As filed with the Securities and Exchange Commission on May 21, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NEWMONT MINING CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1700 LINCOLN STREET 13-1806811
(State or other jurisdiction of) DENVER, COLORADO 80203 (I.R.S. Employer
incorporation or organization) (303) 863-7414 Identification No.)
(Address of principal executive offices)
</TABLE>
NEWMONT MINING CORPORATION
1996 EMPLOYEES STOCK PLAN
(Full Title of Plan)
TIMOTHY J. SCHMITT, ESQ.
NEWMONT MINING CORPORATION
1700 LINCOLN STREET
DENVER, COLORADO 80203
(303) 863-7414
(Name, address and telephone number,
including area code, of agent for service)
Copies to:
MAUREEN BRUNDAGE, ESQ.
WHITE & CASE
1155 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 819-8200
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price aggregate Amount of
securities to be registered registered per share <F1> offering registration fee
price<F1>
<S> <C> <C> <C> <C>
Common Stock, $1.60 par 3,000,000 58.56 175,680,000 60,579.31
value......
<FN>
<F1> Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(h) and 457(c) under the
Securities Act of 1933, based upon the average of the high and low prices of the Common Stock as reported on the New York
Stock Exchange, Inc. on May 17, 1996.
</TABLE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Company hereby incorporates by reference in this Prospectus the
Company's Annual Report on Form 10-K for the year ended December 31, 1995,
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 and the
description of the Company's Common Stock contained in the Company's
registration statement for such Common Stock filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including any amendment
or report filed for the purpose of updating such description. All documents
subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregister
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 of such documents. Any statement contained herein or in a document
all or a portion of which is 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.
Section 145 of the Delaware General Corporation Law authorizes and
empowers the Company to indemnify the directors, officers, employees and
agents of the Company against liabilities incurred in connection with, and
related expenses resulting from, any claim, action or suit brought against any
<PAGE>
such person as a result of his relationship with the Company, provided that
such persons acted in good faith and in a manner such person reasonably
believed to be in, and not opposed to, the best interests of the Company in
connection with the acts or events on which such claim, action or suit is
based. The finding of either civil or criminal liability on the part of such
persons in connection with such acts or events is not necessarily
determinative of the question of whether such persons have met the required
standard of conduct and are, accordingly, entitled to be indemnified. The
foregoing statements are subject to the detailed provisions of Section 145 of
the General Corporation Law of the State of Delaware.
The By-Laws of the Company provide that each person who at any time
is or shall have been a director or officer of the Company, or is or shall
have been serving another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity at the request of
the Company, and his heirs, executors and administrators, shall be indemnified
by the Company in accordance with and to the full extent permitted by the
General Corporation Law of the State of Delaware. Section 6 of the By-Laws of
the Company facilitates enforcement of the right of directors and owners to be
indemnified by establishing such right as a contract right pursuant to which
the person entitled thereto may bring suit as if the indemnification
provisions of the By-Laws were set forth in a separate written contract
between the Company and the director or officer.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENTS
4.1 Restated Certificate of Incorporation dated as of July 13, 1987.
Incorporated by reference to Exhibit 3 to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1987.
4.2 By-Laws, as amended, through November 1, 1993 and adopted November
1, 1993. Incorporated by reference to Exhibit 3(b) to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1993.
5. Opinion of White & Case, counsel to the Registrant, dated May 20,
1996 with respect to the legality of the Common Stock being
registered.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of White & Case (included in Exhibit 5 to the Registration
Statement).
24 Power of Attorney of certain officers and directors.
99 Newmont Mining Corporation 1996 Employees Stock Plan.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
<PAGE>
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the 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 the registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the regis-
tration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) 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 the registration statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof;
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering;
(4) 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 15(d) of the Exchange Act that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(5) that, for purposes of determining any liability under the Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus, filed by the Registrant pursuant to Rule 424(b)(1) or (4)
under the Act shall be deemed to be part of this registration statement
as of the time it was declared effective.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the provisions described in Item 6, or otherwise,
the Company has been advised that in the opinion of the 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
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE
THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-8 AND HAS DULY
CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF DENVER, STATE OF
COLORADO, ON THE 21ST DAY OF MAY, 1996.
NEWMONT MINING CORPORATION
By /s/ Timothy J. Schmitt
Timothy J. Schmitt
Vice President, Secretary and
Assistant General Counsel
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
*
Rudolph I.J. Agnew Director May 21, 1996
*
J.P. Bolduc Director May 21, 1996
* Chairman, President, Chief Executive
Ronald C. Cambre Officer and Director (Principal
Executive Officer) May 21, 1996
*
Joseph P. Flannery Director May 21, 1996
*
Thomas A. Holmes Director May 21, 1996
*
Robin A. Plumbridge Director May 21, 1996
*
Moeen A. Qureshi Director May 21, 1996
<PAGE>
*
Michael K. Reilly Director May 21, 1996
*
William I.M. Turner, Jr. Director
May 21, 1996
* Senior Vice President and Chief
Wayne W. Murdy Financial Officer (Principal Financial
Officer) May 21, 1996
* Vice President and Controller (Principal
Gary E. Farmar Accounting Officer) May 21, 1996
*By /s/ Timothy J. Schmitt
Timothy J. Schmitt as
Attorney-in-fact
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit No.
4.1 Restated Certificate of Incorporation dated as of July 13, 1987.
Incorporated by reference to Exhibit 3 to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1987
4.2 By-Laws, as amended, through November 1, 1993 and adopted November
1, 1993. Incorporated by reference to Exhibit 3(b) to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1993
5 Opinion of White & Case, counsel to the Registrant, dated May 20,
1996 with respect to the legality of the Common Stock being
registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of White & Case (included in Exhibit 5 to the Registration
Statement)
24 Power of Attorney of certain officers and directors
99 Newmont Mining Corporation 1996 Employees Stock Plan
<PAGE>
EXHIBIT 5
May 20, 1996
Newmont Mining Corporation
1700 Lincoln Street
Denver, Colorado 80203
Re: Newmont Mining Corporation
3,000,000 Shares of Common Stock
Dear Sirs:
We are familiar with the proceedings taken and proposed to be taken by
Newmont Mining Corporation, a Delaware corporation (the "Company"), in
connection with the registration pursuant to the Registration Statement on
Form S-8 (the "Registration Statement") filed by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, of 3,000,000 shares of its Common Stock, $1.60 par value (the "Common
Stock"), issuable pursuant to the Company's 1996 Employees Stock Plan (the
"Plan").
We have examined such documents, certificates, records, authorizations
and proceedings and have made such investigations as we have deemed necessary
or appropriate in order to give the opinion expressed herein.
Based on the foregoing, it is our opinion that the 3,000,000 shares of
Common Stock referred to above have been duly authorized by the Company and,
when issued and, in the case of shares to be issued upon exercise of stock
options granted under the Plan, the option price therefor paid as described in
the Plan, will be validly issued, fully paid and nonassessable shares of
Common Stock of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement.
Very truly yours,
TG:JC
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 23, 1996
included in Newmont Mining Corporation's Form 10K for the year ended December
31, 1995 and to all references to our Firm included in this registration
statement.
ARTHUR ANDERSON LLP
Denver, Colorado
May 14, 1996
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Timothy J. Schmitt his true and lawful
attorney-in-fact and agent, with full power of substitution and revocation, in
his name and on his behalf, to do any and all acts and things and to execute
any and all instruments which said attorney-in-fact and agent may deem
necessary or advisable to enable Newmont Mining Corporation (the
"Corporation") to comply with the Securities Act of 1933, as amended (the
"Act"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration
under the Act of up to, and including, 3,000,000 shares of Common Stock of the
Corporation including power and authority to sign his name in any and all
capacities (including his capacity as a Director and/or Officer of the
Corporation) to a Registration Statement on Form S-8 or such other form as may
be appropriate, and to any and all amendments, including post-effective
amendments, to such Registration Statement, and to any and all instruments or
documents filed as part of or in connection with such Registration Statement
or any amendments thereto; and the undersigned hereby ratifies and confirms
all that said attorney-in-fact and agent shall lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned have subscribed these presents
as of the 21st day of May, 1996.
<TABLE>
<CAPTION>
Signature Title
<S> <C>
/s/ Rudolph I. J. Agnew Director
Rudolph I.J. Agnew
<PAGE>
/s/ J.P. Bolduc Director
J. P. Bolduc
/s/ Ronald C. Cambre Chairman, President and
Ronald C. Cambre Chief Executive Officer
and Director
(Principal Executive Officer)
/s/ Joseph P. Flannery Director
Joseph P. Flannery
/s/ Thomas A. Holmes Director
Thomas A. Holmes
/s/ Robin A. Plumbridge Director
Robin A. Plumbridge
/s/ Moeen A. Qureshi Director
Moeen A. Qureshi
/s/ Michael K. Reilly Director
Michael K. Reilly
/s/ William I.M. Turner, Jr. Director
William I.M. Turner, Jr.
/s/ Wayne W. Murdy Senior Vice President
Wayne W. Murdy and Chief Financial Officer (Principal Financial Officer)
/s/ Gary E. Farmar Vice President and Controller
Gary E. Farmar (Principal Accounting Officer)
</TABLE>
NEWMONT MINING CORPORATION
1996 EMPLOYEES STOCK PLAN
1. Purposes. The purposes of the Newmont Mining Corporation 1996
Employees Stock Plan are:
(a) To further the growth, development and success of the Company and its
Subsidiaries by enabling employees of the Company and its Subsidiaries to
acquire a continuing equity interest in the Company, thereby increasing their
personal interests in such growth, development and success and motivating such
employees to exert their best efforts on behalf of the Company and its
Subsidiaries; and
(b) To maintain the ability of the Company and its Subsidiaries to
attract and retain employees of outstanding ability by offering them an
opportunity to acquire a continuing equity interest in the Company and its
<PAGE>
Subsidiaries which will reflect the growth, development and success of the
Company and its Subsidiaries.
Toward these objectives, the Committee may grant Options, Stock Appreciation
Rights, or Other Stock-Based Awards or award Restricted Stock to such
employees or pay such employees' bonuses (if any) or other compensation in
Common Stock or award or grant any combination thereof, all pursuant to the
terms and conditions of the Plan (each, an "Award").
2. Definitions. As used in the Plan, the following capitalized terms
shall have the meanings set forth below:
(a) "ADDITIONAL ANNUAL INCREMENT" - a number of shares of Common Stock
equal to one percent of the number of shares of Common Stock outstanding on
December 31 of the immediately preceding year.
(b) "AGREEMENT" - an option or award agreement evidencing an Award.
(c) "AWARD" - an Option, SAR, Other Stock-Based Award or Restricted Stock
granted or awarded, or bonus or other compensation of an employee paid in
Common Stock, pursuant to the terms and conditions of the Plan.
(d) "AWARD GAIN" - the gain represented by the product of the excess of
the Fair Market Value of the Common Stock on the date of exercise of an Option
or SAR over the exercise price of such Option or SAR multiplied by the number
of shares of Common Stock subject to such Option or SAR, or portion thereof,
exercised, without regard to any subsequent decrease or increase in the Fair
Market Value of the Common Stock.
(e) "AWARD LIMIT" - 500,000 shares of Common Stock (as adjusted in
accordance with Section 15).
(f) "BOARD" - the Board of Directors of the Company.
(g) "CEO" - the Chief Executive Officer of the Company.
(h) "CODE" - the Internal Revenue Code of 1986, as it may be amended from
time to time, including regulations and rules thereunder and successor
provisions and regulations and rules thereto.
(i) "COMMITTEE" - the Compensation Committee of the Board, or such other
Board committee as may be designated by the Board to administer the Plan.
(j) "COMMON STOCK" - the $1.60 par value common stock of the Company.
(k) "COMPANY" - Newmont Mining Corporation, a Delaware corporation, or
any successor entity.
(l) "DIVIDEND EQUIVALENTS" - the equivalent value (in cash or Common
Stock) of dividends paid on Common Stock subject to Other Stock-Based Awards
granted under Section 9.
(m) "EXCHANGE ACT" - the Securities Exchange Act of 1934, as it may be
amended from time to time.
(n) "FAIR MARKET VALUE" of a share of Common Stock as of a given date
shall be the average of the high and low sales prices for a share of Common
Stock as reported for New York Stock Exchange issues in The Wall Street
Journal for such date; provided, however, that if there is no sale of shares
of Common Stock reported in The Wall Street Journal on such date, such fair
market value shall be the average between the bid and asked prices for a share
of Common Stock reported in The Wall Street Journal at the close of trading on
such date; provided further, however, that if no such prices are reported for
such day, the most recent day for which such prices are available shall be
used. In the event that the method for determining the fair market value of a
share of Common Stock provided for in the previous sentence shall not be
<PAGE>
practicable, then such fair market value shall be determined by such other
reasonable valuation method as the Committee shall, in its discretion, select
and apply in good faith as of the given date; provided, however, that for
purposes of paragraph (a) of Section 6, such fair market value shall be
determined subject to Section 422(c)(7) of the Code.
(o) "ISO," OR "INCENTIVE STOCK OPTION" - an option to purchase Common
Stock granted to a Participant under the Plan in accordance with the terms and
conditions set forth in Section 6 and which conforms to the applicable
provisions of Section 422 of the Code.
(p) "NOTICE" - written notice actually received by the Company at its
offices on the day of such receipt, if received on or before 1:30 p.m., Denver
time, on a day when the Company's offices are open for business, or, if
received after such time, such notice shall be deemed received on the next
such day, which notice may be delivered in person to the Company's Payroll
Department or sent by facsimile to the Company, or sent by certified or
registered mail or overnight courier, prepaid, addressed to the Company at
1700 Lincoln Street, Denver, Colorado 80203, Attention: Payroll Department.
(q) "OPTION" - an option to purchase Common Stock granted to a
Participant under the Plan in accordance with the terms and conditions set
forth in Section 6. Options may be either ISOs or stock options other than
ISOs.
(r) "OPTIONEE" - a Participant who has been granted an Option under the
Plan in accordance with the terms and conditions set forth in Section 6.
(s) "OTHER STOCK-BASED AWARDS" - Awards granted to Participants under the
Plan in accordance with the terms and conditions set forth in Section 10.
(t) "PARTICIPANT" - any employee of the Company or its Subsidiaries
selected to participate in the Plan pursuant to Section 3.
(u) "PERFORMANCE CRITERIA" - earnings, increases in production,
reductions in costs of production and reserve replacement.
(v) "PLAN" - this Newmont Mining Corporation 1996 Employees Stock Plan.
(w) "PREDECESSOR PLANS" - the Company's Amended and Restated 1992 Key
Employees Stock Plan and the Company's Amended and Restated 1987 Key Employees
Stock Option Plan.
(x) "RESTRICTED STOCK" - Common Stock awarded under the Plan in
accordance with the terms and conditions set forth in Section 8.
(y) "RESTRICTION PERIOD" - a time period, which may or may not be based
upon the achievement of particular performance goals and/or the satisfaction
of vesting or earnout provisions (which may be dependent on the continued
employment of the recipient) applicable to, and established or specified by
the Committee at the time of, each award of Restricted Stock.
(z) "RULE 16B-3" - Rule 16b-3 under the Exchange Act, as such rule may be
amended from time to time.
(aa) "SAR" - a stock appreciation right granted to a Participant under
the Plan and in accordance with the terms and conditions of Section 7.
(bb) "SEC" shall mean the Securities and Exchange Commission.
(cc) "SUBSIDIARY" shall mean (i) any present or future corporation which
is or would be a "subsidiary corporation" of the Company as the term is de-
fined in Section 424(f) of the Code and (ii) any unincorporated entity in
which the Company and/or one or more of its "subsidiary corporations" (as
defined in Section 424(f) of the Code) presently or in the future own an
<PAGE>
aggregate profits interest of fifty percent (50%) or more, which the Committee
in its discretion determines will be a "Subsidiary" for purposes of the Plan.
3. Administration of the Plan. (a) The Committee shall have exclusive
authority to operate, manage and administer the Plan in accordance with its
terms and conditions. Notwithstanding the foregoing, in its absolute
discretion, the Board may at any time and from time to time exercise any and
all rights, duties and responsibilities of the Committee under the Plan,
including, but not limited to, establishing procedures to be followed by the
Committee, but excluding matters which under Rule 16b-3 or Section 162(m) of
the Code are required to be determined in the discretion of the Committee.
(b) The Committee shall be appointed from time to time by the Board,
and the Committee shall consist of not less than three members of the Board,
each of whom is an "outside director" within the meaning of Section 162(m) of
the Code and, to the extent necessary for the Plan and/or Awards thereunder to
satisfy the requirements and conditions of Rule 16b-3, a "disinterested
person," as defined by Rule 16b-3 (or a "non-employee director" under Rule
16b-3 as proposed to be amended by the SEC, if such amendments are finally
adopted by the SEC substantially as proposed); provided, however, that if one
or more of the members of the Committee does not qualify as such an "outside
director" or a "disinterested person" (or a "non-employee director," if
applicable) at the time any Award is granted, such Award nevertheless shall be
deemed to be properly authorized and issued under the Plan and shall remain in
full force and effect subject to the other terms and conditions contained in
the Plan and the relevant Agreement.
(c) Without limiting the generality of paragraph (a) of this
Section 3, the Committee shall have the exclusive right and discretionary
authority to: (i) interpret the Plan and the Agreements; (ii) determine
eligibility for participation in the Plan and the amount of Awards payable
under the Plan; (iii) select, from time to time, from amongst those eligible,
the employees to whom Awards shall be granted under the Plan, which selection
may be based upon information furnished to the Committee by the Company's
management; (iv) determine whether an Award shall take the form of an ISO,
Option other than an ISO, SAR, Restricted Stock, bonuses or other compensation
payable in Common Stock, Other Stock-Based Award (and, if so, the form
thereof) or any combination thereof; (v) determine the number of shares of
Common Stock to be included in any Award or to which any Award shall otherwise
relate and the periods for which Awards will be outstanding; (vi) establish,
amend, waive and/or rescind rules and regulations and administrative
guidelines for carrying out the Plan; (vii) to the extent permitted under the
Plan and the applicable Agreement, accelerate the exercisability or the
termination of any Restriction Period with respect to any Award when such
acceleration and/or termination would be in the best interest of the Company;
(viii) to the extent permitted under the Plan and the applicable Agreement,
grant waivers of Plan terms, conditions, restrictions and limitations; (ix)
correct any errors, supply any omissions or reconcile any inconsistencies in
the Plan and/or any Agreement or any other instrument relating to any Award;
(x) to the extent permitted by the Plan, amend or adjust the terms and
conditions of any outstanding Award and/or adjust the number and/or class of
shares of Common Stock subject to any outstanding Award; (xi) in accordance
with the Plan, establish and administer any performance goals in connection
with any Awards, including the Performance Criteria to which such performance
goals relate and the applicable measurement periods, and certify whether, and
to what extent, any such performance goals have been met; (xii) at any time
and from time to time after the granting of an Award, specify such additional
terms, conditions and restrictions with respect to any ISO, Option other than
an ISO, SAR, Other Stock-Based Award, Restricted Stock and/or bonuses or other
compensation payable in Common Stock as may be deemed necessary or appropriate
to ensure compliance with any and all applicable laws, including, but not
limited to, (A) terms, restrictions and conditions for compliance with Federal
and state securities laws, (B) methods of withholding or providing for the
payment of required taxes and (C) restrictions regarding a Participant's
ability to exercise Awards under a "cashless exercise" program established by
the Committee; and (xiii) take any and all such other action it deems
<PAGE>
necessary or advisable for the proper operation and/or administration of the
Plan. The Committee shall have full discretionary authority in all matters
related to the discharge of its responsibilities and the exercise of its
authority under the Plan. Decisions and actions by the Committee with respect
to the Plan and any Agreement shall be final, conclusive and binding on all
persons having or claiming to have any right or interest in or under the Plan
and/or any Agreement. Awards, including Awards under the same section of the
Plan, need not be uniform as to all grants and recipients thereof.
(d) Each Award shall be evidenced by an Agreement, which shall be
executed by the Company and the Participant to whom such Award has been
granted, unless the Agreement provides otherwise; however, two or more Awards
to a single Participant may be combined in a single Agreement. An Agreement
shall not be a precondition to the granting of an Award; however, no person
shall have any rights under any Award unless and until the Participant to whom
the Award shall have been granted (i) shall have executed and delivered to the
Company an Agreement or other instrument evidencing the Award, unless such
Agreement provides otherwise, and (ii) has otherwise complied with the
applicable terms and conditions of the Award. The Committee shall prescribe
the form of all Agreements, and, subject to the terms and conditions of the
Plan, shall determine the content of all Agreements. Any Agreement may be
supplemented or amended in writing from time to time as approved by the
Committee; provided that the terms and conditions of any such Agreement as
supplemented or amended are not inconsistent with the provisions of the Plan.
(e) A majority of the members of the entire Committee shall
constitute a quorum and the actions of a majority of the members of the
Committee in attendance at a meeting at which a quorum is present, or actions
by a written instrument signed by all members of the Committee, shall be the
actions of the Committee.
(f) The Committee may, in its discretion, delegate to the CEO, any
Senior Vice President of the Company or the Secretary of the Company the
"administration" of the Plan under this Section 3; provided, however, that no
such delegation by the Committee shall be made if such delegation would not be
permitted under applicable law or with respect to the administration of the
Plan as it affects the CEO or the President or Secretary of the Company or any
Senior Vice President of the Company, and, provided further, however, the
Committee may not delegate its authority to grant Awards or correct errors,
omissions or inconsistencies in the Plan. All authority delegated by the
Committee under this paragraph (f) of this Section 3 shall be exercised in
accordance with the terms and conditions of the Plan and any rules,
regulations or administrative guidelines that may from time to time be
established by the Committee, and any delegee of such authority shall
periodically report to the Committee concerning the performance or discharge
of the matters delegated to such individual.
4. Shares of Stock Subject to the Plan. (a) The shares of stock
subject to Awards granted under the Plan shall be shares of Common Stock.
Such shares of Common Stock subject to the Plan may be either authorized and
unissued shares (which will not be subject to preemptive rights) or previously
issued shares acquired by the Company or any Subsidiary. The total number of
shares of Common Stock that may be delivered pursuant to any Awards under the
Plan is 3,000,000 plus an additional number of shares on January 1 of each
calendar year (beginning with calendar year 1997) during the duration of the
Plan equal to the Additional Annual Increment, of which 600,000 shares of
Common Stock plus an additional amount of shares of Common Stock each calendar
year equal to twenty percent of the Additional Annual Increment with respect
to such year may be awarded as Restricted Stock and no more than 7,500,000
shares of Common Stock may be awarded in the aggregate with respect to ISOs
for the duration of the Plan. The exercise of a SAR, whether paid in cash or
Common Stock, shall be deemed to be an issuance of Common Stock for purposes
of determining the number of shares delivered under the Plan.
<PAGE>
(b) Notwithstanding any of the foregoing limitations set forth in
this Section 4, the numbers of shares of Common Stock specified in this
Section 4 shall be adjusted as provided in Section 15.
(c) Any shares of Common Stock subject to an Option or SAR or Other
Stock-Based Award which for any reason expires or is terminated without having
been fully exercised and any Restricted Stock which is forfeited may again be
granted pursuant to an Award under the Plan, subject to the limitations of
this Section 4; provided, however, that forfeited shares of Common Stock shall
not be available for further Awards if the recipient thereof has realized any
benefits of ownership from such shares.
5. Eligibility. Employees of the Company and its Subsidiaries (but
excluding members of the Committee as well as non-employee directors) shall be
eligible to become Participants and receive Awards under the Plan.
6. Terms and Conditions of Stock Options. All Options to purchase
Common Stock granted under the Plan shall be either ISOs or Options other than
ISOs. Each Option shall be subject to all the applicable provisions of the
Plan, including the following terms and conditions, and to such other terms
and conditions not inconsistent therewith as the Committee shall determine and
which are set forth in the applicable Agreement.
(a) The option exercise price per share of shares of Common Stock
subject to each Option shall be determined by the Committee and stated in
the Agreement; provided, however, that, subject to paragraph (g)(C) of
this Section 6, such price shall not be less than 100% of the Fair Market
Value of a share of Common Stock at the time that the Option is granted.
(b) Each Option shall be exercisable in whole or in such
installments, at such times and under such conditions as may be
determined by the Committee in its discretion and stated in the
Agreement, and, in any event, over a period of time ending not later than
ten years from the date such Option was granted, subject to paragraph
(g)(C) of this Section 6.
(c) An Option shall not be exercisable with respect to a fractional
share of Common Stock or the lesser of fifty shares or the full number of
shares of Common Stock then subject to the Option. No fractional shares
of Common Stock shall be issued upon the exercise of an Option.
(d) Each Option may be exercised by giving Notice to the Company
specifying the number of shares of Common Stock to be purchased, which
shall be accompanied by payment in full including applicable taxes, if
any, in accordance with Section 14. Payment shall be in any manner
permitted by applicable law and prescribed by the Committee, in its
discretion, and set forth in the Agreement, including, in the Committee's
discretion, payment in accordance with a "cashless exercise" program
established by the Committee.
(e) No Optionee or other person shall become the beneficial owner of
any shares of Common Stock subject to an Option, nor have any rights to
dividends or other rights of a shareholder with respect to any such
shares until he or she has exercised his or her Option in accordance with
the provisions of the Plan and the applicable Agreement.
(f) An Option may be exercised only if at all times during the
period beginning with the date of the granting of the Option and ending
on the date of such exercise, the Optionee was an employee of either the
Company or of a Subsidiary or of another corporation referred to in
Section 421(a)(2) of the Code. Notwithstanding the above, the Committee
may determine in its discretion that an Option may be exercised following
termination of such continuous employment, whether or not exercisable at
such time, to the extent provided in the applicable Agreement.
<PAGE>
(g)(A) Each Agreement relating to an Option shall state whether such
Option will or will not be treated as an ISO. No ISO shall be granted
unless such Option, when granted, qualifies as an "incentive stock
option" under Section 422 of the Code. Any ISO granted under the Plan
shall contain such terms and conditions, consistent with the Plan, as the
Committee may determine to be necessary to qualify such Option as an
"incentive stock option" under Section 422 of the Code. Any ISO granted
under the Plan may be modified by the Committee to disqualify such Option
from treatment as an "incentive stock option" under Section 422 of the
Code.
(B) Notwithstanding any intent to grant ISOs, an Option granted
under the Plan will not be considered an ISO to the extent that it,
together with any other "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to subsection (d) of such
Section) under the Plan or any other incentive stock option plans of the
Company and any Subsidiary, are exercisable for the first time by any
Optionee during any calendar year with respect to Common Stock having an
aggregate Fair Market Value in excess of $100,000 (or such other limit as
may be required by the Code) as of the time the Option with respect to
such Common Stock is granted. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in
which they were granted.
(C) No ISO shall be granted to a Participant who owns (within the
meaning of Section 424(d) of the Code), at the time the Option is
granted, more than 10% of the total combined voting power of all classes
of stock of the Company or a Subsidiary. This restriction does not apply
if at the time such ISO is granted the Option exercise price per share of
Common Stock subject to the Option is at least 110% of the Fair Market
Value of a share of Common Stock on the date such ISO is granted, and the
ISO by its terms is not exercisable after the expiration of five years
from such date of grant.
(h) Notwithstanding any other provision contained in the Plan to the
contrary, the maximum number of shares of Common Stock which may be
subject to Options granted under the Plan to any Participant in any
twelve-month period shall not exceed the Award Limit. To the extent
required by Section 162(m) of the Code, shares of Common Stock subject to
Options which are cancelled shall continue to be counted against the
Award Limit and if, after the grant of an Option, the price of shares
subject to such Option is reduced and the transaction is treated as a
cancellation of the Option and a grant of a new Option, both the Option
deemed to be canceled and the Option deemed to be granted shall be
counted against the Award Limit.
7. Terms and Conditions of SARs. Any SAR granted by the Committee
under the Plan shall be granted in conjunction with all or part of an Option
granted under the Plan. Each SAR shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions, and to
such other terms and conditions not inconsistent therewith as the Committee
shall determine and which are set forth in the applicable Agreement.
(a) The Committee may grant a SAR with respect to an Option which
is not an ISO, either at the time such Option is granted or at any
subsequent time during the term of such Option, or with respect to an
ISO, only at the time such ISO is granted. A SAR shall entitle the
grantee thereof to elect, in the manner described below and as set forth
in the applicable Agreement, in lieu of exercising his or her related
Option, for all or a portion of the shares of Common Stock covered by
such Option, to surrender such Option with respect to any or all of such
shares and to receive from the Company a payment, such payment shall have
a value equal to the amount by which (A) the Fair Market Value of a share
of Common Stock on the date of such election, multiplied by the number of
shares of Common Stock as to which the grantee shall have made such
election, exceeds (B) the exercise price stated in such Option multiplied
<PAGE>
by such number of shares. A SAR shall be exercisable only to the extent
and at the time the related Option is exercisable. The SAR shall
terminate and shall no longer be exercisable upon the expiration or
exercise of the related Option. An Option with respect to which an
Optionee has elected to exercise a SAR, as described above, shall, to the
extent of the shares covered by such exercise, be canceled automatically
and surrendered to the Company. Such Option shall thereafter remain
exercisable according to its terms only with respect to the number of
shares of Common Stock as to which it would otherwise be exercisable,
less the number of such shares with respect to which such SAR has been
so-exercised.
(b) The Company may, in the discretion of the Committee, as set
forth in the Agreement, make payment on a properly exercised SAR; (i) in
cash equal to the excess of the amount described in clause (A) over the
amount described in clause (B) of paragraph 7(a) above; or (ii) in the
nearest whole number of shares of Common Stock having an aggregate Fair
Market Value on the date of exercise of the SAR which is not greater than
the cash amount calculated in clause 7(b)(i) above; or (iii) in a
combination of the manners described in clauses 7(b)(i) and (ii) above.
(c) An election to exercise SARs shall be deemed to have been made
on the date of Notice of such election to the Company.
(d) Notwithstanding any other provision contained in the Plan to the
contrary, the maximum number of shares of Common Stock for which SARs may
be granted under the Plan to any Participant in any twelve-month period
shall not exceed the Award Limit. To the extent required by Section
162(m) of the Code, shares of Common Stock subject to SARs which are
cancelled continue to be counted against the Award Limit and if, after
the grant of a SAR, the price of shares subject to such SAR is reduced
and the transaction is treated as a cancellation of the SAR and a grant
of a new SAR, both the SAR deemed to be canceled and the SAR deemed to be
granted shall be counted against the Award Limit.
8. Terms and Conditions of Restricted Stock Awards. All awards of
Restricted Stock under the Plan shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions, and to
such other terms and conditions not inconsistent therewith, as the Committee
shall determine and which are set forth in the applicable Agreement.
(a) Awards of Restricted Stock may be in addition to or in lieu of
any other types of Awards granted under the Plan.
(b)(i) During the Restriction Period stated in the Agreement, the
recipient shall not be permitted to sell, transfer, pledge, assign,
encumber or otherwise dispose of the shares of Restricted Stock. Any
attempt by such recipient to do so shall constitute the immediate and
automatic forfeiture of such Award.
(ii) An award of Restricted Stock with a Restriction Period based
upon the attainment of particular performance goals established by the
Committee, which performance goals are determined over a measurement
period or periods established by the Committee and relate to one or more
Performance Criteria, as determined by the Committee, in its discretion,
is intended to qualify as "other performance-based compensation," as used
in Code Section 162(m)(4)(c). The maximum number of shares of Restricted
Stock intended to qualify as "other performance-based compensation," as
used in Code Section 162(m)(4)(C), that may be awarded to a Participant
in any twelve-month period shall not exceed the Award Limit.
(c) Except as otherwise provided in this paragraph (c) of Section 8,
shares of Restricted Stock shall be forfeited and revert to the Company
upon termination for any reason of the recipient's employment with the
Company or a Subsidiary and/or the failure to meet any performance goals
to the extent set forth in the Agreement. Notwithstanding the foregoing,
<PAGE>
upon any such termination of employment during the Restriction Period,
shares of Restricted Stock shall become free of all or part of the
restrictions applicable thereto to the extent that: the Agreement, as
determined by the Committee in its discretion on the award date, provides
for lapse of such restrictions upon such termination of employment or the
Committee in its discretion determines to waive forfeiture of such shares
of Restricted Stock for whatever reason the Committee considers to be in
the interests of the Company; provided, however, to the extent that
subparagraph (b)(ii) of this Section 8 is intended to apply to shares of
Restricted Stock, in no event shall restrictions applicable thereto be
subject to lapse prior to the end of the Restriction Period for any
reason other than the death or disability of the recipient or change of
control or ownership of the Company.
(d) Each recipient of shares of Restricted Stock hereunder may, but
need not, be issued one or more stock certificates in respect of such
shares of Restricted Stock. Any such stock certificates for shares of
Restricted Stock shall be registered in the name of the recipient but
shall either be appropriately legended and returned to the Company by the
recipient, together with a stock power, endorsed in blank by the
recipient, or delivered to and held by the Secretary of the Company.
(e) The recipient of shares of Restricted Stock shall be entitled to
vote shares of Restricted Stock, and shall be entitled to all dividends
paid thereon, except that dividends paid in Common Stock or other
property shall be subject to the same restrictions. To the extent that
the Committee so determines, and sets forth in the Agreement, in the
event of any adjustment as provided in Section 15, any new or additional
shares or securities received by a recipient of Restricted Stock shall be
subject to the same terms and conditions as relate to the original shares
of Restricted Stock.
(f) Restricted Stock shall become free of the foregoing restrictions
upon the expiration of the applicable Restriction Period and the Company
shall, subject to paragraph (c) of Section 15, then deliver Common Stock
certificates evidencing such stock to the Participant.
9. Terms and Conditions of Other Stock-Based Awards. The Committee may
grant to Participants Awards under the Plan that are valued in whole or in
part by reference to, or otherwise based on Common Stock ("Other Stock-Based
Awards"). The provisions of Other Stock-Based Awards need not be the same
with respect to each recipient or each Award. The Committee, in its
discretion, may grant Other Stock-Based Awards as it deems appropriate,
including, by way of example and not in limitation, (i) to take advantage of
the compensation practices or tax laws or accounting rules applicable at the
time of grant of such an Award, even if such practices, laws and/or rules are
different from those in effect on the effective date of the Plan, (ii) to
reflect the financial situation of the Company from time to time or (iii) to
conform to and comply with tax, securities or other law or regulations in
jurisdictions outside the United States. Other Stock-Based Awards shall take
such form as the Committee, in its discretion, from time to time, determines,
including, by way of example, and not in limitation, deferred stock,
performance shares, performance units and convertible debentures. All Other
Stock-Based Awards under the Plan shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions, and to
such other terms, conditions, restrictions and/or limitations, if any, not
inconsistent with the Plan, as the Committee shall determine, in its
discretion, and which are set forth in the applicable Agreement.
(a) Unless the Committee determines otherwise, the recipient of an
Other Stock-Based Award shall be entitled to receive Dividend Equivalents
based on the dividends declared with respect to the number of shares of
Common Stock covered by such Award during the period between the date
such Award is granted and the date such Award is exercised, vests or
expires, as determined by the Committee. Such Dividend Equivalents shall
be converted to cash or additional shares of Common Stock by such formula
<PAGE>
and at such time and subject to such limitations as may be determined by
the Committee.
(b) An Other Stock-Based Award, and any Common Stock covered by such
Award, may be forfeited to the extent determined by the Committee, in its
discretion, and as provided in the Agreement.
(c) All Other Stock-Based Awards, and any Common Stock covered
thereby, shall be forfeited upon termination of the recipient's
employment with the Company or a Subsidiary. Notwithstanding the
foregoing, if any such recipient's employment is terminated for any
reason specified by the Committee in its discretion and set forth in the
Agreement, any or all remaining limitations, restrictions or requirements
imposed pursuant to the Plan or in the Agreement with respect to such
recipient's Other Stock-Based Award shall be waived provided, however,
that, in the case of any Other Stock-Based Award to which paragraph (d)
of this Section 10 applies, no such waiver shall be available other than
in the case of death or disability of the recipient or a change of
control or ownership of the Company. The Committee may, in its
discretion, otherwise modify or accelerate the exercisability or other
terms and conditions of any Other Stock-Based Award, to the extent that
any such modification or acceleration is (i) permitted under, and not
inconsistent with, the Plan and (ii) in the best interests of the Company
and, provided, that, paragraph (d) of this Section 10 is not applicable
to such Other Stock-Based Award.
(d) An Other Stock-Based Award based in whole or in part upon the
attainment of particular performance goals established by the Committee
is intended to qualify as "other performance-based compensation," as used
in Code Section 162(m)(4)(C). Such performance goals shall be determined
over a measurement period or periods established by the Committee and
shall relate to one or more Performance Criteria, as determined by the
Committee, in its discretion. The maximum number of shares of Common
Stock that may be awarded to a Participant subject to an Other Stock-
Based Award in any twelve-month period shall not exceed the Award Limit.
10. Bonuses or Other Compensation Payable in Stock. In lieu of cash
bonuses or other compensation otherwise payable under the Company's or
applicable Subsidiary's compensation practices to employees who are eligible
to participate in the Plan, the Committee, in its discretion, may determine
that such bonuses or other compensation shall be payable in Common Stock, or
partly in Common Stock and partly in cash. Such bonuses or other compensation
shall be in consideration of services previously performed and as an incentive
toward future services and shall consist of shares of Common Stock subject to
such terms as the Committee may determine in its discretion.
11. Forfeiture. Notwithstanding any other provisions of the Plan to the
contrary:
(a) To the extent provided in the Agreement, if a Participant shall
exercise an Option or a SAR, or any portion thereof, and leave the employment
of the Company or a Subsidiary within six months after such exercise for any
reason other than death, permanent disability, retirement under a retirement
plan of the Company and/or a Subsidiary or termination of employment with the
written consent of the Company or such Subsidiary (as applicable), then any
Award Gain realized by such Participant as the result of such exercise shall
be paid by such Participant to the Company; provided, however, that no Award
Gain otherwise payable by a Participant to the Company with respect to the
exercise of an Option pursuant to this paragraph (a) of Section 11 shall be so
payable to the extent that the Fair Market Value of the Common Stock, as of
the date such Participant's employment by the Company or the Subsidiary
terminates, is less than the Option exercise price previously paid by such
Participant and such Participant has not, on or before such date, sold or
otherwise disposed of the Common Stock received upon the exercise of such
Option.
<PAGE>
(b) To the extent provided in the Agreement, if at any time prior to
the latest to occur of: (x) the termination or exercise of an Option or a SAR
or an Other Stock-Based Award or the expiration of the Restriction Period
applicable to Restricted Stock granted to a Participant, (y) three years after
a Participant leaves employment with the Company or a Subsidiary for any
reason other than death or permanent disability, or (z) three years after a
Participant exercises an Option or a SAR, or any portion thereof, such
Participant engages directly or indirectly in any manner or capacity in any
activity in competition with the business conducted by the Company or a
Subsidiary (as determined by the Committee in its discretion) or inimical,
contrary or harmful to the interests of the Company or a Subsidiary (as
determined by the Committee in its discretion) then (1) any Option, SAR or
Other Stock-Based Award granted to such Participant shall terminate upon the
date on which such Participant enters into such activity to the extent that
such Option, SAR or Other Stock-Based Award was not previously exercised or
terminated in accordance with the other provisions of the Plan or the
Agreement as of such date, (2) any Award Gain realized by such Participant as
the result of an exercise referred to in clause (z) above shall be paid by
such Participant to the Company, (3) any Restricted Stock awarded to such
Participant with respect to which the Restriction Period has not expired as of
such date shall be forfeited and revert to the Company and (4) any unpaid
Dividend Equivalents as of such date, shall be forfeited and shall not be paid
to such Participant.
(c) A Participant shall satisfy any obligation he or she owes to the
Company under the foregoing paragraphs (a) and (b) of this Section 11 promptly
after the accrual thereof by payment in cash to the Company; however, in lieu
thereof, the Company may elect to deduct the unpaid amount of any such
obligation owed by such Participant to the Company from any payment of any
kind otherwise due to such Participant, including, but not limited to, wages
or other compensation, fringe benefits or vacation pay.
(d) The Committee may release a Participant from any or all
obligations that he or she owes to the Company pursuant to this Section 11,
and/or waive, in whole or in part, the application of this Section 11 to a
Participant if the Committee determines, in its discretion, that such action
is in the best interests of the Company.
12. Transfer, Leave of Absence. For purposes of the Plan, a transfer of
an employee from the Company to a Subsidiary or an affiliate of the Company,
whether or not incorporated, or vice versa, or from one Subsidiary or
affiliate of the Company to another, and a leave of absence, duly authorized
in writing by the Company or a Subsidiary or affiliate of the Company, shall
not be deemed a termination of employment of the employee.
13. Rights of Employees and Other Persons. (a) No person shall have any
rights or claims under the Plan except in accordance with the provisions of
the Plan and the applicable Agreement.
(b) Nothing contained in the Plan or in any Agreement shall be
deemed to give any employee the right to be retained in the service of the
Company or its Subsidiaries nor restrict in any way the right of the Company
or any Subsidiary to terminate any employee's employment at any time with or
without cause.
(c) The adoption of the Plan shall not be deemed to give any
employee of the Company or any Subsidiary or any other person any right to be
selected as a Participant or to be granted an Award.
(d) Nothing contained in the Plan or in any Agreement shall be
deemed to give any employee the right to receive any bonus, whether payable in
cash or in Common Stock, or in any combination thereof, from the Company, nor
be construed as limiting in any way the right of the Company to determine, in
its sole discretion, whether or not it shall pay any employee bonuses, and, if
so paid, the amount thereof and the manner of such payment.
<PAGE>
14. Tax Withholding Obligations. (a) The Company and/or any Subsidiary
are authorized to take whatever actions are necessary and proper to satisfy
all obligations of Participants for the payment of all Federal, state, local
and foreign taxes in connection with any Awards (including, but not limited
to, actions pursuant to the following paragraphs (b) and (c) of this Section
14).
(b) If any Participant properly elects, within the period permitted
under Section 83 of the Code after the date on which property subject to an
Award is transferred to such Participant to include in gross income for
Federal income tax purposes an amount equal to the Fair Market Value (on the
date of transfer) of the Common Stock subject to such Award, such Participant
shall pay, or make arrangements satisfactory to the Company, as determined in
the Committee's discretion, to pay to the Company, at the time of such
election, any Federal, state or local taxes required to be withheld with
respect to such Award. If any such Participant shall fail to make such tax
payments as are required, the Company and its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Participant.
(c) Any Participant who does not or cannot make the election
described in paragraph (a) of this Section 14 with respect to an Award shall
(and in no event shall Common Stock be delivered to such Participant with
respect to such Award until), no later than the date as of which the value of
the Award first becomes includible in the gross income of the Participant for
income tax purposes, pay to the Company in cash, or make arrangements
satisfactory to the Company, as determined in the Committee's discretion,
regarding payment to the Company of, any taxes of any kind required by law to
be withheld with respect to the Common Stock or other property subject to such
Award, and the Company and any Subsidiary shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to such Participant. Notwithstanding the above, the Committee
may, in its discretion and pursuant to procedures approved by the Committee,
permit the Participant to (i) elect withholding by the Company of Common Stock
otherwise deliverable to such Participant pursuant to such Award (provided,
however, that the amount of any Common Stock so withheld shall not exceed the
minimum required withholding obligation taking into account the Participant's
effective tax rate and all applicable Federal, state, local and foreign taxes)
and/or (ii) tender to the Company Common Stock owned by such Participant (or
by such Participant and his or her spouse jointly) and acquired more than six
months prior to such tender in full or partial satisfaction of such tax
obligations.
15. Changes in Capital. (a) Upon changes in the outstanding Common
Stock by reason of a stock dividend, stock split, reverse split, subdivision,
recapitalization, merger, consolidation (whether or not the Company is a
surviving corporation), an extraordinary dividend payable in cash or property,
combination or exchange of shares, separation, reorganization or liquidation,
the aggregate number and class of shares available under the Plan as to which
Awards may be granted, the number and class of shares under (i) each Option
and the option price per share, (ii) each SAR and the exercise price thereof,
(iii) each Other Stock-Based Award and the exercise price (or equivalent, if
applicable) thereof and (iv) each award of Restricted Stock shall, in each
case, be correspondingly adjusted by the Committee. Such adjustments shall be
made in the case of any outstanding Options and/or SARs without change in the
total price applicable to such Options and SARs.
(b) Except as otherwise specifically provided in the Agreement, in
the event (i) of the approval by the shareholders of the Company of a merger,
consolidation, combination, reorganization or other transaction resulting in
less than fifty percent of the combined voting power of the surviving or
resulting entity being owned by the former shareholders of the Company, the
liquidation or dissolution of the Company or the sale or other disposition of
all or substantially all of the assets or business of the Company; (ii) that
an offer is made to the holders of Common Stock to sell or exchange such
Common Stock for cash, securities or stock of another corporation and such
<PAGE>
offer, if accepted, would result in the offeror becoming the owner of (A) at
least fifty percent of the then outstanding Common Stock or (B) such lesser
percentage of the outstanding Common Stock which the Committee in its
discretion determines may materially adversely affect the market value of the
Common Stock after such transaction; (iii) any person or group of persons
(within the meaning of Sections 13(d) and 14(d) of the Exchange Act) directly
or indirectly purchases or otherwise becomes the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) or has the right to acquire such
beneficial ownership (whether or not such right is exercisable immediately,
with the passage of time, or subject to any condition), other than from the
Company, of twenty percent or more of the combined voting power of the
Company's then outstanding securities; or (iv) during any period of two
consecutive years individuals who at the beginning of such period constituted
the Board cease for any reason to constitute at least a majority thereof,
unless the election, or nomination for the election by the shareholders of the
Company, of each new director was approved by at least two-thirds of the
directors then still in office who were directors at the beginning of the
period (other than, in the case of clauses (i), (ii) and (iii) above, a sale
or other disposition to or for the benefit of, or any beneficial ownership or
offer by or on behalf of the Company or a Subsidiary or any employee benefit
plan (or related trust) of the Company or a Subsidiary, or any group comprised
solely of such entities): (1) all restrictions on Restricted Stock previously
awarded to Participants under the Plan shall (unless the Committee determines
otherwise) be immediately cancelled and the Restriction Periods applicable
thereto shall immediately terminate, without regard to any contrary provisions
contained in the Plan or the applicable Agreements and (2) the time of
exercise of Options, SARs and/or Other Stock-Based Awards which are
outstanding shall (unless the Committee determines otherwise) be accelerated
so that such Awards become immediately exercisable in full without regard to
any limitations of time or amount otherwise contained in the Plan or the
applicable Agreements and (3) all such Awards shall (unless the Committee
determines otherwise) immediately become fully vested and nonforfeitable.
Upon the occurrence of any event described in the preceding sentence, the
Committee may, in its discretion, determine (A) that Options, SARs and/or
Other Stock-Based Awards shall be adjusted and make such adjustments by
substituting for Common Stock subject to such Options, SARs and/or Other
Stock-Based Awards stock or other securities of any successor corporation to
the Company or that may be issuable by another corporation that is a party to
the transaction if such stock or other securities are publicly traded, in
which event the aggregate exercise price (as applicable) shall remain the same
and the amount of shares or other securities subject to option or other rights
under an Award shall be the amount of shares or other securities which could
have been purchased on the closing date or expiration date of such transaction
with the proceeds which would have been received by the Participant if the
Option, SAR and/or Other Stock-Based Award had been exercised in full prior to
such transaction or expiration date and the Participant exchanged all of such
shares in the transaction, (B) to cancel or waive any payment owed by, or
forfeiture imposed on a Participant pursuant to Section 11, and/or (C) that
any outstanding Options, SARs and/or Other Stock-Based Awards shall, in each
case, be converted into a right to receive in cash, as soon as practicable
following the closing date or expiration date of the transaction or offer, an
amount equal to the greater of (x) the highest value of the consideration to
be received in connection with such transaction for one share of Common Stock
and (y) the highest market trading price of a share of the Common Stock
reported in The Wall Street Journal during the 30 consecutive trading days
prior to the closing date or expiration date of such transaction, less, in the
case of an Award prescribing an exercise price, the per share exercise price
of such Award, multiplied by the number of shares of Common Stock subject to
such Award. No Participant shall have any right to prevent the consummation
of any of the foregoing acts affecting the number of shares available to such
Participant. Any actions or determinations of the Committee under this
paragraph (b) of Section 15 need not be uniform as to all outstanding Awards,
nor treat all Participants identically. Notwithstanding the foregoing
adjustments, in no event may any Option be exercised after ten years from the
date it was originally granted and any changes to ISOs shall, unless the
Committee determines otherwise, only be effective to the extent such
<PAGE>
adjustments or changes do not cause a "modification" (within the meaning of
Section 424(h)(3) of the Code) of such ISOs or adversely affect the tax status
of such ISOs.
16. Miscellaneous Provisions. (a) The Plan shall be unfunded. The
Company shall not be required to establish any special or separate fund or to
make any other segregation of assets to assure the issuance of shares or the
payment of cash upon exercise or payment of any Award. Proceeds from the sale
of shares of Common Stock pursuant to Options granted under the Plan shall
constitute general funds of the Company. The expenses of the Plan shall be
borne by the Company.
(b) Except as otherwise provided in this paragraph (b) of Section
16, an Award by its terms shall be personal and may not be sold, transferred,
pledged, assigned, encumbered or otherwise alienated or hypothecated otherwise
than by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of a Participant only by him or her. The
foregoing to the contrary notwithstanding, at the Committee's discretion, an
Agreement may permit the receipt or exercise of a Participant's Award (or any
portion thereof) after his or her death by the beneficiary most recently named
by such Participant in a written designation thereof filed with the Company,
or, in lieu of any such surviving beneficiary, by the legal representatives of
such Participant's estate and/or an Award other than an ISO to be transferred
by a Participant during his or her lifetime to such Participant's alternate
payee pursuant to a qualified domestic relations order, as defined by the Code
or Title I of the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations thereunder. In the event any Award is exercised
by the executors, administrators, heirs or distributees of the estate of a
deceased Participant, or such a Participant's beneficiary, pursuant to the
terms and conditions of the Plan and the applicable Agreement, the Company
shall be under no obligation to issue Common Stock thereunder unless and until
the Company is satisfied, as determined in the discretion of the Committee,
that the person or persons exercising such Award are the duly appointed legal
representative of the deceased Participant's estate or the proper legatees or
distributees thereof or the named beneficiary of such Participant. Further
notwithstanding the foregoing to the contrary, at the Committee's discretion,
an Agreement may permit the transfer of an Award other than an ISO by the
recipient thereof, subject to such terms, conditions and limitations
prescribed by the Committee, and the applicable transferee of such Award shall
be treated under the Plan and the applicable Agreement as the Participant for
purposes of any exercise of such Award.
(c) It is understood that the Committee may, at any time and from
time to time after the granting of an Award, specify such additional terms,
conditions and restrictions with respect to such Award as may be deemed
necessary or appropriate to ensure compliance with any and all applicable
laws, including, but not limited to, (i) terms, restrictions and conditions
for compliance with Federal and state securities laws, (ii) methods of
withholding or providing for the payment of required taxes and (iii)
restrictions regarding a Participant's ability to exercise Awards under a
"cashless exercise" program established by the Committee.
(d) If at any time the Committee shall determine, in its discretion,
that the listing, registration and/or qualification of shares of Common Stock
upon any national securities exchange or under any state or Federal law, or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
shares of Common Stock hereunder, no Option, SAR or Other Stock-Based Award
may be exercised or Restricted Stock or bonus or other compensation payable in
Common Stock may be transferred in whole or in part unless and until such
listing, registration, qualification, consent and/or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Committee.
(e) The Committee may require each person receiving Common Stock in
connection with any Award under the Plan to represent and agree with the
<PAGE>
Company in writing that such person is acquiring the shares for investment
without a view to the distribution thereof.
(f) By accepting any benefit under the Plan, each Participant and
each person claiming under or through such Participant shall be conclusively
deemed to have indicated their acceptance and ratification of, and consent to,
all of the terms and conditions of the Plan and any action taken under the
Plan by the Committee, the Company or the Board.
(g) Except with respect to "incentive stock options" (as defined in
Section 422 of the Code) granted under the Predecessor Plans and outstanding
on the effective date of the Plan, subject to approval of the Plan by the
Company's shareholders, in accordance with Section 20, the provisions of the
Plan shall apply to and govern existing and subsequent awards under the
Predecessor Plans and, unless otherwise determined by the Committee, existing
and subsequent awards under the Predecessor Plans shall be deemed to be
amended to provide any additional rights applicable to Awards hereunder,
subject to the right of any affected participant in either of the Predecessor
Plans to refuse to consent to such amendment pursuant to the terms and
conditions of the applicable Predecessor Plan and the applicable option or
award agreement between the Company and such participant.
(h) Neither the adoption of the Plan nor anything contained herein
shall affect any other compensation or incentive plans or arrangements of the
Company or any Subsidiary (other than the Predecessor Plans, as provided in
paragraph (g) of this Section 16), or prevent or limit the right of the
Company or any Subsidiary to establish any other forms of incentives or
compensation for their employees or consultants or directors, or grant or
assume options or other rights otherwise than under the Plan.
(i) The Plan shall be governed by and construed in accordance with
the laws of the State of Delaware, except as superseded by applicable Federal
law.
17. Limits of Liability. (a) Any liability of the Company or a
Subsidiary to any Participant with respect to any Award shall be based solely
upon contractual obligations created by the Plan and the Agreement.
(b) Neither the Company nor a Subsidiary nor any member of the
Committee or the Board, nor any other person participating in any
determination of any question under the Plan, or in the interpretation,
administration or application of the Plan, shall have any liability, in the
absence of bad faith, to any party for any action taken or not taken in
connection with the Plan, except as may expressly be provided by statute.
18. Limitations Applicable to Certain Awards Subject to Section 16 and
Code Section 162(m). Unless stated otherwise in the Agreement,
notwithstanding any other provision of the Plan, any Award granted to an
executive or officer of the Company who is then subject to Section 16 of the
Exchange Act, shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act (including Rule
16b-3 as it may be amended from time to time) that are requirements for the
application of such exemptive rule, and the Plan shall be deemed amended to
the extent necessary to conform to such limitations. Furthermore, unless
stated otherwise in the Agreement, notwithstanding any other provision of the
Plan, any Award granted to an officer or executive of the Company intended to
qualify as "other performance-based compensation" as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including any amendment to Section 162(m)
of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as "other performance-based compensation" as
described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed
amended to the extent necessary to conform to such requirements.
19. Amendments and Termination. The Board may, at any time and with or
without prior notice, amend, alter, suspend, or terminate the Plan; provided,
<PAGE>
however, no amendment, alteration, suspension, or termination shall be made
which would impair the previously accrued rights of any holder of an Award
theretofore granted without his or her written consent or which, without first
obtaining approval of the stockholders of the Company (where such approval is
necessary to satisfy (i) the then-applicable requirements of Rule 16b-3, (ii)
any requirements under the Code relating to ISOs or for exemption from Section
162(m) of the Code, or (iii) applicable state law), would:
(a) except as is provided in Sections 4(a) and 15, increase the
maximum number of shares of Common Stock which may be sold or awarded
under the Plan;
(b) except as is provided in Section 15, decrease the minimum
option exercise price requirements of Section 6(a);
(c) change the class of persons eligible to receive Awards under
the Plan; or
(d) extend the duration of the Plan or the period during which
Options may be exercised under Section 6(b).
The Committee may amend the terms of any Award theretofore granted,
including any Agreement, retroactively or prospectively, but no such amendment
shall impair the previously accrued rights of any Participant without his or
her written consent. Notwithstanding the foregoing, the Board may amend the
Plan and the Committee may amend any Award, including any Agreement, either
retroactively or prospectively, and without the consent of the applicable
Participant, so as to preserve or come within any exemptions from liability
under Section 16(b) of the Exchange Act, pursuant to the rules and releases
promulgated by the SEC (including Rule 16b-3) and/or so that any Award granted
to an officer or executive of the Company shall qualify as "other performance-
based compensation" as described in Section 162(m)(4)(C) of the Code.
20. Duration. The Plan shall become effective as of the date on which
it is approved by the holders of a majority of the Company's outstanding
Common Stock which is present and voted at a meeting, which approval must
occur within the period ending twelve months after the date the Plan is
adopted by the Board. The Plan shall terminate upon the earliest to occur of
(a) the effective date of a resolution adopted by the Board terminating the
Plan or (b) ten years from the date the Plan is approved by the Company's
shareholders. No Award may be granted under the Plan after the earliest of
(a) and (b) of this Section 20 to occur; however, Awards theretofore granted
may extend beyond such date.
No such termination of the Plan shall affect the rights of any
Participant hereunder and all Awards previously granted hereunder shall
continue in force and in operation after the termination of the Plan, except
as they may be otherwise terminated in accordance with the terms of the Plan
or the Agreement.
