Document:

equity based plan 2011

 

 

EXHIBIT 10.1 Associated Estates Realty
Corporation

2011 EQUITY-BASED AWARD PLAN

1.       Purpose; Definitions.

The
purpose of the Associated Estates Realty Corporation 2011 Equity-Based Award
Plan (the "Plan") is to enable Associated Estates Realty Corporation
and its Subsidiaries to attract, retain and reward employees and directors of
the Company, its Subsidiaries and Affiliates designated by the Company's Board
of Directors or the Executive Compensation Committee of the Board and to
strengthen the mutuality of interests between those employees and directors and
the Company's shareholders by offering the employees and directors equity or
equity-based incentives thereby increasing their ownership interest in the
Company and enhancing their personal interest in the Company's success.

For
purposes of the Plan, the following terms are defined as follows:

(a)         "409A Award"
means an Award that provides for a deferral of compensation from the date of
grant, as determined under Code Section 409A and the regulations promulgated
thereunder.

(b)         
"409A Change
in Control" has the meaning set
forth in Section 11(E).

(c)         
"Affiliate" means any entity (other than the Company and any
Subsidiary) that is designated by the Board as a participating employer under
the Plan.

(d)         
"Award" means any
award of Stock Options, Share Appreciation Rights, Restricted Shares, Deferred
Shares or Other Share-Based Awards under the Plan.

(e)         
"Award Agreement"
means an agreement between the Company and a participant evidencing an Award.

(f)          
"Board" means the
Board of Directors of the Company.

(g)         
"Cause" means,
unless otherwise provided by the Committee, (i) "Cause" as defined in
any Individual Agreement to which the participant is a party, or (ii) if there
is no such Individual Agreement or if it does not define Cause: (A) conviction
of the participant for committing a felony under federal law or in the law of
the state in which such action occurred, (B) dishonesty in the course of
fulfilling the participant's employment duties, (C) willful and deliberate
failure on the part of the participant to perform the participant's employment
duties in any material respect, or (D) prior to a Change in Control, such other
events as shall be determined by the Committee.  The Committee shall, unless
otherwise provided in an Individual Agreement with the participant, have the
sole discretion to determine whether "Cause" exists, and its
determination shall be final.

(h)         
"Change in Control"
has the meaning set forth in Section 11(D).

(i)           
"Code" means the
Internal Revenue Code of 1986, as amended from time to time, and any successor
thereto.

(j)          
"Committee" means
the Executive Compensation Committee of the Board of the Company or any other
committee or subcommittee authorized by the Board to administer the Plan.

 

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(k)         
"Company" means
Associated Estates Realty Corporation, an Ohio corporation, or any successor
corporation.

(l)           
"Deferral Period"
has the meaning set forth in Section 8(A).

(m)       
"Deferred Shares"
means an Award of the right to receive Shares at the end of a specified
deferral period granted pursuant to Section 8.

(n)         
"Disability"
means (i) permanent "Disability" as defined in any Individual
Agreement to which the participant is a party, or (ii) if there is no such
Individual agreement or if it does not define permanent Disability, a permanent
and total disability as defined in Section 22(e)(3) of the Code.  The Committee
shall, unless otherwise provided in an Individual Agreement with the
participant, have the sole discretion to determine whether "Disability"
exists, and its determination will be final.

(o)         
"Dividend Equivalent"
means a right, granted to a participant under Section 9 hereof, to receive
cash, Shares, other Awards or other property equal in value to dividends paid
with respect to a specified number of Shares, or other periodic payments.

(p)         
"Elective Deferral Period"
has the meaning set forth in Section 8(B)(9).

(q)         
"Exchange Act"
means the Securities Exchange Act of 1934, as amended.

(r)          
"Fair Market Value"
means, as of a given date (in order of applicability): (i) the closing
price of a Common Share on the principal exchange on which the Common Shares
are then trading, if any, on such date, or if Common Shares were not traded on
such date, then on the next succeeding trading day during which a sale occurs;
or (ii) if Common Shares are not then traded on an exchange, the mean between
the closing representative bid and asked prices for Common Shares on such date
as reported by a national quotation system; or (iii) if Common Shares are not
traded on an exchange and not quoted on a national quotation system, the mean
between the closing bid and asked prices for Common Shares, on such date, as
determined in good faith by the Committee; or (iv) if Common Shares are not
publicly traded, the fair market value established by the Committee acting in
good faith and in accordance with the applicable requirements of Code Section
409A and the regulations promulgated thereunder.

(s)          
"Good Reason"
means an employee's resignation within two years of a Change in Control or 409A
Change in Control, caused by and within ninety (90) days of the following: (a)
without the express written consent of employee, duties are assigned to
employee that are materially inconsistent with the employee's position, duties
and status with the Company at the time of the Change in Control or 409A Change
in Control; (b) any action by the Company or its successor that results in a
material diminution in the position, duties or status of employee with the
Company at the time of the Change in Control or 409A Change in Control; (c)  any
transfer or proposed transfer of employee for any extended period to a location
outside his principal place of employment at the time of the Change in Control or
409A Change in Control without his consent, except for a transfer or proposed
transfer for strategic reallocations of personnel reporting to employee; (d)
the base annual salary of employee, as the same may hereafter be increased from
time to time, is reduced; or (e) without limiting the generality of the
foregoing, the Company or its successor fails to comply with any of its
material obligations under an Individual Agreement with the employee, if
applicable, or this Plan.

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(t)          
"Incentive Stock Option"
means any Stock Option intended to be and designated as, and that otherwise
qualifies as, an "Incentive Stock Option" within the meaning of Section
422 of the Code or any successor section thereto.

(u)         
"Individual Agreement"
means an employment or similar agreement between a participant and the Company
or one of its Subsidiaries or Affiliates.

(v)         
"Minimum Deferral Period" has the meaning set forth in Section 8(B)(1).

(w)        
"Minimum Holding Period"
has the meaning set forth in Section 9(B)(1).

(x)         
"Minimum Restriction
Period" has the meaning set forth in Section 7(B)(3).

(y)         
"Non-Employee Director" has the meaning set forth under Rule 16b-3 under the
Exchange Act.

(z)         
"Non-Qualified Stock
Option" means any Stock Option that is not an Incentive Stock Option.

(aa)      "Option Agreement" has the meaning
set forth in Section 5(B).

(bb)      "Other Share-Based Awards" means an
Award granted pursuant to Section 9 that is valued, in whole or in part, by
reference to, or is otherwise based on, Shares.

(cc)       "Outside Director" has the meaning
set forth in Section 162(m) of the Code and the regulations promulgated
thereunder.

(dd)      "Performance Goals" means the
performance goals selected by the Committee with respect to any Award, which
may be based on objective criteria relating to one or more of the following
measures: net operating income, leverage ratios, funds from operations,
revenue, physical occupancy, operating margins, relative performance to the
peer group, adherence to strategic objectives, budgets, or such other criteria
as the Committee may from time to time establish in its sole discretion.
Performance Goals may be measured on a Company-wide, subsidiary or business
unit basis, or any combination thereof.  Performance Goals may reflect absolute
entity performance or a relative comparison of entity performance to the
performance of a peer group of entities or other external measure.

(ee)       "Plan" means the Associated Estates
Realty Corporation 2011 Equity-Based Award Plan, as amended from time to time.

(ff)       
"Restricted Shares"
means an Award of Shares that is granted pursuant to Section 7 and is subject
to restrictions.

(gg)       "Restriction Period" has the meaning
set forth in Section 7(B)(3).

(hh)      "Section 16 Participant" means a participant
under the Plan who is subject to Section 16 of the Exchange Act.

(ii)         
"Separation from Service"
has the meaning set forth in Section 10(B)(1)(C).

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(jj)        
"Share Appreciation Right"
means an Award of a right to receive an amount from the Company that is granted
pursuant to Section 6.

(kk)      "Shares" means the Common Shares,
without par value, of the Company.

(ll)         
"Specified Employee"
has the meaning set forth in Section 10(B)(1)(D).

(mm)  "Stock Option" or "Option"
means any option to purchase Shares (including Restricted Shares and Deferred
Shares, if the Committee so determines) that is granted pursuant to Section 5.

(nn)      "Subsidiary" means any corporation
(other than the Company) in an unbroken chain of corporations beginning with
the Company if each of the corporations (other than the last corporation in the
unbroken chain) owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in that chain.

2.       Administration.

The
Plan shall be administered by the Committee.  The Committee shall consist of
not less than three directors of the Company.  It is intended that all members
of the Committee shall be independent directors, Outside Directors and
Non-Employee Directors; provided, however, that the formation and establishment
of the Committee and all actions taken by the Committee (or by any subcommittee
or any Committee member) shall be valid and effective even if it is determined
that one or more members of the Committee or any subcommittee does not or may
not qualify as an independent director, Outside Director or a Non-Employee
Director.  Those directors shall be appointed by the Board and shall serve as
the Committee at the pleasure of the Board.  The functions of the Committee
specified in the Plan shall be exercised by the Board if and to the extent that
no Committee exists that has the authority to so administer the Plan.

The
Committee shall have full power to interpret and administer the Plan and full
authority to select the individuals to whom Awards will be granted (other than Awards to directors of the Company who are
not executive officers, which must be approved by the Board) and to determine
the Performance Goals on which the granting of Awards will be based, the type
and amount of any Award to be granted to each participant (other than to a
director who is not an executive officer, which must be approved by the Board),
the consideration, if any, to be paid for any Award, the timing of each Award,
the terms and conditions of any Award granted under the Plan, and the terms and
conditions of the related agreements that will be entered into with
participants.  As to the selection of and grant of Awards to participants who
are not executive officers of the Company or any Subsidiary or Affiliate, or
Section 16 Participants, the Committee may delegate its responsibilities to
members of the Company's management in any manner consistent with applicable
law.

The
Committee shall have the authority to adopt, alter and repeal such rules,
guidelines and practices governing the Plan as it shall, from time to time,
deem advisable; to interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any agreement relating thereto); to direct employees
of the Company or other advisors to prepare such materials or perform such
analyses as the Committee deems necessary or appropriate; and otherwise to
supervise the administration of the Plan.

Any
interpretation or administration of the Plan by the Committee, and all actions
and determinations of the Committee, shall be final, binding and conclusive on
the Company, its shareholders, Subsidiaries, Affiliates, all participants in
the Plan, their respective legal representatives, successors and assigns, and
all persons claiming under or through any of them.  No member of the Board or
of the Committee or any delegate shall incur any liability for any action taken
or omitted, or any determination made, in good faith in connection with the
Plan. 

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3.       Shares Subject to the Plan.

A.          
Aggregate Shares Subject to the
Plan.  Subject to adjustment as
provided in Section 3(C), the total number of Shares reserved and available for
Awards under the Plan is 1,726,608.  Any Shares issued hereunder may consist,
in whole or in part, of authorized and unissued shares or treasury shares.  

B.          
Forfeiture or Termination of
Awards of Shares.  If any Shares
subject to any Award granted hereunder are forfeited or an Award otherwise
terminates or expires without the issuance of Shares, the Shares subject to
that Award shall again be available for distribution in connection with future
Awards under the Plan as set forth in Section 3(A).

C.          
Adjustment.  In the event of any merger, reorganization,
consolidation, recapitalization, share dividend, share split, combination of
shares or other change in corporate structure of the Company affecting the
Shares, such substitution or adjustment shall be made in the aggregate number
of Shares reserved for issuance under the Plan, in the number and option price
of Shares subject to outstanding options granted under the Plan, in the annual
award limit, in the number of Share Appreciation Rights granted under the Plan,
in the number of Shares underlying any Dividend Equivalent Rights granted under
the Plan will be based on,  and in the number of Shares subject to Restricted
Share Awards, Deferred Share Awards and any other outstanding Awards granted
under the Plan, but the number of Shares subject to any Award shall always be a
whole number.  The Committee, in its sole discretion, shall determine the kind
of securities or other property substituted and the amount of any substitution
or adjustment made, and the Committee's determination shall be final, binding
and conclusive.  Any fractional Shares otherwise issuable in connection with
such substitution or adjustment shall be eliminated.  Notwithstanding the
foregoing, no substitution or adjustment shall be made which will result in an
Award becoming subject to the terms and conditions of Code Section 409A, unless
agreed upon by the Committee and the participant.

D.          
Annual Award Limit.  No participant may be granted Stock Options or
other Awards under the Plan with respect to an aggregate of more than 125,000 Shares
(subject to adjustment as provided in Section 3(C) hereof) during any calendar
year; provided, however, that in connection with the commencement of
employment, a participant may be granted Stock Options and Share Appreciation
Rights with respect to an aggregate of 100,000 Shares, which will not count
against such annual limit.

4.       Eligibility.

Grants
may be made from time to time to those officers, employees and directors of the
Company, a Subsidiary or an Affiliate who are designated by the Committee in
its sole and exclusive discretion.  Eligible persons may include, but shall not
necessarily be limited to, officers and directors of the Company and any
Subsidiary or Affiliate; however, Stock Options intended to qualify as
Incentive Stock Options shall be granted only to eligible persons while
actually employed by the Company, a Subsidiary or an Affiliate.  The Committee
may grant more than one Award to the same eligible person.  No Award shall be
granted to any eligible person during any period of time when such eligible
person is on a leave of absence.  Awards to be granted to directors, which may
include members of the Committee, must be approved and granted by the Board.

5.       Stock Options.

A.          
Grant.  Stock Options may be granted alone, in addition to
or in tandem with other Awards granted under the Plan or cash awards made
outside the Plan. The Committee shall determine the individuals to whom, and
the time or times at which, grants of Stock Options will be made, the number of
Shares purchasable under each Stock Option, and the other terms and conditions
of the Stock Options in addition to those set forth in Sections 5(B) and 5(C). 

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Stock
Options granted under the Plan may be of two types which shall be indicated on
their face: (i) Incentive Stock Options and (ii) Non-Qualified Stock Options. 
Subject to Section 5(C), the Committee shall have the authority to grant to any
participant Incentive Stock Options, Non-Qualified Stock Options or both types
of Stock Options.

B.          
Terms and Conditions.  A Stock Option granted under the Plan shall be
evidenced by an agreement (an "Option Agreement"), shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of the Plan, as the Committee
shall deem desirable:

(1)         
Option Price.  The option price per share of Shares purchasable
under a Non-Qualified Stock Option or an Incentive Stock Option shall be
determined by the Committee at the time of grant and shall be not less than
100% of the Fair Market Value of the Shares at the date of grant (or, with
respect to an Incentive Stock Option, 110% of the Fair Market Value of the
Shares at the date of grant in the case of a participant who at the date of
grant owns Shares possessing more than 10% of the total combined voting power
of all classes of stock of the Company or its parent or Subsidiary corporations
(as determined under Sections 424(d), (e) and (f) of the Code)).

(2)         
Option Term.  The term of each Stock Option shall be determined
by the Committee and may not exceed ten years from the date the Option is
granted (or, with respect to an Incentive Stock Option, five years in the case
of a participant who at the date of grant owns Shares possessing more than 10%
of the total combined voting power of all classes of stock of the Company or
its parent or Subsidiary corporations (as determined under Sections 424(d), (e)
and (f) of the Code)).

(3)         
Exercise.  Stock Options shall be exercisable at such time or
times and shall be subject to such terms and conditions as shall be determined
by the Committee at or after grant and permitted by Code Section 409A or agreed
upon in writing by the Committee and the participant; but, except as provided
in Section 5(B)(6) and Section 12, unless otherwise determined by the Committee
at or after grant, no Stock Option shall be exercisable prior to six months and
one day following the date of grant.  If any Stock Option is exercisable only
in installments or only after specified exercise dates, the Committee may
waive, in whole or in part, such installment exercise provisions, and may
accelerate any exercise date or dates, at any time at or after grant, based on
such factors as the Committee shall determine in its sole discretion; provided,
however, the Committee may not waive, without the participant's consent, such
installment exercise provisions or accelerate any exercise dates with respect
to a 409A Award if doing so would result in any adverse tax consequences for
the optionee under Code Section 409A and the regulations promulgated
thereunder.

(4)         
Method of Exercise.  Subject to any installment exercise provisions that
apply with respect to any Stock Option, Code Section 409A and the regulations
promulgated thereunder, and Section 5(B)(3), a Stock Option may be exercised in
whole or in part, at any time during the Option period, by the holder thereof
giving to the Company written notice of exercise specifying the number of
Shares to be purchased.

That notice shall be accompanied by payment in full of
the Option price of the Shares for which the Stock Option is exercised, and the
Committee shall determine the acceptable
form of consideration for exercising a Stock Option, including the method of
payment, either through the terms of the Option Agreement or at the time of
exercise of a Stock Option. Acceptable forms of consideration may include: 

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(A)        
cash;

(B)        
check or wire transfer
(denominated in U.S. Dollars);

(C)        
subject to any conditions or
limitations established by the Committee, other Shares which (A) in the case of
Shares acquired from the Company (whether upon the exercise of a Stock Option
or otherwise), have been owned by the participant for more than six months on
the date of surrender (unless this condition is waived by the Committee), and
(B) have a Fair Market Value on the date of surrender equal to or greater than
the aggregate exercise price of the Shares as to which said Stock Option is
being exercised (it being agreed that the excess of the Fair Market Value over
the aggregate exercise price shall be refunded to the participant in cash);

(D)        
subject to any conditions or
limitations established by the Committee, the Company withholding shares
otherwise issuable upon exercise of a Stock Option;

(E)        
consideration received by the
Company under a broker-assisted sale and remittance program acceptable to the
Committee;

(F)         
such other consideration and
method of payment for the issuance of Shares to the extent permitted by applicable
law; or

(G)        
any combination of the foregoing
methods of payment.

No Shares shall be issued on an exercise of an Option
until full payment has been made.  Except in connection with the tandem award
of Dividend Equivalent Rights, a participant shall not have rights to dividends
or any other rights of a shareholder with respect to any Shares subject to an
Option unless and until the participant has given written notice of exercise,
has paid in full for those Shares, has given, if requested, the representation
described in Section 14(A), and those Shares have been issued to the
participant.

(5)         
Non-Transferability of Options.  No Stock Option shall be transferable by any
participant other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order (as defined in the Code or the
Employment Retirement Income Security Act of 1974, as amended) except that, if
so provided in the Option Agreement, the participant may transfer the Option,
other than an Incentive Stock Option, during the participant's lifetime to one
or more members of the participant's family, to one or more trusts for the
benefit of one or more of the participant's family, or to a partnership or
partnerships of members of the participant's family, or to a charitable
organization as defined in Section 501(c)(3) of the Code, provided that the
transfer would not result in the loss of any exemption under Rule 16b-3 of the
Exchange Act with respect to any Option.  The transferee of an Option will be
subject to all restrictions, terms and conditions applicable to the Option
prior to its transfer, except that the Option will not be further transferable
by the transferee other than by will or by the laws of descent and
distribution.

 

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(6)         
Termination of Employment.

(A)        
Termination by Death.  Subject to Sections 5(B)(3) and 5(C), if any
participant's employment with the Company or any Subsidiary or Affiliate
terminates by reason of death, any Stock Option held by that participant shall
become immediately and automatically vested and exercisable.  The provisions of
Section 5(B)(3) otherwise requiring a minimum period of six months and one day
to elapse prior to exercise of a Stock Option will not apply in the event of a
participant's death.  If termination of a participant's employment is due to
death, then any Stock Option held by that participant may thereafter be
exercised for a period of two years (or with respect to an Incentive Stock
Option, for a period of one year) (or such other period as the Committee may
specify at or after grant) from the date of death.  Notwithstanding the
foregoing, in no event will any Stock Option be exercisable after the
expiration of the option period of such Option.  The balance of the Stock
Option shall be forfeited if not exercised within the period contemplated by
this Section 5(B)(6)(A).

(B)        
Termination by Reason of
Disability.  Subject to Sections
5(B)(3) and 5(C), if a participant's employment with the Company or any
Subsidiary or Affiliate terminates by reason of Disability, any Stock Option held
by that participant shall become immediately and automatically vested and
exercisable.  The provisions of Section 5(B)(3) otherwise requiring a minimum
period of six months and one day to elapse prior to the exercise of a Stock
Option will not apply in the event of a participant's Disability. If
termination of a participant's employment is due to Disability, then any Stock
Option held by that participant may thereafter be exercised by the participant
or by the participant's duly authorized legal representative if the participant
is unable to exercise the Option as a result of the participant's Disability,
for a period of two years (or with respect to an Incentive Stock Option, for a
period of one year) (or such other period as the Committee may specify at or
after grant) from the date of such termination of employment; and if the
participant dies prior to the expiration of the period during which the Stock
Option remains exercisable, any unexercised Stock Option held by that
participant shall thereafter be exercisable by the estate of the participant
(acting through its fiduciary) for the duration of such unexpired  period. 
Notwithstanding the foregoing, in no event will any Stock Option be exercisable
after the expiration of the option period of such Option.  The balance of the
Stock Option shall be forfeited if not exercised within two years (or one year
with respect to Incentive Stock Options).

(C)        
Termination for Cause.  Unless otherwise determined by the Committee at or
after the time of granting any Stock Option, if a participant's employment with
the Company or any Subsidiary or Affiliate terminates for Cause, any unvested
Stock Options will be forfeited and terminated immediately upon termination and
any vested Stock Options held by that participant shall terminate 30 days after
the date employment terminates.  Notwithstanding the foregoing, in no event
will any Stock Option be exercisable after the expiration of the option period
of such Option.  The balance of the Stock Option shall be forfeited if not
exercised within 30 days.

(D)        
Other Termination.  Unless otherwise determined by the Committee at or
after the time of granting any Stock Option, if a participant's employment with
the Company or any Subsidiary or Affiliate terminates for any reason other than
death, Disability, or for Cause all Stock Options held by that participant
shall terminate 90 days after the date employment terminates.  Notwithstanding
the foregoing, in no event will any Stock Option be exercisable after the
expiration of the option period of such Option.  The balance of the Stock
Option shall be forfeited if not exercised within 90 days.

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(E)        
Leave of Absence.  In the event a participant is granted a leave of
absence by the Company or any Subsidiary or Affiliate to enter military service
or because of sickness, the participant's employment with the Company or such
Subsidiary or Affiliate will not be considered terminated, and the participant
shall be deemed an employee of the Company or such Subsidiary or Affiliate
during such leave of absence or any extension thereof granted by the Company or
such Subsidiary or Affiliate. Notwithstanding the foregoing, in the case of an
Incentive Stock Option, a leave of absence of more than 90 days will be viewed
as a termination of employment unless continued employment is guaranteed by
contract or statute.

C.          
Incentive Stock Options.  Notwithstanding Sections 5(B)(5) and (6), an
Incentive Stock Option shall be exercisable by (i) a participant's authorized
legal representative (if the participant is unable to exercise the Incentive
Stock Option as a result of the participant's Disability) only if, and to the
extent, permitted by Section 422 of the Code and (ii) by the participant's
estate, in the case of death, or authorized legal representative, in the case
of Disability, no later than 10 years from the date the Incentive Stock Option
was granted (in addition to any other restrictions or limitations that may
apply).  Anything in the Plan to the contrary notwithstanding, no term or
provision of the Plan relating to Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the
Plan be exercised, so as to disqualify the Plan under Section 422 of the Code,
or, without the consent of the participants affected, to disqualify any
Incentive Stock Option under that Section 422 or any successor Section thereto.

D.          
Buyout Provisions.  The Committee may at any time buy out for a payment
in cash, Shares, Deferred Shares or Restricted Shares, an Option previously
granted, based on such terms and conditions as the Committee shall establish
and agree upon with the participant, but (i) no such transaction involving
a Section 16 Participant shall be structured or effected in a manner that
would result in any liability on the part of the participant under
Section 16(b) of the Exchange Act or the rules and regulations promulgated
thereunder, and (ii) no such transaction may buy out or cancel outstanding
Options or Share Appreciation Rights in exchange for cash, Options, Share
Appreciation Rights or other Awards with an exercise price that is less than
the exercise price of the original Options or Share Appreciation Rights without
shareholder approval. Further, any such buy out shall comply with the
requirements of Code Section 409A and the regulations promulgated
thereunder, unless otherwise agreed upon in writing by the Committee and the
participant.  Nothing in this Section 5(D) will limit the Committee's right to
require early exercise of an Award under Section 10(B).

6.       Share Appreciation Rights.

A.          
Grant.  Share Appreciation Rights may be granted in
connection with all or any part of an Option, either concurrently with the
grant of the Option or, if the Option is a Non-Qualified Stock Option, by an
amendment to the Option at any time thereafter during the term of the Option. 
Share Appreciation Rights may be exercised in whole or in part at such times
and under such conditions as may be specified by the Committee in the
participant's Option Agreement; provided, that no Share Appreciation Right
granted in connection with all or any part of an Option shall be exercisable
for less than the Fair Market Value of the underlying Common Shares as of the
date of the original grant of the Option unless such Share Appreciation Right
or Option is a 409A Award, as provided for in the applicable Award Agreement.

 

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B.          
Terms and Conditions.  The following terms and conditions will apply to
all Share Appreciation Rights that are granted in connection with Options:

(1)         
Rights.  Share Appreciation Rights shall entitle the
participant, upon exercise of all or any part of the Share Appreciation Rights,
to surrender to the Company, unexercised, that portion of the underlying Option
relating to the same number of Shares as is covered by the Share Appreciation Rights
(or the portion of the Share Appreciation Rights so exercised) and to receive
in exchange from the Company an amount equal to the excess of (x) the Fair
Market Value, on the date of exercise, of the Shares covered by the surrendered
portion of the underlying Option over (y) the exercise price of the Shares
covered by the surrendered portion of the underlying Option.  The Committee may
limit the amount that the participant will be entitled to receive upon exercise
of the Share Appreciation Right as provided for in the applicable Award
Agreement.

(2)         
Surrender of Option.  Upon the exercise of the Share Appreciation Right
and surrender of the related portion of the underlying Option, the Option, to
the extent surrendered, will not thereafter be exercisable.  The underlying
Option may provide that such Share Appreciation Rights will be payable solely
in cash.  The terms of the underlying Option may provide a specific method by
which an alternative fair market value of the Shares on the date of exercise
shall be calculated, which shall be based on one of the following:  (x) Fair
Market Value of the Shares at the close of business on the business day
immediately preceding the day of exercise; (y) the highest closing price of the
Shares on the national exchange on which they have been traded during the 30
days immediately preceding the Change in Control; or (z) the greater of (x) and
(y).

(3)         
Exercise.  In addition to any further conditions upon exercise
that may be imposed by the Committee, the Share Appreciation Rights shall be
exercisable only to the extent that the related Option is exercisable, except
that in no event will a Share Appreciation Right held by a Section 16
Participant be exercisable within the first six months after it is awarded even
though the related Option is or becomes exercisable, and each Share
Appreciation Right will expire no later than the date on which the related
Option expires.  A Share Appreciation Right may be exercised only at a time
when the Fair Market Value of the Shares covered by the Share Appreciation
Right exceeds the exercise price of the Shares covered by the underlying
Option.

(4)         
Method of Exercise.  Share Appreciation Rights may be exercised by the
participant giving written notice of the exercise to the Company, stating the
number of Share Appreciation Rights the participant has elected to exercise and
surrendering the portion of the underlying Option relating to the same number
of Shares as the number of Share Appreciation Rights elected to be exercised.

(5)         
Payment.  The manner in which the Company's obligation
arising upon the exercise of the Share Appreciation Right will be paid will be
determined by the Committee and shall be set forth in the participant's Option
Agreement.  The Committee may provide for payment in Shares or cash, or a fixed
combination of Shares or cash, or the Committee may reserve the right to
determine the manner of payment at the time the Share Appreciation Right is
exercised.  Shares issued upon the exercise of a Share Appreciation Right will
be valued at their Fair Market Value on the date of exercise.

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7.       Restricted Shares.

A.          
Grant.  Restricted Shares may be issued alone, in addition
to or in tandem with other Awards under the Plan or cash awards made outside
the Plan.  The Committee shall determine the individuals to whom, and the time
or times at which, grants of Restricted Shares will be made, the number of
Restricted Shares to be awarded to each participant, the price (if any) to be
paid by the participant (subject to Section 7(B)), the date or dates upon which
Restricted Share Awards will vest, the period or periods within which those
Restricted Share Awards may be subject to forfeiture, and the other terms and
conditions of those Awards in addition to those set forth in Section 7(B).

The
Committee may condition the grant of Restricted Shares upon the attainment of
specified Performance Goals or such other factors as the Committee may
determine in its sole discretion.

B.          
Terms and Conditions.  Restricted Shares awarded under the Plan shall be
subject to the following terms and conditions and such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall deem desirable.  A participant who receives a Restricted Share Award
shall not have any rights with respect to that Award, unless and until the
participant has executed an agreement evidencing the Award in the form approved
from time to time by the Committee, has delivered a fully executed copy thereof
to the Company, and has otherwise complied with the applicable terms and
conditions of that Award.

(1)         
The purchase price (if any) for
Restricted Shares shall be determined by the Committee at the time of grant.

(2)         
Awards of Restricted Shares must
be accepted by executing a Restricted Share Award Agreement and paying the
price (if any) that is required under Section 7(B)(1).

(3)         
Subject to the provisions of this
Plan and the Restricted Share Award Agreement, during a period set by the
Committee commencing with the date of any Award (the "Restriction Period"),
the participant shall not be permitted to sell, transfer, pledge, assign or
otherwise encumber the Restricted Shares covered by that Award. The Restriction
Period shall not be less than six months and one day in duration ("Minimum
Restriction Period") unless otherwise determined by the Committee at the
time of grant. Subject to these limitations and the Minimum Restriction Period
requirement, the Committee, in its sole discretion, may provide for the lapse
of restrictions in installments and may accelerate or waive restrictions, in
whole or in part, based on service, performance or such other factors and
criteria as the Committee may determine in its sole discretion.

(4)         
Except as provided in this Section
7(B)(4) and Sections 7(B)(3) and 7(B)(5), the participant shall have, with
respect to the Restricted Shares awarded, all of the rights of a shareholder of
the Company, including the right to vote the Shares and the right to receive
any dividends.  The Committee, in its sole discretion, as determined at the
time of Award, may permit or require the payment of cash dividends to be
deferred and subject to forfeiture and, if the Committee so determines,
reinvested in additional Restricted Shares  or otherwise reinvested.  Unless
the Committee or Board determines otherwise, Share dividends issued with
respect to Restricted Shares shall be treated as additional restricted shares
that are subject to the same restrictions and other terms and conditions that
apply to the Shares with respect to which such dividends are issued; provided,
however, that because such Share dividends (as well as any share dividends that
may be issued in connection with a participant's election to defer receipt of
any Award under any deferred compensation plan maintained by the Company or any
Subsidiary or Affiliate) will be issued in lieu of cash payments on account of
an Award already granted, such Share dividends will not constitute Shares
issued under this Plan for purposes of Section 3.

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(5)         
No Restricted Shares shall be
transferable by a participant other than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order (as defined in
the Code or the Employee Retirement Income Security Act of 1974, as amended)
except that, if so provided in the Restricted Share Award Agreement, the
participant may transfer the Restricted Shares, during the participant's
lifetime to one or more members of the participant's family, to one or more
trusts for the benefit of one or more of the participant's family, to a
partnership or partnerships of members of the participant's family, or to a
charitable organization as defined in Section 501(c)(3) of the Code, provided
that the transfer would not result in the loss of any exemption under Rule
16b-3 under the Exchange Act with respect to any Restricted Shares.  The
transferee of Restricted Shares will be subject to all restrictions, terms and
conditions applicable to the Restricted Shares prior to its transfer, except
that the Restricted Shares will not be further transferable by the transferee
other than by will or by the laws of descent and distribution.

(6)         
Unless otherwise determined by the
Committee at or after the time of granting any Restricted Shares, if a
participant's employment with the Company or any Subsidiary or Affiliate
terminates by reason of death, any Restricted Shares held by that participant
shall thereafter vest and any restriction shall lapse.

(7)         
Unless otherwise determined by the
Committee at or after the time of granting any Restricted Shares, if a
participant's employment with the Company or any Subsidiary or Affiliate
terminates by reason of Disability, any Restricted Shares held by that
participant shall thereafter vest and any restriction shall lapse.

(8)         
Unless otherwise determined by the
Committee at or after the time of granting any Restricted Shares, if a
participant's employment with the Company or any Subsidiary or Affiliate
terminates for any reason other than death or Disability, the Restricted Shares
held by that participant that are unvested or subject to restriction at the
time of termination shall thereupon be forfeited.

C.          
Minimum Value.  In order to better ensure that Award payments
actually reflect the performance of the Company and service of the participant,
the Committee may provide, in its sole discretion, for a tandem performance-based
or other award designed to guarantee a minimum value, payable in cash or
Shares, to the recipient of a Restricted Share Award, subject to such
performance, future service, deferral and other terms and conditions as may be
specified by the Committee.

8.       Deferred Shares.

A.          
Grant.  Deferred Shares may be awarded alone, in addition
to or in tandem with other Awards granted under the Plan or cash awards made
outside the Plan.  The Committee shall determine the individuals to whom, and
the time or times at which, Deferred Shares shall be awarded, the number of
Deferred Shares to be awarded to any participant, the duration of the period
(the "Deferral Period") during which, and the conditions under which,
receipt of the Shares will be deferred, and the other terms and conditions of
the Award in addition to those set forth in Section 8(B).

The
Committee may condition the grant of Deferred Shares upon the attainment of
specified performance goals or such other factors as the Committee shall
determine in its sole discretion.

B.          
Terms and Conditions.  Deferred Share Awards shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable:

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(1)         
The purchase price for Deferred
Shares shall be determined at the time of grant by the Committee. Subject to
the provisions of the Plan and the Deferred Share Award Agreement referred to
in Section 8(B)(10), Deferred Share Awards may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Deferral Period.  At
the expiration of the Deferral Period (or the Elective Deferral Period referred
to in Section 8(B)(9), where applicable), share certificates shall be delivered
to the participant, or the participant's legal representative, for the Shares
covered by the Deferred Share Award Agreement.  The Deferral Period applicable
to any Deferred Share Award shall not be less than six months and one day ("Minimum
Deferral Period").

(2)         
To the extent a Deferred Share
Award is a 409A Award, the Committee will grant the Award in a manner as to
comply with the requirements of Code Section 409A and the regulations
promulgated thereunder and in accordance with Section 10(B).

(3)         
Unless otherwise determined by the
Committee at grant, amounts equal to any dividends declared during the Deferral
Period with respect to the number of Shares covered by the Deferred Share Award
will be paid to the participant currently, or deferred and deemed to be
reinvested in additional deferred shares, or otherwise reinvested, all as
determined by the Committee, in its sole discretion, at the time of the Award. 
Because deferred shares issued as deemed reinvested dividends will be issued in
lieu of cash on account of an Award already granted, such additional deferred shares
will not constitute Shares issued under this Plan for purposes of Section 3.

(4)         
No Deferred Shares shall be
transferable by a participant other than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order (as defined in
the Code or the Employee Retirement Income Security Act of 1974, as amended)
except that, if so provided in the Deferred Share Award Agreement, the
participant may transfer the Deferred Shares during the participant's lifetime
to one or more members of the participant's family, to one or more trusts for
the benefit of one or more of the participant's family, to a partnership or
partnerships of members of the participant's family, or to a charitable
organization as defined in Section 501(c)(3) of the Code, provided that  the
transfer would not result in the loss of any exemption under Rule 16b-3 of the
Exchange Act with respect to any Deferred Shares.  The transferee of Deferred
Shares will be subject to all restrictions, terms and conditions applicable to
the Deferred Shares prior to its transfer, except that the Deferred Shares will
not be further transferable by the transferee other than by will or by the laws
of descent and distribution.

(5)         
Unless otherwise determined by the
Committee at the time of granting any Deferred Shares, if a participant's
employment by the Company or any Subsidiary or Affiliate terminates by reason
of death, any Deferred Shares held by such participant shall thereafter vest or
any restriction shall lapse, and the participant's representative shall receive
the Deferred Shares in one lump sum within 10 business days following such
death.

(6)         
Unless otherwise determined by the
Committee at the time of granting any Deferred Shares, if a participant's
employment by the Company or any Subsidiary or Affiliate terminates by reason
of Disability, any Deferred Shares held by such participant shall thereafter
vest or any restriction lapse, and the participant or the participant's
representative shall receive the Deferred Shares in one lump sum within 10
business days following such Disability.

(7)         
Unless otherwise determined by the
Committee at or after the time of granting any Deferred Share Award, if a
participant's employment by the Company or any Subsidiary or Affiliate
terminates for any reason other than death or Disability, all Deferred Shares
held by such participant which are unvested or subject to restriction shall
thereupon be forfeited.

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(8)         
Based on service, performance or
such other factors or criteria as the Committee may determine, the Committee
may, at or after grant, accelerate the vesting of all or any part of any
Deferred Share Award, subject in all cases to the Minimum Deferral Period
requirement.

(9)         
A participant may elect to further
defer receipt of a Deferred Share Award (or an installment of an Award) for a
specified period or until a specified event (the "Elective Deferral Period"),
subject in each case to the Committee's approval, the terms of this Section 8,
and such other terms as are determined by the Committee, all in its sole
discretion, and in compliance with the terms and conditions of Code Section
409A and the regulations promulgated thereunder.  Subject to any exceptions
approved by the Committee, such election must be made at least 12 months prior
to the date the Deferral Period is set to expire and the Elective Deferral
Period must be for a period of at least five years from the date the Deferral
Period is set to expire, except to the extent the holder of a Deferred Share Award
becomes entitled to receive the underlying Shares due to death or Disability.

(10)     
Each such Award shall be confirmed
by, and subject to the terms of, a Deferred Share Award Agreement evidencing
the Award in the form approved from time to time by the Committee.

C.          
Minimum Value Provisions.  In order to better ensure that Award payments
actually reflect the performance of the Company and service of the participant,
the Committee may provide, in its sole discretion, for a tandem
performance-based or other Award designed to guarantee a minimum value, payable
in cash or Shares to the recipient of a Deferred Share Award, subject to such
performance, future service, deferral and other terms and conditions as may be
specified by the Committee.

9.       Other Share-Based Awards.

A.          
Grant.  Other Awards of Shares and other Awards that are
valued, in whole or in part, by reference to, or are otherwise based on,
Shares, including, without limitation, performance shares, convertible
preferred shares, convertible debentures, exchangeable securities, dividend
equivalent rights and Share Awards or options valued by reference to Book Value
or Subsidiary performance, may be granted alone, in addition to or in tandem
with other Awards granted under the Plan or cash awards made outside the Plan.

At
the time the Shares or Other Share-Based Awards are granted, the Committee
shall determine the individuals to whom and the time or times at which such
Shares or Other Share-Based Awards shall be awarded, the number of Shares to be
used in computing an Award or which are to be awarded pursuant to such Awards,
the consideration, if any, to be paid for such Shares or Other Share-Based
Awards, and all other terms and conditions of the Awards in addition to those
set forth in Section 9(B). The Committee will also have the right, at its sole
discretion, to settle such Awards in Shares, Restricted Shares or cash in an
amount equal to the Fair Market Value of the Shares or Other Share-Based Awards
at the time of settlement.

The
provisions of Other Share-Based Awards need not be the same with respect to
each participant.

B.          
Terms and Conditions.  Other Share-Based Awards shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable:

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(1)         
Subject to the provisions of this
Plan and the Award Agreement referred to in Section 9(B)(5) below, Shares
awarded or subject to Awards made under this Section 9 may not be sold,
assigned, transferred, pledged or otherwise encumbered prior to the date on
which the Shares are issued, or, if later, the date on which any applicable
restriction, performance, holding or deferral period or requirement is
satisfied or lapses. All Shares or Other Share-Based Awards granted under this
Section 9 shall be subject to a minimum holding period (including any
applicable restriction, performance and/or deferral periods) of six months and
one day ("Minimum Holding Period").

(2)         
Subject to the provisions of this
Plan and the Award Agreement and unless otherwise determined by the Committee
at the time of grant, the recipient of an Other Share-Based Award shall be
entitled to receive, currently or on a deferred basis, interest or dividends or
interest or dividend equivalents with respect to the number of Shares covered
by the Award, as determined at the time of the Award by the Committee, in its
sole discretion, and the Committee may provide that such amounts (if any) shall
be deemed to have been reinvested in additional Shares or otherwise reinvested. 
Because additional Shares issued as deemed reinvested dividends will be issued
in lieu of cash on account of an Award already granted, such additional Shares
will not constitute Shares issued under this Plan for purposes of Section 3.

(3)         
Subject to the Minimum Holding
Period, any Other Share-Based Award and any Shares covered by any such Award
shall vest or be forfeited to the extent, at the times and subject to the
conditions, if any, provided in the Award Agreement, as determined by the
Committee in its sole discretion subject, if applicable, to the provisions of
Code Section 409A and the regulations promulgated thereunder.

(4)         
In the event of the participant's
Disability or death, or in cases of special circumstances, the Committee may,
in its sole discretion, waive, in whole or in part, any or all of the remaining
limitations imposed hereunder or under any related Award Agreement (if any)
with respect to any part or all of any Award under this Section 9, provided
that the Minimum Holding Period requirement may not be waived, except in case
of a participant's Disability or death.  Notwithstanding the foregoing, the
Committee may not waive, in whole or in part, any remaining limitations imposed
with respect to any Award if such waiver results in an Award's failure to
comply with the requirements of Code Section 409A and the regulations
promulgated thereunder, unless agreed upon in writing by the Committee and the
participant.

(5)         
Each Award shall be confirmed by,
and subject to the terms of, an agreement or other instrument evidencing the
Award in the form approved from time to time by the Committee, the Company and
the participant.

(6)         
Shares (including securities
convertible into Shares) issued on a bonus basis under this Section 9 shall be
issued for no cash consideration.  Shares (including securities convertible
into Shares) purchased pursuant to a purchase right awarded under this Section
9 shall bear a price of at least 85% of the Fair Market Value of the Shares on
the date of grant.  The purchase price of such Shares, and of any Other
Share-Based Award granted hereunder, or the formula by which such price is to
be determined, shall be fixed by the Committee at the time of grant.

(7)         
In the event that any "derivative
security," as defined in Rule 16a-1(c) (or any successor thereto)
promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act, is awarded pursuant to this Section 9 to any Section 16
Participant, such derivative security shall not be transferable other than by
will or by the laws of descent and distribution.

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C.          
Dividend Equivalent Rights.  A Dividend Equivalent Right is an Award entitling
the recipient to receive credits based on cash distributions that would have
been paid on the Shares specified in the Dividend Equivalent Right (or other
Award to which it relates) if such Shares had been issued to and held by the
recipient.  A Dividend Equivalent Right may be granted hereunder to any
participant as a component of another Award or as a freestanding award.

(1)         
Terms And Conditions.  In addition to the terms and conditions set forth
in Section 9(B), Dividend Equivalent Rights shall be subject to the following
additional terms and conditions.  Dividend Equivalents credited to the holder
of a Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in additional Shares, which may thereafter accrue additional
dividend equivalents.  Any such reinvestment shall be at Fair Market Value on
the date of reinvestment.  Because additional Shares accrued in respect of
dividends will be issued in lieu of cash on account of an Award already
granted, such additional Shares will not constitute Shares issued under this
Plan for purposes of Section 3.  Dividend Equivalent Rights may be settled in
cash or Shares or a combination thereof, in a single installment or
installments, all determined in the sole discretion of the Committee.  A
Dividend Equivalent Right granted as a component of another Award may provide
that such Dividend Equivalent Right shall be settled upon exercise, settlement,
or payment of, or lapse of restrictions on, such other award, and that such
Dividend Equivalent Right shall expire or be forfeited or annulled under the
same conditions as such other Award.  A Dividend Equivalent Right granted as a
component of another Award may also contain terms and conditions different from
such other Award.

(2)         
Interest Equivalents. Any Award under this Plan that is settled in whole
or in part in cash on a deferred basis may provide in the Award Agreement for
interest equivalents to be credited with respect to such cash payment. 
Interest equivalents may be compounded and shall be paid upon such terms and
conditions as may be specified by the grant.

(3)         
Termination of Employment.  Except as may otherwise be provided by the Committee
either in the Award Agreement or in writing after the Award Agreement is
issued, a participant's rights in all Dividend Equivalent Rights or interest
equivalents (other than any vested but unpaid Dividend Equivalent Rights or
interest equivalents) shall automatically terminate upon the date that a
participant's employment with the Company or any Subsidiary or Affiliate
terminates for any reason other than death or Disability.  Any vested but
unpaid Dividend Equivalent Rights or interest equivalents shall be paid in one
lump sum amount by the Company within 90 days after the termination of the
participant's employment with the Company or any Subsidiary or Affiliate.

10.    Form and Timing of Payment Under Awards; Deferrals.

A.          
Form and Timing of Payment.  Subject to the terms of the Plan and any applicable
Award Agreement (as may be amended pursuant to Section 12 hereof), payments to
be made by the Company, a Subsidiary or Affiliate upon the exercise of an
Option or other Award or settlement of an Award may be made in such forms as
the Committee shall determine, including, without limitation, cash, Shares,
other Awards or other property, and may be made in a single payment or
transfer, in installments, or on a deferred basis.  The settlement of any Award
may be accelerated and cash paid in lieu of Shares in connection with such
settlement.   Installment or deferred payments may be required by the Committee
or permitted at the election of the participant on terms and conditions
approved by the Committee, including without limitation the ability to defer
awards pursuant to any deferred compensation plan maintained by the Company, a
Subsidiary or Affiliate.  Payments may include, without limitation, provisions
for the payment or crediting of a reasonable interest rate on installment or
deferred payments or the grant or crediting of Dividend Equivalents or other
amounts in respect of installment or deferred payments denominated in Shares.

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B.          
Certain Limitations on Awards to
Ensure Compliance with Code Section 409A.

(1)         
409A Awards and Deferrals.  Other provisions of the Plan notwithstanding, the
terms of any 409A Award, including any authority of the Company or the
Committee and rights of the participant with respect to the 409A Award, shall
be limited to those terms permitted under Code Section 409A and the regulations
promulgated thereunder.  The following rules will apply to 409A Awards:

(A)        
If a participant is permitted to
elect to defer an Award or any payment under an Award, such election shall be
permitted only at times in compliance with Code Section 409A and the
regulations promulgated thereunder;

(B)        
The Company shall have no
authority to accelerate or delay distributions relating to 409A Awards in
excess of the authority permitted under Code Section 409A and the regulations promulgated
thereunder;

(C)        
Any distribution of a 409A Award
triggered by a Participant's termination of employment shall be made only at
the time that the Participant has had a "Separation from Service"
within the meaning of Code Section 409A (or at such earlier time preceding a
termination of employment that there occurs another event triggering a
distribution under the Plan or the applicable Award Agreement in compliance
with Code Section 409A and the regulations promulgated thereunder);

(D)        
Any distribution of a 409A Award
to a "Specified Employee," as determined under Code Section 409A,
after Separation from Service, shall occur at the expiration of the six-month
period following said Specified Employee's Separation from Service.  In the
case of installment payments, this six-month delay shall not affect the timing
of any installment otherwise payable after the six-month delay period; and in
the case of any distribution of a 409A Award, the time and form of payment for
such distribution will be specified in the Award Agreement; provided that, if
the time and form of payment for such distribution is not otherwise specified
in the Plan or an Award Agreement or other governing document, the distribution
shall be made in one lump sum amount on March 15 in the calendar year following
the calendar year in which the settlement of the Award is specified to occur,
any applicable restriction lapses, or there is no longer a substantial risk of
forfeiture applicable to such amounts.

(2)         
Distribution upon Vesting.  In the case of any Award providing for a
distribution upon the lapse of a substantial risk of forfeiture, the time and
form of payment for such distribution will be specified in the Award Agreement;
provided that, if the timing and form of payment of such distribution is not
otherwise specified in the Plan or an Award Agreement or other governing
document, the distribution shall be made in one lump sum amount on March 15 of
the calendar year following the calendar year in which the substantial risk of
forfeiture lapses.

(3)         
Scope and Application of this
Provision.  For purposes of the Plan,
references to a term or event (including any authority or right of the Company,
the Committee or a participant) being "permitted" under Code Section
409A means that the term or event will not cause the participant to be deemed
to be in constructive receipt of compensation relating to the 409A Award prior
to the distribution of cash, shares or other property or to be liable for
payment of interest or a tax penalty under Code Section 409A.

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(4)         
Interpretation.  If and to the extent that any provision of an Award
is required or intended to comply with Code Section 409A, such provision shall
be administered and interpreted in a manner consistent with the requirements of
Code Section 409A.  If and solely to the extent that any such provision of an
Award as currently written would conflict with or result in adverse
consequences to a participant under Code Section 409A, the Committee shall have
the authority, without the consent of the participant, to administer such
provision and to amend the Award with respect to such provision to the extent
the Committee deems necessary for the purposes of avoiding any portion of the
Shares or amounts to be delivered to the participant being subject to
additional income or other taxes under Code Section 409A.

11.    Change In Control Provision.

A.          
Impact of Event. Notwithstanding any other provisions hereof or in
any other agreement to the contrary, in the event of a "Change in Control"
as defined in Section 11(D) or a "409A Change in Control" as defined
in Section 11(E), each outstanding Award shall be assumed or an equivalent
Award substituted by the successor entity or a parent or subsidiary of the
successor entity. In the event an Award is assumed or an equivalent Award
substituted, and the participant's service is terminated (i) by the participant
for good reason, or (ii) by the successor or surviving corporation or entity
other than for Cause upon or within twenty-four (24) months following (a) if
the Award is not a 409A Award, a Change in Control, or (b) if the Award is a
409A Award, a 409A Change in Control, then such participant shall be fully
vested in such assumed or substituted Award. 

B.          
Refusal to Assume or Substitute
Awards. In the event that the
successor entity in a Change in Control or a 409A Change in Control refuses to
assume or substitute for the Award, the Committee may cause any or all of such
Awards to become fully exercisable immediately prior to the consummation of
such transaction and all forfeiture restrictions on any or all of such Awards
to lapse. If an Award is exercisable in lieu of assumption or substitution in
the event of a Change in Control or a 409A Change in Control, the Company shall
notify the participant that the Award shall be fully exercisable for a period
of fifteen (15) days from the date of such notice, contingent upon the
occurrence of the Change in Control or the 409A Change in Control, as
applicable, and the Award shall terminate upon the expiration of such period. 

C.          
Assumption of Award.  For the purposes of this Section 11, an Award shall
be considered assumed if, following the Change in Control or the 409A Change in
Control, the Award confers the right to purchase or receive, for each Share
subject to the Award, immediately prior to the Change in Control or the 409A
Change in Control, as applicable, the consideration (whether stock, cash, or
other securities or property) received in the Change in Control or the 409A
Change in Control, as applicable, by holders of Shares for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the Change in Control or the 409A Change in Control, as applicable, was not
solely shares of common stock of the successor corporation or its parent, the Company
may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Award, for each Share
subject to an Award to be solely shares of common stock of the successor
corporation or its parent equal in fair market value to the per Share
consideration received by the holders of Shares in the Change in Control or the
409A Change in Control, as applicable. 

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D.          
Definition of Change in Control.  For purposes of Section 11(A), a "Change in
Control" means the occurrence of any of the following: (i) the
consummation of a consolidation or merger in which the Company is not the
surviving corporation, the sale of substantially all of the assets of the
Company, or shareholder approval of the liquidation or dissolution of the
Company; (ii) a transaction or series of transactions (other than an offering
of common stock to the general public through a registration statement filed
with the Securities and Exchange Commission) whereby any person, other entity
or related group of persons (other than the Company or a Subsidiary or any
Company employee benefit plan (including any trustee of any such plan acting in
its capacity as trustee)) purchases Shares (or securities convertible into
Shares) pursuant to a tender or exchange offer without the prior consent of the
Board of Directors, or otherwise becomes the beneficial owner of securities of
the Company representing 20% or more of the voting power of the Company's
outstanding securities; or (iii) during any two-year period, individuals who at
the beginning of such period constitute the entire Board of Directors cease to
constitute a majority of the Board of Directors, unless the election or the
nomination for election of each new director is approved by at least two-thirds
of the directors then still in office who were directors at the beginning of
that period. 

E.           
Definition of 409A Change in
Control.  For purposes of Section
11(A), a "409A Change in Control" means the date on which any one of
the following occurs:  (i) any one person, or more than one person acting as a
group (as determined under Code Section 409A and the regulations promulgated
thereunder), acquires (or has acquired during the twelve (12) month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Company possessing 30% or more of the total voting
power of the stock of the Company; or (ii) a majority of members of the Board
of Directors is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Board of Directors before the date of such appointment or election; or (iii)
any one person, or more than one person acting as a group (as determined under
Code Section 409A and the regulations promulgated thereunder), acquires
ownership of stock of the Company that, together with stock held by such person
or group, constitutes more than 50% of the total fair market value or total
voting power of the stock of the Company; or (iv) any one person, or more than
one person acting as a group (as determined under Code Section 409A and the
regulations thereunder), acquires (or has acquired during the twelve (12) month
period ending on the date of the most recent acquisition by such person or
persons) assets from the Company that have a total gross fair market value
equal to or more than 40% of the total gross fair market value of all of the
assets of the Company before such acquisition or acquisitions.  For this
purpose, "gross fair market value" means the value of the assets of
the Company, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.

12.    Amendments and Termination.

The
Board may at any time, amend, alter or discontinue the Plan, but no such
amendment, alteration or discontinuation shall be made that would (i) impair
the rights of a participant under an Award theretofore granted, without the
participant's consent or (ii) require shareholder approval under any applicable
law or regulation (including any applicable regulation of an exchange on which
the Shares are traded), unless such shareholder approval is received.  The
Company shall submit to the shareholders of the Company, for their approval,
any amendments to the Plan required pursuant to Section 162(m) of the Code or
any material revisions to the Plan so long as such approval is required by law
or regulation (including any applicable regulation of an exchange on which the
Shares are traded).

The
Committee may at any time, in its sole discretion, amend the terms of any
Award, but (i) no such amendment shall be made that would impair the rights of
a participant under an Award theretofore granted, without the participant's
consent; (ii) no such amendment shall be made that would make the applicable
exemptions provided by Rule 16b-3 under the Exchange Act unavailable to any
Section 16 Participant holding the Award without the participant's consent and
(iii) no such amendment shall be made if it would reduce the exercise price of
a Stock Option or reduce the purchase price, if any, of the Shares that are
subject to the Award.

A-19

 

 

 

 

 

 

Subject
to the above provisions, the Board shall have all necessary authority to amend
the Plan, clarify any provision or to take into account changes in applicable
securities and tax laws and accounting rules, as well as other developments.

13.    Unfunded Status of Plan.

The
Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation.  With respect to any payment not yet made to a
participant by the Company, nothing contained herein shall give that
participant any rights that are greater than those of a general creditor of the
Company.

14.    General Provisions.

A.          
The Committee may require each
participant acquiring Shares pursuant to an Award under the Plan to represent
to and agree with the Company in writing that the participant is acquiring the
Shares without a view to distribution thereof. The certificates for any such
Shares may include any legend which the Committee deems appropriate to reflect
any restrictions on transfer.

All
Shares or other securities delivered under the Plan shall be subject to such
stop-transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Shares are then listed,
and any applicable federal or state securities laws, and the Committee may
cause a legend or legends to be put on any certificate for any such Shares to
make appropriate reference to those restrictions.

B.          
Nothing contained in this Plan
shall prevent the Board from adopting other or additional compensation
arrangements, subject to shareholder approval if such approval is required, and
such arrangements may be either generally applicable or applicable only in
specific cases.

C.          
Neither the adoption of the Plan,
nor its operation, nor any document describing, implementing or referring to
the Plan, or any part thereof, shall confer upon any participant under the Plan
any right to continue in the employ, or as a director, of the Company or any
Subsidiary or Affiliate, or shall in any way affect the right and power of the
Company or any Subsidiary or Affiliate to terminate the employment, or service
as a director, of any participant under the Plan at any time with or without
assigning a reason therefor, to the same extent as the Company or any Subsidiary
or Affiliate might have done if the Plan had not been adopted.

D.          
For purposes of this Plan, a
transfer of a participant between the Company and any Subsidiary or Affiliate
shall not be deemed a termination of employment.

E.           
No later than the date as of which
an amount first becomes includable in the gross income of the participant for
federal income tax purposes with respect to any Award under the Plan, the
participant shall pay to the Company, or make arrangements satisfactory to the
Committee regarding the payment of, any federal, state or local taxes or other
items of any kind required by law to be withheld with respect to that amount. 
Subject to the following sentence, unless otherwise determined by the
Committee, withholding obligations may be settled with Shares, including
unrestricted Shares previously owned by the participant or Shares that are part
of the Award that gives rise to the withholding requirement. Notwithstanding
the foregoing, any right by a Section 16 Participant to elect to settle any tax
withholding obligation with Shares that are part of an Award must be set forth
in the agreement evidencing that Award or be approved by the Committee in its
sole discretion.  The obligations of the Company under the Plan shall be
conditional on those payments or arrangements and the Company and its
Subsidiaries and Affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise payable
to the participant.

A-20

 

 

 

 

 

 

F.           
The Plan, all Awards made and
actions taken thereunder and any agreements relating thereto shall be governed
by and construed in accordance with the laws of the State of Ohio.

G.          
All agreements entered into with
participants pursuant to the Plan shall be subject to the Plan.

H.          
The provisions of Awards need not
be the same with respect to each participant.

15.    Clawback.

If
any participant engaged in fraud or other misconduct (as determined by the
Committee or the Board, in their respective sole discretion) resulting, in
whole or in part, in a restatement of the financial or operating results used
to determine the vesting of an Award based upon the attainment of Performance
Goals hereunder, the Company will have the right to recoup from such
participant, and the participant will transfer or pay to the Company promptly
upon demand, in the Company's discretion, either (A) the number of Shares that
vested (or that were subject to Stock Options that vested and were thereafter
exercised), were distributed or were deferred (as applicable) upon or after
such vesting based on the incorrect operating or financial results, (B) the
dollar equivalent of such number of Shares determined as of the date of such
vesting, or (C) the value that was paid to or earned by the participant, as
applicable, at the time of vesting or upon the exercise of rights pursuant to
any such vested Award.  The Company further shall have the right to terminate
and cancel any and all Awards previously made to such participant at any time
hereunder that are then unvested or, if applicable, that have vested but have
not then been exercised, and to recover from such participant the Company's
costs and expenses incurred in connection with recovering such Shares or funds
from participant and enforcing its rights under this section, including,
without limitation, reasonably attorneys' fees and court costs.  There shall be
no time limit on the Company's right to recover such amounts under this
section, except as otherwise provided by applicable law.

16.    Shareholder Approval; Effective Date of Plan.

The
Plan was adopted by the Board on February 23, 2011, and was approved
by the holders of the Company's outstanding Shares on May 4, 2011.  No further shareholder approval shall be required with respect to the granting
of Awards pursuant to the Plan.

17.    Term of Plan.

No Award shall be granted pursuant to the Plan on or
after February 23, 2021, but Awards granted prior to that date may extend
beyond that date.

 

A-21form10q-exhibit10a.htm

Exhibit 10(a)

 

AMENDMENT NO. 5

TO

PPL CORPORATION INCENTIVE

COMPENSATION PLAN FOR KEY EMPLOYEES

WHEREAS, PPL Corporation, (“PPL”) has adopted the PPL Corporation Incentive Compensation Plan for Key Employees (“Plan”), effective January 1, 1997; and

WHEREAS, the Plan was amended and restated effective January 1, 2003, and subsequently amended by Amendment No. 1, 2, 3, and 4; and

WHEREAS, PPL desires to further amend the Plan;

NOW, THEREFORE, the Plan is hereby amended as follows:

I.           Effective March 1, 2011, Sections 2,  7 and 8 are amended to read:

SECTION 2.  DEFINITIONS.

(cc)                  "Retirement" means:

(a)       eligibility for commencement of benefits at the earliest date under the PPL Retirement Plan, or other defined benefit plan of a PPL affiliated company; or

(b)       for Participants who are not covered by any defined benefit plan, termination of employment with PPL Corporation and all of its Affiliated Companies after (i) attaining age 55, or (ii) for a Participant who at the time of termination of employment is an officer of PPL Corporation or any of its Affiliated Companies, after attaining age 50, if CLC, in its sole discretion, determines that such termination constitutes "Retirement" for purposes of this Plan.

SECTION 7.  RESTRICTED STOCK, RESTRICTED STOCK UNITS.

B.  Restriction Period.  At the time a Restricted Stock or Restricted Stock Units Award is granted, CLC shall establish a Restriction Period applicable to such Award which shall be not less than three years.  Each Restricted Stock or Restricted Stock Units Award may have a different Restriction Period.  All Restricted Stock Units granted after December 31, 2004 shall have a mandatory Restriction Period, except in the case of death, if the Restriction Period has not lapsed as of the day prior to a termination of employment, of six calendar months from the day of termination of employment.

C.  Forfeiture or Payout of Award.  During the Restriction Period, Restricted Stock or Restricted Stock Units Awards are subject to forfeiture or payout (i.e., removal of restrictions) as indicated for each of the following events:

(ii)  Retirement - In this event, Restricted Stock will be completely forfeited, but payout of the Restricted Stock Units Award will be made with complete removal of restrictions, but, for Restricted Stock Units granted after December 31, 2004, six calendar months after the last day of employment, if the Participant is eligible for retirement benefits.  If retirement or severance benefits are payable under a separation program or policy, the restrictions will be modified, but only in accordance with the express terms of such separation program or policy, and in the absence of such express terms there shall be a complete forfeiture of Restricted Stock or Restricted Stock Units.

(iii)  Disability - In this event, payout of the Restricted Stock or Restricted Stock Units Award will be made with complete removal of restrictions, but payout of the Restricted Stock Units granted after December 31, 2004 shall not be made until six calendar months after the event of disability.

(iv)  Death - In this event, payout of the Restricted Stock or Restricted Stock Units Award will be made with complete removal of restrictions to the Beneficiary.

SECTION 8.  STOCK OPTIONS.

G.  Right to Exercise.

(c)          Unless specifically prohibited by the terms of the Option, all restrictions on exercise of an Option, including the one year of continuous employment requirement, shall lapse and the Option shall be immediately exercisable on the date of a Participant's Retirement, provided the Participant does not receive improved retirement benefits under a separation program or policy.  If the Participant receives improved retirement benefits under a separation program or policy, the restrictions on the exercise of an Option shall be modified only in accordance with the express terms of such separation program or policy.

II. Except as provided for in this Amendment No. 5, all other provisions of the Plan shall remain in full force and effect.

IN WITNESS WHEREOF, this Amendment No. 5 is executed this         day of ____________________, 2011.

 

 

 

	 	
 PPL CORPORATION

 

 

By: ________________________________________

       James H. Miller

       Chairman/President and CEO

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