Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report on Form 10-K of J.P. Morgan 9 42K
2: EX-10 Ex 10I - 1995 Stock Incentive Plan 15± 58K
3: EX-10 Ex 10J - 1995 Executive Officer Performance Plan 5± 20K
4: EX-13 Annual Report 116 666K
5: EX-21 Ex 21 - Subsidiaries of Jp Morgan 9± 28K
6: EX-23 Ex 23 - Consent of Price Waterhouse 1 7K
7: EX-24 Ex 24 - Powers of Attorney 16 36K
8: EX-27 Article 9 Financial Data Schedule 2 10K
EX-10 — Ex 10I – 1995 Stock Incentive Plan
Exhibit 10(i)
1995 Stock Incentive Plan of
J.P. Morgan & Co. Incorporated and Affiliated Companies
Article I
Purpose
The purpose of the 1995 Stock Incentive Plan (the "Plan") is to
afford an incentive to key employees of J.P. Morgan & Co. Incorporated
(the "Company") and its affiliates to acquire a proprietary interest in
the Company, to encourage such employees to increase their efforts on
behalf of the Company and remain in its employ, and to more closely
align the interests of such key employees with those of the Company's
stockholders.
Article II
Definitions
2.1. The following terms shall have the meanings described below when
used in the Plan:
(a) "Award" shall refer to a Restricted Stock Award granted under
Article Vlll or a Stock Unit Award granted under Article IX.
(b) "Board of Directors" shall mean the Board of Directors of the
Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(d ) "Committee" shall mean the committee appointed by the Board
of Directors to administer the Plan pursuant to Article lll.
(e) "Common Stock" shall mean common stock, par value $2.50, of
the Company.
(f ) "Company" shall mean J.P. Morgan & Co. Incorporated or any
successor to it in ownership of all or substantially all of its assets.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(h) "Fair Market Value" of Common Stock on any day shall mean the
average of the highest and lowest price of Common Stock as reported on
the composite tape for such day, unless the Committee determines that
another procedure for determining Fair Market Value would be more
appropriate.
(i) "Incentive Stock Option" shall mean a stock option granted
under Article Vl which is intended to meet the requirements of Section
422 of the Code.
(j) "Nonqualified Stock Option" shall mean a stock option granted
under Article Vl which is not intended to be an Incentive Stock Option.
(k) "Option" shall mean an Incentive Stock Option or a
Nonqualified Stock Option.
(l) "Optionee" shall mean a Participant who is granted an Option.
(m) "Participant" shall mean an eligible employee who has been
granted an Option, Stock Appreciation Right or Award under the Plan.
(n) "Participating Company" shall mean the Company, the Trust
Company or any subsidiary or other affiliated entity (whether or not
incorporated).
(o) "Plan" shall mean this 1995 Stock Incentive Plan of J.P.
Morgan & Co. Incorporated and Affiliated Companies.
(p) "Related Right" shall mean a Stock Appreciation Right
described in Section 7.2.
(q) "Restricted Period" shall mean the period during which a
Restricted Stock Award is being earned in accordance with Section 8.3.
(r) "Restricted Stock Award" shall mean an award granted under
Article Vlll.
(s) "Stand Alone Right" shall mean a Stock Appreciation Right
described in Section 7.3.
(t) "Stock Appreciation Right" shall mean a right granted under
Article Vll.
(u) "Stock Unit Award" shall mean an award granted under Article
IX.
(v) "Trust Company" shall mean Morgan Guaranty Trust Company of
New York or any successor to it in ownership of all or substantially
all of its assets.
Article III
3.1. (a) The Board of Directors shall appoint not less than three
Directors to the Committee which shall administer the Plan. With
respect to determinations regarding the grant, amount, acceleration or
forfeiture of Options, Stock Appreciation Rights or awards with respect
to an eligible employee who is a member of the Board of Directors, the
Committee shall be composed of all directors of the Company who are not
employees of the Company or any other Participating Company. No
individual shall be a member of the Committee unless such individual is
disinterested within the meaning of Rule 16b-3 under the Exchange Act.
The Committee shall have full power and authority, subject to such
orders or resolutions not inconsistent with the provisions of the Plan
as may from time to time be issued or adopted by the Board of
Directors, to grant to eligible persons Options, Stock Appreciation
Rights and Awards under the Plan; to waive any restrictions or
limitations, or impose additional limitations or restrictions, on
previously granted Options, Stock Appreciation Rights, or Awards
(within the parameters of the Plan); to interpret the provisions of the
Plan and any agreements relating to Options, Stock Appreciation Rights
or Awards granted under the Plan; to supervise the administration of
the Plan and to delegate to senior officers of the Company or the Trust
Company the power to act for the Committee as the Committee shall
specify.
(b) All decisions made by the Committee (or such persons acting
under a delegation by the Committee pursuant to subsection 3.1 (a) )
pursuant to the provisions of the Plan and related orders of the Board
of Directors shall be within the absolute discretion of the Committee
or its delegate, as the case may be, and shall be conclusive and
binding on all persons, including the Company, stockholders, employees
and beneficiaries of employees.
Article IV
Shares Subject To The Plan
4.1. (a) Subject to adjustment pursuant to subsection 4.1 (d), the
maximum number of shares of Common Stock with respect to which Options,
Stock Appreciation Rights and Awards may be granted shall be 28,000,000
shares of Common Stock. Shares of Common Stock may be made available
from the authorized but unissued shares of the Company or from shares
reacquired by the Company, including shares purchased in the open
market. If an Option, Stock Appreciation Right or Award granted under
the Plan shall expire or terminate for any reason other than the
exercise of a Related Right (to the extent set forth in subsection
7.2(c) ), the shares subject to such Option, Stock Appreciation Right
or Award shall be available for other Options, Stock Appreciation
Rights and Awards to the same Participant or other eligible employees.
Any shares delivered in payment of the exercise price of an Option
shall be available for other Options, Stock Appreciation Rights and
Awards to the same Participant or other eligible employees.
(b) Subject to adjustment pursuant to subsection 4.1 (d), of the
total shares of Common Stock referred to in subsection 4.1 (a), the
number of shares of Common Stock with respect to which Awards may be
granted shall not exceed 7,000,000 shares of Common Stock.
(c) Subject to adjustment pursuant to subsection 4.1 (d), of the
total shares of Common Stock referred to in subsection 4.1 (a), the
number of shares of Common Stock with respect to which Options or Stock
Appreciation Rights may be granted to any Participant during the term
of the Plan shall not exceed 2,800,000 shares of Common Stock.
(d) In the event that the Committee shall determine that any stock
dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination,
exchange of shares, warrants or rights offering to purchase Common
Stock at a price substantially below fair market value, or other
similar corporate event affects the Common Stock such that an
adjustment is required in order to preserve the benefits or potential
benefits intended to be made available under this Plan, then the
Committee shall, in its sole discretion, and in such manner as the
Committee may deem equitable, adjust any or all of ( 1 ) the number and
kind of shares which thereafter may be awarded or optioned and sold or
made the subject of Stock Appreciation Rights under the Plan, (2) the
number and kind of shares subject to outstanding Options, Stock
Appreciation Rights and Awards, and (3) the option price with respect
to any of the foregoing and/or, if deemed appropriate, make provision
for a cash payment to a Participant. The number of shares subject to
any Option, Stock Appreciation Right or Award shall always be a whole
number.
Article V
Eligibility
5.1. The employees eligible to participate in the Plan and receive
Options, Stock Appreciation Rights and Awards under the Plan shall
consist of key employees of the Company and other Participating
Companies.
Article VI
Stock Options
6.1. Grant of Options. Subject to the limitations of the Plan, the
Committee shall, after such consultation with and consideration of the
recommendations of management as the Committee considers desirable,
select from eligible employees those Participants to be granted Options
and determine the time when each Option shall be granted and the number
of shares subject to each Option. Options may be either Incentive Stock
Options or Nonqualified Stock Options and more than one Option may be
granted to the same person. Options shall be evidenced in such manner
as may be approved by the Committee. Options may be amended or
supplemented from time to time as approved by the Committee, provided
that the terms of such Options after being amended or supplemented
conform to the terms of the Plan.
6.2. Option Price. The price at which shares may be purchased upon
exercise of a particular Option shall be not less than 100% of the Fair
Market Value of such shares on the date such Option is granted.
6.3. Medium and Time of Payment. No shares shall be delivered
pursuant to any exercise of an Option until payment in full of the
Option price therefor is received by the Company. Such payment shall be
made in cash or, unless prohibited by the Committee, through the
delivery of shares of Common Stock of the . Company with a Fair Market
Value equal to the total Option price or a combination of cash and
shares. The Committee may prescribe additional methods of payment to
the extent permitted by applicable law. Any shares so delivered shall
be valued at their Fair Market Value on the exercise date, or on such
other date as determined by the Committee for administrative
convenience. No Optionee, transferee, legal representative, legatee or
distributee of any Optionee shall be deemed to be a holder of any
shares subject to any Option prior to the issuance of such shares upon
exercise of such Option or any related Stock Appreciation Right.
6.4. Term and Exercisability of Options. An Option shall be
exercisable ratably on each of the first three anniversaries of the
date of grant of such Option or as otherwise determined by the
Committee, but in no event shall such Option be exercised earlier than
one year or later than ten years from the date the Option is granted.
The Committee may require that an Option only be exercised upon the
achievement of such performance objectives as the Committee shall
designate. An Option shall be subject to earlier termination as
provided in Section 6.6 with respect to death, retirement and
termination of employment or as provided in Section 10.6.
6.5. Transferability of Options. (a) Except as provided in
subsection (b) below, an Option may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or the
laws of descent and distribution and, during the lifetime of the
Optionee, may be exercised only by such Optionee.
(b) Notwithstanding subsection (a) above, the Committee may
determine that an Option may be transferred by the Optionee to one or
more members of the Optionee's immediate family, to a partnership of
which the only partners are members of the Optionee's immediate family,
or to a trust established by the Optionee for the benefit of one or
more members of the Optionee's immediate family. For this purpose
immediate family means the Optionee's spouse, parents, children,
grandchildren and the spouses of such parents, children and
grandchildren. A transferee described in this subsection may not
further transfer an Option. An Option transferred pursuant to this
subsection shall remain subject to the provisions of the Plan,
including, but not limited to, the provisions of Section 6.6 relating
to the exercise of the Option upon the death, retirement or termination
of employment of the Optionee, and shall be subject to such other rules
as the Committee shall determine.
6.6. Death, Retirement and Termination of Employment. Subject to
the condition that no Option be exercised in whole or in part after the
expiration of the Option period specified by the Committee, and subject
to the Committee's right to cancel any Option in accordance with
Section 10.6, unless otherwise determined by the Committee:
(a) Upon termination of employment prior to an Optionee's
attainment of age 55 but after the Optionee is eligible for retirement
pursuant to a retirement plan of the Company or any of its
subsidiaries, an Optionee or a transferee described in subsection
6.5(b), may, within three years after the date of such termination,
purchase any or all of the shares subject to an Option granted at least
one year prior to such termination of employment, at or after the time
or times the Optionee would have been entitled to purchase such shares
had the Optionee not terminated employment;
(b) Upon termination of employment on or after an Optionee's
attainment of age 55 and after the Optionee is eligible for retirement
pursuant to a retirement plan of the Company or any of its
subsidiaries, an Optionee or a transferee described in subsection
6.5(b), may, at any time prior to the expiration of the Option period,
purchase any or all of the shares subject to an Option granted at least
one year prior to such termination of employment, at or after the time
or times the Optionee would have been entitled to purchase such shares
had the Optionee not terminated employment;
(c) Upon the death of an Optionee after a termination of
employment described in subsections (a) or (b) above, the Optionee's
designated beneficiary, or if none, the person or persons to whom such
Optionee's rights under the Option are transferred by will or the laws
of descent and distribution, or a transferee described in subsection
6.5(b), may, at any time prior to the expiration of the Option period
determined under subsection (a) or (b), as the case may be, purchase
any or all of the shares subject to an Option at or after the time the
Optionee would have been entitled to purchase such shares had the
Optionee survived;
(d) Upon the death of an Optionee while employed, the Optionee's
designated beneficiary, or if none, the person or persons to whom such
Optionee's rights under the Option are transferred by will or the laws
of descent and distribution, or a transferee described in subsection
6.5(b), may, within three years after the date of such death, but no
later than the expiration of the Option period, purchase any or all of
the shares subject to an Option at or after the time the Optionee would
have been entitled to purchase such shares had the Optionee survived;
and
(e) Upon termination of employment for any reason other than death
or retirement as aforesaid, an Optionee's Options, including any
Options transferred pursuant to subsection 6.5(b), shall be cancelled
to the extent not theretofore exercised. In addition, the Optionee
shall repay to the Company the value of the difference between the Fair
Market Value on the date of exercise over the Option price of any
Options exercised within the six month period preceding the date of
such termination and the value of any Related Right described in
Section 7.2 exercised during such period.
Article VII
Stock Appreciation Rights
7.1. Grant of Stock Appreciation Rights. Subject to the
limitations of the Plan, the Committee shall, after such consultation
with and consideration of the recommendations of management as the
Committee considers desirable, select from eligible employees those
Participants to be granted Stock Appreciation Rights and determine the
time when each Stock Appreciation Right shall be granted and such other
terms of each Stock Appreciation Right pursuant to this Article Vll.
Stock Appreciation Rights may be granted either alone ("Stand Alone
Rights") or in conjunction with all or part of any Option granted under
the Plan ( "Related Rights" ) . In the case of a Nonqualified Stock
Option, Related Rights may be granted either at or after the time of
the grant of the Nonqualified Stock Option. In the case of an Incentive
Stock Option, Related Rights may be granted only at the time of the
grant of the Incentive Stock Option.
7.2. Related Rights. (a) A Related Right shall be exercisable only
at such time or times and to the extent that the Option to which it
relates shall be exercisable in accordance with Article 6, provided
that the Committee may, for administrative convenience, determine that,
for any Related Right which can only be exercised during a limited
period of time in order to satisfy rules imposed by the Securities and
Exchange Commission, the exercise of any such Related Right for cash
during such limited period shall be deemed to occur for all purposes
hereunder on the day during such limited period on which the Fair
Market Value of the Common Stock is the highest. A Related Right
granted with respect to an Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Option,
provided that, unless otherwise provided by the Committee, a Related
Right granted with respect to less than the full number of shares
covered by a related Option shall only be reduced if and to the extent
that the number of shares covered by the exercise or termination of the
related Option exceeds the number of shares not covered by the Related
Right, provided further that, in the event of the death of the
Participant, the Related Right shall be cancelled to the extent not
theretofore exercised, whether or not the related Option is cancelled.
(b) Upon the exercise of a Related Right, a Participant shall be
entitled to receive up to, but not more than, an amount in cash or
shares of Common Stock equal in value to the excess of the Fair Market
Value of one share of Common Stock over the Option price per share of
Common Stock of the related Option multiplied by the number of shares
of Common Stock in respect of which the Related Right shall have been
exercised. The Committee shall have the right to determine the form of
payment. Any shares delivered in payment shall be valued at their Fair
Market Value on the date of exercise. No fractional shares shall be
issued and the Participant shall receive cash in lieu thereof.
(c) Upon the exercise of a Related Right, the Option or part
thereof to which such Related Right is related shall be deemed to have
been exercised for the purpose of the limitations set forth in Section
4.1 on the number of shares of Common Stock to be issued under the
Plan, but only to the extent of the number of shares of Common Stock
issued under the Related Right.
7.3. Stand Alone Rights. (a) A Stand Alone Right shall be
exercisable ratably on each of the first three anniversaries of the
grant of such Stand Alone Right or as otherwise determined by the
Committee, but in no event shall such Stand Alone Right be exercised
earlier than one year or later than ten years from the date the Stand
Alone Right is granted. The Committee may require that a Stand Alone
Right only be exercised upon the achievement of such performance
objectives as the Committee shall designate. The Committee may, for
administrative convenience, determine that, for any Stand Alone Right
which can only be exercised during a limited period of time in order to
satisfy rules imposed by the Securities and Exchange Commission, the
exercise of any such Stand Alone Right for cash during such limited
period shall be deemed to occur for all purposes hereunder on the day
during such limited period on which the Fair Market Value of the Common
Stock is the highest. A Stand Alone Right shall be subject to earlier
termination as provided in subsection 7.3(c) with respect to death,
retirement and termination of employment.
(b) Upon the exercise of a Stand Alone Right, a Participant shall
be entitled to receive up to, but not more than, an amount in cash or
shares of Common Stock equal in value to the excess of the Fair Market
Value of one share of Common Stock on the date of exercise over the
Fair Market Value of one share of Common Stock on the date of grant
multiplied by the number of shares in respect of which the right is
being exercised. The Committee shall have the right to determine the
form of payment. Any shares delivered in payment shall be valued at
their Fair Market Value on the date of exercise. No fractional shares
shall be issued and the Participant shall receive cash in lieu thereof.
(c) Subject to the condition that no Stand Alone Right may be
exercised in whole or in part after the expiration of the period
specified by the Committee, and subject to the Committee's right to
cancel any Stock Appreciation Right in accordance with Section 10.6,
unless otherwise determined by the Committee:
(i) Upon termination of employment prior to a Participant's
attainment of age 55 but after the Participant is eligible for
retirement pursuant to a retirement plan of the Company or any of its
subsidiaries, a Participant may, within three years after the date of
such termination, exercise any or all of the Stand Alone Right granted
at least one year prior to such termination of employment, at or after
the time or times the Participant would have been entitled to exercise
such Stand Alone Right had the Participant not terminated employment;
(ii) Upon termination of employment on or after a Participant's
attainment of age 55 and after the Participant is eligible for
retirement pursuant to a retirement plan of the Company or any of its
subsidiaries, a Participant may, at any time prior to the expiration of
the Stock Appreciation Right exercise period, exercise any or all of
the Stand Alone Right granted at least one year prior to such
termination of employment, at or after the time or times the
Participant would have been entitled to exercise such Stand Alone Right
had the Participant not terminated employment; and
(iii) Upon termination of employment for any reason other than
retirement as aforesaid, a Participant's Stand Alone Rights shall be
cancelled to the extent not theretofore exercised. In addition, except
in the event of death, the Participant shall repay to the Company the
value of any Stand Alone Right exercised within the six month period
preceding the date of such termination.
7.4. Transfer of Stock Appreciation Rights. A Stock Appreciation
Right may not be transferred to anyone and may only be exercised by the
Participant to whom it is granted
Article VIII
Restricted Stock Awards
8.1. Grant of Restricted Stock Awards. Subject to the limitations
of the Plan, the Committee shall, after such consultation with and
consideration of the recommendations of management as the Committee
considers desirable, select from eligible employees those Participants
to be granted Restricted Stock Awards and determine the time when each
Award shall be granted, the vesting date or vesting dates for each
Award, the time or times as of which vested Awards shall be paid and
the number of share credits (each of which shall be equivalent to one
share of Common Stock) subject to each Award. Restricted Stock Awards
shall be evidenced in such manner as may be approved by the Committee.
Restricted Stock Awards may be amended or supplemented from time to
time as approved by the Committee, provided that the terms of such
Awards after being amended or supplemented conform to the terms of the
Plan. No provision of this Plan shall be interpreted to prohibit the
grant of a Restricted Stock Award hereunder in connection with awards
granted pursuant to the 1995 Executive Officer Performance Plan of J.P.
Morgan & Co. Incorporated and Affiliated Companies or any other plan of
the Company, provided that any such Award conforms to the terms of this
Plan.
8.2. Number of Share Credits. Each Restricted Stock Award shall
state the number of share credits to be subject to the Award.
8.3. Restrictions. A Restricted Stock Award may not be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed of,
except by will or the laws of descent and distribution, for a period of
five years from the date of grant of the Award or such other period as
the Committee shall determine, and for such further period as the
payment of Awards may be deferred pursuant to Section 8.5. The
Committee may define the Restricted Period in terms of the passage of
time, the satisfaction of performance criteria, a combination of time
and performance, or in any other manner it deems appropriate.
Restricted Stock Awards shall not be paid until the successful
completion of the Restricted Period except as may be otherwise provided
in circumstances of death or retirement pursuant to Section 8.4, or
until the end of any deferral period described in subsection 8.5(b).
8.4. Death, Retirement and Termination of Employment. Unless
otherwise determined by the Committee:
(a) Upon termination of a Participant's employment prior to the
end of the Restricted Period for any reason except for retirement or
death, as described below, the Participant's Awards shall be forfeited
and the Participant shall have no right with respect to such Award.
(b) Upon termination of a Participant's employment prior to the
end of the Restricted Period by reason of the Participant's retirement
under a retirement plan maintained by the Company or any of its
subsidiaries, or by reason of death, a pro rata portion (based on
completed full years of service subsequent to the date of grant of an
Award) of an Award shall be payable to the Participant or the
Participant's beneficiary, or if none, the person or persons to whom
such Participant's rights under the Award are transferred by will or
the laws of descent and distribution, subject to any further deferral
of the Award in accordance with subsection 8.5(b), provided that with
respect to an Award subject to performance restrictions, the Committee
shall make such determination with respect to such Award as it deems
appropriate.
8.5. Payment of Awards. (a) Subject to the provisions of
subsection (b) hereof, as soon as practicable after the successful
completion of the Restricted Period, such Award shall be paid to the
Participant or, in the case of the death of the Participant, the
Participant's beneficiary, or if none, the person or persons to whom
such Participant's rights under the Award are transferred by will or
the laws of descent and distribution.
(b) The Committee may, in its discretion, provide that payment of
Awards be deferred until such time or times as the Committee shall
specify, or such time or times as the Participant may elect. Any
election of a Participant pursuant to the preceding sentence shall be
filed with the Committee in accordance with such rules and regulations,
including any deadline for the making of such an election, as the
Committee may provide.
(c) Except as otherwise determined pursuant to subsection 8.6(c),
payments pursuant to this Section 8.5, including any dividend
equivalents determined under subsection 8.6(b), shall be made in shares
of Common Stock, except there may be paid in cash the value of any
partial shares of Common Stock and that part of the total payment
determined by the Company to be necessary to satisfy tax withholding
requirements.
8.6. Dividend Equivalents. (a) Except as may be otherwise
determined by the Committee, in addition to the payment provided for in
Section 8.5, each Participant (or beneficiary) entitled to payment
under Section 8.5 shall receive the dividend equivalent amount
calculated under subsection (b) hereof.
(b) The dividend equivalent amount is the number of additional
share credits attributable to the number of share credits awarded plus
additional share credits calculated hereunder. Such additional share
credits shall be determined and credited as of the end of each calendar
year by dividing ( 1 ) the aggregate cash dividends which would have
been paid had the share credits awarded or credited under this
subsection (b), as the case may be, been actual shares of Common Stock
on the record date for each such dividend during such calendar year by
(2) the average market prices per shares of Common Stock on the last
trading day of each calendar month during the 12 months ending on the
November 30 preceding the date such determination is being made. For
this purpose, the market price on any day shall be the average of the
highest and lowest price of a share of Common Stock as reported on the
composite tape for such day. The Committee may designate any other
manner for determining and crediting dividend equivalents as it deems j
appropriate.
(c) In such cases as the Committee may deem advisable, the
Committee may, in lieu of the crediting provided for in subsection (b),
determine to pay all or part of the dividend equivalent amount in cash
or stock as dividends are actually paid on Common Stock, or at such
other time or times as the Committee may otherwise determine.
Article IX
Stock Unit Awards
9.1. Grant of Stock Unit Awards. The Committee shall have
authority to grant to eligible employees Stock Unit Awards which can be
in the form of Common Stock or units, the value of which is based, in
whole or in part, on the value of Common Stock. Subject to the
provisions of the Plan, including Section 9.2 below, Stock Unit Awards
shall be subject to such terms, restrictions, conditions, vesting
requirements and payment rules (all of which are sometimes hereinafter
collectively referred to as "rules" ) as the Committee may determine in
its sole discretion, all such rules applicable to a particular Stock
Unit Award to be reflected in writing and furnished to the Participant.
In no event shall any Award vest less than one year from the date of
grant. The rules need not be identical for each Stock Unit Award. No
provision of this Plan shall be interpreted to prohibit the grant of a
Stock Unit Award hereunder in connection with awards granted pursuant
to the 1995 Executive Officer Performance Plan or any other plan of the
Company, provided that any such Award conforms to the terms of the
Plan.
9.2. Rules. In the sole discretion of the Committee, a Stock Unit
Award shall be granted subject to the following rules
(a) Any shares of Common Stock which are part of a Stock Unit
Award may not be sold, assigned, I transferred, pledged, hypothecated
or otherwise disposed of, except by will or the laws of descent and
distribution, prior to the date on which the shares are issued or such
other date provided by the Committee at the time of grant of the Award
or thereafter.
(b) Stock Unit Awards may provide for the payment of cash
consideration by the person to whom such Award is granted or provide
that the Award, and Common Stock to be issued in connection therewith,
if applicable, shall be delivered without the payment of cash
consideration.
(c) Stock Unit Awards may relate in whole or in part to
performance criteria established by the Committee at the time of grant.
(d) Stock Unit Awards may provide for deferred payment schedules,
vesting over a specified period of employment, the payment (on a
current or deferred basis) of dividend equivalent amounts, with respect
to the number of shares of Common Stock covered by the Award, and
elections by the Participant to defer payment of the Award or the
lifting of restrictions on the Award, if any.
Article X
General Provisions
10.1. Change in Control. (a) (i) In the case of a Change in
Control (as defined below) of the Company, (i) each Option and Stock
Appreciation Right then outstanding shall (unless the Committee
determines otherwise) immediately be nonforfeitable and exercisable in
full;
(ii) In the case of a Change in Control (as defined below) of the
Company, each Award shall (unless the Committee determines otherwise)
immediately be fully vested and nonforfeitable and shall thereupon be
paid as soon as practicable.
(b) Any determination by the Committee made pursuant to this
Section 10.1 may be made as to all outstanding Options, Stock
Appreciation Rights or Awards or only as to certain Options, Stock
Appreciation Rights or Awards specified by the Committee, and all such
determinations shall be made in cases covered by paragraphs (c) (i) or
(ii) below, prior to or as soon as practicable after the occurrence of
such event and in the cases covered by paragraphs (c) (iii) and (iv)
below, prior to the occurrence of such event.
(c) A Change in Control shall occur if:
(i) any "person" or "group of persons" as such terms are used in
Section 13(d) and 14(d) of the Exchange Act directly or indirectly
purchases or otherwise becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) or has the right to acquire such
beneficial ownership (whether or not such right is exercisable
immediately, with the passage of time, or subject to any condition), of
voting securities representing 25% or more of the combined voting power
of all outstanding voting securities of the Company;
(ii) during any period of two consecutive years, the individuals
who at the beginning of such period constitute the Board of Directors
cease for any reason to constitute at least a majority of the members
thereof, unless ( 1 ) there are seven or more directors then still in
office who were directors at the beginning of the period, and (2) the
election, or the nomination for election by the Company's stockholders,
of each new director was approved by at least two-thirds of the
directors then still in office who were directors at the beginning of
the period;
(iii) the stockholders of the Company shall approve an agreement
to merge or consolidate the Company with or into another corporation as
a result of which less than 50% of the outstanding voting securities of
the surviving or resulting entity are or are to be owned by the former
shareholders of the Company (excluding from former shareholders, a
shareholder who is or, as a result of the transaction in question,
becomes an "affiliate," as defined in Rule 12b-2 under the Exchange
Act, of any party to such consolidation or merger); or
(iv) the stockholders of the Company shall approve the sale of all
or substantially all of the Company's business and/or assets to a
person or entity which is not a wholly-owned subsidiary of the Company.
10.2. Designation of Beneficiary. Subject to such rules and
regulations as the Committee may prescribe, including the right of the
Committee to limit the types of designations which are acceptable for
purposes of the Plan, each Participant who shall be granted an Option
or Award under the Plan may designate a beneficiary or beneficiaries
and may change such designation from time to time by filing a written
designation of beneficiaries with the Committee on a form to be
prescribed by it, provided that no such designation shall be effective
unless so filed prior to the death of such Participant.
10.3. No Right of Continued Employment. Neither the establishment
of the Plan, the granting of Options, Stock Appreciation Rights or
Awards, nor the payment of any benefits hereunder nor any action of the
Company or of the Board of Directors or of the Committee shall be held
or construed to confer upon any person any legal right to be continued
in the employ of the Company or its subsidiaries, each of which
expressly reserves the right to discharge any employee whenever the
interest of any such company in its sole discretion may so require
without liability to such company, the Board of Directors or the
Committee except as to any rights which may be expressly conferred upon
such employee under the Plan.
10.4. No Segregation of Cash or Shares. The Company shall not be
required to segregate any cash or any shares of Common Stock which may
at any time be represented by Options, Stock Appreciation Rights,
Awards, share credits or dividend equivalent amounts and the Plan shall
constitute an "unfunded" plan of the Company. No employee shall have
voting or other rights with respect to shares of Common Stock prior to
the delivery of such shares. The Company shall not, by any provisions
of the Plan, be deemed to be a trustee of any Common Stock or any other
property, and the liabilities of the Company to any employee pursuant
to the Plan shall be those of a debtor pursuant to such contract
obligations as are created by or pursuant to the Plan, and the rights
of any employee, former employee or beneficiary under the Plan shall be
limited to those of a general creditor of the Company. In its sole
discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the obligations of the Company and each other
Participating Company under the Plan, provided, however, that existence
of such trusts or other arrangements is consistent with the unfunded
status of the Plan.
10.5. Delivery of Shares. No shares shall be delivered pursuant to
any exercise of an Option or Stock Appreciation Right or pursuant to
the payment of any Award until the requirements of such laws and
regulations as may be deemed by the Committee to be applicable thereto
are satisfied.
10.6. Cancellation of Options, Stock Appreciation Rights and
Awards.
(a) Prior to the occurrence of a Change in Control, but not
thereafter, the Committee may, in its sole discretion and with or
without cause, cancel any Option, Stock Appreciation Right or Award in
whole or in part to the extent it has not theretofore been exercised
or, in the case of Awards, become vested. Such cancellation shall be
effective as of the date specified by the Committee.
(b) Notwithstanding subsection (a) above, prior to payment of any
Award, the Committee may, in its sole discretion, in cases involving a
serious breach of conduct by an employee or former employee, or
activity of a former employee in competition with the business of a
Participating Company, cancel any Award, whether or not vested, in
whole or in part. Such cancellation shall be effective as of the date
specified by the Committee. The determination of whether an employee or
former employee has engaged in a serious breach of conduct or activity
in competition with the business of a Participating Company shall be
determined by the Committee in good faith and in its sole discretion.
10.7. Transfer, Leave of Absence, etc. For purposes of the Plan:
(1 ) a transfer of a Participant from a Participating Company to an
affiliated company, (2) a leave of absence, duly authorized in writing
by the Participating Company, for military service or sickness, or for
any other purpose approved by the Participating Company H the period of
such leave does not exceed ninety days, and (3) a leave of absence in
excess of ninety days, duly authorized in writing by the Participating
Company, provided the Participant's right to reemployment is guaranteed
either by a statute or by contract, shall not be deemed a termination
of employment.
10.8. New York Law to Govern. All questions pertaining to the
construction, regulation, validity and effect of the provisions of the
Plan shall be determined in accordance with the laws of the State of
New York.
10.9. Payments and Tax Withholding. The delivery of any shares of
Common Stock and the payment of any amount in respect of a Stock
Appreciation Right or Award shall be of the account of the applicable
Participating Company and any such delivery or payment shall not be
made until the recipient shall have made satisfactory arrangements for
the payment of any applicable withholding taxes.
Article XI
Amendment and Termination
11.1. Amendments, Suspension or Discontinuance. The Board of
Directors may amend, suspend or discontinue the Plan, provided,
however, that the Board of Directors may not, without the prior
approval of the stockholders of the Company, make any amendment for
which stockholder approval is necessary to comply with any applicable
tax or regulatory requirement, including for these purposes any
approval requirement which is a prerequisite for exemptive relief under
Section 16(b) of the Exchange Act, and provided, further, that upon or
following the occurrence of a Change in Control no amendment may
adversely affect the rights of any person in connection with any
Option, Stock Appreciation Right or Award previously granted.
11.2. Termination. No Option, Stock Appreciation Right or Award
shall be granted under the Plan after expiration of ten years from the
date upon which the Plan is approved by vote of the stockholders of the
Company.
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