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EXHIBIT 10.1
MELLON FINANCIAL CORPORATION
LONG-TERM PROFIT INCENTIVE PLAN (1996)
I. Purposes
The purposes of this Long-Term Profit Incentive Plan (1996), as amended and
restated, are to promote the growth and profitability of Mellon Financial
Corporation ("Corporation") and its Affiliates, to provide officers and other
key executives of the Corporation and its Affiliates with the incentive to
achieve long-term corporate objectives, to attract and retain officers and other
key executives of outstanding competence, and to provide such officers and key
executives with an equity interest in the Corporation.
II. Definitions
The following terms shall have the meanings shown:
2.1 "Affiliate " shall mean any corporation, limited partnership or other
organization in which the Corporation owns, directly or indirectly, 50% or more
of the voting power.
2.2 "Award" shall mean Options, SARs, Performance Units, Restricted Stock,
Deferred Share Awards and Deferred Cash Incentive Awards, as defined in and
granted under the Plan.
2.3 "Board of Directors" shall mean the Board of Directors of the
Corporation.
2.4 "Change in Control Event" shall mean any of the following events:
(a) The occurrence with respect to the Corporation of a "control
transaction", as such term is defined in Section 2542 of the Pennsylvania
Business Corporation Law of 1988, as of August 15, 1989; or
(b) Approval by the stockholders of the Corporation of (i) any
consolidation or merger of the Corporation where either (x) the holders of
voting stock of the Corporation immediately before the merger or consolidation
will not own more than 50% of the voting shares of the continuing or surviving
corporation immediately after such merger or consolidation or (y) the
Incumbent Directors immediately before the merger or consolidation will not
hold more than 50% (rounded to the next whole person) of the seats on the
board of directors of the continuing or surviving corporation, or (ii) any
sale, lease or exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of the
Corporation; or
(c) A change of 25% (rounded to the next whole person) in the membership
of the Board of Directors within a 12-month period, unless the election or
nomination for election by stockholders of each new director within such
period (i) was approved by the vote of 85% (rounded to the next whole person)
of the directors then still in office who were in office at the beginning of
the 12-month period and (ii) was not as a result of an actual or threatened
election with respect to directors or any other actual or threatened
solicitation of proxies by or on behalf of any person other than the Board of
Directors. As used in this Section 2.4, the term "Incumbent Director" means as
of any time a director of the Corporation (x) who has been a member of the
Board of Directors continuously for at least 12 months or (y) whose election
or nomination as a director within such period met the requirements of clauses
(i) and (ii) of the preceding sentence.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, and regulations thereunder, in each case as
in effect from time to time. References to sections of the Code shall be
construed also to refer to any successor sections.
2.6 "Committee " shall mean the Human Resources Committee of the Board of
Directors, or any successor committee.
2.7 "Common Stock " shall mean Common Stock of the Corporation.
2.8 "Deferred Cash Incentive Award" shall mean an Award granted pursuant to
Article VII of the Plan.
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2.9 "Deferred Share Award" shall mean an Award granted pursuant to Article
VIII, Section 8.7, of the Plan.
2.10 "Fair Market Value" shall mean the closing price of a share of Common
Stock in the New York Stock Exchange Composite Transactions on the relevant
date, or, if no sale shall have been made on such exchange on that date, the
closing price in the New York Stock Exchange Composite Transactions on the last
preceding day on which there was a sale.
2.11 "Incentive Stock Option" shall mean an option qualifying under Section
422 of the Code granted by the Corporation.
2.12 "Options" shall mean rights to purchase shares of Common Stock granted
pursuant to Article IV of the Plan.
2.13 "Participant" shall mean an eligible employee who is granted an Award
under the Plan.
2.14 "Performance Goals" shall mean goals established by the Committee in
compliance with Section 162(m) of the Code covering a performance period set by
the Committee and based on maintenance of or changes in one or more of the
following objective business criteria: earnings or earnings per share; return on
equity, assets or investment; revenues; expenses; stock price; market share;
charge-offs; or non-performing assets. Performance Goals shall be established by
the Committee in connection with the grant of Performance Units and Deferred
Cash Incentive Awards and may be established in connection with the grant of
Restricted Stock. Performance Goals may be applicable to a business unit or to
the Corporation as a whole and need not be the same for each of the foregoing
types of Awards or for each individual receiving the same type of Award. The
Committee may retain the discretion to reduce (but not to increase) the portion
of any Award which will be earned based on achieving Performance Goals.
2.15 "Performance Units" shall mean units granted pursuant to Article VI of
the Plan.
2.16 "Plan" shall mean the Mellon Financial Corporation Long-Term Profit
Incentive Plan (1996), as amended and restated.
2.17 "Reload Option Rights" and "Reload Options" shall have the meanings set
forth in Article IV of the Plan.
2.18 "Restricted Stock" shall mean any share of Common Stock granted
pursuant to Article VIII of the Plan.
2.19 "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended from
time to time, or any successor rule.
2.20 "SAR" shall mean any stock appreciation right granted pursuant to
Article V of the Plan.
III. General
3.1 Administration.
(a) The Plan shall be administered by the Committee, each member of which
shall at the time of any action under the Plan be (i) a "non-employee
director" as then defined under Rule 16b-3 and (ii) an "outside director" as
then defined under Section 162(m) of the Code.
(b) The Committee shall have the authority in its sole discretion from
time to time: (i) to designate the employees eligible to participate in the
Plan; (ii) to grant Awards under the Plan; (iii) to prescribe such
limitations, restrictions and conditions upon any such Award as the Committee
shall deem appropriate; and (iv) to interpret the Plan, to adopt, amend and
rescind rules and regulations relating to the Plan, and to make all other
determinations and take all other action necessary or advisable for the
implementation and administration of the Plan. A majority of the Committee
shall constitute a quorum, and the action of a majority of members of the
Committee present at any meeting at which a quorum is present, or acts
unanimously adopted in writing without the holding of a meeting, shall be the
acts of the Committee.
(c) All actions of the Committee shall be final, conclusive and binding
upon the Participant. No member of the Committee shall be liable for any
action taken or decision made in good faith relating to the Plan or any Award
thereunder.
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3.2 Eligibility. The Committee may grant Awards under the Plan to any
corporate officer, key executive, administrative or professional employee of the
Corporation or any of its Affiliates. In granting such Awards and determining
their form and amount, the Committee shall give consideration to the functions
and responsibilities of the employee, his or her potential contributions to
profitability and to the sound growth of the Corporation and such other factors
as the Committee may deem relevant.
3.3 Effective and Expiration Dates of Plan. The amended and restated Plan
shall become effective on the date (herein referred to as the "effective date")
approved by the holders of a majority of the shares present or represented and
entitled to vote at the 1996 Annual Meeting of Shareholders of the Corporation.
No Award shall be granted after December 31, 2005, except that Reload Options
may be granted pursuant to Reload Option Rights then outstanding.
3.4 Aggregate and Individual Limitations on Awards.
(a) The aggregate number of shares of Common Stock reserved for issue
under the Plan on and after April 18, 2000 shall not exceed 49,770,693 shares,
subject to adjustments pursuant to Section 9.7. No more than 7,888,876 shares
of Common Stock may be issued as Restricted Stock on and after April 18, 2000.
Shares of Common Stock which may satisfy Awards granted under the Plan may be
either authorized and unissued shares of Common Stock or authorized and issued
shares of Common Stock held in the Corporation 's treasury or issued and
outstanding shares of Common Stock held by any employee stock benefit trust
established by the Corporation.
(b) For purposes of paragraph (a) of this Section 3.4, shares of Common
Stock that are actually issued upon exercise of an Option shall be counted
against the total number of shares reserved for issuance, except that when
Options are exercised by the delivery of shares of Common Stock the charge
against the shares reserved for issuance shall be limited to the net new
shares of Common Stock issued. In addition to shares of Common Stock actually
issued pursuant to the exercise of Options, there shall be deemed to have been
issued under the Plan a number of shares of Common Stock equal to (i) the
number of shares issued pursuant to SARs which shall have been exercised
pursuant to the Plan, (ii) the number of Performance Units which shall have
been paid in shares of Common Stock pursuant to the Plan and (iii) the number
of shares of Restricted Stock which shall have been granted pursuant to the
Plan. For purposes of paragraph (a) of this Section 3.4, the payment of a
Deferred Cash Incentive Award shall not be deemed to result in the issuance of
any shares of Common Stock in addition to those issued pursuant to the
exercise of the related Option.
(c) For purposes of paragraph (a) of this Section 3.4, any shares of
Common Stock subject to an Option which for any reason either terminates
unexercised, or expires except by reason of the exercise of a related SAR, and
any shares of Restricted Stock granted under this Plan or any shares of Common
Stock covered by a Deferred Share Award which are surrendered or forfeited to
the Corporation (including shares of Restricted Stock or Deferred Share Awards
outstanding as of April 18, 2000), shall again be available for issuance under
the Plan.
(d) The maximum number of shares of Common Stock available for grants of
Options or SARs to any one Participant under the Plan during a calendar year
shall not exceed 4,000,000 shares. The limitation in the preceding sentence
shall be interpreted and applied in a manner consistent with Section 162(m) of
the Code. To the extent consistent with Section 162(m) of the Code, a Reload
Option (A) shall be deemed to have been granted at the same time as the
original underlying Option grant and (B) shall not be deemed to increase the
number of shares covered by the original underlying Option.
3.5 Cancellation and Reissuance of Options. The Committee will not permit
the repricing of Options by any method, including by cancellation and
reissuance.
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IV. Options
4.1 Grant. The Committee may from time to time, subject to the provisions of
the Plan, in its discretion grant Options to Participants to purchase for cash
or shares of Common Stock the number of shares of Common Stock allotted by the
Committee. In the discretion of the Committee, any Options or portions thereof
granted pursuant to this Plan may be designated as Incentive Stock Options. The
aggregate Fair Market Value (determined as of the time the Incentive Stock
Option is granted) of Common Stock and any other stock of the Corporation or any
parent, subsidiary or affiliate corporation with respect to which such Incentive
Stock Options are exercisable for the first time by a Participant in any
calendar year under all plans of the Corporation, its subsidiaries and
affiliates shall not exceed $100,000 or such sum as may from time to time be
permitted under Section 422 of the Code. The Committee shall also have the
authority, in its discretion, to award reload option rights ("Reload Option
Rights") in conjunction with the grant of Options with the effect described in
Section 4.7. Reload Option Rights may be awarded either at the time an Option is
granted or, except in the case of Incentive Stock Options, at any time
thereafter during the term of the Option.
4.2 Option Agreements. The grant of any Option shall be evidenced by a
written "Stock Option Agreement" executed by the Corporation and the
Participant, stating the number of shares of Common Stock subject to the Option
evidenced thereby and such other terms and conditions of the Option as the
Committee may from time to time determine.
4.3 Option Price. The option price for the Common Stock covered by any
Option granted under the Plan shall in no case be less than 100% of the Fair
Market Value of said Common Stock on the date of grant. Except as otherwise
provided in the Stock Option Agreement, the option price of an Option may be
paid in whole or in part by delivery to the Corporation of a number of shares of
Common Stock having a Fair Market Value on the date of exercise equal to the
option price or portion thereof to be paid; provided, however, that no shares
may be delivered in payment of the option price of an Option unless such shares,
or an equivalent number of shares, shall have been held by the Participant (or
other person entitled to exercise the Option) for at least six months prior to
such delivery.
4.4 Term of Options. The terms of each Option granted under the Plan shall
be for such period as the Committee shall determine, but for not more than 10
years from the date of grant thereof. Each Option shall be subject to earlier
termination as provided in Sections 4.6 and 5.4 hereof.
4.5 Exercise of Options. Each Option granted under the Plan shall be
exercisable on such date or dates during the term thereof and for such number of
shares of Common Stock as may be provided in the Stock Option Agreement
evidencing its grant. Pursuant to the terms of the Stock Option Agreement or
otherwise, the Committee may change the date on which an outstanding Option
becomes exercisable; provided, however, that an exercise date designated in a
Stock Option Agreement may not be changed to a later date without the consent of
the holder of the Option. Notwithstanding any other provision of this Plan,
unless expressly provided to the contrary in the applicable Stock Option
Agreement, all Options granted under the Plan shall become fully exercisable
immediately and automatically upon the occurrence of a Change in Control Event.
4.6 Termination of Employment. Except as otherwise provided in the Stock
Option Agreement:
(a) If termination of employment of a Participant occurs on or after age
55 and the Participant is credited with at least five years of employment with
the Corporation or an Affiliate, the Participant shall have the right to
exercise his or her Options within the period of two years after such
termination, to the extent such Options were exercisable at the time of such
termination; provided, however, that such post-termination exercise period may
be extended by action of the Committee for up to the full term of such
Options.
(b) If a Participant shall die while employed by the Corporation or an
Affiliate or within a period following termination of employment during which
the Option remains exercisable under paragraphs (a), (c) or (d) of this
Section 4.6, his or her Options may be exercised to the extent exercisable by
the Participant at the time of his or her death within a period of two years
from the date of death by the executor or administrator of the Participant's
estate or by the person or persons to whom the Participant shall have
transferred such right by will or by the laws of descent and distribution.
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(c) If termination of employment of a Participant is by reason of the
disability of the Participant covered by a long-term disability plan of the
Corporation or an Affiliate then in effect, the Participant shall have the
right to exercise his or her Options within the period of two years after the
date of termination of employment, to the extent such Options were exercisable
at the time of termination of employment.
(d) In the event the employment of a Participant is terminated by the
Corporation or an Affiliate without cause within two years after the
occurrence of a Change in Control Event, the Participant shall have the right
to exercise his or her Options within one year after the date such termination
occurred, to the extent such Options were exercisable at the time of such
termination of employment. For purposes of this paragraph, "without cause"
shall mean any termination of employment where it cannot be shown that the
employee has (i) willfully failed to perform his or her employment duties for
the Corporation or an Affiliate, (ii) willfully engaged in conduct that is
materially injurious to the Corporation or an Affiliate, monetarily or
otherwise, or (iii) committed acts that constitute a felony under applicable
federal or state law or constitute common law fraud. For purposes of this
paragraph, no act or failure to act on the Participant's part shall be
considered "willful" unless done, or omitted to be done, by him or her not in
good faith and without reasonable belief that his or her action or omission
was in the best interest of the Corporation or Affiliate.
(e) In the event all employment of a Participant with the Corporation or
an Affiliate is terminated for any reason other than as stated in the
preceding paragraphs (a) - (d), his or her Options shall terminate upon such
termination of employment.
(f) Notwithstanding the foregoing, in no event shall an Option granted
hereunder be exercisable after the expiration of its term.
4.7 Reload Option Rights. Reload Option Rights if awarded with respect to an
Option shall entitle the original grantee of the Option (and unless otherwise
determined by the Committee, in its discretion, only such original grantee),
upon exercise of the Option or any portion thereof through delivery of shares of
Common Stock, automatically to be granted on the date of such exercise an
additional Option (a "Reload Option") (i) for that number of shares of Common
Stock not greater than the number of shares delivered by the Participant in
payment of the option price of the original Option and any withholding taxes
related thereto, (ii) having an option price not less than 100% of the Fair
Market Value of the Common Stock covered by the Reload Option on the date of
grant of such Reload Option, (iii) having an expiration date not later than the
expiration date of the original Option so exercised and (iv) otherwise having
terms permissible for the grant of an Option under the Plan. Subject to the
preceding sentence and the other provisions of the Plan, Reload Option Rights
and Reload Options shall have such terms and be subject to such restrictions and
conditions, if any, as shall be determined, in its discretion, by the Committee.
In granting Reload Option Rights, the Committee, may, in its discretion, provide
for successive Reload Option grants upon the exercise of Reload Options granted
hereunder. Unless otherwise determined by the Committee, in its discretion,
Reload Option Rights shall entitle the Participant to be granted Reload Options
only if the underlying Option to which they relate is exercised by the
Participant during employment with the Corporation or any of its Affiliates.
Except as otherwise specifically provided herein or required by the context, the
term Option as used in this Plan shall include Reload Options granted hereunder.
V. SARs
5.1 Grant. SARs may be granted by the Committee as stand-alone SARs or in
tandem with all or any part of any Option granted under the Plan. SARs which are
granted in tandem with an Option may be granted either at the time of the grant
of such Option or, except in the case of an Incentive Stock Option, at any time
thereafter during the term of such Option.
5.2 SAR Agreements. The grant of any SAR shall be evidenced by the related
Stock Option Agreement or by a written "Stock Appreciation Rights Agreement"
executed by the Corporation and the Participant, stating the number of shares of
Common Stock covered by the SAR, the base price of a stand-alone SAR and such
other terms and conditions of the SAR as the Committee may from time to time
determine. The base price for stand-alone SARs (the "base price") shall be such
price as the Committee, in its sole discretion, shall determine but shall not be
less than 100% of the Fair Market Value per share of the Common Stock covered by
the stand-alone SAR on the date of grant.
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5.3 Payment. SARs shall entitle the Participant upon exercise to receive the
amount by which the Fair Market Value of a share of Common Stock on the date of
exercise exceeds the option price of any tandem Option or the base price of a
stand-alone SAR, multiplied by the number of shares in respect of which the SAR
shall have been exercised. In the sole discretion of the Committee, the
Corporation may pay all or any part of its obligation arising out of a SAR
exercise in (i) cash, (ii) shares of Common Stock or (iii) cash and shares of
Common Stock. Payment shall be made by the Corporation as soon as practicable
after the date of exercise.
5.4 Exercise of Tandem Award. If SARs are granted in tandem with an Option
(i) the SARs shall be exercisable at such time or times and to such extent, but
only to such extent, that the related Option shall be exercisable, (ii) the
exercise of the related Option shall cause a share for share reduction in the
number of SARs which were granted in tandem with the Option; and (iii) the
payment of SARs shall cause a share for share reduction in the number of shares
covered by such Option.
5.5 Termination of Employment. Except as otherwise provided in the Stock
Appreciation Rights Agreement:
(a) If termination of employment of a Participant occurs on or after age
55 and the Participant is credited with at least five years of employment with
the Corporation or an Affiliate, the Participant shall have the right to
exercise his or her stand-alone SARs within the period of two years after such
retirement, to the extent such SARs were exercisable at the time of
retirement; provided, however, that such post-retirement exercise period may
be extended by action of the Committee for up to the full term of such SARs.
(b) If a Participant shall die while employed by the Corporation or an
Affiliate thereof or within a period following termination of employment
during which the SARs remain exercisable under paragraphs (a), (c) or (d) of
this Section 5.5, his or her stand-alone SARs may be exercised to the extent
exercisable by the Participant at the time of his or her death within a period
of two years from the date of death by the executor or administrator of the
Participant's estate or by the person or persons to whom the Participant shall
have transferred such right by will or by the laws of descent and
distribution.
(c) If termination of employment of a Participant is by reason of the
disability of the Participant covered by a long-term disability plan of the
Corporation or an Affiliate then in effect, the Participant shall have the
right to exercise his or her stand-alone SARs within the period of two years
after the date of termination of employment, to the extent such SARs were
exercisable at the time of termination of employment.
(d) In the event all employment of a Participant with the Corporation or
an Affiliate is terminated without cause within two years after the occurrence
of a Change in Control Event, the Participant shall have the right to exercise
his or her stand-alone SARs within one year after the date such termination
occurred, to the extent such stand-alone SARs were exercisable at the time of
such termination of employment. For purposes of this paragraph, "without
cause" shall have the meaning provided in Section 4.6(d).
(e) In the event all employment of a Participant with the Corporation or
an Affiliate is terminated for any reason other than as stated in the
preceding paragraphs (a) - (d), his or her stand-alone SARs shall terminate
upon such termination of employment.
(f) Notwithstanding the foregoing, in no event shall a stand-alone SAR
granted hereunder be exercisable after the expiration of its term.
VI. Performance Units
6.1 Grant. The Committee may from time to time grant one or more Performance
Units to eligible employees. Performance Units shall represent the right of a
Participant to receive shares of Common Stock or cash at a future date upon the
achievement of Performance Goals which are established by the Committee.
6.2 Performance Unit Agreements. The grant of any Performance Unit shall be
evidenced by a written "Performance Unit Agreement", executed by the Corporation
and the Participant stating the amount of cash and/or number of shares of Common
Stock covered by the Performance Unit and such other terms and conditions of the
Performance Unit as the Committee may determine, including the performance
period to be covered by the award and the Performance Goals to be achieved.
6.3 Payment. After the completion of a performance period, performance
during such period shall be measured against the Performance Goals set by the
Committee. If the Performance Goals are met or exceeded, the Committee shall
certify that fact in writing in the Committee minutes or elsewhere and certify
the amount to be paid to the Participant under the Performance Unit. In the sole
discretion of the Committee, the Corporation may pay all or any part of its
obligation under the Performance Unit in (i) cash, (ii) shares of Common Stock
or (iii) cash and shares of Common Stock. Payment shall be made by the
Corporation as soon as practicable after the certification of achievement of the
Performance Goals.
6.4 Termination of Employment. To be entitled to receive payment under a
Performance Unit, a Participant must remain in the employment of the Corporation
or an Affiliate through the end of the applicable performance period; except
that this limitation shall not apply where a Participant 's employment is
terminated by the Corporation or an Affiliate without cause (as defined in
Section 4.6(d)) following the occurrence of a Change in Control Event.
6.5 Maximum Cash Payment. The maximum amount that may be paid in cash or in
Fair Market Value of Common Stock (to be valued no later than three days after
the date the Committee certifies the achievement of the Performance Goals) under
all Performance Units paid to any one Participant during a calendar year shall
in no event exceed $1,000,000.
VII. Deferred Cash Incentive Awards
7.1 Granting of Deferred Cash Incentive Awards. Deferred Cash Incentive
Awards, as hereafter described, may be granted in conjunction with all or any
part of any Option (other than an Incentive Stock Option) granted under the
Plan, either at the time of the grant of such Option or at any time thereafter
during the term of such Option.
7.2 Deferred Cash Incentive Agreements. Deferred Cash Incentive Awards shall
entitle the holder of an Option to receive from the Corporation an amount of
cash equal to the aggregate exercise price of all Options exercised by such
Participant in accordance with the terms of a written "Deferred Cash Incentive
Agreement" executed by the Corporation and the Participant. Deferred Cash
Incentive Agreements shall specify the conditions under which Deferred Cash
Incentive Awards become payable, the conditions under which Deferred Cash
Incentive Awards are forfeited and any other terms and conditions as the
Committee may from time to time determine. Under no circumstances may a Deferred
Cash Incentive Award be applied to any purpose other than the payment of the
exercise price of a properly exercised related Option.
7.3 Pre-established Performance Goals.
(a) Except in the event of (i) death, (ii) disability of the Participant
covered by a long-term disability plan of the Corporation or an Affiliate then
in effect or (iii) the occurrence of a Change in Control Event, any Deferred
Cash Incentive Award shall only be earned and become payable if the
Corporation achieves Performance Goals which are established for a calendar
year or longer period by the Committee. After the completion of a performance
period, performance during such period shall be measured against the
Performance Goals set by the Committee. If the Performance Goals are met or
exceeded, the Committee shall certify that fact in writing in the Committee
minutes or elsewhere.
(b) The amount payable to a Participant upon achieving the Performance
Goals set by the Committee for the Deferred Cash Incentive Award shall be
equal to the option price of the related Option, which shall be the Fair
Market Value of the shares of Common Stock subject to the Option on the date
the Option is granted. No individual may in any calendar year receive payment
of Deferred Cash Incentive Awards with respect to Options for more than
3,000,000 shares of Common Stock.
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VIII. Restricted Stock
8.1 Award of Restricted Stock. The Committee may from time to time, subject
to the provisions of the Plan and such other terms and conditions as it may
prescribe, grant one or more shares of Restricted Stock to eligible employees.
In the discretion of the Committee, shares of Restricted Stock may be granted
alone, in addition to or in tandem with other Awards granted under the Plan
and/or cash awards made outside of the Plan.
8.2 Restricted Stock Agreements. Each award of Restricted Stock under the
Plan shall be evidenced by a written Restricted Stock Agreement executed by the
Corporation and the Participant in such form as the Committee shall prescribe
from time to time in accordance with the Plan.
8.3 Restrictions. Shares of Restricted Stock issued to a Participant may not
be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of,
except by will or the laws of descent and distribution, for such period as the
Committee shall determine, beginning on the date on which the Award is granted
(the "Restricted Period"). The Committee may also impose such other restrictions
and conditions on the shares or the release of the restrictions thereon as it
deems appropriate, including the achievement of Performance Goals established by
the Committee. In determining the Restricted Period of an Award, the Committee
may provide that the foregoing restrictions shall lapse with respect to
specified percentages of the awarded shares on specified dates following the
date of such Award or all at once.
8.4 Stock Certificate. As soon as practicable following the making of an
award, the Restricted Stock shall be registered in the Participant's name in
certificate or book-entry form. If a certificate is issued, it shall bear an
appropriate legend referring to the restrictions and it shall be held by the
Corporation on behalf of the Participant until the restrictions are satisfied.
If the shares are registered in book-entry form, the restrictions shall be
placed on the book-entry registration. Except for the transfer restrictions, and
subject to such other restrictions, if any, as determined by the Committee, the
Participant shall have all other rights of a holder of shares of Common Stock,
including the right to receive dividends paid with respect to the Restricted
Stock and the right to vote such shares. As soon as is practicable following the
date on which transfer restrictions on any shares lapse, the Corporation shall
deliver to the Participant the certificates for such shares, provided that the
Participant shall have complied with all conditions for delivery of such shares
contained in the Restricted Stock Agreement or otherwise reasonably required by
the Corporation.
8.5 Termination of Employment.
(a) Unless expressly provided to the contrary in the applicable Restricted
Stock Agreement, all restrictions placed upon Restricted Stock shall lapse
immediately upon (i) termination of the Participant's employment with the
Corporation or an Affiliate if, and only if, such termination is by reason of
the Participant's death, the disability of the Participant covered by a
long-term disability plan of the Corporation or an Affiliate then in effect or
(except where Performance Goals have been set for the Award) if such
termination occurs on or after age 55 and the Participant is credited with at
least five years of employment with the Corporation or an Affiliate or (ii)
the occurrence of a Change in Control Event. In addition, the Committee may in
its discretion (except where Performance Goals have been set for the Award)
allow restrictions on Restricted Stock to lapse prior to the date specified in
a Restricted Stock Agreement.
(b) Except as otherwise provided in the Restricted Stock Agreement, upon
the effective date of a termination for any reason not specified in paragraph
(a) of this Section 8.5, all shares then subject to restrictions immediately
shall be forfeited to the Corporation without consideration or further action
being required of the Corporation. For purposes of this paragraph (b), the
effective date of a Participant's termination shall be the date upon which
such Participant ceases to perform services as an employee of the Corporation
or any of its Affiliates, without regard to accrued vacation, severance or
other benefits or the characterization thereof on the payroll records of the
Corporation or Affiliate.
8.6 Maximum Award. The compensation payable to a Participant upon achieving
any Performance Goals set by the Committee for Restricted Stock shall be equal
to the Fair Market Value of a share of Common Stock for each share of Restricted
Stock that is granted. No individual Participant may in any one calendar year
receive payment of a Restricted Stock Award (where Performance Goals have been
set for the Award) covering more than 400,000 shares of Common Stock.
8.7 Deferred Share Award.
(a) A Deferred Share Award shall entitle the Participant to receive from
the Corporation a number of shares of Common Stock on a deferred payment date
specified by the Participant. Participants shall be entitled to elect a
Deferred Share Award as permitted by the Committee (a "Deferred Share Award
Election").
(b) Except as otherwise provided by the Committee, a Deferred Share Award
Election (i) may be offered only with respect to a potential Restricted Stock
Award or an outstanding Restricted Stock Award with at least one year to
derestriction, (ii) shall have derestriction conditions identical as nearly as
practicable to those of the Restricted Stock Award, (iii) shall specify a
payment commencement date and form, which may occur no earlier than January 1
of the year following termination of employment on or after age 55 with five
credited years of employment with the Corporation or an Affiliate and no later
than January 1 of the year following age 70, in one lump sum payment or in
equal annual payments over 5 or 10 years; provided, however, that payment
following derestriction of the Award upon a termination of employment prior to
age 55 or on or after age 55 with less than five years of credited employment
with the Corporation or an Affiliate shall be made in a lump sum payment no
later than March 1 of the year following such termination of employment.
(c) Except as otherwise provided by the Committee, a Deferred Share Award
shall entitle the Participant to receive dividend equivalents payable no
earlier than the date payment is elected for the Deferred Share Award.
Dividend equivalents shall be calculated on the number of shares covered by
the Deferred Share Award as soon as practicable after the date dividends are
payable on the Common Stock.
(d) A Deferred Share Award shall be evidenced by a written Deferred Share
Award Agreement executed by the Corporation and the Participant in such form
as the Committee shall prescribe from time to time in accordance with the
Plan.
(e) Deferred Share Awards shall be subject to the same aggregate and
individual limitations set under the Plan for Restricted Stock Awards and
shall be subject to adjustment as provided in Section 9.7.
IX. Miscellaneous
9.1 General Restriction. Each Award under the Plan shall be subject to the
requirement that, if at any time the Committee shall determine that any listing
or registration of the shares of Common Stock or any consent or approval of any
governmental body, or any other agreement or consent is necessary or desirable
as a condition of the granting of an Award or issuance of Common Stock or cash
in satisfaction thereof, such Award may not be consummated unless such
requirement is satisfied in a manner acceptable to the Committee.
9.2 Non-Assignability. No Award under the Plan shall be assignable or
transferable by a Participant, except by will or by the laws of descent and
distribution or by such other means as the Committee may approve from time to
time. During the life of the Participant, such Award shall be exercisable only
by such Participant or by such other persons as the Committee may approve from
time to time.
9.3 Withholding Taxes. Whenever the Corporation proposes or is required to
issue or transfer shares of Common Stock under the Plan, the Corporation shall
have the right to require the Participant to remit to the Corporation an amount
sufficient to satisfy any federal, state, local or other withholding tax
requirements prior to the delivery of any certificate for such shares. Whenever
under the Plan payments are to be made in cash, such payments shall be net of an
amount sufficient to satisfy any federal, state, local or other withholding tax
requirements.
<PAGE> 8
9.4 No Right to Employment. Nothing in the Plan or in any agreement entered
into pursuant to it shall confer upon any Participant the right to continue in
the employment of the Corporation or an Affiliate or affect any right which the
Corporation or an Affiliate may have to terminate the employment of such
Participant.
9.5 Non-Uniform Determinations. The Committee's determinations under the
Plan (including without limitation its determinations of the employees to
receive Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards and the establishment of performance goals and
performance periods) need not be uniform and may be made by it selectively among
employees who receive, or are eligible to receive, Awards under the Plan,
whether or not such persons are similarly situated.
9.6 No Rights as Shareholders. Participants as such shall have no rights as
shareholders of the Corporation, except as provided in Section 8.4, unless and
until shares of Common Stock are registered in their name.
9.7 Adjustments of Stock. If there is any change in the Common Stock by
reason of any stock split, stock dividend, spin-off, split-up, spin-out,
recapitalization, merger, consolidation, reorganization, combination or exchange
of shares, or any other similar transaction, the number and kind of shares
available for grant under the Plan or subject to or granted pursuant to an Award
and the price thereof, or other numeric limitations under the Plan, as
applicable, shall be appropriately adjusted by the Committee or the Board.
9.8 Amendment or Termination of the Plan. The Committee or the Board may at
any time terminate the Plan or any part thereof and may from time to time amend
the Plan as it may deem advisable. Any such action of the Committee or the Board
may be taken without the approval of the Corporation's shareholders, but only to
the extent that such shareholder approval is not required by applicable law or
regulation, including specifically Rule 16b-3, or the rules of any stock
exchange on which the Common Stock is listed. The termination or amendment of
the Plan shall not, without the consent of the Participant, adversely affect
such Participant's rights under an Award previously granted.
9.9 Awards to Foreign Nationals and Employees Outside the United States. To
the extent the Committee deems it necessary, appropriate or desirable to comply
with foreign law or practice and to further the purpose of the Plan, the
Committee may, without amending the Plan, (i) establish special rules applicable
to Awards granted to Participants who are foreign nationals, are employed
outside the United States, or both, including rules that differ from those set
forth in this Plan, and (ii) grant Awards to such Participants in accordance
with those rules.
9.10 Previously Granted Awards. Awards outstanding on the effective date of
this amended and restated Plan shall continue to be governed by and construed in
accordance with the Plan as in effect prior to the effective date; except that
outstanding Deferred Cash Incentive Awards shall be subject to the limitations
of new Section 7.3(a) and (b) of the Plan and, to the extent required by Section
162(m) of the Code, a grant of a Reload Option shall be subject to the
limitation of new Section 3.4(d) of the Plan.
April 2000
