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EXHIBIT 4.4
AETNA U.S. HEALTHCARE INC.
(TO BE RENAMED AETNA INC.)
NON-EMPLOYEE DIRECTOR COMPENSATION PLAN
SECTION 1. ESTABLISHMENT OF PLAN; PURPOSE.
The Plan is hereby established to permit Eligible Directors of the
Company, in recognition of their contributions to the Company, to receive Shares
in the manner described below. The Plan is intended to enable the Company to
attract, retain and motivate qualified Directors and to enhance the long-term
mutuality of interest between Directors and stockholders of the Company.
SECTION 2. DEFINITIONS.
When used in this Plan, the following terms shall have the definitions
set forth in this Section:
"Accounts" shall mean an Eligible Director's Stock Unit Account and
Interest Account, as described in Section 9.
"Affiliate" shall mean any corporation or other entity (other than the
Company or one of its Subsidiaries) in which the Company directly or indirectly
owns at least twenty percent (20%) of the combined voting power of all classes
of stock of such entity or at least twenty percent (20%) of the ownership
interests in such entity.
"Board of Directors" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations thereunder.
"Committee" shall mean the Nominating and Corporate Governance
Committee of the Board of Directors or such other committee of the Board as the
Board shall designate from time to time.
"Company" shall mean Aetna U.S. Healthcare Inc., a Pennsylvania
corporation. Following consummation of the transactions contemplated by the
Merger Agreement, Aetna U.S. Healthcare Inc. will change its name to Aetna Inc.
"Compensation" shall mean the annual retainer fees earned by an
Eligible Director for service as a Director, the annual retainer fee, if any,
earned by an Eligible Director for service as a member of a committee of the
Board of Directors; and any fees earned by an Eligible Director for attendance
at meetings of the Board of Directors and any of its committees.
"Director" shall mean any member of the Board of Directors, whether or
not such member is an Eligible Director.
"Disability" shall mean an illness or injury that lasts at least six
months, is expected to be permanent and renders a Director unable to carry out
his/her duties.
"Effective Date" shall mean the date on which the transactions
contemplated by the Merger Agreement are consummated.
"Eligible Director" shall mean a member of the Board of Directors who
is not an employee of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean on any date, with respect to a Share,
the closing price of a Share as reported by the Consolidated Tape of New York
Stock Exchange Listed Shares on the next preceding date on which there was such
a trade.
"Government Service" shall mean the appointment or election of the
Eligible Director to a position with the federal, state or local government or
any political subdivision, agency or instrumentality thereof.
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"Grant" shall mean a grant of Units under Section 5, Options under
Section 7 and Other Stock Based Awards under Section 12.
"Interest Account" shall mean the bookkeeping account established to
record the interests of an Eligible Director with respect to deferred
Compensation that is not deemed invested in Units.
"Merger Agreement" shall mean the Agreement and Plan of Restructuring
and Merger among ING America Insurance Holdings, Inc., ANB Acquisition Corp.,
the Former Parent and for limited purposes only, ING Groep N.V., dated as of
July 19, 2000.
"Option" shall mean the right granted under Section 7 to purchase the
number of shares of Stock specified by the Board of Directors, at a price and
for the term fixed by the Board of Directors in accordance with the Plan and
subject to any other limitations and restrictions as this Plan and the Board of
Directors shall impose, which such option is not intended to qualify as an
"incentive stock option" under Section 422 of the Code.
"Other Stock Based Awards" means any right granted under Section 12.
"Prior Plan" shall mean the Aetna Inc. Non-Employee Director Deferred
Stock and Deferred Compensation Plan.
"Retirement" shall mean termination of service as a Director on account
of the Company's mandatory Director retirement policy as may be in effect on the
date of such termination of service.
"Shares" shall mean shares of Stock.
"Stock" shall mean the Common Shares, $.01 par value, of the Company.
"Stock Unit Account" shall mean, with respect to an Eligible Director
who has elected to have deferred amounts deemed invested in Units, a bookkeeping
account established to record such Eligible Director's interest under the Plan
related to such Units.
"Subsidiary" shall mean any entity of which the Company possesses
directly or indirectly fifty percent (50%) or more of the total combined voting
power of all classes of stock of such entity.
"Unit" shall mean a contractual obligation of the Company to deliver a
Share or pay cash based on the Fair Market Value of a Share to an Eligible
Director or the beneficiary or estate of such Eligible Director as provided
herein.
"Year of Service as a Director" shall mean a period of 12 months of
service as a Director, measured from the effective date of a Unit.
SECTION 3. ADMINISTRATION.
The Plan shall be administered by the Board of Directors. The Board of
Directors shall have the responsibility of construing and interpreting the Plan
and of establishing and amending such rules and regulations as it deems
necessary or desirable for the proper administration of the Plan. Any decision
or action taken or to be taken by the Board of Directors, arising out of or in
connection with the construction, administration, interpretation and effect of
the Plan and of its rules and regulations, shall, to the maximum extent
permitted by applicable law, be within its absolute discretion (except as
otherwise specifically provided herein) and shall be conclusive and binding upon
all Eligible Directors and any person claiming under or through any Eligible
Director.
Subject to the terms of the Plan and applicable law, and in addition to
other express powers and authorizations conferred on the Board of Directors by
the Plan, the Board of Directors shall have full power and authority to: (i)
determine the number of Shares to be covered by, or with respect to which
payments, rights, or other matters are to be calculated in connection with,
Units and Options; (ii) determine the terms and conditions of any Option; (iii)
interpret and administer the Plan and any instrument or agreement relating to,
or Grant made under, the Plan; (iv) 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 (v) make any other determination and
take any other action that the Board of Directors deems necessary or desirable
for the administration of the Plan.
The Plan shall be administered such that awards under the Plan shall be
deemed to be exempt under Rule 16b-3 of the Securities and Exchange Commission
under the Exchange Act ("Rule 16b-3"), as such Rule is in effect on the
Effective Date of the Plan and as it may be subsequently amended from time to
time.
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SECTION 4. SHARES AUTHORIZED FOR ISSUANCE.
4.1 MAXIMUM NUMBER OF SHARES. The aggregate number of Shares with
respect to which Grants may be awarded to Eligible Directors under the Plan
shall not exceed 250,000 Shares, subject to adjustment as provided in Section
4.2 below, plus that number of Shares equal to the aggregate number of Shares
credited to each Eligible Director's Stock Unit Account as a result of transfers
of stock units from the Prior Plan pursuant to Section 9.10. If any Unit or
Option is settled in cash or is forfeited without a distribution of Shares, the
Shares otherwise subject to such Unit or Option shall again be available for
Grants hereunder.
4.2 ADJUSTMENT FOR CORPORATE TRANSACTIONS. In the event that any stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Stock at a price substantially below Fair Market
Value, or other similar event affects the Stock such that an adjustment is
required to preserve, or to prevent enlargement of, the benefits or potential
benefits made available under the Plan, then the Board of Directors shall adjust
the number and kind of shares which thereafter may be awarded under the Plan and
the number of Units and Options and the exercise price thereof that have been,
or may be, granted under the Plan. Additionally, the Board of Directors may make
provisions for a cash payment to an Eligible Director.
SECTION 5. UNIT GRANTS.
5.1 UNIT AWARDS. Each Eligible Director (other than any Eligible
Director who has received an award under the Prior Plan) who is first elected or
appointed to the Board of Directors on or after the Effective Date of the Plan
shall be awarded 1,500 Units on such date (or such other number of Units as the
Board shall determine). In addition, on the date of each Annual Meeting of
Shareholders of the Company occurring after 2000 and during the term of the Plan
an eligible Director serving as a Director on such date shall be awarded 350
Units (or such other number of Units as the Board shall determine).
5.2 DELIVERY OF SHARES. Subject to satisfaction of the applicable
vesting requirements set forth in Section 6 and except as otherwise provided in
Section 8, all Shares that are subject to any Units shall be delivered to an
Eligible Director and transferred on the books of the Company on the date which
is the first business day of the month immediately following the termination of
such Eligible Director's service as a Director. Notwithstanding the foregoing,
an Eligible Director may elect that all or a portion of his or her Units shall
be payable in cash as soon as practicable following the first business day of
the month immediately following the termination of such Eligible Director's
service as a Director. Any fractional Shares to be delivered in respect of Units
shall be settled in cash based upon the Fair Market Value on the date any whole
Shares are transferred on the books of the Company to the Eligible Director or
the Eligible Director's beneficiary. The amount of any cash payment shall be
determined by multiplying the number of Units and the number of Units subject to
a cash payment election by the Fair Market Value on the last business day
preceding the payment date. Upon the delivery of a Share (or cash with respect
to a whole or fractional Share) pursuant to the Plan, the corresponding Unit (or
fraction thereof) shall be canceled and be of no further force or effect.
5.3 DIVIDEND EQUIVALENTS. An Eligible Director shall have no rights as
a shareholder of the Company with respect to any Units until Shares are
delivered to the Director pursuant to this Section 5 hereof; provided that, each
Eligible Director shall have the right to receive an amount equal to the
dividend per Share for the applicable dividend payment date (which, in the case
of any dividend distributable in property other than Shares, shall be the per
Share value of such dividend, as determined by the Company for purposes of
income tax reporting) times the number of Units held by such Eligible Director
on the record date for the payment of such dividend (a "Dividend Equivalent").
Each Eligible Director may elect, prior to any calendar year, whether the
Dividend Equivalent is (i) payable in cash, on or as soon as practicable after
each date on which dividends are paid to shareholders with respect to Shares;
(ii) treated as reinvested in an additional number of Units determined by
dividing (A) the cash amount of any such dividend by (B) the Fair Market Value
on the related dividend payment date; or (iii) deferred and credited to the
Eligible Director's Interest Account pursuant to Section 9.4.
SECTION 6. UNIT VESTING.
6.1 SERVICE REQUIREMENTS. Except as otherwise provided in this Section
6 or Section 8, an Eligible Director shall vest in his or her Units as provided
in this Section 6.1. If an Eligible Director terminates service prior to the
completion of three Years of Service as a Director, the number of Shares to be
delivered to such Eligible Director in respect of Units granted upon his or her
election to the Board shall equal the amount obtained by multiplying 1,500 by a
fraction, the numerator of which is the number of full months of service
completed by such Director from the applicable date of Unit grant and the
denominator of which is 36. If an Eligible Director terminates service prior to
the completion of one Year of Service as a Director from the date of Unit grant
with respect to any annual grant of Units made hereunder, the number of Shares
to be delivered to such Eligible Director
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in respect of such Unit grant shall equal the amount obtained by multiplying 350
by a fraction, the numerator of which is the number of full months of service
completed by such Director from the applicable date of Unit grant and the
denominator of which is 12. Notwithstanding the foregoing, and except as
provided in Section 6.2, if the Eligible Director terminates service by reason
of his/her death, Disability, Retirement, or acceptance of a position in
Government Service prior to the completion of the period of service required to
be performed to fully vest in any Unit grant, all Shares that are the subject of
such Unit grant (or, if elected by the Eligible Director, the value thereof in
cash) shall be delivered to such Eligible Director (or the Eligible Director's
beneficiary or estate).
6.2 SIX MONTHS' MINIMUM SERVICE. If an Eligible Director has completed
less than six consecutive months of service as a Director, all Units held by
such Eligible Director shall be immediately forfeited. If an Eligible Director
has completed less than six consecutive months of service from any date on which
any annual grant of Units is made, all Units held by such Eligible Director that
relate to such annual grant of units shall be immediately forfeited.
6.3 DISTRIBUTION ON DEATH. Except as provided in Section 6.2, in the
event of the death of an Eligible Director, the Shares corresponding to such
Units or, at the election of the Eligible Director's beneficiary or estate, the
Fair Market Value thereof in cash shall be delivered to the beneficiary
designated by the Eligible Director on a form provided by the Company, or, in
the absence of such designation, to the Eligible Director's estate.
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SECTION 7. STOCK OPTIONS.
(a) Grant. Subject to the provisions of the Plan, the Board of
Directors shall have the authority to award Options to an Eligible Director and
to determine (i) the number of Shares to be covered by each Option, (ii) subject
to Section 7(b), the exercise price of the Option and (iii) the conditions and
limitations applicable to the exercise of the Option.
(b) Exercise Price. The exercise price of an Option shall not be less
than 100% of the Fair Market Value on the date of grant.
(c) Exercise. Each Option shall be exercised at such times and subject
to such terms and conditions as the Board of Directors may specify at the time
of the award of such Option or thereafter. No shares shall be delivered pursuant
to any exercise of an Option unless arrangements satisfactory to the Board of
Directors have been made to assure full payment of the exercise price therefor.
Without limiting the generality of the foregoing, payment of the exercise price
may be made in cash or its equivalent or, if and to the extent permitted by the
Board of Directors by exchanging Shares owned by the Eligible Director (which
are not the subject of any pledge or other security interest) either actually or
by attestation, or by a combination of the foregoing, provided that the combined
value of all cash and cash equivalents and the Fair Market Value of any such
Shares so tendered to the Company, valued as of the date of such tender, is at
least equal to such exercise price.
(d) No Eligible Director shall have any rights as a shareholder with
respect to any Shares to be issued pursuant to any Option under the Plan prior
to the issuance thereof.
SECTION 8. CHANGE IN CONTROL.
8.1 IMMEDIATE VESTING. Upon the occurrence of a Change in Control, each
Eligible Director's right and interest in Units and Options which have not
previously vested shall become vested and nonforfeitable.
8.2 CASH SETTLEMENT. (a) (i) Upon the occurrence of a Change in
Control, in lieu of delivering Shares with respect to the Units then held by an
Eligible Director, the Company shall pay such Eligible Director, not later than
60 days after the Change in Control occurs, cash in an aggregate amount equal to
the product of (x) the number of Shares that are subject to all Units credited
to such Eligible Director at the time of the Change in Control multiplied by (y)
the Fair Market Value on the date of the Change in Control.
(ii) Upon the occurrence of a Change in Control, the Company shall pay
to each Eligible Director cash in an amount equal to the accrued value of such
Eligible Director's Interest Account.
(b) Upon the occurrence of a Change in Control, in lieu of delivering
Shares with respect to each Option then held by an Eligible Director, the
Company shall pay such Eligible Director, not later than 60 days after the
Change in Control occurs, cash in an aggregate amount equal to the product of
(i) the number of Shares that are subject to each Option held by such Eligible
Director at the time of the Change in Control multiplied by (ii) the amount by
which the Fair Market Value on the date of the Change of Control exceeds the
exercise price of such Option.
8.3 DEFINITION. "Change in Control" shall mean the occurrence of any of
the following events:
(i) When any "person" as defined in Section 3(a)(9) of the Exchange Act
and as used in Sections 13(d) and 14(d) thereof, including a "group" as defined
in Section 13(d) of the Exchange Act but excluding the Company and any
Subsidiary thereof and any employee benefit plan sponsored or maintained by the
Company or any Subsidiary (including any trustee of such plan acting as
trustee), directly or indirectly, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act, as amended from time to time), of securities
of the Company representing 20 percent or more of the combined voting power of
the Company's then outstanding securities;
(ii) When, during any period of 24 consecutive months the individuals
who, at the beginning of such period, constitute the Board (the "Incumbent
Directors") cease for any reason other than death to constitute at least a
majority thereof, provided that a Director who was not a Director at the
beginning of such 24-month period shall be deemed to have satisfied such
24-month requirement (and be an Incumbent Director) if such Director was elected
by, or on the recommendation of or with the approval of, at least two-thirds of
the Directors who then qualified as Incumbent Directors either actually (because
they were directors at the beginning of such 24-month period) or by prior
operation of this Paragraph (ii); or
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(iii) The occurrence of a transaction requiring stockholder approval
for the acquisition of the Company by an entity other than the Company or a
Subsidiary through purchase of assets, or by merger, or otherwise.
SECTION 9. DEFERRED COMPENSATION PROGRAM.
9.1 ELECTION TO DEFER. On or before December 31 of any calendar year,
an Eligible Director may elect to defer receipt of all or any part of any
Compensation payable in respect of the calendar year following the year in which
such election is made, and to have such amounts credited, in whole or in part,
to a Stock Unit Account or an Interest Account. Any person who shall become an
Eligible Director during any calendar year may elect, not later than the 30th
day after his or her term as a Director begins, to defer payment of all or any
part of his or her Compensation payable for the portion of such calendar year
following such election.
9.2 METHOD OF ELECTION. A deferral election shall be made by written
notice filed with the Corporate Secretary of the Company. Such election shall
continue in effect (including with respect to Compensation payable for
subsequent calendar years) unless and until the Eligible Director revokes or
modifies such election by written notice filed with the Corporate Secretary of
the Company. Any such revocation or modification of a deferral election shall
become effective as of the end of the calendar year in which such notice is
given and only with respect to Compensation payable for services rendered
thereafter. Amounts credited to the Eligible Director's Stock Unit Account prior
to the effective date of any such revocation or modification of a deferral
election shall not be affected by such revocation or modification and shall be
distributed only in accordance with the otherwise applicable terms of the Plan.
An Eligible Director who has revoked an election to participate in the Plan may
file a new election to defer Compensation payable for services to be rendered in
the calendar year following the year in which such election is filed.
9.3 INVESTMENT ELECTION. At the time an Eligible Director elects to
defer receipt of Compensation pursuant to Section 9.1, the Eligible Director
shall designate in writing the portion of such Compensation, stated as a whole
percentage, to be credited to the Interest Account (or such other account as may
be established from time to time by the Committee) and the portion to be
credited to the Stock Unit Account. If an Eligible Director fails to notify the
Corporate Secretary as to how to allocate any Compensation between the Accounts,
100% of such Compensation shall be credited to the Interest Account. By written
notice to the Corporate Secretary of the Company, an Eligible Director may
change the manner in which the Compensation payable with respect to services
rendered after the end of such calendar year are allocated among the Accounts.
9.4 DIVIDEND EQUIVALENTS. In addition to the deferral of Compensation
permitted under Section 9.1, an Eligible Director may elect, in the manner and
at the time described in Section 5.3, to have Dividend Equivalents payable in
respect of his or her Units credited to his or her Interest Account in the
manner and at the time described in such Section 5.3.
9.5 INTEREST ACCOUNT. Any Compensation allocated to the Interest
Account shall be credited to the Interest Account as of the date such Fees would
have been paid to the Eligible Director. Any amounts credited to the Interest
Account shall be credited with interest at the same rate and in the manner in
which interest is credited under the Fixed Investment Fund (or, if such fund no
longer exists, the fund with the investment criteria most clearly comparable to
that of such Fund) under the Aetna Inc. Incentive Savings Plan (or any successor
thereto).
9.6 STOCK UNIT ACCOUNT. Any Compensation allocated to the Stock Unit
Account shall be deemed to be invested in a number of Units equal to the
quotient of (i) such Compensation divided by (ii) the Fair Market Value on the
date the Fees then being allocated to the Stock Unit Account would otherwise
have been paid. Fractional Units shall be credited, but shall be rounded to the
nearest hundredth percentile, with amounts equal to or greater than .005 rounded
up and amounts less than .005 rounded down. Whenever a dividend other than a
dividend payable in the form of Shares is declared with respect to the Shares,
the number of Units in the Eligible Director's Stock Unit Account shall be
increased by the number of Units determined by dividing (i) the product of (A)
the number of Units in the Eligible Director's Stock Unit Account on the related
dividend record date, and (B) the amount of any cash dividend declared by the
Company on a Share (or, in the case of any dividend distributable in property
other than Shares, the per share value of such dividend, as determined by the
Company for purposes of income tax reporting), by (ii) the Fair Market Value on
the related dividend payment date. In the case of any dividend declared on
Shares which is payable in Shares, the Eligible Director's Stock Unit Account
shall be increased by the number of Units equal to the product of (i) the number
of Units credited to the Eligible Director's Stock Unit Account on the related
dividend record date, and (ii) the number of Shares (including any fraction
thereof) distributable as a dividend on a Share.
9.7 DISTRIBUTION ELECTION. At the time an Eligible Director makes a
deferral election pursuant to Section 9.1, the Eligible Director shall also file
with the Corporate Secretary of the Company a written election (a "Distribution
Election") with respect to whether:
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(i) the aggregate amount, if any, credited to the Interest Account at
any time and the value of any Units credited to the Stock Unit Account shall be
distributed in cash, in Shares or in a combination thereof at the election of
the Director;
(ii) such distribution shall commence as soon as practicable following
the first business day of the calendar month following the date the Eligible
Director ceases to be a Director or on the first business day of any calendar
year following the calendar year in which the Eligible Director ceases to be a
Director; and
(iii) such distribution shall be in one lump sum payment or in such
number of annual installments (not to exceed ten) as the Eligible Director may
designate.
The amount of any installment payment shall be determined by
multiplying the amount credited to the Accounts of an Eligible Director
immediately prior to the distribution by a fraction, the numerator of which is
one and the denominator of which is the number of installments (including the
current installment) remaining to be paid. An Eligible Director may at any time,
and from time to time, change any Distribution Election applicable to his or her
Accounts, provided that no election to change the timing of any final
distribution shall be effective unless it is made in writing and received by the
Corporate Secretary of the Company at least one full calendar year prior to the
time at which the Eligible Director ceases to be a director.
9.8 FINANCIAL HARDSHIP WITHDRAWAL. Any Eligible Director may, after
submission of a written request to the Corporate Secretary of the Company and
such written evidence of the Eligible Director's financial condition as the
Committee may reasonably request, withdraw from his Interest Account up to such
amount as the Committee shall determine to be necessary to alleviate the
Eligible Director's financial hardship.
9.9 TIMING AND FORM OF DISTRIBUTIONS. Any distribution to be made
hereunder, whether in the form of a lump sum payment or installments, following
the termination of an Eligible Director's service as a Director shall commence
in accordance with the Distribution Election made by the Eligible Director
pursuant to Section 9.7. If an Eligible Director fails to specify a form of
payment for a distribution in accordance with Section 9.7, the distribution from
the Interest Account shall be made in cash and the distribution from the Stock
Unit Account shall be made in Shares. If an Eligible Director fails to specify
in accordance with Section 9.7 a commencement date for a distribution or whether
such distribution shall be made in a lump sum payment or a number of
installments, such distribution shall be made in a lump sum payment and commence
on the first business day of the month immediately following the date on which
the Eligible Director ceases to be a Director. In the case of any distribution
being made in annual installments, each installment after the first installment
shall be paid on the first business day of each subsequent calendar year, or as
soon as practical thereafter, until the entire amount subject to such
Distribution Election shall have been paid.
9.10 EFFECT ON PRIOR PLAN. Subject to approval of the Company's sole
shareholder and the consummation of the transactions contemplated by the Merger
Agreement, the amounts standing to the credit of each Eligible Director's stock
unit account under the Prior Plan shall be transferred to the Plan and credited
to the Eligible Director's Stock Unit Account. Any elections in effect under
such Prior Plan shall be deemed to be an election made pursuant to and in
accordance with the terms of this Section 9 unless and until the Eligible
Director elects to change such elections in accordance with the provisions of
this Section 9.
SECTION 10. UNFUNDED STATUS.
The Company shall be under no obligation to establish a fund or reserve
in order to pay the benefits under the Plan. A Unit represents a contractual
obligation of the Company to deliver Shares or pay cash to a Director as
provided herein. The Company has not segregated or earmarked any Shares or any
of the Company's assets for the benefit of a Director or his/her beneficiary or
estate, and the Plan does not, and shall not be construed to, require the
Company to do so. The Director and his/her beneficiary or estate shall have only
an unsecured, contractual right against the Company with respect to any Units
granted or amounts credited to a Director's Accounts hereunder, and such right
shall not be deemed superior to the right of any other creditor. Units shall not
be deemed to constitute options or rights to purchase Stock.
SECTION 11. AMENDMENT AND TERMINATION.
The Plan may be amended at any time by the Board of Directors, provided
that, except as provided in Section 4.2, the Board of Directors may not, without
approval of the shareholders of the Company increase the number of Shares which
may be awarded under the Plan. The Plan shall terminate on April 30, 2010.
Notwithstanding the foregoing, no amendment or termination of the Plan shall
materially and adversely affect any rights of any Director under any Grant made
pursuant to the Plan. Unless the Board otherwise specifies at the time
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of such termination, a termination of the Plan will not result in the
distribution of the amounts credited to an Eligible Director's Accounts.
SECTION 12. OTHER STOCK-BASED AWARDS.
The Board of Directors shall have authority to grant to Eligible
Directors an "Other Stock-Based Award", which shall consist of any right which
is (i) not a Grant described in Sections 5 or 7 above and (ii) a Grant of Shares
or a Grant denominated or payable in, valued in whole or in part by reference
to, or otherwise based on or related to, Shares (including, without limitation,
securities convertible into Shares), as deemed by the Board of Directors to be
consistent with the purposes of the Plan; provided that any such rights must
comply, to the extent deemed desirable by the Board of Directors, with Rule
16b-3 and applicable law. Subject to the terms of the Plan and any applicable
award agreement, the Board of Directors shall determine the terms and conditions
of any such Other Stock-Based Award.
SECTION 13. GENERAL PROVISIONS.
13.1 NO RIGHT TO SERVE AS A DIRECTOR. This Plan shall not impose any
obligations on the Company to retain any Eligible Director as a Director nor
shall it impose any obligation on the part of any Eligible Director to remain as
a Director of the Company.
13.2 CONSTRUCTION OF THE PLAN. The validity, construction,
interpretation, administration and effect of the Plan, and the rights relating
to the Plan, shall be determined solely in accordance with the laws of the State
of Connecticut.
13.3 NO RIGHT TO PARTICULAR ASSETS. Nothing contained in this Plan and
no action taken pursuant to this Plan shall create or be construed to create a
trust of any kind or any fiduciary relationship between the Company and any
Eligible Director, the executor, administrator or other personal representative
or designated beneficiary of such Eligible Director, or any other persons. Any
reserves that may be established by the Company in connection with Units granted
under this Plan shall continue to be treated as the assets of the Company for
federal income tax purposes and remain subject to the claims of the Company's
creditors. To the extent that any Eligible Director or the executor,
administrator, or other personal representative of such Eligible Director,
acquires a right to receive any payment from the Company pursuant to this Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company.
13.4 LISTING OF SHARES AND RELATED MATTERS. If at any time the Board of
Directors shall determine in its discretion that listing, registration or
qualification of the Shares covered by this Plan upon any national securities
exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the delivery of Shares under this Plan, no Shares will be
delivered unless and until such listing, registration, qualification, consent or
approval shall have been effected or obtained, or otherwise provided for, free
of any conditions not acceptable to the Board of Directors.
13.5 SEVERABILITY OF PROVISIONS. If any provision of this Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
effect any other provisions hereof, and this Plan shall be construed and
enforced as if such provision had not been included.
13.6 INCAPACITY. Any benefit payable to or for the benefit of a minor,
an incompetent person or other person incapable of receipting therefor shall be
deemed paid when paid to such person's guardian or to the party providing or
reasonably appearing to provide for the care of such person, and such payment
shall fully discharge any liability or obligation of the Board of Directors, the
Company and all other parties with respect thereto.
13.7 NONTRANSFERABILITY. No Grant may be assigned or transferred, in
whole or in part, either directly or by operation of law (except in the event of
an Eligible Director's death by will or applicable laws of descent and
distribution), including, but not by way of limitation, by execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner, and no such
right or interest of any Eligible Director in the Plan shall be subject to any
obligation or liability of such Eligible Director.
13.8 HEADINGS AND CAPTIONS. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of
this Plan, and shall not be employed in the construction of this Plan.
