HOLLINGER INTERNATIONAL INC.
1999 STOCK INCENTIVE PLAN
PURPOSE AND ADOPTION OF THE PLAN
1.01 PURPOSE. The purpose of the Hollinger International Inc. 1999 Stock
Incentive Plan is to assist in attracting and retaining highly competent
employees and directors and to act as an incentive in motivating selected
officers and other key employees and directors of the Company and its
Subsidiaries to achieve long-term corporate objectives.
1.02 ADOPTION AND TERM. The Plan has been approved by the Board of
Directors of the Company, effective as of May 5, 1999, but is subject to the
approval of the stockholders of the Company. The Plan shall remain in effect
until terminated by action of the Board; provided, however, that no Incentive
Stock Option may be granted hereunder after the tenth anniversary of the
Effective Date and the provisions of Articles VII and VIII with respect to
performance-based awards to "covered employees" under Section 162(m) of the Code
shall expire as of the fifth anniversary of the Effective Date.
1.03 THE PRIOR PLAN. The Company previously adopted the Hollinger
International Inc. 1994 Stock Option Plan and the 1997 Stock Incentive Plan.
Stock options granted under the Prior Plan prior to the Effective Date shall not
be affected by the adoption of the Plan, and the Prior Plan shall remain in
effect following the Effective Date to the extent necessary to administer the
Prior Options, but no new options shall be granted under the Prior Plan on or
after the Effective Date.
For the purpose of this Plan, capitalized terms shall have the following
2.01 AWARD means (a) any grant to a Participant of one or a combination of
Non-Qualified Stock Options or Incentive Stock Options described in Article VI,
Stock Appreciation Rights described in Article VI, Restricted Shares described
in Article VII and Performance Awards described in Article VIII and (b) any
grant to a Non-Employee Director of a Non-Employee Director Award described in
2.02 AWARD AGREEMENT means a written agreement between the Company and a
Participant or a written acknowledgment from the Company to a Participant
specifically setting forth the terms and conditions of an Award granted under
2.03 AWARD PERIOD means, with respect to an Award, the period of time set
forth in the Award Agreement during which specified target performance goals
must be achieved or other conditions set forth in the Award Agreement must be
2.04 BENEFICIARY means an individual, trust or estate who or which, by a
written designation of the Participant filed with the Company or by operation of
law, succeeds to the rights and obligations of the Participant under the Plan
and the Award Agreement upon the Participant's death.
2.05 BOARD means the Board of Directors of the Company.
2.06 CLASS A COMMON STOCK means Class A Common Stock of the Company, par
value $.01 per share.
2.07 CODE means the Internal Revenue Code of 1986, as amended. References
to a section of the Code shall include that section and any comparable section
or sections of any future legislation that amends, supplements or supersedes
2.08 COMMITTEE means the Committee defined in Section 3.01.
2.09 COMPANY means Hollinger International Inc., a Delaware corporation,
and its successors.
2.10 DATE OF GRANT means the date designated by the Committee as the date
as of which it grants an Award, which shall not be earlier than the date on
which the Committee approves the granting of such Award.
2.11 EFFECTIVE DATE means May 5, 1999.
2.12 EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
2.13 EXERCISE PRICE means, with respect to a Stock Appreciation Right, the
amount established by the Committee in the Award Agreement which is to be
subtracted from the Fair Market Value on the date of exercise in order to
determine the amount of the payment to be made to the Participant, as further
described in Section 6.02(b).
2.14 FAIR MARKET VALUE means, on any date, the average of the high and low
quoted sales prices of a share of Class A Common Stock, as reported on the
Composite Tape for New York Stock Exchange Listed Companies, on such date or, if
there were no sales on such date, on the last date preceding such date on which
a sale was reported.
2.15 INCENTIVE STOCK OPTION means a stock option within the meaning of
Section 422 of the Code.
2.16 LIMITED STOCK APPRECIATION RIGHT means an Award granted in accordance
with Section 6.06.
2.17 MERGER means any merger, reorganization, consolidation, exchange,
significant transfer of assets or other transaction having similar effect
involving the Company.
2.18 NON-EMPLOYEE DIRECTOR means each member of the Board who is not an
employee of the Company.
2.19 NON-EMPLOYEE DIRECTOR AWARDS means Awards granted in accordance with
2.20 NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.
2.21 OPTIONS means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under the Plan.
2.22 PARTICIPANT means a person designated to receive an Award under the
Plan in accordance with Section 5.01 and, solely to the extent provided in
Article IX of the Plan, any Non-Employee Directors of the Company.
2.23 PERFORMANCE AWARDS means Awards granted in accordance with Article
2.24 PLAN means the Hollinger International Inc. 1999 Stock Incentive Plan
as described herein, as the same may be amended from time to time.
2.25 PRIOR OPTIONS means stock options granted under the Prior Plan before
the Effective Date.
2.26 PRIOR PLAN means both the Hollinger International Inc. 1994 Stock
Option Plan and the 1997 Stock Incentive Plan, as amended.
2.27 PURCHASE PRICE, with respect to Options, shall have the meaning set
forth in Section 6.01(b).
2.28 RESTRICTED SHARES means Class A Common Stock subject to restrictions
imposed in connection with Awards granted under Article VII.
2.29 RETIREMENT means early or normal retirement under a pension plan or
arrangement of the Company or one of its Subsidiaries in which the Participant
2.30 STOCK APPRECIATION RIGHTS means Awards granted in accordance with
2.31 SUBSIDIARY means a domestic or foreign subsidiary of the Company
within the meaning of Section 424(f) of the Code.
2.32 TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment with the Company or a Subsidiary for
any reason, including death, disability, retirement or as the
result of the divestiture of the Participant's employer or any similar
transaction in which the Participant's employer ceases to be the Company or one
of its Subsidiaries. Whether entering military or other government service shall
constitute Termination of Employment, or whether a Termination of Employment
shall occur as a result of disability, shall be determined in each case by the
Committee in its sole discretion.
3.01 COMMITTEE. The Plan shall be administered by a committee of the Board
("Committee") comprised of at least two persons. The Committee shall have
exclusive and final authority in each determination, interpretation or other
action affecting the Plan and its Participants. The Committee shall have the
sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate, and to take such steps in connection with
the Plan and Awards granted hereunder as it may deem necessary or advisable. The
Committee may, subject to compliance with applicable legal requirements, with
respect to Participants who are not subject to Section 16(b) of the Exchange
Act, delegate such of its powers and authority under the Plan as it deems
appropriate to designated officers or employees of the Company. In addition, the
Board may exercise any of the authority conferred upon the Committee hereunder.
In the event of such delegation of authority or exercise of authority by the
Board, references in the Plan to the Committee shall be deemed to refer to the
delegate of the Committee or the Board, as the case may be.
4.01 NUMBER OF SHARES ISSUABLE. The total number of shares initially
authorized to be issued under the Plan shall be 8,500,000 shares of Class A
Common Stock. The number of shares available for issuance under the Plan shall
be subject to adjustment in accordance with Section 10.07. The shares to be
offered under the Plan shall be authorized and unissued Class A Common Stock, or
issued Class A Common Stock which shall have been reacquired by the Company.
4.02 SHARES SUBJECT TO TERMINATED AWARDS. Class A Common Stock covered by
any unexercised portions of terminated Options or Prior Options (including
canceled Options or Prior Options), Class A Common Stock forfeited as provided
in Section 7.02(a) and Class A Common Stock subject to any Awards which are
otherwise surrendered by the Participant may again be subject to new Awards
under the Plan. Class A Common Stock subject to Options, or portions thereof,
which have been surrendered in connection with the exercise of Stock
Appreciation Rights shall not be available for subsequent Awards under the Plan,
but Class A Common Stock issued in payment of such Stock Appreciation Rights
shall not be charged against the number of shares of Class A Common Stock
available for the grant of Awards hereunder.
5.01 ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such
directors, officers and other key employees of the Company and its Subsidiaries
as the Committee, in its sole discretion, may designate from time to time. The
Committee's designation of a Participant in any year shall not require the
Committee to designate such person to receive Awards or grants in any other
year. The designation of a Participant to receive one type of Award or grant
under the Plan does not require the Committee to provide such Participant with
other types of Awards or grants under the Plan. The Committee shall consider
such factors as it deems pertinent in selecting Participants and in determining
the type and amount of their respective Awards. Subject to adjustment in
accordance with Section 10.07, during the term of this Plan, no Participant
shall be granted Awards in respect of more than 600,000 shares of Class A Common
Stock (whether through grants of Options or Stock Appreciation Rights or other
grants of Class A Common Stock or rights with respect thereto) in any
calendar year. Non-Employee Directors shall receive Non-Employee Director Awards
in accordance with Article IX of the Plan, the provisions of which are automatic
and non-discretionary in operation. Non-Employee Directors shall also be
eligible to receive any other Awards under the Plan.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
(A) OPTION AWARDS. The Committee may grant, to such Participants as the
Committee may select, Options entitling the Participant to purchase shares of
Class A Common Stock from the Company in such number, at such price, and on such
terms and subject to such conditions, not inconsistent with the terms of this
Plan, as may be established by the Committee. The terms of any Option granted
under this Plan shall be set forth in an Award Agreement.
(B) PURCHASE PRICE OF OPTIONS. The Purchase Price of each share of Class A
Common Stock which may be purchased upon exercise of any Option granted under
the Plan shall be determined by the Committee; provided, however, that the
Purchase Price of Options shall in all cases be equal to or greater than the
Fair Market Value on the Date of Grant.
(C) DESIGNATION OF OPTIONS. Except as otherwise expressly provided in the
Plan, the Committee may designate, at the time of the grant of each Option, the
Option as an Incentive Stock Option or a Non-Qualified Stock Option.
(D) INCENTIVE STOCK OPTION SHARE LIMITATION. No Participant may be granted
Incentive Stock Options under the Plan (or any other plans of the Company and
its Subsidiaries) which would result in shares with an aggregate Fair Market
Value (measured on the Date of Grant) of more than $100,000 first becoming
exercisable in any one calendar year.
(E) RIGHTS AS A STOCKHOLDER. A Participant or a transferee of an Option
pursuant to Section 10.04 shall have no rights as a stockholder with respect to
Class A Common Stock covered by an Option until the Participant or transferee
shall have become the holder of record of any such shares, and no adjustment
shall be made for dividends in cash or other property or distributions or other
rights with respect to any such Class A Common Stock for which the record date
is prior to the date on which the Participant or a transferee of the Option
shall have become the holder of record of any such shares covered by the Option;
provided, however, that Participants are entitled to share adjustments to
reflect capital changes under Section 10.07.
6.02 STOCK APPRECIATION RIGHTS.
(A) STOCK APPRECIATION RIGHT AWARDS. The Committee is authorized to grant
to any Participant one or more Stock Appreciation Rights. Such Stock
Appreciation Rights may be granted either independent of or in tandem with
Options granted to the same Participant. Stock Appreciation Rights granted in
tandem with Options may be granted simultaneously with, or, in the case of
Non-Qualified Stock Options, subsequent to, the grant to such Participant of the
related Option; provided, however, that: (i) any Option covering any share of
Class A Common Stock shall expire and not be exercisable upon the exercise of
any Stock Appreciation Right with respect to the same share, (ii) any Stock
Appreciation Right covering any share of Class A Common Stock shall expire and
not be exercisable upon the exercise of any related Option with respect to the
same share, and (iii) an Option and Stock Appreciation Right covering the same
share of Class A Common Stock may not be exercised simultaneously. Upon exercise
of a Stock Appreciation Right with respect to a share of Class A Common Stock,
the Participant shall be entitled to receive an amount equal to the excess, if
any, of (A) the Fair Market Value of a share of Class A Common Stock on the date
of exercise over (B) the Exercise Price of such Stock Appreciation Right
established in the Award Agreement, which amount shall be payable as provided in
(B) EXERCISE PRICE. The Exercise Price established under any Stock
Appreciation Right granted under this Plan shall be determined by the Committee,
but in the case of Stock Appreciation Rights granted in
tandem with Options shall not be less than the Purchase Price of the related
Option. Upon exercise of Stock Appreciation Rights, the number of shares subject
to exercise under any related Option shall automatically be reduced by the
number of shares of Class A Common Stock represented by the Option or portion
thereof which are surrendered as a result of the exercise of such Stock
(C) PAYMENT OF INCREMENTAL VALUE. Any payment which may become due from the
Company by reason of a Participant's exercise of a Stock Appreciation Right may
be paid to the Participant as determined by the Committee (i) all in cash, (ii)
all in Class A Common Stock, or (iii) in any combination of cash and Class A
Common Stock. In the event that all or a portion of the payment is made in Class
A Common Stock, the number of shares of Class A Common Stock delivered in
satisfaction of such payment shall be determined by dividing the amount of such
payment or portion thereof by the Fair Market Value on the Exercise Date. No
fractional share of Class A Common Stock shall be issued to make any payment in
respect of Stock Appreciation Rights; if any fractional share would be issuable,
the combination of cash and Class A Common Stock payable to the Participant
shall be adjusted as directed by the Committee to avoid the issuance of any
6.03 TERMS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
(A) CONDITIONS ON EXERCISE. An Award Agreement with respect to Options
and/or Stock Appreciation Rights may contain such waiting periods, exercise
dates and restrictions on exercise (including, but not limited to, periodic
installments) as may be determined by the Committee at the time of grant. The
Committee may also establish exceptions to such waiting periods, exercise dates
and restrictions on exercise, including, without limitation, in the case of a
Change in Control of the Company.
(B) DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options and Stock
Appreciation Rights shall terminate after the first to occur of the following
(i) Expiration of the Option or Stock Appreciation Right as provided
in the Award Agreement; or
(ii) Termination of the Award as provided in Section 6.03(e),
following the Participant's Termination of Employment; or
(iii) In the case of an Incentive Stock Option, ten years from the
Date of Grant; or
(iv) Solely in the case of a Stock Appreciation Right granted in
tandem with an Option, upon the expiration of the related Option.
(C) ACCELERATION OF EXERCISE TIME. The Committee, in its sole discretion,
shall have the right (but shall not in any case be obligated), exercisable at
any time after the Date of Grant, to permit the exercise of any Option or Stock
Appreciation Right prior to the time such Option or Stock Appreciation Right
would otherwise become exercisable under the terms of the Award Agreement.
(D) EXTENSION OF EXERCISE TIME. In addition to the extensions permitted
under Section 6.03(e) in the event of Termination of Employment, the Committee,
in its sole discretion, shall have the right (but shall not in any case be
obligated), exercisable on or at any time after the Date of Grant, to permit any
Option or Stock Appreciation Right granted under this Plan to be exercised after
its expiration date described in Section 6.03(e), subject, however, to the
limitations described in Section 6.03(b)(i), (iii), and (iv).
(E) EXERCISE OF OPTIONS OR STOCK APPRECIATION RIGHTS UPON TERMINATION OF
(I) TERMINATION OF VESTED OPTIONS AND STOCK APPRECIATION RIGHTS UPON
TERMINATION OF EMPLOYMENT.
(A) TERMINATION. In the event of Termination of Employment of a
Participant other than by reason of death, disability or Retirement, the
right of the Participant to exercise the Option or Stock Appreciation
Right under the Plan shall terminate thirty (30) days after the date of
such Termination of Employment, unless the exercise period is extended
by the Committee in accordance with Section 6.03(d). In no event,
however, may any Option or Stock Appreciation Right be
exercised later than the date of expiration of the Option determined
pursuant to Section 6.03(b)(i), (iii) or (iv).
(B) DISABILITY OR RETIREMENT. In the event of a Participant's
Termination of Employment by reason of disability or Retirement, the
right of the Participant to exercise the Options or Stock Appreciation
Rights which he or she was entitled to exercise upon Termination of
Employment (or which became exercisable at a later date pursuant to
Section 6.03(e)(ii)) shall terminate one year after the date of such
Termination of Employment, unless the exercise period is extended by the
Committee in accordance with Section 6.03(d). In no event, however, may
any Option or Stock Appreciation Right be exercised later than the date
of expiration of the Option determined pursuant to Section 6.03(b)(i),
(iii) or (iv).
(C) DEATH. In the event of the death of a Participant while
employed by the Company or a Subsidiary or within the additional period
of time from the date of the Participant's Termination of Employment and
prior to the expiration of the Option or Stock Appreciation Right as may
be permitted in Section 6.03(e)(i)(B) or Section 6.03(d) above, to the
extent the right to exercise the Option or Stock Appreciation Right
accrued as of the date of such Termination of Employment and did not
expire during such additional period and prior to the Participant's
death, the right of the Participant's Beneficiary to exercise the Option
or Stock Appreciation Right under the Plan shall terminate upon the
expiration of one year from the date of the Participant's death (but in
no event more than one year from the date of the Participant's
Termination of Employment by reason of disability or retirement), unless
the exercise period is extended by the Committee in accordance with
Section 6.03(d). In no event, however, may any Option or Stock
Appreciation Right be exercised later than the date of expiration of the
Option determined pursuant to Section 6.03(b)(i), (iii) or (iv).
(II) TERMINATION OF UNVESTED OPTIONS OR STOCK APPRECIATION RIGHTS UPON
TERMINATION OF EMPLOYMENT. Subject to Section 6.03(c), to the extent the
right to exercise an Option or a Stock Appreciation Right, or any portion
thereof, has not accrued as of the date of Termination of Employment, such
right shall expire at the date of such Termination of Employment.
Notwithstanding the foregoing, the Committee, within its discretion and
under such terms as it deems appropriate, may permit a Participant who
terminates employment by reason of Retirement and who will continue to
render significant services to the Company or one of its Subsidiaries after
his or her Termination of Employment, to continue vesting in his or her
Options and Stock Appreciation Rights during the period in which the
individual continues to render such services.
6.04 EXERCISE PROCEDURES. Each Option and Stock Appreciation Right granted
under the Plan shall be exercised by written notice to the Company which must be
received by the officer or employee of the Company designated in the Award
Agreement on or before the close of business on the expiration date of the
Award. The Purchase Price of shares purchased upon exercise of an Option granted
under the Plan shall be paid in full in cash by the Participant pursuant to the
Award Agreement; provided, however, that the Committee may (but shall not be
required to) permit payment to be made by delivery to the Company of either (a)
Class A Common Stock (which may include Restricted Shares or shares otherwise
issuable in connection with the exercise of the Option, subject to such rules as
the Committee deems appropriate) or (b) any combination of cash and Class A
Common Stock, or (c) such other consideration as the Committee deems appropriate
and in compliance with applicable law (including payment in accordance with a
cashless exercise program under which, if so instructed by the Participant,
Class A Common Stock may be issued directly to the Participant's broker or
dealer upon receipt of an irrevocable written notice of exercise from the
Participant). In the event that any Class A Common Stock shall be transferred to
the Company to satisfy all or any part of the Purchase Price, the part of the
Purchase Price deemed to have been satisfied by such transfer of Class A Common
Stock shall be equal to the product derived by multiplying the Fair Market Value
as of the date of exercise times the number of shares of Class A Common Stock
transferred to the Company. The Participant may not transfer to the Company in
satisfaction of the Purchase Price any fractional share of Class A Common Stock.
Any part of the Purchase Price paid in cash upon the exercise of any Option
shall be added to the general funds of the Company and may be used for any
proper corporate purpose. Unless the
Committee shall otherwise determine, any Class A Common Stock transferred to the
Company as payment of all or part of the Purchase Price upon the exercise of any
Option shall be held as treasury shares.
7.01 RESTRICTED SHARE AWARDS. The Committee may grant to any Participant an
Award of Class A Common Stock in such number of shares, and on such terms,
conditions and restrictions, whether based on performance standards, periods of
service, retention by the Participant of ownership of purchased or designated
shares of Class A Common Stock or other criteria, as the Committee shall
establish. With respect to performance-based Awards of Restricted Shares
intended to qualify for deductibility under Section 162(m) of the Code,
performance targets will include specified levels of one or more of earnings
before interest, taxes, depreciation and amortization of intangibles and/or
earnings per share. The terms of any Restricted Share Award granted under this
Plan shall be set forth in an Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with this Plan.
(A) ISSUANCE OF RESTRICTED SHARES. As soon as practicable after the Date of
Grant of a Restricted Share Award by the Committee, the Company shall cause to
be transferred on the books of the Company, or its agent, Class A Common Stock,
registered on behalf of the Participant, evidencing the Restricted shares
covered by the Award, but subject to forfeiture to the Company as of the Date of
Grant if an Award Agreement with respect to the Restricted Shares covered by the
Award is not duly executed by the Participant and timely returned to the
Company. All Class A Common Stock covered by Awards under this Article VII shall
be subject to the restrictions, terms and conditions contained in the Plan and
the Award Agreement entered into by the Participant. Until the lapse or release
of all restrictions applicable to an Award of Restricted Shares the share
certificates representing such Restricted Shares may be held in custody by the
Company, its designee, or, if the certificates bear a restrictive legend, by the
Participant. Upon the lapse or release of all restrictions with respect to an
Award as described in Section 7.01(d), one or more share certificates,
registered in the name of the Participant, for an appropriate number of shares
as provided in Section 7.01(d), free of any restrictions set forth in the Plan
and the Award Agreement shall be delivered to the Participant.
(B) STOCKHOLDER RIGHTS. Beginning on the Date of Grant of the Restricted
Share Award and subject to execution of the Award Agreement as provided in
Section 7.01(a), the Participant shall become a stockholder of the Company with
respect to all shares subject to the Award Agreement and shall have all of the
rights of a stockholder, including, but not limited to, the right to vote such
shares and the right to receive dividends; provided, however, that any Class A
Common Stock distributed as a dividend or otherwise with respect to any
Restricted Shares as to which the restrictions have not yet lapsed, shall be
subject to the same restrictions as such Restricted Shares and held or
restricted as provided in Section 7.01(a).
(C) RESTRICTION ON TRANSFERABILITY. None of the Restricted Shares may be
assigned, transferred (other than by will or the laws of descent and
distribution, or to an inter vivos trust with respect to which the Participant
is treated as the owner under Sections 671 through 677 of the Code), pledged or
sold prior to lapse of the restrictions applicable thereto.
(D) DELIVERY OF SHARES UPON VESTING. Upon expiration or earlier termination
of the forfeiture period without a forfeiture and the satisfaction of or release
from any other conditions prescribed by the Committee, or at such earlier time
as provided under the provisions of Section 7.02(b), the restrictions applicable
to the Restricted Shares shall lapse. As promptly as administratively feasible
thereafter, subject to the requirements of Section 10.05, the Company shall
deliver to the Participant or, in case of the Participant's death, to the
Participant's Beneficiary, one or more share certificates for the appropriate
number of shares of Class A Common Stock, free of all such restrictions, except
for any restrictions that may be imposed by law.
7.02 TERMS OF RESTRICTED SHARES.
(A) FORFEITURE OF RESTRICTED SHARES. Subject to Section 7.02(b), all
Restricted Shares shall be forfeited and returned to the Company and all rights
of the Participant with respect to such Restricted Shares shall terminate unless
the Participant continues in the service of the Company or a Subsidiary as an
employee until the expiration of the forfeiture period for such Restricted
Shares and satisfies any and all other conditions set forth in the Award
Agreement. The Committee shall determine the forfeiture period (which may, but
need not, lapse in installments) and any other terms and conditions applicable
with respect to any Restricted Share Award.
(B) WAIVER OF FORFEITURE PERIOD. Notwithstanding anything contained in this
Article VII to the contrary, the Committee may, in its sole discretion, waive
the forfeiture period and any other conditions set forth in any Award Agreement
under appropriate circumstances (including the death, disability or Retirement
of the Participant, a change in control of the Company or a material change in
circumstances arising after the date of an Award) and subject to such terms and
conditions (including forfeiture of a proportionate number of the Restricted
Shares) as the Committee shall deem appropriate.
8.01 PERFORMANCE AWARDS.
(A) AWARD PERIODS AND CALCULATIONS OF POTENTIAL INCENTIVE AMOUNTS. The
Committee may grant Performance Awards to Participants. A Performance Award
shall consist of the right to receive a payment (measured by the Fair Market
Value of a specified number of shares of Class A Common Stock, increases in such
Fair Market Value during the Award Period and/or a fixed cash amount) contingent
upon the extent to which certain predetermined performance targets have been met
during an Award Period. Performance Awards may be made in conjunction with, or
in addition to, Restricted Share Awards made under Article VII. The Award Period
shall be two or more fiscal or calendar years as determined by the Committee.
The Committee, in its discretion and under such terms as it deems appropriate,
may permit newly eligible employees, such as those who are promoted or newly
hired, to receive Performance Awards after an Award Period has commenced.
(B) PERFORMANCE TARGETS. The performance targets may include such goals
related to the performance of the Company and/or the performance of a
Participant as may be established by the Committee in its discretion. In the
case of Performance Awards intended to qualify for deductibility under Section
162(m) of the Code, the targets will include one or more specified levels of
earnings before interest, taxes and amortization of intangibles and/or earnings
per share. The performance targets established by the Committee may vary for
different Award Periods and need not be the same for each Participant receiving
a Performance Award in an Award Period. Except to the extent inconsistent with
the performance-based compensation exception under Section 162(m) of the Code,
in the case of Performance Awards granted to employees to whom such section is
applicable, the Committee, in its discretion, but only under extraordinary
circumstances as determined by the Committee, may change any prior determination
of performance targets for any Award Period at any time prior to the final
determination of the Award when events or transactions occur to cause the
performance targets to be an inappropriate measure of achievement.
(C) EARNING PERFORMANCE AWARDS. The Committee, at or as soon as practicable
after the Date of Grant, shall prescribe a formula to determine the percentage
of the Performance Award to be earned based upon the degree of attainment of
(D) PAYMENT OF EARNED PERFORMANCE AWARDS. Payments of earned Performance
Awards shall be made in cash or Class A Common Stock, or a combination of cash
and Class A Common Stock, in the discretion of the Committee. The Committee, in
its sole discretion, may define such terms and conditions with respect to the
payment of earned Performance Awards as it may deem desirable.
8.02 TERMS OF PERFORMANCE AWARDS.
(A) TERMINATION OF EMPLOYMENT. Unless otherwise provided below or in
Section 8.03, in the case of a Participant's Termination of Employment prior to
the end of an Award Period, the Participant will not have earned any Performance
(B) RETIREMENT. If a Participant's Termination of Employment is because of
Retirement prior to the end of an Award Period, the Participant will not be paid
any Performance Awards, unless the Committee, in its sole and exclusive
discretion, determines that an Award should be paid. In such a case, the
Participant shall be entitled to receive a pro-rata portion of his or her Award
as determined under Subsection (d).
(C) DEATH OR DISABILITY. If a Participant's Termination of Employment is
due to death or disability (as determined in the sole and exclusive discretion
of the Committee) prior to the end of an Award Period, the Participant or the
Participant's personal representative shall be entitled to receive a pro-rata
share of his or her Award as determined under Subsection (d).
(D) PRO-RATA PAYMENT. The amount of any payment made to a Participant whose
employment is terminated by retirement, death or disability (under circumstances
described in Subsections (b) and (c)) will be the amount determined by
multiplying the amount of the Performance Award which would have been earned,
determined at the end of the Award Period, had such employment not been
terminated, by a fraction, the numerator of which is the number of whole months
such Participant was employed during the Award Period, and the denominator of
which is the total number of months of the Award Period. Any such payment made
to a Participant whose employment is terminated prior to the end of an Award
Period under this Section 8.02 shall be made at the end of the respective Award
Period, unless otherwise determined by the Committee in its sole discretion. Any
partial payment previously made or credited to a deferred account for the
benefit of a Participant as provided under Section 8.01(d) of the Plan shall be
subtracted from the amount otherwise determined as payable as provided in this
(E) OTHER EVENTS. Notwithstanding anything to the contrary in this Article
VIII, the Committee may, in its sole and exclusive discretion, determine to pay
all or any portion of a Performance Award to a Participant who has terminated
employment prior to the end of an Award Period under certain circumstances
(including the death, disability or retirement of the Participant, a change a
control of the Company or a material change in circumstances arising after the
Date of Grant) and subject to such terms and conditions as the Committee shall
NON-EMPLOYEE DIRECTOR AWARDS
9.01 GRANT OF NON-EMPLOYEE DIRECTOR AWARDS. Each person whose term as a
Director continues after the date of each annual meeting of stockholders of the
Company, commencing with the initial annual meeting after the Effective Date and
continuing until the date this Plan terminates, shall as of the date of each
such annual meeting of stockholders be granted an Option to purchase 4,000
shares of Class A Common Stock. The exercise price for such Options shall be the
Fair Market Value on the Date of Grant of the shares subject to the Option. All
such Options shall be designated as Non-Qualified Stock Options and shall have a
ten year term. Such Options shall vest and become exercisable in equal
installments on the first and second anniversaries of the Date of Grant.
9.02 TERMINATION OF SERVICE AND OTHER TERMS. If a Non-Employee Director's
service with the Company terminates by reason of death or disability, any Award
held by such Non-Employee Director may be exercised for a period of one year
from the date of such termination or until the expiration of the Award,
whichever is shorter. If a Non-Employee Director's service with the Company
terminates other than by reason of death or disability, under mutually
satisfactory conditions, any Award held by such Non-Employee Director shall
expire thirty (30) days after the date of such termination. All applicable
provisions of the Plan not inconsistent with this Article IX shall apply to
Awards granted to Non-Employee Directors; provided, however, that the
Committee may not exercise discretion under any provision of the Plan with
respect to Awards granted under this Article IX except to the extent expressly
TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
10.01 PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Committee
have the power to grant any Award under the Plan which is contrary to any of the
provisions of the Plan. In the event any provision of any Award granted under
the Plan shall conflict with any term in the Plan as constituted on the Date of
Grant of such Award, the term in the Plan as constituted on the Date of Grant of
such Award shall control. Except as provided in Section 10.03 and Section 10.07,
the terms of any Award granted under the Plan may not be changed after the Date
of Grant of such Award so as to materially decrease the value of the Award
without the express written approval of the holder.
10.02 AWARD AGREEMENT. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award.
10.03 MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan to
a Participant may be modified (unless such modification does not materially
decrease the value of the Award) after the Date of Grant except by express
written agreement between the Company and the Participant, provided that any
such change (a) shall not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Committee.
10.04 LIMITATION ON TRANSFER. Except as provided in Section 7.01(c) in the
case of Restricted Shares, a Participant's rights and interest under the Plan
may not be assigned or transferred other than by will or the laws of descent and
distribution, and during the lifetime of a Participant, only the Participant
personally (or the Participant's personal representative) may exercise rights
under the Plan. The Participant's Beneficiary may exercise the Participant's
rights to the extent they are exercisable under the Plan following the death of
the Participant. Notwithstanding the foregoing, the Committee may grant
Non-Qualified Stock Options that are transferable, without payment of
consideration, to immediate family members of the Participant or to trusts or
partnerships for such family members, and the Committee may also amend
outstanding Non-Qualified Stock Options to provide for such transferability.
10.05 TAXES. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares issuable under such Participant's Award, or with respect to any income
recognized upon a disqualifying disposition of shares received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer payment or
issuance of the cash or shares upon exercise or vesting of an Award unless
indemnified to its satisfaction against any liability for any such tax. The
amount of such withholding or tax payment shall be determined by the Committee
and shall be payable by the Participant at such time as the Committee determines
in accordance with the following rules:
(a) The Participant shall have the right to elect to meet his or her
withholding requirement (i) by having withheld from such Award at the
appropriate time that number of shares of Class A Common Stock, rounded up
to the next whole share, whose Fair Market Value is equal to the amount of
withholding taxes due, (ii) by direct payment to the Company in cash of the
amount of any taxes required to be withheld with respect to such Award or
(iii) by a combination of shares and cash.
(b) The Committee shall have the discretion as to any Award, to cause
the Company to pay to tax authorities for the benefit of any Participant,
or to reimburse such Participant for the individual taxes which are due on
the grant, exercise or vesting of any share Award, or the lapse of any
restriction on any
share Award (whether by reason of a Participant's filing of an election
under Section 83(b) of the Code or otherwise), including, but not limited
to, Federal income tax, state income tax, local income tax and excise tax
under Section 4999 of the Code, as well as for any such taxes as may be
imposed upon such tax payment or reimbursement.
(c) In the case of Participants who are subject to Section 16 of the
Exchange Act, the Committee may impose such limitations and restrictions as
it deems necessary or appropriate with respect to the delivery or
withholding of shares of Class A Common Stock to meet tax withholding
10.06 SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Committee and
the holder approve.
10.07 ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
(A) RECAPITALIZATION. The number and kind of shares subject to outstanding
Awards, the Purchase Price or Exercise Price for such shares, the number and
kind of shares available for Awards subsequently granted under the Plan and the
maximum number of shares in respect of which Awards can be made to any
Participant in any calendar year shall be appropriately adjusted to reflect any
stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in capitalization with a similar substantive
effect upon the Plan or the Awards granted under the Plan. The Committee shall
have the power and sole discretion to determine the amount of the adjustment to
be made in each case.
(B) MERGER. After any Merger in which the Company is the surviving
corporation, each Participant shall, at no additional cost, be entitled upon any
exercise of all Option or receipt of other Award to receive (subject to any
required action by stockholders), in lieu of the number of shares of Class A
Common Stock receivable or exercisable pursuant to such Award, the number and
class of shares or other securities to which such Participant would have been
entitled pursuant to the terms of the Merger if, at the time of the Merger, such
Participant had been the holder of record of a number of shares equal to the
number of shares receivable or exercisable pursuant to such Award. Comparable
rights shall accrue to each Participant in the event of successive Mergers of
the character described above. In the event of a Merger in which the Company is
not the surviving corporation, the surviving, continuing, successor, or
purchasing corporation, as the case may be (the "Acquiring Corporation"), shall
either assume the Company's rights and obligations under outstanding Award
Agreements or substitute awards in respect of the Acquiring Corporation's stock
for such outstanding Awards. In the event the Acquiring Corporation elects not
to assume or substitute for such outstanding Awards, the Board shall provide
that any unexercisable and/or unvested portion of the outstanding Awards shall
be immediately exercisable and vested as of a date prior to such merger or
consolidation, as the Board so determines. The exercise and/or vesting of any
Award that was permissible solely by reason of this Section 10.07(b) shall be
conditioned upon the consummation of the merger or consolidation. Any Options
which are neither assumed by the Acquiring Corporation not exercised as of the
date of the Merger shall terminate effective as of the effective date of the
(C) OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES. After any
merger in which the Company or a Subsidiary shall be a surviving corporation,
the Committee may grant substituted options under the provisions of the Plan,
pursuant to Section 424 of the Code, replacing old options granted under a plan
of another party to the merger whose shares or stock subject to the old options
may no longer be issued following the merger. The foregoing adjustments and
manner of application of the foregoing provisions shall be determined by the
Committee in its sole discretion. Any such adjustments may provide for the
elimination of any fractional shares which might otherwise become subject to any
10.08 NO RIGHT TO EMPLOYMENT. No employee or other person shall have any
claim of right to be granted an Award under this Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.
10.09 AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
10.10 GOVERNING LAW. All determinations made and actions taken pursuant to
the Plan shall be governed by the laws of the State of Delaware and construed in
10.11 NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Committee, or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.
10.12 CAPTIONS. The captions (i.e., all Section headings) used in the Plan
are for convenience only, do not constitute a part of the Plan, and shall not be
deemed to limit, characterize or affect in any way any provisions of the Plan,
and all provisions of the Plan shall be construed as if no captions have been
used in the Plan.
10.13 SEVERABILITY. Whenever possible, each provision in the Plan and every
Award at any time granted under the Plan shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of the Plan
or any Award at any time granted under the Plan shall be held to be prohibited
by or invalid under applicable law, then (a) such provision shall be deemed
amended to accomplish the objectives of the provision as originally written to
the fullest extent permitted by law and (b) all other provisions of the Plan and
every other Award at any time granted under the Plan shall remain in full force
10.14 AMENDMENT AND TERMINATION.
(A) AMENDMENT. The Board shall have complete power and authority to amend
the Plan at any time. No termination or amendment of the Plan may, without the
consent of the Participant to whom any Award shall theretofore have been granted
under the Plan, adversely affect the right of such individual under such Award.
(B) TERMINATION. The Board shall have the right and the power to terminate
the Plan at any time. No Award shall be granted under the Plan after the
termination of the Plan, but the termination of the Plan shall not have any
other effect and any Award outstanding at the time of the termination of the
Plan may be exercised after termination of the Plan at any time prior to the
expiration date of such Award to the same extent such Award would have been
exercisable had the Plan not terminated.