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REX STORES CORPORATION
1999 OMNIBUS STOCK INCENTIVE PLAN
SECTION 1. PURPOSE AND ESTABLISHMENT.
The purpose of this Plan is to benefit the Company's shareholders by
encouraging high levels of performance by individuals who contribute to the
success of the Company and its Subsidiaries and to enable the Company and its
Subsidiaries to attract, motivate, retain and reward talented and experienced
individuals. This purpose is to be accomplished by providing eligible employees
and directors with an opportunity to acquire or increase a proprietary interest
in the Company and/or by providing eligible employees with additional incentive
compensation opportunities.
SECTION 2. DEFINITIONS.
(a) DEFINED TERMS. The terms defined in this section shall have the
following meanings for purposes of this Plan:
"Award" means an award granted pursuant to Section 4.
"Award Agreement" means an agreement described in Section 6 entered
into between the Company and a Participant, setting forth the terms and
conditions of an Award granted to a Participant.
"Beneficiary" means a person or persons (including a trust or trusts)
validly designated by a Participant or, in the absence of a valid designation,
entitled by will or the laws of descent and distribution, to receive the
benefits specified in the Award Agreement and under this Plan in the event of a
Participant's death.
"Board of Directors" or "Board" means the Board of Directors of the
Company.
"Cash Awards" means Awards that, if paid, must be paid in cash and that
are neither denominated in nor have a value derived from the value of, nor an
exercise or conversion privilege at a price related to, shares of Stock, as
described in Section 4(a)(5).
"Change in Control" means change in control as defined in Section 7(c).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
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"Committee" means the Committee described in Section 8.
"Company" means REX Stores Corporation.
"Covered Employee" means any Employee who is the chief executive
officer of the Company, or is among the four highest compensated executive
officers of the Company (other than the chief executive officer) as determined
pursuant to the executive compensation disclosure rules under the Exchange Act.
"Employee" means any officer or other key employee of the Company or
any of its Subsidiaries.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Fair Market Value" means the closing price of the relevant security as
reported on the New York Stock Exchange Composite Tape (or, if the security is
not so listed or if the principal market on which it is traded is not the New
York Stock Exchange, such other reporting system as shall be selected by the
Committee) on the relevant date, or if no sale of the security is reported for
that date, the next preceding day for which there is a reported sale. The
Committee shall determine the Fair Market Value of any security that is not
publicly traded, using criteria as it shall determine, in its sole discretion,
to be appropriate for the valuation.
"Insider" means any person who is subject to Section 16(b) of the
Exchange Act.
"Nonemployee Director" means any member of the Board of Directors of
the Company who is not an employee of the Company or any of its Subsidiaries.
"Option" means a Nonqualified Stock Option as described in Section
4(a)(1).
"Participant" means an Employee or a Nonemployee Director who is
granted an Award pursuant to this Plan that remains outstanding.
"Performance-Based Awards" is defined in Section 4(b).
"Performance Goal" and "Performance Goals" means one or more of the
performance goals specified in Section 4(b)(3).
"Rule 16b-3" means Rule 16b-3 under Section 16 of the Exchange Act, as
amended from time to time.
"Stock" means shares of Common Stock of the Company, par value $.01 per
share.
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"Stock-Based Awards" means Awards that are payable or denominated in or
have a value derived from the value of, or an exercise or conversion privilege
at a price related to, shares of Stock, as described in Sections 4(a)(1) through
(4).
"Subsidiary" means, as to any person, any corporation, association,
partnership, joint venture or other business entity of which 50% or more of the
voting stock or other equity interests (in the case of entities other than
corporations), is owned or controlled (directly or indirectly) by that entity,
or by one or more of the Subsidiaries of that entity, or by a combination
thereof.
(b) FINANCIAL AND ACCOUNTING TERMS. Except as the context otherwise
requires, financial and accounting terms, including terms defined herein as
Performance Goals, are used as defined for purposes of, and shall be determined
in accordance with, generally accepted accounting principles and as derived from
the audited consolidated financial statements of the Company.
SECTION 3. ELIGIBILITY.
(a) EMPLOYEES. Any one or more Awards may be granted to any Employee
who is designated by the Committee to receive an Award.
(b) NONEMPLOYEE DIRECTORS. Nonemployee Directors are eligible for
grants of Nonqualified Stock Options as provided in Section 4(d).
SECTION 4. AWARDS.
(a) TYPE OF AWARDS. The Committee may grant any of the following types
of Awards, either singly, in tandem or in combination with other Awards:
(1) Options. An Option is a right to purchase a specified
number of shares of Stock at a specified price during such specified time as the
Committee may determine. An Option granted under this Plan shall be a
Nonqualified Stock Option that is not intended to comply with the requirements
of Code Section 422. The exercise price of each Option granted under this Plan
shall not be less than the Fair Market Value of the Stock on the date the Option
is granted or, if the exercise price of an Option is reduced by amendment, the
Fair Market Value of the Stock on the date of amendment. Each Option granted
under this Plan shall be exercisable in whole or in part and at such intervals
or in such installments as the Committee may determine.
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(2) Stock Appreciation Rights. A Stock Appreciation Right is a
right to receive, upon surrender of the right, but without payment, an amount
based on appreciation in the value of Stock over a base price established in the
Award, payable in cash and/or Stock, at times and upon conditions (which may
include a Change in Control) as may be approved by the Committee. The minimum
base price of a Stock Appreciation Right granted under this Plan shall be not
less than the lowest of the Fair Market Value of the underlying Stock on the
date the Stock Appreciation Right is granted or, if the base price of a Stock
Appreciation Right is reduced by amendment, the Fair Market Value of the Stock
on the date of the amendment, or, in the case of a Stock Appreciation Right
related to an Option, the exercise price of the related Option. A Stock
Appreciation Right may be granted in tandem with, in addition to, or independent
of an Option or any other Award under this Plan. A Stock Appreciation Right
issued in tandem with an Option may be granted at the time of grant of the
related Option or at any time thereafter during the term of the Option. The
exercise of either a Stock Appreciation Right issued in tandem with an Option or
exercise of the related Option shall automatically cancel the Participant's
right under the tandem Award with respect to the number of shares so exercised.
(3) Restricted Stock. Restricted Stock is Stock that is issued
to a Participant, but subject to restrictions on transfer and/or such other
restrictions on incidents of ownership as the Committee may determine.
Restricted Stock Awards to Covered Employees that are either granted or vest
upon attainment of one or more of the Performance Goals may be granted as
Performance-Based Awards under Section 4(b).
(4) Other Stock-Based Awards. The Committee may from time to
time grant Stock or the right to purchase Stock, or other Stock-Based Awards
including, but not limited to, bonus stock, phantom stock or units, performance
stock or units, dividend equivalents, or similar securities or rights that have
a value derived from the value of, or an exercise or conversion privilege at a
price related to, or that are otherwise payable in, shares of Stock. The Awards
shall be in a form determined by the Committee, not inconsistent with the other
terms of this Plan. Awards under this Section 4(a)(4) to Covered Employees that
are either granted or become vested, exercisable or payable based on attainment
of one or more of the Performance Goals may be granted as Performance-Based
Awards under Section 4(b).
(5) Cash Awards. Cash Awards provide Participants with the
opportunity to earn a cash payment based upon the level of performance of the
Company relative to one or more Performance Goals established by the Committee
for an award cycle of more than one but not more than five years. For each award
cycle, the
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Committee shall determine the size of the Cash Awards, the Performance Goals,
the performance targets as to each of the Performance Goals, the level or levels
of achievement necessary for award payments and the weighting of the Performance
Goals, if more than one Performance Goal is applicable. Cash Awards to Covered
Employees that are either granted or become vested, exercisable or payable based
on attainment of one or more Performance Goals may only be granted as
Performance-Based Awards under Section 4(b).
(b) SPECIAL PERFORMANCE-BASED AWARDS. Any of the type of Awards listed
in Section 4(a) may be granted as awards that satisfy the requirements for
"performance-based compensation" within the meaning of Code Section 162(m)
("Performance-Based Awards"), the grant, vesting, exercisability or payment of
which depends on the degree of achievement of the Performance Goals relative to
preestablished targeted levels for the Company on a consolidated basis. Any
Option or Stock Appreciation Right with an exercise price or a base price not
less than Fair Market Value on the date of grant shall be subject only to the
requirements of clauses (1), (2) and (4)(A) below in order for such Awards to
satisfy the requirements for Performance-Based Awards under this Section 4(b)
(such Awards are hereinafter referred to as a "Qualifying Option" or a
"Qualifying Stock Appreciation Right," respectively). With the exception of any
Qualifying Option or Qualifying Stock Appreciation Right, an Award intended to
satisfy the requirements of this Section 4(b) shall be designated as a
Performance-Based Award at the time of grant.
(1) Shareholder Approval. The material terms of
Performance-Based Awards shall be approved by a majority vote of shareholders of
the Company before the compensation is paid.
(2) Eligible Class. The eligible class of persons for
Performance-Based Awards shall be all Employees.
(3) Performance Goals. The performance goals for any
Performance-Based Awards (other than Qualifying Options and Qualifying Stock
Appreciation Rights) shall be, on an absolute or relative basis, one or more of
the following: earnings per share, return on stockholders equity, common stock
price per share, total stockholder return, net sales, income from operations,
income before income taxes, net income, comparable store sales or market share.
The specific performance target(s) with respect to Performance Goal(s) must be
established by the Committee in advance of the deadlines applicable under Code
Section 162(m) and while the performance relating to the Performance Goal(s)
remains substantially uncertain.
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(4) Individual Limits.
(A) Stock-Based Awards. The maximum number of shares
of Stock that are issuable under Options, Stock Appreciation Rights,
Restricted Stock or other Stock-Based Awards granted as
Performance-Based Awards to any Participant during the period Awards
may be made under this Plan shall not exceed the total number of shares
available under this Plan. Awards that are cancelled or repriced during
such period shall be counted against this limit to the extent required
by Code Section 162(m).
(B) Cash Awards. The aggregate amount of compensation
to be paid to any Participant in respect of those Cash Awards that are
granted during any fiscal year of the Company as Performance-Based
Awards shall not exceed $1,000,000.
(5) Committee Certification. Before any Performance-Based
Award (other than Qualifying Options and Qualifying Stock Appreciation Rights)
is paid, the Committee must certify in writing that the applicable Performance
Goal(s) and other material terms of the Performance-Based Award were satisfied,
provided that a Performance-Based Award may be paid without regard to the
satisfaction of the applicable Performance Goal in the event of a Change in
Control as provided in Section 7(b).
(6) Terms and Conditions of Awards; Committee Discretion to
Reduce Performance Awards. The Committee shall have discretion to determine the
conditions, restrictions or other limitations, in accordance with the terms of
this Plan and Code Section 162(m), on the payment of individual
Performance-Based Awards. To the extent set forth in an Award Agreement, the
Committee may reserve the right to reduce the amount payable in accordance with
any standards or any other basis (including the Committee's discretion), as the
Committee may impose.
(7) Adjustments for Material Changes. In the event of (i) a
change in corporate capitalization, a corporate transaction or a complete or
partial corporate liquidation, (ii) any extraordinary gain or loss or other
event that is treated for accounting purposes as an extraordinary item under
generally accepted accounting principles or (iii) any material change in
accounting policies or practices affecting the Company and/or the Performance
Goals or targets, then, to the extent any of the foregoing events (or a material
effect thereof) was not anticipated at the time the targets were set, the
Committee may make adjustments to the Performance Goals and/or targets, applied
as of the date of the event, and based solely on objective criteria, so as to
neutralize, in the Committee's judgment, the effect of the event on the
applicable Performance-Based Award.
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(8) Interpretation. Except as specifically provided in this
Section 4(b), the provisions of this Section 4(b) shall be interpreted and
administered by the Committee in a manner consistent with the requirements for
exemption of Performance-Based Awards granted to Covered Employees as
"performance-based compensation" under Code Section 162(m) and regulations and
other interpretations issued by the Internal Revenue Service thereunder.
(c) MAXIMUM TERM OF AWARDS. No Award that contemplates exercise or
conversion may be exercised or converted to any extent, and no other Award that
defers vesting, shall remain outstanding and unexercised, unconverted or
unvested more than ten years after the date the Award was initially granted.
(d) NONEMPLOYEE DIRECTOR AWARDS. On the date of each annual meeting of
shareholders of the Company on and after the effective date of this Plan, each
Nonemployee Director shall be granted a Nonqualified Stock Option to purchase a
number of shares of Stock such that the exercise price of the Option multiplied
by the number of shares subject to the Option is as near as possible to
$100,000, but in no event more than 10,000 shares. The exercise price of each
such Nonqualified Stock Option shall be the Fair Market Value of the Stock on
the date of grant. Each Nonqualified Stock Option granted pursuant to this
Section 4(d) shall become exercisable in five equal annual installments
commencing on the first anniversary of the date of grant and shall expire ten
years from the date of grant. The other terms of this Plan shall apply to
Nonqualified Stock Options granted pursuant to this Section 4(d) to the extent
consistent with this Section 4(d).
SECTION 5. SHARES OF STOCK SUBJECT TO PLAN.
(a) AGGREGATE LIMIT. The maximum number of shares of Stock for which
Stock-Based Awards may be granted under this Plan is 2,000,000, subject to
adjustment as provided in this Section 5 or Section 7.
(b) REISSUE OF SHARES. Any unexercised, unconverted or undistributed
portion of any expired, cancelled, terminated or forfeited Stock-Based Award, or
any Stock-Based Award settled in cash, shall again be available for Award under
Section 5(a), whether or not the Participant has received benefits of ownership
(such as dividends or dividend equivalents or voting rights) during the period
in which the Participant's ownership was restricted or otherwise not vested.
Shares of Stock that are issued pursuant to Awards and subsequently reacquired
by the Company pursuant to the terms and conditions of the Awards shall be
available for reissuance under this Plan.
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(c) INTERPRETIVE ISSUES. Additional rules for determining the number of
shares of Stock authorized under this Plan may be adopted by the Committee, as
it deems necessary or appropriate.
(d) TREASURY SHARES; NO FRACTIONAL SHARES. The Stock which may be
issued or otherwise delivered pursuant to an Award under this Plan may be
treasury or authorized but unissued Stock or Stock acquired, subsequently or in
anticipation of a transaction under this Plan, in the open market or in
privately negotiated transactions to satisfy the requirements of this Plan. No
fractional shares shall be issued but fractional interests may be accumulated.
(e) CONSIDERATION. The Stock issued under this Plan may be issued for
any lawful form of consideration, the value of which equals the par value of the
Stock or such greater or lesser value as the Committee, consistent with Sections
10(d) and 4(a)(1) and (2), may require.
(f) PURCHASE OR EXERCISE PRICE; WITHHOLDING. The exercise or purchase
price of the Stock issuable pursuant to any Award and any withholding obligation
under applicable tax laws shall be paid in cash or, subject to the Committee's
express authorization and the restrictions, conditions and procedures as the
Committee may impose, any one or combination of (i) cash, (ii) the delivery of
shares of Stock or (iii) a reduction in the amount of Stock or other amounts
otherwise issuable or payable pursuant to such Award. In the case of a payment
by the means described in clause (ii) or (iii) above, the Stock to be so
delivered or offset shall be determined by reference to the Fair Market Value of
the Stock on the date as of which the payment or offset is made.
(g) CASHLESS EXERCISE. The Committee may permit the exercise of the
Award and payment of any applicable withholding tax in respect of an Award by
delivery of written notice, subject to the Company's receipt of a third party
payment in full in cash for the exercise price and the applicable withholding
prior to issuance of Stock, in the manner and subject to the procedures as may
be established by the Committee.
SECTION 6. AWARD AGREEMENTS.
Each Award under this Plan shall be evidenced by an Award Agreement in
a form approved by the Committee setting forth, in the case of Stock-Based
Awards, the number of shares of Stock or units subject to the Award, the price
(if any) and term of the Award and, in the case of Performance-Based Awards, the
applicable Performance Goals. The Award Agreement shall also set forth (or
incorporate by reference) other material terms and conditions applicable to the
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Award as determined by the Committee consistent with the limitations of this
Plan.
(a) INCORPORATED PROVISIONS. Award Agreements shall be subject to the
terms of this Plan and shall be deemed to include the following terms, unless
the Committee in the Award Agreement otherwise (consistent with applicable legal
considerations) provides:
(1) Non-transferability. The Award shall not be assignable nor
transferable, except by will or by the laws of descent and distribution. During
the lifetime of a Participant, the Award shall be exercised only by such
Participant or by his or her guardian or legal representative. The designation
of a Beneficiary hereunder shall not constitute a prohibited transfer.
Notwithstanding the foregoing, a Participant, with the approval of the
Committee, may transfer a Nonqualified Stock Option for no consideration to or
for the benefit of the Participant's immediate family, to a trust for the
benefit of the Participant's immediate family or to a partnership or limited
liability company for one or more members of the Participant's immediate family,
subject to such limits as the Committee may establish, and the transferee shall
remain subject to all the terms and conditions applicable to the Option prior to
such transfer. "Immediate family" means a child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law, and includes
adoptive relationships as well as the Participant.
(2) Rights as Stockholder. A Participant shall have no rights
as a holder of Stock with respect to any unissued securities covered by an Award
until the date the Participant becomes the holder of record of the securities.
Except as provided in Section 7, no adjustment or other provision shall be made
for dividends or other stockholder rights, except to the extent that the Award
Agreement provides for dividend equivalents or similar economic benefits.
(3) Withholding. The Participant shall be responsible for
payment of any taxes or similar charges required by law to be withheld from an
Award or an amount paid in satisfaction of an Award and these obligations shall
be paid by the Participant on or prior to the payment of the Award. In the case
of an Award payable in cash, the withholding obligation shall be satisfied by
withholding the applicable amount and paying the net amount in cash to the
Participant. In the case of an Award paid in shares of Stock, a Participant
shall satisfy the withholding obligation as provided in Section 5(f).
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(4) Option Holding Period. Subject to the authority of the
Committee under Section 7, a minimum six-month period shall elapse between the
date of initial grant of any Option and the sale of the underlying shares of
Stock, and the Company may impose legend and other restrictions on the Stock
issued on exercise of the Options to enforce this requirement.
(5) Termination of Employee Options. Each Option granted to an
Employee shall terminate and may no longer be exercised if the Participant
ceases for any reason to be an Employee, except that:
(A) If the Participant's employment shall have
terminated for any reason other than cause, disability (as
defined below) or death, the Participant may, at any time
within a period of six months after such termination of
employment, exercise the Option to the extent the Option was
exercisable by the Participant on the date of termination of
employment.
(B) If the Participant's employment shall have been
terminated because of disability within the meaning of Code
Section 22(e)(3), the Participant may at any time within a
period of one year after such termination of employment
exercise the Option to the extent the Option was exercisable
by the Participant on the date of termination of employment.
(C) If the Participant dies at a time when the Option
was exercisable by the Participant, a Beneficiary to whom the
Option has been transferred may, within six months following
the death, exercise the Option to the extent the Option might
have been exercised at the time of the Participant's death.
(D) No Option granted to an Employee may be exercised
to any extent by anyone after the expiration date of the
Option.
(6) Termination of Nonemployee Director Options.
(A) In the event of the termination of service on the
Board of a Nonemployee Director other than by reason of
retirement, disability (as defined above) or death, the
Nonemployee Director may, at any time within six months after
such termination of service, exercise the Option to the extent
the Option was exercisable by the Nonemployee Director on the
date of termination of service.
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(B) In the event of termination of service by reason
of retirement or disability (as defined above), each
outstanding Option shall continue to become exercisable in
accordance with Section 4(d). In the event of the death of the
holder of any Option granted pursuant to Section 4(d), each
outstanding Option shall become immediately exercisable in
full and may be exercised by a Beneficiary to whom the Option
has been transferred at any time within two years after death.
(C) No Option granted to a Nonemployee Director may
be exercised to any extent by anyone after the expiration date
of the Option.
(b) OTHER PROVISIONS. Award Agreements may include other terms and
conditions as the Committee shall approve, including but not limited to the
following:
(1) Termination of Employment. A provision describing the
treatment of an Award in the event of the retirement, disability, death or other
termination of a Participant's employment with or services to the Company,
including any provisions relating to the vesting, exercisability, forfeiture or
cancellation of the Award in these circumstances, subject, in the case of
Performance-Based Awards, to the requirements for "performance-based
compensation" under Code Section 162(m) and, in the case of Options, to the
requirements of Sections 6(a)(5) and (6).
(2) Vesting; Effect of Termination; Change in Control. Any
other terms consistent with the terms of this Plan as are necessary and
appropriate to effect the Award to the Participant, including but not limited to
the vesting provisions, any requirements for continued employment, any other
restrictions or conditions (including performance requirements) of the Award and
the method by which the restrictions or conditions lapse, and the effect on the
Award of a Change in Control.
(3) Replacement and Substitution. Any provisions permitting or
requiring the surrender of outstanding Awards or securities held by the
Participant in whole or in part in order to exercise or realize rights under or
as a condition precedent to other Awards, or in exchange for the grant of new or
amended Awards under similar or different terms.
(4) Reloading. Any provisions for successive or replenished
Awards, including but not limited to reload Options.
(c) CONTRACT RIGHTS, FORMS AND SIGNATURES. Any obligation of the
Company to any Participant with respect to an Award shall be
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based solely upon contractual obligations created by this Plan and an Award
Agreement. No Award shall be enforceable until the Award Agreement or a receipt
has been signed by the Participant and the Company. By executing the Award
Agreement or receipt, a Participant shall be deemed to have accepted and
consented to the terms of this Plan. Unless the Award Agreement otherwise
expressly provides, there shall be no third party beneficiaries of the
obligations of the Company to the Participant under the Award Agreement.
SECTION 7. ADJUSTMENTS; CHANGE IN CONTROL.
(a) ADJUSTMENTS. If there shall occur any recapitalization, stock split
(including a stock split in the form of a stock dividend), reverse stock split,
merger, combination, consolidation, or other reorganization or any extraordinary
dividend or other extraordinary distribution in respect of the Stock (whether in
the form of cash, Stock or other property), or any split-up, spin-off,
extraordinary redemption, or exchange of outstanding Stock, or there shall occur
any other similar corporate transaction or event in respect of the Stock, or a
sale of substantially all the assets of the Company as an entirety, then the
Committee shall, in the manner and to the extent as it deems appropriate and
equitable to the Participants and consistent with the terms of this Plan, and
taking into consideration the effect of the event on the holders of the Stock:
(1) proportionately adjust any or all of
(A) the number and type of shares of Stock and units
which thereafter may be made the subject of Awards (including the
specific maximums and numbers of shares of Stock or units set forth
elsewhere in this Plan),
(B) the number and type of shares of Stock, other
property, units or cash subject to any or all outstanding Awards,
(C) the grant, purchase or exercise price, or
conversion ratio of any or all outstanding Awards, or of the Stock,
other property or units underlying the Awards,
(D) the securities, cash or other property
deliverable upon exercise or conversion of any or all outstanding
Awards,
(E) subject to Section 4(b), the performance targets
or standards appropriate to any outstanding Performance-Based Awards,
or
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(F) any other terms as are affected by the event; or
(2) subject to any applicable limitations in the case of a
transaction to be accounted for as a pooling of interests under generally
accepted accounting principles, provide for
(A) an appropriate and proportionate cash settlement
or distribution, or
(B) the substitution or exchange of any or all
outstanding Awards, or the cash, securities or property deliverable on
exercise, conversion or vesting of the Awards;
The Committee may act prior to an event described in this Section 7(a)
(including at the time of an Award by means of more specific provisions in the
Award Agreement) if deemed necessary or appropriate to permit the Participant to
realize the benefits intended to be conveyed by an Award in respect of the Stock
in the case of such an event.
(b) CHANGE IN CONTROL. The Committee may, in the Award Agreement,
provide for the effect of a Change in Control on an Award. Such provisions may
include, but are not limited to any one or more of the following with respect to
any or all Awards: (i) the specific consequences of a Change in Control on the
Awards, (ii) a reservation of the Committee's right to determine in its
discretion at any time that there shall be full acceleration or no acceleration
of benefits under the Awards, (iii) that only certain or limited benefits under
the Awards shall be accelerated, (iv) that the Awards shall be accelerated for a
limited time only, or (v) that acceleration of the Awards shall be subject to
additional conditions precedent (such as a termination of employment following a
Change in Control).
In addition to any action required or authorized by the terms of an
Award, the Committee may take any other action it deems appropriate to ensure
the equitable treatment of Participants in the event of or in anticipation of a
Change in Control, including but not limited to any one or more of the following
with respect to any or all Awards: (i) the acceleration or extension of time
periods for purposes of exercising, vesting in, or realizing gain from, the
Awards, (ii) the waiver of conditions on the Awards that were imposed for the
benefit of the Company, (iii) provision for the cash settlement of the Awards
for their equivalent cash value, as determined by the Committee, as of the date
of the Change in Control, or (iv) such other modification or adjustment to the
Awards as the Committee deems appropriate to maintain and protect the rights and
interests of Participants upon or following the Change in Control. The Committee
also may accord any Participant
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a right to refuse any acceleration of exercisability, vesting or benefits,
whether pursuant to the Award Agreement or otherwise, in such circumstances as
the Committee may approve.
Notwithstanding the foregoing provisions of this Section 7(b) or any
provision in an Award Agreement to the contrary, (i) in no event shall the
Committee be deemed to have discretion to accelerate or not accelerate or make
other changes in or to any or all Awards, in respect of a transaction, if such
action or inaction would be inconsistent with or would otherwise frustrate the
intended accounting for a proposed transaction as a pooling of interests under
generally accepted accounting principles, and (ii) if any Award to any Insider
is accelerated to a date that is less than six months after the date of the
Award, the Committee may prohibit a sale of the underlying Stock (other than a
sale by operation or law in exchange for or through conversion into other
securities), and the Company may impose legend and other restrictions on the
Stock to enforce this prohibition.
(c) CHANGE IN CONTROL DEFINITION. For purposes of this Plan, a change
in control means a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act, provided that, without limitation, such a change in
control shall include and be deemed to occur upon the following events:
(1) Any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, but excluding any person described in and
satisfying the conditions of Rule 13d-l(b)(1) thereunder), other than the
Company, its Subsidiaries or any employee benefit plan of the Company or any of
its Subsidiaries, becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities.
(2) The "Incumbent Directors" cease to constitute at least a
majority of the Board. For purposes hereof, "Incumbent Directors" means the
members of the Board at the effective date of this Plan and the persons elected
or nominated for election as their successors or pursuant to increases in the
size of the Board by a vote of at least two-thirds of the Board members then
still in office (or successors or additional members so elected or nominated).
(3) The stockholders of the Company approve a merger,
combination, consolidation, recapitalization or other reorganization of the
Company with one or more other entities that are not Subsidiaries and, as a
result of the transaction, less than 50% of the outstanding voting securities of
the surviving or resulting corporation shall immediately after the event be
owned in the
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aggregate by the stockholders of the Company (directly or indirectly),
determined on the basis of record ownership as of the date of determination of
holders entitled to vote on the action (or in the absence of a vote, the day
immediately prior to the event).
(4) The stockholders of the Company approve a plan of
liquidation and dissolution or the sale or transfer of substantially all of the
Company's business and/or assets as an entirety to an entity that is not a
Subsidiary.
Notwithstanding the foregoing, no Change in Control shall be deemed to have
occurred if, prior to such time as a Change in Control would otherwise be deemed
to have occurred, the Board determines otherwise.
SECTION 8. ADMINISTRATION.
(a) COMMITTEE AUTHORITY AND STRUCTURE. This Plan and all Awards granted
under this Plan shall be administered by the Compensation Committee of the Board
or such other committee of the Board as may be designated by the Board and
constituted so as to permit this Plan to comply with the "Non-Employee Director"
requirement of Rule 16b-3 under the Exchange Act and the "outside director"
requirement of Code Section 162(m). The members of the Committee shall be
designated by the Board. A majority of the members of the Committee (but not
fewer than two) shall constitute a quorum. The vote of a majority of a quorum or
the unanimous written consent of the Committee shall constitute action by the
Committee.
(b) SELECTION AND GRANT. The Committee shall have the authority to
determine the Employees to whom Awards will be granted under this Plan, the type
of Awards to be made, and the nature, amount, pricing, timing and other terms of
Awards to be made to any one or more of these individuals, subject to the terms
of this Plan.
(c) CONSTRUCTION AND INTERPRETATION. The Committee shall have the power
to interpret and administer this Plan and Award Agreements, and to adopt, amend
and rescind related rules and procedures. All questions of interpretation and
determinations with respect to this Plan, the number of shares of Stock, Stock
Appreciation Rights, or units or other Awards granted, and the terms of any
Award Agreements, the adjustments required or permitted by Section 7, and other
determinations hereunder shall be made by the Committee and its determination
shall be final and conclusive upon all parties in interest. In the event of any
conflict between an Award Agreement and any non-discretionary provisions of this
Plan, the terms of this Plan shall govern.
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(d) EXPRESS AUTHORITY (AND LIMITATIONS ON AUTHORITY) TO CHANGE TERMS OF
AWARDS. Without limiting the Committee's authority under other provisions of
this Plan, but subject to any express limitations of this Plan, the Committee
shall have the authority to accelerate the exercisability or vesting of an
Award, to extend the term or waive early termination provisions of an Award
(subject to the maximum ten-year term under Section 4(c)), to waive the
Company's rights with respect to an Award or restrictive conditions of an Award
(including forfeiture conditions), and to reduce by amendment the exercise or
purchase price of an outstanding Award, with or without adjusting any holding
period or other terms of the Award, in any case in such circumstances as the
Committee deems appropriate. Except as provided in Section 7, no amendment to an
outstanding Award shall increase the number of shares subject to, comprising or
referenced in such Award.
(e) RULE 16b-3 CONDITIONS; BIFURCATION OF PLAN. It is the intent of the
Company that this Plan and Stock-Based Awards hereunder satisfy and be
interpreted in a manner, that, in the case of Participants who are or may be
Insiders, satisfies the applicable requirements of Rule 16b-3, so that these
persons will be entitled to the benefits of Rule 16b-3 or other exemptive rules
under Section 16 of the Exchange Act and will not be subjected to avoidable
liability thereunder as to Awards intended to be entitled to the benefits of
Rule 16b-3. If any provision of this Plan or of any Award would otherwise
frustrate or conflict with the intent expressed in this Section 8(e), that
provision to the extent possible shall be interpreted and deemed amended so as
to avoid such conflict. To the extent of any remaining irreconcilable conflict
with this intent, the provision shall be deemed disregarded as to Awards
intended as Rule 16b-3 exempt Awards. The provisions of this Plan may at any
time be bifurcated by the Board or the Committee in any manner so that certain
provisions of this Plan or any Award Agreement intended (or required in order)
to satisfy the applicable requirements of Rule 16b-3 are only applicable to
Insiders and to those Awards to Insiders intended to satisfy the requirements of
Rule 16b-3.
(f) DELEGATION. The Committee may delegate to the officers or employees
of the Company the authority to execute and deliver those instruments and
documents, to do all acts and things, and to take all other steps deemed
necessary, advisable or convenient for the effective administration of this Plan
in accordance with its terms and purpose, except that the Committee may not
delegate any discretionary authority to grant or amend an Award or with respect
to substantive decisions or functions regarding this Plan or Awards as these
relate to the material terms of Performance-Based Awards to Covered Employees or
to the timing, eligibility, pricing, amount or other material terms of Awards to
Insiders.
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(g) EXCULPATION AND INDEMNITY. Neither the Company nor any member of
the Board of Directors or of the Committee, nor any other person participating
in any determination of any question under this Plan, or in the interpretation,
administration or application of this Plan, shall have any liability to any
party for any action taken or not taken in good faith under this Plan or for the
failure of an Award (or action in respect of an Award) to satisfy Code
requirements or to realize other intended tax consequences, to qualify for
exemption or relief under Rule 16b-3 or to comply with any other law, compliance
with which is not required on the part of the Company.
SECTION 9. AMENDMENT AND TERMINATION OF THIS PLAN.
The Board of Directors may at any time amend, suspend or discontinue
this Plan. The Committee may at any time alter or amend any or all Award
Agreements under this Plan in any manner that would be authorized for a new
Award under this Plan. Notwithstanding the foregoing, no such action by the
Board or the Committee shall, in any manner adverse to a Participant other than
as expressly permitted by the terms of an Award Agreement, affect any Award then
outstanding and evidenced by an Award Agreement without the consent in writing
of the Participant or a Beneficiary who has become entitled to an Award.
SECTION 10. MISCELLANEOUS.
(a) UNFUNDED PLAN. This Plan shall be unfunded. Neither the Company,
the Board of Directors nor the Committee shall be required to segregate any
assets that may at any time be represented by Awards made pursuant to this Plan.
Neither the Company, the Committee, nor the Board of Directors shall be deemed
to be a trustee of any amounts to be paid or securities to be issued under this
Plan.
(b) RIGHTS OF EMPLOYEES.
(1) No Right to an Award. Status as an Employee shall not be
construed as a commitment that any one or more Awards will be made under this
Plan to an Employee or to Employees generally. Status as a Participant shall not
entitle the Participant to any additional Award.
(2) No Assurance of Employment. Nothing contained in this Plan
(or in any other documents related to this Plan or to any Award) shall confer
upon any Employee or Participant any right to continue in the employ or other
service of the Company or any Subsidiary or constitute any contract (of
employment or otherwise) or limit in any way the right of the Company or any
Subsidiary to
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change a person's compensation or other benefits or to terminate the employment
of a person with or without cause.
(c) EFFECTIVE DATE; DURATION. This Plan has been adopted by the Board
of Directors of the Company on April 19, 2000, effective as of March 26, 1999.
This Plan shall remain in effect until discontinued by the Board of Directors.
All Awards made under this Plan prior to its discontinuance shall remain in
effect until such Awards have been exercised, converted or terminated under the
terms of this Plan and applicable Award Agreements.
(d) COMPLIANCE WITH LAWS. This Plan, Award Agreements, and the grant,
exercise, conversion, operation and vesting of Awards, and the issuance and
delivery of shares of Stock and/or other securities or property or the payment
of cash under this Plan, Awards or Award Agreements, are subject to compliance
with all applicable federal and state laws, rules and regulations (including but
not limited to state and federal insider trading, registration, reporting and
other securities laws and federal margin requirements) and to such approvals by
any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith. Any
securities delivered under this Plan shall be subject to such restrictions (and
the person acquiring such securities shall, if requested by the Company, provide
such evidence, assurance and representations to the Company as to compliance
with any thereof) as the Company may deem necessary or desirable to assure
compliance with all applicable legal requirements.
(e) APPLICABLE LAW. This Plan, Award Agreements and any related
documents and matters shall be governed in accordance with the laws of the State
of Ohio, except as to matters of federal law.
(f) NON-EXCLUSIVITY OF PLAN. Nothing in this Plan shall limit or be
deemed to limit the authority of the Company, the Board or the Committee to
grant awards or authorize any other compensation, with or without reference to
the Stock, under any other plan or authority.
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