EXHIBIT No. 10
(b)
This document constitutes
part of a prospectus covering securities
that have been registered
under the Securities Act of 1933.
Constellation Energy Group, Inc.
Amended and Restated Executive Long-Term Incentive Plan
(Plan)
1.
Purpose. The purpose of this Plan is to increase shareholder
value by providing a long-term incentive to reward officers and key
employees of the Company and its Subsidiaries, who are mainly
responsible for the continued growth, development, and financial
success of the Company and its Subsidiaries, and for the continued
profitable performance of the Company and its Subsidiaries.
The Plan is also designed to permit the Company and its
Subsidiaries to attract and retain talented and motivated
directors, officers and key employees and to increase their
ownership of Company common stock. The Plan also provides the
ability to award long-term incentives that qualify for federal
income tax deduction.
2.
Definitions. All singular terms defined in this Plan will
include the plural and vice versa. As used herein, the
following terms will have the meaning specified below:
“Adjusted
EBIT” means EBIT, subject to, and/or after giving effect to,
any adjustments applicable pursuant to Section 9A(iv) at
the time Business Criteria and Performance Target(s) are
established for any Year or Years.
“Adjusted
EPS” means EPS, subject to, and/or after giving effect to,
any adjustments applicable pursuant to Section 9A(iv) at
the time Business Criteria and Performance Target(s) are
established for any Year or Years.
“Adjusted
Net Income” means Net Income, subject to, and/or after giving
effect to, any adjustments applicable pursuant to
Section 9A(iv) at the time Business Criteria and
Performance Target(s) are established for any Year or
Years.
“Adjusted
Return on Assets” means Return on Assets subject to, and/or
after giving effect to, any adjustments applicable pursuant to
Section 9A(iv) at the time Business Criteria and
Performance Target(s) are established for any Year or
Years.
“Adjusted
Return on Equity” means Return on Equity, subject to, and/or
after giving effect to, any adjustments applicable pursuant to
Section 9A(iv) at the time Business Criteria and
Performance Target(s) are established for any Year or
Years.
“Award” means individually or
collectively, Restricted Stock, Restricted Stock Units, Options,
Performance Units, Stock Appreciation Rights, Dividend Equivalents,
or Equity granted under this Plan.
“Board” means the Board of
Directors of the Company.
“Book
Value” means the book value of a share of Stock determined in
accordance with the Company’s regular accounting practices as
of the last business
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day of the month
immediately preceding the month in which a Stock Appreciation Right
is exercised as provided in Section 10.
“Business
Criteria” means any one or any combination of Net Income,
Adjusted Net Income, Return on Equity, Adjusted Return on Equity,
Return on Assets, Adjusted Return on Assets, Total Shareholder
Return, Stock Fair Market Value, EBIT, Adjusted EBIT, EPS or
Adjusted EPS.
“Code”
means the Internal Revenue Code of 1986, as amended. Reference in
the Plan to any section of the Code will be deemed to include any
amendments or successor provisions to such section and any
regulations promulgated thereunder.
“Committee” means the Committee on
Management of the Board; provided, however, that if such Committee
fails to satisfy the disinterested administration provisions of
Section 16b-3 of the 1934 Act or the outside director
provisions of Section 162(m)(4)(C) of the Code,
“Committee” shall mean a committee of directors of the
Company who satisfy the requirements of such Sections.
“Company” means Constellation
Energy Group, Inc., a Maryland corporation, or its successor,
including any “New Company” as provided in
Section 15I.
“Covered
Award” means any Award granted under the Plan on or after
December 18, 2005.
“Date of
Grant” means the date on which the granting of an Award is
authorized by the Committee or such later date as may be specified
by the Committee in such authorization.
“Date of
Retirement” means the date of Retirement.
“Disability” means the
determination that a Participant is “disabled” under
the Company disability plan in effect at that time.
“Dividend
Equivalent” means an Award granted under
Section 11.
“EBIT”
for any Year means the consolidated earnings before income taxes of
the Company, as reported in the consolidated financial statements
of the Company for the Year.
“Eligible
Person” means any person who satisfies all of the
requirements of Section 5.
“EPS”
for any Year means diluted earnings per share of the Company, as
reported in the Company’s consolidated financial statements
for the Year.
“Equity” means an Award granted
under Section 12.
“Excluded
Transactions” has the meaning set forth in Section
13.
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“Exercise
Period” means the period or periods during which a Stock
Appreciation Right is exercisable as described in
Section 10.
“Fair Market Value” means the
average of the highest and lowest price at which the Stock was sold
regular way on the New York Stock Exchange-Composite Transactions
on a specified date ; provided, however, that notwithstanding the
foregoing, solely for purposes of determining the Option price per
share of Stock under Section 8C for Option grants made after
October 19, 2006, “Fair Market Value” means the price
at which the Stock was last sold on the New York Stock
Exchange-Composite Transactions on the Date of Grant
.
“Incentive
Stock Option” means an incentive stock option within the
meaning of Section 422 of the Code.
“Net
Income” for any Year means the consolidated net income of the
Company, as reported in the consolidated financial statements of
the Company for the Year.
“1934
Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
“Option” or “Stock
Option” means either a nonqualified stock option or an
incentive stock option granted under Section 8.
“Option
Period” or “Option Periods” means the period or
periods during which an Option is exercisable as described in
Section 8.
“Participant” means an individual
who has been granted an Award under this Plan.
“Pension
Plan” means the Pension Plan of Constellation Energy
Group, Inc. as may be amended from time to time.
“Performance-Based” means that in
determining the amount of a Restricted Stock or Restricted Stock
Unit Award payout, the Committee will take into account the
Performance Targets.
“Performance
Period” means the taxable year of the Company or any other
period designated by the Committee with respect to which an Award
may be granted.
“Performance
Target(s)” means the specific objective goal or goals that
are timely set in writing by the Committee pursuant to
Section 9A(ii) for each Participant for the applicable
Performance Period in respect of any one or more of the Business
Criteria.
“Performance
Unit” means a unit of measurement equivalent to such amount
or measure as defined by the Committee which may include, but is
not limited to, dollars, market value shares, or book value
shares.
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“Plan
Administrator” means, as set forth in Section 4, the
Committee.
“Restricted
Stock” means Stock issued in the name of a Participant that
bears a restrictive legend prohibiting sale, transfer, pledge or
hypothecation of the Stock until the expiration of the restriction
period.
“Restricted
Stock Unit” means a right granted under Section 7 that
is denominated in shares of stock, each of which represents a right
to receive the value of a share of stock (or a percentage of such
value, which percentage may be higher than 100%) upon the terms and
conditions set forth by the Committee.
“Retirement” means retirement on or
after the “Early Retirement Date” (as such term is
defined in the Pension Plan or a Subsidiary’s retirement or
pension plan).
“Return on
Assets” means Net Income divided by the average of the total
assets of the Company at the end of the four fiscal quarters of the
Year, as reported by the Company in its consolidated financial
statements.
“Return on
Equity” means the Net Income divided by the average of the
common shareholders equity of the Company at the end of each of the
four fiscal quarters of the Year, as reported by the Company in its
consolidated financial statements.
“Service-Based” means that in
determining the amount of a Restricted Stock or Restricted Stock
Unit Award payout, the Committee will take into account only the
period of time that the Participant performed services for the
Company or its Subsidiaries since the Date of Grant.
“Stock” means the common stock,
without par value, of the Company.
“Stock
Appreciation Right” means an Award granted under
Section 10.
“Subsidiary(ies)” means any entity
that is directly or indirectly controlled by the Company or any
entity, including an acquired entity, in which the Company has a
significant equity interest, as determined by the Committee, in its
discretion.
“Termination” means resignation or
discharge from employment with the Company or any of its
Subsidiaries except in the event of death, Disability, or
Retirement.
“Total
Shareholder Return” means the sum of the change in the Fair
Market Value of the Stock plus the value of reinvested dividends
and cash equivalents, over the Performance Period.
“Year”
means a fiscal year of the Company commencing on or after
January 1, 2002 that constitutes all or part of the applicable
Performance Period.
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3.
Effective Date, Duration and Stockholder Approval.
A.
Effective Date and
Stockholder Approval. Subject to the approval of the Plan by
a majority of the outstanding shares of Stock voted at the 2002
Annual Meeting of Stockholders, the Plan will be effective as of
January 1, 2002. The Plan was most recently amended and
restated effective as of October 19, 2006.
B.
Period for Grants of
Awards. Awards may be made as provided herein for a period of
10 years after January 1, 2002.
C.
Termination.
The Plan will continue in
effect until all matters relating to the payment of outstanding
Awards and administration of the Plan have been settled.
4.
Plan Administration. The Committee is the Plan Administrator
and has sole authority (except as specified otherwise herein) to
determine all questions of interpretation and application of the
Plan, or of the terms and conditions pursuant to which Awards are
granted, exercised or forfeited under the Plan provisions, and, in
general, to make all determinations advisable for the
administration of the Plan to achieve its stated purpose. Without
limiting the generality of the foregoing, the Plan Administrator
may modify, amend, extend or renew outstanding Awards, or accept
the surrender of outstanding Awards and substitute new Awards
(provided, however, that, except as provided in Section 15H of
the Plan, any modification that would materially adversely affect
any outstanding Award shall not be made without the consent of the
Participant, and provided, further, that no modification, amendment
or substitution that results in repricing a Stock Option to a lower
exercise price, other than to reflect an adjustment made pursuant
to Section 15H, shall be made without prior stockholder
approval).
The Plan
Administrator’s determinations under the Plan (including
without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards and any agreements evidencing such
Awards) need not be uniform and may be made by the Administrator
selectively among persons who receive, or are eligible to receive,
Awards under the Plan, whether or not such persons are similarly
situated. Such determinations shall be final and not subject to
further appeal.
The Committee may
delegate its authority under the Plan with respect to Participants
who are not directors or executive officers.
5.
Eligibility. Each officer, key employee or director of the
Company and its Subsidiaries may be designated by the Committee as
a Participant, from time to time, with respect to one or more
Awards. No officer, employee or director of the Company or its
Subsidiaries shall have any right to be granted an Award under this
Plan. The Plan Administrator may also grant Awards to individuals
in connection with hiring (as an officer, key employee or
director), retention or otherwise, prior to the date the individual
first performs services for the Company or a Subsidiary;
provided,
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however, that
such Awards shall not become vested or exercisable prior to the
date the individual first commences performance of such
services.
6.
Grant of Awards and Limitation of Number of Shares Awarded.
The Committee may, from time to time, grant Awards to one or more
Eligible Persons, provided that subject to any adjustment pursuant
to Section 15H, the aggregate number of shares of Stock
subject to Awards that may be delivered under this Plan may not
exceed eight million (8,000,000) shares. Shares delivered by the
Company under the Plan may be authorized and unissued Stock, Stock
held in the treasury of the Company, or Stock purchased on the open
market (including private purchases) in accordance with applicable
securities laws.
Any shares of
Stock covered by an Award (or portion of an Award) granted under
the Plan that is forfeited or canceled, expires or is settled in
cash, including the settlement of tax withholding obligations using
shares, shall be deemed not to have been delivered for purposes of
determining the maximum number of shares available for delivery
under the Plan. Likewise, if any Option granted under the Plan is
exercised by tendering shares of Stock to the Company as full or
partial payment for such exercise under the Plan, only the number
of shares issued net of the shares tendered shall be deemed
delivered for purposes of determining the maximum number of shares
available for delivery under the Plan.
The maximum number
of shares of Stock that may be issued in conjunction with
Service-Based Restricted Stock or Restricted Stock Unit Awards
under Section 7 of the Plan, Performance-Based Restricted
Stock or Restricted Stock Unit or Performance Unit Awards under
Section 9 of the Plan and Equity Awards under Section 12
of the Plan shall in the aggregate be eight hundred thousand
(800,000). The maximum number of shares of Stock subject to Awards
of any combination that may be granted during any calendar year
under the Plan to any one person is two million (2,000,000);
provided, however, that to the extent the maximum permissible award
is not made in a year, such amount may be carried over to
subsequent years. Such per-individual limit shall not be adjusted
to effect a restoration of shares of Stock with respect to which
the related Award is terminated, surrendered or
canceled.
The Plan
Administrator may permit or require a recipient of an Award to
defer all or part of such individual’s receipt of the payment
of cash or the delivery of Stock that would otherwise be due to
such individual by virtue of the exercise of, payment of, or lapse
or waiver of restrictions respecting, any Award. If any such
payment deferral is required or permitted, the Plan Administrator
shall, in its sole discretion, establish rules and procedures for
such payment deferrals.
7.
Service-Based Restricted Stock and Restricted Stock Unit
Awards.
A.
Grants of Service-Based
Restricted Shares or Units. One or more shares of Restricted
Stock or Restricted Stock Units may be granted to any Eligible
Person. The Service-Based Restricted Stock will be issued or
Restricted Stock Unit granted to the Participant on the Date of
Grant without the payment of consideration by the
Participant. The Service-Based Restricted Stock will be
issued or Restricted
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Stock Unit
granted in the name of the Participant and will bear a restrictive
legend prohibiting sale, transfer, pledge or hypothecation of the
Service-Based Restricted Stock or Restricted Stock Unit until the
expiration of the restriction period.
The Committee may
also impose such other restrictions and conditions on the
Service-Based Restricted Stock or Restricted Stock Unit as it deems
appropriate.
Upon issuance to
the Participant of the Service-Based Restricted Stock the
Participant will have the right to vote the Service-Based
Restricted Stock. Upon issuance to the Participant of the
Restricted Stock or grant of the Restricted Stock Unit and subject
to the Committee’s discretion, the Participant will have the
right to receive the cash dividends (or Dividend Equivalents as
provided in Section 11) distributable with respect to such
shares or units, with such dividends or Dividend Equivalents
treated as compensation to the Participant. The Committee, in its
sole discretion, may direct the accumulation and payment of
distributable dividends to the Participant at such times, and in
such form and manner, as determined by the Committee.
B.
Restriction Period.
At the time a Service-Based Restricted Stock or Restricted Stock
Unit Award is granted, the Committee will establish a restriction
period applicable to such Award which will be not less than one
year and not more than ten years. Each Restricted Stock or
Restricted Stock Unit Award may have a different restriction
period, at the discretion of the Committee.
C.
Forfeiture or Payout of
Award. In the event a Participant ceases employment (or
ceases Board membership in the case of a director) during a
restriction period, a Service-Based Restricted Stock or Restricted
Stock Unit Award is subject to forfeiture or payout (i.e., removal
of restrictions) as follows: (a) Termination—the
Service-Based Restricted Stock or Restricted Stock Unit Award is
completely forfeited; or (b) Retirement, Disability or
death—payout of the Service-Based Restricted Stock or
Restricted Stock Unit Award is prorated for service during the
period; provided, however, that the Committee may modify the above
if it determines at its sole discretion that special circumstances
warrant such modification.
Any shares of
Service-Based Restricted Stock which are forfeited will be
transferred to the Company.
Upon completion of
the restriction period, all Award restrictions will expire and new
certificates representing the Award will be issued (the payout)
without the restrictive legend described in
Section 7A.
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D.
Waiver of
Section 83(b) Election. Unless otherwise directed by the
Committee, as a condition of receiving an Award of Service-Based
Restricted Stock, a Participant must waive in writing the right to
make an election under Section 83(b) of the Code to report the
value of the Service-Based Restricted Stock as income on the Date
of Grant.
8.
Stock Options.
A.
Grants of Options.
One or more Options may be granted to any Eligible Person on the
Date of Grant without the payment of consideration by the
Participant.
B.
Stock Option
Agreement. Each Option granted under the Plan will be
evidenced by a “Stock Option Agreement” between the
Company and the Participant containing provisions determined by the
Committee, including, without limitation, provisions to qualify
Incentive Stock Options as such under Section 422 of the Code
if directed by the Committee at the Date of Grant; provided,
however, that each Incentive Stock Option Agreement must include
the following terms and conditions: (i) that the Options are
exercisable, either in total or in part, with a partial exercise
not affecting the exercisability of the balance of the Option;
(ii) every share of Stock purchased through the exercise of an
Option will be paid for in full at the time of the exercise;
(iii) each Option will cease to be exercisable, as to any
share of Stock, at the earliest of (a) the Participant’s
purchase of the Stock to which the Option relates, (b) the
Participant’s exercise of a related Stock Appreciation Right,
or (c) the lapse of the Option; (iv) Options will not be
transferable by the Participant except by Will or the laws of
descent and distribution and will be exercisable during the
Participant’s lifetime only by the Participant or by the
Participant’s guardian or legal representative; and
(v) notwithstanding any other provision, in the event of a
public tender for all or any portion of the Stock or in the event
that any proposal to merge or consolidate the Company with another
company is submitted to the stockholders of the Company for a vote,
the Committee, in its sole discretion, may declare any previously
granted Options to be immediately exercisable.
C.
Option Price. The
Option price per share of Stock will be set by the grant, but will
be not less than 100% of the Fair Market Value at the Date of
Grant.
D.
Form of Payment. At
the time of the exercise of the Option, the Option price will be
payable in cash or in other shares of Stock or in a combination of
cash and other shares of Stock, in a form and manner as required by
the Committee in its sole discretion. When Stock is used in full or
partial payment of the Option price, it will be valued at the Fair
Market Value on the applicable date.
E.
Other Terms and
Conditions. The Option will become exercisable in such manner
and within such Option Period or Periods, not to exceed
10 years from its Date of Grant, as set forth in the Stock
Option Agreement upon payment in full. Except as otherwise provided
in this Plan or in the Stock Option Agreement, any Option may be
exercised in whole or in part at any time.
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F.
Lapse of Option. An
Option will lapse upon the earlier of: (i) 10 years from
the Date of Grant, or (ii) at the expiration of the Option
Period set by the grant. If the Participant ceases employment (or
ceases Board membership in the case of a director) within the
Option Period and prior to the lapse of the Option, the Option will
lapse as follows: (a) Termination–any unvested Option
will lapse on the effective date of the Termination and any vested
Option will lapse 90 days after the effective date of the
Termination; or (b) Retirement, Disability or death—any
unvested Option will lapse on the effective date of the Retirement,
Disability or death and any vested Option will lapse on the earlier
of 60 months after the effective date of the Retirement,
Disability or death or at the expiration of the Option Period set
by the Grant; provided, however, that the Committee may modify the
above if it determines in its sole discretion that special
circumstances warrant such modification.
G.
Individual
Limitation. In the case of an Incentive Stock Option, the
aggregate Fair Market Value of the Stock for which Incentive Stock
Options (whether under this Plan or another arrangement) in any
calendar year are first exercisable will not exceed $100,000 with
respect to such calendar year (or such other individual limit as
may be in effect under the Code on the Date of Grant) plus any
unused portion of such limit as the Code may permit to be carried
over.
9.
Performance-Based Restricted Stock or Restricted Stock
Units/Performance Units.
A.
Provision for
Awards .
(i)
General . For Awards under this Section 9, the
Committee will establish (a) Performance Target(s) relative to
the applicable Business Criteria, (b) the applicable
Performance Period and (c) the applicable number of shares of
Performance-Based Restricted Stock, Performance-Based Restricted
Stock Units or Performance Units that are the subject of the Award.
The applicable Performance Period and Performance Target(s) shall
be determined by the Committee consistent with the terms of the
Plan and Section 162(m) of the Code. Notwithstanding the fact
that the Performance Target(s) have been attained, the Committee
may pay an Award under this Section 9 of less than the amount
determined by the formula or standard established pursuant to
Section 9A(ii) or may pay no Award at all.
(ii)
Selection of Performance
Target(s) . The specific Performance Target(s) with respect
to the Business Criteria must be established by the Committee in
advance of the deadlines applicable under Section 162(m) of
the Code and while the performance relating to the Performance
Target(s) remains substantially uncertain within the meaning of
Section 162(m) of the Code. The Performance Target(s) with
respect to any Performance Period may be established on a
cumulative basis or in the alternative, and may be established on a
stand-alone basis with respect to the Company or on a relative
basis with respect to any peer companies or index selected by the
Committee. At the time the Performance Target(s) are selected, the
Committee shall provide, in terms of an objective formula or
standard for each Participant, the method of
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computing the specific
amount that will represent the maximum amount of Award payable to
the Participant if the Performance Target(s) are attained. The
objective formula or standard shall preclude the use of discretion
to increase the amount of any Award earned pursuant to the terms of
the Award.
(iii)
Effect of Mid-Year
Commencement of Service . If services as an executive officer or director
commence after the adoption of the Plan and the Performance
Target(s) are established for a Performance Period, the Committee
may grant an Award that is proportionately adjusted based on the
period of actual service during the Year, and the amount of any
Award paid to such person shall not exceed that proportionate
amount of the applicable maximum individual Award under
Section 6.
(iv)
Adjustments.
To preserve the intended
incentives and benefits of an Award based on Adjusted EPS, Adjusted
Net Income, Adjusted Return on Assets or Adjusted Return on Equity,
the Committee may determine at the time the Performance Targets are
established that certain adjustments shall apply to the objective
formula or standard with respect to the applicable Performance
Target to take into account, in whole or in part, in any
manner specified by the Committee, any one or more of the following
with respect to the Performance Period: (i) the gain, loss,
income or expense resulting from changes in accounting principles
that become effective during the Performance Period; (ii) the
gain, loss, income or expense reported publicly by the Company with
respect to the Performance Period that are extraordinary or unusual
in nature or infrequent in occurrence, excluding gains or losses on
the early extinguishment of debt; (iii) the gains or losses
resulting from, and the direct expenses incurred in connection
with, the disposition of a business, in whole or in part or the
sale of investments or non-core assets; (iv) gain or loss from
all or certain claims and/or litigation and all or certain
insurance recoveries relating to claims or litigation; (v) the
impact of impairment of tangible or intangible assets;
(vi) the impact of restructuring or business
recharacterization activities, including but not limited to
reductions in force, that are reported publicly by the Company; and
(vii) the impact of investments or acquisitions made during
the year or, to the extent provided by the Committee, any prior
year. Each of the adjustments described in this
Section 9A(iv) may relate to the Company as a whole or
any part of the Company’s business or operations, as
determined by the Committee at the time the Performance Targets are
established. The adjustments are to be determined in accordance
with generally accepted accounting principles and standards, unless
another objective method of measurement is designated by the
Committee. In addition to the foregoing, the Committee shall adjust
any Business Criteria, Performance Targets or other features of an
Award that relate to or are wholly or partially based on the number
of, or the value of, any stock of the Company, to reflect any stock
dividend or split, recapitalization, combination or exchange of
shares or other similar changes in such stock.
(v)
Committee Discretion to
Determine Award . The Committee has the sole discretion to
determine the standard or formula pursuant to which
each
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Participant’s
Award shall be calculated, whether all or any portion of the amount
so calculated will be paid, and the specific amount (if any) to be
paid to each Participant, subject in all cases to the terms,
conditions and limits of the Plan. To this same extent, the
Committee may at any time establish (and, once established,
rescind, waive or amend) additional conditions and terms of payment
of Awards (including but not limited to the achievement of other
financial, strategic or individual goals, which may be objective or
subjective) as it may deem desirable in carrying out the purposes
of the Plan. The Committee may not, however, increase the maximum
amount permitted to be paid to any individual under the Plan or pay
Awards under this Section 9 if the applicable Performance
Target(s) have not been satisfied.
B.
Performance-Based
Restricted Stock or Restricted Stock Unit Awards .
(i)
Grants of
Performance-Based Restricted Stock or Restricted Stock
Units. Subject to Section 9A, one or more shares
of Performance-Based Restricted Stock or Restricted Stock Units may
be granted to any Eligible Person. The Performance-Based Restricted
Stock or Restricted Stock Unit will be issued to the Participant on
the Date of Grant without the payment of consideration by the
Participant. The Performance-Based Restricted Stock or Restricted
Stock Unit will be issued in the name of the Participant and will
bear a restrictive legend prohibiting sale, transfer, pledge or
hypothecation of the Performance-Based Restricted Stock or
Restricted Stock Unit until the expiration of the restriction
period.
The
Committee may also impose such other restrictions and conditions on
the Performance-Based Restricted Stock or Restricted Stock Unit as
it deems appropriate.
Upon issuance to the Participant of the
Performance-Based Restricted Stock, the Participant will have the
right to vote the Performance-Based Restricted Stock. Upon issuance
to the Participant of the Performance-Based Restricted Stock or
Restricted Stock Unit and subject to the Committee’s
discretion, the Participant will have the right to receive the cash
dividends (or Dividend Equivalents as provided in Section 11)
distributable with respect to such shares or units, with such
dividends or Dividend Equivalents treated as compensation to the
Participant. The Committee, in its sole discretion, may direct the
accumulation and payment of distributable dividends to the
Participant at such times, and in such form and manner, as
determined by the Committee.
(ii)
Restriction Period.
At the time a Performance-Based
Restricted Stock or Restricted Stock Unit Award is granted, the
Committee will establish a restriction period applicable to such
Award which will be not less than one year and not more than ten
years. Each Performance-Based Restricted Stock or Restricted Stock
Unit Award may have a different restriction period, at the
discretion of the Committee.
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(iii)
Waiver of
Section 83(b) Election. Unless otherwise directed by the Committee, as
a condition of receiving an Award of Performance-Based Restricted
Stock, a Participant must waive in writing the right to make an
election under Section 83(b) of the Code to report the value
of the Performance-Based Restricted Stock as income on the Date of
Grant.
C.
Performance Units.
Subject to Section 9A, one or more Performance Units may be
earned by an Eligible Person based on the achievement of
preestablished performance objectives during a Performance
Period.
D.
Forfeiture or Payout of
Award. As soon as practicable after the end of each
Performance Period, the Committee will determine whether the
Performance Targets and other material terms of the Award were
satisfied. The Committee’s determination of all such matters
will be final and conclusive.
As soon as
practicable after the date the Committee makes the above
determination, the Committee will determine the Award payment for
each Participant. Before any payments are made under this
Section 9, the Committee shall be responsible for certifying
in writing to the Company that the applicable Performance Targets
have been met.
In the event a
Participant ceases employment (or ceases Board membership in the
case of a director) during a Performance Period, the
Performance-Based Restricted Stock, Performance-Based Restricted
Stock Unit or Performance Unit Award is subject to forfeiture or
payout as follows: (a) Termination—the Performance-Based
Restricted Stock, Performance-Based Restricted Stock Unit or
Performance Unit Award is completely forfeited; or
(b) Retirement, Disability or death—payout of the
Performance-Based Restricted Stock, Performance-Based Restricted
Stock Unit or Performance Unit Award is prorated taking into
account factors including, but not limited to, service and the
performance of the Participant during the portion of the
Performance Period before employment ceased; provided, however,
that the Committee may modify the above if it determines in its
sole discretion that special circumstances warrant such
modification.
Any shares of
Performance-Based Restricted Stock which are forfeited will be
transferred to the Company.
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