EXHIBIT 4(c)
------------
INSILCO HOLDING CO.
AND INSILCO CORPORATION
EQUITY UNIT PLAN
SECTION 1. PURPOSE. The purposes of the Insilco Holding Co. and Insilco
Corporation Equity Unit Plan are to promote the interests of Insilco Holding Co.
(the "PARENT") and its stockholders and Insilco Corporation ("INSILCO") by
retaining exceptional executive personnel and other key employees of the Parent
and its Subsidiaries and motivating such employees by enabling them to
participate in the long-term growth and financial success of the Parent and its
Subsidiaries.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
"AFFILIATE" means, with respect to any Person, any other Person,
directly or indirectly, controlling, controlled by, or under common control
with, such Person; PROVIDED that no stockholder of the Parent shall be deemed to
be an Affiliate of any other stockholder of the Parent solely by reason of any
investment in the Parent. For the purpose of this definition, the term "CONTROL"
(including, with correlative meanings, the terms "CONTROLLING," "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH"), when used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"AFFILIATED EMPLOYEE BENEFIT TRUST" means any trust that is a successor
to the assets held by a trust established under an employee benefit plan subject
to ERISA or any other trust established directly or indirectly under such plan
or any other such plan having the same sponsor.
"AWARD AGREEMENT" means a written agreement executed by an Employee
evidencing an award of Equity Units under the Plan. Unless otherwise provided by
the Committee, the Award Agreement to be used for the award of Equity Units
under the Plan shall be substantially in the form attached as Exhibit A hereto.
"BASE PRICE" means the Fair Market Value of a Common Share on the date
an Equity Unit is granted to a Participant. The Base Price on August 17, 1998 is
$45 per Common Share.
"BOARD" means the Board of Directors of the Parent.
"CAUSE" means, unless otherwise defined in any Employment Agreement or
Award Agreement:
(a) a Participant's willful and continued failure substantially to
perform his or her duties (other than as a result of total or partial incapacity
due to physical or mental illness);
<PAGE>
(b) a Participant's conviction for a felony arising from, or any act of
fraud, embezzlement, or willful dishonesty by the Participant in relation to the
business or affairs of the Parent or its Affiliates or any other felonious
conduct on the part of the Participant that is materially detrimental to the
best interests of the Parent or its Affiliates;
(c) a Participant's being repeatedly under the influence of illegal
drugs or alcohol while performing his or her duties; or
(d) any other willful act by a Participant which is materially
injurious to the financial condition or business reputation of the Parent or any
of its Affiliates as determined in the reasonable discretion of the Parent,
including a Participant's breach of the provisions of any non-competition,
non-solicitation or confidentiality covenant in favor of the Parent or its
Affiliates binding upon such Participant.
Notwithstanding the foregoing, no action or failure to act will
constitute "Cause" if the Participant believed in good faith that such action or
failure to act was in the best interest of the Parent.
"CODE" means the Internal Revenue Code of 1986, as the same may be
amended, and the rules and regulations promulgated thereunder.
"COMMITTEE" means a committee of the Board designated by the Board to
administer the Plan. Until otherwise determined by the Board, the full Board
shall be the Committee under the Plan.
"COMMON SHARES" means shares of common stock, $0.001 par value, of the
Parent or such other securities as may be designated by the Committee from time
to time.
"EBITDA" means the consolidated operating income of the Parent, plus
(or minus) any income (or losses) from investments (excluding equity income from
Thermalex), plus depreciation, plus amortization, plus (or minus) any unusual,
non-recurring losses (or gains). The Committee may, in good faith, establish
such rules and policies as necessary or appropriate for the calculation of
EBITDA pursuant to the formula set forth above for purposes of the Plan.
"EMPLOYEE" means an employee of the Parent or any Subsidiary.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as the same
may be amended, and the rules and regulations promulgated thereunder.
"EQUITY UNIT" means any right granted under Section 6 of the Plan.
"FAIR MARKET VALUE" means, with respect to a Common Share or other
security of the Parent, as of the date of determination, (i) if on the date of
determination such Common Shares or securities are Publicly Traded, the average
of the reported high and low sale prices of a Common Share or such other
security on such exchange or market as is the principal trading market for such
Common Shares or securities on the date of such determination (or, if such date
<PAGE>
is not a trading date, the last preceding trading date) and (ii) if on the date
of determination such Common Shares or securities are not Publicly Traded, the
amount determined as of the close of the calendar quarter immediately preceding
the date of determination pursuant to the following formula: the quotient of
(x)(A) a multiple of 6.3 times the last 12 months' EBITDA, minus (B) the sum of
the consolidated debt of the Parent and the accreted value of all outstanding
preferred stock of the Parent, plus (C) a multiple of 9.0 times the last 12
months' equity in net income of Affiliates of the Parent, divided by (y) the
aggregate number of shares of all classes of common stock of the Parent
outstanding, determined on a fully diluted basis, as of the close of the
calendar quarter immediately preceding the date of determination.
"INSILCO" means Insilco Corporation, a Delaware corporation.
"INVESTORS' AGREEMENT" means the Investors' Agreement dated as of
August 17, 1998 among (i) the Parent and (ii) DLJ Merchant Banking Partners II,
L.P., a Delaware limited partnership ("DLJMB"), DLJ Offshore Partners II, C.V.,
a Netherlands Antilles limited partnership, DLJ Merchant Banking Partners II-A,
L.P., a Delaware limited partnership, DLJ Diversified Partners, L.P., a Delaware
limited partnership, DLJ Diversified Partners-A, L.P., a Delaware limited
partnership, DLJEAB Partners, L.P., a Delaware limited partnership, DLJ
Millennium Partners, L.P., a Delaware limited partnership, DLJ Millennium
Partners-A, L.P., a Delaware limited partnership, DLJMB Funding II, Inc., a
Delaware corporation, UK Investment Plan 1997 Partners, a Delaware partnership,
DLJ First ESC, L.P., a Delaware limited partnership and DLJ ESC II, L.P., a
Delaware limited partnership, (each of the foregoing, a "DLJ ENTITY," and
collectively the "DLJ ENTITIES"), and 399 Venture Partners, Inc., a wholly owned
subsidiary of CitiBank, N.A. ("CVC").
"PARENT" means Insilco Holding Co., a Delaware corporation.
"PARTICIPANT" means any Employee receiving an Equity Unit under the
Plan.
"PERMITTED TRANSFEREE" means, for purposes of this Plan:
(i) in the case of any DLJ Entity, (A) any other DLJ Entity,
(B) any general or limited partner of any DLJ Entity (a "DLJ PARTNER"),
and any Affiliated Employee Benefit Trust or Person that is an
Affiliate of any DLJ Partner (collectively, the "DLJ AFFILIATES"), (C)
any managing director, general partner, director, limited partner,
officer or employee of any DLJ Entity or of any DLJ Affiliate, or the
heirs, executors, administrators, testamentary trustees, legatees or
beneficiaries of any of the foregoing Persons referred to in this
clause (C) (collectively, "DLJ ASSOCIATES"), (D) a trust, the
beneficiaries of which, or a corporation, limited liability company or
partnership, the stockholders, members or general or limited partners
of which, include only DLJ Entities, DLJ Affiliates, DLJ Associates,
their spouses or their lineal descendants or (E) a voting trustee for
one or more DLJ Entities, DLJ Affiliates or DLJ Associates under the
terms of a voting trust designed to conform with the requirements of
the Insurance Law of the State of New York; and
<PAGE>
(ii) in the case of CVC, (A) any nominee or trustee for or any
general or limited partner or shareholder of CVC, and any Person that
is an Affiliate of CVC (collectively, the "CVC AFFILIATES"), (B) any
managing director, general partner, limited partner, employee, officer
or director of CVC or a CVC Affiliate, or any spouse, lineal
descendant, sibling, parent, heir, executor, administrator,
testamentary trustee, legatee or beneficiary of any of the foregoing
Persons described in this clause (B) (collectively, "CVC ASSOCIATES"),
(C) a "CO-INVESTMENT SCHEME" being a scheme under which certain
officers, employees or partners of CVC or of its adviser or manager are
entitled (as individuals or through a body corporate or any other
vehicle) to acquire Common Shares which CVC would otherwise acquire and
a Co-Investment Scheme which holds Common Shares for a body corporate
or other vehicle may transfer their Common Shares to another body
corporate or another vehicle which holds or is to hold Common Shares
for the Co-Investment Scheme or the officers, employees or partners
entitled to the Common Shares under the Co-Investment Scheme and (D)
any trust, the beneficiaries of which, or any corporation, limited
liability company or partnership, stockholders, members or general or
limited partners of which include only CVC, CVC Affiliates, CVC
Associates, their spouses or their lineal descendants.
"PERSON" means any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"PLAN" means this Insilco Holding Co. and Insilco Corporation Equity
Unit Plan.
"PUBLIC OFFERING" means an underwritten public offering of Registrable
Securities of the Parent occurring after August 17, 1998 pursuant to an
effective registration statement under the Securities Act (other than pursuant
to a registration statement on Form S-4 or Form S-8 or any similar or successor
form).
"PUBLICLY TRADED" means, with respect to any security, that (i) the
security is of a class that is listed or quoted for trading on a national
exchange or NASDAQ or a similar national trading or quotation system and (ii)
the aggregate market capitalization with respect to such class of securities,
based on last sale price or last quoted asked price reported on such exchange or
trading system, is $25,000,000.00, excluding all shares of such class of
securities beneficially owned by any DLJ Affiliate or any CVC Affiliate or any
employee of the Parent or Insilco.
"REGISTRABLE SECURITIES" means, at any time, any Common Shares or
Warrants and any securities issued or issuable in respect of such Common Shares
or Warrants by way of conversion, exchange, stock dividend, split or
combination, recapitalization, merger, consolidation, other reorganization or
otherwise until (i) a registration statement covering such Common Shares or
Warrants has been declared effective by the SEC and such Common Shares or
Warrants have been disposed of pursuant to such effective registration
statement, (ii) such Common Shares or Warrants are sold under circumstances in
which all of the applicable conditions of Rule 144 (or any similar provisions
then in force) under the Securities Act are met or (iii) such Common Shares or
Warrants are otherwise transferred, the Parent has delivered a new certificate
or other evidence of ownership for such Common Shares or Warrants not bearing
<PAGE>
the legend required pursuant to the Investors' Agreement and such Common Shares
or Warrants may be resold without subsequent registration under the Securities
Act.
"SECURITIES ACT" means the Securities Act of 1933, as the same may be
amended, and the rules and regulations promulgated thereunder.
"SIGNIFICANT EVENT" means the first to occur of:
(i) the acquisition by any "person" (as such term is used in
Section 3(a)(9) and 13(d)(3) of the Exchange Act) other than (A) the
DLJ Entities, CVC and/or any of their respective Permitted Transferees
or (B) any "group" (within the meaning of such Section 13(d)(3)) of
which any of the DLJ Entities, CVC and/or any of their respective
Permitted Transferees is a part, directly or indirectly, by virtue of
the consummation of any purchase, merger or other combination,
securities of the Parent representing more than 50% of the combined
voting power of the Parent's then outstanding voting securities
entitled to vote with respect to matters submitted to a vote of the
stockholders generally;
(ii) the consummation of a Public Offering which results in
the DLJ Entities', CVC's, and/or their respective Permitted
Transferees' ceasing to have beneficial ownership of securities of the
Parent representing, in the aggregate, at least 45% of the combined
voting power of the Parent's then outstanding voting securities
entitled to vote with respect to matters submitted to a vote of the
stockholders generally;
(iii) the ceasing of the individuals who constitute the Board
on the date hereof (the "INCUMBENT BOARD"), for any reason, to
constitute at least a majority thereof, provided that any person
becoming a director subsequent to such date whose election, or
nomination for election by the Parent's shareholders, was approved by a
vote of at least two-thirds (2/3) of the directors then comprising the
Incumbent Board shall be, for purposes of this clause (iii), considered
as though such person were a member of the Incumbent Board;
(iv) the approval by the shareholders of the Parent of a plan
or agreement providing (A) for a merger or consolidation of the Parent
other than with a wholly-owned subsidiary and other than a merger or
consolidation that would result in the voting securities of the Parent
outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities
of the surviving entity) more than 50% of the combined voting power of
the voting securities of the Parent or such surviving entity
outstanding immediately after such merger or consolidation, or (B) for
a plan of complete liquidation of the Parent. If any of the events
enumerated in this paragraph (iv) occurs, the Board shall determine the
effective date of the Significant Event resulting therefrom for
purposes of this Agreement;
(v) a sale or transfer by the Parent or any of its
Subsidiaries of more than 50%, in value, all of the consolidated assets
of the Parent and its Subsidiaries to an entity which is not an
Affiliate of the Parent prior to such sale or transfer;
<PAGE>
(vi) August 17, 2008; or
(vii) any other event or circumstance determined by the Board
to constitute a Significant Event.
"STOCKHOLDER" means each Person (other than the Parent) who shall be a
party to or be bound by the Investors' Agreement, whether in connection with the
execution and delivery thereof, pursuant to Section 3.03 or Section 6.05
thereof, or otherwise, so long as such Person shall beneficially own any
securities of the Parent.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"TERMINATION DATE" means, with respect to an Employee, the last date on
which the Employee performs services for the Parent and its Subsidiaries in
exchange for compensation as an Employee.
"WARRANTS" means the warrants issued by the Parent to Stockholders for
the purchase of an aggregate of 110,453 Common Shares (subject to adjustment as
provided for herein).
SECTION 3. ADMINISTRATION.
(a) AUTHORITY OF COMMITTEE. The Plan shall be administered by the
Committee. Subject to the terms of the Plan, applicable law and contractual
restrictions affecting the Parent, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the
number of Equity Units to be awarded, or with respect to which payments, rights,
or other matters are to be calculated; (iii) determine the method or methods by
which Equity Units may be settled; (iv) determine whether, to what extent, and
under what circumstances cash or Common Shares payable with respect to Equity
Units shall be deferred if requested by the holder thereof; (v) interpret and
administer the Plan and any instrument or agreement relating to, or Equity Unit
granted under, the Plan; (vi) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (vii) make any other determination and take any
other action that the Committee deems necessary or desirable for the
administration of the Plan.
(b) COMMITTEE DISCRETION BINDING. Unless otherwise expressly provided
in the Plan, all designations, determinations, interpretations, and other
decisions under or with respect to the Plan or any Equity Unit shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon all Persons, including the Parent, any
Subsidiary, any Participant, any holder or beneficiary of any Equity Unit, any
shareholder and any Employee.
<PAGE>
SECTION 4. EQUITY UNITS AVAILABLE FOR AWARDS.
(a) EQUITY UNITS AVAILABLE. Subject to adjustment as provided in
Sections 4(b) and 4(c), the number of Equity Units which may be granted under
the Plan shall be 88,194.
(b) ADJUSTMENTS. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Common Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, reclassification, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Common Shares or other
securities of the Parent, issuance of warrants or other rights to purchase
Common Shares or other securities of the Parent, or other similar corporate
transaction or event affects the Common Shares such that an adjustment is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in good faith and in such manner as it may deem equitable,
adjust the number of (i) Equity Units available under the Plan, (ii) Equity
Units outstanding, (iii) Common Shares (or number and kind of other securities
or property) available for settlement of Equity Units, and (iv) the amount of
the Base Price.
(c) SOURCES OF COMMON SHARES DELIVERABLE UNDER EQUITY UNITS. Any Common
Shares delivered pursuant to settlement of an Equity Unit may consist, in whole
or in part, of authorized and unissued Common Shares or of treasury Common
Shares.
SECTION 5. ELIGIBILITY. Any Employee, including any officer or
employee-director of the Parent or any Subsidiary shall be eligible to be
designated as a Participant.
SECTION 6. EQUITY UNITS.
(a) GRANT. Subject to (i) execution of an Award Agreement by the Parent
and an Employee and (ii) compliance with such other conditions as the Committee
shall, in its sole discretion require, such Employee shall be granted the number
of Equity Units set forth opposite such Employee's name on Exhibit B hereto.
Subject to earlier termination pursuant to Section 7, each such Equity Unit
shall be cancelled and settled as set forth in Section 6(b). Additional
Employees may be granted Equity Units available under the Plan as determined by
the Committee.
(b) VESTING. All Equity Units shall be 100% vested.
(c) PAYMENT OF BASE PRICE. Upon the grant of an Equity Unit to a
Participant, the Participant shall be required to pay to Insilco an amount equal
to the Base Price multiplied by the number of Equity Units granted to the
Participant. The Participant may satisfy the requirement of paying the Base
Price by (i) making a cash payment to Insilco at the time of the grant, (ii)
agreeing at the time of the grant to cancel and terminate unexercised option
rights under the Insilco Corporation 1993 Long-Term Incentive Stock Option Plan,
and/or (iii) agreeing at the time of the grant to forego future salary or bonus
payments. Interest shall accrue on the unpaid amount of the Base Price, computed
from the date the Equity Unit is granted until the date the Base Price is paid
in full, and shall be compounded monthly. The rate of interest shall be a
<PAGE>
variable rate, adjusted as of the first day of each calendar month, equal to the
"applicable federal rate" which is the long-term rate, as defined in Section
1274(d) of the Internal Revenue Code of 1986, as amended, and as pronounced by
the Internal Revenue Service from time to time.
(d) SETTLEMENT OF EQUITY UNITS. Each Equity Unit held by a Participant
shall be cancelled upon the earlier of the occurrence of a Significant Event or
the Participant's Termination Date in exchange for the applicable amount set
forth below (the "EQUITY UNIT SETTLEMENT AMOUNT") paid in the method and form
described below:
(i) SIGNIFICANT EVENT. Within 30 days after the occurrence of
a Significant Event, each Equity Unit held by a Participant shall be
cancelled in exchange for the payment to the Participant of an amount
equal (a) to the Fair Market Value of a Common Share as of the date of
such Significant Event, less (b) the amount of the Base Price the
Participant is obligated to pay but has not yet paid and any unpaid
interest and withholdings under Section 8(d).
(ii) TERMINATION OF EMPLOYMENT OTHER THAN FOR CAUSE. If a
Participant's employment with the Parent and its Subsidiaries is
terminated by reason of the Participant's resignation, retirement,
disability or death or a termination by the Parent for any reason other
than Cause or a termination described in Section 6(d)(iii) below, each
Equity Unit held by the Participant shall be cancelled in exchange for
payment to the Participant (or, in the case of the Participant's death,
to the Participant's estate), within 30 days after such termination, of
an amount equal to (a) the Fair Market Value of a Common Share as of
the Participant's Termination Date, less (b) the amount of the Base
Price the Participant is obligated to pay but has not yet paid and any
unpaid interest and withholding under Section 8(d).
(iii) TERMINATION OF EMPLOYMENT OTHER THAN FOR CAUSE PRIOR TO
DECEMBER 31, 2000. If a Participant's employment with Parent and its
Subsidiaries is terminated by Parent and its Subsidiaries without Cause
on or before December 31, 2000, each Equity Unit held by Participant
shall be cancelled in exchange for payment by Parent to the
Participant, within 30 days after such termination, of an amount equal
to (a) the greater of (x) the Fair Market Value of a Common Share as of
the Participant's Termination or (y) $45.00 plus the amount of any
interest accruing on any unpaid portion of the Base Price from August
17, 1998 until the date of such termination (whether or not such
interest has been paid as of such termination date) less (b) the amount
of the Base Price the Participant is obligated to pay but has not yet
paid and any unpaid interest and withholding under Section 8(d).
(iv) TERMINATION OF EMPLOYMENT FOR CAUSE. If a Participant's
employment with the Parent and its Subsidiaries is terminated by the
Parent and its subsidiaries for Cause, each Equity Unit held by the
Participant shall be cancelled in exchange for payment to the
Participant within 30 days after such termination, of an amount equal
to the lesser of (a) the Fair Market Value of a Common Share as of the
Participant's Termination Date, less the amount of the Base Price the
Participant is obligated to pay but has not yet paid and any
withholding under Section 8(d), or (b) $45.00, less the
<PAGE>
amount of the Base Price the Participant is obligated to pay but has
not yet paid and any unpaid interest and withholding under Section
8(d).
(v) FORM OF PAYMENT. With respect to payments under this
Section 6, the Committee shall determine, in its sole discretion,
whether Equity Units held by a Participant shall be settled by payment
in cash paid by Insilco, Common Shares, or a combination of cash and
Common Shares.
(vi) PARTICIPANT PAYMENT OBLIGATION. At the time that Equity
Unit is settled pursuant to this Section 6(d), the Participant is
unconditionally obligated to pay the full amount of the Base Price and
interest relating to the Participant's Equity Unit, less the amount of
the Base Price and interest previously paid by the Participant; and the
Company shall have full recourse against the Participant for the
payment of such amount.
(e) PRIOR TAXABILITY. If the Internal Revenue Service finally
determines that a Participant must recognize taxable income in connection with
the Participant's cancellation and termination of unexercised option rights
under the Insilco Corporation 1993 Long-Term Incentive Stock Option Plan and the
related grant of Equity Units under the Plan, such Participant shall be entitled
to elect to cancel a sufficient number of Equity Units to satisfy the related
tax liability. Each such Equity Unit shall be cancelled in exchange for a cash
payment by Insilco to such Participant within 30 days after the Participant's
written notice of the final determination of the Internal Revenue Service is
received by the Committee in an amount equal to the Fair Market Value of a
Common Share on the date such notice is given by the Participant.
SECTION 7. AMENDMENT AND TERMINATION.
(a) AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time subject to
Section 7(b); provided that no such amendment, alteration, suspension,
discontinuance or termination shall be made without shareholder approval if such
approval is necessary to comply with any tax or regulatory requirement for which
or with which the Board deems it necessary or desirable to qualify or comply.
Notwithstanding anything to the contrary herein, the Committee may amend the
Plan in such manner as may be necessary so as to have the Plan conform with
local rules and regulations in any jurisdiction outside the United States.
(b) AMENDMENT TO EQUITY UNITS. Subject to the terms of the Plan and
applicable law, the Committee may, at any time, waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate,
any Equity Unit theretofore granted, prospectively or retroactively; provided
that any such waiver, amendment, alteration, suspension, discontinuance,
cancellation or termination that would adversely affect the rights of any
Participant or any holder or beneficiary of any Equity Unit theretofore granted
shall not, to that extent, be effective without the consent of the affected
Participant, holder or beneficiary.
SECTION 8. GENERAL PROVISIONS.
<PAGE>
(a) NONTRANSFERABILITY. No Equity Unit shall be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by a Participant,
except by will or the laws of descent and distribution.
(b) NO RIGHTS TO EQUITY UNITS. No Employee or other Person shall have
any claim to be granted any Equity Units, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Equity Units. The terms and conditions of Equity Units need not be the same
with respect to each recipient.
(c) COMMON SHARE CERTIFICATES. In the event any Equity Units are
settled in Common Shares, certificates issued in respect of such Common Shares
shall, unless the Committee otherwise determines, be registered in the name of
the Participant. Such stock certificates shall carry such appropriate legends,
and such written instructions shall be given to the Parent's transfer agent, as
may be deemed necessary or advisable by counsel to the Parent in order to comply
with the requirements of the Securities Act, any state securities laws or any
other applicable laws. All such certificates for Common Shares or other
securities delivered under the Plan shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the Plan
or the rules, regulations and other requirements of the Securities Exchange
Commission or any stock exchange upon which such Common Shares or other
securities are then listed and any other applicable laws or rules or
regulations, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(d) WITHHOLDING. A Participant may be required to pay to the Parent or
any Subsidiary, and the Parent or any Subsidiary shall have the right and is
hereby authorized to withhold from any payment due under the Plan or from any
compensation or other amount owing to a Participant the amount (in cash, Common
Shares, other securities, or other property) of any applicable withholding taxes
in respect of any Equity Unit, and to take such other action as may be necessary
in the opinion of the Parent to satisfy all obligations for the payment of such
taxes. The Committee may, in its sole discretion, provide for additional cash
payments to holders of Equity Units to defray or offset any tax liability
related to the Equity Units.
(e) AWARD AGREEMENTS. Each grant of Equity Units hereunder shall be
evidenced by an Award Agreement which shall be delivered to the Participant and
shall specify the terms and conditions of the Equity Units and any rules
applicable thereto.
(f) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in
the Plan shall prevent the Parent or any Subsidiary from adopting or continuing
in effect other compensation arrangements, which may, but need not, provide for
the grant of equity units, options, restricted stock, Common Shares and other
types of awards (subject to shareholder approval if such approval is required),
and such arrangements may be either generally applicable or applicable only in
specific cases.
(g) NO RIGHT TO EMPLOYMENT. The grant of Equity Units shall not be
construed as giving a Participant the right to be retained in the employ or
service of the Parent or any Subsidiary or interfere in any way with the right
of the Parent or any Subsidiary to terminate his
<PAGE>
or her employment at any time, subject to any obligations under any Employment
Agreement covering the Participant.
(h) RIGHTS AS A STOCKHOLDER. No Participant or holder or beneficiary of
any Equity Units shall have any rights as a stockholder with respect to any
Common Shares unless and until he or she becomes the holder of such Common
Shares.
(i) GOVERNING LAW. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan and any Award Agreement shall
be determined in accordance with the laws of the State of Delaware.
(j) SEVERABILITY. If any provision of the Plan or any Award Agreement
is or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Equity Unit, or would disqualify the Plan or
any Equity Unit under any law deemed applicable by the Committee, such provision
shall be construed or deemed to be amended to conform to the applicable laws, or
if it cannot be construed or deemed to be amended without, in the determination
of the Committee, materially altering the intent of the Plan or the Award
Agreement, such provision shall be stricken as to such jurisdiction, Person or
Equity Unit, and the remainder of the Plan and any such Award Agreement shall
remain in full force and effect.
(k) OTHER LAWS. The Committee may refuse to issue or transfer any
Equity Units, Common Shares or other consideration under the Plan if, acting in
its sole discretion, it determines that the issuance or transfer of such Equity
Units, Common Shares or such other consideration violates any applicable law or
regulation or entitles the Parent to recover the same under Section 16(b) of the
Exchange Act, and any payment tendered to the Parent by a Participant in
connection therewith shall be promptly refunded to the relevant Participant,
holder or beneficiary. Without limiting the generality of the foregoing, the
granting and settlement of Equity Units hereunder shall not be construed as an
offer to sell securities of the Parent, and no such offer shall be outstanding,
unless and until the Committee, in its sole discretion, has determined that any
such offer, if made, would be in compliance with all applicable requirements of
the U.S. federal securities laws and any other laws to which such offer, if
made, would be subject.
(l) NO TRUST OR FUND CREATED. Neither the Plan nor the granting and
settlement of any Equity Unit shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Parent or any
Subsidiary and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Parent or any Subsidiary
hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Parent or any Subsidiary.
(m) NO FRACTIONAL COMMON SHARES. No fractional Common Shares shall be
issued or delivered pursuant to the Plan, and the Committee shall determine
whether cash or other securities or other property shall be paid or transferred
in lieu of any fractional Common Shares or whether such fractional Common Shares
or any rights thereto shall be cancelled, terminated, or otherwise eliminated.
<PAGE>
(n) HEADINGS. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed to be in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 9. TERM OF THE PLAN.
(a) EFFECTIVE DATE. The Plan shall be effective as of August 17, 1998,
subject to the approval by the shareholders of the Parent. Equity Units may be
granted hereunder prior to such shareholder approval, subject in all cases,
however, to such approval.
(b) EXPIRATION DATE. The Plan shall terminate and be of no further
force or effect as of the date all payments due under the Plan have been made.
