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RELIANCE GROUP HOLDINGS, INC.
2000 RESTRICTED STOCK PLAN
1. Purpose of the Plan
The purpose of the Reliance Group Holdings, Inc. 2000 Restricted Stock
Plan is to promote the interests of the Corporation and its stockholders by
strengthening the Corporation's ability to attract, motivate, and retain
personnel upon whose judgment, initiative, and efforts the financial success and
growth of the business of the Corporation largely depend, to offer such
personnel additional incentives to put forth maximum efforts for the success of
the business, and to afford such personnel an opportunity to acquire a
proprietary interest in the Corporation through stock ownership and other
rights.
2. Definitions
Wherever the following capitalized terms are used in this Plan, they
shall have the meanings specified below:
(a) "Award" means a Restricted Stock Award granted under the Plan.
(b) "Award Agreement" means an agreement entered into between the
Corporation and a Participant setting forth the terms and conditions of an Award
granted to a Participant.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Bonus Plans" means the Corporation's 1998 Executive Bonus Plan and
the Executive Bonus Plan for James E. Yacobucci.
(e) "Bonus Plan Awards" shall have the meaning specified in Section 6.4
hereof.
(f) "Bonus Plan Committee" shall have the meaning specified in Section
6.4 hereof.
(g) "Cause" shall be as defined in any employment or similar agreement
in force between the Corporation and a Participant or, in the event there is no
employment or similar agreement in force between the Corporation and a
Participant which defines "Cause", "Cause" shall mean a termination of a
Participant's employment by the Corporation as a result of: (i) willful fraud or
material dishonesty in connection with the Participant's performance of duties
to the Corporation; (ii) the deliberate or intentional failure by the
Participant to substantially perform his duties to the Corporation; (iii)
conduct which is materially detrimental to the Corporation's reputation,
goodwill or business operations; (iv) breach or threatened breach of any
restrictive covenants the Participant is subject to with respect to the
Corporation; or (v) the conviction for, or plea of nolo contendere, to a charge
of commission of a felony.
(h) "Change in Control" shall have the meaning specified in Section 7
hereof.
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(i) "Code" means the Internal Revenue Code of 1986, as amended.
(j) "Committee" means the Compensation Committee of the Board or any
other committee of the Board appointed by the Board to administer the Plan from
time to time.
(k) "Common Stock" means the common stock of the Corporation.
(l) "Corporation" means Reliance Group Holdings, Inc., a Delaware
corporation.
(m) "Date of Grant" means the date on which an Award under the Plan is
made by the Committee, or such later date as the Committee may specify to be the
effective date of the Award.
(n) "Disability" means a permanent and total disability (within the
meaning of section 22(e)(3) of the Code).
(o) "Effective Date" means the Effective Date of this Plan, as defined
in Section 10.1 hereof.
(p) "Eligible Person" means any person who is an Employee of the
Corporation or any of its Subsidiaries.
(q) "Employee" means any person who is employed as a common-law
employee.
(r) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(s) "Fair Market Value" of a share of Common Stock as of a given date
means the closing sales price of the Common Stock on the New York Stock Exchange
as reflected on the composite index on the trading day immediately preceding the
date as of which Fair Market Value is to be determined or, in the absence of any
reported sales of Common Stock on such date, on the first preceding date on
which any such sale shall have been reported. If the Common Stock is not listed
on the New York Stock Exchange on the date as of which Fair Market Value is to
be determined, the Committee shall determine in good faith the Fair Market Value
in whatever manner it considers appropriate.
(t) "Participant" means any Eligible Person who holds an outstanding
Award under the Plan.
(u) "Plan" means the Reliance Group Holdings, Inc. 2000 Restricted
Stock Plan as set forth herein, as it may be amended from time to time.
(v) "Restricted Stock Award" means an award of restricted stock under
Section 6 hereof entitling a Participant to shares of Common Stock that are
nontransferable and subject to forfeiture until specific conditions established
by the Committee are satisfied.
(w) "Subsidiary" means (a) an entity (whether or not a corporation)
that is wholly or majority owned or controlled, directly or indirectly, by the
Corporation, or (b) any other affiliate of the Corporation that is so
designated, from time to time, by the Committee.
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3. Shares of Common Stock Subject to the Plan
3.1. Number of Shares. Subject to the following provisions of this
Section 3, the aggregate number of shares of Common Stock that may be issued
pursuant to all Awards under the Plan is 15,000,000 shares of Common Stock. The
shares of Common Stock to be delivered under the Plan will be made available
from authorized but unissued shares of Common Stock or issued shares that have
been reacquired by the Corporation. To the extent that any Award payable in
Common Stock is forfeited, cancelled, returned to the Corporation for failure to
satisfy vesting requirements or upon the occurrence of other forfeiture events,
or otherwise terminates without payment being made thereunder, shares of Common
Stock covered thereby will no longer be charged against the foregoing maximum
share limitations and may again be made subject to Awards under the Plan
pursuant to such limitations.
3.2. Adjustments. If there shall occur any recapitalization,
reclassification, stock dividend, stock split, reverse stock split, or other
distribution with respect to the shares of Common Stock, or other change in
corporate structure affecting the Common Stock, the Committee may, in the manner
and to the extent that it deems appropriate and equitable to the Participants
and consistent with the terms of this Plan, cause an adjustment to be made in
(i) the maximum number and kind of shares provided in Section 3.1 hereof, (ii)
the performance targets or goals applicable to any outstanding Awards or (iii)
any other terms of an Award that are affected by the event.
4. Administration of the Plan
4.1. Committee Members. The Plan shall be administered by a Committee
comprised of no fewer than two persons selected by the Board. Solely to the
extent deemed necessary or advisable by the Board, each Committee member shall
meet the definition of a "nonemployee director" for purposes of such Rule 16b-3
under the Exchange Act. The Board shall also have the authority to exercise the
powers and duties of the Committee under the Plan. The Committee shall have such
powers and authority as may be necessary or appropriate for the Committee to
carry out its functions as described in the Plan. No member of the Committee
shall be liable for any action or determination made in good faith by the
Committee with respect to the Plan or any Award thereunder.
4.2. Discretionary Authority. Subject to the express limitations of the
Plan, the Committee shall have authority in its discretion to determine the
Eligible Persons to whom, and the time or times at which, Awards may be granted,
the number of shares subject to each Award, the time or times at which an Award
will become vested, the performance criteria, business or performance goals or
other conditions of an Award, and all other terms of the Award. The Committee
shall also have discretionary authority to interpret the Plan, to make all
factual determinations under the Plan, and to make all other determinations
necessary or advisable for Plan administration. The Committee may prescribe,
amend, and rescind rules and regulations relating to the Plan. All
interpretations, determinations, and actions by the Committee shall be final,
conclusive, and binding upon all parties.
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4.3. Changes to Awards. The Committee shall have the authority to
effect, at any time and from time to time, (i) the cancellation of any or all
outstanding Awards and the grant in substitution therefor of new Awards covering
the same or different numbers of shares of Common Stock, or (ii) the amendment
of the terms of any and all outstanding Awards; provided, however, that no such
action by the Committee may adversely impair the rights of a Participant (or any
permitted transferee) under any outstanding Award without the consent of the
Participant (or transferee). The Committee may in its discretion accelerate the
vesting of an Award at any time or on the basis of any specified event.
4.4. Delegation of Authority. The Committee shall have the right, from
time to time, to delegate to one or more officers of the Corporation the
authority of the Committee to grant and determine the terms and conditions of
Awards awarded under the Plan, subject to such limitations as the Committee
shall determine; provided, however, that no such authority may be delegated with
respect to Awards awarded to any member of the Board or any Participant who the
Committee determines may be subject to Rule 16b-3 under the Exchange Act.
5. Eligibility and Awards
All Eligible Persons are eligible to be designated by the Committee to
receive an Award under the Plan. The Committee has authority, in its sole
discretion, to determine and designate from time to time those Eligible Persons
who are to be granted Awards, the types of Awards to be granted and the number
of shares subject to the Awards that are granted under the Plan. Each Award will
be evidenced by an Award Agreement between the Corporation and the Participant
that shall include such terms and conditions (consistent with the Plan) as the
Committee may determine; provided, however, that failure to issue an Award
Agreement shall not invalidate an Award.
6. Restricted Stock Award
6.1. Grant of Restricted Stock Awards. A Restricted Stock Award to a
Participant represents shares of Common Stock that are issued subject to such
restrictions on transfer and other incidents of ownership and such forfeiture
conditions as the Committee may determine ("Restricted Shares"). In connection
with issuance of any Restricted Shares, the Committee may (but shall not be
obligated to) require the payment of a specified purchase price (which price may
be less than Fair Market Value).
6.2. Vesting Requirements. The restrictions imposed on Restricted
Shares issued under a Restricted Stock Award shall lapse in accordance with the
vesting requirements specified by the Committee in the Award Agreement. Such
vesting requirements may be based on the continued employment of the Participant
with the Corporation or its Subsidiaries for a specified time period or periods,
provided that any such restriction shall not be scheduled to lapse in its
entirety earlier than the first anniversary of the Date of Grant. Such vesting
requirements may also be based on the attainment of specified business or
performance goals or measures established by the Committee in its sole
discretion. Notwithstanding the foregoing, unless otherwise provided by the
Committee in the Award Agreement, all restrictions on Restricted Shares shall
lapse upon (i) a Change in Control of the Corporation, (ii) the death or
Disability of
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the Participant, or (iii) an involuntary termination of the Participant's
employment other than for Cause.
6.3. Restrictions. Restricted Shares may not be transferred or assigned
(except by will or by the laws of descent and distribution), or subject to any
encumbrance, pledge or charge until all applicable restrictions are removed or
have expired, unless otherwise allowed by the Committee. The Committee may
require the Participant to enter into an escrow agreement providing that the
certificates representing the Restricted Shares will remain in the physical
custody of an escrow holder until all restrictions are removed or have expired.
Failure to satisfy any applicable restrictions shall result in the Restricted
Shares' being forfeited and returned to the Corporation, with any purchase price
paid by the Participant to be refunded, unless otherwise provided by the
Committee. The Committee may require that certificates representing Restricted
Shares bear a legend making appropriate reference to the restrictions imposed.
Any shares of Common Stock, any other securities of the Company and any other
property (except cash dividends) distributed with respect to Restricted Shares
shall be subject to the same restrictions, terms and conditions as such
Restricted Shares. At the time that all applicable restrictions are removed or
have expired with respect to the Restricted Shares, a stock certificate for the
appropriate number of shares of Common Stock, free of the restrictions and
restrictive stock legend (other than as required under the Securities Act of
1933 or otherwise), shall be delivered to the Participant or his beneficiary or
estate, as the case may be.
6.4. Bonus Plans Awards. Notwithstanding anything elsewhere in the Plan
to the contrary, in addition to any Restricted Stock Award granted by the
Committee under otherwise applicable provisions of the Plan, Restricted Stock
Awards shall be granted hereunder in payment of awards under the Corporation's
Bonus Plans ("Bonus Plan Awards"), to the extent directed by the Committee
administering the applicable Bonus Plan (the "Bonus Plan Committee"). The terms
of any such Bonus Plan Award (including, without limitation, the number of
shares covered and the vesting requirements) shall be as determined by the
applicable Bonus Plan Committee (consistent with provisions of the Plan) and all
decisions concerning the administration of any Restricted Stock Award granted in
payment of a Bonus Plan Award shall be made by the applicable Bonus Plan
Committee.
6.5. Rights as a Stockholder. Subject to the foregoing provisions of
this Section 6, the Participant will have all rights of a stockholder with
respect to Restricted Shares held by him, including the right to vote the shares
and receive all dividends and other distributions paid or made with respect
thereto.
6.6. Forfeiture Events. Unless otherwise specified by the Committee in
an Award Agreement, any unvested portion of a Restricted Stock Award will be
forfeited upon the Participant's termination of employment by the Corporation
for Cause or upon a voluntary termination of employment by the Participant. In
addition, the Committee may specify in an Award that the Participant's rights
with respect to an Award shall be subject to reduction, cancellation, forfeiture
or recoupment upon the occurrence of certain other specified events, in addition
to any otherwise applicable vesting or performance conditions of an Award. Such
events shall include, but shall not be limited to, violation of material
Corporation or Subsidiary policies, breach of noncompetition, confidentiality or
other restrictive covenants that may apply
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to the Participant, or other conduct by the Participant that is
detrimental to the business or reputation of the Corporation or any Subsidiary.
6.7. Section 83(b) Election. The Committee may provide in an Award
Agreement that the Restricted Stock Award is conditioned upon the Participant's
refraining from making an election with respect to the Award under section 83(b)
of the Code. Irrespective of whether an Award is so conditioned, if a
Participant makes an election pursuant to section 83(b) of the Code with respect
to a Restricted Stock Award, the Participant shall be required to promptly file
a copy of such election with the Corporation.
7. Change in Control
For purposes hereof, a "Change in Control" of the Corporation shall
mean:
(i) an acquisition subsequent to the Effective Date hereof by any
individual, entity or group (within the meaning of section 13(d)(3) or
14(d)(2) of the Exchange Act (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than fifty percent (50%) or more of either (A) the then
outstanding shares of Common Stock or (B) the combined voting power of
the then outstanding voting securities of the Corporation entitled to
vote generally in the election of directors (the "Outstanding
Corporation Voting Securities"); excluding, however, the following: (1)
any acquisition directly from the Corporation, other than an
acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself acquired directly from the
Corporation, (2) any acquisition by the Corporation and (3) any
acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any Subsidiary;
(ii) during any period of two (2) consecutive years (not including
any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board (and any new directors
whose election by the Board or nomination for election by the
Corporation's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was so approved) cease for any reason (except
for death, disability or voluntary retirement) to constitute a majority
thereof;
(iii) the consummation of a merger, consolidation, reorganization
or similar corporate transaction which has been approved by the
stockholders of the Corporation, whether or not the Corporation is the
surviving Corporation in such transaction, other than a merger,
consolidation, or reorganization that would result in the voting
securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least
fifty percent (50%) of the combined voting power of the voting
securities of the Corporation (or such surviving entity) outstanding
immediately after such merger, consolidation, or reorganization;
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(iv) the approval by the stockholders of the Corporation of (A) the
sale or other disposition of all or substantially all of the assets of
the Corporation or (B) a complete liquidation or dissolution of the
Corporation; or
(v) adoption by the Board of a resolution to the effect that any
person has acquired effective control of the business and affairs of
the Corporation.
8. Award Agreements
8.1. Form of Agreement. Each Award under this Plan shall be evidenced
by an Award Agreement in a form approved by the Committee setting forth the
number of shares of Common Stock subject to the Award, the time or times at
which an Award will become vested, and the purchase price (if any) for the
shares. The Award Agreement shall also set forth other material terms and
conditions applicable to the Award as determined by the Committee consistent
with the limitations of this Plan.
9. General Provisions
9.1. Employment or Service. Nothing in the Plan, in the grant of any
Award or in any Award Agreement shall confer upon any Eligible Person the right
to continue in the capacity in which he is employed by, or otherwise serves, the
Corporation or any Subsidiary.
9.2. Securities Laws. No shares of Common Stock will be issued or
transferred pursuant to an Award unless and until all then applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any stock
exchanges upon which the Common Stock may be listed, have been fully met. As a
condition precedent to the issuance of shares pursuant to an Award, the
Corporation may require the Participant to take any reasonable action to meet
such requirements. The Committee may impose such conditions on any shares of
Common Stock issuable under the Plan as it may deem advisable, including,
without limitation, restrictions under the Securities Act of 1933, as amended,
under the requirements of any stock exchange upon which such shares of the same
class are then listed, and under any blue sky or other securities laws
applicable to such shares.
9.3. Tax Withholding. The Participant shall be responsible for payment
of any taxes or similar charges required by law to be withheld from an Award or
an amount paid in satisfaction of an Award, which shall be paid by the
Participant on or prior to the payment or other event that results in taxable
income in respect of an Award. The Award Agreement shall specify the manner in
which the withholding obligation shall be satisfied with respect to the
particular type of Award.
9.4. Other Compensation and Benefit Plans. Except as provided herein,
the adoption of the Plan shall not affect any other stock incentive or other
compensation plans in effect for the Corporation or any Subsidiary, nor shall
the Plan preclude the Corporation from establishing any other forms of stock
incentive or other compensation for employees of the Corporation or any
Subsidiary. The amount of any compensation deemed to be received by a
Participant pursuant to an Award shall not constitute compensation with respect
to which any other employee benefits of
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such Participant are determined, including, without limitation, benefits under
any bonus, pension, profit sharing, life insurance or salary continuation plan,
except as otherwise specifically provided by the terms of such plan.
9.5. Plan Binding on Transferees. The Plan shall be binding upon the
Corporation, its transferees and assigns, and the Participant, his executor,
administrator and permitted transferees and beneficiaries.
9.6. Construction and Interpretation. Whenever used herein, nouns in
the singular shall include the plural, and the masculine pronoun shall include
the feminine gender. Headings of Articles and Sections hereof are inserted for
convenience and reference and constitute no part of the Plan.
9.7. Severability. If any provision of the Plan or any Award Agreement
shall be determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable and
enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.
9.8. Governing Law. The validity and construction of this Plan and of
the Award Agreements shall be governed by the laws of the State of Delaware.
10. Effective Date, Termination and Amendment
10.1. Effective Date. The Plan shall become effective on the date of
its adoption by the Board.
10.2. Termination. The Plan shall terminate on the date immediately
preceding the tenth anniversary of the date the Plan is adopted by the Board.
The Board may, in its sole discretion and at any earlier date, terminate the
Plan. Notwithstanding the foregoing, no termination of the Plan shall adversely
affect any Award theretofore granted without the consent of the Participant or
the permitted transferee of the Award.
10.3. Amendment. The Board may at any time and from time to time and in
any respect, amend or modify the Plan; provided, however, that the Board may
seek the approval of any amendment or modification by the Corporation's
stockholders to the extent it deems necessary or advisable in its sole
discretion for the listing requirements of the New York Stock Exchange or for
any other purpose. No amendment or modification of the Plan shall adversely
affect any Award theretofore granted without the consent of the Participant or
the permitted transferee of the Award.
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