1993 Stock and Long-Term Incentive Plan - Halliburton Co.
HALLIBURTON COMPANY
1993 STOCK AND LONG-TERM INCENTIVE PLAN
As Amended and Restated May 16, 2000
I. PURPOSE
The purpose of the Halliburton Company 1993 Stock and Long-Term Incentive
Plan (the "Plan") is to provide a means whereby Halliburton Company, a Delaware
corporation (the "Company"), and its Subsidiaries may attract, motivate and
retain highly competent employees and to provide a means whereby selected
employees can acquire and maintain stock ownership, thereby strengthening their
concern for the long-term welfare of the Company. The Plan is also intended to
provide employees with additional incentive and reward opportunities designed to
enhance the profitable growth of the Company over the long term. A further
purpose of the Plan is to allow awards under the Plan to Non-employee Directors
in order to enhance the Company's ability to attract and retain highly qualified
Directors. Accordingly, the Plan provides for granting Incentive Stock Options,
Options which do not constitute Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Performance Share Awards, Stock Value
Equivalent Awards, or any combination of the foregoing, as is best suited to the
circumstances of the particular employee or Non-employee Director as provided
herein.
II. DEFINITIONS
The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:
(a) "Award" means, individually or collectively, any Option, Stock
Appreciation Right, Restricted Stock Award, Performance Share Award or
Stock Value Equivalent Award.
(b) "Board" means the Board of Directors of Halliburton Company.
(c) "Change of Control Value" means, for the purposes of Clause (B) of
Paragraph (e) of Article XII and Clause (B) of Paragraph (f) of Article
XII, the amount determined in Clause (i), (ii) or (iii), whichever is
applicable, as follows: (i) the per share price offered to stockholders of
the Company in any merger, consolidation, sale of assets or dissolution
transaction, (ii) the per share price offered to stockholders of the
Company in any tender offer or exchange offer whereby a Corporate Change
takes place or (iii) if a Corporate Change occurs other than as described
in Clause (i) or Clause (ii), the fair market value per share determined by
the Committee as of the date determined by the Committee to be the date of
cancellation and surrender of an Option or Stock Appreciation Right. If the
consideration offered to stockholders of the Company in any transaction
described in this Paragraph or Paragraphs (e) and (f) of Article XII
consists of anything other than cash, the Committee shall determine the
fair cash equivalent of the portion of the consideration offered which is
other than cash.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include
any amendments or successor provisions to such section and any regulations
under such section.
(e) "Committee" means the committee selected by the Board to
administer the Plan in accordance with Paragraph (a) of Article IV of the
Plan.
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(f) "Common Stock" means the common stock par value $2.50 per share,
of Halliburton Company.
(g) "Company" means Halliburton Company.
(h) "Corporate Change" means one of the following events: (i) the
merger, consolidation or other reorganization of the Company in which the
outstanding Common Stock is converted into or exchanged for a different
class of securities of the Company, a class of securities of any other
issuer (except a direct or indirect wholly owned subsidiary of the
Company), cash or other property; (ii) the sale, lease or exchange of all
or substantially all of the assets of the Company to any other corporation
or entity (except a direct or indirect wholly owned subsidiary of the
Company); (iii) the adoption by the stockholders of the Company of a plan
of liquidation and dissolution; (iv) the acquisition (other than any
acquisition pursuant to any other clause of this definition) by any person
or entity, including without limitation a "group" as contemplated by
Section 13(d)(3) of the Exchange Act, of beneficial ownership, as
contemplated by such Section, of more than twenty percent (based on voting
power) of the Company's outstanding capital stock; or (v) as a result of or
in connection with a contested election of directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value" means, as of any specified date, the closing
price of the Common Stock on the New York Stock Exchange (or, if the Common
Stock is not then listed on such exchange, such other national securities
exchange on which the Common Stock is then listed) on that date, or if no
prices are reported on that date, on the last preceding date on which such
prices of the Common Stock are so reported. If the Common Stock is not then
listed on any national securities exchange but is traded over the counter
at the time a determination of its Fair Market Value is required to be made
hereunder, its Fair Market Value shall be deemed to be equal to the average
between the reported high and low sales prices of Common Stock on the most
recent date on which Common Stock was publicly traded. If the Common Stock
is not publicly traded at the time a determination of its value is required
to be made hereunder, the determination of its Fair Market Value shall be
made by the Committee in such manner as it deems appropriate.
(k) "Holder" means an employee or Non-employee Director of the Company
who has been granted an Award.
(l) "Immediate Family" means, with respect to a particular Holder, the
Holder's spouse, children and grandchildren (including adopted and step
children and grandchildren).
(m) "Incentive Stock Option" means an Option within the meaning of
section 422 of the Code.
(n) "Non-employee Director" means a member of the Board who is not an
employee or former employee of the Company or its Subsidiaries.
(o) "Option" means an Award granted under Article VII of the Plan and
includes both Incentive Stock Options to purchase Common Stock and Options
which do not constitute Incentive Stock Options to purchase Common Stock.
(p) "Option Agreement" means a written agreement between the Company
and a Holder with respect to an Option.
(q) "Optionee" means a Holder who has been granted an Option.
(r) "Parent Corporation" shall have the meaning set forth in section
424(e) of the Code.
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(s) "Performance Share Award" means an Award granted under Article X
of the Plan.
(t) "Plan" means the Halliburton Company 1993 Stock and Long-Term
Incentive Plan.
(u) "Restricted Stock Award" means an Award granted under Article IX
of the Plan.
(v) "Rule 16b-3" means Rule 16b-3 of the general Rules and Regulation
of the Securities and Exchange Commission under the Exchange Act, as such
rule is currently in effect or as hereafter modified or amended.
(w) "Spread" means, in the case of a Stock Appreciation Right, an
amount equal to the excess, if any, of the Fair Market Value of a share of
Common Stock on the date such right is exercised over the exercise price of
such Stock Appreciation Right.
(x) "Stock Appreciation Right" means an Award granted under Article
VIII of the Plan.
(y) "Stock Appreciation Rights Agreement" means a written agreement
between the Company and a Holder with respect to an Award of Stock
Appreciation Rights.
(z) "Stock Value Equivalent Award" means an Award granted under
Article XI of the Plan.
(aa) "Subsidiary" means a company (whether a corporation, partnership,
joint venture or other form of entity) in which the Company or a
corporation in which the Company owns a majority of the shares of capital
stock, directly or indirectly, owns a greater than twenty percent equity
interest, except that with respect to the issuance of Incentive Stock
Options the term "Subsidiary" shall have the same meaning as the term
"subsidiary corporation" as defined in section 424(f) of the Code.
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective upon the date of its adoption by the Board,
provided the Plan is approved by the stockholders of the Company within twelve
months thereafter and on or prior to the date of the first annual meeting of
stockholders of the Company held subsequent to the acquisition of an equity
security by a Holder hereunder for which exemption is claimed under Rule 16b-3.
Notwithstanding any provision of the Plan or in any Option Agreement or Stock
Appreciation Rights Agreement, no Option or Stock Appreciation Right shall be
exercisable prior to such stockholder approval. No further Awards may be granted
under the Plan after ten years from the date the Plan is adopted by the Board.
Subject to the provisions of Article XIII, the Plan shall remain in effect until
all Options and Stock Appreciation Rights granted under the Plan have been
exercised or expired by reason of lapse of time, all restrictions imposed upon
Restricted Stock Awards have lapsed and all Performance Share Awards and Stock
Value Equivalent Awards have been satisfied.
IV. ADMINISTRATION
(a) Composition of Committee. The Plan shall be administered by a committee
which shall be (i) appointed by the Board and (ii) constituted so as to permit
the Plan to comply with Rule 16b-3 and regulations promulgated under section
162(m) of the Code.
(b) Powers. The Committee shall have authority, in its discretion, to
determine which eligible individuals shall receive an Award, the time or times
when such Award shall be made, whether an Incentive Stock Option, nonqualified
Option or Stock Appreciation Right shall be granted, the number of shares of
Common Stock which may be issued under each Option, Stock Appreciation Right and
Restricted Stock Award, and the value of each Performance Share Award and Stock
Value Equivalent Award. In making such determinations the Committee may take
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into account the nature of the services rendered by the respective individuals,
their responsibility level, their present and potential contribution to the
Company's success and such other factors as the Committee in its discretion
shall deem relevant.
(c) Additional Powers. The Committee shall have such additional powers as
are delegated to it by the other provisions of the Plan. Subject to the express
provisions of the Plan, the Committee is authorized to construe the Plan and the
respective agreements executed thereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the Plan,
and to determine the terms, restrictions and provisions of each Award, including
such terms, restrictions and provisions as shall be requisite in the judgment of
the Committee to cause designated Options to qualify as Incentive Stock Options,
and to make all other determinations necessary or advisable for administering
the Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in any agreement relating to an Award in the manner
and to the extent the Committee shall deem expedient to carry the Award into
effect. The determinations of the Committee on the matters referred to in this
Article IV shall be conclusive.
(d) Delegation of Authority. The Committee may delegate some or all of its
power to the Chief Executive Officer of the Company as the Committee deems
appropriate; provided, however, that (i) the Committee may not delegate its
power with regard to the grant of an Award to any person who is a "covered
employee" within the meaning of section 162(m) of the Code or who, in the
Committee's judgment, is likely to be a covered employee at any time during the
period an Award to such employee would be outstanding; and (ii) the Committee
may not delegate its power with regard to the selection for participation in the
Plan of an officer or other person subject to Section 16 of the Exchange Act or
decisions concerning the timing, pricing or amount of an Award to such an
officer or other person.
V. GRANT OF OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED STOCK
AWARDS, PERFORMANCE SHARE AWARDS AND STOCK VALUE EQUIVALENT
AWARDS; SHARES SUBJECT TO THE PLAN
(a) Award Limits. The Committee may from time to time grant Awards to one
or more individuals determined by it to be eligible for participation in the
Plan in accordance with the provisions of Article VI. The aggregate number of
shares of Common Stock that may be issued under the Plan shall not exceed
49,000,000 shares, of which no more than 16,000,000 may be issued in the form of
Restricted Stock Awards or pursuant to Performance Share Awards. Notwithstanding
anything contained herein to the contrary, the number of Option shares or Stock
Appreciation Rights, singly or in combination, together with shares or share
equivalents under Performance Share Awards granted to any Holder in any one
calendar year, shall not in the aggregate exceed 500,000. Any of such shares
which remain unissued and which are not subject to outstanding Options or Awards
at the termination of the Plan shall cease to be subject to the Plan, but, until
termination of the Plan, the Company shall at all times reserve a sufficient
number of shares to meet the requirements of the Plan. Shares shall be deemed to
have been issued under the Plan only to the extent actually issued and delivered
pursuant to an Award. To the extent that an Award lapses or the rights of its
Holder terminate or the Award is paid in cash, any shares of Common Stock
subject to such Award shall again be available for the grant of an Award. The
aggregate number of shares which may be issued under the Plan shall be subject
to adjustment in the same manner as provided in Article XII with respect to
shares of Common Stock subject to Options then outstanding. Separate stock
certificates shall be issued by the Company for those shares acquired pursuant
to the exercise of an Incentive Stock Option and for those shares acquired
pursuant to the exercise of any Option which does not constitute an Incentive
Stock Option.
(b) Stock Offered. The stock to be offered pursuant to the grant of an
Award may be authorized but unissued Common Stock or Common Stock previously
issued and reacquired by the Company.
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VI. ELIGIBILITY
Awards made pursuant to the Plan may be granted to individuals who, at the
time of grant, are employees of the Company or any Parent Corporation or
Subsidiary of the Company or are Non-employee Directors. An Award made pursuant
to the Plan may be granted on more than one occasion to the same person, and
such Award may include an Incentive Stock Option, an Option which is not an
Incentive Stock Option, an Award of Stock Appreciation Rights, a Restricted
Stock Award, a Performance Share Award, a Stock Value Equivalent Award or any
combination thereof. Each Award shall be evidenced by a written instrument duly
executed by or on behalf of the Company.
VII. STOCK OPTIONS
(a) Stock Option Agreement. Each Option shall be evidenced by an Option
Agreement between the Company and the Optionee which shall contain such terms
and conditions as may be approved by the Committee. The terms and conditions of
the respective Option Agreements need not be identical. Specifically, an Option
Agreement may provide for the payment of the option price, in whole or in part,
by the delivery of a number of shares of Common Stock (plus cash if necessary)
having a Fair Market Value equal to such option price. Each Option Agreement
shall provide that the Option may not be exercised earlier than six months from
the date of grant and shall specify the effect of termination of the Holder's
service on the exercisability of the Option.
(b) Option Period. The term of each Option shall be as specified by the
Committee at the date of grant; provided that, in no case, shall the term of an
Option exceed ten years.
(c) Limitations on Exercise of Option. An Option shall be exercisable in
whole or in such installments and at such times as determined by the Committee.
(d) Special Limitations on Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined at the time the respective Incentive
Stock Option is granted) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by an individual during any calendar
year under all incentive stock option plans of the Company and its Parent
Corporation and Subsidiaries exceeds $100,000, such excess Incentive Stock
Options shall be treated as Options which do not constitute Incentive Stock
Options. The Committee shall determine, in accordance with applicable provisions
of the Code, Treasury Regulations and other administrative pronouncements, which
of an Optionee's Incentive Stock Option will not constitute Incentive Stock
Options because of such limitation and shall notify the Optionee of such
determination as soon as practicable after such determination. No Incentive
Stock Option shall be granted to an individual if, at the time the Option is
granted, such individual owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of its Parent
Corporation or a Subsidiary, within the meaning of section 422(b)(6) of the
Code, unless (i) at the time such Option is granted the option price is at least
110% of the Fair Market Value of the Common Stock subject to the Option and (ii)
such Option by its terms is not exercisable after the expiration of five years
from the date of grant.
(e) Option Price. The purchase price of Common Stock issued under each
Option shall be determined by the Committee, but such purchase price shall not
be less than the Fair Market Value of Common Stock subject to the Option on the
date the Option is granted.
(f) Options and Rights in Substitution for Stock Options Granted by Other
Corporations. Options and Stock Appreciation Rights may be granted under the
Plan from time to time in substitution for stock options held by employees of
corporations who become, or who became prior to the effective date of the Plan,
employees of the Company or of any Subsidiary as a result of a merger or
consolidation of the employing corporation with the Company or such Subsidiary,
or the acquisition by the Company or a Subsidiary of all or a portion of the
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assets of the employing corporation, or the acquisition by the Company or a
Subsidiary of stock of the employing corporation with the result that such
employing corporation becomes a Subsidiary.
(g) Repricing Prohibited. Except for adjustments pursuant to Article XII,
the purchase price of Common Stock for any outstanding Option granted under the
Plan may not be decreased after the date of grant nor may an outstanding Option
granted under the Plan be surrendered to the Company as consideration for the
grant of a new Option with a lower purchase price.
VIII. STOCK APPRECIATION RIGHTS
(a) Stock Appreciation Rights. A Stock Appreciation Right is the right to
receive an amount equal to the Spread with respect to a share of Common Stock
upon the exercise of such Stock Appreciation Right. Stock Appreciation Rights
may be granted in connection with the grant of an Option, in which case the
Option Agreement will provide that exercise of Stock Appreciation Rights will
result in the surrender of the right to purchase the shares under the Option as
to which the Stock Appreciation Rights were exercised. Alternatively, Stock
Appreciation Rights may be granted independently of Options in which case each
Award of Stock Appreciation Rights shall be evidenced by a Stock Appreciation
Rights Agreement between the Company and the Holder which shall contain such
terms and conditions as may be approved by the Committee. The terms and
conditions of the respective Stock Appreciation Rights Agreements need not be
identical. The Spread with respect to a Stock Appreciation Right may be payable
either in cash, shares of Common Stock with a Fair Market Value equal to the
Spread or in a combination of cash and shares of Common Stock. With respect to
stock Appreciation Rights that are subject to Section 16 of the Exchange Act,
however, the Committee shall, except as provided in Paragraphs (e) and (f) of
Article XII, retain sole discretion (i) to determine the form in which payment
of the Stock Appreciation Right will be made (i.e., cash, securities or any
combination thereof) or (ii) to approve an election by a Holder to receive cash
in full or partial settlement of Stock Appreciation Rights. Upon the exercise of
any Stock Appreciation Rights granted hereunder, the number of shares reserved
for issuance under the Plan shall be reduced only to the extent that shares of
Common Stock are actually issued in connection with the exercise of such Right.
Each Stock Appreciation Rights Agreement shall provide that the Stock
Appreciation Rights may not be exercised earlier than six months from the date
of grant and shall specify the effect of a Holder's termination of service on
the exercisability of the Stock Appreciation Rights.
(b) Exercise Price. The exercise price of each Stock Appreciation Right
shall be determined by the Committee, but such exercise price shall not be less
than the Fair Market Value of a share of Common Stock on the date the Stock
Appreciation Right is granted.
(c) Exercise Period. The term of each Stock Appreciation Right shall be as
specified by the Committee at the date of grant; provided that, in no case,
shall the term of a Stock Appreciation Right exceed ten years.
(d) Limitations on Exercise of Stock Appreciation Right. A Stock
Appreciation Right shall be exercisable in whole or in such installments and at
such times as determined by the Committee.
(e) Repricing Prohibited. Except for adjustments pursuant to Article XII,
the exercise price of a Stock Appreciation Right may not be decreased after the
date of grant nor may an outstanding Stock Appreciation Right granted under the
Plan be surrendered to the Company as consideration for the grant of a new Stock
Appreciation Right with a lower exercise price.
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IX. RESTRICTED STOCK AWARDS
(a) Restricted Period To Be Established by the Committee. At the time a
Restricted Stock Award is made, the Committee shall establish a period of time
(the "Restriction Period") applicable to such Award; provided, however, that,
except as set forth below and as permitted by Paragraph (b) of this Article IX,
such Restriction Period shall not be less than three (3) years from the date of
grant (the "Minimum Criteria"). An award which provides for the lapse of
restrictions on shares applicable to such Award in equal annual installments
over a period of at least three (3) years from the date of grant shall be deemed
to meet the Minimum Criteria. The foregoing notwithstanding, with respect to
Restricted Stock Awards of up to an aggregate 550,000 shares (subject to
adjustment as set forth in Article XII), the Minimum Criteria shall not apply
and the Committee may establish such lesser Restriction Periods applicable to
such Awards as it shall determine in its discretion. Subject to the foregoing,
each Restricted Stock Award may have a different Restriction Period, in the
discretion of the Committee. The Restriction Period applicable to a particular
Restricted Stock Award shall not be changed except as permitted by Paragraph (b)
of this Article or by Article XII.
(b) Other Terms and Conditions. Common Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered in
the name of the Holder of such Restricted Stock Award or, at the option of the
Company, in the name of a nominee of the Company. The Holder shall have the
right to receive dividends during the Restriction Period, to vote the Common
Stock subject thereto and to enjoy all other stockholder rights, except that (i)
the Holder shall not be entitled to possession of the stock certificate until
the Restriction Period shall have expired, (ii) the Company shall retain custody
of the stock during the Restriction Period, (iii) the Holder may not sell,
transfer, pledge, exchange, hypothecate or otherwise dispose of the stock during
the Restriction Period and (iv) a breach of the terms and conditions established
by the Committee pursuant to the Restricted Stock Award shall cause a forfeiture
of the Restricted Stock Award. At the time of such Award, the Committee may, in
its sole discretion, prescribe additional terms, conditions or restrictions
relating to Restricted Stock Awards, including, but not limited to, rules
pertaining to the termination of a Holder's service (by retirement, disability,
death or otherwise) prior to expiration of the Restriction Period.
(c) Payment for Restricted Stock. A Holder shall not be required to make
any payment for Common Stock received pursuant to a Restricted Stock Award,
except to the extent otherwise required by law and except that the Committee
may, in its discretion, charge the Holder an amount in cash not in excess of the
par value of the shares of Common Stock issued under the Plan to the Holder.
(d) Miscellaneous. Nothing in this Article shall prohibit the exchange of
shares issued under the Plan (whether or not then subject to a Restricted Stock
Award) pursuant to a plan of reorganization for stock or securities in the
Company or another corporation a party to the reorganization, but the stock or
securities so received for shares then subject to the restrictions of a
Restricted Stock Award shall become subject to the restrictions of such
Restricted Stock Award. Any shares of stock received as a result of a stock
split or stock dividend with respect to shares then subject to a Restricted
Stock Award shall also become subject to the restrictions of the Restricted
Stock Award.
X. PERFORMANCE SHARE AWARDS
(a) Performance Period. The Committee shall establish, with respect to and
at the time of each Performance Share Award, a performance period over which the
performance applicable to the Performance Share Award of the Holder shall be
measured; provided, however, that such performance period shall not be less than
one (1) year.
(b) Performance Share Awards. Each Performance Share Award may have a
maximum value established by the Committee at the time of such Award.
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(c) Performance Measures. A Performance Share Award may be awarded
contingent upon the achievement of one or more performance measures. The
performance criteria for Performance Share Awards shall consist of objective
tests based on the following: earnings, cash flow, cash value added performance,
shareholder return and/or value, revenues, operating profits (including EBITDA),
net profits, earnings per share, stock price, cost reduction goals, debt to
capital ratio, financial return ratios, profit return and margins, market share,
working capital and customer satisfaction. The Committee may select one
criterion or multiple criteria for measuring performance. Performance criteria
may be measured on corporate, subsidiary or business unit performance, or on a
combination thereof. Further, the performance criteria may be based on
comparative performance with other companies or other external measure of the
selected performance criteria.
(d) Payment. Following the end of the performance period, the Holder of a
Performance Share Award shall be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Share Award, if any, based on the
achievement of the performance measures for such performance period, as
determined by the Committee in its sole discretion. Payment of a Performance
Share Award (i) may be made in cash, Common Stock or a combination thereof, as
determined by the Committee in its sole discretion, (ii) shall be made in a lump
sum or in installments as prescribed by the Committee in its sole discretion and
(iii) to the extent applicable, shall be based on the Fair Market Value of the
Common Stock on the payment date. If a payment of cash or issuance of Common
Stock is to be made on a deferred basis, the Committee shall establish whether
interest or dividend equivalents shall be credited on the deferred amounts and
any other terms and conditions applicable thereto.
(e) Termination of Service. The Committee shall determine the effect of
termination of service during the performance period on a Holder's Performance
Share Award.
XI. STOCK VALUE EQUIVALENT AWARDS
(a) Stock Value Equivalent Awards. Stock Value Equivalent Awards are rights
to receive an amount equal to the Fair Market Value of shares of Common Stock or
rights to receive an amount equal to any appreciation or increase in the Fair
Market Value of Common Stock over a specified period of time, which vest over a
period of time as established by the Committee, without payment of any amounts
by the Holder thereof (except to the extent otherwise required by law) or
satisfaction of any performance criteria or objectives. Each Stock Value
Equivalent Award may have a maximum value established by the Committee at the
time of such Award.
(b) Award Period. The Committee shall establish, with respect to and at the
time of each Stock Value Equivalent Award, a period over which the Award shall
vest with respect to the Holder.
(c) Payment. Following the end of the determined period for a Stock Value
Equivalent Award, the Holder of a Stock Value Equivalent Award shall be entitled
to receive payment of an amount, not exceeding the maximum value of the Stock
Value Equivalent Award, if any, based on the then vested value of the Award.
Payment of a Stock Value Equivalent Award (i) shall be made in cash, (ii) shall
be made in a lump sum or in installments as prescribed by the Committee in its
sole discretion and (iii) shall be based on the Fair Market Value of the Common
Stock on the payment date. Cash dividend equivalents may be paid during, or may
be accumulated and paid at the end of, the determined period with respect to a
Stock Value Equivalent Award, as determined by the Committee. If payment of cash
is to be made on a deferred basis, the Committee shall establish whether
interest shall be credited, the rate thereof and any other terms and conditions
applicable thereto.
(d) Termination of Service. The Committee shall determine the effect of
termination of service during the applicable vesting period on a Holder's Stock
Value Equivalent Award.
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XII. RECAPITALIZATION OR REORGANIZATION
(a) Except as hereinafter otherwise provided, in the event of any
recapitalization, reorganization, merger, consolidation, combination, exchange,
stock dividend, stock split, extraordinary dividend or divestiture (including a
spin-off) or any other change in the corporate structure or shares of Common
Stock occurring after the date of the grant of an Award, the Committee may, in
its discretion, make such adjustment as to the number and price of shares of
Common Stock or other consideration subject to such Awards as the Committee
shall deem appropriate in order to prevent dilution or enlargement of rights of
the Holders.
(b) The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities having any
priority or preference with respect to or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or
any other corporate act or proceeding.
(c) The shares with respect to which Options may be granted are shares of
Common Stock as presently constituted, but if, and whenever, prior to the
expiration of an Option theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Common Stock or the payment of a stock
dividend on Common Stock without receipt of consideration by the Company, the
number of shares of Common Stock with respect to which such Option may
thereafter be exercised (i) in the event of an increase in the number of
outstanding shares shall be proportionately increased, and the purchase price
per share shall be proportionately reduced, and (ii) in the event of a reduction
in the number of outstanding shares shall be proportionately reduced, and the
purchase price per share shall be proportionately increased.
(d) If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise of an Option theretofore granted the
Optionee shall be entitled to purchase under such Option, in lieu of the number
of shares of Common Stock as to which such Option shall then be exercisable, the
number and class of shares of stock and securities and the cash and other
property to which the Optionee would have been entitled pursuant to the terms of
the recapitalization if, immediately prior to such recapitalization, the
Optionee had been the holder of record of the number of shares of Common Stock
then covered by such Option.
(e) In the event of a Corporate Change, then no later than (i) two business
days prior to any Corporate Change referenced in Clause (i), (ii), (iii) or (v)
of the definition thereof or (ii) ten business days after any Corporate Change
referenced in Clause (iv) of the definition thereof, the Committee, acting in
its sole discretion without the consent or approval of any Optionee, shall act
to effect one or more of the following alternatives with respect to outstanding
Options which acts may vary among individual Optionees, may vary among Options
held by individual Optionees and, with respect to acts taken pursuant to Clause
(i) above, may be contingent upon effectuation of the Corporate Change: (A)
accelerate the time at which Options then outstanding may be exercised so that
such Options may be exercised in full for a limited period of time on or before
a specified date (before or after such Corporate Change) fixed by the Committee,
after which specified date all unexercised Options and all rights of Optionees
thereunder shall terminate, (B) require the mandatory surrender to the Company
by selected Optionees of some or all of the outstanding Options held by such
Optionees (irrespective of whether such Options are then exercisable under the
provisions of the Plan) as of a date (before or after such Corporate Change)
specified by the Committee, in which event the Committee shall thereupon cancel
such Options and pay to each Optionee an amount of cash per share equal to the
excess, if any, of the Change of Control Value of the shares subject to such
Option over the exercise price(s) under such Options for such shares, (C) make
such adjustments to Options then outstanding as the Committee deems appropriate
to reflect such Corporate Change (provided, however, that the Committee may
determine in its sole discretion that no adjustment is necessary to Options then
outstanding) or (D) provide that thereafter upon any exercise of an Option
theretofore granted the Optionee shall be entitled to purchase under such
Option, in lieu of the number of shares of Common Stock as to which such Option
shall then be exercisable, the number and class of shares of stock or other
securities or property (including, without limitation, cash) to which the
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Optionee would have been entitled pursuant to the terms of the agreement of
merger, consolidation or sale of assets or plan of liquidation and dissolution
if, immediately prior to such merger, consolidation or sale of assets or any
distribution in liquidation and dissolution of the Company, the Optionee had
been the holder of record of the number of shares of Common Stock then covered
by such Option.
(f) In the event of a Corporate Change, then no later than (i) two business
days prior to any Corporate Change referenced in Clause (i), (ii), (iii) or (v)
of the definition thereof or (ii) ten business days after any Corporate Change
referenced in Clause (iv) of the definition thereof, the Committee, acting in
its sole discretion without the consent or approval of any Holder of a Stock
Appreciation Right, shall act to effect one or more of the following
alternatives with respect to outstanding Stock Appreciation Rights which acts
may vary among individual Holders, may vary among Stock Appreciation Rights held
by individual Holders and, with respect to acts taken pursuant to Clause (ii)
above, may be contingent upon effectuation of the Corporate Change (A)
accelerate the time at which Stock Appreciation Rights then outstanding may be
exercised so that such Stock Appreciation Rights may be exercised in full for a
limited period of time on or before a specified date (before or after such
Corporate Change) fixed by the Committee, after which specified date all
unexercised Stock Appreciation Rights and all rights of Holders thereunder shall
terminate, (B) require the mandatory surrender to the Company by selected
Holders of Stock Appreciation Rights of some or all of the outstanding Stock
Appreciation Rights held by such Holders (irrespective of whether such Stock
Appreciation Rights are then exercisable under the provisions of the Plan) as of
a date (before or after such Corporate Change) specified by the Committee, in
which event the Committee shall thereupon cancel such Stock Appreciation Rights
and pay to each Holder an amount of cash equal to the Spread with respect to
such Stock Appreciation Rights with the Fair Market Value of the Common Stock at
such time to be deemed to be the Change of Control Value or (C) make such
adjustments to Stock Appreciation Rights then outstanding as the Committee deems
appropriate to reflect such Corporate Change (provided, however, that the
Committee may determine in its sole discretion that no adjustment is necessary
to Stock Appreciation Rights then outstanding).
(g) Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to Options or Stock Appreciation Rights
theretofore granted, the purchase price per share of Common Stock subject to
Options or the calculation of the Spread with respect to Stock Appreciation
Rights.
(h) The provisions of the Plan or the Award agreements to the contrary
notwithstanding, with respect to any Restricted Stock Awards outstanding at the
time a Corporate Change occurs, the Committee may, in its discretion, provide
(i) for full vesting of all Common Stock awarded to the Holders pursuant to such
Restricted Stock Awards as of the date of such Corporate Change and (ii) that
all restrictions applicable to such Restricted Stock Award shall terminate as of
such date.
(i) The provisions of the Plan or the Award agreements to the contrary
notwithstanding, with respect to any Performance Share Awards which have been
approved but which are unpaid at the time a Corporate Change occurs, the
Committee may, in its discretion, provide (i) for full vesting of such Awards as
of the date of such Corporate Change, (ii) for payment of the then value of such
Awards as soon as administratively feasible following the Corporate Change, with
the value of such Awards to be based, to the extent applicable, on the Change of
Control Value of the Common Stock, (iii) that any provisions in Awards regarding
forfeiture of unpaid Awards shall not be applicable from and after a Corporate
Change with respect to Awards made prior to such Corporate Change and (iv) that
all performance measures applicable to unpaid Awards at the time of a Corporate
Change shall be deemed to have been satisfied in full during the performance
period upon the occurrence of such Corporate Change.
(j) The provisions of the Plan or the Award agreements to the contrary
notwithstanding, with respect to any Stock Value Equivalent Awards which have
been approved but which are unpaid at the time a Corporate Change occurs, the
Committee may, in its discretion, provide (i) for full vesting of such Awards as
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of the date of such Corporate Change and (ii) for payment of the then value of
such Awards as soon as administratively feasible following the Corporate Change
with the value of such Awards to be based on the Change of Control Value of the
Common Stock.
XIII. AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan or alter or amend the
Plan or any part thereof from time to time; provided that no change in any Award
theretofore granted may be made which would impair the rights of the Holder
without the consent of the Holder, and provided, further, that the Board may
not, without approval of the stockholders, amend the Plan:
(a) to increase the aggregate number of shares which may be issued
pursuant to the provisions of the Plan, except as provided in
Articles V and XII;
(b) to change the class of persons eligible to receive Awards under
the Plan;
(c) to change the maximum individual award limits under the Plan;
(d) to change the minimum exercise price of an Option or Stock
Appreciation Right or the maximum Award term;
(e) to permit the repricing or cancellation and reissuance of Options
and Stock Appreciation Rights; or
(f) to extend the duration of the Plan beyond February 18, 2003.
XIV. OTHER
(a) No Right To An Award. Neither the adoption of the Plan nor any action
of the Board or of the Committee shall be deemed to give an employee or a
non-employee Director any right to be granted an Option, a Stock Appreciation
Right, a right to a Restricted Stock Award or a right to a Performance Share
Award or Stock Value Equivalent Award or any other rights hereunder except as
may be evidenced by an Award or by an Option or Stock Appreciation Agreement
duly executed on behalf of the Company, and then only to the extent of and on
the terms and conditions expressly set forth therein. The Plan shall be
unfunded. The Company shall not be required to establish any special or separate
fund or to make any other segregation of funds or assets to assure the payment
of any Award.
(b) No Employment Rights Conferred. Nothing contained in the Plan or in any
Award made hereunder shall (i) confer upon any employee any right to
continuation of employment with the Company or any Subsidiary or (ii) interfere
in any way with the right of the Company or any Subsidiary to terminate his or
her employment at any time.
(c) No Rights to Serve as a Director Conferred. Nothing contained in the
Plan or in any Award made hereunder shall confer upon any Director any right to
continue their position as a Director of the Company.
(d) Other Laws; Withholding. The Company shall not be obligated to Issue
any Common Stock pursuant to any Award granted under the Plan at any time when
the offering of the shares covered by such Award has not been registered under
the Securities Act of 1933 and such other state and federal laws, rules or
regulations as the Company or the Committee deems applicable and, in the opinion
of legal counsel for the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the issuance and
sale of such shares. No fractional shares of Common Stock shall be delivered,
nor shall any cash in lieu of fractional shares be paid. The Company shall have
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the right to deduct in connection with all Awards any taxes required by law to
be withheld and to require any payments necessary to enable it to satisfy its
withholding obligations. The Committee may permit the Holder of an Award to
elect to surrender, or authorize the Company to withhold, shares of Common Stock
(valued at their Fair Market Value on the date of surrender or withholding of
such shares) in satisfaction of the Company's withholding obligation, subject to
such restrictions as the Committee deems necessary to satisfy the requirements
of Rule 16b-3.
(e) No Restriction on Corporate Action. Nothing contained in the Plan shall
be construed to prevent the Company or any Subsidiary from taking any corporate
action which is deemed by the Company or such Subsidiary to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan or any Award made under the Plan. No Holder, beneficiary or other
person shall have any claim against the Company or any Subsidiary as a result of
any such action.
(f) Restrictions on Transfer. An Award shall not be transferable otherwise
than by will or the laws of descent and distribution or pursuant to a "qualified
domestic relations order" as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, and shall be exercisable
during the lifetime of the Holder only by such Holder, the Holder's guardian or
legal representative, a transferee under a qualified domestic relations order or
a transferee as described below; provided, however, that the Committee shall
have the authority, in its discretion, to grant (or to sanction by way of
amendment to an existing grant) Options (other than Incentive Stock Options)
which may be transferred by the Holder for no consideration to or for the
benefit of the Holder's Immediate Family, to a trust solely for the benefit of
the Holder and his Immediate Family, or to a partnership or limited liability
company whose only partners or shareholders are the Holder and members of his
Immediate Family, in which case the Option Agreement shall so state. A transfer
of an Option pursuant to this paragraph (f) shall be subject to such rules and
procedures as the Committee may establish. In the event an Option is transferred
as contemplated in this paragraph (f), (i) such Option may not be subsequently
transferred by the transferee except by will or the laws of descent and
distribution, and (ii) such Option shall continue to be governed by and subject
to the terms and limitations of the Plan and the relevant Option Agreement and
the transferee shall be entitled to the same rights as the Holder under Articles
XII and XIII hereof as if no transfer had taken place.
The Option Agreement, Stock Appreciation Rights Agreement or other written
instrument evidencing an Award shall specify the effect of the death of the
Holder on the Award.
(g) Rule 16b-3. It is intended that the Plan and any grant of an Award made
to a person subject to Section 16 of the Exchange Act meet all of the
requirements of Rule 16b-3. If any provision of the Plan or any such Award would
disqualify the Plan or such Award under, or would otherwise not comply with,
Rule 16b-3, such provision or Award shall be construed or deemed amended to
conform to Rule 16b-3.
(h) Governing Law. This Plan shall be construed in accordance with the laws
of the State of Texas, except to the extent that it implicates matters which are
the subject of the General Corporation Law of the State of Delaware which
matters shall be governed by the latter law.
(i) Foreign Awardees. Without amending the Plan, the Committee may grant
Awards to eligible persons who are foreign nationals on such terms and
conditions different from those specified in the Plan as may, in the judgment of
the Committee, be necessary or desirable to foster and promote achievement of
the purposes of the Plan and, in furtherance of such purposes, the Committee may
make such modifications, amendments, procedures, subplans and the like as may be
necessary or advisable to comply with the provisions of laws and regulations in
other countries or jurisdictions in which the Company or its Subsidiaries
operate.
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