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As filed with the Securities and Exchange Commission on October 14, 1998
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
ALLEGHENY ENERGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Maryland
(State or Other Jurisdiction of Incorporation or Organization)
13-553-1602
(I.R.S. Employer Identification Number)
10435 Downsville Pike, Hagerstown, MD 21740-1766
(Address of Principal Executive Offices)
Allegheny Energy, Inc.
1998 Long-Term Incentive Plan
(Full Title of the Plan)
Thomas K. Henderson
10435 Downsville Pike, Hagerstown, MD 21740-1766
(301) 665-2703
(Name, Address and Telephone Number of Agent for Service)
CALCULATION OF REGISTRATION FEE
Title of Each Amount to be Proposed Proposed Amount
Class of Registered Maximum Maximum of
Securities to be Offering Aggregate Registr
Registered Price Per Offering ation
Share(1) Price (1) Fee (1)
Common Stock of 10,000,000 $30.15625 $301,562,500 $88,961
Allegheny Energy,
Inc., par value
$1.25 per share
(1) Pursuant to Rule 457(h)(1) of the Securities Act of 1933,
as amended, the proposed maximum offering price per share, the
proposed maximum aggregate offering price and the amount of
the registration fee have been computed on the basis of the
price of securities of the same class.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
EXPLANATORY NOTE
As permitted by Rule 428 under the Securities Act of 1933,
as amended (the 'Securities Act'), this Registration Statement
omits the information specified in Part I of Form S-8. The
documents containing the information specified in Part I will be
delivered to the participants in the plan covered by this
Registration Statement, as required by Rule 428(b). Such
documents are not being filed with the Securities and Exchange
Commission (the "Commission") as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant
to Rule 424 of the Securities Act.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents By Reference
The following documents filed by Allegheny Energy, Inc.
(the "Company") are hereby incorporated by reference in this
Registration Statement:
The Annual Report on Form 10-K, filed by the Company on
March 23, 1998, pursuant to the Securities Exchange Act of 1934
(the "Exchange Act") (File No. 1-267).
The Current Report on Form 8-K, filed by the Company on
April 2, 1998, pursuant to the Exchange Act (File No. 1-267).
The Quarterly Report on Form 10-Q, filed by the Company on
May 13, 1998, pursuant to the Exchange Act (File No. 1-267).
The Quarterly Report on Form 10-Q, filed by the Company on
August 13, 1998, pursuant to the Exchange Act (File No. 1-267).
The Current Report on Form 8-K, filed by the Company on
June 12, 1998, pursuant to the Exchange Act (File No. 1-267).
The Current Report on Form 8-K, filed by the Company on
July 27, 1998, pursuant to the Exchange Act (File No. 1-267).
The Current Report on Form 8-K, filed by the Company on
October 7, 1998, pursuant to the Exchange Act (File No. 1-267).
The Current Report on Form 8-K, filed by the Company on
July 30, 1998, pursuant to the Exchange Act (File No. 1-267).
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of
this Registration Statement and prior to the filing of a post-
effective amendment to this Registration Statement which
indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the filing date of such
documents.
Any statement contained in a document incorporated or
deemed to be incorporated by reference herein 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 document which also is incorporated
or deemed to be incorporated by reference herein) modifies or
supersedes such statement. Any such 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
Not applicable.
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Item 5. Interests of Named Experts and Counsel
Thomas K. Henderson beneficially owns approximately
5,349 shares of the Company's common stock.
Item 6. Indemnification of Directors and Officers
Under Article XIII of the Articles of Incorporation of the
Company, Article VI of the By-laws of the Company, and
Section 2.418 of the Corporations and Associations Article of the
Annotated Code of Maryland, directors and officers are entitled
to indemnification by the Company against liability which they
may incur in their respective capacities as directors and
officers under certain circumstances. Directors' and Officers'
Liability Insurance is carried in an amount of $80,000,000 with a
$500,000 corporate reimbursement.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibit No. Description
4.1 Allegheny Energy, Inc. 1998 Long-Term Incentive Plan.
5.1 Opinion of Thomas K. Henderson as to newly
registered Common Stock.
23.1 Consent of Thomas K. Henderson (contained in
Exhibit 5.1 attached hereto).
23.2 Consent of PriceWaterhouseCoopers LLP.
24.0 Power of Attorney (included on signature page of
this Registration Statement on Form S-8).
Item 9. Undertakings
The undersigned registrant hereby undertakes:
(1) 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;
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(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 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 (a)(1)(i)
and (a)(1)(ii) of this Item 9 do not apply if the
information required to be included in the post-
effective amendment by those paragraphs is contained
in period reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(3) 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.
(4) The undersigned Company hereby undertakes that, for purposes
of determining any liability under the Securities Act, each
filing of the Company's annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) 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 that time shall
be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that, in
the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In any event
that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company 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 Company 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 Securities Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Company 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 Hagerstown, State of Maryland, on October 8, 1998.
ALLEGHENY ENERGY, INC.
By: /s/ Alan J. Noia
Name: Alan J. Noia
Title: Chairman, President,
Chief Executive Officer
and Director
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose
signature appears below constitutes and appoints Thomas K.
Henderson and Eileen M. Beck, and each of them with full power to
act without the others, his or her true and lawful attorneys-in-
fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and
stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration
Statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the indicated capacities on October 8, 1998.
Name Title
/s/ Alan J. Noia
Alan J. Noia Chairman, President,Chief Executive
Officer and Director (Principal
Executive Officer)
/s/ Michael P. Morrell
Michael P. Morrell Vice-President and Chief Financial
Officer (Principal Financial Officer)
/s/ Kenneth M. Jones
Kenneth M. Jones Vice-President and Controller
(Principal Accounting Officer)
/s/ Eleanor Baum
Eleanor Baum Member of the Board of Directors
/s/ William L. Bennett
William L. Bennett Member of the Board of Directors
/s/ Wendell F. Holland
Wendell F. Holland Member of the Board of Directors
/s/ Phillip E. Lint
Phillip E. Lint Member of the Board of Directors
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/s/ Frank A. Metz, Jr.
Frank A. Metz, Jr. Member of the Board of Directors
/s/ Steven H. Rice
Steven H. Rice Member of the Board of Directors
/s/ Gunnar E. Sarsten
Gunnar E. Sarsten Member of the Board of Directors
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INDEX TO EXHIBITS
4.1 Allegheny Energy, Inc. 1998 Long-Term Incentive
Plan.
5.1 Opinion of Thomas K. Henderson as to newly
registered Common Stock.
23.1 Consent of Thomas K. Henderson (contained in
Exhibit 5.1 attached hereto).
23.2 Consent of PriceWaterhouseCoopers LLP.
24.0 Power of Attorney (included on signature page of
this Registration Statement on Form S-8).
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EXHIBIT 4.1
ALLEGHENY ENERGY, INC.
1998 LONG-TERM INCENTIVE PLAN
ARTICLE I
PURPOSE AND ADOPTION OF THE PLAN
1.01 Purpose. The purpose of the Allegheny Energy, Inc. 1998
Long-Term Incentive Plan (as the same may be amended from time to
time, the "Plan") is to assist Allegheny Energy, Inc., a Maryland
corporation (the "Company"), and its Subsidiaries (as defined below)
in attracting and retaining highly competent key employees and
directors and to act as an incentive in motivating selected key
employees and directors of the Company and its Subsidiaries (as
defined below) to achieve long-term corporate objectives.
1.02 Adoption and Term. The Plan has been approved by the Board
of Directors of the Company (the "Board") to be effective as of the
date of approval of the Plan by the shareholders of the Company (the
"Effective Date"). The Plan shall remain in effect until terminated by
action of the Board; provided, however, that no Incentive Stock Option
(as defined below) may be granted hereunder after the tenth
anniversary of the Effective Date and the provisions of Articles VII
and VIII with respect to performance-based awards to "covered
employees" under Section 162(m) of the Code (as defined below) shall
expire as of the fifth anniversary of the Effective Date.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, capitalized terms shall have the
following meanings:
2.01 Acquiring Corporation shall have the meaning given to such
term in Section 9.08(b).
2.02 Award means any grant to a Participant of one or a
combination of Non-Qualified Stock Options or Incentive Stock Options
described in Article VI, Restricted Shares described in Article VII
and Performance Awards described in Article VIII.
2.03 Award Agreement means a written agreement between the
Company and a Participant or a written notice from the Company to a
Participant specifically setting forth the terms and conditions of an
Award granted under the Plan.
2.04 Award Period means, with respect to an Award, the period of
time set forth in the Award Agreement during which specified target
performance goals must be achieved or other conditions set forth in
the Award Agreement must be satisfied.
2.05 Beneficiary means an individual, trust or estate who or
which, by a written designation of the Participant filed with the
Company or by operation of law, succeeds to the rights and obligations
of the Participant under the Plan and an Award Agreement upon the
Participant's death.
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2.06 Board shall have the meaning given to such term in
Section 1.02.
2.07 Change in Control shall be deemed to have occurred at such
time as (a) any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 25% or more of the combined voting power of
the Company Voting Securities; or (b) during any period of not more
than two years, individuals who constitute the Board as of the
beginning of the period and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (a) or (c) of this
sentence) whose election by the Board or nomination for election by
the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at such time or whose election or nomination for election
was previously so approved, cease for any reason to constitute a
majority thereof; or (c) the shareholders of the Company approve a
merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the Company
Voting Securities outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 50% of the
combined voting power of the Company Voting Securities or the voting
securities of such surviving entity outstanding immediately after such
merger or consolidation, or the shareholders of the Company approve a
plan of complete liquidation of the Company or any agreement for the
sale or disposition by the Company of all or substantially all of the
Company's assets.
2.08 Code means the Internal Revenue Code of 1986, as amended.
References to a section of the Code include that section and any
comparable section or sections of any future legislation that amends,
supplements or supersedes said section.
2.09 Committee means the committee established in accordance
with Section 3.01.
2.10 Company shall have the meaning given to such term in
Section 1.01.
2.11 Common Stock means Common Stock of the Company.
2.12 Company Voting Securities means the combined voting power
of all outstanding securities of the Company entitled to vote
generally in the election of directors of the Company.
2.13 Date of Grant means the date as of which the Committee
grants an Award. If the Committee contemplates an immediate grant to a
Participant, the Date of Grant shall be the date of the Committee's
action. If the Committee contemplates a date on which the grant is to
be made other than the date of the Committee's action, the Date of
Grant shall be the date so contemplated and set forth in or
determinable from the records of action of the Committee; provided,
however, that the Date of Grant shall not precede the date of the
Committee's action.
2.14 Dividend Equivalent Account shall have the meaning given to
such term in Section 6.03(a).
2.15 Effective Date shall have the meaning given to such term in
Section 1.02.
2.16 Exchange Act means the Securities Exchange Act of 1934, as
amended.
2.17 Exercise Price shall have the meaning given to such term in
Section 6.01(b).
2.18 Fair Market Value means, as of any applicable date, the
closing price per share of the Common Stock as quoted in the
NYSE-Composite Transactions listing in The Wall Street Journal (or
such other reliable publication as the Committee, in its discretion,
may determine to rely upon) for the date as of
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which Fair Market Value
is to be determined. If there are no sales on such date, then Fair
Market Value shall be the closing price per share of the Common Stock
as so quoted on the nearest date before the date as of which Fair
Market Value is to be determined on which there are sales. 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
in good faith determine the Fair Market Value of the Common Stock on
such date. Fair Market Value shall be determined without regard to any
restriction other than a restriction which, by its terms, will never
lapse. Notwithstanding the foregoing, in the case of Options granted
in connection with the assumption by the Company of stock options of
acquired companies, as described in Section 9.08(c), the Committee may
determine that the term "Fair Market Value" shall have the same
meaning as is given to such term under the provisions of such assumed
stock option.
2.19 Incentive Stock Option means a stock option within the
meaning of Section 422 of the Code.
2.20 Merger means any merger, reorganization, consolidation,
share exchange, transfer of assets or other transaction having similar
effect involving the Company.
2.21 Non-Qualified Stock Option means a stock option which is
not an Incentive Stock Option.
2.22 Options means all Non-Qualified Stock Options and Incentive
Stock Options granted at any time under the Plan.
2.23 Original Option shall have the meaning given to such term
in Section 6.04.
2.24 Participant means a person designated to receive an Award
under the Plan in accordance with Section 5.01.
2.25 Performance Awards means Awards granted in accordance with
Article VIII.
2.26 Plan shall have the meaning given to such term in
Section 1.01.
2.27 Reload Option shall have the meaning given to such term in
Section 6.04.
2.28 Restricted Shares means Common Stock subject to
restrictions imposed in connection with Awards granted under
Article VII.
2.29 Retirement means early or normal retirement under a pension
plan or arrangement of the Company or one of its Subsidiaries in which
the Participant participates.
2.30 Subsidiary means a subsidiary of the Company within the
meaning of Section 424(f) of the Code.
2.31 Termination of Employment means the voluntary or
involuntary termination of a Participant's employment with the Company
or a Subsidiary for any reason, including death, disability,
retirement or as the result of the divestiture of the Participant's
employer or any similar transaction in which the Participant's
employer ceases to be the Company or one of its Subsidiaries. A leave
of absence approved in accordance with Company policy shall not be
deemed a Termination of Employment. Whether entering military or other
government service shall constitute Termination of Employment, or
whether a Termination of Employment
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shall occur as a result of
disability, shall be determined in each case by the Committee in its
sole discretion. In the case of a director who is not an employee of
the Company or a Subsidiary, Termination of Employment shall mean
voluntary or involuntary cessation of Board service for any reason.
ARTICLE III
ADMINISTRATION
3.01 Committee. The Plan shall be administered by a committee
of the Board (the "Committee") comprised of at least two directors of
the Company. The Committee shall have exclusive and final authority in
each determination, interpretation or other action affecting the Plan
and its Participants. The Committee shall have the sole discretionary
authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and
restrictions on Awards as it determines appropriate, and to take such
steps in connection with the Plan and Awards granted hereunder as it
may deem necessary or advisable. The Committee may, subject to
compliance with applicable legal requirements, delegate to any
designated executive officer of the Company the power to determine the
employees (other than himself or herself or any employee to whom such
designated executive officer reports) to receive Awards under the Plan
and the types and amounts of such Awards, subject in each case to the
terms and conditions of the Plan. In addition, the Board may exercise
any of the authority conferred upon the Committee hereunder. In the
event of any such delegation of authority or exercise of authority by
the Board, references in the Plan to the Committee shall be deemed to
refer to the delegate of the Committee or the Board, as the case may
be.
ARTICLE IV
SHARES
4.01 Number of Shares Issuable. The total number of shares
initially authorized to be issued under the Plan shall be 10,000,000
shares of Common Stock. The number of shares available for issuance
under the Plan shall be subject to adjustment in accordance with
Section 9.08. The shares to be offered under the Plan shall be
authorized and unissued shares of Common Stock, or issued shares of
Common Stock which will have been reacquired by the Company.
4.02 Shares Subject to Terminated Awards. Shares of Common
Stock covered by any unexercised portions of terminated Options
(including canceled Options) granted under Article VI, shares of
Common Stock forfeited as provided in Section 7.02(a) and shares of
Common Stock subject to any Award that are otherwise surrendered by a
Participant or terminated may be subject to new Awards under the Plan.
If any shares of Common Stock are withheld from those otherwise
issuable or are tendered to the Company, by attestation or otherwise,
in connection with the exercise of an Option, only the net number of
shares of Common Stock issued as a result of such exercise shall be
deemed delivered for purposes of determining the maximum number of
shares available for delivery under the Plan.
ARTICLE V
PARTICIPATION
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5.01 Eligible Participants. Participants in the Plan shall be
such key employees and directors of the Company and its Subsidiaries
as the Committee, in its sole discretion, may designate from time to
time. The Committee's designation of a Participant in any year shall
not require the Committee to designate such person to receive Awards
in any other year. The designation of a Participant to receive an
Award under one portion of the Plan does not require the Committee to
include such Participant under other portions of the Plan. The
Committee shall consider such factors as it deems pertinent in
selecting Participants and in determining the types and amounts of
their respective Awards. Subject to adjustment in accordance with
Section 9.08, during any calendar year no Participant shall be granted
Awards in respect of more than 600,000 shares of Common Stock (whether
through grants of Options or other Awards of Common Stock or rights
with respect thereto); provided, however, that if it is the
Committee's intention as of the Date of Grant of an Award, as
evidenced by the applicable Award Agreement, that such Award shall be
earned by the Participant over a period of more than one calendar
year, then for purposes of applying the foregoing per calendar year
share limitation, the shares of Common Stock subject to such Award
shall be allocated to the first calendar year in which such shares may
be earned (determined without regard to possible vesting as a result
of a Change in Control or pursuant to any provision of this Plan
authorizing the Committee to accelerate the vesting of an Award).
ARTICLE VI
STOCK OPTIONS
6.01 Option Awards.
(a) Grant of Options. The Committee may grant, to such
Participants as the Committee may select, Options entitling the
Participants to purchase shares of Common Stock from the Company
in such numbers, at such prices, and on such terms and subject to
such conditions, not inconsistent with the terms of the Plan, as
may be established by the Committee. The terms of any Option
granted under the Plan shall be set forth in an Award Agreement.
(b) Exercise Price of Options. The exercise price of each
share of Common Stock which may be purchased upon exercise of any
Option granted under the Plan (the "Exercise Price") shall be
determined by the Committee; provided, however, that, except in
the case of any substituted Options described in Section 9.08(c),
the Exercise Price shall in all cases be equal to or greater than
the Fair Market Value on the Date of Grant.
(c) Designation of Options. Except as otherwise expressly
provided in the Plan, the Committee may designate, at the time of
the grant of an Option, such Option as an Incentive Stock Option
or a Non-Qualified Stock Option; provided, however, that an
Option may be designated as an Incentive Stock Option only if the
applicable Participant is an employee of the Company or a
Subsidiary on the Date of Grant.
(d) Special Incentive Stock Option Rules. No Participant
may be granted Incentive Stock Options under the Plan (or any
other plans of the Company and its Subsidiaries) that would
result in Incentive Stock Options to purchase shares of Common
Stock with an aggregate Fair Market Value (measured on the Date
of Grant) of more than $100,000 first becoming exercisable by
such Participant in any one calendar year. Notwithstanding any
other provision of the Plan to the contrary,
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no Incentive Stock
Option shall be granted to any person who, at the time the Option
is granted, owns stock (including stock owned by application of
the constructive ownership rules in Section 424(d) of the Code)
possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any Subsidiary, unless at
the time the Incentive Stock Option is granted the Exercise
Price is at least 110% of the Fair Market Value on the Date of
Grant of the Common Stock subject to the Incentive Stock Option
and the Incentive Stock Option by its terms is not exercisable
for more than five (5) years from the Date of Grant.
(e) Rights as a Shareholder. A Participant or a transferee
of an Option pursuant to Section 9.04 shall have no rights as a
shareholder with respect to the shares of Common Stock covered by
an Option until that Participant or transferee shall have become
the holder of record of any such shares, and, except to the
extent that Dividend Equivalent Accounts are granted in
accordance with Section 6.03, no adjustment shall be made with
respect to any such shares of Common Stock for dividends in cash
or other property or distributions of other rights on the Common
Stock for which the record date is prior to the date on which
that Participant or transferee shall have become the holder of
record of any shares covered by such Option; provided, however,
that Participants are entitled to the adjustments set forth in
section 9.08.
6.02 Terms of Stock Options
(a) Conditions on Exercise. An Award Agreement with
respect to Options may contain such waiting periods, exercise
dates and restrictions on exercise (including, but not limited
to, periodic installments) as may be determined by the Committee
at the time of grant.
(b) Duration of Options. Options shall terminate after the
first to occur of the following events:
(i) Expiration of the Option as provided in the
related Award Agreement; or
(ii) Termination of the Award as provided in
Section 6.02(e) following the Participant's Termination of
Employment; or
(iii) Ten years from the Date of Grant.
(c) Acceleration of Exercise Time. The Committee, in its
sole discretion, shall have the right (but shall not in any case
be obligated), exercisable at any time after the Date of Grant,
to permit the exercise of any Option prior to the time such
Option would otherwise become exercisable under the terms of the
related Award Agreement.
(d) Extension of Exercise Time. In addition to the
extensions permitted under Section 6.02(e) in the event of
Termination of Employment, the Committee, in its sole discretion,
shall have the right (but shall not in any case be obligated),
exercisable on or at any time after the Date of Grant, to permit
the exercise of any Option after its expiration date described
in Section 6.02(e), subject, however, to the limitations
described in Sections 6.02(b)(i) and (iii).
(e) Exercise of Options Upon Termination of Employment.
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(i) Termination. In the event of Termination of
Employment of a Participant other than by reason of death,
disability or Retirement, all Options which were not
exercisable as of the date of the Termination of Employment
shall expire as of such date and the right of the
Participant to exercise any Options which were exercisable
as of the date of Termination of Employment shall expire
ninety (90) days after the date of such Termination of
Employment, unless the exercise period is extended by the
Committee in accordance with Section 6.02(d). In no event,
however, may the Option be exercised later than the date of
expiration of the Option determined pursuant to
Section 6.02(b)(i) or (iii).
(ii) Disability or Retirement. In the event of a
Participant's Termination of Employment by reason of
disability or Retirement, the right of the Participant to
exercise all Options which were not exercisable as of the
date of the Termination of Employment shall expire as of
such date and all Options which he or she was entitled to
exercise upon Termination of Employment shall expire one
year after the date of such Termination of Employment,
unless the exercise period is extended by the Committee in
accordance with Section 6.02(d). In no event, however, may
any Option be exercised later than the date of expiration of
the Option determined pursuant to Section 6.02(b)(i) or
(iii).
(iii) Death. In the event of the death of a
Participant while employed by the Company or a Subsidiary or
within any additional period of time from the date of the
Participant's Termination of Employment and prior to the
expiration of any Option as provided pursuant to
Section 6.02(e)(i) or (ii) or Section 6.02(d) above, all
Options which were not exercisable as of the date of death
shall expire as of such date and to the extent the right to
exercise the Option was accrued as of the date of such
Termination of Employment and had not expired during such
additional period, the right of the Participant's
Beneficiary to exercise the Option shall expire one year
after the date of the Participant's death (but in no event
more than one year from the date of the Participant's
Termination of Employment by reason of disability or
Retirement), unless the exercise period is extended by the
Committee in accordance with Section 6.02(d). In no event,
however, may any Option be exercised later than the date of
expiration of the Option determined pursuant to
Section 6.02(b)(i) or (iii).
6.03 Dividend Equivalent Accounts. The Committee shall have the
discretion, upon the grant of an Option or thereafter, to establish a
dividend equivalent account ("Dividend Equivalent Account") with
respect to the Option, and applicable Option Award Agreement or an
amendment thereto shall confirm such establishment. If a Dividend
Equivalent Account is established, the following terms apply:
(a) Crediting of Dividends. Subject to such conditions,
limitations and restrictions as shall be established by the Committee,
from the Date of Grant of the Option or, if later, the date of
establishment of the Dividend Equivalent Account, to the earlier of
(i) the date of payment of such Dividend Equivalent Account or
(ii) the date of cancellation, termination or expiration of the
Option, the Dividend Equivalent Account shall be credited as of the
record date of each cash dividend on the Common Stock with an amount
equal to the cash dividends which would be paid with respect to the
Common Stock then covered by the Option if the Option had been
exercised and such Common Stock had been held of record on such record
date. The Participant or other holder of such Option shall be entitled
to receive from the Company in cash the balance credited to the
Dividend Equivalent Account at such time, or from time to time, and
subject to such terms and conditions as shall be
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determined by the Committee and set forth in the applicable Option
Award Agreement or an amendment thereto.
(b) Other Dividend Equivalent Terms. To the extent that an
Option is cancelled, terminates or expires without being exercised,
the Dividend Equivalent Account with respect to the Option shall be
eliminated, and no payment with respect to the Dividend Equivalent
Account shall be made by the Company. Dividend Equivalent Accounts
shall be established and maintained only on the books and records of
the Plan and/or the Company and no assets or funds of the Company or
of the Plan shall be set aside, placed in trust, removed from the
claims of the Company's general creditors, or otherwise made available
until such amounts are actually payable as provided hereunder.
6.04 Reload Options. The Committee shall have the authority to
specify, at or after the time of grant of an Option, that, subject to
the availability of shares of Common Stock under the Plan at the time
of such grant, a Participant shall be granted a reload option ("Reload
Option") in the event(i) such Participant exercises all or a part of
an Option (an "Original Option") by surrendering previously acquired
shares of Common Stock in full or partial payment of the Exercise
Price under such Original Option, and/or (ii) a Participant's
withholding tax obligation with respect to the exercise of an Original
Option is satisfied in whole or in part by the delivery of previously
acquired shares of Common Stock by the Participant to the Company or
the withholding of shares of Common Stock from the shares otherwise
issuable to the Participant upon the exercise of the Original Option.
Each such Reload Option shall cover a number of shares of Common Stock
equal to the number of shares of Common Stock surrendered in payment
of the Exercise Price under such Original Option and/or surrendered or
withheld to pay withholding taxes with respect to such Original
Option. Each such Reload Option shall have an Exercise Price per share
of Common Stock equal to the Fair Market Value of the Common Stock on
the date of exercise of the Original Option in respect of which the
Reload Option was granted and shall expire on the stated expiration
date of the Original Option. A Reload Option shall be exercisable at
any time and from time to time from and after the Date of Grant of
such Reload Option, subject to such restrictions on exercisability as
may be imposed in the discretion of the Committee. Any Reload Option
may provide for the grant, when exercised, of subsequent Reload
Options to the extent and upon such terms and conditions, consistent
with this Section 6.04, as the Committee in its sole discretion shall
specify at or after the time of grant of such Reload Option. A Reload
Option shall contain such other terms and conditions, which may
include a restriction on the transferability of the shares of Common
Stock received upon exercise of the Reload Option, as the Committee in
its sole discretion shall deem desirable and which may be set forth in
rules or guidelines adopted by the Committee or in the Award
Agreements evidencing the Reload Options.
6.05 Option Exercise Procedures. Each Option granted under the
Plan shall be exercised by written notice to the Company which must be
received by the officer or employee of the Company designated in the
Award Agreement at or before the close of business on the expiration
date of the Award. The Exercise Price of shares purchased upon
exercise of an Option granted under the Plan shall be paid in full in
cash by the Participant pursuant to the Award Agreement; provided,
however, that in lieu of such cash a Participant may (if authorized by
the Committee) pay the Exercise Price in whole or in part by
delivering (actually or by attestation) to the Company shares of the
Common Stock having a Fair Market Value on the date of exercise of the
Option equal to the Exercise Price for the shares being purchased;
except that (i) any portion of the Exercise Price representing a
fraction of a share shall in any event be paid in cash and (ii) no
shares of the Common Stock which have been held for less than six
months may be delivered in payment of the Exercise Price of an Option.
Payment may also be made, in the discretion of the Committee, by the
delivery (including, without limitation, by fax) to the Company or its
designated agent of an executed irrevocable
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option exercise form
together with irrevocable instructions to a broker-dealer to sell or
margin a sufficient portion of the shares and deliver the sale or
margin loan proceeds directly to the Company to pay for the Exercise
Price. The date of exercise of an Option shall be determined under
procedures established by the Committee, and as of the date of
exercise the person exercising the Option shall, as between the
Company and such person, be considered for all purposes to be the
owner of the shares of Common Stock with respect to which the Option
has been exercised. Any part of the Exercise Price paid in cash upon
the exercise of any Option shall be added to the general funds of the
Company and may be used for any proper corporate purpose. Unless the
Committee shall otherwise determine, any shares of Common Stock
transferred to the Company as payment of all or part of the Exercise
Price upon the exercise of any Option shall be held as unauthorized
but unissued shares.
6.06 Change in Control. Unless otherwise provided by the
Committee in the applicable Award Agreement, in the event of a Change
in Control, all Options outstanding on the date of such Change in
Control shall become immediately and fully exercisable. The provisions
of this Section 6.06 shall not be applicable to any Options granted to
a Participant if any Change in Control results from such Participant's
beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of Common Stock or Company Voting Securities.
ARTICLE VII
RESTRICTED SHARES
7.01 Restricted Share Awards. The Committee may grant to any
Participant an Award of such number of shares of Common Stock on such
terms, conditions and restrictions, whether based on performance
standards, periods of service, retention by the Participant of
ownership of specified shares of Common Stock or other criteria, as
the Committee shall establish. With respect to performance-based
Awards of Restricted Shares intended to qualify for deductibility
under the "performance-based" compensation exception contained in
Section 162(m) of the Code, performance targets will include specified
levels of one or more of the following (in absolute terms or relative
to one or more other companies or indices): operating income, return
on investment, return on shareholders' equity, stock price
appreciation, earnings before interest, taxes, depreciation and
amortization, earnings per share and/or growth in earnings per share.
The terms of any Restricted Share Award granted under this Plan shall
be set forth in an Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with this Plan.
(a) Issuance of Restricted Shares. As soon as practicable
after the Date of Grant of a Restricted Share Award by the
Committee, the Company shall cause to be transferred on the books
of the Company or its agent, shares of Common Stock, registered
on behalf of the Participant, evidencing the Restricted Shares
covered by the Award, subject to forfeiture to the Company as of
the Date of Grant if an Award Agreement with respect to the
Restricted Shares covered by the Award is not duly executed by
the Participant and timely returned to the Company. All shares of
Common Stock covered by Awards under this Article VII shall be
subject to the restrictions, terms and conditions contained in
the Plan and the applicable Award Agreements entered into by the
appropriate Participants. Until the lapse or release of all
restrictions applicable to an Award of Restricted Shares the
share certificates representing such Restricted Shares may be
held in custody by the Company, its designee, or, if the
certificates bear a restrictive legend, by the Participant. Upon
the lapse or release of all restrictions with respect to an Award
as described in Section 7.01(d), one
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or more share certificates,
registered in the name of the Participant, for an appropriate
number of shares as provided in Section 7.01(d), free of any
restrictions set forth in the Plan and the related Award
Agreement shall be delivered to the Participant.
(b) Shareholder Rights. Beginning on the Date of Grant of
a Restricted Share Award and subject to execution of the related
Award Agreement as provided in Section 7.01(a), and except as
otherwise provided in such Award Agreement, the Participant shall
become a shareholder of the Company with respect to all shares
subject to the Award Agreement and shall have all of the rights
of a shareholder, including, but not limited to, the right to
vote such shares and the right to receive dividends; provided,
however, that any shares of Common Stock distributed as a
dividend or otherwise with respect to any Restricted Shares as to
which the restrictions have not yet lapsed, shall be subject to
the same restrictions as such Restricted Shares and held or
restricted as provided in Section 7.01(a).
(c) Restriction on Transferability. None of the
Restricted Shares may be assigned or transferred (other than by
will or the laws of descent and distribution or to an inter vivos
trust with respect to which the Participant is treated as the
owner under Sections 671 through 677 of the Code), pledged or
sold prior to the lapse of the restrictions applicable thereto.
(d) Delivery of Shares Upon Vesting. Upon expiration or
earlier termination of the forfeiture period without a forfeiture
and the satisfaction of or release from any other conditions
prescribed by the Committee, or at such earlier time as provided
under the provisions of Section 7.03, the restrictions applicable
to the Restricted Shares shall lapse. As promptly as
administratively feasible thereafter, subject to the requirements
of Section 9.05, the Company shall deliver to the Participant or,
in case of the Participant's death, to the Participant's
Beneficiary, one or more share certificates for the appropriate
number of shares of Common Stock, free of all such restrictions,
except for any restrictions that may be imposed by law.
7.02 Terms of Restricted Shares.
(a) Forfeiture of Restricted Shares. Subject to
Sections 7.02(b) and 7.03, Restricted Shares shall be forfeited
and returned to the Company and all rights of the Participant
with respect to such Restricted Shares shall terminate unless the
Participant continues in the service of the Company or a
Subsidiary until the expiration of the forfeiture period for such
Restricted Shares and satisfies any and all other conditions set
forth in the Award Agreement. The Committee shall determine the
forfeiture period (which may, but need not, lapse in
installments) and any other terms and conditions applicable with
respect to any Restricted Share Award.
(b) Waiver of Forfeiture Period. Notwithstanding anything
contained in this Article VII to the contrary, the Committee may,
in its sole discretion, waive the forfeiture period and any other
conditions set forth in any Award Agreement under appropriate
circumstances (including the death, disability or Retirement of
the Participant or a material change in circumstances arising
after the date of an Award) and subject to such terms and
conditions (including forfeiture of a proportionate number of the
Restricted Shares) as the Committee shall deem appropriate.
7.03 Change in Control. Unless otherwise provided by the
Committee in the applicable Award Agreement, in the event of a Change
in Control, all restrictions applicable to the Restricted Share Award
shall
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terminate fully and the Participant shall immediately have the
right to the delivery of share certificates for such shares in
accordance with Section 7.01(d).
ARTICLE VIII
PERFORMANCE AWARDS
8.01 Performance Awards.
(a) Award Periods and Determinations of Awards. The
Committee may grant Performance Awards to Participants. A
Performance Award shall consist of the right to receive a payment
(measured by the Fair Market Value of a specified number of
shares of Common Stock, increases in such Fair Market Value
during the Award Period and/or a fixed cash amount) contingent
upon the extent to which certain predetermined performance
targets have been met during an Award Period. Performance Awards
may be made in conjunction with, or in addition to, Restricted
Share Awards made under Article VII. The Award Period shall be
two or more fiscal or calendar years or other annual periods as
determined by the Committee. The Committee, in its discretion and
under such terms as it deems appropriate, may permit newly
eligible Participants, such as those who are promoted or newly
hired, to receive Performance Awards after an Award Period has
commenced.
(b) Performance Targets. The performance targets may
include such goals related to the performance of the Company
and/or the performance of a Participant as may be established by
the Committee in its discretion. In the case of Performance
Awards intended to qualify for deductibility under the
"performance-based" compensation exception contained in Section
162(m) of the Code, the targets will include specified levels of
one or more of the following (in absolute terms or relative to
one or more other companies or indices): operating income, return
on investment, return on shareholders' equity, stock price
appreciation, earnings before interest, taxes, depreciation and
amortization, earnings per share and/or growth in earnings per
share. The performance targets established by the Committee may
vary for different Award Periods and need not be the same for
each Participant receiving a Performance Award in an Award
Period. Except to the extent inconsistent with the
performance-based compensation exception under Section 162(m) of
the Code, in the case of Performance Awards granted to
Participants to whom such section is applicable, the Committee,
in its discretion, but only under extraordinary circumstances as
determined by the Committee, may change any prior determination
of performance targets for any Award Period at any time prior to
the final determination of the value of a related Performance
Award when events or transactions occur to cause such performance
targets to be an inappropriate measure of achievement.
(c) Earning Performance Awards. The Committee, on or as
soon as practicable after the Date of Grant, shall prescribe a
formula to determine the percentage of the applicable Performance
Award to be earned based upon the degree of attainment of
performance targets.
(d) Payment of Earned Performance Awards. Payments of
earned Performance Awards shall be made in cash or shares of
Common Stock or a combination of cash and shares of Common Stock,
in the discretion of the Committee. The Committee, in its sole
discretion, may provide such terms and conditions with respect to
the payment of earned Performance Awards as it may deem
desirable.
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<PAGE>
8.02 Terms of Performance Awards.
(a) Termination of Employment. Unless otherwise provided
below or in Section 8.03, in the case of a Participant's
Termination of Employment prior to the end of an Award Period,
the Participant will not have earned any Performance Awards for
that Award Period.
(b) Retirement. If a Participant's Termination of
Employment is because of Retirement prior to the end of an Award
Period, the Participant will not be paid any Performance Award,
unless the Committee, in its sole and exclusive discretion,
determines that an Award should be paid. In such a case, the
Participant shall be entitled to receive a pro-rata portion of
his or her Award as determined under subsection (d).
(c) Death or Disability. If a Participant's Termination of
Employment is due to death or to disability (as determined in the
sole and exclusive discretion of the Committee) prior to the end
of an Award Period, the Participant or the Participant's personal
representative shall be entitled to receive a pro-rata share of
his or her Award as determined under subsection (d).
(d) Pro-Rata Payment. The amount of any payment to be made
to a Participant whose employment is terminated by Retirement,
death or disability (under the circumstances described in
subsections (b) and (c)) will be the amount determined by
multiplying (i) the amount of the Performance Award that would
have been earned through the end of the Award Period had such
employment not been terminated by (ii) a fraction, the numerator
of which is the number of whole months such Participant was
employed during the Award Period, and the Denominator of which is
the total number of months of the Award Period. Any such payment
made to a Participant whose employment is terminated prior to the
end of an Award Period shall be made at the end of such Award
Period, unless otherwise determined by the Committee in its sole
discretion. Any partial payment previously made or credited to a
deferred account for the benefit of a Participant in accordance
with Section 8.01(d) of the Plan shall be subtracted from the
amount otherwise determined as payable as provided in this
Section 8.02(d).
(e) Other Events. Notwithstanding anything to the contrary
in this Article VIII, the Committee may, in its sole and
exclusive discretion, determine to pay all or any portion of a
Performance Award to a Participant who has terminated employment
prior to the end of an Award Period under certain circumstances
(including the death, disability or Retirement of the Participant
or a material change in circumstances arising after the Date of
Grant), subject to such terms and conditions as the Committee
shall deem appropriate.
8.03 Change in Control. Unless otherwise provided by the
Committee in the applicable Award Agreement, in the event of a Change
in Control, all Performance Awards for all Award Periods shall
immediately become fully payable to all Participants and shall be paid
to Participants within thirty (30) days after such Change in Control.
ARTICLE IX
TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
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9.01 Plan Provisions Control Award Terms. The terms of the Plan
shall govern all Awards granted under the Plan, and in no event shall
the Committee have the power to grant any Award under the Plan the
terms of which are contrary to any of the provisions of the Plan. In
the event any provision of any Award granted under the Plan shall
conflict with any term in the Plan as constituted on the Date of Grant
of such Award, the term in the Plan as constituted on the Date of
Grant of such Award shall control.
9.02 Award Agreement. No person shall have any rights under any
Award granted under the Plan unless and until the Company and the
Participant to whom such Award shall have been granted shall have
executed and delivered an Award Agreement or the Participant shall
have received and acknowledged notice of the Award authorized by the
Committee expressly granting the Award to such person and containing
provisions setting forth the terms of the Award.
9.03 Modification of Award After Grant. No Award granted under
the Plan to a Participant may be modified (unless such modification
does not materially decrease the value of that Award) after its Date
of Grant except by express written agreement between the Company and
such Participant, provided that any such change (a) may not be
inconsistent with the terms of the Plan, and (b) shall be approved by
the Committee.
9.04 Limitation on Transfer. Except as provided in
Section 7.01(c) in the case of Restricted Shares, a Participant's
rights and interest under the Plan may not be assigned or transferred
other than by will or the laws of descent and distribution and, during
the lifetime of a Participant, only the Participant personally (or the
Participant's personal representative) may exercise rights under the
Plan. The Participant's Beneficiary may exercise the Participant's
rights to the extent they are exercisable under the Plan following the
death of the Participant. Notwithstanding the foregoing, the Committee
may grant Non-Qualified Stock Options that are transferable, without
payment of consideration, to immediate family members of the
Participant, to trusts or partnerships for such family members, or to
such other parties as the Committee may approve (was evidenced by the
applicable Award Agreement or an amendment thereto), and the Committee
may also amend outstanding Non-Qualified Stock Options to provide for
such transferability.
9.05 Withholding Taxes. The Company shall be entitled, if the
Committee deems it necessary or desirable, to withhold (or secure
payment from the Participant in lieu of withholding) the amount of any
withholding or other tax required by law to be withheld or paid by the
Company with respect to any amount payable and/or shares issuable
under such Participant's Award or with respect to any income
recognized upon a disqualifying disposition of shares received
pursuant to the exercise of an Incentive Stock Option, and the Company
may defer payment of cash or issuance of shares upon exercise or
vesting of an Award unless indemnified to its satisfaction against any
liability for any such tax. The amount of such withholding or tax
payment shall be determined by the Committee and shall be payable by
the Participant at such time as the Committee determines. With the
approval of the Committee, the Participant may elect to meet his or
her withholding requirement (i) by having withheld from such Award at
the appropriate time that number of shares of Common Stock, rounded up
to the next whole share, the Fair Market Value of which is equal to
the amount of withholding taxes due, (ii) by direct payment to the
Company in cash of the minimum amount of any taxes required to be
withheld with respect to such Award or (iii) by a combination of
withholding such shares and paying cash.
9.06 Surrender of Awards. Any Award granted under the Plan may
be surrendered to the Company for cancellation on such terms as the
Committee and the Participant approve.
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9.07 Cancellation and Rescission of Awards.
(a) Detrimental Activities. Unless the Award Agreement
specifies otherwise, the Committee may cancel, rescind, suspend,
withhold or otherwise limit or restrict any unexpired, unpaid, or
deferred Awards at any time if the Participant is not in
compliance with all applicable provisions of the Award Agreement
and the Plan, or if the Participant engages in any "Detrimental
Activity." For purposes of this Section 9.07, "Detrimental
Activity" shall include: (i) the rendering of services for any
organization or engaging directly or indirectly in any business
which is or becomes competitive with the Company, or which
organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to
or in conflict with the interests of the Company; (ii) the
disclosure to anyone outside the Company, or the use in other
than the Company's business, without prior written authorization
from the Company, of any confidential information or material
relating to the business of the Company, acquired by the
Participant either during or after employment with the Company;
(iii) any attempt directly or indirectly to induce any employee
of the Company to be employed or perform services elsewhere or
any attempt directly or indirectly to solicit the trade or
business of any current or prospective customer, supplier or
partner of the Company; or (iv) any other conduct or act
determined to be injurious, detrimental or prejudicial to any
interest of the Company.
(b) Upon exercise, payment or delivery pursuant to an
Award, the Participant shall certify in a manner acceptable to
the Company that he or she is in compliance with the terms and
conditions of the Plan. In the event a Participant fails to
comply with the provisions of paragraphs (a)(i)-(vii) of this
Section 9.07 prior to, or during the six months after, any
exercise, payment or delivery pursuant to an Award, such
exercise, payment or delivery may be rescinded within two years
thereafter. In the event of any such rescission, the Participant
shall pay to the Company the amount of any gain realized or
payment received as a result of the rescinded exercise, payment
or delivery, in such manner and on such terms and conditions as
may be required, and the Company shall be entitled to set-off
against the amount of any such gain any amount owed to the
Participant by the Company.
9.08 Adjustments to Reflect Capital Changes.
(a) Recapitalization. The number and kind of shares
subject to outstanding Awards, the Exercise Price or Exercise
Price for such shares, the number and kind of shares available
for Awards subsequently granted under the Plan and the maximum
number of shares in respect of which Awards can be made to any
Participant in any calendar year shall be appropriately adjusted
to reflect any stock dividend, stock split, combination or
exchange of shares, merger, consolidation or other change in
capitalization with a similar substantive effect upon the Plan or
the Awards granted under the Plan. The Committee shall have the
power and sole discretion to determine the amount of the
adjustment to be made in each case.
(b) Certain Mergers. After any Merger in which the Company
is not the surviving corporation or pursuant to which a majority
of the shares which are of the same class as the shares that are
subject to outstanding Options are exchanged for, or converted
into, or otherwise become shares of another corporation, the
surviving, continuing, successor or purchasing corporation, as
the case may be (the "Acquiring Corporation"), will either assume
the Company's rights and obligations under outstanding Award
Agreements or substitute awards in respect of the Acquiring
Corporation's
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stock for outstanding Awards, provided, however,
that if the Acquiring Corporation does not assume or substitute
for such outstanding Awards, the Board shall provide prior to the
Merger that any unexercisable and/or unvested portion of the
outstanding Awards shall be immediately exercisable and vested as
of a date prior to such Merger, as the Board so determines. The
exercise and/or vesting of any Award that was permissible solely
by reason of this Section 9.08 shall be conditioned upon the
consummation of the Merger. Any Awards which are neither assumed
by the Acquiring Corporation nor exercised as of the date of the
Merger shall terminate effective as of the effective date of the
Merger. Comparable rights shall accrue to each Participant in the
event of successive Mergers of the character described above.
(c) Options to Purchase Shares or Stock of Acquired
Companies. After any Merger in which the Company or a Subsidiary
shall be a surviving corporation, the Committee may grant Options
or other Awards under the provisions of the Plan, pursuant to
Section 424 of the Code or as is otherwise permitted under the
Code, in full or partial replacement of or substitution for old
stock options granted under a plan of another party to the merger
whose shares of stock subject to the old options may no longer be
issued following the Merger. The manner of application of the
foregoing provisions to such options and any appropriate
adjustments in the terms of such stock options shall be
determined by the Committee in its sole discretion. Any such
adjustments may provide for the elimination of any fractional
shares which might otherwise become subject to any Options. The
foregoing shall not be deemed to preclude the Company from
assuming or substituting for stock options of acquired companies
other than pursuant to this Plan.
9.09 Legal Compliance. Shares of Common Stock shall not be
issued hereunder unless the issuance and delivery of such shares shall
comply with applicable laws and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
9.10 No Right to Employment. No Participant or other person
shall have any claim of right to be granted an Award under the Plan.
Neither the Plan nor any action taken hereunder shall be construed as
giving any Participant any right to be retained in the service of the
Company or any of its Subsidiaries.
9.11 Awards Not Includable for Benefit Purposes. Payments
received by a Participant pursuant to the provisions of the Plan shall
not be included in the determination of benefits under any pension,
group insurance or other benefit plan applicable to the Participant
which is maintained by the Company or any of its Subsidiaries, except
as may be provided under the terms of such plans or determined by the
Board.
9.12 Governing Law. All determinations made and actions taken
pursuant to the Plan shall be governed by the laws of the State of
Maryland, other than the conflict of laws provisions thereof, and
construed in accordance therewith.
9.13 No Strict Construction. No rule of strict construction
shall be implied against the Company, the Committee or any other
person in the interpretation of any of the terms of the Plan, any
Award granted under the Plan or any rule or procedure established by
the Committee.
9.14 Captions. The captions (i.e., all Section headings) used
in the Plan are for convenience only, do not constitute a part of the
Plan, and shall not be deemed to limit, characterize or affect in any
way any provisions of the Plan, and all provisions of the Plan shall
be construed as if no captions had been used in the Plan.
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<PAGE>
9.15 Severability. Whenever possible, each provision in the
Plan and every Award at any time granted under the Plan shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Plan or any Award at any
time granted under the Plan shall be held to be prohibited by or
invalid under applicable law, then (a) such provision shall be deemed
amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other
provisions of the Plan, such Award and every other Award at any time
granted under the Plan shall remain in full force and effect.
9.16 Amendment and Termination.
(a) Amendment. The Board shall have complete power and
authority to amend the Plan at any time; provided, that no
termination or amendment of the Plan may, without the consent of
the Participant to whom any Award shall theretofore have been
granted under the Plan, materially adversely affect the right of
such individual under such Award; and provided further, that no
such alteration or amendment of the Plan shall, without approval
by the shareholders of the Company (a) increase the total number
of shares of Common Stock which may be issued or delivered under
the Plan, (b) increase the total number of shares which may be
covered by Awards to any one Participant, or (c) change the
minimum Option Exercise Price.
(b) Termination. The Board shall have the right and the
power to terminate the Plan at any time. No Award shall be
granted under the Plan after the termination of the Plan, but the
termination of the Plan shall not have any other effect and any
Award outstanding at the time of the termination of the Plan may
be exercised after termination of the Plan at any time prior to
the expiration date of such Award to the same extent such Award
would have been exercisable had the Plan not been terminated.
<PAGE>
EXHIBIT 5.1
October 8, 1998
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549
RE: Allegheny Energy, Inc. 1998 Long-Term Incentive
Plan
Ladies and Gentlemen:
I am legal counsel to and Vice-President of Allegheny
Energy, Inc. (the "Company") and have reviewed the Registration
Statement on Form S-8 ("Registration Statement") under the
Securities Act of 1933, as amended, covering an aggregate of
10,000,000 shares of Common Stock, par value $1.25 per share (the
"Shares") of the Company, to be issued pursuant to the Allegheny
Energy, Inc. 1998 Long-Term Incentive Plan (the "Plan").
I have examined, or have had attorneys under my
supervision examine, and am familiar with the Restated
Certificate of Incorporation, as amended, and the By-Laws of the
Company, and the various corporate records and proceedings
relating to the proposed issuance of the Shares. I have also
examined, or have had attorneys under my supervision examine,
such other documents and proceedings as I have considered
necessary for the purpose of this opinion.
Based on the foregoing, it is my opinion that the
Shares have been duly authorized and, when issued and paid for in
accordance with the terms of the Registration Statement and the
Plan, will be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
/s/ Thomas K. Henderson
Thomas K. Henderson
<PAGE>
EXHIBIT 23.2
CONSENT OF THE INDEPENDENT AUDITORS
To the Board of Directors of Allegheny Energy, Inc.
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report, dated February 4, 1998,
appearing on page 41 of the Allegheny Energy, Inc. Annual Report
on Form 10-K for the year ended December 31, 1997.
Pittsburgh, Pennsylvania
October 14, 1998
PricewaterhouseCoopers LLP
