Exhibit 10.3
(as amended)
DEL WEBB CORPORATION
2000 EXECUTIVE LONG-TERM INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Del Webb Corporation, a Delaware corporation
(the "Company"), establishes an incentive compensation plan to be known as the
"Del Webb Corporation 2000 Executive Long-Term Incentive Plan" (the "Plan"). The
Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options,
Restricted Stock, Performance Units, and Performance-Based Awards.
Subject to shareholder ratification, the Plan shall become effective as of
November 2, 2000 (the "Effective Date") and shall remain in effect as provided
in Section 1.3.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the success
and enhance the value of Company by linking the personal interests of
Participants to those of Company shareholders, and by providing Participants
with an incentive for outstanding performance. The Plan is also intended to
provide flexibility to Company in its ability to motivate, attract, and retain
the services of Participants upon whose judgment, interest, and special effort
the successful conduct of its operation is dependent.
1.3 DURATION OF THE PLAN. Subject to ratification by the shareholders of
Company, the Plan shall begin on the Effective Date and shall remain in effect,
subject to Article 13, 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 November 1, 2010.
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
2.1 DEFINITIONS.
(a) "Award" means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Restricted
Stock, Performance Units, or Performance-Based Awards.
(b) "Beneficial Owner" shall have the meaning ascribed in Rule 13d-3
of the General Rules and Regulations under the Exchange Act.
(c) "Board" or "Board or Directors" means the Board of Directors of
Company.
(d) "Cause" means (i) the breach by a Participant of any employment
contract between the Participant and Company, (ii) the conviction of a
Participant of a felony or crime involving moral turpitude (meaning a crime
that necessarily includes the commission of an act of gross depravity,
dishonesty or bad morals), or (iii) willful and gross misconduct on the
part of a Participant that is materially and demonstrably detrimental to
Company.
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(e) A "Change in Control" of Company shall be deemed to have occurred
in any or all of the following instances:
(1) Any "person" as such term is used in Sections 13(d) and 14(d)
of the Exchange Act, other than a trustee or other fiduciary holding
securities under an employee benefit plan of Company or a corporation
owned directly or indirectly by the stockholders of Company in
substantially the same proportions as their ownership of stock of
Company, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
of Company representing 20% or more of the total voting power
represented by Company's then outstanding Voting Securities (as
defined below); or
(2) During any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of Directors of
Company and any new Director whose election by the Board of Directors
or nomination for election by 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 period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
(3) The stockholders of Company approve a merger or consolidation
of Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of Company
outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into Voting Securities
of the surviving entity) at least 80% of the total voting power
represented by the Voting Securities of Company or such surviving
entity outstanding immediately after such merger or consolidation; or
(4) The stockholders of Company approve a plan of complete
liquidation of Company or an agreement for the sale or disposition by
Company of (in one transaction or a series of transactions) all or
substantially all Company's assets.
For purposes of this Section, the term "Voting Securities" shall mean
and include any securities of Company which vote generally for the election
of directors.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means the committee, as specified in Article 3,
appointed by the Board to administer the Plan with respect to grants of
Awards.
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(h) "Company" means Del Webb Corporation (including any and all
Subsidiaries), or any successor thereto as provided in Article 15.
(i) "Covered Employee" means an Employee who is a "covered employee"
within the meaning of Section 162(m) of the Code.
(j) "Director" means any individual who is a member of the Board of
Directors of Company.
(k) "Disability" means a permanent and total disability, within the
meaning of Code Section 22(e)(3), as determined by the Committee in good
faith, upon receipt of sufficient competent medical advice from one or more
individuals, selected by the Committee, who are qualified to give
professional medical advice.
(l) "Employee" means any full-time, nonunion employee of Company.
Directors who are not otherwise employed by Company shall not be considered
Employees under this Plan.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act.
(n) "Fair Market Value" means, as of any given date, the fair market
value of a Share or other property determined by such methods or procedures
as may be established from time to time by the Committee. Unless otherwise
determined by the Committee, the Fair Market Value of a Share as of any
date shall be the closing price for a Share on any national securities
exchange on which the Shares are then listed for that date or, if there is
no closing price for that date, the closing price on the next preceding
date for which there is a closing price, all as reported in the WALL STREET
JOURNAL.
(o) "Incentive Stock Option" or "ISO" means an option to purchase
Shares which is designated as an Incentive Stock Option and is intended to
meet the requirements of Section 422 of the Code.
(p) "Insider" means an Employee who is, at the time an Award is made,
an insider pursuant to Section 16 of the Exchange Act.
(q) "Non-Employee Director" means a member of the Board who qualifies
as a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the Exchange
Act as it may be amended or replaced from time to time.
(r) "Nonqualified Stock Option" or "NQSO" means an Option to purchase
Shares which is not intended to be an Incentive Stock Option.
(s) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
(t) "Option Price" means the price at which a Share may be purchased
by a Participant pursuant to an Option, as determined by the Committee.
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(u) "Parent" shall have the meaning ascribed to such term in Rule
12b-2 of the Exchange Act.
(v) "Participant" means an Employee who has outstanding an Award.
(w) "Performance-Based Awards" means the Performance-Based Restricted
Stock Awards and Performance Unit Awards granted to selected Covered
Employees pursuant to Articles 7 and 8, but which are subject to the terms
and conditions set forth in Article 9. All Performance-Based Awards are
intended to qualify as "performance-based compensation" under Section
162(m) of the Code.
(x) "Performance Criteria" means the criteria that the Committee
selects for purposes of establishing the Performance Goal or Performance
Goals for a Participant for a Performance Period. The Performance Criteria
that will be used to establish Performance Goals are limited to the
following: pre- or after-tax net earnings, revenue growth, operating
income, operating cash flow, return on net assets, return on shareholders'
equity, return on assets, return on capital, Share price growth,
shareholder returns, gross or net profit margin, earnings per share, price
per Share, and market share, any of which may be measured either in
absolute terms or as compared to any incremental increase or as compared to
results of a peer group. The Committee shall, within the time prescribed by
Section 162(m) of the Code, define in an objective fashion the manner of
calculating the Performance Criteria to use for the Performance Period.
(y) "Performance Goals" means, for a Performance Period, the goals
established in writing by the Committee for the Performance Period based
upon the Performance Criteria. Depending on the Performance Criteria used,
the Goal may relate to overall Company performance or performance of an
operating unit or community. The Committee, in its discretion, may, within
the time prescribed by Section 162(m) of the Code, adjust or modify the
calculation of Performance Goals to prevent dilution or enlargement of the
rights of Participants, (i) in the event of, in recognition of, or in
anticipation of, any unanticipated, unusual nonrecurring or extraordinary
corporate item, transaction, event, or development; or (ii) in response to,
or in anticipation of, changes in applicable laws, regulations, accounting
principles, or business conditions.
(z) "Performance Period" means the periods of time, which may be of
varying and overlapping durations, as the Committee may select, over which
Performance Goals will be measured for the purpose of determining a
Participant's right to, and the payment of, a Performance-Based Award.
(aa) "Performance Unit" means an Award granted to an Employee pursuant
to Article 8.
(bb) "Period of Restriction" means the period during which the
transfer of Shares of Restricted Stock is limited in some way (as
determined by the Committee, in its discretion), and the Shares are subject
to a substantial risk of forfeiture, as provided in Article 7.
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(cc) "Restricted Stock" means an Award granted to a Participant
pursuant to Article 7.
(dd) "Retirement" means a voluntary termination of employment by a
Participant who has less than 10 years of service with Company at or after
age 65, or voluntary termination at or after age 55 for Participants who
have at least 10 years of service with Company as of the date of employment
termination. The Committee may shorten the years of service or the age
requirements.
(ee) "Shares" means the shares of common stock of Company.
(ff) "Subsidiary" means any corporation in which Company owns
directly, or indirectly through subsidiaries, at least 50% of the total
combined voting power of all classes of stock, or any other entity
(including, but not limited to, partnerships and joint ventures) in which
Company owns at least 50% of the combined equity.
2.2 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.
2.3 SEVERABILITY. If a court of competent jurisdiction determines that any
portion of this Plan is in violation of any statute, common law, or public
policy, then only the portion of this Plan that violate such statute, common
law, or public policy shall be stricken. All portions of this Plan that do not
violate any statute or public policy shall continue in full force and effect.
Further, any court order striking any portion of this Plan shall modify the
stricken terms as narrowly as possible, or the Committee may amend the Plan, to
give as much effect as possible to the intentions of the parties under this
Plan.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Human Resources
Committee of the Board, or by any other Committee if the Board so determines. In
any event, unless otherwise specifically provided by the Board, the Committee
shall consist of not less than two Directors, each of whom qualifies as a
Non-Employee Director, and an "outside director" under Code Section 162(m) and
the regulations thereunder. The members of the Committee shall serve at the
discretion of the Board.
3.2 AUTHORITY OF THE COMMITTEE. The Committee shall have full power, except
as limited by law or by the Articles of Incorporation or Bylaws of Company, and
subject to the provisions herein, to determine the size and types of Awards; to
determine the terms and conditions of such Awards including, but not limited to,
the exercise price, grant price, or purchase price, any restrictions or
limitations on any Award, any schedule for lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers
thereof, based in each case on such considerations as the Committee in its sole
discretion determines; to cancel and reissue any Awards granted hereunder in the
event the Award lapses for any reason (provided that the Committee shall not
have the authority to reprice previously issued and currently outstanding Awards
without shareholder approval); to construe and interpret the Plan and any
agreement or instrument entered into under the Plan; to establish, amend, or
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waive rules and regulations for the Plan's administration; and (subject to the
provisions of Article 13) to amend the terms and conditions of any outstanding
Award to the extent such terms and conditions are within the discretion of the
Committee as provided in the Plan. The Committee shall make all other
determinations that may be necessary or advisable for the administration of the
Plan.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive, and binding on
all persons, including Company, its stockholders, Employees, Participants, and
their estates and beneficiaries.
3.4 DELEGATION. As permitted by law, the Committee may delegate to any
officer of Company or any committee comprised of officers of Company the
authority to take any and all actions permitted or required to be taken by the
Committee hereunder; provided that such delegation shall not be permitted with
respect to Options or other Awards granted or to be granted to any officer of
Company and that, to the extent the Committee delegates authority to grant
Options and other Awards hereunder, such delegation shall specify the aggregate
number of Shares that may be awarded pursuant to such delegation and may
establish the maximum number of Shares that may be subject to any Award made
pursuant to such delegation and any other limitations thereon that the Committee
may choose to impose.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3, the
total number of Shares available for grant under the Plan shall be 500,000.
4.2 LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason, any Shares subject to such Award
again shall be available for the grant of an Award.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. The Committee may make or provide for
such adjustments in the (a) number of Shares covered by outstanding Awards
granted hereunder, (b) prices per Share applicable to outstanding Awards and (c)
kind of Shares covered thereby, as the Committee in its sole discretion may in
good faith determine to be equitably required in order to prevent dilution or
enlargement of the rights of Participants that otherwise would result from (x)
any stock dividend, stock split, combination or exchange of Shares,
recapitalization or other change in the capital structure of Company, (y) any
merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization,
partial or complete liquidation, other distribution of assets (other than a
normal cash dividend), issuance of rights or warrants to purchase securities, or
(z) any other corporate transaction or event having an effect similar to any of
the foregoing. Moreover, in the event of any such transaction or event, the
Committee may provide in substitution for any outstanding Awards alternative
consideration as it may in good faith determine to be equitable under the
circumstances, and may require the surrender of all Awards so substituted. The
Committee may also make or provide for such adjustments in the number of Shares
specified in Section 4.1, 4.4, or 9.5 as the Committee in its sole discretion
may in good faith determine to be appropriate in order to reflect any
transaction or event described in this Section. Any adjustment pursuant to this
Section will be conclusive and binding for all purposes.
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4.4 LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARD. Notwithstanding any
provision in the Plan to the contrary, the maximum number of shares of Stock
that may be subject to one or more Awards granted to any one Participant over
the term of the Plan shall be 150,000.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include all
officers and key Employees of Company, as determined by the Committee.
5.2 ACTUAL PARTICIPATION. The Committee may, from time to time, select from
all eligible Employees those to whom Awards shall be granted and shall determine
the nature and amount of each Award. No Employee shall have any right to be
granted an Award under this Plan. Nothing in this Plan shall interfere with or
limit the right of Company to terminate any Participant's employment at any
time, nor confer on any Participant any right to continue in the employ of
Company. Transfer of employment of a Participant between Company and any one of
its Subsidiaries (or between Subsidiaries) shall not be a termination of
employment.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Options may be granted to Employees at any time and
from time to time as shall be determined by the Committee. The Committee shall
have discretion in determining the number of Shares subject to Options granted
to each Participant. The Committee may grant ISOs, NQSOs, or a combination
thereof. Nothing in this Article 6 shall be deemed to prevent the grant of NQSOs
in excess of the maximum established for ISOs by Section 422(d) of the Code.
6.2 OPTION AGREEMENT. Each Option grant shall be evidenced by an Option
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. The Option Agreement also shall specify whether the
Option is intended to be an ISO within Section 422 of the Code, or a NQSO.
6.3 OPTION PRICE. The Option Price for each grant shall not be less than
100% of the Fair Market Value on the date of grant.
6.4 DURATION OF OPTIONS. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, that no Option shall
be exercisable later than the 10th anniversary of grant.
6.5 EXERCISE OF OPTIONS. Options shall be exercisable at times and be
subject to restrictions and conditions as the Committee shall in each instance
approve, which need not be the same for each grant or for each Participant.
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6.6 PAYMENT. Options shall be exercised by written notice to the Secretary
of 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 shall be payable to Company either: (a) in
cash or its equivalent, or (b) by tendering previously acquired Shares having a
Fair Market Value equal to the total Option Price (provided that the Shares
which are tendered must have been held by the Participant for at least 6 months
prior to their tender to satisfy the Option Price), or (c) by a combination of
(a) and (b).
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. The proceeds from such a payment shall be
added to the general funds of Company.
As soon as practicable after receipt of a written notification of exercise
and full payment, Company shall deliver to the Participant, in the Participant's
name, Share certificates based upon the number of Shares purchased under the
Option(s).
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee shall impose
restrictions on any Shares acquired pursuant to the exercise of an Option 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 DUE TO DEATH, DISABILITY, OR RETIREMENT.
(a) Termination by Death. If employment is terminated by death, any
outstanding Options which are vested as of the date of death shall remain
exercisable at any time prior to their expiration date, or for 1 year after
the date of death, whichever period is shorter, by such person or persons
as shall have been named as the Participant's beneficiary or by anyone that
has acquired the Participant's rights under the Option by will or the laws
of descent and distribution.
In addition, Options not vested as of the date of death shall be
vested as follows: The percentage vesting of the portion of an Option which
would have vested on the anniversary of the date of grant next following
employment termination (the "Next Vesting Date"), shall equal a fraction,
the numerator of which is the number of full weeks of Participant's
employment during the 12-month period ending on the Next Vesting Date, and
the denominator of which is 52; and
Any portion not deemed vested as of the date of employment termination
shall expire immediately.
(b) TERMINATION BY DISABILITY. If employment is terminated by
Disability, any outstanding Options which are vested as of the date of
termination shall remain exercisable at any time prior to their expiration
date, or for l year after the date of termination, whichever period is
shorter.
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In addition, Options not vested as of the date of termination due to
disability shall be vested as determined by the guidelines in Subparagraph
(a) of Section 6.8.
Any Options not deemed vested as of the date of termination due to
Disability shall expire immediately.
(c) TERMINATION BY RETIREMENT. If employment is terminated by
Retirement, any outstanding Options vested as of the effective date of
Retirement shall remain exercisable at any time prior to their expiration
date, or for 3 years after the effective date of Retirement, whichever
period is shorter.
In addition, Options not vested as of the effective date of Retirement
shall be vested as determined by the guidelines in Subparagraph (a) of
Section 6.8.
Any Options not vested as of the effective date of Retirement shall
expire immediately.
(d) EXERCISE LIMITATIONS ON ISOS. In the case of ISOs, the tax
treatment prescribed under Section 422 of the Code may not be available if
the Options are not exercised within Section 422 prescribed time periods
after each of the various types of employment termination.
(e) OPTION AGREEMENTS. The exercise periods and vesting rules
described in Subparagraphs (a), (b), and (c) above shall apply in the
absence of any contrary provisions in the Option Agreement. The Committee
may prescribe alternative vesting rules and exercise periods in an Option
Agreement or may accelerate vesting upon Death, Disability or Retirement,
at its discretion.
6.9 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. Except as otherwise
provided in an Option Agreement, if employment shall terminate for any reason,
other than the reasons set forth in Section 6.8 or for Cause, all Options not
vested as of the effective date of employment termination shall expire.
Except as otherwise provided in an Option Agreement, Options vested as of
the effective date of termination may be exercised from the effective date of
employment termination to 3 months after termination.
If the employment shall terminate for Cause, all outstanding Options
immediately shall be forfeited to Company and no additional exercise period
shall be allowed, regardless of the vested status of the Options.
6.10 NONTRANSFERABILITY OF OPTIONS. An ISO may not be sold, transferred, or
otherwise alienated or hypothecated, other than by will or the laws of descent
and distribution. A NQSO may be transferrable subject to terms and conditions
established by the Committee. All Options shall be exercisable during his or her
lifetime only by Participant or an authorized transferee.
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ARTICLE 7. RESTRICTED STOCK
7.1 GRANT OF RESTRICTED STOCK. Subject to the terms of the Plan, the
Committee may grant Shares of Restricted Stock to eligible Employees. The total
number of Shares granted pursuant to Restricted Stock Agreements that include
only time based restrictions shall not exceed 50,000. The total number of Shares
granted pursuant to Restricted Stock Agreements that include restrictions based
on achievement of specific performance goals, (including, but not limited to
Company-wide, divisional, and/or individual goals) shall not exceed an
additional 100,000 Shares.
7.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall have a
Restricted Stock Agreement that shall specify the Periods of Restriction, the
number of Shares granted, and other provisions as the Committee shall determine.
7.3 TRANSFERABILITY. Except as provided in this Article 7, Shares of
Restricted Stock may not be sold, transferred, or otherwise alienated or
hypothecated until the end of the Period of Restriction or satisfaction of any
other conditions as specified by the Committee or set forth in the Restricted
Stock Agreement. All rights to the Restricted Stock shall be available during
his or her lifetime only to Participant.
7.4 OTHER RESTRICTIONS. The Committee shall impose such other restrictions
on any Shares of Restricted Stock as it may deem advisable including, without
limitation, restrictions based upon the achievement of specific performance
goals (Company-wide, divisional, and/or individual), and/or restrictions under
applicable Federal or state securities laws; and may legend the certificates
representing Restricted Stock to give appropriate notice of such restrictions.
7.5 CERTIFICATE LEGEND. In addition to any legends placed on certificates
pursuant to Section 7.4, each certificate representing Shares of Restricted
Stock granted pursuant to the Plan may bear the following legend:
"The sale or transfer of the Shares represented by this certificate,
whether voluntary, involuntary, or by operation of law, is subject to
certain restrictions on transfer in the Del Webb Corporation 2000 Executive
Long-Term Incentive Plan, and in a Restricted Stock Agreement. A copy of
the Plan and Restricted Stock Agreement may be obtained from the Secretary
of Del Webb Corporation."
7.6 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this Article
7, 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 Period of Restriction. Once Shares are released from the restrictions,
the Participant shall be entitled to have the legend required by Section 7.5
removed from his or her Share certificate.
7.7 VOTING RIGHTS. During the Period of Restriction, Participants holding
Shares of Restricted Stock may exercise full voting rights.
7.8 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be entitled to receive all
dividends and other distributions paid with respect to those Shares. If any such
dividends or distributions are paid in Shares, the Shares shall be subject to
the same restrictions on transferability and forfeitability as the Shares with
respect to which they were paid.
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7.9 TERMINATION OF EMPLOYMENT. If employment shall terminate for any
reason, except as otherwise stated in the Restricted Stock Agreement, all
nonvested shares of Restricted Stock shall be forfeited immediately. The number
of Shares of Restricted Stock deemed vested as of the effective date of
termination shall be determined pursuant to the guidelines in Sections 6.8 and
6.9, except as otherwise provided in the Restricted Stock Agreement.
ARTICLE 8. PERFORMANCE UNITS
8.1 GRANT OF PERFORMANCE UNITS. Subject to the terms of the Plan,
Performance Units may be granted to eligible Employees as determined by the
Committee. The terms on which the Performance Units are granted shall be stated
in a Performance Unit Award Agreement
8.2 VALUE OF PERFORMANCE UNITS. Each Performance Unit shall have an initial
value established by the Committee at the time of grant. The Committee shall set
performance goals in its discretion that will determine the number and/or value
of Performance Units that will be paid out.
8.3 EARNING OF PERFORMANCE UNITS. After the time period during which the
goals must be met, the holder of Performance Units shall be entitled to receive
payout on the number of Performance Units earned over such period, all as set
forth in the Performance Unit Award Agreement.
8.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS. Payment of earned
Performance Units shall be made in a single lump sum, within 45 calendar days
following the end of the time period during which the goals must be met. The
Committee, in its sole discretion, may pay earned Performance Units in the form
of cash or in Shares (or in a combination thereof) which have an aggregate Fair
Market Value equal to the value of the earned Performance Units at the close of
such period.
Prior to the beginning of each period during which the goals must be met,
Participants may elect to defer the receipt of the Performance Unit payout upon
such terms as the Committee may approve.
8.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, RETIREMENT, OR
INVOLUNTARY TERMINATION (WITHOUT CAUSE). In the event employment is terminated
by reason of death, Disability, Retirement, or involuntary termination without
Cause during a Performance Period, the Participant shall receive a prorated
payout of the Performance Units. The prorated payout shall be determined by the
Committee, in its sole discretion, based upon the guidelines in Sections 6.8 and
6.9, or such other standards as may be prescribed by the Committee in the
Performance Unit Award Agreement, and further adjusted based on the achievement
of the preestablished performance goals.
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Payment of earned Performance Units shall be made at the time payments are
made to Participants who did not terminate employment during the time period
during which the goals must be met.
8.6 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event of
termination for any reason other than reasons in Section 8.5, unless the
Committee determines otherwise, all Performance Units shall be forfeited.
8.7 NONTRANSFERABILITY. Performance Units may not be sold, transferred or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution. Participant's rights shall be exercisable during the
Participant's lifetime only by the Participant or Participant's legal
representative.
ARTICLE 9. PERFORMANCE-BASED AWARDS
9.1 PURPOSE. The purpose of Article 9 is to provide the ability to qualify
the Restricted Stock Awards under Article 7 and the Performance Unit Awards
under Article 8 as "performance-based compensation" under Section 162(m) of the
Code. If the Committee, in its discretion, decides to grant a Performance-Based
Award to a Covered Employee, the provisions of Article 9 shall control over any
contrary provision in Articles 7 or 8.
9.2 APPLICABILITY. Article 9 shall apply only to those Covered Employees
receiving Performance-Based Awards. The Committee may, in its discretion, grant
Restricted Stock Awards or Performance Unit Awards to Covered Employees that do
not satisfy the requirements of Article 9.
9.3 DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE AWARDS. The
Committee shall have full discretion to select the Participant, the length of
any Performance Period, the type of Performance-Based Awards to be issued, the
kind and/or level of the Performance Goal, and whether the Performance Goal is
to apply to Company, a Subsidiary or any division or business unit.
9.4 PAYMENT OF PERFORMANCE AWARDS. Unless otherwise provided in the Award
Agreement, a Participant must be employed by Company or a Subsidiary on the last
day of the Performance Period to be eligible for a Performance Award for such
Performance Period. A Participant shall be eligible to receive payment only if
the Performance Goals are achieved.
The Committee may reduce or eliminate the amount of the Performance-Based
Award for the Performance Period if, in its absolute discretion, a reduction or
elimination is appropriate.
9.5 MAXIMUM AWARD PAYABLE. Notwithstanding any provision contained in the
Plan to the contrary, the maximum Performance-Based Award payable to any
Participant for a Performance Period is 40,000 Shares, or if the
Performance-Based Award is paid in cash, such maximum Performance-Based Award
shall be determined by multiplying 40,000 by the Fair Market Value of one Share
as of the date of the Performance-Based Award.
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ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant may name any beneficiaries (contingently or successively)
to whom any benefit is to be paid in case of death before Participant receives
all of the benefit. Each such designation shall revoke all prior designations,
shall be in a form prescribed by Company, and will be effective only when filed
by the Participant in writing with the Human Resources Department of Company
during Participant's lifetime. In the absence of any such designation, benefits
shall be paid to the Participant's estate.
ARTICLE 11. DEFERRALS
The Committee may permit a Participant to defer receipt of the payment of
cash or the delivery of Shares that would otherwise be due to Participant by
virtue of the exercise of an Option, the lapse or waiver of restrictions with
respect to Restricted Stock, or the satisfaction of any goals with respect to
Performance Units. If any deferral election is permitted, the Committee shall,
in its sole discretion, establish rules and procedures for such payment
deferrals.
ARTICLE 12. CHANGE IN CONTROL
Upon a Change in Control, unless otherwise specifically prohibited by the
terms of Article 16:
(a) All Options shall become immediately exercisable and shall remain
exercisable at any time prior to their expiration date or for 1 year after
the Change in Control, whichever period is shorter; provided that, if the
Participant is terminated following a Change in Control, the provisions of
the Plan regarding exercisability of vested options set forth in Sections
6.8 and 6.9 shall apply.
(b) Any restriction periods and restrictions imposed on Restricted
Shares shall lapse, and within 10 business days after a Change in Control,
the stock certificates representing Shares of Restricted Stock, without any
restrictions or legend thereon, shall be delivered to the applicable
Participants;
(c) The value, time and manner of payment of all Performance Units
shall be governed by the Performance Unit Award Agreement; and
(d) Subject to Article 13, the Committee shall have the authority to
make any modifications to the Awards as determined to be appropriate before
the effective date of the Change in Control.
ARTICLE 13. AMENDMENT, MODIFICATION, AND TERMINATION
13.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the
Board, the Committee may terminate, amend, or modify the Plan. However, to the
extent necessary and desirable to comply with any applicable law, regulation, or
stock exchange rule, the Board shall obtain shareholder approval of any Plan
amendment as may be required.
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13.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification
of the Plan shall adversely affect any Award previously granted, without the
written consent of the Participant holding the Award.
ARTICLE 14. WITHHOLDING
The Company shall have the power and the right to deduct or withhold, or
require a Participant to remit to Company, an amount sufficient to satisfy
Federal, state, and local taxes (including FICA obligation) required to be
withheld with respect to any grant, exercise, or payment made as a result of the
Plan.
ARTICLE 15. SUCCESSORS
All obligations of Company with respect to Awards shall be binding on any
successor to 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 the business and/or assets of Company.
ARTICLE 16. REQUIREMENTS OF LAW
16.1 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.
16.2 GOVERNING LAW. The Plan, and all agreements hereunder, shall be
governed by Delaware law.
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