Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Form 10-K for Fiscal Year End December 31, 1998 73 391K
2: EX-3.2 Bylaws of Amr, Amended November 18, 1998 23 57K
4: EX-10.15 Deferred Compensation Agreement - Edward Brennan 3 16K
5: EX-10.19 Deferred Compensation Agreement - Armando Codina 2 14K
6: EX-10.23 Deferred Compensation Agreement - Charles Fisher 2 15K
7: EX-10.27 Deferred Compensation Agreement - Charles Pistor 2 15K
3: EX-10.3 Compensation & Benefit Agreement 9 38K
8: EX-10.30 Deferred Compensation Agreement - Judith Rodin 2 14K
9: EX-10.34 1998 Long-Term Incentive Plan 19 77K
10: EX-10.37 Current Form of Stock Option Agreement 5 23K
11: EX-10.41 Current Form of Career Equity Program 8 29K
12: EX-10.42 Current Form of Career Equity Program-Non Officers 5 24K
13: EX-10.42(A) Current Form of Career Equity Program-Sr. 8 30K
Officers
14: EX-10.50 Performance Share Program for the Years 1999-2001 4 23K
15: EX-10.52 Amr Corporation 1987 Executive Deferral Plan 12 39K
16: EX-10.56 1999 Employee Profit Sharing Plan 5 22K
17: EX-10.60 American Airlines, Inc. 1999 Incentive Comp. Plan 6 26K
18: EX-10.61 Termination Benefits Agreement - Gerard J. Arpey 29 85K
19: EX-10.62 Termination Benefits Agreement - Robert W. Baker 29 85K
20: EX-10.63 Termination Benefits Agreement - Peter M. Bowler 29 85K
21: EX-10.64 Termination Benefits Agreement - Donald J. Carty 29 84K
22: EX-10.65 Termination Benefits Agreement - Peter J. Dolara 29 85K
23: EX-10.66 Termination Benefits Agreement - Daniel P. Garton 29 85K
24: EX-10.67 Termination Benefits Agreement - Michael W. Gunn 29 84K
25: EX-10.68 Termination Benefits Agreement - Thomas J. Kiernan 29 85K
26: EX-10.69 Termination Benefits Agreement - David L. Kruse 29 85K
27: EX-10.70 Termination Benefits Agreement - Charles Marlett 29 85K
28: EX-10.71 Termination Benefits Agreement - Anne McNamara 29 85K
29: EX-10.76 Aircraft Purchase Agreement 44 93K
30: EX-12 Computation of Ratio of Earnings to Fixed Charges 1 11K
31: EX-21 Subsidiaries of the Registrant 3 25K
32: EX-23 Consent of Independent Auditors 1 12K
33: EX-27.1 Financial Data Schedule 1 12K
34: EX-27.2 Restated Financial Data Schedule 1 12K
35: EX-27.3 Restated Financial Data Schedule 1 12K
EX-10.34 — 1998 Long-Term Incentive Plan
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EXHIBIT 10.34
AMR CORPORATION
1998 LONG TERM INCENTIVE PLAN, AS AMENDED
SECTION 1. Purpose, Definitions.
The purpose of the AMR Corporation 1998 Long Term Incentive Plan, as
amended (the "Plan") is to enable AMR Corporation (the "Company") to attract,
retain and reward key employees of the Company and its Subsidiaries and
Affiliates, and strengthen the mutuality of interests between such key
employees and the Company's shareholders, by offering such key employees
performance- based stock incentives and/or other equity interests or
equity-based incentives in the Company, as well as performance-based incentives
payable in cash.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board as a participating employer under
the Plan, provided that the Company directly or indirectly owns at least twenty
percent (20%) of the combined voting power of all classes of stock of such
entity or at least twenty percent (20%) of the ownership interests in such
entity.
(b) "Board" means the Board of Directors of the Company.
(c) "Book Value" means, as of any given date, on a per share basis (i)
the Stockholders' Equity in the Company as of the end of the immediately
preceding fiscal year as reflected in the Company's audited consolidated
balance sheet, subject to such adjustments as the Committee shall specify,
divided by (ii) the number of then outstanding shares of Stock as of such
year-end date (as adjusted by the Committee for subsequent events).
(d) "Cause" means a felony conviction of a participant or the failure
of a participant to contest prosecution for a felony, or a participant's
willful misconduct or dishonesty, any of which is directly and materially
harmful to the business or reputation of the Company or any Subsidiary or
Affiliate.
(e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(f) "Committee" means the Committee referred to in Section 2 of the
Plan. If at any time no Committee shall be in office, then the functions of the
Committee specified in the Plan shall be exercised by the Board.
(g) "Company" means AMR Corporation, a corporation organized under the
laws of the State of Delaware, or any successor corporation.
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(h) "Deferred Stock" means the right to receive Stock at the end of a
specified deferral period pursuant to Section 8.
(i) "Disability" means disability as determined under procedures
established by the Committee for purposes of this Plan.
(j) "Early Retirement" means retirement, with the express consent for
purposes of this Plan of the Company at or before the time of such retirement,
from active employment with the Company and any Subsidiary or Affiliate.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
(l) "Fair Market Value" means, as of any given date, unless otherwise
determined by the Committee in good faith, the mean between the highest and
lowest quoted selling price, regular way, of the Stock on the New York Stock
Exchange or, if no such sale of Stock occurs on the New York Stock Exchange on
such date, the fair market value of the Stock as determined by the Committee in
good faith.
(m) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422 of
the Code.
(n) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(o) "Normal Retirement" means retirement from active employment with
the Company and any Subsidiary or Affiliate pursuant to the applicable
retirement provisions of the applicable pension plan of such entity.
(p) "Other Stock Based Award" means an award under Section 10 below
that is valued in whole or in part by reference to, or is otherwise based on,
Stock.
(q) "Performance Related Awards" means an award made pursuant to
Section 11 of Restricted Stock or Deferred Stock or Other Stock Based Awards
upon the determination by the Committee that performance objectives established
by the Committee have been attained, in whole or in part.
(r) "Plan" means this AMR Corporation 1998 Long Term Incentive Plan,
as it may be amended from time to time.
(s) "Restricted Stock" means shares of Stock that are subject to
restrictions under Section 7 below.
(t) "Retirement" means Normal or Early Retirement.
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(u) "Stock" means the Common Stock, $1.00 par value per share, of the
Company.
(v) "Stock Appreciation Right" means the right pursuant to an award
granted under Section 6 below to surrender to the Company all (or a portion) of
a Stock Option in exchange for an amount equal to the difference between: (i)
the Fair Market Value, as of the date such Stock Option (or such portion
thereof) is surrendered, of the shares of Stock covered by such Stock Option
(or such portion thereof), subject, where applicable, to the pricing provisions
in Section 6(b)(ii); and (ii) the aggregate exercise price of such Stock Option
(or such portion thereof).
(w) "Stock Option" or "Option" means any option to purchase shares of
Stock (including Restricted Stock and Deferred Stock, if the Committee so
determines) granted pursuant to Section 5 below.
(x) "Stock Purchase Right" means the right to purchase Stock pursuant
to Section 9.
(y) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.
In addition, the terms "LTIP Awards," "Performance Criteria", "Change
in Control," "Potential Change in Control" and "Change in Control Price" shall
have the meanings set forth, respectively, in Sections 2, 11(a), 12(b), (c) and
(d) below.
SECTION 2. Administration.
The Plan shall be administered by a committee of not less than two
members of the Board, who shall be appointed by, and serve at the pleasure of,
the Board. In selecting the members of the Committee, the Board shall take into
account the requirements for the members of the Committee to be treated as
"Outside Directors" within the meaning of Section 162(m) of the Code and
"Non-Employee Directors" for purposes of Rule 16b-3, as promulgated under
Section 16 of the Exchange Act. The functions of the Committee specified in the
Plan shall be exercised by the Board, if and to the extent that no Committee
exists which has the authority to so administer the Plan, or to the extent that
the Committee is not comprised solely of Non-Employee Directors for purposes of
Rule 16b-3, as promulgated under Section 16 of the Exchange Act.
The Committee shall have full authority to grant, pursuant to the
terms of the Plan, to officers and other key employees eligible under Section
4: (i) Stock Options and Incentive Stock Options; (ii) Stock Appreciation
Rights; (iii) Restricted Stock; (iv) Deferred Stock; (v) Stock Purchase Rights;
(vi) Other Stock Based Awards; and/or (vii) Performance Related Awards
(collectively, the "LTIP Awards").
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In particular the Committee shall have the authority:
(a) to select the officers and other key employees of the
Company and its Subsidiaries and Affiliates to whom LTIP Awards may
from time to time be granted hereunder;
(b) to determine whether and to what extent LTIP Awards, or
any combination thereof, are to be granted hereunder to one or more
eligible employees;
(c) subject to the provisions of Sections 3, 5 and 11, to
determine the number of shares to be covered by each such award
granted hereunder;
(d) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including,
but not limited to, the share price and any restriction or limitation,
or any vesting acceleration or waiver of forfeiture restrictions
regarding any Stock Option or other award and/or the shares of Stock
relating thereto, based in each case on such factors as the Committee
shall determine in its sole discretion);
(e) to determine whether, to what extent and under what
circumstances a Stock Option may be settled in cash, Restricted Stock
and/or Deferred Stock under Section 5(k) or 5(1), as applicable,
instead of Stock;
(f) to determine whether, to what extent and under what
circumstances an award of Restricted Stock or Deferred Stock may be
settled in cash;
(g) to determine whether, to what extent and under what
circumstances Option grants and/or other awards under the Plan and/or
other cash awards made by the Company are to be made, and operate, on
a tandem basis vis-a-vis other awards under the Plan and/or cash
awards made outside of the Plan, or on an additive basis;
(h) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an award
under this Plan shall be deferred either automatically or at the
election of the participant (including providing for and determining
the amount (if any) of any deemed earnings on any deferred amount
during any deferral period);
(i) to determine the terms and restrictions applicable to
Stock Purchase Rights and the Stock purchased by exercising such
Rights;
(j) with respect to an award of Restricted Stock, to
determine whether the right to vote will be granted with such award
and/or whether any dividends declared with respect to such award will
be paid in cash, additional Restricted Stock, Deferred Stock, Other
Stock Based Awards, or not at all;
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(k) with respect to an award of Deferred Stock, to determine
whether any dividends declared with respect to such award will be paid
in cash, Restricted Stock, additional Deferred Stock, Other Stock
Based Awards, or not at all; and
(l) to determine the terms and conditions pursuant to which
an LTIP Award may vest on a pro rata basis or be terminated.
The Committee shall have the authority: to adopt, alter and repeal
such rules, guidelines and practices governing the Plan as it shall, from time
to time, deem advisable; to interpret the terms and provisions of the Plan and
any award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be made in the Committee's sole discretion and shall be final and
binding on all persons, including the Company and Plan participants.
SECTION 3. Stock Subject to Plan.
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 5,000,000 shares, plus any shares
remaining available for issuance under the 1988 Long Term Incentive Plan, as
amended, as of the Effective Date hereof. Such shares may consist, in whole or
in part, of authorized and unissued shares or treasury shares.
Subject to Section 6(b)(iv) below, if any shares of Stock that have
been optioned cease to be subject to a Stock Option, or if any such shares of
Stock that are subject to any Restricted Stock or Deferred Stock award, Stock
Purchase Right, Other Stock Based Award or Performance Related Award granted
hereunder or granted under the 1988 Long Term Incentive Plan, as amended, are
forfeited or any such award otherwise terminates without a payment being made
to the participant in the form of Stock or cash equivalent value, such shares
shall again be available for distribution in connection with future awards
under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split or other change in corporate
structure affecting the Stock, such substitution or adjustment shall be made in
the aggregate number of shares reserved for issuance under the Plan, in the
number and option price of shares subject to outstanding Options granted under
the Plan, in the number and purchase price of shares subject to outstanding
Stock Purchase Rights under the Plan, and in the number of shares subject to
other outstanding awards granted under the Plan as may be determined to be
appropriate by the Committee, in its sole discretion, provided that the number
of shares subject to any award shall always be a whole number. Such adjusted
option price shall also be used to determine the amount payable by the Company
upon the exercise of any Stock Appreciation Right associated with any Stock
Option.
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SECTION 4. Eligibility.
Officers and other key employees of the Company and its Subsidiaries
and Affiliates (but excluding members of the Committee and any person who
serves only as a director) who are responsible for, or contribute to, the
management, growth and/or profitability of the business of the Company and/or
its Subsidiaries and Affiliates are eligible for awards under the Plan.
SECTION 5. Stock Options.
Stock Options may be granted alone, in addition to, or in tandem with,
other awards granted under the Plan. Any Stock Option granted under the Plan
shall be in such form as the Committee may from time to time approve.
Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options; and (ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant to any optionee
Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock
Options (in each case with or without Stock Appreciation Rights); provided
that, in no event shall the number of shares of Stock subject to any Stock
Options granted to any employee during any calendar year exceed 250,000 shares,
as such number may be adjusted pursuant to Section 3.
Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a) Option Price. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of grant;
provided, that such option price may not be less than the Fair Market Value of
the Stock on the date the Stock Option is granted.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten (10) years
after the date the Option is granted.
(c) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee; provided, however, that except as determined by the Committee, no
Stock Option shall be exercisable prior to the first anniversary date of the
granting of the Option. If the Committee provides, in its sole discretion, that
any Stock Option is exercisable only in installments, the Committee may waive
such installment exercise provisions at any time in whole or in part, based on
such factors as the Committee shall determine, in its sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise
provisions apply under Section 5(c) and subject to whatever restrictions may be
imposed by the Company, Stock Options may be exercised in whole or in part at
any time during the option period, by giving written notice of exercise to the
Company specifying the number of shares to be purchased.
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Such notice shall be accompanied by payment in full of the purchase
price. Without limiting the generality of the foregoing, payment of the option
price may be made: (i) in cash or its equivalent; (ii) by exchanging shares of
Stock owned by the optionee (which are not the subject of any pledge or other
security interest), including in the case of a Non-Qualified Stock Option,
Restricted Stock or Deferred Stock subject to an award hereunder (or an award
under the terms of the 1988 Long Term Incentive Plan, as amended); (iii)
through an arrangement with a broker approved by the Company whereby payment of
the exercise price is accomplished with the proceeds of the sale of Stock; or
(iv) by any combination of the foregoing, provided that the combined value of
all cash and cash equivalents paid and the Fair Market Value of any such Stock
so tendered to the Company, valued as of the date of such tender, is at least
equal to such option price.
If payment of the option exercise price of a Non-Qualified Stock
Option is made in whole or in part in the form of Restricted Stock or Deferred
Stock, such Restricted Stock or Deferred Stock (and any replacement shares
relating thereto) shall remain (or be) restricted or deferred, as the case may
be, in accordance with the original terms of the Restricted Stock award or
Deferred Stock award in question, and any additional Stock received upon the
exercise shall be subject to the same forfeiture restrictions or deferral
limitations, unless otherwise determined by the Committee, in its sole
discretion.
No shares of Stock shall be issued upon exercise of a stock option
until full payment therefor has been made. An optionee shall generally have the
rights to dividends or other rights of a shareholder with respect to shares
subject to the Option when the optionee has given written notice of exercise,
has paid in full for such shares, and, if requested, has given the
representation described in Section 15(a).
(e) Transferability of Options. Unless the Committee shall permit (on
such terms and conditions as it shall establish) an Option to be transferred to
a member of the participant's immediate family or to a trust or similar vehicle
for the benefit of such immediate family members, no Option shall be assignable
or transferable except by will or the laws of descent and distribution, and
except to the extent required by law, no right or interest of any participant
shall be subject to any lien, obligation or liability of the participant.
(f) Termination by Death. Subject to Section 5(j), if an optionee's
employment by the Company and any Subsidiary or Affiliate terminates by reason
of death, any Stock Option held by such optionee may thereafter be exercised in
accordance with the terms and conditions established by the Committee.
(g) Termination by Reason of Disability. Subject to Section 5(j), if
an optionee's employment by the Company and any Subsidiary or Affiliate
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee in accordance with the terms and
conditions established by the Committee. In the event of termination of
employment by reason of Disability, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, such Stock Option will thereafter be treated as a
Non-Qualified Stock Option.
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(h) Termination by Reason of Retirement. Subject to Section 5(j), if
an optionee's employment by the Company and any Subsidiary or Affiliate
terminates by reason of Normal or Early Retirement, any Stock Option held by
such optionee may thereafter be exercised by the optionee in accordance with
the terms and conditions established by the Committee. In the event of
termination of employment by reason of Retirement, if an Incentive Stock Option
is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
(i) Other Termination. Unless otherwise determined by the Committee,
if an optionee's employment by the Company or any Subsidiary or Affiliate
terminates for any reason other than death, Disability or Normal or Early
Retirement, the Stock Option shall thereupon terminate.
(j) Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify the Plan under
Section 422 of the Code, or, without the consent of the optionee(s) affected,
to disqualify any Incentive Stock Option under such Section 422.
(k) Buyout Provisions. The Committee may at any time offer to buy out
for a payment in cash, Stock, Deferred Stock or Restricted Stock, an option
previously granted hereunder, based on such terms and conditions as the
Committee shall establish and communicate to the participant at the time that
such offer is made.
(l) Settlement Provisions. If the option agreement so provides at
grant or is amended after grant, and prior to the exercise, to so provide (with
the optionee's consent), the Committee may require that all or part of the
shares to be issued with respect to the spread value of an exercised Option
take the form of Deferred or Restricted Stock, which shall be valued on the
date of exercise on the basis of the Fair Market Value (as determined by the
Committee) of such Deferred or Restricted Stock determined without regard to
the deferral limitations and/or the forfeiture restrictions involved.
SECTION 6. Stock Appreciation Rights.
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of grant of such
Stock Option.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, subject to such
provisions as the Committee may specify at grant where a Stock Appreciation
Right is granted with respect to less than the full number of shares covered by
a related Stock Option.
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A Stock Appreciation Right may be exercised by an optionee, subject to
Section 6(b), in accordance with the procedures established by the Committee
for such purposes. Upon such exercise, the optionee shall be entitled to
receive an amount determined in the manner prescribed in Section 6(b). Stock
Options relating to exercised Stock Appreciation Rights shall no longer be
exercisable to the extent that the related Stock Appreciation Rights have been
exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject
to such terms and conditions, not inconsistent with the provisions of the Plan,
as shall be determined from time to time by the Committee, including the
following:
(i) Stock Appreciation Rights shall be exercisable only at
such time or times and to the extent that the Stock Options to which
they relate shall be exercisable in accordance with the provisions of
Section 5 and this Section 6 of the Plan.
(ii) Upon the exercise of a Stock Appreciation Right, an
optionee shall be entitled to receive an amount in cash and/or shares
of Stock equal in value to the excess of the Fair Market Value of one
share of Stock over the option price per share specified in the
related Stock Option multiplied by the number of shares in respect of
which the Stock Appreciation Right shall have been exercised, with the
Committee having the right to determine the form of payment. When
payment is to be made in shares, the number of shares to be paid shall
be calculated on the basis of the Fair Market Value of the shares on
the date of exercise.
(iii) Stock Appreciation Rights shall be transferable only
when and to the extent that the underlying Stock Option would be
transferable under Section 5(e) of the Plan.
(iv) Upon the exercise of a Stock Appreciation Right, the
Stock Option or part thereof to which such Stock Appreciation Right is
related shall be deemed to have been exercised for the purpose of the
limitation set forth in Section 3 of the Plan on the number of shares
of Stock exercised under the Plan, but only to the extent of the
number of shares issued under the Stock Appreciation Right at the time
of exercise based on the value of the Stock Appreciation Right at such
time.
(v) The Committee, in its sole discretion, may provide that,
in the event of a Change in Control and/or a Potential Change in
Control, the amount to be paid upon the exercise of a Stock
Appreciation Right shall be based on the Change in Control Price,
subject to such terms and conditions as the Committee may specify at
grant.
SECTION 7. Restricted Stock
(a) Administration. Shares of Restricted Stock may be issued either
alone, in addition to, or in tandem with, other awards granted under the Plan
and/or awards made outside of the Plan. The Committee shall determine the
eligible persons to whom, and the time or times at which, grants of Restricted
Stock will be made, the number of shares to be awarded, the price (if any) to
9
be paid by the recipient of Restricted Stock (subject to Section 7(b)), the
time or times within which such awards may be subject to forfeiture, and all
other terms and conditions of the awards.
The Committee may condition the grant of Restricted Stock upon the
attainment of specified Performance Criteria or such other factors as the
Committee may determine, in its sole discretion.
The provisions of Restricted Stock awards need not be the same with
respect to each recipient.
(b) Awards and Certificates. The prospective recipient of a Restricted
Stock award shall not have any rights with respect to such award, unless and
until the Company and such recipient have executed an agreement evidencing the
award and the recipient has delivered a fully executed copy thereof to the
Company, and has otherwise complied with the applicable terms and conditions of
such award.
(i) The purchase price for shares of Restricted Stock shall
be equal to or less than their par value and may be zero.
(ii) Awards of Restricted Stock must be accepted within a
reasonable period (or such specific period as the Committee may
specify at grant) after the award date, by executing a Restricted
Stock award agreement and paying whatever price (if any) is required
under Section 7(b)(i).
(iii) Each participant receiving a Restricted Stock award
shall be issued a stock certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered in the name of
such participant, and shall bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such award.
(iv) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of
any Restricted Stock award, the participant shall have delivered a
stock power, endorsed in blank, relating to the Stock covered by such
award.
(c) Terms and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following terms and
conditions:
(i) Subject to the provisions of this Plan and the award
agreement, during a period set by the Committee commencing with the
date of such award (the "Restriction Period"), the participant shall
not be permitted to sell, transfer, pledge or assign shares of
Restricted Stock awarded under the Plan. Within these limits and
subject to Sections 7(c)(iv) and/or 7(c)(v), the Committee, in its
sole discretion, may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions in whole or
in part, based on service, Performance Criteria and/or such other
factors as the Committee may determine, in its sole discretion.
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(ii) If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock subject to such Restriction
Period, certificates for an appropriate number of unrestricted shares
of Stock shall be delivered to the participant promptly (unless the
Committee decides pursuant to Section 2(f) to settle the award in
cash).
(iii) The voting rights and/or dividend rights, if any, of
the Restricted Stock award shall be established by the Committee
pursuant to Section 2(j).
(iv) An award of Restricted Stock, where the Restriction
Period is based on Performance Criteria, shall have a Restriction
Period of at least one (1) year.
(v) An award of Restricted Stock, where the Restriction
Period is based on service, shall have a Restriction Period of at
least three (3) years.
(d) Minimum Value Provisions. In order to better ensure that award
payments actually reflect the performance of the Company and service of the
participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable
in cash or Stock to the recipient of a Restricted Stock award, subject to such
Performance Criteria, future service, deferral and other terms and conditions
as may be specified by the Committee.
SECTION 8. Deferred Stock.
(a) Administration. Deferred Stock may be awarded either alone, in
addition to, or in tandem with, other awards granted under the Plan and/or
awards made outside of the Plan. The Committee shall determine the eligible
persons to whom and the time or times at which Deferred Stock shall be awarded,
the number of shares of Deferred Stock to be awarded to any person, the
duration of the period (the "Deferral Period") during which, and the conditions
under which, receipt of the Stock will be deferred, and the other terms and
conditions of the award in addition to those set forth in Section 8(b).
The Committee may condition the grant of Deferred Stock upon the
attainment of specified Performance Criteria or such other factors or criteria
as the Committee shall determine, in its sole discretion.
The provisions of Deferred Stock awards need not be the same with
respect to each recipient.
(b) Terms and Conditions. The shares of Deferred Stock awarded
pursuant to this Section 8 shall be subject to the following terms and
conditions:
(i) Subject to the provisions of this Plan and the award
agreement referred to in Section 8(b)(iv) below, Deferred Stock awards
may not be sold, assigned, transferred, pledged or otherwise
encumbered during the Deferral Period. At the expiration of the
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Deferral Period (or the Elective Deferral Period referred to in
Section 8(b)(iii), where applicable), stock certificates shall be
delivered to the participant, or his legal representative, in a number
equal to the shares covered by the Deferred Stock award (unless the
Committee decides pursuant to Section 2(f) to settle the award in
cash).
(ii) Subject to Sections 8(b)(vi) and/or 8(b)(vii), the
Committee may accelerate the vesting of all or any part of any
Deferred Stock award and/or waive the deferral limitations in whole or
in part, based on service, Performance Criteria and/or such other
factors as the Committee may determine, in its sole discretion.
(iii) A participant may elect to further defer receipt of an
award (or an installment of an award) for a specified period or until
a specified event (the "Elective Deferral Period"), subject in each
case to such terms as are determined by the Committee, all in its sole
discretion. Subject to any exceptions adopted by the Committee, such
election must generally be made at least twelve (12) months prior to
completion of the Deferral Period for such Deferred Stock award (or
such installment).
(iv) Each award shall be confirmed by, and subject to the
terms of, a Deferred Stock agreement executed by the Company and the
participant.
(v) The dividend rights, if any, of the Deferred Stock award
established by the Committee pursuant to Section 2(k).
(vi) An award of Deferred Stock, where the Deferral Period is
based on Performance Criteria, shall have a Deferral Period of at
least one (1) year.
(vii) An award of Deferred Stock, where the Deferral Period
is based on service, shall have a Deferral Period of at least three
(3) years.
(c) Minimum Value Provisions. In order to better ensure that award
payments actually reflect the performance of the Company and service of the
participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable
in cash or Stock to the recipient of a Deferred Stock award, subject to such
Performance Criteria, future service, deferral and other terms and conditions
as may be specified by the Committee.
SECTION 9. Stock Purchase Rights.
(a) Awards and Administration. The Committee may grant eligible
participants Stock Purchase Rights which shall enable such participants to
purchase Stock (including Deferred Stock and Restricted Stock) at price(s)
determined by the Committee at or after grant, in its sole discretion.
12
The Committee shall also impose such deferral, forfeiture and/or other
terms and conditions as it shall determine, in its sole discretion, on such
Stock Purchase Rights or the exercise thereof.
The terms of Stock Purchase Rights awards need not be the same with
respect to each participant.
Each Stock Purchase Right award shall be confirmed by, and be subject
to the terms of, a Stock Purchase Rights agreement.
(b) Exercisability. Stock Purchase Rights shall be exercisable for
such period after grant as is determined by the Committee.
SECTION 10. Other Stock Based Awards.
(a) Administration. Other awards of Stock and other awards that are
valued in whole or in part by reference to, or are otherwise based on, Stock
("Other Stock Based Awards"), including, without limitation, stock purchase
rights, performance shares, convertible preferred stock, convertible
debentures, exchangeable securities and Stock awards or options valued by
reference to Book Value or subsidiary performance, may be granted either alone,
in addition to, or in tandem with, Stock Options, Stock Appreciation Rights,
Restricted Stock, Deferred Stock, Stock Purchase Rights or Performance Related
Awards granted under the Plan and/or cash awards made outside of the Plan.
Subject to the provisions of the Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which such
awards shall be made, the amount of such awards, and all other conditions of
the awards including any dividend and/or voting rights. Subject to Sections
10(b)(iv) and 10(b)(v), the Committee may also provide for the grant of Stock
upon the attainment of specified Performance Criteria or such other factors as
the Committee may determine, in its sole discretion.
The provisions of Other Stock Based Awards need not be the same with
respect to each recipient.
(b) Terms and Conditions. Other Stock Based Awards made pursuant to
this Section 10 shall be subject to the following terms and conditions:
(i) Subject to the provisions of this Plan and the award
agreement referred to in Section 10(b)(ii) below, awards made under
this Section 10 may not be sold, assigned, transferred, pledged or
otherwise encumbered prior to the date on which any shares are issued
or amounts are paid, or, if later, the date on which any applicable
restriction, performance or deferral period lapses. Subject to
Sections 10(b)(iv) and/or 10(b)(v), the Committee, in its sole
discretion, may accelerate the vesting of all or any part of any Other
Stock Based Award, and/or waive any restrictions or deferral
limitations in whole or in
13
part, based on service, Performance Criteria and/or other factors as
the Committee may determine, in its sole discretion.
(ii) Each award under this Section 10 shall be confirmed by,
and subject to the terms of, an agreement or other instrument by the
Company and by the participant.
(iii) Stock (including securities convertible into Stock)
issued on a bonus basis under this Section 10 may be issued for no
cash consideration. Stock (including securities convertible into
Stock) purchased pursuant to a purchase right awarded under this
Section 10 shall be purchased at price(s) determined by the Committee,
in its sole discretion.
(iv) Any Other Stock Based Award that has a Restriction
Period or Deferral Period that is based on Performance Criteria shall
have a Restriction Period or Deferral Period, as the case may be, of
at least one (1) year.
(v) Any Other Stock Based Award that has a Restriction Period
or Deferral Period that is based on service shall have a Restriction
Period or Deferral Period, as the case may be, of at least three (3)
years.
SECTION 11. Performance Related Awards.
(a) Performance Objectives. Notwithstanding anything else contained in
the Plan to the contrary, unless the Committee otherwise determines at the time
of grant, any award of Restricted Stock or Deferred Stock or Other Stock Based
Awards to an officer who is subject to the reporting requirements of Section
16(a) of the Exchange Act other than an award which will vest solely on the
basis of the passage of time, shall become vested, if at all, upon the
determination by the Committee that performance objectives established by the
Committee have been attained, in whole or in part (a "Performance Award"). Such
performance objectives shall be determined over a measurement period or periods
established by the Committee (which period or periods shall not be less than
one (1) year) and related to at least one of the following criteria, which may
be determined solely by reference to the performance of: (i) the Company; (ii)
a Subsidiary; (iii) an Affiliate; (iv) a division or unit of any of the
foregoing or based on comparative performance of any of the foregoing relative
to past performance or to other companies: (A) return on equity; (B) total
shareholder return; (C) revenues; (D) cash flows, revenues and/or earnings
relative to other parameters (e.g., net or gross assets); (E) operating income;
(F) return on investment; (G) changes in the value of the Stock; and (H) return
on assets (the "Performance Criteria"). Excluding Stock Options and/or Stock
Appreciation Rights granted hereunder, the maximum number of shares of Stock
that may be subject to any such Performance Award granted to any key employee
in any calendar year shall not exceed 100,000 shares, as such number may be
adjusted pursuant to Section 3.
(b) Annual Incentive Compensation. The Committee may, in addition to
the Performance Awards described above, pay cash amounts under the Plan or any
other plan or arrangement approved by the Committee, provided such other plan
or arrangement is in conformity with the
14
provisions of this Section 11(b), to any officer of the Company or any
Subsidiary who is subject to the reporting requirements of Section 16(a) of the
Exchange Act upon the achievement, in whole or in part, of performance goals or
objectives established in writing by the Committee with respect to such
performance periods as the Committee shall determine. Any such goals or
objectives shall be based on one or more of the Performance Criteria.
Notwithstanding anything else contained herein to the contrary, the maximum
amount of any such cash payment to any single officer with respect to any
calendar year shall not exceed the lesser of (i) $2,000,000; or (ii) twice the
officer's annual base salary as in effect on the last day of the preceding
fiscal year.
(c) Interpretation. Notwithstanding anything else contained in the
Plan to the contrary, to the extent required to so qualify any Performance
Award as other performance based compensation within the meaning of Section
162(m)(4)(C) of the Code, the Committee shall not be entitled to exercise any
discretion otherwise authorized under the Plan (such as the right to accelerate
vesting without regard to the achievement of the relevant performance
objectives) with respect to such Performance Award if the ability to exercise
such discretion (as opposed to the exercise of such discretion) would cause
such award to fail to qualify as other performance based compensation.
SECTION 12. Change in Control Provisions.
(a) Impact of Event. Notwithstanding the provisions of Sections
7(c)(iv), 7(c)(v), 8(b)(vi), 8(b)(vii), 10(b)(iv), and 10(b)(v), in the event
of:
(i) a "Change in Control" as defined in Section 12(b), or
(ii) a "Potential Change in Control" as defined in Section
12(c), but only if and to the extent so determined by the Committee or
the Board (subject to any right of approval expressly reserved by the
Committee or the Board at the time of such determination):
(A) Any Stock Options awarded under the Plan not previously
exercisable and vested shall become fully exercisable and vested;
(B) The restrictions and deferral limitations applicable to
any Restricted Stock, Deferred Stock, Stock Purchase Rights, Other
Stock Based Awards and Performance Related Awards, in each case to the
extent not already vested under the Plan, shall lapse and such shares
and awards shall be deemed fully vested and any Performance Criteria
shall be deemed met at target; and
(C) The value of all outstanding LTIP Awards to the extent
vested may at the sole discretion of the Committee at or after grant
but prior to any Change in Control, be cashed out on the basis of the
"Change in Control Price" as defined in Section 12(d) as of the date
such Change in Control or such Potential Change in Control is
determined to have occurred or such other date as the Committee may
determine prior to the Change in Control.
15
(b) Definition of "Change in Control". For purposes of Section 12(a),
a "Change in Control" means the happening of any of the following:
(i) When any "person" as defined in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) of the Exchange Act
but excluding the Company, any Subsidiary or any employee benefit plan
sponsored or maintained by the Company or any Subsidiary (including
any trustee of such plan acting as trustee), directly or indirectly,
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, as amended from time to time), of securities of the
Company representing fifteen percent (15%) or more of the combined
voting power of the Company's then outstanding securities;
(ii) The individuals who, as of the Effective Date of this
Plan, constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the
Effective Date of the Plan whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company or the acquisition of assets of another
corporation (a "Business Combination"), in each case, unless,
following such Business Combination: (A) all or substantially all of
the individuals and entities who were the beneficial owners,
respectively, of the then outstanding shares of Stock of the Company
and the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election
of directors immediately prior to such Business Combination
beneficially own, directly or indirectly, more than sixty percent
(60%) of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially
all of the Company's assets either directly or through one or more
subsidiaries); (B) no person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly,
fifteen percent (15%) or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination; and (C) at least
a majority of the members of the board of directors of the corporation
resulting from such Business
16
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(iv) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
(c) Definition of Potential Change in Control. For purposes of Section
12(a), a "Potential Change in Control" means the happening of any one of the
following:
(i) The approval by shareholders of an agreement by the
Company, the consummation of which would result in a Change in Control
of the Company as defined in Section 12(b); or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than the Company or
a Subsidiary or any Company employee benefit plan (including any
trustee of such plan acting as such trustee)) of securities of the
Company representing five percent (5%) or more of the combined voting
power of the Company's outstanding securities and the adoption by the
Board of a resolution to the effect that a Potential Change in Control
of the Company has occurred for purposes of this Plan.
(d) Change in Control Price. For the purposes of this Section 12,
"Change in Control Price" means the highest price per share paid in any
transaction reported on the New York Stock Exchange Composite Index, or paid or
offered in any bona fide transaction related to a potential or actual Change in
Control of the Company at any time during the sixty (60) day period immediately
preceding the occurrence of the Change in Control (or, where applicable, the
occurrence of the Potential Change in Control event), in each case as
determined by the Committee except that, in the case of Incentive Stock Options
and Stock Appreciation Rights relating to Incentive Stock Options, such price
shall be based only on transactions reported for the date on which the optionee
exercises such Stock Appreciation Rights or, where applicable, the date on
which a cashout occurs under Section 12(a)(ii)(C).
SECTION 13. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of
an optionee or participant under an LTIP Award theretofore granted, without the
optionee's or participant's consent.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but subject to Section 3
above, no such amendment shall impair the rights of any holder without the
holder's consent.
17
Subject to the above provisions, the Board shall have broad authority
to amend the Plan to take into account changes in applicable securities and tax
laws and accounting rules, as well as other developments.
SECTION 14. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than 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
created under the Plan to deliver Stock or payments in lieu of or with respect
to awards hereunder; provided, however, that unless the Committee otherwise
determines with the consent of the affected participant, the existence of such
trusts or other arrangements is consistent with the "unfunded" status of the
Plan.
SECTION 15. General Provisions.
(a) The Committee may require each person purchasing shares pursuant
to a Stock Option or other award under the Plan to represent to and agree with
the Company in writing that the optionee or participant is acquiring the shares
without a view to distribution thereof. The certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Stock is then listed, and any applicable federal or
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required, and such arrangements may be either
generally applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any employee of the
Company or any Subsidiary or Affiliate any right to continued employment with
the Company or a Subsidiary or Affiliate, as the case may be, nor shall it
interfere in any way with the right of the Company or a Subsidiary or Affiliate
to terminate the employment of any of its employees at any time.
(d) Except as the participant and the Company may otherwise agree, no
later than the date as of which an amount first becomes includible in the gross
income of the participant for federal income tax purposes with respect to any
award under the Plan, the participant shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
18
federal, state, or local taxes of any kind required by law to be withheld with
respect to such amount. Unless otherwise determined by the Committee,
withholding obligations may be settled with Stock, including Stock that is part
of the award that gives rise to the withholding requirement. The obligations of
the Company under the Plan shall be conditional on such payment or
arrangements, and the Company and its Subsidiaries or Affiliates shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
(e) The actual or deemed reinvestment of dividends or dividend
equivalents in additional Restricted Stock (or in Deferred Stock or other types
of Plan awards) at the time of any dividend payment shall only be permissible
if sufficient shares of Stock are available under Section 3 for such
reinvestment (taking into account then outstanding Stock Options, Stock
Purchase Rights and other Plan awards).
(f) The Committee may permit a participant to postpone the delivery of
Stock under any award, including a Stock Option, under the Plan upon such terms
and conditions as the Committee shall determine.
(g) The Plan and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.
SECTION 16. Effective Date of Plan.
As amended, the Plan shall be effective as of May 21, 1998.
SECTION 17. Term of Plan.
No LTIP Award shall be granted pursuant to the Plan on or after the
tenth anniversary of the date of shareholder approval, but awards granted prior
to such tenth anniversary may extend beyond that date, in accordance with the
terms of such awards.
SECTION 18. Applicability to Grants under 1988 Plan.
The provisions of the Plan relating to stock options, stock
appreciation rights, restricted stock awards, deferred stock awards, stock
purchase rights, other stock-based awards or performance related awards shall
apply to, and govern existing and subsequent stock options, stock appreciation
rights, restricted stock awards, deferred stock awards, stock purchase rights,
other stock-based awards or performance related awards granted under the 1988
Long Term Incentive Plan, as amended.
19
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
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This ‘10-K405’ Filing | | Date | | First | | Last | | | Other Filings |
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| | |
Filed on: | | 3/19/99 |
For Period End: | | 12/31/98 |
| | 5/21/98 | | 19 | | | | | 8-K |
| List all Filings |
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