As filed with the Securities and
Exchange Commission on September 18, 1998
Registration No. 333-
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
___________________
Aquarion Company
(Exact name of registrant as specified in its charter)
Delaware 06-0885252
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
835 Main Street
Bridgeport, Connecticut 06604-4995
(Address, including zip code, of Registrant's principal executive offices)
________________________
Aquarion Company Stock Incentive Plan
(Full Title of the Plan)
________________________
Janet M. Hansen
Executive Vice President, Chief Financial Officer and Treasurer
Aquarion Company
835 Main Street
Bridgeport, Connecticut 06604-4995
(203) 335-2333
(Name, address and telephone number, including area code, of agent for service)
________________________
Copies to:
Martin L. Budd, Esq.
Day, Berry & Howard LLP
One Canterbury Green
Stamford, Connecticut 06901-2047
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount Proposed Proposed Maximum
Securities to to be Maximum Aggregate Amount of
be Registered Registered Per Share (3) Offering Price(3) Registration Fee
-------------- ---------- ------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, no par
value (1) 300,000 shares (2) $33.53125 $10,059,375 $2,967.52
===========================================================================================
(1) This Registration Statement also pertains to Preferred Share Purchase
Rights ("Rights") of the Registrant. Until the occurrence of certain
prescribed events, the Rights are not exercisable, will be evidenced by
the certificates for the Common Stock and will be transferred along with
and only with the Common Stock.
(2) In addition, pursuant to Rule 416(a), this Registration Statement also
covers such indeterminate number of addditional shares of Common Stock
and Rights as is necessary to eliminate any dilutive effect of any
future stock split, stock dividend or similar transaction.
(3) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) and (h), based on the average of the high
and low sale prices of the Common Stock on September 16, 1998, as
reported on the New York Stock Exchange Composite Tape.
======================================================================================================
</TABLE>
<PAGE>
<PAGE>
PART II
Information Required in the Registration Statement
Pursuant to General Instruction E to Form S-8, the contents of the
Registration Statement on Form S-8, File No. 33-53473, filed by Aquarion
Company (the "Company"), are hereby incorporated herein by reference and made
a part hereof, except to the extent that such contents are modified or
superseded hereby.
Item 3. Incorporation of Documents By Reference
The following documents filed with the Securities and Exchange Commission
by the Company are hereby incorporated in this Registration Statement by
reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1998 and June 30, 1998;
(c) The description of the Company's Common Stock contained in the
Registration Statement on Form 8-A filed by the Company to
register its Common Stock pursuant to Section 12(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including any amendments or reports filed for purposes of updating
such description; and
(d) The description of the Company's Preferred Share Purchase Rights
contained in the Registration Statement on Form 8-A filed by the
Company to register its Preferred Share Purchase Rights pursuant
to Section 12(b) of the Exchange Act, including any amendments or
reports filed for purposes of updating such description.
All documents filed by the Company pursuant to Sections 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 which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing 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 or
is 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.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Company is incorporated under the laws of the State of Delaware.
Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a Delaware corporation may indemnify any person who is,
or is threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation
or enterprise. The indemnity may include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding,
provided such person acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the corporation's best interests and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe that his or her conduct was unlawful. A Delaware corporation may also
indemnify any person who is, or is threatened to be made, a party to any
threatened,
-2-
<PAGE>
<PAGE>
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person is or
was a director, officer, employee or agent of such corporation, or is or was
serving at the request of such corporation as a director, officer, employee or
agent of another corporation or enterprise. The indemnity may include
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit,
provided such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests, except
that no indemnification is permitted without judicial approval if the officer,
director, employee or agent is adjudged to be liable to the corporation. In
addition, Section 145(c) of the DGCL provides that when an officer or director
is successful on the merits or otherwise in the defense of any action referred
to above, the corporation must indemnify him against the expenses which such
officer or director has actually and reasonably incurred.
The Company's Amended and Restated By-laws contain provisions requiring
indemnification of its officers and directors to the maximum extent permitted
by Delaware law and allowing such indemnification of its employees and agents
and persons serving at its request as a director, officer, employee or agent
of another entity.
Section 145(e) of the DGCL provides that expenses (including attorney's
fees) incurred by a director or officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that such
director or officer is not entitled to be indemnified by the corporation. The
Company s Amended and Restated By-laws provide that expenses incurred in
defending a civil or criminal action, suit or proceeding may be paid by the
Company in advance of the final disposition of such action, suit or proceeding
as authorized by the Company s Board of Directors, upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to
repay such amount unless it shall ultimately be determined that he or she is
entitled to be indemnified by the Company.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duties as a director, except for liability (i) for any
transaction from which the director derives an improper personal benefit, (ii)
for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, (iii) for improper payment of dividends, stock
purchases or redemptions of shares, or (iv) for any breach of a director's
duty of loyalty to the company or its stockholders. The Company's Restated
Certificate of Incorporation includes such a provision.
The Company's Amended and Restated By-laws provide that the Board of
Directors, notwithstanding any interest of the directors in the action, may
authorize the Company to purchase and maintain insurance, in such amounts as
the Board of Directors deems appropriate, on behalf of any person who is or
was a director, officer, employee or agent of the Company or its subsidiaries,
or is or was serving at the request of the Company as a director, officer,
employee or agent of another enterprise, for liabilities incurred by him or
her in any such capacity or arising out of his or her status as such, whether
or not the Company shall have the power to indemnify such person against such
liability.
The Company maintains an insurance policy under which its directors and
officers are insured, within the limits and subject to the limitations of such
insurance policy, against certain liabilities which may be imposed in
connection with such persons' service as such directors or officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Restated Certificate of Incorporation of the Company (incorporated
by reference to Exhibit 3(a) to the Company's Quarterly Report on
Form 10-Q (File No. 1-8060) for the quarter ended March 31, 1998).
4.2 Amended and Restated By-laws of the Company (incorporated by
reference to Exhibit 3(b) to the Company's Quarterly Report on
Form 10-Q (File No. 1-8060) for the quarter ended March 31, 1998).
4.3 Rights Agreement, dated as of June 25, 1996, between the Company
and ChaseMellon Shareholder Services, L.L.C., which includes the
Form of Certificate of Designation of Series B Junior
Participating Preferred Stock
-3-
<PAGE>
<PAGE>
as Exhibit A, the form of Right Certificate as Exhibit B and the Summary of
Rights to Purchase Shares of Preferred Stock as Exhibit C (incorporated by
reference to Exhibit 1 to the Company's Registration Statement on Form 8-A
(File No. 1-8060) dated June 26, 1996).
5 Opinion of Day, Berry & Howard LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Day, Berry & Howard LLP (included in the opinion filed
as Exhibit 5).
24 Power of Attorney.
99 Aquarion Company Stock Incentive Plan.
- --------------------------------
Item 9. Undertakings.
(a) 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 of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(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
set forth in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant 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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant s annual report pursuant to Section 13(a) or Section 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 herein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
-4-
<PAGE>
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant 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 the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
-5-
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Aquarion Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements of 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 Bridgeport, State of Connecticut, on this 18th day
of September, 1998.
AQUARION COMPANY
By: /s/JANET M. HANSEN
-------------------------------
Janet M. Hansen
Executive Vice President,
Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
on this 18th day of September, 1998.
*
- ------------------------------ Chairman of the Board of Directors and
George W. Edwards, Jr. Director
*
- ------------------------------ President, Chief Executive Officer and
Richard K. Schmidt Director
(Principal Executive Officer)
/s/JANET M. HANSEN
- ------------------------------ Executive Vice President, Chief Financial
Janet M. Hansen Officer and Treasurer
(Principal Financial and Accounting
Officer)
*
- ------------------------------ Director
Jack E. McGregor
*
- ------------------------------ Director
Geoffrey Etherington
*
- ------------------------------ Director
Janet D. Greenwood
*
- ------------------------------ Director
Donald M. Halsted, Jr.
*
- ------------------------------ Director
Edgar G. Hotard
-6-
<PAGE>
<PAGE>
*
- ------------------------------ Director
G. Jackson Ratcliffe
*
- ------------------------------ Director
John A. Urquhart
* By signing her name hereto, Janet M. Hansen signs this Registration
Statement as Executive Vice President, Chief Financial Officer and
Treasurer of the Registrant and on behalf of the persons indicated above
pursuant to the power of attorney duly executed by such persons and
filed herewith.
/s/JANET M. HANSEN
------------------------------
(Janet M. Hansen, Attorney-in-Fact)
-7-
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibit
4.1 Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3(a) to the Company's
Quarterly Report on Form 10-Q (File No. 1-8060) for the quarter
ended March 31, 1998).
4.2 Amended and Restated By-laws of the Company (incorporated by
reference to Exhibit 3(b) to the Company's Quarterly Report on
Form 10-Q (File No. 1-8060) for the quarter ended March 31,
1998).
4.3 Rights Agreement, dated as of June 25, 1996, between the
Company and ChaseMellon Shareholder Services, L.L.C., which
includes the Form of Certificate of Designation of Series B
Junior Participating Preferred Stock as Exhibit A, the form of
Right Certificate as Exhibit B and the Summary of Rights to
Purchase Shares of Preferred Stock as Exhibit C (incorporated
by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A (File No. 1-8060) dated June 26, 1996).
5 Opinion of Day, Berry & Howard LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Day, Berry & Howard LLP (included in the opinion
filed as Exhibit 5).
24 Power of Attorney.
99 Aquarion Company Stock Incentive Plan.
<PAGE>
Exhibit 5
September 18, 1998
Aquarion Company
835 Main Street
Bridgeport, CT 06601-2353
Re: Aquarion Company Stock Incentive Plan
Registration Statement on Form S-8
---------------------------------------
Ladies and Gentlemen:
We are counsel for Aquarion Company, a Delaware corporation (the
"Company"), and issue the following opinion in connection with a Registration
Statement on Form S-8 (the "Registration Statement"), to be filed by the
Company under the Securities Act of 1933, as amended (the "Act"), with respect
to the proposed offering by the Company of an additional 300,000 shares of its
Common Stock, no par value (the "Shares"), and related Preferred Share
Purchase Rights (the "Rights"), in connection with the Company's Stock
Incentive Plan (the "Plan").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of the Restated Certificate of Incorporation and By-laws
of the Company, each as amended, and such other documents, corporate records,
certificates of public officials and instruments as we have considered
necessary or advisable for the purpose of this opinion. We have assumed the
authenticity of all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as copies. We have not
independently verified such information and assumptions.
We are members of the Bar of the State of Connecticut and we express no
opinion as to the law of any jurisdiction other than the laws of the State of
Connecticut and Delaware corporate law.
Subject to the foregoing and based on such examination and review, we
are of the opinion that:
1. When the Registration Statement has become effective under the Act
and the Shares have been issued and delivered against payment therefor in
accordance with the applicable provisions of the Plan, the Shares issued
pursuant to the Plan will be duly authorized, validly issued, fully paid and
non-assessable.
2. Assuming that the Rights Agreement, dated as of June 25, 1996,
between the Company and ChaseMellon Shareholder Services, L.L.C.
("ChaseMellon") has been duly authorized, executed and delivered by
ChaseMellon, when the Registration Statement has become effective under the
Act and the shares have been validly issued and delivered as contemplated in
the preceding paragraph, the Rights attributable to the Shares will be validly
issued.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving the foregoing consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act, or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
DAY, BERRY & HOWARD L.L.P.
/s/MICHAEL F. HALLORAN
By:______________________________
Michael F. Halloran
MFH:SSFC/VW
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 and the related Prospectus of
our report dated January 28, 1998, which appears on page 29 of
the 1997 Annual Report to Shareholders of Aquarion Company, which
is incorporated by reference in Aquarion Company's Annual Report
on Form 10-K for the year ended December 31, 1997.
/s/PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
New York, NY
September 17, 1998
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, officers
and directors of Aquarion Company (the "Company") in their respective
capacities set forth below constitutes and appoints Richard K. Schmidt, Janet
M. Hansen and Larry L. Bingaman, and each of them, 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 do any and all acts and all things and to execute any
and all instruments which said attorney and agent may deem necessary or
desirable to enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations and requirements of the Securities and
Exchange Commission thereunder in connection with the registration under such
Act of shares of Common Stock of the Company ("Common Stock"), and related
Preferred Share Purchase Rights ("Rights"), to be issued pursuant to the
Aquarion Company Stock Incentive Plan (the "Plan") to the extent that any such
registration may be required in the opinion of the executive officers of the
Company, upon the advice of counsel, including, without limitation, the power
and authority to sign the name of the undersigned individual in the capacity
indicated below opposite the name of such individual to a Registration
Statement on Form S-8 or any other Form, relating to the registration of such
Common Stock and Rights, to be filed with the Securities and Exchange
Commission with respect to said Common Stock and Rights, to sign any and all
amendments (including post-effective amendments) and supplements to such
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and 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, 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 either of them, or their substitutes,
may lawfully do or cause to be done by virtue hereof.
Signature Title Date
/s/GEORGE W. EDWARDS
- -----------------------------
George W. Edwards, Jr. Chairman of the June 23, 1998
Board of Directors
and Director
/s/RICHARD K. SCHMIDT
- -----------------------------
Richard K. Schmidt President, Chief June 23, 1998
Executive Officer
and Director
/s/JANET M. HANSEN
- -----------------------------
Janet M. Hansen Executive Vice June 23, 1998
President,Chief
Financial Officer and
Treasurer
/s/JACK E. MCGREGOR
- -----------------------------
Jack E. McGregor Director June 23, 1998
/s/GEOFFREY ETHERINGTON
- -----------------------------
Geoffrey Etherington Director June 23, 1998
/s/JANET D. GREENWOOD
- -----------------------------
Janet D. Greenwood Director June 23, 1998
/s/DONALD M. HALSTED, JR.
- -----------------------------
Donald M. Halsted, Jr. Director June 23, 1998
<PAGE>
/s/EDGAR G. HOTARD
- -----------------------------
Edgar G. Hotard Director June 23, 1998
/s/G. JACKSON RATCLIFFE
- -----------------------------
G. Jackson Ratcliffe Director June 23, 1998
/s/JOHN A. URQUHART
- -----------------------------
John A. Urquhart Director June 23, 1998
<PAGE>
EXHIBIT 99
AQUARION COMPANY
STOCK INCENTIVE PLAN
Effective as of April 26, 1994
and amended as of April 22, 1997
1. Purpose
The purpose of the Aquarion Company Stock Incentive Plan is to attract
and retain persons of ability as employees of Aquarion Company and its
subsidiaries, motivate and reward good performance, encourage such
employees to continue to exert their best efforts on behalf of the
Company and its subsidiaries and provide further opportunities for stock
ownership by such employees in order to increase their proprietary
interest in Aquarion Company by providing incentive awards to Key
Employees (including officers and directors who are also employees),
whose responsibilities and decisions directly affect the performance of
the Company and its subsidiaries. Such incentive awards may consist of
Common Stock of Aquarion Company, or at the discretion of the Committee,
other shares of stock of the Company convertible into such Common Stock,
subject to such restrictions as the Committee may determine or as
provided herein, performance units or stock appreciation rights payable
in such stock or cash, or incentive or non-qualified stock options to
purchase such stock, or any combination of the foregoing, as the
Committee may determine.
2. Definitions
When used herein, the following terms shall have the following meanings:
"Award" means an award granted to any Key Employee in accordance with
the provisions of the Plan in the form of Options, Rights, Restricted
Stock, Stock or Performance Units, or any combination of the foregoing.
"Award Agreement" means the written agreement evidencing each Award
granted to a Key Employee under the Plan.
"Beneficiary" means the beneficiary or beneficiaries designated pursuant
to Section 11 to achieve the amount, if any, payable under the Plan upon
the death of a Key Employee.
"Board" means the Board of Directors of the Company.
"Change of Control" shall be deemed to have occurred in the following
circumstances unless the event in question has been approved in advance
by the continuing directors:
(a) The acquisition by any person (including a group, within the meaning
of Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934 but
excluding the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company) of beneficial ownership
of 15 percent or more of the Company's then outstanding voting
securities;
(b) Commencement of a tender offer or exchange offer, pursuant to which
shares of the Company's Stock are at any time purchased;
(c) The first day on which less than two-thirds of the total membership
of the Board of Directors of the Company are continuing directors; or
A-1
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<PAGE>
(d) Approval by shareholders of the Company of a merger, consolidation,
liquidation or dissolution of the Company, or of the sale of all or
substantially all of the assets of the Company.
"Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. (All citations to sections of the Code are to such
sections as they may from time to time be amended or renumbered.)
"Committee" means the Compensation Committee of the Board.
"Company" means Aquarion Company, and its successors and assigns.
"Continuing Director" means any director of the Company who either is a
member of the Board of Directors on February 22, 1994 or is recommended
or elected to the Company's Board of Directors by a majority of the
continuing directors.
"Fair Market Value" means, as of any date, the closing price for one
share of Stock on the New York Stock Exchange Composite Tape or, if no
sales of Stock have taken place on such date, the closing price on the
most recent date on which selling prices were quoted. If the Stock is
not listed or admitted to trading on the New York Stock Exchange, the
fair market value of the Stock shall be the closing price of one share
of Stock on the principal national securities exchange which the Stock
is listed or admitted to trading, or, if the Stock is not listed or
admitted to trading on any national securities exchange, the closing
price of one share of Stock as furnished by the National Association of
Securities Dealers, Inc. through the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or similar organization if
NASDAQ is no longer reporting that information. If the Stock is not
quoted by any such organization, the fair market value of the Stock
shall be determined in good faith by the Committee, or in the event of a
Change of Control, the continuing directors.
"Key Employee" means those employees (including any officer or director
who is also an employee) of any Participating Company who, in the
judgment of the Committee, are considered especially important to the
future of the Company.
"Option" means an option to purchase Stock, including Restricted Stock
if the Committee so determines, subject to the appropriate requirements
under Section 5 and awarded in accordance with the terms of the Plan and
may be an incentive stock option qualified under Section 422 of the Code
or a non-qualified stock option.
"Participating Company" means the Company or any subsidiary or other
affiliate of the Company; provided, however, for incentive stock options
only, "Participating Company" means the Company or any corporation which
at the time such option is granted under the Plan qualifies as a
subsidiary of the Company under the definition of "subsidiary
corporation" contained in Section 424(f) of the Code.
"Performance Unit" means a performance unit subject to the requirements
of Section 6 and awarded in accordance with the terms of the Plan.
"Plan" means Aquarion Company Stock Incentive Plan, as the same may be
amended, administered or interpreted from time to time.
"Restricted Stock" means Stock delivered under the Plan subject to the
requirements of Section 7 and such other restrictions as the Committee
deems appropriate or desirable.
A-2
<PAGE>
<PAGE)
"Right" means a stock appreciation right subject to the appropriate
requirements under Section 5 and awarded in accordance with the terms of
the Plan.
"Stock" means the Common Stock (no par value) of the Company.
"Total Disability" means the complete and permanent inability of a Key
Employee to perform all his or her duties under the terms of his or her
employment with any Participating Company, as determined by the
Committee upon the basis of such evidence, including independent medical
reports and data, as the Committee deems appropriate or necessary.
3. Shares Subject to the Plan
The aggregate number of shares of Stock which may be awarded under the
Plan or subject to purchase by exercising an Option shall not exceed
825,000 shares. Such shares shall be made available either from
authorized and unissued shares or shares held by the Company in its
treasury. The Committee may, in its discretion, decide to award other
shares issued by the Company that are convertible into Stock or make
such shares subject to purchase by an Option, in which event the maximum
number of shares of Stock into which such stock may be converted shall
be used in applying the aggregate share limit under this Section 3 and
all provisions of the Plan relating to Stock shall apply with full force
and effect with respect to such convertible shares. Shares subject to
Options or Rights which are cancelled, forfeited or expire unexercised,
or shares subject to Rights payable in Stock which are paid in cash
shall again become available for award under the Plan.
4. Grant of Awards and Award Agreements
(a) Subject to the provisions of the Plan, the Committee shall (i)
determine and designate from time to time those Key Employees or groups
of Key Employees to whom Awards are to be granted; (ii) determine the
form or forms of Award to be granted to any Key Employee; (iii)
determine the amount or number of shares of Stock, including Restricted
Stock if the Committee so determines, subject to each Award; and (iv)
determine the terms and conditions of each Award.
(b) Each Award granted under the Plan shall be evidenced by a written
Award Agreement, in a form approved by the Committee. Such agreement
shall be subject to and incorporate the express terms and conditions, if
any, required under the Plan or as required by the Committee for the
form of Award granted and to such other terms and conditions as the
Committee may specify.
5. Stock Options and Stock Appreciation Rights
(a) With respect to Options and Rights, the Committee shall (i)
authorize the granting of incentive stock options (within the meaning of
Section 422 of the Code), nonqualified stock options, Rights or a
combination of incentive stock options, nonqualified stock options and
Rights; (ii) determine the number of shares of Stock subject to each
Option or the number of shares of Stock that shall be used to determine
the value of a Right; (iii) determine whether such Stock shall be
Restricted Stock; (iv) determine the time or times when and the manner
in which each Option shall be exercisable and the duration of the
exercise period; and (v) determine whether or not all or part of each
Option may be canceled by the exercise of a Right; provided, however,
that (A) no Option shall be granted after the expiration of five years
from the effective date of the Plan, (B) the aggregate Fair Market Value
(determined as of the date an incentive stock option is granted) of the
Stock, disregarding any restrictions in the case of Restricted Stock,
for which any Key Employee may be granted incentive stock options which
are exercisable for the first time by such Key Employee in any calendar
year under this Plan or any other plans of any Participating Company in
any calendar year shall not exceed $100,000
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(or such other limitation as may be required by Section 422(d) of the
Code or any successor provision thereto), and (C) the number of shares
of Stock which may be issued under Options or Rights granted under this
Plan to any one individual in any fiscal year shall not exceed 100,000.
(b) The exercise period for a non-qualified stock option shall be ten
years and one day from the date of grant, and the exercise period for an
incentive stock option or Right, including any extension which the
Committee may from time to time decide to grant, shall not exceed ten
years from the date of grant; provided, however, that in the case of an
incentive stock option granted to a Key Employee who at the time of
grant owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Company (a "Ten Percent
Shareholder"), such period, including extensions, shall not exceed five
years from the date of grant (to the extent such period is required
under Section 422 of the Code for an incentive stock option).
(c) The Option or Right price per share shall be determined by the
Committee at the time any Option is granted and shall be not less than
(i) the Fair Market Value, or (ii) in the case of an incentive stock
option granted to a Ten Percent Shareholder, 110 percent of the Fair
Market Value (to the extent such limitation is required under Section
422 of the Code for an incentive stock option but in neither event less
than the par value) of one share of Stock, disregarding any restrictions
in the case of Restricted Stock, on the date the Option is granted, as
determined by the Committee.
(d) No part of any Option or Right may be exercised until the Key
Employee who has been granted the Award shall have remained in the
employ of a Participating Company for such period after the date on
which the Option or Right is granted as the Committee may specify, if
any, and the Committee may further require exercisability in
installments.
(e) Subject to Section 10(c), except as otherwise provided in the Plan,
the purchase price of the shares as to which an Option shall be
exercised shall be paid to the Company at the time of exercise either in
cash or in such other consideration as the Committee deems appropriate,
including Stock already owned by the optionee having a total fair market
value, as determined by the Committee, equal to the purchase price or a
combination of cash and such other consideration having a total fair
market value, as so determined, equal to the purchase price.
(f) (i) If a Key Employee has been granted an incentive stock option,
and his or her employment terminates by reason of death while an
employee of a Participating Company or Total Disability, then any
such incentive stock options granted to such Key Employee may be
exercised, (in the case of death by his or her estate or the
person who acquires the incentive stock option by will or
intestate succession and in the case of Total Disability by the
Key Employee), to the extent that the incentive stock option was
exercisable at the date of such termination, at any time, or from
time to time, within twelve months after the date of the
termination of his or her employment.
(ii) If the Key Employee's employment terminates for any other
reason, he or she may exercise his or her incentive stock options,
to the extent that the incentive stock option was exercisable at
the date of such termination, at any time, or from time to time,
within three months after the date of the termination of his or
her employment.
(g) If a Key Employee has been granted an Option other than an incentive
stock option or a Right, and his or her employment with a Participating
Company terminates, he or she may exercise his or her Option or Right in
accordance with the following:
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(i) If the termination occurs for any reason (including, without
limitation, the sale of a subsidiary) other than death, retirement
with consent of the Company or by reason of Total Disability, such
Option or Right may be exercised, to the extent exercisable on the
date of such termination on the earlier of (a) the date which is
three months from the date of the Key Employee's termination of
employment (even if such Key Employee is subsequently reemployed)
or (b) the end of the exercise period specified in the Option or
Right;
(ii) If the termination occurs due to the Key Employee's
retirement with the consent of the Company, the installments of
such Key Employee's Option or Right shall continue to mature in
the normal course as otherwise provided in the Option or Right and
the Key Employee (or in the event of his or her death after the
date of retirement, his or her estate or the person who acquires
the Option or Right by will or intestate succession) shall have
the right to exercise the Option or Right until the later of (a)
three years after the date of such retirement or (b) in the event
that death occurs during such three-year period, twelve months
after the death of the Key Employee, but in no event later than
the end of the exercise period specified in the Option or Right;
(iii) If the termination occurs due to a Key Employee's retirement
due to Total Disability, the Key Employee (or in the event of his
or her death after the date of retirement, his or her estate or
the person who acquires the Option or Right by will or intestate
succession) shall have the right to exercise the Option or Right,
to the extent it was exercisable on the date of such retirement
due to Total Disability, until the later of (a) twelve months
after the date of such retirement or (b) in the event that death
occurs during such twelve-month period, twelve months after the
death of the Key Employee, but in no event later than the end of
the exercise period specified in the Option or Right; or
(iv) If the termination occurs due to a Key Employee's death, any
Option or Right held by such Key Employee may thereafter be
immediately exercised, to the extent then exercisable by his or
her estate or the person who acquires the Option or Right by will
or intestate succession until the earlier of (a) one year from the
date of such death or (b) the end of the exercise period specified
in the Option or Right.
(h) No Option or Right granted under the Plan shall be transferable
other than by will or by the laws of descent and distribution. During
the lifetime of the optionee, an Option or Right shall be exercisable
only by him or her.
(i) With respect to an incentive stock option, the Committee shall
specify such terms and provisions as the Committee may determine to be
necessary or desirable in order to qualify such Option as an incentive
stock option within the meaning of Section 422 of the Code and shall
take all necessary steps to preserve such qualifications to the extent
practicable.
(j) Upon exercise of a Right, the Key Employee shall be entitled,
subject to such terms and conditions the Committee may specify, to
receive upon exercise thereof all or a portion of the excess of (i) the
Fair Market Value of a specified number of shares of Stock, disregarding
any restrictions in the case of Restricted Stock, at the time of
exercise, as determined by the Committee, over (ii) a specified amount
which shall not, subject to Section 5 (k), be less than the Fair Market
Value of such specified number of shares of Stock, disregarding any
restrictions in the case of Restricted Stock, at the time the Right is
granted. Upon exercise of a Right, payment of such excess shall be made
as the Committee shall specify (A) in cash, (B) by the issuance or
transfer of the Key Employee of whole shares of Stock, including
Restricted Stock, with a Fair Market Value, disregarding any
restrictions in the case of Restricted Stock, at such time equal to any
such excess, or (C) in a combination of cash and shares of Stock with a
combined fair market value at such time equal to any such excess, all as
determined by
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the Committee; provided, however, a fractional share of Stock shall be
paid in cash equal to the Fair Market Value of the fractional share of
Stock, disregarding any restrictions in the case of Restricted Stock, at
such time. If and to the extent a Right is payable in Stock and the
full amount of such value is not paid in Stock, then the shares of Stock
representing such portion of the value of the Right not paid in Stock
shall again become available for award under the Plan.
(k) If under the terms of an Award the exercise of a Right will result
in the cancellation of all or any portion of an unexercised Option, then
the Option price per share of Stock must be used as the specified price
in Section 5(j) to determine the value of the Right upon such exercise,
and, in the event of the exercise of such Right, the Company's
obligation in respect of such Option or such portion thereof will be
discharged by payment of the Right so exercised. In the event of such a
cancellation, the number of shares as to which such Option was canceled
shall become available for use under the Plan less the number of shares
received by the optionee upon such cancellation.
(l) No share of Stock acquired by an exercise of an incentive stock
option shall be transferable other than by will or by the laws of
descent and distribution within two years of the date such Option was
granted or within one year after the transfer of such share pursuant to
such exercise.
6. Performance Units
(a) The Committee shall determine a performance period (the
"Performance Period") of not less than two nor more than five years and
shall determine the performance objectives for Awards of Performance
Units. Performance objectives may vary from Key Employee to Key
Employee and between groups of Key Employees and shall be based upon
such performance criteria or combination of factors as the Committee may
deem appropriate. Performance Periods may overlap and Key Employees may
participate simultaneously with respect to Performance Units for which
different Performance Periods are prescribed.
(b) At the beginning of a Performance Period, the Committee shall
determine for each Key Employee or group of Key Employees eligible for
Performance Units with respect to that Award period the range of dollar
values, if any, which may be fixed or may vary in accordance with
criteria specified by the Committee, which shall be paid to a Key
Employee as an Award if the relevant measure of Company performance for
the Award period is met.
(c) If during the course of a Performance Period there shall occur
significant events as determined by the Committee, including, but not
limited to, a reorganization of the Company or a Change of Control of
the Company, which the Committee expects to have a substantial effect on
a performance objective during such period, the Committee may revise
such objective.
(d) If a Key Employee terminates service with all Participating
Companies during a Performance Period because of death, Total
Disability, retirement at age 65, or if at an earlier age, with the
consent of the Company, or upon a significant event, as determined by
the Committee, that Key Employee shall be entitled to an Award of
Performance Units at the end of the Performance Period (i) based upon
the performance objectives satisfied at the end of such period and (ii)
prorated for the portion of the Performance Period during which the Key
Employee was employed by any Participating Company; provided, however,
the Committee may provide for an earlier payment in settlement of such
Performance Units in such amount and under such terms and conditions as
the Committee deems appropriate or desirable with the consent of the Key
Employee. If a Key Employee terminates service with all Participating
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Companies during a Performance Period for any other reason, then such
Key Employee shall not be entitled to any Award with respect to that
Performance Period, but the Committee, in its sole and absolute
discretion may provide otherwise.
(e) Each Performance Unit may be paid in whole shares of Stock,
including Restricted Stock (together with any cash representing
fractional shares of Stock), or cash, or a combination of Stock and cash
either as a lump sum payment or in annual installments, all as the
Committee shall determine, commencing as soon as practicable after the
end of the relevant Performance Period.
7. Restricted Stock
(a) Restricted Stock may be received by a Key Employee either as an
Award or as the result of an exercise of an Option or Right or as
payment for a Performance Unit. Restricted Stock shall be subject to a
restriction period (after which restrictions will lapse) which shall
mean a period commencing on the date the Award is granted or on the date
of exercise of the Option or Right and ending on such date as the
Committee shall determine (the "Restriction Period").
(b) Except as otherwise provided in this Section 7, no shares of
Restricted Stock received by a Key Employee shall be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period; provided, however, the Restriction Period for any
Key Employee shall be deemed to end and all restrictions on shares of
Restricted Stock shall lapse upon the Key Employee's death, Total
Disability or retirement after attaining age 65 (or an earlier age with
the consent of the Company, or upon a reorganization of the Company) or
a Change of Control or, some significant event, as determined by the
Committee.
(c) Unless the Committee, in its discretion determines otherwise, if a
Key Employee terminates employment with all Participating Companies for
any reason before the expiration of the Restriction Period (other than
as provided in Section 7(b)), all shares of Restricted Stock still
subject to restriction shall be forfeited by the Key Employee and shall
be reacquired by the Company, and, in the case of Restricted Stock
purchased through the exercise of an Option, the Company shall refund
the purchase price paid on the exercise of the Option.
(d) The Committee may require under such terms and conditions as it
deems appropriate or desirable that the certificates for Stock delivered
under the Plan may be held in custody by a bank or other institution, or
that the Company may itself hold such shares in custody until the
Restriction Period expires or until restrictions thereon otherwise
lapse, and may require as a condition of any receipt of Restricted Stock
that the Key Employee shall have delivered a stock power endorsed in
blank relating to the Restricted Stock.
(e) Nothing in this Section 7 shall preclude a Key Employee from
exchanging any shares of Restricted Stock subject to the restrictions
contained herein for any other shares of Stock that are similarly
restricted.
8. Unrestricted Stock
The Committee, in its sole and absolute discretion, may make Awards in
the form of shares of stock which are not restricted in the hands of the
participants who receive such Awards. Such Awards may be made either in
connection with any annual or longer term bonus program sponsored by the
Company or an affiliate or in any other circumstances that the Committee
deems appropriate.
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9. Certificates for Awards of Stock
(a) Subject to Section 7(d), each Key Employee entitled to receive
Stock under the Plan shall be issued a certificate for the shares of
Stock. Such certificate shall be registered in the name of the Key
Employee, and shall bear an appropriate legend reciting the terms,
conditions and restrictions applicable to such Award as described in
Section 9(c) hereof.
(b) The Company shall not be required to issue or deliver any
certificates for shares of Stock prior to (i) the listing of such shares
on any stock exchange on which the Stock may then be listed and (ii) the
completion of any registration or qualification of such shares under any
federal or state law, or any ruling or regulation of any government body
which the Company shall, in its sole discretion, determine to be
necessary or advisable.
(c) All certificates for shares of Stock delivered under the Plan also
shall be subject to such stop-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock
exchange upon which the Stock is then listed and any applicable federal
or state securities laws, and the Committee may cause a legend or
legends to be placed on any such certificates to make appropriate
reference to such restrictions. The foregoing provisions of this
Section 9(c) shall not be effective if and to the extent that the shares
of Stock delivered under the Plan are covered by an effective and
current registration statement under the Securities Act of 1933, or if
and so long as the Committee determines that application of such
provisions is no longer required or desirable. In making such a
determination, the Committee may rely upon an opinion of counsel for the
Company.
(d) Except for the restrictions on Restricted Stock under Section 7,
each Key Employee who receives an Award of Stock shall have all of the
rights of a shareholder with respect to such shares, including the right
to vote the shares and receive dividends and other distributions. No
Key Employee awarded an Option, a Right, a Performance Unit payable in
Stock, including Restricted Stock, or selected by the Committee to
participate during a Performance Period for a Performance Unit payable
in Stock, including Restricted Stock, shall have any right as a
shareholder with respect to any shares subject to his or her Option
Right or Performance Unit prior to the date of issuance to him or her of
a certificate or certificates for such shares.
10. Loans and Supplemental Cash Payments
(a) The Committee may provide for supplemental cash payments or loans
to Key Employees at such time and in such manner as the Committee may
determine in connection with Awards granted under the Plan.
(b) Supplemental cash payments shall be subject to such terms and
conditions as the Committee may specify; provided, however, in no event
shall the amount of such payment exceed (i) in the case of an Option,
the excess of the Fair Market Value of the shares of Stock, disregarding
any restrictions in the case of Restricted Stock, purchased through the
Option on the date of exercise over the option price, or (ii) in the
case of an Award of a Right, Performance Unit, or Restricted Stock, the
value of the shares of Stock and other consideration issued in payment
of such Award.
(c) In the case of loans, any such loan shall be evidenced by a written
loan agreement or other instruments in such form and shall contain such
terms and conditions, including without limitation, provisions for
interest, payment schedules, collateral, forgiveness, events of default
or acceleration of such loans or parts thereof, as the Committee shall
specify; provided, however, that the interest rate set by the Committee
under such an arrangement shall be no lower than that required to avoid
the imputation of unstated interest under Section 483 of the Code.
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11. Beneficiary
(a) Each Key Employee shall file with the Committee a written
designation of one or more persons as the Beneficiary who shall be
entitled to receive the Award, if any, payable under the Plan upon his
or her death. A Key Employee may from time to time revoke or change his
or her Beneficiary designation without the consent of any prior
Beneficiary by filing a new designation with the Committee. The last
such designation received by the Committee shall be controlling;
provided, however, that no designation, or change or revocation thereof,
shall be effective unless received by the Committee prior to the Key
Employee's death, and in no event shall it be effective as of a date
prior to such receipt.
(b) If no such Beneficiary designation is in effect at the time of a
Key Employee's death, or if no designated Beneficiary survives the Key
Employee or if such designation conflicts with law, the Key Employee's
estate shall be entitled to receive the Award, if any, payable under the
Plan upon his or her death. If the Committee is in doubt as to the
right of any person to receive such Award, the Company may retain such
Award, without liability for any interest thereon, until the Committee
determines the rights thereto, or the Company may pay such Award into
any court of appropriate jurisdiction and such payment shall be a
complete discharge of the liability of the Company therefor.
12. Effect of Change of Control
The Committee, in its discretion, may provide under the terms of any
Award Agreement, either at the time of grant or at any time thereafter,
that upon the occurrence of a Change of Control, all outstanding Options
or Rights which are not then exercisable shall become immediately
exercisable in full and all Restricted Stock shall become immediately
vested. Each Option shall, to the extent exercisable after giving
effect to the prior sentence, have a limited right of surrender allowing
the optionee to surrender that Option within the 30-day period following
a Change of Control and to receive cash, in lieu of exercising the
Option, in the amount by which the highest fair market value during the
60 days preceding the date on which the Change of Control occurs of the
number of shares of Stock covered by the option exceeds the option price
for the shares of Stock covered by the Option.
13. Withholding Taxes
As a condition to exercise of any Option or Right, the vesting of
Restricted Stock or payment of a Performance Unit hereunder
(collectively, a "Realization Event"), the Company may, in its
discretion, require a Key Employee to pay to the Company at the time of
exercise the amount that the Company deems necessary to satisfy its
obligation to withhold federal, state or local income or other taxes
(which for purposes of this Section 13 includes a Key Employee's FICA
obligation) incurred by reason of the Realization Event. Upon the
occurrence of a Realization Event requiring tax withholding, a Key
Employee may make a written election to have shares of Stock withheld by
the Company from the shares otherwise to be received. The number of
shares so withheld shall have an aggregate Fair Market Value on the date
of exercise sufficient to satisfy the applicable withholding taxes. The
acceptance of any such election by a Key Employee shall be at the sole
discretion of the Committee. In addition, subject to acceptance by the
Committee, in its sole discretion, a Key Employee may make a written
election to deliver to the Company previously owned shares, in either
case to satisfy any additional federal, state or local income or other
taxes applicable to the Key Employee and the particular transaction, up
to the maximum marginal tax rates, whether in the case of a Realization
Event in which taxability is immediate or in which taxability is
deferred. The number of shares so withheld and/or delivered shall have
an aggregate Fair Market Value on the date withholding is required
sufficient to satisfy the applicable withholding taxes or to satisfy
taxes up to maximum marginal tax rate as and to the extent elected by a
Key Employee. Withholding provisions may
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be instituted by the Company to the extent withholding is required in
the future on the disposition of shares of Stock acquired upon the
exercise of an incentive stock option.
14. Administration of the Plan
(a) The Plan shall be administered by the Committee, as appointed by
the Board and serving at the Board's pleasure. Each member of the
Committee shall be both a member of the Board and a "disinterested
person" within the meaning of Rule 16b-3 under the Securities Exchange
Act of 1934 or successor rule or regulation and from and after the first
meeting of shareholders at which directors are to be elected that occurs
after July 1, 1994, the Committee shall contain at least two "Outside
Directors" as that term is defined in Section 162(m) of the Code.
(b) The Committee shall have full power, discretion and authority to
interpret, construe and administer the Plan and, all decisions,
determinations or actions of the Committee made or taken pursuant to
grants of authority under the Plan shall be made or taken in the sole
discretion of the Committee and shall be final, conclusive and binding
on all persons for all purposes.
(c) The Committee's decisions and determinations under the Plan need
not be uniform and may be made selectively among Key Employees, whether
or not such Key Employees are similarly situated.
(d) The Committee may employ such legal counsel, including without
limitation independent legal counsel and counsel regularly employed by
the Company, consultants and agents as the Committee may deem
appropriate for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any
computations received from any such consultant or agent.
(e) All expenses incurred by the Committee in interpreting and
administering the Plan, including without limitation, meeting fees and
expenses and professional fees, shall be paid by the Company.
(f) No member or former member of the Committee or the Board shall be
liable for any action or determination made in good faith with respect
to the Plan or any Award granted under it. Each member or former member
of the Committee or the Board shall be indemnified and held harmless by
the Company against all cost or expense (including counsel fees) or
liability (including any sum paid in settlement of a claim with the
approval of the Board) arising out of any act or omission to act in
connection with the Plan unless such cost or liability arises out of
such member's or former member's own fraud or bad faith. Such
indemnification shall be in addition to any rights of indemnification
the members or former members may have as directors or under the by-laws
of the Company.
(g) All elections, designations, requests, notices, instructions and
other communications from a Key Employee, Beneficiary or other person to
the Committee, required or permitted under the Plan, shall be in such
form as is prescribed from time to time by the Committee and shall be
mailed by first class mail or delivered to such location as shall be
specified by the Committee.
15. Amendment or Discontinuance
(a) The Board may at any time, or from time to time, suspend or
terminate the Plan in whole or in part or amend it in such respects as
the Board may deem appropriate, provided, however, that no such
amendment shall be made, which would, without approval of the
shareholders: (i) materially modify the eligibility requirements for
receiving Awards; (ii) increase the total number of shares of Stock
which may be issued pursuant to Awards, except as is provided for in
accordance with Section 16 of the Plan; (iii) reduce the minimum grant
price of any Award
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except in accordance with Section 16 of the Plan; (iv) extend the period
during which Awards may be granted; or (v) materially increase in any
other way the benefits accruing to Key Employees.
(b) No amendment, suspension or termination of this Plan or any Award
shall, without the Key Employee's consent, alter or impair any of the
rights or obligations under any Award theretofore granted to a Key
Employee under the Plan.
(c) The Board may amend this Plan, subject to the limitations cited
above, in such manner as it deems necessary to permit the granting of
Awards meeting the requirements of future amendments to the Code or
regulations promulgated thereunder.
(d) If and to the extent the provisions of Rule 16b-3 (as in effect on
the date of adoption of the Plan by the Board) under the Exchange Act
are amended to permit the amendment of stock incentive plans without
compliance with the shareholder approval requirements presently set
forth in Rule 16b-3(b), then the restrictions on the ability of the
Board to amend the Plan set forth in Section 15(a) hereof shall
terminate and the Board shall thereafter be empowered to amend the Plan
without regard to such restrictions.
16. Adjustments in Event of Change in Stock
In the event of any recapitalization, reclassification, split-up or
consolidation of shares of Stock, merger or consolidation of the Company
or sale by the Company of all or a portion of its assets, or any other
major change in the Company's overall cost of equity or of capital or
allowable rate of return on Stock equity, as prescribed by the
appropriate governmental authority, or other event which could distort
the implementation of the Plan or the realization of its objectives, the
Company may make such adjustments in the Stock subject to Awards,
including Stock subject to purchase by an Option, or the terms,
conditions or restrictions on Stock or Awards as the Committee deems
equitable.
17. Miscellaneous
(a) Nothing in this Plan or any Award granted hereunder shall confer
upon any employee any right to continue in the employ of any
Participating Company or interfere in any way with the right of any
Participating Company to terminate his or her employment at any time.
No Award payable under the Plan shall be deemed salary or compensation
for the purpose of computing benefits under any employee benefit plan or
other arrangement of any Participating Company for the benefit of its
employees except as otherwise required by law, unless the Committee
shall determine otherwise. No Key Employee shall have any claim to an
Award until it is actually granted under the Plan. To the extent that
any person acquires a right to receive payments from the Company under
this Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. All payments to be made hereunder
shall be paid from the general funds of the Company and no special or
separate fund shall be established and no segregation of assets shall be
made to assure payment of such amounts except as provided in Section
7(d) with respect to Restricted Stock.
(b) Absence on leave approved by a duly constituted officer of the
Company shall not be considered interruption or termination of
employment for any purposes of the Plan; provided, however, that, unless
otherwise determined by the Committee, no Award may be granted to an
employee while he or she is absent on leave.
(c) If the Committee shall find that any person to whom any Award, or
portion thereof, is payable under the Plan is unable to care for his or
her affairs because of illness or accident, or is a minor, then any
payment due him or her (unless a prior claim therefor has been made by a
duly appointed legal representative) may, if the Committee so directs
the Company, be paid
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to his or her spouse, a child, a relative, an institution maintaining or
having custody of such person, or any other person deemed by the
Committee be a proper recipient on behalf of such person otherwise
entitled to payment. Any such payment shall be a complete discharge of
the liability of the Company therefor.
(d) The right of any Key Employee or other person to any Award payable
under the Plan may not be assigned, transferred, pledged or encumbered,
either voluntarily or by operation of law, except as provided in Section
11 with respect to the designation of a Beneficiary or as may otherwise
be required by law. If, by reason of any attempted assignment,
transfer, pledge, or encumbrance or any bankruptcy or other event
happening at any time, any amount payable under the Plan would be made
subject to the debts or liabilities of the Key Employee or his or her
Beneficiary or would otherwise devolve upon anyone else and not be
enjoyed by the Key Employee or his or her Beneficiary, then the
Committee may determine such person's interest in any such payment and
direct that the same be held and applied to or for the benefit of the
Key Employee, his or her Beneficiary or any other persons deemed to be
the natural objects of his or her bounty, taking into account the
expressed wishes of the Key Employee (or, in the event of his or her
death, those of his or her Beneficiary) in such manner as the Committee
may deem proper.
(e) The Plan and the granting of Awards shall be subject to all
applicable federal and state laws, rules, and regulations and to such
approvals by any government or regulatory agency as may be required.
(f) The terms of the Plan shall be binding upon the Company and its
successors and assigns.
(g) Captions preceding the sections hereof are inserted solely as a
matter of convenience in no way define or limit the scope or intent of
any provision hereof.
18. Effective Date, Term of Plan and Shareholder Approval
The effective date of the Plan shall be April 26, 1994, subject to
approval by a majority of the Company's shareholders at their 1994
Annual Meeting. Notwithstanding anything in the Plan to the contrary,
if the Plan shall have been approved by the Board prior to such Annual
Meeting, Key Employees may be selected and Award criteria may be
determined as provided herein subject to such subsequent shareholder
approval. No Awards shall be granted under the Plan more than five
years after the date the Plan is adopted by the Company.
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