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Registration No. ___ - _____
As filed with the Securities and Exchange Commission on March 5, 1998
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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BRISTOL-MYERS SQUIBB COMPANY
(Exact name of issuer as specified in its charter)
Delaware 22-0790350
(State of Incorporation) (I.R.S. Employer Identification No.)
345 Park Avenue
New York, New York 10154
(212) 546-4000
(Address and telephone number of principal executive offices)
BRISTOL-MYERS SQUIBB COMPANY
1997 STOCK INCENTIVE PLAN
(EFFECTIVE AS OF MAY 6, 1997)
BRISTOL-MYERS SQUIBB COMPANY
1983 STOCK OPTION PLAN
(AS AMENDED AND RESTATED
EFFECTIVE AS OF SEPTEMBER 10, 1996)
(Full title of Plans)
--------------------
John L. McGoldrick
Senior Vice President, Law and Strategic Planning, and General Counsel
Bristol-Myers Squibb Company
345 Park Avenue
New York, New York 10154
(212) 546-4000
(Name, address and telephone number of agent for service)
--------------------
Copies to:
Alice Brennan Scott Applebaum
Vice President and Secretary Assistant Counsel, Corporate Human Resources
Bristol-Myers Squibb Company Bristol-Myers Squibb Company
345 Park Avenue 777 Scudders Mill Road
New York, New York 10154 Plainsboro, New Jersey 08536
(212) 546-4000 (609) 897-2000
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CALCULATION OF REGISTRATION FEE
<TABLE>
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=========================================================================================================================
Proposed Maximum Proposed Maximum
Amount to be Offering Price Per Aggregate Offering Amount
Title of Securities to be Registered Registered Share(1) Price(1) Registration Fee(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.10 per
share............................. 20,000,000 $100.21875 $2,437,500,000 $591,290.62
=========================================================================================================================
</TABLE>
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(1) Pursuant to Rule 457(h) and Rule 457(c), the proposed maximum offering
price per share and the registration fee are based on the reported average
of the high and low prices for Bristol-Myers Squibb Company Common Stock
as reported on the New York Stock Exchange on February 26, 1998.
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PART I
INFORMATION REQUIRED IN A SECTION 10(a) PROSPECTUS
Item 1. PLAN INFORMATION
Item 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
PART II
INFORMATION REQUIRED IN THIS REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have heretofore been filed by
Bristol-Myers Squibb Company (the "Company") (File No. 001-01136) with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), are incorporated by reference
herein and shall be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996;
2. The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997, June 30, 1997, and
September 30, 1997;
3. The description of the Company's Common Stock contained
in a Registration Statement filed under the 1934 Act,
including any amendment or report filed for the purpose
of updating such description; and
4. The contents of the Company's Registration Statement
on Form S-8 (Registration No. 33-52691) filed with
the Commission on March 16, 1994.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this
Registration Statement and made a part hereof from their respective dates of
filing (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents"); provided, however, that the documents
enumerated above or subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act in each year during which the
offering made by this Registration Statement is in effect prior to the filing
with the Commission of the Company's Annual Report on Form 10-K covering such
year shall not be Incorporated Documents or be incorporated by reference in this
Registration Statement or be a part hereof from and after the filing of such
Annual Report on Form 10-K.
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such
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statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
See Item 3.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the Common Stock offered pursuant to this Registration
Statement has been passed upon for the Company by John L. McGoldrick, Senior
Vice President, Law and Strategic Planning, and General Counsel of the Company,
345 Park Avenue, New York, New York 10154. Mr. McGoldrick is an officer of the
Company and owns, and has options to purchase, shares of common stock of the
Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL")
provides that a corporation may indemnify directors and officers as well as
other employees and individuals against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation - a
"derivative action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal actions or proceedings, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) actually and reasonably incurred
in connection with the defense or settlement of such action, and the DGCL
requires court approval before there can be any indemnification where the person
seeking indemnification has been found liable to the corporation. The DGCL
provides that it is not exclusive of other indemnification that may be granted
by a corporation's by-laws, disinterested director vote, stockholder vote,
agreement or otherwise.
Under the terms of the Company's Bylaws and subject to the applicable
provisions of the laws of the State of Delaware, the Company has indemnified
each of its directors and officers, and any employee of the Company who, at the
Company's request, has served as a director or officer of another corporation in
which the Company owns capital or of which it is a creditor, against expenses
incurred or paid in connection with any claim made against such director or
officer or any actual or threatened action, suit or proceeding in which such
director or officer may be involved by reason of being or having been a director
or officer of the Company, or of serving or having served at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any
action taken or not taken by such director or officer in such capacity, and
against the amount or amounts paid by such director or officer in settlement of
any such claim, action, suit or proceeding or any judgment or order entered
therein.
Section 102(b)(7) of the DGCL permits a provision in the certificate of
incorporation of each corporation organized thereunder, such as the Company,
eliminating or limiting, with certain exceptions, the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director. The Restated Certificate of Incorporation of
the Company eliminates the liability of directors to the extent permitted by the
DGCL.
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The Company carries directors' and officers' liability insurance that
covers certain liabilities and expenses of the Company's directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
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<CAPTION>
Exhibit Number Description
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<S> <C>
4(a) - Restated Certificate of Incorporation of Bristol-Myers Squibb Company
(filed as Exhibit 4(a) to the Registrant's Registration Statement on Form
S-3, Registration No. 33-33682, dated March 7, 1990) as amended
through May 6, 1997.*
4(b) - Bylaws of the Registrant, as amended through November 5, 1996 (filed
as Exhibit 3(b) to the Registrant's Annual Report on Form 10-K, File
No. 001-01136, for the fiscal year ended December 31, 1996)* as amended
through January 1, 1998.
5 - Opinion of the Registrant's General Counsel as to the legality of
securities offered under the Bristol-Myers Squibb Company 1997 Stock
Incentive Plan, effective as of May 6, 1997 and the Bristol-Myers Squibb
Company 1983 Stock Option Plan, as amended and restated effective as of
September 10, 1996.
23(a) - Consent of Independent Accountants, Price Waterhouse LLP.
23(b) - Consent of Counsel (contained in the Opinion of the Registrant's
General Counsel, Exhibit 5 hereto).
99(a) - Bristol-Myers Squibb Company 1997 Stock Incentive Plan, effective as
of May 6, 1997 and amended through December 2, 1997.
99(b) - Bristol-Myers Squibb Company 1983 Stock Option Plan, as
amended and restated effective as of September 10, 1996
(filed as Exhibit 10c to the Registrant's Annual Report
on Form 10-K, File No. 001-01136, for the fiscal year
ended December 31, 1996).*
</TABLE>
- ------------------------------
* Incorporated by reference
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ITEM 9. UNDERTAKINGS.
(1) The undersigned Registrant hereby undertakes:
(a) to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
this Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in this Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in this Registration
Statement or any material change to such
information in this Registration Statement;
Provided, however, that paragraphs (1)(a)(i) and (1)(a)(ii) do
not apply if the registration statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by those
paragraphs are contained in periodic reports filed by the Registrant pursuant to
Section 13(a) or Section 15(d) of the 1934 Act that are incorporated by
reference in the registration statement:
(b) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(2) The undersigned Registrant hereby undertakes that, for the purpose
of determining any liability under the Securities Act of 1933, each filing of
the issuer's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this Registration Statement shall be
deemed to be a new Registration Statement relating to the securities offered
therein and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of
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expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
EXPERTS
The financial statements incorporated in the Prospectus constituting
part of this Registration Statement by reference to the Annual Report on Form
10-K of Bristol-Myers Squibb Company for the year ended December 31, 1996, have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, and the State of New York, on the 3rd day
of March, 1998.
BRISTOL-MYERS SQUIBB COMPANY
By: *
------------------------------------
(Charles A. Heimbold, Jr.,
Chairman of the Board,
Chief Executive Officer and Director)
* Signed on behalf of Charles A. Heimbold, Jr. by Charles G. Tharp pursuant
to the power of attorney executed by Charles A. Heimbold, Jr. included
herewith.
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POWER OF ATTORNEY
Each person whose signature appears below hereby severally constitutes
and appoints Charles G. Tharp and each of them acting singly, as his or her true
and lawful attorney-in-fact and agent, with full and several power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, in any and all capacities indicated below, the registration
statement on Form S-8 filed herewith and any and all pre-effective and
post-effective amendments and supplements to said registration statement, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary fully to all intents and purposes
as he or she might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his or her substitute, may lawfully
do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on March 3, 1998.
Signature Title
- --------- -----
/s/ Charles A. Heimbold, Jr.
- ------------------------------ Chairman of the Board,
(Charles A. Heimbold, Jr.) Chief Executive Officer and Director
(Principal Executive Officer)
- ------------------------------ Executive Vice President and
(Kenneth E. Weg) Director
/s/ Michael F. Mee
- ------------------------------ Senior Vice President and
(Michael F. Mee) Chief Financial Officer
/s/ Frederick S. Schiff
- ------------------------------ Corporate Staff Vice President,
(Frederick S. Schiff) Financial Operations and Controller
(Principal Accounting Officer)
/s/ Robert E. Allen
- ------------------------------ Director
(Robert E. Allen)
- ------------------------------ Director
(Vance D. Coffman)
/s/ Ellen V. Futter
- ------------------------------ Director
(Ellen V. Futter)
/s/ Louis V. Gerstner, Jr.
- ------------------------------ Director
(Louis V. Gerstner, Jr.)
/s/ Laurie H. Glimcher, M.D.
- ------------------------------ Director
(Laurie H. Glimcher, M.D.)
/s/ John D. Macomber
- ------------------------------ Director
(John D. Macomber)
/s/ James D. Robinson, III
- ------------------------------ Director
(James D. Robinson III)
/s/ Andrew C. Sigler
- ------------------------------ Director
(Andrew C. Sigler)
/s/ Louis W. Sullivan, M.D.
- ------------------------------ Director
(Louis W. Sullivan, M.D.)
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Bristol-Myers Squibb Company
-------------------------
Exhibit Index
Exhibit Sequential
Number Description Page Number
- ------- ----------- -----------
4(a) Restated Certificate of Incorporation of
Bristol-Myers Squibb Company (filed as
Exhibit 4(a) to the Registrant's Registration
Statement on Form S-3, Registration No.
33-33682, dated March 7, 1990), as
amended through May 6, 1997.*
4(b) Bylaws of the Registrant, as amended
through November 5, 1996 (filed as Exhibit
3(b) to the Registrant's Annual Report on
Form 10-K, File No. 001-01136, for the
fiscal year ended December 31, 1996)*
as amended through January 1, 1998.
5 Opinion of the Registrant's General
Counsel as to the legality of securities
offered under the Bristol-Myers Squibb
Company 1997 Incentive Stock Plan,
effective as of May 6, 1997 and the
Bristol-Myers Squibb 1983 Stock Option
Plan, as amended and restated effective
as of September 10, 1996.
23(a) Consent of Independent Accountants, Price
Waterhouse LLP.
23(b) Consent of Counsel (contained in the
Opinion of the Registrant's General
Counsel, Exhibit 5 hereto).
99(a) Bristol-Myers Squibb Company 1997
Incentive Stock Plan, effective as of May 6,
1997 and amended through December 2,
1997.
99(b) Bristol-Myers Squibb Company 1983 Stock
Option Plan, as amended and restated effective
as of September 10, 1996 (filed as Exhibit 10c
to the Registrant's Annual Report on Form 10-K,
File No. 001-01136, for the fiscal year ended
December 31, 1996).*
- -----------------------------------
* Incorporated by reference
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CERTIFICATE OF AMENDMENT
OF
BYLAWS
Bristol-Myers Squibb Company, a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
That at a meeting of the Board of Directors of December 17, 1997 a
resolution was duly adopted setting forth an amendment to the Bylaws of the
corporation. The resolution setting forth the amendment is as follows:
RESOLVED, that effective January 1, 1998, the first
sentence of Section (a) of Bylaw No. 15 of the Company
be, and hereby is, amended to read in full as follows:
'The Board of Directors shall
consist of eleven directors.'
IN WITNESS WHEREOF, said corporation has caused this certificate to
be signed by Alice C. Brennan, its Vice President and Secretary, this
2nd day of March, 1998.
By: /s/ Alice C. Brennan
--------------------------
Alice C. Brennan
Vice President & Secretary
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EXHIBIT 5
March 3, 1998
Bristol-Myers Squibb Company
345 Park Avenue
New York, New York 10154
Re: Bristol-Myers Squibb Company - Registration Statement on
Form S-8 relating to the Bristol-Myers Squibb Company
1997 Stock Incentive Plan, effective as of May 6,
1997 and the Bristol-Myers Squibb Company 1983 Stock
Option Plan, as amended and restated effective as of
September 10, 1996 (the "Registration Statement").
---------------------------------------------------------
Gentlemen:
In connection with the proposed sale of up to 20,000,000 shares of the
common stock par value $.10 (the "Shares") of Bristol-Myers Squibb Company (the
"Company") pursuant to the Bristol-Myers Squibb Company 1997 Stock Incentive
Plan and the Bristol-Myers Squibb Company 1983 Stock Option Plan (the "Plans")
with respect to which a Registration Statement on Form S-8 has been prepared for
filing with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, I have examined or supervised the examination of such corporate
records, other documents and questions of law as I considered necessary for the
purpose of this opinion.
I am of the opinion that when:
(a) the applicable provisions of the Securities Act of 1933 and of State
securities "blue sky" laws shall have been complied with;
(b) the Company's Board of Directors shall have duly authorized the issue
and sale of the Shares; and
(c) the Shares shall have been duly issued and paid for (in an amount not
less than $.10 par value thereof);
the Shares will be legally issued, fully paid and nonassessable.
I hereby consent to the use of this opinion as an Exhibit to the
Registration Statement on Form S-8 and to the reference to me under the caption
"Legal Opinion" in the Registration Statement and related Prospectus, and any
amendments thereto, filed or distributed in connection with the Plans.
Very truly yours,
/s/ John L. McGoldrick
------------------------------
John L. McGoldrick
General Counsel
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EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-8 of our report dated
January 22, 1997 appearing on page 53 of the Bristol-Myers Squibb Company's
Annual Report on Form 10-K for the year ended December 31, 1996. We also consent
to the reference to us under the heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
--------------------------------
PRICE WATERHOUSE LLP
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EXHIBIT B
BRISTOL-MYERS SQUIBB COMPANY
1997 STOCK INCENTIVE PLAN
1. PURPOSE: The purpose of the 1997 Stock Incentive Plan is to secure for
the Company and its stockholders the benefits of the incentive inherent in
common stock ownership by the officers and key employees of the Company and its
Subsidiaries and Affiliates who will be largely responsible for the Company's
future growth and continued financial success and by providing long-term
incentives in addition to current compensation to certain key executives of the
Company and its Subsidiaries and Affiliates who contribute significantly to the
long-term performance and growth of the Company and such Subsidiaries and
Affiliates. It is intended that the former purpose will be effected through the
granting of stock options, stock appreciation rights, dividend equivalents
and/or restricted stock under the Plan and that the latter purpose will be
effected through an award conditionally granting performance units or
performance shares under the Plan, either independently or in conjunction with
and related to a nonqualified stock option grant under the Plan.
2. DEFINITIONS: For purposes of this Plan:
(a) 'Affiliate' shall mean any entity in which the Company has an
ownership interest of at least 20%.
(b) 'Code' shall mean the Internal Revenue Code of 1986, as amended.
(c) 'Common Stock' shall mean the Company's common stock (par value
$.10 per share).
(d) 'Company' shall mean the Issuer (the Bristol-Myers Squibb
Company), its Subsidiaries and Affiliates.
(e) 'Disability' or 'Disabled' shall mean qualifying for and receiving
payments under a disability pay plan of the Company or any Subsidiary or
Affiliate.
(f) 'Exchange Act' shall mean the Securities Exchange Act of 1934, as
amended.
(g) 'Fair Market Value' shall mean the average of the high and low
sale prices of a share of Common Stock on the New York Stock Exchange, Inc.
composite tape on the date of measurement or on any date as determined by
the Committee and if there were no trades on such date, on the day on which
a trade occurred next preceding such date.
(h) 'Issuer' shall mean the Bristol-Myers Squibb Company.
(i) 'Prior Plan' shall mean the Bristol-Myers Squibb Company 1983
Stock Option Plan as amended and restated effective as of September 10,
1996.
(j) 'Retirement' shall mean termination of the employment of an
employee with the Company or a Subsidiary or Affiliate on or after (i) the
employee's 65th birthday or (ii) the employee's 55th birthday if the
employee has completed 10 years of service with the Company, its
Subsidiaries and/or its Affiliates. For purposes of this Section 2(j) and
all other purposes of this Plan, Retirement shall also mean termination of
employment of an employee with the Company or a Subsidiary or Affiliate for
any reason (other than the employee's death, disability, resignation,
willful misconduct or activity deemed detrimental to the interests of the
Company) where, on termination, the employee's age plus years of service
(rounded up to the next higher whole number) equals at least 70 and the
employee has completed 10 years of service with the Company, its
Subsidiaries and/or its Affiliates.
Furthermore, an employee who makes an election to retire under Article
19 of the Bristol-Myers Squibb Company Retirement Income Plan (the
'Retirement Income Plan') shall have any additional years of age and
service which are credited under Article 19 of the Retirement Income Plan
taken into account when determining such employee's age and service under
this Section 2(j). Such election shall be deemed a Retirement for purposes
of this Section 2(j) and all other purposes of this Plan.
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(k) 'Subsidiary' shall mean any corporation which at the time
qualifies as a subsidiary of the Company under the definition of
'subsidiary corporation' in Section 424 of the Code.
3. AMOUNT OF STOCK: The amount of stock which may be made subject to grants
of options or awards of performance units under the Plan in calendar year 1997
shall not exceed an amount equal to the amount of shares available for, and not
made subject to, grants of options or awards under the Prior Plan as of February
28, 1997. With respect to each succeeding year, the amount of stock which may be
made subject to grants of options or awards of performance units under the Plan
shall not exceed an amount equal to (i) 0.9% of the outstanding shares of the
Company's Common Stock on January 1 of such year plus, subject to this Section
3, (ii) in any year the number of shares equal to the amount of shares that were
available for grants and awards in the prior year but were not made subject to a
grant or award in such prior year and (iii) the number of shares that were
subject to options or awards granted hereunder or under the Prior Plan, which
options or awards terminated or expired in the prior year without being
exercised. No individual may be granted options or awards under Sections 6, 7 or
8 in the aggregate, in respect of more than 1,500,000 shares of the Company's
Common Stock in a calendar year; upon a change in stock the maximum number of
shares shall be adjusted in number and kind pursuant to Section 10. Aggregate
shares issued under performance share awards made pursuant to Section 7 and
restricted stock awards made pursuant to Section 8 may not exceed 10,000,000
shares over the life of the Plan. Common Stock issued hereunder may be
authorized and reissued shares or issued shares acquired by the Company or its
Subsidiaries on the market or otherwise.
4. ADMINISTRATION: The Plan shall be administered under the supervision of
the Board of Directors of the Company which shall exercise its powers, to the
extent herein provided, through the agency of a Compensation and Management
Development Committee (the 'Committee') which shall be appointed by the Board of
Directors of the Company. The Committee shall consist of not less than three (3)
members of the Board who meet the definition of 'outside director' under the
provisions of Section 162(m) of the Code and the definition of 'non-employee
directors' under the provisions of the Exchange Act or rules or regulations
promulgated thereunder. No member of the Committee shall have been within one
year prior to appointment to, or while serving on, the Committee granted or
awarded equity securities of the Company pursuant to this or any other plan of
the Company except to the extent that participation in any such plan or receipt
of any such grant or award would not adversely affect the Committee member's
status as a 'nonemployee director' or as an 'outside director'.
The Committee, from time to time, may adopt rules and regulations
('Regulations') for carrying out the provisions and purposes of the Plan and
make such other determinations, not inconsistent with the terms of the Plan, as
the Committee shall deem appropriate. The interpretation and construction of any
provision of the Plan by the Committee shall, unless otherwise determined by the
Board of Directors, be final and conclusive.
The Committee shall maintain a written record of its proceedings. A
majority of the Committee shall constitute a quorum, and the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
unanimously approved in writing, shall be the acts of the Committee.
5. ELIGIBILITY: Options and awards may be granted only to present or future
officers and key employees of the Company and its Subsidiaries and Affiliates,
including Subsidiaries and Affiliates which become such after the adoption of
the Plan. Any officer or key employee of the Company or of any such Subsidiary
or Affiliate shall be eligible to receive one or more options or awards under
the Plan. Any director who is not an officer or employee of the Company or one
of its Subsidiaries or Affiliates and any member of the Committee, during the
time of the member's service as such or thereafter, shall be ineligible to
receive an option or award under the Plan. The adoption of this Plan shall not
be deemed to give any officer or employee any right to an award or to be granted
an option to purchase Common Stock of the Company, except to the extent and upon
such terms and conditions as may be determined by the Committee.
6. STOCK OPTIONS: Stock options under the Plan shall consist of incentive
stock options under Section 422 of the Code or nonqualified stock options
(options not intended to qualify as incentive stock options), as the Committee
shall determine. In addition, the Committee may grant stock appreciation rights
in conjunction with an option, as set forth in Section 6(b)(11), or may grant
awards in conjunction with an option, as set forth in Section 6(b)(10) (an
'Associated Option').
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Each option shall be subject to the following terms and conditions:
(a) Grant of Options. The Committee shall (1) select the officers and
key employees of the Company and its Subsidiaries and Affiliates to whom
options may from time to time be granted, (2) determine whether incentive
stock options or nonqualified stock options are to be granted, (3)
determine the number of shares to be covered by each option so granted, (4)
determine the terms and conditions (not inconsistent with the Plan) of any
option granted hereunder (including but not limited to restrictions upon
the options, conditions of their exercise, or on the shares of Common Stock
issuable upon exercise thereof), (5) determine whether nonqualified stock
options or incentive stock options granted under the Plan shall include
stock appreciation rights and, if so, shall determine the terms and
conditions thereof in accordance with Section 6(b)(11) hereof, (6)
determine whether any nonqualified stock options granted under the Plan
shall be Associated Options, and (7) prescribe the form of the instruments
necessary or advisable in the administration of options.
(b) Terms and Conditions of Option. Any option granted under the Plan
shall be evidenced by a Stock Option Agreement executed by the Company and
the optionee, in such form as the Committee shall approve, which agreement
shall be subject to the following terms and conditions and shall contain
such additional terms and conditions not inconsistent with the Plan, and in
the case of an incentive stock option not inconsistent with the provisions
of the Code applicable to incentive stock options, as the Committee shall
prescribe:
(1) Number of Shares Subject to an Option. The Stock Option
Agreement shall specify the number of shares of Common Stock subject to
the Agreement. If the option is an Associated Option, the number of
shares of Common Stock subject to such Associated Option shall initially
be equal to the number of performance units or performance shares
subject to the award, but one share of Common Stock shall be canceled
for each performance unit or performance share paid out under the award.
(2) Option Price. The purchase price per share of Common Stock
purchasable under an option will be determined by the Committee but will
be not less than the Fair Market Value of a share of Common Stock on the
date of the grant of such option.
(3) Option Period. The period of each option shall be fixed by the
Committee, but no option shall be exercisable after the expiration of
ten years from the date the option is granted.
(4) Consideration. Each optionee, as consideration for the grant of
an option, shall remain in the continuous employ of the Company or of
one of its Subsidiaries or Affiliates for at least one year from the
date of the granting of such option, and no option shall be exercisable
until after the completion of such one year period of employment by the
optionee.
(5) Exercise of Option. An option may be exercised in whole or in
part from time to time during the option period (or, if determined by
the Committee, in specified installments during the option period) by
giving written notice of exercise to the Company specifying the number
of shares to be purchased, such notice to be accompanied by payment in
full of the purchase price and Withholding Taxes (as defined in Section
11 hereof), unless an election to defer receipt of shares is made under
Section 12, due either by certified or bank check, or in shares of
Common Stock of the Company owned by the optionee having a Fair Market
Value at the date of exercise equal to such purchase price, or in a
combination of the foregoing; provided, however, that payment in shares
of Common Stock of the Company will not be permitted unless at least 100
shares of Common Stock are required and delivered for such purpose. No
shares shall be issued until full payment therefor has been made. An
optionee shall have the rights of a stockholder only with respect to
shares of stock for which certificates have been issued to the optionee.
(6) Nontransferability of Options. No option or stock appreciation
right granted under the Plan shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution, and
such option or stock appreciation right shall be exercisable, during the
optionee's lifetime, only by the optionee. Notwithstanding the
foregoing, the Committee may set forth in a Stock Option Agreement at
the time of grant or thereafter, that the options
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(other than Incentive Stock Options) may be transferred to members of
the optionee's immediate family, to trusts solely for the benefit of
such immediate family members and to partnerships in which such family
members and/or trusts are the only partners. For this purpose, immediate
family means the optionee's spouse, parents, children, stepchildren,
grandchildren and legal dependants. Any transfer of options made under
this provision will not be effective until notice of such transfer is
delivered to the Company.
(7) Retirement and Termination of Employment Other than by Death or
Disability. If an optionee shall cease to be employed by the Company or
any of its Subsidiaries or Affiliates for any reason (other than
termination of employment by reason of death or Disability) after the
optionee shall have been continuously so employed for one year after the
granting of the option, the option shall be exercisable only to the
extent that the optionee was otherwise entitled to exercise it at the
time of such cessation of employment with the Company, Subsidiary or
Affiliate, but in no event after the expiration of the option period set
forth therein except that in the case of cessation of employment other
than by reason of Retirement or death, the option shall in no event be
exercisable after the date three months next succeeding such cessation
of employment. The Plan does not confer upon any optionee any right with
respect to continuation of employment by the Company or any of its
Subsidiaries or Affiliates.
(8) Disability of Optionee. An optionee who ceases to be employed
by reason of Disability shall be treated as though the optionee remained
in the employ of the Company or a Subsidiary or Affiliate until the
earlier of (i) cessation of payments under a disability pay plan of the
Company, Subsidiary or Affiliate, (ii) the optionee's death, or (iii)
the optionee's 65th birthday.
(9) Death of Optionee. In the event of the death of the optionee
while in the employ of the Company or of any of its Subsidiaries or
Affiliates or within whichever period after Retirement or cessation of
employment of the optionee specified in subsection (7) or (8) is
applicable, and provided the optionee shall have been continuously so
employed for one year after the granting of the option, the option shall
be exercisable by the executors, administrators, legatees or
distributees of the optionee's estate, as the case may be, at any time
following death but in no event after the expiration of the option
period set forth therein and only to the extent that the optionee would
otherwise have been entitled to exercise it if the optionee were then
living, except that in the case of the death of an optionee after
Retirement or other cessation of employment, the option shall in no
event be exercisable after the later of (i) the date twelve months next
succeeding such death or (ii) the last day of the period after
Retirement or other cessation of employment of the optionee specified in
Section 6(b)(7). In the event any option is exercised by the executors,
administrators, legatees or distributees of the estate of a deceased
optionee, the Company shall be under no obligation to issue stock
thereunder unless and until the Company is satisfied that the person or
persons exercising the option are the duly appointed legal
representatives of the deceased optionee's estate or the proper legatees
or distributees thereof.
(10) Long-Term Performance Awards. The Committee may from time to
time grant nonqualified stock options under the Plan in conjunction with
and related to an award of performance units or performance shares made
under a Long-Term Performance Award as set forth in Section 7(b)(11). In
such event, notwithstanding any other provision hereof, (i) the number
of shares to which the Associated Option applies shall initially be
equal to the number of performance units or performance shares granted
by the award, but such number of shares shall be reduced on a
one-share-for-one unit or share basis to the extent that the Committee
determines pursuant to the terms of the award, to pay to the optionee or
the optionee's beneficiary the performance units or performance shares
granted pursuant to such award; and (ii) such Associated Option shall be
cancelable in the discretion of the Committee, without the consent of
the optionee, under the conditions and to the extent specified in the
award.
(11) Stock Appreciation Rights. In the case of any option granted
under the Plan, either at the time of grant or by amendment of such
option at any time after such grant there may be
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included a stock appreciation right which shall be subject to such terms
and conditions, not inconsistent with the Plan, as the Committee shall
impose, including the following:
(A) A stock appreciation right shall be exercisable to the
extent, and only to the extent, that the option in which it is
included is at the time exercisable, and may be exercised within such
period only at such time or times as may be determined by the
Committee;
(B) A stock appreciation right shall entitle the optionee (or
any person entitled to act under the provisions of subsection (9)
hereof) to surrender unexercised the option in which the stock
appreciation right is included (or any portion of such option) to the
Company and to receive from the Company in exchange therefor that
number of shares having an aggregate value equal to (or, in the
discretion of the Committee, less than) the excess of the value of
one share (provided such value does not exceed such multiple of the
option price per share as may be specified by the Committee) over the
option price per share specified in such option times the number of
shares called for by the option, or portion thereof, which is so
surrendered. The Committee shall be entitled to cause the Company to
settle its obligation, arising out of the exercise of a stock
appreciation right, by the payment of cash equal to the aggregate
value of the shares the Company would otherwise be obligated to
deliver or partly by the payment of cash and partly by the delivery
of shares. Any such election shall be made within 30 business days
after the receipt by the Committee of written notice of the exercise
of the stock appreciation right. The value of a share for this
purpose shall be the Fair Market Value thereof on the last business
day preceding the date of the election to exercise the stock
appreciation right;
(C) No fractional shares shall be delivered under this
subsection (11) but in lieu thereof a cash adjustment shall be made;
(D) If a stock appreciation right included in an option is
exercised, such option shall be deemed to have been exercised to the
extent of the number of shares called for by the option or portion
thereof which is surrendered on exercise of the stock appreciation
right and no new option may be granted covering such shares under
this Plan; and
(E) If an option which includes a stock appreciation right is
exercised, such stock appreciation right shall be deemed to have been
canceled to the extent of the number of shares called for by the
option or portion thereof is exercised and no new stock appreciation
rights may be granted covering such shares under this Plan.
(12) Incentive Stock Options. In the case of any incentive stock
option granted under the Plan, the aggregate Fair Market Value of the
shares of Common Stock of the Company (determined at the time of grant
of each option) with respect to which incentive stock options granted
under the Plan and any other plan of the Company or its parent or a
Subsidiary which are exercisable for the first time by an employee
during any calendar year shall not exceed $100,000 or such other amount
as may be required by the Code. In any year, the maximum number of
shares with respect to which incentive stock options may be granted
shall not exceed 4,000,000 shares.
(13) Rights of Transferee. Notwithstanding anything to the contrary
herein, if an option has been transferred in accordance with Section
6(b)(6), the option shall be exercisable solely by the transferee. The
option shall remain subject to the provisions of the Plan, including
that it will be exercisable only to the extent that the optionee or
optionee's estate would have been entitled to exercise it if the
optionee had not transferred the option. In the event of the death of
the optionee prior to the expiration of the right to exercise the
transferred option, the period during which the option shall be
exercisable will terminate on the date one year following the date of
the optionee's death. In the event of the death of the transferee prior
to the expiration of the right to exercise the option, the period during
which the option shall be exercisable by the executors, administrators,
legatees and distributees of the transferee's estate, as the case may be
for a period of one year following the date of the transferee's death
but in
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no event be exercisable after the expiration of the option period set
forth in the Stock Option Agreement. The option shall be subject to such
other rules as the Committee shall determine.
7. LONG-TERM PERFORMANCE AWARDS: Awards under the Plan shall consist of the
conditional grant to the participants of a specified number of performance units
or performance shares. The conditional grant of a performance unit to a
participant will entitle the participant to receive a specified dollar value,
variable under conditions specified in the award, if the performance objectives
specified in the award are achieved and the other terms and conditions thereof
are satisfied. The conditional grant of a performance share to a participant
will entitle the participant to receive a specified number of shares of Common
Stock of the Company, or the equivalent cash value, if the objective(s)
specified in the award are achieved and the other terms and conditions thereof
are satisfied.
Each award will be subject to the following terms and conditions:
(a) Grant of Awards. The Committee shall (1) select the officers and
key executives of the Company and its Subsidiaries and Affiliates to whom
awards may from time to time be granted, (2) determine the number of
performance units or performance shares covered by each award, (3)
determine the terms and conditions of each performance unit or performance
share awarded and the award period and performance objectives with respect
to each award, (4) determine the periods during which a participant may
request the Committee to approve deferred payment of a percentage (not less
than 25%) of an award (the 'Deferred Portion') and the interest or rate of
return thereon or the basis on which such interest or rate of return
thereon is to be determined, (5) determine whether payment with respect to
the portion of an award which has not been deferred (the 'Current Portion')
and the payment with respect to the Deferred Portion of an award shall be
made entirely in cash, entirely in Common Stock or partially in cash and
partially in Common Stock, (6) determine whether the award is to be made
independently of or in conjunction with a nonqualified stock option granted
under the Plan, and (7) prescribe the form of the instruments necessary or
advisable in the administration of the awards.
(b) Terms and Conditions of Award. Any award conditionally granting
performance units or performance shares to a participant shall be evidenced
by a Performance Unit Agreement or Performance Share Agreement, as
applicable, executed by the Company and the participant, in such form as
the Committee shall approve, which Agreement shall contain in substance the
following terms and conditions applicable to the award and such additional
terms and conditions as the Committee shall prescribe:
(1) Number and Value of Performance Units. The Performance Unit
Agreement shall specify the number of performance units conditionally
granted to the participant. If the award has been made in conjunction
with the grant of an Associated Option, the number of performance units
granted shall initially be equal to the number of shares which the
participant is granted the right to purchase pursuant to the Associated
Option, but one performance unit shall be canceled for each share of the
Company's Common Stock purchased upon exercise of the Associated Option
or for each stock appreciation right included in such option that has
been exercised. The Performance Unit Agreement shall specify the
threshold, target and maximum dollar values of each performance unit and
corresponding performance objectives as provided under Section 6(b)(5).
No payout under a performance unit award to an individual Participant
may exceed 0.15% of the pre-tax earnings of the Company for the fiscal
year which coincides with the final year of the performance unit period.
(2) Number and Value of Performance Shares. The Performance Share
Agreement shall specify the number of performance shares conditionally
granted to the participant. If the award has been made in conjunction
with the grant of an Associated Option, the number of performance shares
granted shall initially be equal to the number of shares which the
participant is granted the right to purchase pursuant to the Associated
Option, but one performance share shall be canceled for each share of
the Company's Common Stock purchased upon exercise of the Associated
Option or for each stock appreciation right included in such option that
has been exercised. The Performance Share Agreement shall specify that
each Performance Share will have a value equal to one (1) share of
Common Stock of the Company.
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(3) Award Periods. For each award, the Committee shall designate an
award period with a duration to be determined by the Committee in its
discretion but in no event less than three calendar years within which
specified performance objectives are to be attained. There may be
several award periods in existence at any one time and the duration of
performance objectives may differ from each other.
(4) Consideration. Each participant, as consideration for the award
of performance units or performance shares, shall remain in the
continuous employ of the Company or of one of its Subsidiaries or
Affiliates for at least one year after the date of the making of such
award, and no award shall be payable until after the completion of such
one year of employment by the participant.
(5) Performance Objectives. The Committee shall establish
performance objectives with respect to the Company for each award period
on the basis of such criteria and to accomplish such objectives as the
Committee may from time to time determine. Performance criteria for
awards under the Plan may include one or more of the following measures
of the operating performance:
<TABLE>
<S> <C> <C> <C>
a. Earnings d. Financial return ratios
b. Revenue e. Total Shareholder Return
c. Operating or net cash flows f. Market share
</TABLE>
The Committee shall establish the specific targets for the selected
criteria. These targets may be set at a specific level or may be
expressed as relative to the comparable measure at comparison
companies or a defined index. These targets may be based upon the
total Company or upon a defined business unit which the executive
has responsibility for or influence over.
(6) Determination and Payment of Performance Units or Performance
Shares Earned. As soon as practicable after the end of an award period,
the Committee shall determine the extent to which awards have been
earned on the basis of the Company's actual performance in relation to
the established performance objectives as set forth in the Performance
Unit Agreement or Performance Share Agreement and certify these results
in writing. The Performance Unit Agreement or Performance Share
Agreement shall specify that as soon as practicable after the end of
each award period, the Committee shall determine whether the conditions
of Sections 7(b)(4) and 7(b)(5) hereof have been met and, if so, shall
ascertain the amount payable or shares which should be distributed to
the participant in respect of the performance units or performance
shares. As promptly as practicable after it has determined that an
amount is payable or should be distributed in respect of an award, the
Committee shall cause the Current Portion of such award to be paid or
distributed to the participant or the participant's beneficiaries, as
the case may be, in the Committee's discretion, either entirely in cash,
entirely in Common Stock or partially in cash and partially in Common
Stock. The Deferred Portion of an award shall be contingently credited
and payable to the participant over a deferred period and shall be
credited with interest, rate of return, or other valuation as determined
by the Committee. The Committee, in its discretion, shall determine the
conditions upon, and method of, payment of such Deferred Portions and
whether such payment will be made entirely in cash, entirely in Common
Stock or partially in cash and partially in Common Stock.
In making the payment of an award in Common Stock hereunder, the
cash equivalent of such Common Stock shall be determined by the Fair
Market Value of the Common Stock on the day the Committee designates the
performance units shall be payable.
(7) Nontransferability of Awards and Designation of Beneficiaries.
No award under this Section of the Plan shall be transferable by the
participant other than by will or by the laws of descent and
distribution, except that a participant may designate a beneficiary
pursuant to the provisions hereof.
If any participant or the participant's beneficiary shall attempt
to assign the participant's rights under the Plan in violation of the
provisions thereof, the Company's obligation to make
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any further payments to such participant or the participant's
beneficiaries shall forthwith terminate.
A participant may name one or more beneficiaries to receive any
payment of an award to which the participant may be entitled under the
Plan in the event of the participant's death, on a form to be provided
by the Committee. A participant may change the participant's beneficiary
designation from time to time in the same manner.
If no designated beneficiary is living on the date on which any
payment becomes payable to a participant's beneficiary, or if no
beneficiary has been specified by the participant, such payment will be
payable to the person or persons in the first of the following classes
of successive preference:
(i) Widow or widower, if then living,
(ii) Surviving children, equally,
(iii) Surviving parents, equally,
(iv) Surviving brothers and sisters, equally,
(v) Executors or administrators
and the term 'beneficiary' as used in the Plan shall include such
person or persons.
(8) Retirement and Termination of Employment Other Than by Death or
Disability. In the event of the Retirement prior to the end of an award
period of a participant who has satisfied the one year employment
requirement of Section 7(b)(4) with respect to an award prior to
Retirement, the participant, or his estate, shall be entitled to a
payment of such award at the end of the award period, pursuant to the
terms of the Plan and the participant's Performance Unit Agreement or
Performance Share Agreement, provided, however, that the participant
shall be deemed to have earned that proportion (to the nearest whole
unit or share) of the value of the performance units or performance
shares granted to the participant under such award as the number of
months of the award period which have elapsed since the first day of the
calendar year in which the award was made to the end of the month in
which the participant's Retirement occurs, bears to the total number of
months in the award period, subject to the attainment of performance
objectives associated with the award as certified by the Committee. The
participant's right to receive any remaining performance units or
performance shares shall be canceled and forfeited.
Subject to Section 7(b)(6) hereof, the Performance Unit Agreement
or Performance Share Agreement shall specify that the right to receive
the performance units or performance shares granted to such participant
shall be conditional and shall be canceled, forfeited and surrendered if
the participant's continuous employment with the Company and its
Subsidiaries and Affiliates shall terminate for any reason, other than
the participant's death, Disability or Retirement prior to the end of
the award period.
(9) Disability of Participant. For the purposes of any award a
participant who becomes Disabled shall be deemed to have suspended
active employment by reason of Disability commencing on the date the
participant becomes entitled to receive payments under a disability pay
plan of the Company or any Subsidiary or Affiliate and continuing until
the date the participant is no longer entitled to receive such payments.
In the event a participant becomes Disabled during an award period but
only if the participant has satisfied the one year employment
requirement of Section 7(b)(4) with respect to an award prior to
becoming Disabled, upon the determination by the Committee of the extent
to which an award has been earned pursuant to Section 7(b)(6) the
participant shall be deemed to have earned that proportion (to the
nearest whole unit) of the value of the performance units granted to the
participants under such award as the number of months of the award
period in which the participant was not Disabled bears to the total
number of months in the award period subject to the attainment of the
performance objectives associated with the award as certified by the
Committee. The participant's right to receive any remaining performance
units shall be canceled and forfeited.
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(10) Death of Participant. In the event of the death prior to the
end of an award period of a participant who has satisfied the one year
employment requirement with respect to an award prior to the date of
death, the participant's beneficiaries or estate, as the case may be,
shall be entitled to a payment of such award upon the end of the award
period, pursuant to the terms of the Plan and the participant's
Performance Unit Agreement or Performance Share Agreement, provided,
however, that the participant shall be deemed to have earned that
proportion (to the nearest whole unit or share) of the value of the
performance units or performance shares granted to the participant under
such award as the number of months of the award period which have
elapsed since the first day of the calendar year in which the award was
made to the end of the month in which the participant's death occurs,
bears to the total number of months in the award period. The
participant's right to receive any remaining performance units or
performance shares shall be canceled and forfeited.
The Committee may, in its discretion, waive, in whole or in part,
such cancellation and forfeiture of any performance units or performance
shares.
(11) Grant of Associated Option. If the Committee determines that
the conditional grant of performance units or performance shares under
the Plan is to be made to a participant in conjunction with the grant of
a nonqualified stock option under the Plan, the Committee shall grant
the participant an Associated Option under the Plan subject to the terms
and conditions of this subsection (11). In such event, such award under
the Plan shall be contingent upon the participant's being granted such
an Associated Option pursuant to which: (i) the number of shares the
optionee may purchase shall initially be equal to the number of
performance units or performance shares conditionally granted by the
award, (ii) such number of shares shall be reduced on a
one-share-for-one-unit or share basis to the extent that the Committee
determines, pursuant to Section 7(b)(6) hereof, to pay to the
participant or the participant's beneficiaries the performance units or
performance shares conditionally granted pursuant to the award, and
(iii) the Associated Option shall be cancelable in the discretion of the
Committee, without the consent of the participant, under the conditions
and to the extent specified herein and in Section 7(b)(6) hereof.
If no amount is payable in respect of the conditionally granted
performance units or performance shares, the award and such performance
units or performance shares shall be deemed to have been canceled,
forfeited and surrendered, and the Associated Option, if any, shall
continue in effect in accordance with its terms. If any amount is
payable in respect of the performance units or performance shares and
such units or shares were granted in conjunction with an Associated
Option, the Committee shall, within 30 days after the determination of
the Committee referred to in the first sentence of Section 7(b)(6),
determine, in its sole discretion, either:
(a) to cancel in full the Associated Option, in which event the
value of the performance units or performance shares payable pursuant
to Sections 7(b)(5) and (6) shall be paid or the performance shares
shall be distributed;
(b) to cancel in full the performance units or performance
shares, in which event no amount shall be paid to the participant in
respect thereof and no shares shall be distributed but the Associated
Option shall continue in effect in accordance with its terms; or
(c) to cancel some, but not all, of the performance units or
performance shares, in which event the value of the performance units
payable pursuant to Sections 7(b)(5) and (6) which have not been
canceled shall be paid and/or the performance shares shall be
distributed and the Associated Option shall be canceled with respect
to that number of shares equal to the number of conditionally granted
performance units or performance shares that remain payable.
Any action taken by the Committee pursuant to the preceding
sentence shall be uniform with respect to all awards having the same
award period. If the Committee takes no such
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action, it shall be deemed to have determined to cancel in full the
award in accordance with clause (b) above.
8. RESTRICTED STOCK: Restricted stock awards under the Plan shall consist
of grants of shares of Common Stock of the Issuer subject to the terms and
conditions hereinafter provided.
(a) Grant of Awards: The Committee shall (i) select the officers and key
employees to whom Restricted Stock may from time to time be granted, (ii)
determine the number of shares to be covered by each award granted, (iii)
determine the terms and conditions (not inconsistent with the Plan) of any award
granted hereunder, and (iv) prescribe the form of the agreement, legend or other
instrument necessary or advisable in the administration of awards under the
Plan.
(b) Terms and Conditions of Awards: Any restricted stock award granted
under the Plan shall be evidenced by a Restricted Stock Agreement executed by
the Issuer and the recipient, in such form as the Committee shall approve, which
agreement shall be subject to the following terms and conditions and shall
contain such additional terms and conditions not inconsistent with the Plan as
the Committee shall prescribe:
(1) Number of Shares Subject to an Award: The Restricted Stock
Agreement shall specify the number of shares of Common Stock subject to the
Award.
(2) Restriction Period: The period of restriction applicable to each
Award shall be established by the Committee but may not be less than one
year. The Restriction Period applicable to each Award shall commence on the
Award Date.
(3) Consideration: Each recipient, as consideration for the grant of
an award, shall remain in the continuous employ of the Company for at least
one year from the date of the granting of such award, and any shares
covered by such an award shall lapse if the recipient does not remain in
the continuous employ of the Company for at least one year from the date of
the granting of the award.
(4) Restriction Criteria: The Committee shall establish the criteria
upon which the restriction period shall be based. Restrictions may be based
upon either the continued employment of the recipient or upon the
attainment by the Company of one or more of the following measures of the
operating performance:
<TABLE>
<S> <C> <C> <C>
a. Earnings d. Financial return ratios
b. Revenue e. Total Shareholder Return
c. Operating or net cash flows f. Market share
</TABLE>
The Committee shall establish the specific targets for the selected
criteria. These targets may be set at a specific level or may be expressed as
relative to the comparable measure at comparison companies or a defined index.
Performance objectives may be established in combination with restrictions based
upon the continued employment of the recipient. These targets may be based upon
the total Company or upon a defined business unit which the executive has
responsibility for or influence over.
In cases where objective performance criteria are established, the
Committee shall determine the extent to which the criteria have been achieved
and the corresponding level to which restrictions will be removed from the Award
or the extent to which a participant's right to receive an Award should be
lapsed in cases where the performance criteria have not been met and shall
certify these determinations in writing. The Committee may provide for the
determination of the attainment of such restrictions in installments where
deemed appropriate.
(c) Terms and Conditions of Restrictions and Forfeitures: The shares of
Common Stock awarded pursuant to the Plan shall be subject to the following
restrictions and conditions:
(1) During the Restriction Period, the participant will not be
permitted to sell, transfer, pledge or assign Restricted Stock awarded
under this Plan.
(2) Except as provided in Section 8(c)(i), or as the Committee may
otherwise determine, the participant shall have all of the rights of a
stockholder of the Issuer, including the right to vote the shares and
receive dividends and other distributions provided that distributions in
the form of stock shall be subject to the same restrictions as the
underlying Restricted Stock.
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(3) In the event of a participant's retirement, death or disability
prior to the end of the Restriction Period for a participant who has
satisfied the one year employment requirement of Section 7(c)(iii) with
respect to an award prior to Retirement, death or Disability, the
participant, or his/her estate, shall be entitled to receive that
proportion (to the nearest whole share) of the number of shares subject to
the Award granted as the number of months of the Restriction Period which
have elapsed since the Award date to the date at which the participant's
retirement, death or disability occurs, bears to the total number of months
in the Restriction Period. The participant's right to receive any remaining
shares shall be canceled and forfeited and the shares will be deemed to be
reacquired by the Issuer.
(4) In the event of a participant's retirement, death, disability or
in cases of special circumstances as determined by the Committee, the
Committee may, in its sole discretion when it finds that such an action
would be in the best interests of the Company, accelerate or waive in whole
or in part any or all remaining time based restrictions with respect to all
or part of such participant's Restricted Stock.
(5) Upon termination of employment for any reason during the
restriction period, subject to the provisions of paragraph (iii) above or
in the event that the participant fails promptly to pay or make
satisfactory arrangements as to the withholding taxes as provided in the
following paragraph, all shares still subject to restriction shall be
forfeited by the participant and will be deemed to be reacquired by the
Company.
(6) A participant may, at any time prior to the expiration of the
Restriction Period, waive all right to receive all or some of the shares of
a Restricted Stock Award by delivering to the Company a written notice of
such waiver.
(7) Notwithstanding the other provisions of this Section 7, the
Committee may adopt rules which would permit a gift by a participant of
restricted shares to members of his/her immediate family (spouse, parents,
children, stepchildren, grandchildren or legal dependants) or to a Trust
whose beneficiary or beneficiaries shall be either such a person or persons
or the participant.
(8) Any attempt to dispose of Restricted Stock in a manner contrary to
the restrictions shall be ineffective.
9. DETERMINATION OF BREACH OF CONDITIONS: The determination of the
Committee as to whether an event has occurred resulting in a forfeiture or a
termination or reduction of the Company's obligations in accordance with the
provisions of the Plan shall be conclusive.
10. ADJUSTMENT IN THE EVENT OF CHANGE IN STOCK: In the event of changes in
the outstanding Common Stock of the Company by reason of stock dividends,
recapitalization, mergers, consolidations, split-ups, combinations or exchanges
of shares and the like, the aggregate number and class of shares available under
the Plan, and the number, class and the price of shares subject to outstanding
options and/or awards and the number of performance units and/or the dollar
value of each unit shall be appropriately adjusted by the Committee, whose
determination shall be conclusive.
11. TAXES: Each participant shall, no later than the Tax Date (as defined
below), pay to the Company, or make arrangements satisfactory to the Committee
regarding payment of, any Withholding Tax (as defined below) with respect to an
Option or Award, and the Company shall, to the extent permitted by law, have the
right to deduct such amount from any payment of any kind otherwise due to the
participant. The Company shall also have the right to retain or sell without
notice, or to demand surrender of, shares of Common Stock in value sufficient to
cover the amount of any Withholding Tax (that is that portion of any Applicable
Tax, as defined below, required by any governmental entity to be withheld or
otherwise deducted and paid with respect to such Award), and to make payment (or
to reimburse itself for payment made) to the appropriate taxing authority of an
amount in cash equal to the amount of such Withholding Tax, remitting any
balance to the participant. For purposes of the paragraph, the value of shares
of Common Stock so retained or surrendered shall be the average of the high and
low sales prices per share on the New York Stock Exchange composite tape on the
date that the amount of the Withholding Tax is to be determined (the 'Tax Date')
and the value of shares of Common Stock so sold shall be the actual net sale
price per share (after deduction of commissions) received by the Company.
Notwithstanding the foregoing, if the stock options have been transferred, the
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optionee shall provide the Company with funds sufficient to pay such
Withholding Tax or Applicable Tax. Furthermore, if such optionee does not
satisfy his tax payment obligation and the stock options have been transferred,
the transferree may provide the funds sufficient to enable the Company to pay
such taxes. However, if the stock options have been transferred, the Company
shall have no right to retain or sell without notice, or to demand surrender
from the transferree of, the shares of Common Stock in order to pay such
Withholding Tax or Applicable Tax.
Notwithstanding the foregoing, the participant shall be entitled to satisfy
the obligation to pay any Withholding Tax or to satisfy the obligation to pay
any tax to any governmental entity in respect of such Award, including any
Federal, state or local income tax up to an amount determined on the basis of
the highest marginal tax rate applicable to such participant, Federal Insurance
Contribution Act taxes or other governmental impost or levy (an 'Applicable
Tax'), in whole or in part, by providing the Company with funds sufficient to
enable the Company to pay such Withholding Tax or Applicable Tax or by requiring
the Company to retain or to accept upon delivery thereof by the participant
shares of Common Stock having a Fair Market Value sufficient to cover the amount
of such Withholding Tax or Applicable Tax or in a greater amount as deemed
appropriate by the Company. Each election by a participant to have shares
retained or to deliver shares for this purpose shall be subject to the following
restrictions: (i) the election must be in writing and be made on or prior to the
Tax Date; (ii) the election must be irrevocable; (iii) the election shall be
subject to the disapproval of the Committee.
12. DEFERRAL ELECTION: Notwithstanding the provisions of Section 11, any
optionee or participant may elect, with the concurrence of the Committee and
consistent with any rules and regulations established by the Committee, to defer
the delivery of the proceeds of the exercise of any stock option not transferred
under the provisions of Section 6(b)(6) or stock appreciation rights.
(a) Election Timing: The election to defer the delivery of the
proceeds from any eligible award must be made at least six months prior to
the date such award is exercised or at such other time as the Committee may
specify. Deferrals will only be allowed for exercises which occur while the
optionee or participant is an active employee of the Company. Any election
to defer the delivery of proceeds from an eligible award shall be
irrevocable as long as the optionee or participant remains an employee of
the Company.
(b) Stock Option Deferral: The deferral of the proceeds of stock
options may be elected by an optionee subject to the Regulations
established by the Committee. The proceeds from such an exercise shall be
credited to the optionee's deferred stock option account as the number of
deferred share units equivalent in value to those proceeds. Deferred share
units shall be valued at the Fair Market Value on the date of exercise.
Subsequent to exercise, the deferred share units shall be valued at the
Fair Market Value of Common Stock of the Company. Deferred share units
shall accrue dividends at the rate paid upon the Company's Common Stock
credited in the form of additional deferred share units. Deferred share
units shall be distributed in shares of Company Stock upon the termination
of employment of the participant or at such other date as may be approved
by the Committee over a period of no more than 10 years.
(c) Stock Appreciation Right Deferral: Upon such exercise, the Company
will credit the optionee's deferred stock option account with the number of
deferred share units equivalent in value to the difference between the Fair
Market Value of a share of Common Stock on the exercise date and the
exercise price of the Stock Appreciation Right multiplied by the number of
shares exercised. Deferred share units shall be valued at the Fair Market
Value on the date of exercise. Subsequent to exercise, the deferred share
units shall be valued at the Fair Market Value of Common Stock of the
Company. Deferred share units shall accrue dividends at the rate paid upon
the Company's Common Stock credited in the form of additional deferred
share units. Deferred share units shall be distributed in shares of Common
Stock upon the termination of employment of the participant or at such
other date as may be approved by the Committee over a period of no more
than 10 years.
(d) Accelerated Distributions: The Committee may, at its sole
discretion, allow for the early payment of an optionee's or participant's
deferred share units account in the event of an 'unforeseeable emergency'
or in the event of the death or disability of the optionee or participant.
An 'unforeseeable emergency' is defined as an unanticipated emergency
caused by an event
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beyond the control of the optionee or participant that would result in
severe financial hardship if the distribution were not permitted. Such
distributions shall be limited to the amount necessary to sufficiently
address the financial hardship. Any distributions under this provision
shall be consistent with the Regulations established under the Code.
Additionally, the Committee may use its discretion to cause deferred share
unit accounts to be distributed when continuing the Program is no longer in
the best interest of the Company.
(e) Assignability: No rights to deferred share unit accounts may be
assigned or subject to any encumbrance, pledge or charge of any nature
except that an optionee or participant may designate a beneficiary pursuant
to any rules established by the Committee.
13. AMENDMENT OF THE PLAN: The Board of Directors may amend or suspend the
Plan at any time and from time to time. No such amendment of the Plan may,
however, increase the maximum number of shares to be offered under options or
awards, or change the manner of determining the option price, or change the
designation of employees or class of employees eligible to receive options or
awards, or permit the transfer or issue of stock before payment therefor in
full, or, without the written consent of the optionee or participant, alter or
impair any option or award previously granted under the Plan or Prior Plan.
Notwithstanding the foregoing, if an option has been transferred in accordance
with Section 6(b)(6), written consent of the transferee (and not the optionee)
shall be necessary to alter or impair any option or award previously granted
under the Plan.
14. MISCELLANEOUS:
(a) By accepting any benefits under the Plan, each optionee or
participant and each person claiming under or through such optionee or
participant shall be conclusively deemed to have indicated acceptance and
ratification of, and consent to, any action taken or made to be taken or
made under the Plan by the Company, the Board, the Committee or any other
Committee appointed by the Board.
(b) No participant or any person claiming under or through him shall
have any right or interest, whether vested or otherwise, in the Plan or in
any option, or stock appreciation right or award thereunder, contingent or
otherwise, unless and until all of the terms, conditions and provisions of
the Plan and the Agreement that affect such participant or such other
person shall have been complied with.
(c) Nothing contained in the Plan or in any Agreement shall require
the Company to segregate or earmark any cash or other property.
(d) Neither the adoption of the Plan nor its operation shall in any
way affect the rights and powers of the Company or any of its Subsidiaries
or Affiliates to dismiss and/or discharge any employee at any time.
(e) Notwithstanding anything to the contrary in the Plan, neither the
Board nor the Committee shall have any authority to take any action under
the Plan where such action would affect the Company's ability to account
for any business combination as a 'pooling of interests.'
15. TERM OF THE PLAN: The Plan, if approved by stockholders, will be
effective May 6, 1997. The Plan shall expire on May 31, 2002 unless suspended or
discontinued by action of the Board of Directors. The expiration of the Plan,
however, shall not affect the rights of Optionees under options theretofore
granted to them or the rights of participants under awards theretofore granted
to them, and all unexpired options and awards shall continue in force and
operation after termination of the Plan except as they may lapse or be
terminated by their own terms and conditions.
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