EXHIBIT 10.18
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PACKAGING CORPORATION OF AMERICA
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1999 LONG-TERM EQUITY INCENTIVE PLAN
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TABLE OF CONTENTS
PAGE
1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. DEFINITIONS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
3. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
4. SHARES AVAILABLE FOR THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . .4
5. PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
6. INCENTIVE AND NON-QUALIFIED OPTIONS AND SARs. . . . . . . . . . . . . . . . . .5
(a) PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
(b) PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
(c) TERMS OF OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
(d) LIMITATIONS ON GRANTS. . . . . . . . . . . . . . . . . . . . . . . . . . .7
(e) TERMINATION; CHANGE IN CONTROL . . . . . . . . . . . . . . . . . . . . . .7
(f) GRANT OF RELOAD OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . .9
7. STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . .9
8. RESTRICTED STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9. PERFORMANCE AWARDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
10. WITHHOLDING TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(a) PARTICIPANT ELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) COMPANY REQUIREMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11. WRITTEN NOTICE; VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12. TRANSFERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13. LISTING, REGISTRATION AND QUALIFICATION . . . . . . . . . . . . . . . . . . . 13
14. TRANSFER OF EMPLOYEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
15. ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
16. AMENDMENT AND TERMINATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . 14
17. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN. . . . . . . . . . . . . . 14
18. COMMENCEMENT DATE; TERMINATION DATE . . . . . . . . . . . . . . . . . . . . . 14
19. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
PACKAGING CORPORATION OF AMERICA
1999 LONG-TERM EQUITY INCENTIVE PLAN
1. PURPOSE.
This plan shall be known as the Packaging Corporation of America 1999
Long-Term Equity Incentive Plan (the "Plan"). The purpose of the Plan shall be
to promote the long-term growth and profitability of Packaging Corporation of
America (the "Company") and its Subsidiaries by (i) providing certain directors,
officers and employees of, and certain other individuals who perform services
for, or to whom an offer of employment has been extended by, the Company and its
Subsidiaries with incentives to maximize stockholder value and otherwise
contribute to the success of the Company and (ii) enabling the Company to
attract, retain and reward the best available persons for positions of
responsibility. Grants of incentive or non-qualified stock options, stock
appreciation rights ("SARs"), either alone or in tandem with options, restricted
stock, performance awards, or any combination of the foregoing may be made under
the Plan.
2. DEFINITIONS.
(a) "BOARD OF DIRECTORS" and "BOARD" mean the board of directors of
the Company.
(b) "CAUSE" means the occurrence of one or more of the following
events:
(i) a participant's theft or embezzlement, or attempted theft
or embezzlement, of money or property of the Company or its Subsidiaries,
perpetration or attempted perpetration of fraud, or participation in a fraud or
attempted fraud, on the Company or its Subsidiaries or unauthorized
appropriation of, or attempt to misappropriate, any tangible or intangible
assets or property of the Company or its Subsidiaries;
(ii) any act or acts of disloyalty, misconduct or moral
turpitude by a participant injurious to the interest, property, operations,
business or reputation of the Company or its Subsidiaries or conviction of a
participant of a crime the commission of which results in injury to the Company
or its Subsidiaries; or
(iii) a participant's failure or inability (other than by reason
of his or her permanent disability) to carry out effectively his or her duties
and obligations to the Company or its Subsidiaries or to participate effectively
and actively in the management of the Company or its Subsidiaries, as determined
in the reasonable judgment of the Board.
(c) "CHANGE IN CONTROL" means the occurrence of one of the following
events:
(i) if any "person" or "group" as those terms are used in
Sections 13(d) and 14(d) of the Exchange Act or any successors thereto, other
than an Exempt Person, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act or any successor thereto), directly or indirectly,
of securities of the Company representing 50% or more of the combined voting
power of the Company's then outstanding securities; or
(ii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board and any new directors whose
election by the Board or nomination for election by the Company's stockholders
was approved by at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election was
previously so approved, cease for any reason to constitute a majority thereof;
or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation (A) which would result in all or a portion of the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (B) by which the corporate
existence of the Company is not affected and following which the Company's chief
executive officer and directors retain their positions with the Company (and
constitute at least a majority of the Board); or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets, other than a sale to
an Exempt Person.
(d) "CODE" means the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" means the Compensation Committee of the Board, which
shall consist solely of two or more members of the Board.
(f) "COMMON STOCK" means the Common Stock, par value $.01 per share,
of the Company, and any other shares into which such stock may be changed by
reason of a recapitalization, reorganization, merger, consolidation or any other
change in the corporate structure or capital stock of the Company.
(g) "COMPETITION" is deemed to occur if a person whose employment
with the Company or its Subsidiaries has terminated obtains a position as a
full-time or part-time employee of, as a member of the board of directors of, or
as a consultant or advisor with or to, or acquires an ownership interest in
excess of 5% of, a corporation, partnership, firm or other entity that engages
in any of the businesses of the Company or any Subsidiary with which the person
was involved in a management role at any time during his or her last five years
of employment with or other service for the Company or any Subsidiaries.
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(h) "DISABILITY" means a disability that would entitle an eligible
participant to payment of monthly disability payments under any Company
disability plan or as otherwise determined by the Committee.
(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(j) "EXEMPT PERSON" means (i) PCA Holdings LLC, Madison Dearborn
Partners, Inc. and Madison Dearborn Partners LLC, (ii) any person, entity or
group under the control of any party included in clause (i), or (iii) any
employee benefit plan of the Company or a trustee or other administrator or
fiduciary holding securities under an employee benefit plan of the Company.
(k) "FAMILY MEMBER" has the meaning given to such term in General
Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended,
and any successor thereto.
(l) "FAIR MARKET VALUE" of a share of Common Stock of the Company
means, as of the date in question, the officially-quoted closing selling price
of the stock (or if no selling price is quoted, the bid price) on the principal
securities exchange on which the Common Stock is then listed for trading
(including for this purpose the Nasdaq National Market) (the "Market") for the
applicable trading day or, if the Common Stock is not then listed or quoted in
the Market, the Fair Market Value shall be the fair value of the Common Stock
determined in good faith by the Board; provided, however, that when shares
received upon exercise of an option are immediately sold in the open market, the
net sale price received may be used to determine the Fair Market Value of any
shares used to pay the exercise price or applicable withholding taxes and to
compute the withholding taxes.
(m) "INCENTIVE STOCK OPTION" means an option conforming to the
requirements of Section 422 of the Code and any successor thereto.
(n) "NON-EMPLOYEE DIRECTOR" has the meaning given to such term in
Rule 16b-3 under the Exchange Act and any successor thereto.
(o) "NON-QUALIFIED STOCK OPTION" means any stock option other than an
Incentive Stock Option.
(p) "OTHER COMPANY SECURITIES" mean securities of the Company other
than Common Stock, which may include, without limitation, unbundled stock units
or components thereof, debentures, preferred stock, warrants and securities
convertible into or exchangeable for Common Stock or other property.
(q) "RETIREMENT" means retirement as defined under any Company
pension plan or retirement program or termination of one's employment on
retirement with the approval of the Committee.
(r) "SUBSIDIARY" means a corporation or other entity of which
outstanding shares
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or ownership interests representing 50% or more of the combined voting power
of such corporation or other entity entitled to elect the management thereof,
or such lesser percentage as may be approved by the Committee, are owned
directly or indirectly by the Company.
3. ADMINISTRATION.
The Plan shall be administered by the Committee; provided that the
Board may, in its discretion, at any time and from time to time, resolve to
administer the Plan, in which case the term "Committee" shall be deemed to mean
the Board for all purposes herein. Subject to the provisions of the Plan, the
Committee shall be authorized to (i) select persons to participate in the Plan,
(ii) determine the form and substance of grants made under the Plan to each
participant, and the conditions and restrictions, if any, subject to which such
grants will be made, (iii) certify that the conditions and restrictions
applicable to any grant have been met, (iv) modify the terms of grants made
under the Plan, (v) interpret the Plan and grants made thereunder, (vi) make any
adjustments necessary or desirable in connection with grants made under the Plan
to eligible participants located outside the United States and (vii) adopt,
amend, or rescind such rules and regulations, and make such other
determinations, for carrying out the Plan as it may deem appropriate. Decisions
of the Committee on all matters relating to the Plan shall be in the Committee's
sole discretion and shall be conclusive and binding on all parties. The
validity, construction, and effect of the Plan and any rules and regulations
relating to the Plan shall be determined in accordance with applicable federal
and state laws and rules and regulations promulgated pursuant thereto. No
member of the Committee and no officer of the Company shall be liable for any
action taken or omitted to be taken by such member, by any other member of the
Committee or by any officer of the Company in connection with the performance of
duties under the Plan, except for such person's own willful misconduct or as
expressly provided by statute.
The expenses of the Plan shall be borne by the Company. The Plan
shall not be required to establish any special or separate fund or make any
other segregation of assets to assume the payment of any award under the Plan,
and rights to the payment of such awards shall be no greater than the rights of
the Company's general creditors.
4. SHARES AVAILABLE FOR THE PLAN.
Subject to adjustments as provided in Section 15, an aggregate of
4,200,000 shares of Common Stock (the "Shares") may be issued pursuant to the
Plan. Such Shares may be in whole or in part authorized and unissued or held by
the Company as treasury shares. If any grant under the Plan expires or
terminates unexercised, becomes unexercisable or is forfeited as to any Shares,
or is tendered or withheld as to any shares in payment of the exercise price of
the grant or the taxes payable with respect to the exercise, then such
unpurchased, forfeited, tendered or withheld Shares shall thereafter be
available for further grants under the Plan unless, in the case of options
granted under the Plan, related SARs are exercised.
Without limiting the generality of the foregoing provisions of this
Section 4 or the generality of the provisions of Sections 3, 6 or 17 or any
other section of this Plan, the Committee
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may, at any time or from time to time, and on such terms and conditions (that
are consistent with and not in contravention of the other provisions of this
Plan) as the Committee may, in its sole discretion, determine, enter into
agreements (or take other actions with respect to the options) for new
options containing terms (including exercise prices) more (or less) favorable
than the outstanding options.
5. PARTICIPATION.
Participation in the Plan shall be limited to those directors
(including Non-Employee Directors), officers (including non-employee officers)
and employees of, and other individuals performing services for, or to whom an
offer of employment has been extended by, the Company and its Subsidiaries
selected by the Committee (including participants located outside the United
States). Nothing in the Plan or in any grant thereunder shall confer any right
on a participant to continue in the employ as a director or officer of or in
the performance of services for the Company or shall interfere in any way with
the right of the Company to terminate the employment or performance of services
or to reduce the compensation or responsibilities of a participant at any time.
By accepting any award under the Plan, each participant and each person claiming
under or through him or her shall be conclusively deemed to have indicated his
or her acceptance and ratification of, and consent to, any action taken under
the Plan by the Company, the Board or the Committee.
Incentive Stock Options or Non-qualified Stock Options, SARs, alone or
in tandem with options, restricted stock awards, performance awards, or any
combination thereof, may be granted to such persons and for such number of
Shares as the Committee shall determine (such individuals to whom grants are
made being sometimes herein called "optionees" or "grantees," as the case may
be). Determinations made by the Committee under the Plan need not be uniform
and may be made selectively among eligible individuals under the Plan, whether
or not such individuals are similarly situated. A grant of any type made
hereunder in any one year to an eligible participant shall neither guarantee nor
preclude a further grant of that or any other type to such participant in that
year or subsequent years.
6. INCENTIVE AND NON-QUALIFIED OPTIONS AND SARs.
The Committee may from time to time grant to eligible participants
Incentive Stock Options, Non-qualified Stock Options, or any combination
thereof; provided that the Committee may grant Incentive Stock Options only to
eligible employees of the Company or its subsidiaries (as defined for this
purpose in Section 424(f) of the Code or any successor thereto). In any one
calendar year, the Committee shall not grant to any one participant options or
SARs to purchase a number of shares of Common Stock in excess of 20% of the
total number of Shares authorized under the Plan pursuant to Section 4. The
options granted shall take such form as the Committee shall determine, subject
to the following terms and conditions.
It is the Company's intent that Non-qualified Stock Options granted
under the Plan not be classified as Incentive Stock Options, that Incentive
Stock Options be consistent with and contain or be deemed to contain all
provisions required under Section 422 of the Code and any successor thereto, and
that any ambiguities in construction be interpreted in order to effectuate such
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intent. If an Incentive Stock Option granted under the Plan does not qualify as
such for any reason, then to the extent of such non-qualification, the stock
option represented thereby shall be regarded as a Non-qualified Stock Option
duly granted under the Plan, provided that such stock option otherwise meets the
Plan's requirements for Non-qualified Stock Options.
(a) PRICE. The price per Share deliverable upon the exercise of each
option ("exercise price") shall be established by the Committee, except that in
the case of the grant of any Incentive Stock Option, the exercise price may not
be less than 100% of the Fair Market Value of a share of Common Stock as of the
date of grant of the option, and in the case of the grant of any Incentive Stock
Option to an employee who, at the time of the grant, owns more than 10% of the
total combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the exercise price may not be less than 110% of the Fair Market
Value of a share of Common Stock as of the date of grant of the option, in each
case unless otherwise permitted by Section 422 of the Code or any successor
thereto.
(b) PAYMENT. Options may be exercised, in whole or in part, upon
payment of the exercise price of the Shares to be acquired. Unless otherwise
determined by the Committee, payment shall be made (i) in cash (including check,
bank draft, money order or wire transfer of immediately available funds),
(ii) by delivery of outstanding shares of Common Stock with a Fair Market Value
on the date of exercise equal to the aggregate exercise price payable with
respect to the options' exercise, (iii) by simultaneous sale through a broker
reasonably acceptable to the Committee of Shares acquired on exercise, as
permitted under Regulation T of the Federal Reserve Board, (iv) by authorizing
the Company to withhold from issuance a number of Shares issuable upon exercise
of the options which, when multiplied by the Fair Market Value of a share of
Common Stock on the date of exercise, is equal to the aggregate exercise price
payable with respect to the options so exercised or (v) by any combination of
the foregoing. Options may also be exercised upon payment of the exercise price
of the Shares to be acquired by delivery of the optionee's promissory note, but
only to the extent specifically approved by and in accordance with the policies
of the Committee.
In the event a grantee elects to pay the exercise price payable with
respect to an option pursuant to clause (ii) above, (A) only a whole number of
share(s) of Common Stock (and not fractional shares of Common Stock) may be
tendered in payment, (B) such grantee must present evidence acceptable to the
Company that he or she has owned any such shares of Common Stock tendered in
payment of the exercise price (and that such tendered shares of Common Stock
have not been subject to any substantial risk of forfeiture) for at least six
months prior to the date of exercise, and (C) Common Stock must be delivered to
the Company. Delivery for this purpose may, at the election of the grantee, be
made either by (A) physical delivery of the certificate(s) for all such shares
of Common Stock tendered in payment of the price, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, or (B) direction to
the grantee's broker to transfer, by book entry, such shares of Common Stock
from a brokerage account of the grantee to a brokerage account specified by the
Company. When payment of the exercise price is made by delivery of Common
Stock, the difference, if any, between the aggregate exercise price payable with
respect to the option being exercised and the Fair Market Value of the shares of
Common Stock tendered in payment (plus any applicable taxes) shall be paid in
cash. No grantee may tender shares of
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Common Stock having a Fair Market Value exceeding the aggregate exercise
price payable with respect to the option being exercised (plus any applicable
taxes).
In the event a grantee elects to pay the exercise price payable
with respect to an option pursuant to clause (iv) above, (A) only a whole
number of Share(s) (and not fractional Shares) may be withheld in payment and
(B) such grantee must present evidence acceptable to the Company that he or
she has owned a number of shares of Common Stock at least equal to the number
of Shares to be withheld in payment of the exercise price (and that such
owned shares of Common Stock have not been subject to any substantial risk of
forfeiture) for at least six months prior to the date of exercise. When
payment of the exercise price is made by withholding of Shares, the
difference, if any, between the aggregate exercise price payable with
respect to the option being exercised and the Fair Market Value of the Shares
withheld in payment (plus any applicable taxes) shall be paid in cash. No
grantee may authorize the withholding of Shares having a Fair Market Value
exceeding the aggregate exercise price payable with respect to the option
being exercised (plus any applicable taxes). Any withheld Shares shall no
longer be issuable under such option (except pursuant to any Reload Option
(as defined below) with respect to any such withheld Shares).
(c) TERMS OF OPTIONS. The term during which each option may be
exercised shall be determined by the Committee, but if required by the Code and
except as otherwise provided herein, no option shall be exercisable in whole or
in part more than ten years from the date it is granted, and no Incentive Stock
Option granted to an employee who at the time of the grant owns more than 10% of
the total combined voting power of all classes of stock of the Company or any of
its Subsidiaries shall be exercisable more than five years from the date it is
granted. All rights to purchase Shares pursuant to an option shall, unless
sooner terminated, expire at the date designated by the Committee. The
Committee shall determine the date on which each option shall become exercisable
and may provide that an option shall become exercisable in installments. The
Shares constituting each installment may be purchased in whole or in part at any
time after such installment becomes exercisable, subject to such minimum
exercise requirements as may be designated by the Committee. Prior to the
exercise of an option and delivery of the Shares represented thereby, the
optionee shall have no rights as a stockholder with respect to any Shares
covered by such outstanding option (including any dividend or voting rights).
(d) LIMITATIONS ON GRANTS. If required by the Code, the aggregate
Fair Market Value (determined as of the grant date) of Shares for which an
Incentive Stock Option is exercisable for the first time during any calendar
year under all equity incentive plans of the Company and its Subsidiaries (as
defined in Section 422 of the Code or any successor thereto) may not exceed
$100,000.
(e) TERMINATION; CHANGE IN CONTROL.
(i) DEATH OR DISABILITY. If a participant ceases to be a
director, officer or employee of, or to perform other services for, the Company
and any Subsidiary due to death or Disability, all of the participant's options
and SARs shall become fully vested and exercisable and shall remain so for a
period of 180 days from the date of such death or Disability, but in no event
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after the expiration date of the options or SARs. Notwithstanding the
foregoing, if the Disability giving rise to the termination of employment is not
within the meaning of Section 22(e)(3) of the Code or any successor thereto,
Incentive Stock Options not exercised by such participant within 90 days after
the date of termination of employment will cease to qualify as Incentive Stock
Options and will be treated as Non-qualified Stock Options under the Plan if
required to be so treated under the Code.
(ii) RETIREMENT. If a participant ceases to be a director,
officer or employee of, or to perform other services for, the Company and any
Subsidiary upon the occurrence of his or her Retirement, (A) all of the
participant's options and SARs that were exercisable on the date of Retirement
shall remain exercisable for, and shall otherwise terminate at the end of, a
period of 90 days after the date of Retirement, but in no event after the
expiration date of the options or SARs; provided that the participant does not
engage in Competition during such 90-day period unless he or she receives
written consent to do so from the Board or the Committee, and (B) all of the
participant's options and SARs that were not exercisable on the date of
Retirement shall be forfeited immediately upon such Retirement; provided,
however, that such options and SARs may become fully vested and exercisable in
the discretion of the Committee. Notwithstanding the foregoing, Incentive Stock
Options not exercised by such participant within 90 days after Retirement will
cease to qualify as Incentive Stock Options and will be treated as Non-qualified
Stock Options under the Plan if required to be so treated under the Code.
(iii) DISCHARGE FOR CAUSE. If a participant ceases to be a
director, officer or employee of, or to perform other services for, the Company
or a Subsidiary due to Cause, or if a participant does not become a director,
officer or employee of, or does not begin performing other services for, the
Company or a Subsidiary for any reason, all of the participant's options and
SARs shall expire and be forfeited immediately upon such cessation or
non-commencement, whether or not then exercisable.
(iv) OTHER TERMINATION. Unless otherwise determined by the
Committee, if a participant ceases to be a director, officer or employee of, or
to otherwise perform services for, the Company or a Subsidiary for any reason
other than death, Disability, Retirement or Cause, (A) all of the participant's
options and SARs that were exercisable on the date of such cessation shall
remain exercisable for, and shall otherwise terminate at the end of, a period of
90 days after the date of such cessation, but in no event after the expiration
date of the options or SARs; provided that the participant does not engage in
Competition during such 90-day period unless he or she receives written consent
to do so from the Board or the Committee, and (B) all of the participant's
options and SARs that were not exercisable on the date of such cessation shall
be forfeited immediately upon such cessation.
(v) CHANGE IN CONTROL. If there is a Change in Control of the
Company and a participant is terminated from being a director, officer or
employee of, or from performing other services for, the Company or a subsidiary
within one year after such Change in Control, all of the participant's options
and SARs shall become fully vested and exercisable upon such termination and
shall remain so for one year after the date of termination, but in no event
after the expiration date
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of the options or SARS. In addition, the Compensation Committee shall have
the authority to grant options that become fully vested and exercisable
automatically upon a Change in Control, whether or not the grantee is
subsequently terminated.
(f) GRANT OF RELOAD OPTIONS. The Committee may provide (either at
the time of grant or exercise of an option), in its discretion, for the grant to
a grantee who exercises all or any portion of an option ("Exercised Options")
and who pays all or part of such exercise price with shares of Common Stock, of
an additional option (a "Reload Option") for a number of shares of Common Stock
equal to the sum (the "Reload Number") of the number of shares of Common Stock
tendered or withheld in payment of such exercise price for the Exercised Options
plus, if so provided by the Committee, the number of shares of Common Stock, if
any, tendered or withheld by the grantee or withheld by the Company in
connection with the exercise of the Exercised Options to satisfy any federal,
state or local tax withholding requirements. The terms of each Reload Option,
including the date of its expiration and the terms and conditions of its
exercisability and transferability, shall be the same as the terms of the
Exercised Option to which it relates, except that (i) the grant date for each
Reload Option shall be the date of exercise of the Exercised Option to which it
relates and (ii) the exercise price for each Reload Option shall be the Fair
Market Value of the Common Stock on the grant date of the Reload Option.
7. STOCK APPRECIATION RIGHTS.
The Committee shall have the authority to grant SARs under this Plan,
either alone or to any optionee in tandem with options (either at the time of
grant of the related option or thereafter by amendment to an outstanding
option). SARs shall be subject to such terms and conditions as the Committee
may specify.
No SAR may be exercised unless the Fair Market Value of a share of
Common Stock of the Company on the date of exercise exceeds the exercise price
of the SAR or, in the case of SARs granted in tandem with options, any options
to which the SARs correspond. Prior to the exercise of the SAR and delivery of
the cash and/or Shares represented thereby, the participant shall have no rights
as a stockholder with respect to Shares covered by such outstanding SAR
(including any dividend or voting rights).
SARs granted in tandem with options shall be exercisable only when, to
the extent and on the conditions that any related option is exercisable. The
exercise of an option shall result in an immediate forfeiture of any related SAR
to the extent the option is exercised, and the exercise of an SAR shall cause an
immediate forfeiture of any related option to the extent the SAR is exercised.
Upon the exercise of an SAR, the participant shall be entitled to a
distribution in an amount equal to the difference between the Fair Market Value
of a share of Common Stock on the date of exercise and the exercise price of the
SAR or, in the case of SARs granted in tandem with
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options, any option to which the SAR is related, multiplied by the number of
Shares as to which the SAR is exercised. The Committee shall decide whether
such distribution shall be in cash, in Shares having a Fair Market Value
equal to such amount, in Other Company Securities having a Fair Market Value
equal to such amount or in a combination thereof.
All SARs will be exercised automatically on the last day prior to the
expiration date of the SAR or, in the case of SARs granted in tandem with
options, any related option, so long as the Fair Market Value of a share of
Common Stock on that date exceeds the exercise price of the SAR or any related
option, as applicable. An SAR granted in tandem with options shall expire at
the same time as any related option expires and shall be transferable only when,
and under the same conditions as, any related option is transferable.
8. RESTRICTED STOCK.
The Committee may at any time and from time to time grant Shares of
restricted stock under the Plan to such participants and in such amounts as it
determines. Each grant of restricted stock shall specify the applicable
restrictions on such Shares, the duration of such restrictions (which shall be
at least six months except as otherwise determined by the Committee or provided
in the third paragraph of this Section 8), and the time or times at which such
restrictions shall lapse with respect to all or a specified number of Shares
that are part of the grant.
The participant will be required to pay the Company the aggregate par
value of any Shares of restricted stock (or such larger amount as the Board may
determine to constitute capital under Section 154 of the Delaware General
Corporation Law, as amended, or any successor thereto) within ten days of the
date of grant, unless such Shares of restricted stock are treasury shares.
Unless otherwise determined by the Committee, certificates representing Shares
of restricted stock granted under the Plan will be held in escrow by the Company
on the participant's behalf during any period of restriction thereon and will
bear an appropriate legend specifying the applicable restrictions thereon, and
the participant will be required to execute a blank stock power therefor.
Except as otherwise provided by the Committee, during such period of restriction
the participant shall have all of the rights of a holder of Common Stock,
including but not limited to the rights to receive dividends and to vote, and
any stock or other securities received as a distribution with respect to such
participant's restricted stock shall be subject to the same restrictions as then
in effect for the restricted stock.
Except as otherwise provided by the Committee, immediately prior to a
Change in Control or at such time as a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company and
its Subsidiaries due to death, Disability or Retirement during any period of
restriction, all restrictions on Shares granted to such participant shall lapse.
At such time as a participant ceases to be, or in the event a participant does
not become, a director, officer or employee of, or otherwise performing services
for, the Company or its Subsidiaries for any other reason, all Shares of
restricted stock granted to such participant on which the restrictions have not
lapsed shall be immediately forfeited to the Company.
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9. PERFORMANCE AWARDS.
Performance awards may be granted to participants at any time and from
time to time as determined by the Committee. The Committee shall have complete
discretion in determining the size and composition of performance awards granted
to a participant and the appropriate period over which performance is to be
measured (a "performance cycle"). Performance awards may include (i) specific
dollar-value target awards (ii) performance units, the value of each such unit
being determined by the Committee at the time of issuance, and/or
(iii) performance Shares, the value of each such Share being equal to the Fair
Market Value of a share of Common Stock.
The value of each performance award may be fixed or it may be
permitted to fluctuate based on a performance factor (e.g., return on equity)
selected by the Committee.
The Committee shall establish performance goals and objectives for
each performance cycle on the basis of such criteria and objectives as the
Committee may select from time to time, including, without limitation, the
performance of the participant, the Company, one or more of its Subsidiaries or
divisions or any combination of the foregoing. During any performance cycle,
the Committee shall have the authority to adjust the performance goals and
objectives for such cycle for such reasons as it deems equitable.
The Committee shall determine the portion of each performance award
that is earned by a participant on the basis of the Company's performance over
the performance cycle in relation to the performance goals for such cycle. The
earned portion of a performance award may be paid out in Shares, cash, Other
Company Securities, or any combination thereof, as the Committee may determine.
A participant must be a director, officer or employee of, or otherwise
perform services for, the Company or its Subsidiaries at the end of the
performance cycle in order to be entitled to payment of a performance award
issued in respect of such cycle; provided, however, that except as otherwise
determined by the Committee, if a participant ceases to be a director, officer
or employee of, or to otherwise perform services for, the Company and its
Subsidiaries upon his or her death, Retirement, or Disability prior to the end
of the performance cycle, the participant shall earn a proportionate portion of
the performance award based upon the elapsed portion of the performance cycle
and the Company's performance over that portion of such cycle.
In the event of a Change in Control, a participant shall earn no less
than the portion of the performance award that the participant would have earned
if the applicable performance cycle(s) had terminated as of the date of the
Change in Control.
10. WITHHOLDING TAXES.
(a) PARTICIPANT ELECTION. Unless otherwise determined by the
Committee, a participant may elect to deliver shares of Common Stock (or have
the Company withhold shares acquired upon exercise of an option or SAR or
deliverable upon grant or vesting of restricted stock,
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as the case may be) to satisfy, in whole or in part, the amount the Company
is required to withhold for taxes in connection with the exercise of an
option or SAR or the delivery of restricted stock upon grant or vesting, as
the case may be. Such election must be made on or before the date the amount
of tax to be withheld is determined. Once made, the election shall be
irrevocable. The fair market value of the shares to be withheld or delivered
will be the Fair Market Value as of the date the amount of tax to be withheld
is determined. In the event a participant elects to deliver, or to have the
Company withhold shares of Common Stock pursuant to this Section 10(a), such
delivery or withholding must be made subject to the conditions and pursuant
to the procedures set forth in Section 6(b) with respect to the delivery or
withholding of Common Stock in payment of the exercise price of options.
(b) COMPANY REQUIREMENT. The Company may require, as a condition to
any grant or exercise under the Plan or to the delivery of certificates for
Shares issued hereunder, that the grantee make provision for the payment to the
Company, either pursuant to Section 10(a) or this Section 10(b), of federal,
state or local taxes of any kind required by law to be withheld with respect to
any grant or delivery of Shares. The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee, an amount equal to any
federal, state or local taxes of any kind required by law to be withheld with
respect to any grant or delivery of Shares under the Plan.
11. WRITTEN NOTICE; VESTING.
Each employee to whom a grant is made under the Plan shall be sent a
written notice from the Company that shall contain such provisions, including
without limitation vesting requirements, consistent with the provisions of the
Plan, as may be approved by the Committee. Unless the Committee determines
otherwise and except as otherwise provided in Sections 6, 7, 8 and 9 in
connection with a Change of Control or certain occurrences of termination, no
grant under this Plan may be exercised, and no restrictions relating thereto may
lapse, within six months of the date such grant is made.
12. TRANSFERABILITY.
Unless the Committee determines otherwise, no option, SAR, performance
award or restricted stock granted under the Plan shall be transferable by a
participant other than by will or the laws of descent and distribution or to a
participant's Family Member by gift. Unless the Committee determines otherwise,
an option, SAR or performance award may be exercised only by the optionee or
grantee thereof; by his or her Family Member if such person has acquired the
option, SAR or performance award by gift; by the executor or administrator of
the estate of any of the foregoing or any person to whom the Option is
transferred by will or the laws of descent and distribution; or by the guardian
or legal representative of any of the foregoing; provided that Incentive Stock
Options may be exercised by any Family Member, guardian or legal representative
only if permitted by the Code and any regulations thereunder.
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13. LISTING, REGISTRATION AND QUALIFICATION.
If the Committee determines that the listing, registration or
qualification upon any securities exchange or under any law of Shares subject to
any option, SAR, performance award or restricted stock grant is necessary or
desirable as a condition of, or in connection with, the granting of same or the
issue or purchase of Shares thereunder, no such option or SAR may be exercised
in whole or in part, no such performance award may be paid out, and no Shares
may be issued, unless such listing, registration or qualification is effected
free of any conditions not acceptable to the Committee.
14. TRANSFER OF EMPLOYEE.
The transfer of an employee from the Company to a Subsidiary, from a
Subsidiary to the Company, or from one Subsidiary to another shall not be
considered a termination of employment; nor shall it be considered a termination
of employment if an employee is placed on military or sick leave or such other
leave of absence which is considered by the Committee as continuing intact the
employment relationship.
15. ADJUSTMENTS.
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of assets,
or any other change in the corporate structure or shares of the Company, the
Committee shall make such adjustment as it deems appropriate in the number and
kind of Shares or other property reserved for issuance under the Plan, in the
number and kind of Shares or other property covered by grants previously made
under the Plan, and in the exercise price of outstanding options and SARs. Any
such adjustment shall be final, conclusive and binding for all purposes of the
Plan. In the event of any merger, consolidation or other reorganization in
which the Company is not the surviving or continuing corporation or in which a
Change in Control is to occur, all of the Company's obligations regarding
options, SARs, performance awards, and restricted stock that were granted
hereunder and that are outstanding on the date of such event shall, on such
terms as may be approved by the Committee prior to such event, be assumed by the
surviving or continuing corporation or canceled in exchange for property
(including cash).
Without limitation of the foregoing, in connection with any
transaction of the type specified by clause (iii) of the definition of a Change
in Control in Section 2(c), the Committee may, in its discretion, (i) cancel any
or all outstanding options under the Plan in consideration for payment to the
holders thereof of an amount equal to the portion of the consideration that
would have been payable to such holders pursuant to such transaction if their
options had been fully exercised immediately prior to such transaction, less the
aggregate exercise price that would have been payable therefor, or (ii) if the
amount that would have been payable to the option holders pursuant to such
transaction if their options had been fully exercised immediately prior thereto
would be equal to or less than the aggregate exercise price that would have been
payable therefor, cancel any or all such options for no consideration or payment
of any kind. Payment of any amount payable pursuant to
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the preceding sentence may be made in cash or, in the event that the
consideration to be received in such transaction includes securities or other
property, in cash and/or securities or other property in the Committee's
discretion.
16. AMENDMENT AND TERMINATION OF THE PLAN.
The Board of Directors or the Committee, without approval of the
stockholders, may amend or terminate the Plan, except that no amendment shall
become effective without prior approval of the stockholders of the Company if
stockholder approval would be required by applicable law or regulations,
including if required for continued compliance with the performance-based
compensation exception of Section 162(m) of the Code or any successor thereto,
under the provisions of Section 422 of the Code or any successor thereto, or by
any listing requirement of the principal stock exchange on which the Common
Stock is then listed.
17. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN.
The terms of any outstanding award under the Plan may be amended from
time to time by the Committee in its discretion in any manner that it deems
appropriate (including, but not limited to, acceleration of the date of exercise
of any award and/or payments thereunder or of the date of lapse of restrictions
on Shares); provided that, except as otherwise provided in Section 15, no such
amendment shall adversely affect in a material manner any right of a participant
under the award without his or her written consent, and provided further that
the Committee shall not reduce the exercise price of any options or SARs awarded
under the Plan without approval of the stockholders of the Company. The
Committee may, in its discretion, permit holders of awards under the Plan to
surrender outstanding awards in order to exercise or realize rights under other
awards, or in exchange for the grant of new awards, or require holders of awards
to surrender outstanding awards as a condition precedent to the grant of new
awards under the Plan.
18. COMMENCEMENT DATE; TERMINATION DATE.
The date of commencement of the Plan shall be October 19, 1999.
Unless previously terminated upon the adoption of a resolution of the
Board terminating the Plan, the Plan shall terminate at the close of business on
October 19, 2009; provided that the Board may, prior to such termination, extend
the term of the Plan for up to five years for the grant of awards other than
Incentive Stock Options. No termination of the Plan shall materially and
adversely affect any of the rights or obligations of any person, without his or
her written consent, under any grant of options or other incentives theretofore
granted under the Plan.
19. GOVERNING LAW.
The Plan shall be governed by the corporate laws of the State of
Delaware, without giving effect to any choice of law provisions.
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