisions.
"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, or
any successor rule.
"SAR" means a right to receive a payment, in cash or Common Stock,
equal to the excess of the Fair Market Value or other specified valuation
of a specified number of shares of Common Stock on the date the right is
exercised over a specified strike price (in each case, as determined by the
Committee).
"Split-Off" means the issuance or delivery of shares of Common Stock
upon conversion of all of the outstanding shares of GM Class E Common Stock
as a result of the merger of GM Mergeco Corporation, a Delaware corporation
and indirect wholly owned subsidiary of the Company, with and into General
Motors effective as of June 7, 1996.
"Stock Award" means an award in the form of shares of Common Stock or
units denominated in shares of Common Stock.
"Subsidiary" means (i) in the case of a corporation, any corporation
of which the Company directly or indirectly owns shares representing more
than 50% of the combined voting power of the shares of all classes or
series of capital stock of such corporation which have the right to vote
generally on matters submitted to a vote of the stockholders of such
corporation and (ii) in the case of a partnership or other business entity
not organized as a corporation, any such business entity of which the
Company directly or indirectly owns more than 50% of the voting, capital or
profits interests (whether in the form of partnership interests, membership
interests or otherwise).
4. Eligibility.
(a) Employees. Key Employees eligible for Employee Awards under this Plan
are those who hold positions of responsibility and whose performance,
in the judgment of the Committee, can have a significant effect on the
success of the Company and its Subsidiaries.
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(b) Directors. Directors eligible for Director Awards under this Plan are
those who are not employees of the Company or any of its Subsidiaries
("Nonemployee Directors").
5. Common Stock Available for Awards. Subject to the provisions of paragraph
15 hereof, there shall be available for Awards under this Plan granted
wholly or partly in Common Stock (including rights or options which may be
exercised for or settled in Common Stock) an aggregate of 60,000,000 shares
of Common Stock (in addition to any shares that are the subject of Awards
outstanding as of the date of the Split-Off), of which an aggregate of not
more than 400,000 shares shall be available for Director Awards and the
remainder shall be available for Employee Awards. The number of shares of
Common Stock that are the subject of Awards under this Plan, that are
forfeited or terminated, expire unexercised, are settled in cash in lieu of
Common Stock or in a manner such that all or some of the shares covered by
an Award are not issued to a Participant or are exchanged for Awards that
do not involve Common Stock, shall again immediately become available for
Awards hereunder; provided, however, that in the case of shares of Common
Stock that are the subject of Awards made under the Existing Plan prior to
the date of the Split-Off, such shares shall in no event become available
for Awards hereunder at any time after such date. The Committee may from
time to time adopt and observe such procedures concerning the counting of
shares against the Plan maximum as it may deem appropriate. The Board and
the appropriate officers of the Company shall from time to time take
whatever actions are necessary to file any required documents with
governmental authorities, stock exchanges and transaction reporting systems
to ensure that shares of Common Stock are available for issuance pursuant
to Awards.
6. Administration.
(a) This Plan, as it applies to Participants who are Employees but not
with respect to Participants who are Nonemployee Directors, shall be
administered by the Committee. To the extent required in order for
Employee Awards to be exempt from Section 16 of the Exchange Act by
virtue of the provisions of Rule 16b-3, the Committee shall consist of
at least two members of the Board who meet the requirements of the
definition of "disinterested person" set forth in Rule 16b-3(c)(2)(i)
promulgated under the Exchange Act.
(b) Subject to the provisions hereof, insofar as this Plan relates to the
Employee Awards, the Committee shall have full and exclusive power and
authority to administer this Plan and to take all actions which are
specifically contemplated hereby or are necessary or appropriate in
connection with the administration hereof. Insofar as this Plan
relates to Employee Awards, the Committee shall also have full and
exclusive power to interpret this Plan and to adopt such rules,
regulations and guidelines for carrying out this Plan as it may deem
necessary or proper, all of which powers shall be exercised in the
best interests of the Company and in keeping with the objectives of
this Plan. The Committee may, in its discretion, provide for the
extension of the exercisability of an Employee Award, accelerate the
vesting or exercisability of an Employee Award, eliminate or make less
restrictive any restrictions contained in an Employee Award, waive any
restriction or other provision of this Plan or an Employee Award or
otherwise amend or modify an Employee Award in any manner that is
either (i) not adverse to the Participant to whom such Employee Award
was granted or (ii) consented to by such Participant. The Committee
may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Employee Award in the manner and
to the extent the Committee deems necessary or desirable to carry it
into effect. Any decision of the Committee in the interpretation and
administration of this Plan shall lie within its sole and absolute
discretion and shall be final, conclusive and binding on all parties
concerned.
(c) No member of the Committee or officer of the Company to whom the
Committee has delegated authority in accordance with the provisions of
paragraph 7 of this Plan shall be liable for anything done or omitted
to be done by him or her, by any member of the Committee or by any
officer of the Company in connection with the performance of any
duties under this Plan, except for his or her own willful misconduct
or as expressly provided by statute.
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7. Delegation of Authority. The Committee may delegate to the Chief Executive
Officer and to other senior officers of the Company its duties under this
Plan pursuant to such conditions or limitations as the Committee may
establish, except that the Committee may not delegate to any person the
authority to grant Awards to, or take other action with respect to,
Participants who are subject to Section 16 of the Exchange Act.
8. Employee Awards.
(a) The Committee shall determine the type or types of Employee Awards to
be made under this Plan and shall designate from time to time the
Employees who are to be the recipients of such Awards. Each Employee
Award may be embodied in an Employee Award Agreement, which shall
contain such terms, conditions and limitations as shall be determined
by the Committee in its sole discretion and shall be signed by the
Participant to whom the Employee Award is made and by an Authorized
Officer for and on behalf of the Company. Employee Awards may consist
of those listed in this paragraph 8(a) hereof and may be granted
singly, in combination or in tandem. Employee Awards may also be made
in combination or in tandem with, in replacement of, or as
alternatives to, grants or rights under this Plan or any other
employee plan of the Company or any of its Subsidiaries, including the
plan of any acquired entity; provided that no Option may be issued in
exchange for the cancellation of an Option with a lower exercise
price. An Employee Award may provide for the grant or issuance of
additional, replacement or alternative Employee Awards upon the
occurrence of specified events, including the exercise of the original
Employee Award granted to a Participant. All or part of an Employee
Award may be subject to conditions established by the Committee, which
may include, but are not limited to, continuous service with the
Company and its Subsidiaries, achievement of specific business
objectives, increases in specified indices, attainment of specified
growth rates and other comparable measurements of performance. Upon
the termination of employment by a Participant who is an Employee, any
unexercised, deferred, unvested or unpaid Employee Awards shall be
treated as set forth in the applicable Employee Award Agreement.
(i) Stock Option. An Employee Award may be in the form of an
Option. An Option awarded pursuant to this Plan may consist of
an Incentive Option or a Nonqualified Option. The price at
which shares of Common Stock may be purchased upon the exercise
of an Incentive Option shall be not less than the Fair Market
Value of the Common Stock on the date of grant. The price at
which shares of Common Stock may be purchased upon the exercise
of a Nonqualified Option shall be not less than, but may
exceed, the Fair Market Value of the Common Stock on the date
of grant. Subject to the foregoing provisions, the terms,
conditions and limitations applicable to any Options awarded
pursuant to this Plan, including the term of any Options and
the date or dates upon which they become exercisable, shall be
determined by the Committee.
(ii) Stock Appreciation Right. An Employee Award may be in the form
of an SAR. The terms, conditions and limitations applicable to
any SARs awarded pursuant to this Plan, including the term of
any SARs and the date or dates upon which they become
exercisable, shall be determined by the Committee.
(iii) Stock Award. An Employee Award may be in the form of a Stock
Award. The terms, conditions and limitations applicable to any
Stock Awards granted pursuant to this Plan shall be determined
by the Committee.
(iv) Cash Award. An Employee Award may be in the form of a Cash
Award. The terms, conditions and limitations applicable to any
Cash Awards granted pursuant to this Plan shall be determined
by the Committee.
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(v) Performance Award. Without limiting the type or number of
Employee Awards that may be made under the other provisions of
this Plan, an Employee Award may be in the form of a
Performance Award. A Performance Award shall be paid, vested or
otherwise deliverable solely on account of the attainment of
one or more pre-established, objective Performance Goals
established by the Committee prior to the earlier to occur of
(x) 90 days after the commencement of the period of service to
which the Performance Goal relates and (y) the elapse of 25% of
the period of service (as scheduled in good faith at the time
the goal is established), and in any event while the outcome is
substantially uncertain. A Performance Goal is objective if a
third party having knowledge of the relevant facts could
determine whether the goal is met. Such a Performance Goal may
be based on one or more of business criteria that apply to the
individual, one or more business units of the Company, or the
Company as a whole, and may include one or more of the
following: increased revenue, net income, stock price, market
share, earnings per share, return on equity, return on assets
or decrease in costs. Unless otherwise stated, such a
Performance Goal need not be based upon an increase or positive
result under a particular business criterion and could include,
for example, maintaining the status quo or limiting economic
losses (measured, in each case, by reference to specific
business criteria). In interpreting Plan provisions applicable
to Performance Goals and Performance Awards, it is the intent
of the Plan to conform with the standards of Section 162(m) of
the Code and Treasury Regulations 1.162-27(e)(2)(i), and the
Committee in establishing such goals and interpreting the Plan
shall be guided by such provisions. Prior to the payment of any
compensation based on the achievement of Performance Goals, the
Committee must certify in writing that applicable Performance
Goals and any of the material terms thereof were, in fact,
satisfied. Subject to the foregoing provisions, the terms,
conditions and limitations applicable to any Performance Awards
made pursuant to this Plan shall be determined by the
Committee.
(b) Notwithstanding anything to the contrary contained in this Plan, the
following limitations shall apply to any Employee Awards made
hereunder:
(i) no Participant may be granted, during any one-year period,
Employee Awards consisting of Options or SARs that are
exercisable for more than 1,500,000 shares of Common Stock;
(ii) no Participant may be granted, during any one-year period,
Employee Awards consisting of shares of Common Stock or units
denominated in such shares (other than any Employee Awards
consisting of Options or SARs) covering or relating to more
than 300,000 shares of Common Stock (the limitation set forth
in this clause (ii), together with the limitation set forth in
clause (i) above, being hereinafter collectively referred to as
the "Stock Based Awards Limitations"); and
(iii) no Participant may be granted Employee Awards consisting of
cash or in any other form permitted under this Plan (other than
Employee Awards consisting of Options or SARs or otherwise
consisting of shares of Common Stock or units denominated in
such shares) in respect of any one-year period having a value
determined on the date of grant in excess of $5,000,000.
(c) Prior to the Split-Off, certain awards consisting of shares of GM
Class E Common Stock or units denominated in such shares (the
"Existing Stock Awards") have been made to Employees under the
Existing Plan as in effect from time to time. As of the Split-Off,
each Existing Stock Award shall be adjusted so that such award shall
consist of or relate to a number of shares of Common Stock equal to
the number of shares of GM Class E Common Stock that are the subject
of such Existing Stock Award immediately prior to such date, without
any alteration or enlargement of the rights of the holders thereof.
Notwithstanding anything to the contrary contained in this Plan, all
Existing Stock Awards that are subject to the restrictions and other
provisions relating to competition by participants and related matters
that are set forth in Section 10 of the Existing
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Plan (the "Noncompetition Provisions") shall continue to be subject to
the Noncompetition Provisions after the Split-Off, as fully and to the
same extent as if Section 10 of the Existing Plan were set forth
herein in its entirety. The Noncompetition Provisions shall apply to
all Existing Awards, but shall not apply to any Awards made after the
Split-Off unless otherwise determined by the Committee.
9. Director Awards. Each Nonemployee Director of the Company shall be granted
Director Awards in accordance with this paragraph 9 and subject to the
applicable terms, conditions and limitations set forth in this Plan and the
applicable Director Award Agreement. Notwithstanding anything to the
contrary contained herein, Director Awards shall not be made in any year in
which a sufficient number of shares of Common Stock are not available to
make such Awards under this Plan.
(a) Director Options. On each Annual Director Award Date, each Nonemployee
Director shall automatically be granted a Director Option that
provides for the purchase of 4,000 shares of Common Stock. In the
event that a Nonemployee Director is elected otherwise than by
election at an annual meeting of stockholders of the Company, on the
date of his or her election, such Nonemployee Director shall
automatically be granted a Director Option that provides for the
purchase of a number of shares of Common Stock (rounded up to the
nearest whole number) equal to the product of (i) 4,000 and (ii) a
fraction the numerator of which is the number of days between the
election of such Nonemployee Director and the next scheduled Annual
Director Award Date (or, if no such date has been scheduled, the first
anniversary of the immediately preceding Annual Director Award Date)
and the denominator of which is 365. Each Director Option shall have a
term of ten years from the date of grant, notwithstanding any earlier
termination of the status of the holder as a Nonemployee Director. The
purchase price of each share of Common Stock subject to a Director
Option shall be equal to the Fair Market Value of the Common Stock on
the date of grant. All Director Options shall vest and become
exercisable in increments of one-third of the total number of shares
of Common Stock that are subject thereto (rounded up to the nearest
whole number) on the first and second anniversaries of the date of
grant and of all remaining shares of Common Stock that are subject
thereto on the third anniversary of the date of grant. All unvested
Director Options shall be forfeited if the Nonemployee Director
resigns as a Director without the consent of a majority of the other
Directors. This paragraph reflects amendments to this Plan made
effective as of June 1, 2000 to increase the number of shares subject
to the Director Option granted on each Annual Director Award Date to
4,000 from 1,500.
In addition to the Director Options automatically awarded pursuant to
the immediately preceding paragraph, a Nonemployee Director may make
an annual election to receive, in lieu of all or any portion of the
Director's fees he would otherwise be entitled to receive in cash
during the next year (including both annual retainer and meeting
fees), Director Options that provide for the purchase of a number of
shares of Common Stock (rounded up to the nearest whole number) equal
to the product of (x) three times (y) a fraction the numerator of
which is equal to the dollar amount of fees the Nonemployee Director
elects to forego in the next year in exchange for Director Options and
the denominator of which is equal to the Fair Market Value of the
Common Stock on the effective date of the election. Each annual
election made by a Nonemployee Director pursuant to this paragraph
9(a)(i) shall take the form of a written document signed by such
Nonemployee Director and filed with the Secretary of the Company, (ii)
shall designate the dollar amount of the fees the Nonemployee Director
elects to forego in the next year in exchange for Director Options and
(iii) to the extent provided by the Committee in order to ensure that
the Award of the Director Options is exempt from Section 16 by virtue
of Rule 16b-3, shall be irrevocable and shall be made prior to the
date as of which such Award of Director Options is to be effective. An
Award of Director Options at the election of a Nonemployee Director
shall be effective on the next Annual Director Award Date.
Any Award of Director Options shall be embodied in a Director Award
Agreement, which shall contain the terms, conditions and limitations
set forth above and shall be signed by the
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Participant to whom the Director Options are granted and by an
Authorized Officer for and on behalf of the Company.
(b) Director Restricted Stock. On each Annual Director Award Date, each
Nonemployee Director shall automatically be granted 500 shares of
Director Restricted Stock. In the event that a Nonemployee Director is
elected otherwise than by election at an annual meeting of
stockholders of the Company, on the date of his or her election, such
Nonemployee Director shall automatically be granted a number of shares
of Director Restricted Stock (rounded up to the nearest whole number)
equal to the product of (i) 500 and (ii) a fraction the numerator of
which is the number of days between the election of such Nonemployee
Director and the next scheduled Annual Director Award Date (or, if no
such date has been scheduled, the first anniversary of the immediately
preceding Annual Director Award Date) and the denominator of which is
365. Shares of Director Restricted Stock awarded to a Nonemployee
Director (i) shall vest in increments of one-third of the total number
of shares of Director Restricted Stock (rounded up to the nearest
whole number) that are the subject of such Award on the first and
second anniversaries of the date of grant and all remaining shares of
Director Restricted Stock that are the subject of such Award on the
third anniversary of the date of grant and (ii) shall fully vest (to
the extent not previously vested pursuant to clause (i) above) upon a
failure to reelect the Nonemployee Director as Director, the death of
the Director or the resignation of the Director by reason of
Disability or at the request of a majority of the other Directors. All
unvested shares of Director Restricted Stock granted to a Nonemployee
Director shall be forfeited if the Nonemployee Director resigns as a
Director without the consent of a majority of the other Directors.
Under such terms and conditions as may be established by the Committee
and in lieu of Restricted Stock to be automatically awarded as of an
Annual Award Date, a Nonemployee Director may irrevocably elect to
receive an equivalent amount of Phantom Stock Units under the
Company's Deferred Compensation Plan for Nonemployee Directors in
which event no Restricted Stock shall be automatically awarded to
Nonemployee Director on such date.
In addition to the Director Restricted Stock automatically awarded
pursuant to the immediately preceding paragraph, a Nonemployee
Director may make an annual election to receive, in lieu of all or any
portion of the Director's fees he would otherwise be entitled to
receive in cash during the next year (including both annual retainer
and meeting fees), a number of shares of Director Restricted Stock
(rounded up to the nearest whole number) having a Fair Market Value
equal to 110% of a fraction the numerator of which is equal to the
dollar amount of fees the Nonemployee Director elects to forego in the
next year in exchange for Director Restricted Stock and the
denominator of which is equal to the Fair Market Value of the Common
Stock on the effective date of the election. Each annual election made
by a Nonemployee Director pursuant to this paragraph 9(b)(i) shall
take the form of a written document signed by such Nonemployee
Director and filed with the Secretary of the Company, (ii) shall
designate the dollar amount of the fees the Nonemployee Director
elects to forego in the next year in exchange for Director Restricted
Stock and (iii) to the extent provided by the Committee in order to
ensure that the Award of the Director Restricted Stock is exempt from
Section 16 by virtue of Rule 16b-3, shall be irrevocable and shall be
made prior to the date as of which such Award of Director Restricted
Stock is to be effective. An Award of Director Restricted Stock at the
election of a Nonemployee Director shall be effective on the next
Annual Director Award Date.
Any Award of Director Restricted Stock shall be embodied in a Director
Award Agreement, which shall contain the terms, conditions and
limitations set forth above and shall be signed by the Participant to
whom the Director Restricted Stock is granted and by an Authorized
Officer for and on behalf of the Company.
10. Payment of Awards.
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(a) General. Payment of Employee Awards may be made in the form of cash or
Common Stock, or a combination thereof, and may include such
restrictions as the Committee shall determine, including, in the case
of Common Stock, restrictions on transfer and forfeiture provisions.
If payment of an Employee Award is made in the form of Restricted
Stock, the Employee Award Agreement relating to such shares shall
specify whether they are to be issued at the beginning or end of the
Restriction Period. In the event that shares of Restricted Stock are
to be issued at the beginning of the Restriction Period, the
certificates evidencing such shares (to the extent that such shares
are so evidenced) shall contain appropriate legends and restrictions
that describe the terms and conditions of the restrictions applicable
thereto. In the event that shares of Restricted Stock are to be issued
at the end of the Restricted Period, the right to receive such shares
shall be evidenced by book entry registration or in such other manner
as the Committee may determine.
(b) Deferral. With the approval of the Committee, payments in respect of
Employee Awards may be deferred, either in the form of installments or
a future lump sum payment. The Committee may permit selected
Participants to elect to defer payments of some or all types of
Employee Awards in accordance with procedures established by the
Committee. Any deferred payment of an Employee Award, whether elected
by the Participant or specified by the Employee Award Agreement or by
the Committee, may be forfeited if and to the extent that the Employee
Award Agreement so provides.
(c) Dividends and Interest. Rights to dividends or Dividend Equivalents
may be extended to and made part of any Employee Award consisting of
shares of Common Stock or units denominated in shares of Common Stock,
subject to such terms, conditions and restrictions as the Committee
may establish. The Committee may also establish rules and procedures
for the crediting of interest on deferred cash payments and Dividend
Equivalents for Employee Awards consisting of shares of Common Stock
or units denominated in shares of Common Stock.
(d) Substitution of Awards. At the discretion of the Committee, a
Participant who is an Employee may be offered an election to
substitute an Employee Award for another Employee Award or Employee
Awards of the same or different type.
11. Stock Option Exercise. The price at which shares of Common Stock may be
purchased under an Option shall be paid in full at the time of exercise in
cash or, if elected by the optionee, the optionee may purchase such shares
by means of tendering Common Stock or surrendering another Award, including
Restricted Stock or Director Restricted Stock, valued at Fair Market Value
on the date of exercise, or any combination thereof. The Committee shall
determine acceptable methods for Participants who are Employees to tender
Common Stock or other Employee Awards; provided that any Common Stock that
is or was the subject of an Employee Award may be so tendered only if it
has been held by the Participant for six months. The Committee may provide
for procedures to permit the exercise or purchase of such Awards by use of
the proceeds to be received from the sale of Common Stock issuable pursuant
to an Employee Award. Unless otherwise provided in the applicable Award
Agreement, in the event shares of Restricted Stock are tendered as
consideration for the exercise of an Option, a number of the shares issued
upon the exercise of the Option, equal to the number of shares of
Restricted Stock or Director Restricted Stock used as consideration
therefor, shall be subject to the same restrictions as the Restricted Stock
or Director Restricted Stock so submitted as well as any additional
restrictions that may be imposed by the Committee.
12. Tax Withholding. The Company shall have the right to deduct applicable
taxes from any Employee Award payment and withhold, at the time of delivery
or vesting of cash or shares of Common Stock under this Plan, an
appropriate amount of cash or number of shares of Common Stock or a
combination thereof for payment of taxes required by law or to take such
other action as may be necessary in the opinion of the Company to satisfy
all obligations for withholding of such taxes. The Committee may also
permit withholding to be satisfied by the transfer to the Company of shares
of Common Stock theretofore owned by the holder of the Employee Award with
respect to which withholding is required. If shares of Common Stock are
used to satisfy tax withholding, such shares
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shall be valued based on the Fair Market Value when the tax withholding is
required to be made. The Committee may provide for loans, on either a short
term or demand basis, from the Company to a Participant who is an Employee
to permit the payment of taxes required by law.
13. Amendment, Modification, Suspension or Termination. The Board may amend,
modify, suspend or terminate this Plan for the purpose of meeting or
addressing any changes in legal requirements or for any other purpose
permitted by law, except that (i) no amendment or alteration that would
adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant, (ii) no amendment or alteration shall be effective prior to
approval by the stockholders of the Company to the extent such approval is
then required pursuant to Rule 16b-3 in order to preserve the applicability
of any exemption provided by such rule to any Award then outstanding
(unless the holder of such Award consents) or to the extent stockholder
approval is otherwise required by applicable legal requirements and (iii)
the Plan shall not be amended more than once every six months to the extent
such limitation is required by Rule 16b-3(c)(2)(ii) (or any successor
provision) under the Exchange Act as then in effect.
14. Assignability. Unless otherwise determined by the Committee and provided in
the Award Agreement, no Award or any other benefit under this Plan
constituting a derivative security within the meaning of Rule 16a-1(c)
under the Exchange Act shall be assignable or otherwise transferable except
by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder. The Committee may
prescribe and include in applicable Award Agreements other restrictions on
transfer. Any attempted assignment of an Award or any other benefit under
this Plan in violation of this paragraph 14 shall be null and void.
15. Adjustments.
(a) The existence of outstanding Awards shall not affect in any manner the
right or power of the Company or its stockholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other
changes in the capital stock of the Company or its business or any
merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock (whether or not such
issue is prior to, on a parity with or junior to the Common Stock) or
the dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate
act or proceeding of any kind, whether or not of a character similar
to that of the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of outstanding shares
of Common Stock, declaration of a dividend payable in shares of Common
Stock or other stock split, then (i) the number of shares of Common
Stock reserved under this Plan, (ii) the number of shares of Common
Stock covered by outstanding Awards in the form of Common Stock or
units denominated in Common Stock, (iii) the exercise or other price
in respect of such Awards, (iv) the appropriate Fair Market Value and
other price determinations for such Awards, (v) the number of shares
of Common Stock covered by Director Options automatically granted
pursuant to paragraph 9(a) hereof, (vi) the number of shares of
Director Restricted Stock automatically granted pursuant to paragraph
9(b) hereof and (vii) the Stock Based Awards Limitations shall each be
proportionately adjusted by the Board to reflect such transaction. In
the event of any other recapitalization or capital reorganization of
the Company, any consolidation or merger of the Company with another
corporation or entity, the adoption by the Company of any plan of
exchange affecting the Common Stock or any distribution to holders of
Common Stock of securities or property (other than normal cash
dividends or dividends payable in Common Stock), the Board shall make
appropriate adjustments to (i) the number of shares of Common Stock
covered by Awards in the form of Common Stock or units denominated in
Common Stock, (ii) the exercise or other price in respect of such
Awards, (iii) the appropriate Fair Market Value and other price
determinations for such Awards, (iv) the number of shares of
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Common Stock covered by Director Options automatically granted
pursuant to paragraph 9(a) hereof, (v) the number of shares of
Director Restricted Stock automatically granted pursuant to paragraph
9(b) hereof and (vi) the Stock Based Awards Limitations to give effect
to such transaction shall each be proportionately adjusted by the
Board to reflect such transaction; provided that such adjustments
shall only be such as are necessary to maintain the proportionate
interest of the holders of the Awards and preserve, without exceeding,
the value of such Awards. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Board shall be authorized to issue
or assume Awards by means of substitution of new Awards, as
appropriate, for previously issued Awards or an assumption of
previously issued Awards as part of such adjustment.
16. Restrictions. No Common Stock or other form of payment shall be issued with
respect to any Award unless the Company shall be satisfied based on the
advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. It is the intent of the
Company that this Plan comply with Rule 16b-3 with respect to persons
subject to Section 16 of the Exchange Act unless otherwise provided herein
or in an Award Agreement, that any ambiguities or inconsistencies in the
construction of this Plan be interpreted to give effect to such intention,
and that if any provision of this Plan is found not to be in compliance
with Rule 16b-3, such provision shall be null and void to the extent
required to permit this Plan to comply with Rule 16b-3. Certificates
evidencing shares of Common Stock certificates delivered under this Plan
(to the extent that such shares are so evidenced) may be subject to such
stop transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any securities exchange or transaction
reporting system upon which the Common Stock is then listed or to which it
is admitted for quotation and any applicable federal or state securities
law. The Committee may cause a legend or legends to be placed upon such
certificates (if any) to make appropriate reference to such restrictions.
17. Unfunded Plan. Insofar as it provides for Awards of cash, Common Stock or
rights thereto, this Plan shall be unfunded. Although bookkeeping accounts
may be established with respect to Participants who are entitled to cash,
Common Stock or rights thereto under this Plan, any such accounts shall be
used merely as a bookkeeping convenience. The Company shall not be required
to segregate any assets that may at any time be represented by cash, Common
Stock or rights thereto, nor shall this Plan be construed as providing for
such segregation, nor shall the Company, the Board or the Committee be
deemed to be a trustee of any cash, Common Stock or rights thereto to be
granted under this Plan. Any liability or obligation of the Company to any
Participant with respect to an Award of cash, Common Stock or rights
thereto under this Plan shall be based solely upon any contractual
obligations that may be created by this Plan and any Award Agreement, and
no such liability or obligation of the Company shall be deemed to be
secured by any pledge or other encumbrance on any property of the Company.
Neither the Company nor the Board nor the Committee shall be required to
give any security or bond for the performance of any obligation that may be
created by this Plan.
18. Governing Law. This Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall
be governed by and construed in accordance with the laws of the State of
Delaware.
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