Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Time Warner Inc. HTML 2.50M
2: EX-3.2 EX-3.2 Time Warner by Laws 25 97K
3: EX-4.10 EX-4.10 Eighth Supp. Indenture Dated 12/9/03 7 28K
7: EX-10.10 EX-10.10 Time Warner Inc. 1988 Rst Stk Plan 10 44K
8: EX-10.15 EX-10.15 Amend & Restat. Time Warner Ann. Bonus 5 27K
9: EX-10.19 EX-10.19 Amend. # 3 to Aol Time Warner Comp Plan 2 15K
10: EX-10.20 EX-10.20 Employ. Agree. 12/18/03 Reg. & Parsons 20 95K
11: EX-10.21 EX-10.21 Confidentiality, Non-Competition/Parsons 8 31K
12: EX-10.22 EX-10.22 Employment Agreement Time Warner/Bewkes 19 100K
13: EX-10.23 EX-10.23 Confidentiality, Non Competition/Bewkes 8 30K
14: EX-10.24 EX-10.24 Employ. Agree. 6/13/01 Reg/Kimmitt 22 82K
15: EX-10.25 EX-10.25 Employment Agreement Time Warner/Pace 16 77K
16: EX-10.35 EX-10.35 $2.0 Billion 5 Yr Revolving Credit Facil 146 473K
17: EX-10.36 EX-10.36 $1.0 Billion 364 Day Revolv. Credit Facil 137 443K
18: EX-10.37 EX-10.37 $500 Million 3-Year Credit Facil 133 419K
4: EX-10.7 EX-10.7 Time Warner Inc 1999 Stock Plan 22 93K
5: EX-10.8 EX-10.8 Time Warner Inc. 1999 Int Employees Plan 10 43K
6: EX-10.9 Ex-10-9 Time Warner Inc. 2003 Stock Incen. Plan 13 65K
19: EX-21 EX-21 Subsidiaries of the Company 3 23K
20: EX-23 EX-23 Consent of Independent Auditors 1 11K
21: EX-31.1 EX-31.1 Section 302 Certification of CEO 2± 13K
22: EX-31.2 EX-31.2 Section 302 Certification of CFO 2± 13K
23: EX-32 EX-32 Section 906 Certification of CEO & CFO 1 10K
EX-10.9 — Ex-10-9 Time Warner Inc. 2003 Stock Incen. Plan
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EXHIBIT 10.9
AS AMENDED THROUGH
NOVEMBER 20, 2003
TIME WARNER INC.
2003 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN
The purpose of the Plan is to aid the Company and its
Affiliates in recruiting and retaining employees, directors, advisors and
consultants and to motivate such employees, directors, advisors and consultants
to exert their best efforts on behalf of the Company and its Affiliates by
providing incentives through the granting of Awards. The Company expects that it
will benefit from the added interest which such employees, directors, advisors
and consultants will have in the welfare of the Company as a result of their
proprietary interest in the Company's success.
2. DEFINITIONS
The following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
(A) "ACT" means The Securities Exchange Act of 1934, as
amended, or any successor thereto.
(B) "AFFILIATE" means any entity that is consolidated
with the Company for financial reporting purposes or
any other entity designated by the Board in which the
Company or an Affiliate has a direct or indirect
equity interest of at least twenty percent (20%),
measured by reference to vote or value.
(C) "AWARD" means an Option, Stock Appreciation Right,
Restricted Stock or Other Stock-Based Award granted
pursuant to the Plan.
(D) "BOARD" means the Board of Directors of the Company.
(E) "CHANGE IN CONTROL" means the occurrence of any of
the following events:
(i) any "Person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Act (other than
the Company or any company owned, directly or
indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership
of stock of the Company) becomes the "Beneficial
Owner" within the meaning of Rule 13d-3 promulgated
under the Act of 30% or more of the combined voting
power of the then outstanding securities of the
Company entitled to vote generally in the election of
directors; excluding, however, any circumstance in
which such beneficial ownership resulted from any
acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company or by
any
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corporation controlling, controlled by, or under
common control with, the Company;
(ii) a change in the composition of the
Board since the Effective Date, such that the
individuals who, as of such date, constituted the
Board (the "INCUMBENT BOARD") cease for any reason to
constitute at least a majority of such Board;
provided that any individual who becomes a director
of the Company subsequent to the Effective Date whose
election, or nomination for election by the Company's
stockholders, was approved by the vote of at least a
majority of the directors then comprising the
Incumbent Board shall be deemed a member of the
Incumbent Board; and provided further, that any
individual who was initially elected as a director of
the Company as a result of an actual or threatened
election contest, as such terms are used in Rule
14a-12 of Regulation 14A promulgated under the Act,
or any other actual or threatened solicitation of
proxies or consents by or on behalf of any person or
Entity other than the Board shall not be deemed a
member of the Incumbent Board;
(iii) a reorganization, recapitalization,
merger or consolidation (a "CORPORATE TRANSACTION")
involving the Company, unless securities representing
60% or more of the combined voting power of the then
outstanding voting securities entitled to vote
generally in the election of directors of the Company
or the corporation resulting from such Corporate
Transaction (or the parent of such corporation) are
held subsequent to such transaction by the person or
persons who were the beneficial holders of the
outstanding voting securities entitled to vote
generally in the election of directors of the Company
immediately prior to such Corporate Transaction, in
substantially the same proportions as their ownership
immediately prior to such Corporate Transaction; or
(iv) the sale, transfer or other disposition
of all or substantially all of the assets of the
Company.
(F) "CODE" means The Internal Revenue Code of 1986, as
amended, or any successor thereto.
(G) "COMMITTEE" means the Compensation and Human
Development Committee of the Board or its successor,
or such other committee of the Board to which the
Board has delegated power to act under or pursuant to
the provisions of the Plan or a subcommittee of the
Compensation and Human Development Committee (or such
other committee) established by the Compensation and
Human Development Committee or such other committee.
(H) "COMPANY" means Time Warner Inc., a Delaware
corporation named AOL Time Warner Inc. prior to
October 16, 2003.
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(I) "EFFECTIVE DATE" means the date the Board approved
the Plan (March 20, 2003).
(J) "EMPLOYMENT" means (i) a Participant's employment if
the Participant is an employee of the Company or any
of its Affiliates, (ii) a Participant's services as a
consultant, if the Participant is a consultant to the
Company or any of its Affiliates and (iii) a
Participant's services as a non-employee director, if
the Participant is a non-employee member of the Board
or the board of directors of an Affiliate; provided
however that unless otherwise determined by the
Committee, a change in a Participant's status from
employee to non-employee (other than a director of
the Company or an Affiliate) shall constitute a
termination of employment hereunder.
(K) "FAIR MARKET VALUE" means, on a given date, (i) if
there should be a public market for the Shares on
such date, the average of the high and low prices of
the Shares on the New York Stock Exchange, or, if the
Shares are not listed or admitted on any national
securities exchange, the average of the per Share
closing bid price and per Share closing asked price
on such date as quoted on the National Association of
Securities Dealers Automated Quotation System (or
such market in which such prices are regularly
quoted)(the "NASDAQ"), or, if no sale of Shares shall
have been reported on the New York Stock Exchange or
quoted on the NASDAQ on such date, then the
immediately preceding date on which sales of the
Shares have been so reported or quoted shall be used,
and (ii) if there should not be a public market for
the Shares on such date, the Fair Market Value shall
be the value established by the Committee in good
faith.
(L) "ISO" means an Option that is also an incentive stock
option granted pursuant to Section 6(e).
(M) "OTHER STOCK-BASED AWARDS" means awards granted
pursuant to Section 9.
(N) "OPTION" means a stock option granted pursuant to
Section 6.
(O) "OPTION PRICE" means the price for which a Share can
be purchased upon exercise of an Option, as
determined pursuant to Section 6(a).
(P) "PARTICIPANT" means an employee, prospective
employee, director, advisor or consultant of the
Company or an Affiliate who is selected by the
Committee to participate in the Plan.
(Q) "PERFORMANCE-BASED AWARDS" means certain Other
Stock-Based Awards granted pursuant to Section 9(b).
(R) "PLAN" means the Time Warner Inc. 2003 Stock
Incentive Plan, as amended from time to time.
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(s) "RESTRICTED STOCK" means any Share granted under
Section 8.
(t) "SHARES" means shares of common stock of the Company,
$.01 par value per share.
(u) "STOCK APPRECIATION RIGHT" means a stock appreciation
right granted pursuant to Section 7.
(v) "SUBSIDIARY" means a subsidiary corporation, as
defined in Section 424(f) of the Code (or any
successor section thereto), of the Company.
3. SHARES SUBJECT TO THE PLAN
The total number of Shares which may be issued under the Plan
is 200,000,000, of which no more than 20% may be issued in the form of
Restricted Stock or Other Stock-Based Awards payable in Shares. The maximum
aggregate number of Shares with respect to which Awards may be granted during a
calendar year, net of any Shares which are subject to Awards (or portions
thereof) which, during such year, terminate or lapse without payment of
consideration, shall be equal to 2% of the number of Shares outstanding on
December 31 of the preceding calendar year. The maximum number of Shares with
respect to which Awards may be granted during a calendar year to any Participant
shall be 2,000,000; provided that the maximum number of Shares that may be
awarded in the form of Restricted Stock or Other Stock-Based Awards payable in
Shares during any calendar year to any Participant shall be 600,000. The Shares
may consist, in whole or in part, of unissued Shares or treasury Shares. The
issuance of Shares or the payment of cash upon the exercise of an Award or in
consideration of the cancellation or termination of an Award shall reduce the
total number of Shares available under the Plan, as applicable. Shares which are
subject to Awards (or portions thereof) which terminate or lapse without the
payment of consideration may be granted again under the Plan.
4. ADMINISTRATION
(a) The Plan shall be administered by the Committee,
which may delegate its duties and powers in whole or
in part to any subcommittee thereof consisting solely
of at least two individuals who are intended to
qualify as "Non-Employee Directors" within the
meaning of Rule 16b-3 under the Act (or any successor
rule thereto) and, to the extent required by Section
162(m) of the Code (or any successor section
thereto), "outside directors" within the meaning
thereof. In addition, the Committee may delegate the
authority to grant Awards under the Plan to any
employee or group of employees of the Company or an
Affiliate; provided, that such grants are consistent
with guidelines established by the Committee from
time to time.
(b) The Committee shall have the full power and authority
to make, and establish the terms and conditions of,
any Award to any person eligible to be a Participant,
consistent with the provisions of the Plan and to
waive any such terms and conditions at any time
(including, without limitation, accelerating or
waiving any vesting conditions). Awards may, in the
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discretion of the Committee, be made under the Plan
in assumption of, or in substitution for, outstanding
awards previously granted by the Company or its
affiliates or a company acquired by the Company or
with which the Company combines. The number of Shares
underlying such substitute awards shall be counted
against the aggregate number of Shares available for
Awards under the Plan.
(c) The Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and
regulations relating to the Plan, and to make any
other determinations that it deems necessary or
desirable for the administration of the Plan, and may
delegate such authority, as it deems appropriate. The
Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan
in the manner and to the extent the Committee deems
necessary or desirable. Any decision of the Committee
in the interpretation and administration of the Plan,
as described herein, shall lie within its sole and
absolute discretion and shall be final, conclusive
and binding on all parties concerned (including, but
not limited to, Participants and their beneficiaries
or successors).
(d) The Committee shall require payment of any amount it
may determine to be necessary to withhold for
federal, state, local or other taxes as a result of
the exercise, grant or vesting of an Award. Unless
the Committee specifies otherwise, the Participant
may elect to pay a portion or all of such withholding
taxes by (a) delivery of Shares or (b) having Shares
withheld by the Company with a Fair Market Value
equal to the minimum statutory withholding rate from
any Shares that would have otherwise been received by
the Participant.
5. LIMITATIONS
(a) No Award may be granted under the Plan after the
fifth anniversary of the meeting of shareholders of
the Company at which the Plan is approved (which
meeting was held on May 16, 2003), but Awards granted
prior to such fifth anniversary may extend beyond
that date.
(b) No Option or Stock Appreciation Right, once granted
hereunder, may be repriced.
(c) With respect to any Awards granted to a Participant
who is a non-employee member of the Board at the time
of grant, such Awards shall be made pursuant to
formulas established by the Board in advance of such
grant. Any such Awards shall be made at the time such
a Participant first becomes a member of the Board
and, thereafter, on an annual basis at or following
the annual meeting of stockholders. Such formulas may
include any one or more of the following: (i) a fixed
number of Options or Stock Appreciation Rights, (ii)
a fixed number of Shares of Restricted Stock or a
number of Shares of Restricted Stock determined by
reference to a fixed dollar amount (calculated based
on the Fair Market Value of a Share on
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the date of grant), and (iii) Other Stock-Based
Awards determined either by reference to a fixed
number of Shares or to a fixed dollar amount
(calculated based on the Fair Market Value of a Share
on the date of grant).
6. TERMS AND CONDITIONS OF OPTIONS
Options granted under the Plan shall be, as determined by the
Committee, nonqualified or incentive stock options for federal income tax
purposes, as evidenced by the related Award agreements, and shall be subject to
the foregoing and the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine, and as
evidenced by the related Award agreement:
(a) Option Price. The Option Price per Share shall be
determined by the Committee, but shall not be less
than 100% of the Fair Market Value of a Share on the
date an Option is granted.
(b) Exercisability. Options granted under the Plan shall
be exercisable at such time and upon such terms and
conditions as may be determined by the Committee, but
in no event shall an Option be exercisable more than
ten years after the date it is granted, except as may
be provided pursuant to Section 15.
(c) Exercise of Options. Except as otherwise provided in
the Plan or in an Award agreement, an Option may be
exercised for all, or from time to time any part, of
the Shares for which it is then exercisable. For
purposes of this Section 6, the exercise date of an
Option shall be the date a notice of exercise is
received by the Company, together with provision for
payment of the full purchase price in accordance with
this Section 6(c). The purchase price for the Shares
as to which an Option is exercised shall be paid to
the Company, as designated by the Committee, pursuant
to one or more of the following methods: (i) in cash
or its equivalent (e.g., by check); (ii) in Shares
having a Fair Market Value equal to the aggregate
Option Price for the Shares being purchased and
satisfying such other requirements as may be imposed
by the Committee; provided, that such Shares have
been held by the Participant for no less than six
months (or such other period as established from time
to time by the Committee in order to avoid adverse
accounting treatment applying generally accepted
accounting principles); (iii) partly in cash and
partly in such Shares or (iv) if there is a public
market for the Shares at such time, through the
delivery of irrevocable instructions to a broker to
sell Shares obtained upon the exercise of the Option
and to deliver promptly to the Company an amount out
of the proceeds of such Sale equal to the aggregate
Option Price for the Shares being purchased. No
Participant shall have any rights to dividends or
other rights of a stockholder with respect to Shares
subject to an Option until the Participant has given
written notice of exercise of the Option, paid in
full for such Shares and, if applicable, has
satisfied any other conditions imposed by the
Committee pursuant to the Plan.
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(d) Deferral. In the sole discretion of the Committee, in
accordance with procedures established by the
Committee, the Participant may be permitted to defer
the issuance of Shares deliverable upon the exercise
of an Option for a specified period or until a
specified date.
(e) ISOs. The Committee may grant Options under the Plan
that are intended to be ISOs. Such ISOs shall comply
with the requirements of Section 422 of the Code (or
any successor section thereto). No ISO may be granted
to any Participant who at the time of such grant,
owns more than ten percent of the total combined
voting power of all classes of stock of the Company
or of any Subsidiary, unless (i) the Option Price for
such ISO is at least 110% of the Fair Market Value of
a Share on the date the ISO is granted and (ii) the
date on which such ISO terminates is a date not later
than the day preceding the fifth anniversary of the
date on which the ISO is granted. Any Participant who
disposes of Shares acquired upon the exercise of an
ISO either (i) within two years after the date of
grant of such ISO or (ii) within one year after the
transfer of such Shares to the Participant, shall
notify the Company of such disposition and of the
amount realized upon such disposition. All Options
granted under the Plan are intended to be
nonqualified stock options, unless the applicable
Award agreement expressly states that the Option is
intended to be an ISO. If an Option is intended to be
an ISO, and if for any reason such Option (or portion
thereof) shall not qualify as an ISO, then, to the
extent of such nonqualification, such Option (or
portion thereof) shall be regarded as a nonqualified
stock option granted under the Plan; provided that
such Option (or portion thereof) otherwise complies
with the Plan's requirements relating to nonqualified
stock options. In no event shall any member of the
Committee, the Company or any of its Affiliates (or
their respective employees, officers or directors)
have any liability to any Participant (or any other
person) due to the failure of an Option to qualify
for any reason as an ISO.
(f) Attestation. Wherever in this Plan or any agreement
evidencing an Award a Participant is permitted to pay
the exercise price of an Option or taxes relating to
the exercise of an Option by delivering Shares, the
Participant may, subject to procedures satisfactory
to the Committee, satisfy such delivery requirement
by presenting proof of beneficial ownership of such
Shares, in which case the Company shall treat the
Option as exercised without further payment and/or
shall withhold such number of Shares from the Shares
acquired by the exercise of the Option, as
appropriate.
7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
(a) Grants. The Committee may grant (i) a Stock
Appreciation Right independent of an Option or (ii) a
Stock Appreciation Right in connection with an
Option, or a portion thereof. A Stock Appreciation
Right granted pursuant to clause (ii) of the
preceding sentence (A) may be granted at the time the
related Option is granted or at any time prior to the
exercise or
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cancellation of the related Option, (B) shall cover
the same number of Shares covered by an Option (or
such lesser number of Shares as the Committee may
determine) and (C) shall be subject to the same terms
and conditions as such Option except for such
additional limitations as are contemplated by this
Section 7 (or such additional limitations as may be
included in an Award agreement).
(b) Terms. The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by
the Committee but in no event shall such amount be
less than the Fair Market Value of a Share on the
date the Stock Appreciation Right is granted;
provided, however, that notwithstanding the foregoing
in the case of a Stock Appreciation Right granted in
conjunction with an Option, or a portion thereof, the
exercise price may not be less than the Option Price
of the related Option. Each Stock Appreciation Right
granted independent of an Option shall entitle a
Participant upon exercise to an amount equal to (i)
the excess of (A) the Fair Market Value on the
exercise date of one Share over (B) the exercise
price per Share, times (ii) the number of Shares
covered by the Stock Appreciation Right. Each Stock
Appreciation Right granted in conjunction with an
Option, or a portion thereof, shall entitle a
Participant to surrender to the Company the
unexercised Option, or any portion thereof, and to
receive from the Company in exchange therefor an
amount equal to (i) the excess of (A) the Fair Market
Value on the exercise date of one Share over (B) the
Option Price per Share, times (ii) the number of
Shares covered by the Option, or portion thereof,
which is surrendered. Payment shall be made in Shares
or in cash, or partly in Shares and partly in cash
(any such Shares valued at such Fair Market Value),
all as shall be determined by the Committee. Stock
Appreciation Rights may be exercised from time to
time upon actual receipt by the Company of written
notice of exercise stating the number of Shares with
respect to which the Stock Appreciation Right is
being exercised. The date a notice of exercise is
received by the Company shall be the exercise date.
No fractional Shares will be issued in payment for
Stock Appreciation Rights, but instead cash will be
paid for a fraction or, if the Committee should so
determine, the number of Shares will be rounded
downward to the next whole Share.
(c) Limitations. The Committee may impose, in its
discretion, such conditions upon the exercisability
or transferability of Stock Appreciation Rights as it
may deem fit.
8. RESTRICTED STOCK
(a) Grant. Subject to the provisions of the Plan, the
Committee shall determine the number of Shares of
Restricted Stock to be granted to each Participant,
the duration of the period during which, and the
conditions, if any, under which, the Restricted Stock
may be forfeited to the Company, and the other terms
and conditions of such Awards; provided that not less
9
than 95% of the Shares of Restricted Stock shall
remain subject to forfeiture for at least three years
after the date of grant, subject to earlier
termination of such potential for forfeiture in whole
or in part in the event of a Change in Control or the
death, disability or other termination of the
Participant's employment.
(b) Transfer Restrictions. Shares of Restricted Stock may
not be sold, assigned, transferred, pledged or
otherwise encumbered, except as provided in the Plan
or the applicable Award agreement. Certificates, or
other evidence of ownership, issued in respect of
Shares of Restricted Stock shall be registered in the
name of the Participant and deposited by such
Participant, together with a stock power endorsed in
blank, with the Company. After the lapse of the
restrictions applicable to such Shares of Restricted
Stock, the Company shall deliver such certificates,
or other evidence of ownership, to the Participant or
the Participant's legal representative.
(c) Dividends. Dividends paid on any Shares of Restricted
Stock may be paid directly to the Participant,
withheld by the Company subject to vesting of the
Restricted Shares pursuant to the terms of the
applicable Award agreement, or may be reinvested in
additional Shares of Restricted Stock, as determined
by the Committee in its sole discretion.
(d) Performance-Based Grants. Notwithstanding anything to
the contrary herein, certain Shares of Restricted
Stock granted under this Section 8 may, at the
discretion of the Committee, be granted in a manner
which is intended to be deductible by the Company
under Section 162(m) of the Code (or any successor
section thereto). The restrictions applicable to such
Restricted Stock shall lapse based wholly or
partially on the attainment of written performance
goals approved by the Committee for a performance
period established by the Committee (i) while the
outcome for that performance period is substantially
uncertain and (ii) no more than 90 days after the
commencement of the performance period to which the
performance goal relates or, if less, the number of
days which is equal to 25 percent of the relevant
performance period. The performance goals, which must
be objective, shall be based upon one or more of the
criteria set forth in Section 9(b) below. The
Committee shall determine in its discretion whether,
with respect to a performance period, the applicable
performance goals have been met with respect to a
given Participant and, if they have, shall so certify
prior to the release of the restrictions on the
Shares.
9. OTHER STOCK-BASED AWARDS
(a) Generally. The Committee, in its sole discretion, may
grant or sell Awards of Shares and Awards that are
valued in whole or in part by reference to, or are
otherwise based on the Fair Market Value of, Shares
("Other Stock-Based Awards"). Such Other Stock-Based
Awards shall be
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in such form, and dependent on such conditions, as
the Committee shall determine, including, without
limitation, the right to receive, or vest with
respect to, one or more Shares (or the equivalent
cash value of such Shares) upon the completion of a
specified period of service, the occurrence of an
event and/or the attainment of performance
objectives. Other Stock-Based Awards may be granted
alone or in addition to any other Awards granted
under the Plan. Subject to the provisions of the
Plan, the Committee shall determine the number of
Shares to be awarded to a Participant under (or
otherwise related to) such Other Stock-Based Awards;
whether such Other Stock-Based Awards shall be
settled in cash, Shares or a combination of cash and
Shares; and all other terms and conditions of such
Awards (including, without limitation, the vesting
provisions thereof and provisions ensuring that all
Shares so awarded and issued shall be fully paid and
non-assessable). The maximum amount of Other
Stock-Based Awards that may be granted during a
calendar year to any Participant shall be: (x) with
respect to Other Stock-Based Awards that are
denominated or payable in Shares, 600,000 Shares and
(y) with respect to Other Stock-Based Awards that are
not denominated or payable in Shares, $10 million.
Notwithstanding any other provision, with respect to
(i) Other Stock-Based Awards settled in Shares that
are subject to time-based vesting, not less than 95%
of such Other Stock Based Awards payable in Shares
shall vest and become payable at least three years
after the date of grant, subject to earlier vesting
in whole or in part in the event of a Change in
Control or the death, disability or other termination
of the Participant's employment, and (ii) Other
Stock-Based Awards settled in Shares that are subject
to vesting upon the attainment of performance
objectives, the minimum performance period shall be
one year.
(b) Performance-Based Awards. Notwithstanding anything to
the contrary herein, certain Other Stock-Based Awards
granted under this Section 9 may be granted in a
manner which is intended to be deductible by the
Company under Section 162(m) of the Code (or any
successor section thereto) ("Performance-Based
Awards"). A Participant's Performance-Based Award
shall be determined based on the attainment of
written performance goals approved by the Committee
for a performance period of not less than one year
established by the Committee (i) while the outcome
for that performance period is substantially
uncertain and (ii) no more than 90 days after the
commencement of the performance period to which the
performance goal relates or, if less, the number of
days which is equal to 25 percent of the relevant
performance period. The performance goals, which must
be objective, shall be based upon one or more of the
following criteria: (i) consolidated earnings before
or after taxes (including earnings before interest,
taxes, depreciation and amortization); (ii) net
income; (iii) operating income; (iv) earnings per
Share; (v) book value per Share; (vi) return on
shareholders' equity; (vii) expense management;
(viii) return on investment; (ix) improvements in
capital structure; (x) profitability of an
identifiable business unit or product; (xi)
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maintenance or improvement of profit margins; (xii)
stock price; (xiii) market share; (xiv) revenues or
sales; (xv) costs; (xvi) cash flow; (xvii) working
capital and (xviii) return on assets. The foregoing
criteria may relate to the Company, one or more of
its Affiliates or one or more of its or their
divisions or units, or any combination of the
foregoing, and may be applied on an absolute basis
and/or be relative to one or more peer group
companies or indices, or any combination thereof, all
as the Committee shall determine. In addition, to the
degree consistent with Section 162(m) of the Code (or
any successor section thereto), the performance goals
may be calculated without regard to extraordinary
items. The Committee shall determine whether, with
respect to a performance period, the applicable
performance goals have been met with respect to a
given Participant and, if they have, shall so certify
and ascertain the amount of the applicable
Performance-Based Award. No Performance-Based Awards
will be paid for such performance period until such
certification is made by the Committee. The amount of
the Performance-Based Award actually paid to a given
Participant may be less than the amount determined by
the applicable performance goal formula, at the
discretion of the Committee. The amount of the
Performance-Based Award determined by the Committee
for a performance period shall be paid to the
Participant at such time as determined by the
Committee in its sole discretion after the end of
such performance period; provided, however, that a
Participant may, if and to the extent permitted by
the Committee and consistent with the provisions of
Section 162(m) of the Code, elect to defer payment of
a Performance-Based Award.
10. ADJUSTMENTS UPON CERTAIN EVENTS
Notwithstanding any other provisions in the Plan to the
contrary, the following provisions shall apply to all Awards granted under the
Plan:
(a) Generally. In the event of any change in the
outstanding Shares after the Effective Date by reason
of any Share dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off,
combination, combination or transaction or exchange
of Shares or other corporate exchange, or any
distribution to shareholders of Shares other than
regular cash dividends or any transaction similar to
the foregoing, the Committee in its sole discretion
and without liability to any person may make such
substitution or adjustment, if any, as it deems to be
equitable, as to (i) the number or kind of Shares or
other securities issued or reserved for issuance
pursuant to the Plan or pursuant to outstanding
Awards, (ii) the maximum number of Shares for which
Awards (including limits established for Restricted
Stock or Other Stock-Based Awards) may be granted
during a calendar year to any Participant, (iii) the
Option Price or exercise price of any Stock
Appreciation Right and/or (iv) any other affected
terms of such Awards.
12
(b) Change in Control. In the event of a Change in
Control after the Effective Date, the Committee may,
but shall not be obligated to, (A) accelerate, vest
or cause the restrictions to lapse with respect to,
all or any portion of an Award or (B) cancel Awards
for fair value (as determined in the sole discretion
of the Committee) which, in the case of Options and
Stock Appreciation Rights, may equal the excess, if
any, of value of the consideration to be paid in the
Change in Control transaction to holders of the same
number of Shares subject to such Options or Stock
Appreciation Rights (or, if no consideration is paid
in any such transaction, the Fair Market Value of the
Shares subject to such Options or Stock Appreciation
Rights) over the aggregate exercise price of such
Options or Stock Appreciation Rights or (C) provide
for the issuance of substitute Awards that will
substantially preserve the otherwise applicable terms
of any affected Awards previously granted hereunder
as determined by the Committee in its sole discretion
or (D) provide that for a period of at least 30 days
prior to the Change in Control, such Options shall be
exercisable as to all shares subject thereto and that
upon the occurrence of the Change in Control, such
Options shall terminate and be of no further force
and effect.
11. NO RIGHT TO EMPLOYMENT OR AWARDS
The granting of an Award under the Plan shall impose no
obligation on the Company or any Affiliate to continue the Employment of a
Participant and shall not lessen or affect the Company's or Subsidiary's right
to terminate the Employment of such Participant. No Participant or other person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Participants, or holders of Awards. The terms and
conditions of Awards and the Committee's determinations and interpretations with
respect thereto need not be the same with respect to each Participant (whether
or not such Participants are similarly situated).
12. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of the
Company and a Participant, including without limitation, the estate of such
Participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the Participant's
creditors.
13. NONTRANSFERABILITY OF AWARDS
Unless otherwise determined by the Committee, an Award shall
not be transferable or assignable by the Participant otherwise than by will or
by the laws of descent and distribution. An Award exercisable after the death of
a Participant may be exercised by the legatees, personal representatives or
distributees of the Participant.
13
14. AMENDMENTS OR TERMINATION
The Board or the Committee may amend, alter or discontinue the
Plan, but no amendment, alteration or discontinuation shall be made, (a) without
the approval of the shareholders of the Company, if such action would (except as
is provided in Section 10 of the Plan), increase the total number of Shares
reserved for the purposes of the Plan or increase the maximum number of Shares
of Restricted Stock or Other Stock-Based Awards that may be awarded hereunder,
or the maximum number of Shares for which Awards may be granted to any
Participant, (b) without the consent of a Participant, if such action would
diminish any of the rights of the Participant under any Award theretofore
granted to such Participant under the Plan or (c) to Section 5(b), relating to
repricing of Options or Stock Appreciation Rights, to permit such repricing;
provided, however, that the Committee may amend the Plan in such manner as it
deems necessary to permit the granting of Awards meeting the requirements of the
Code or other applicable laws.
15. INTERNATIONAL PARTICIPANTS
With respect to Participants who reside or work outside the
United States of America and who are not (and who are not expected to be)
"covered employees" within the meaning of Section 162(m) of the Code, the
Committee may, in its sole discretion, amend the terms of the Plan or Awards
with respect to such Participants in order to conform such terms with the
requirements of local law or to obtain more favorable tax or other treatment for
a Participant, the Company or an Affiliate.
16. OTHER BENEFIT PLANS
All Awards shall constitute a special incentive payment to the
Participant and shall not be taken into account in computing the amount of
salary or compensation of the Participant for the purpose of determining any
benefits under any pension, retirement, profit-sharing, bonus, life insurance or
other benefit plan of the Company or under any agreement between the Company and
the Participant, unless such plan or agreement specifically provides otherwise.
17. CHOICE OF LAW
The Plan shall be governed by and construed in accordance with
the laws of the State of New York without regard to conflicts of laws, and
except as otherwise provided in the pertinent Award agreement, any and all
disputes between a Participant and the Company or any Affiliate relating to an
Award shall be brought only in a state or federal court of competent
jurisdiction sitting in Manhattan, New York.
18. EFFECTIVENESS OF THE PLAN
The Plan shall be effective as of the Effective Date, subject
to the approval of the shareholders of the Company.
Dates Referenced Herein and Documents Incorporated by Reference
8 Subsequent Filings that Reference this Filing
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