As filed with the Securities and Exchange Commission on July 13, 2000
Registration No. _______
__________________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
____________________
HUMANA INC.
(Exact name of registrant as specified in its charter)
|
Delaware incorporation or organization) |
61-0647538 Identification No.) |
500 West Main Street
Louisville, Kentucky 40202
(Address of principal executive offices)
_____________________
HUMANA INC. RESTRICTED STOCK PLAN FOR EMPLOYEES
(Full title of the plan)
____________________
HUMANA INC. RESTRICTED STOCK PLAN FOR OFFICERS AND DIRECTORS
(Full title of the plan)
____________________
Arthur P. Hipwell
Senior Vice President and General Counsel
Humana Inc.
500 West Main Street
Louisville, Kentucky 40202
(502) 580-1000
(Name, address and telephone number,
including area code, of agent for service)
_______________________
|
CALCULATION OF REGISTRATION FEE |
|||||
|
Title of securities to be registered |
Amount to be Registered (1) |
Proposed maximum offering price per share (2) |
Proposed maximum aggregate offering price |
Amount of registration fee (2) |
|
|
Common Stock, par value $0.16-2/3 per share |
5,000,000 |
$5.8438 |
$29,219.00 |
$7,714 |
|
(1) Plus an indeterminable number of additional shares as may become issuable as a result of any antidilution provisions of the Plan. The shares represent the number of shares of the Registrant
=s Common Stock, including associated Preferred Stock Purchase Rights, which may be awarded as Restricted Stock. This is the aggregate share limit for the Humana Inc. Restricted Stock Plan for Employees and the Humana Inc. Restricted Stock Plan for Officers and Directors. Shares awarded under each Plan will reduce the Shares available under the other Plan.(2) Estimated solely for the purpose of determining the registration fee. Calculated in accordance with Rule 457(h) under the Securities Act of 1933 and based on the average of the high and low prices of the Common Stock as reported in the New York Stock Exchange Composite Tape on July 7, 2000.
Exhibit Index on page II-10.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents filed by Humana Inc. (the "Company" or the "Registrant") with the Commission (File No. 1-5975) are incorporated herein by reference and made a part hereof:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1999;
(b) The Registrant
(c) The Registrants' Current Reports of Form 8-K dated January 3, 2000 and February 3, 2000.
(d) The description of the Registrant's Common Stock, par value $0.16-2/3 per share (the "Common Stock"), contained in the Registrant's Registration Statement on Form 8-A, as such description may be amended or updated.
All documents filed by the Company pursuant to Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934 ("Exchange Act"), subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment to this
Registration Statement which indicates that all of the securities offered have been sold or which deregisters all of such shares then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
The Company's authorized capital stock consists of (i) 300,000,000 shares of Common Stock, of which 167,729,460 shares were issued and outstanding as of July 1, 2000; (ii) 10,000,000 shares of Preferred Stock, par value $1.00 per share, of which
none were issued or outstanding as of July 1, 2000.
Item 5. Interest of Named Experts and Counsel.
The validity of the issuance of the shares of Common Stock being offered by the Registration Statement will be passed upon for the Registrant by Kathleen Pellegrino, Vice President and Associate General Counsel of the Registrant. As of July 1,
2000, Ms. Pellegrino owned 8,450 shares of Common Stock, has 5,201 shares of Common Stock in the Humana Retirement and Savings Plan, and also has stock options to purchase 112,971 shares of Common Stock of the Registrant.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL") permits a Delaware corporation to indemnify any person who was or is, or is threatened to be made, a party to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in the right of such corporation) by reason of the fact that such person is or was a director, officer, employee or agent of such corporation, or is or was serving at the request
of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The indemnity may include expenses (including attorneys' fees) actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or
proceeding, such person had no reasonable cause to believe the conduct was unlawful. A Delaware corporation may indemnify such persons in actions brought by or in the right of the corporation to procure a judgment in its favor under the same conditions,
except that no indemnification is permitted in respect of any claim, issue or matter as to which such person has been adjudged to be liable to the corporation unless and to the extent the Court of Chancery of the State of Delaware, or the court in which
such action or suit is brought, determines upon application that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the Court of Chancery or other such court deems proper. To the
extent such person has been successful on the merits or otherwise in defense of any action referred to above, or in defense of any claim, issue or matter therein, the corporation must indemnify such person against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith. Corporations, under certain circumstances, may pay expenses incurred by an officer or director in advance of the final disposition of an action for which indemnification may be
permitted or required. The indemnification and advancement of expenses provided for or granted pursuant to Section 145 of the DGCL are not exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled
under any by-law, agreement, vote of stockholders or disinterested directors or otherwise. Section 145 further provides that a corporation may maintain insurance against liabilities for which indemnification is not expressly provided by statute.
Article X of the Company's By-Laws essentially provides for indemnification of directors, officers, employees and agents of the Company to the fullest extent authorized under the DGCL.
The Tenth Article of the Company's Restated Certificate of Incorporation provides that a director of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director except
for liability (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
or (iv) for any transaction from which the director derived an improper personal benefit.
The Company has in effect officers and directors liability insurance policies with various insurance companies. The policies provide indemnity to the directors and officers of the Company for loss arising from claims concerning a covered wrongful act
where there is no corporate indemnification. The insurance will also reimburse the Company for indemnification it may be required by statute or the Company's By-laws to make to any of its directors and officers in connection with a claim by reason of a
wrongful act. The policies cover negligent acts, errors, omissions, or breach of duty by a director or officer. The principal exclusions from coverage include the following: (i) claims involving violations of Section 16(b) of the Exchange Act; (ii)
dishonest acts; and (iii) libel, slander or non-monetary damages. The policies generally provide for a $500,000 deductible self-insurance retention by the Company. The limit of liability under the policies is $70,000,000 in the aggregate for coverage in
excess of deductibles and participations.
The Company has entered into Indemnity Agreements (the "Agreements") with its directors and officers ("Indemnitees"), whereby the Company will indemnify such parties and advance expenses to the fullest extent permitted by the DGCL.
An Indemnitee will not be entitled to indemnification or advancement of expenses under the Agreements with respect to any proceeding or claim brought or made by the Indemnitee against the Company. If the Indemnitee is not entitled to indemnification
of all expenses, he or she may still be indemnified for a portion of the expenses. The determination of entitlement to indemnification under the Agreements will be made by a majority of a quorum of disinterested directors, independent counsel or by the
stockholders of the Company. In the event of a change in control of the Company (as defined in the Agreements), the determination of entitlement will be made, if the Indemnitee so elects, by an independent counsel selected by the Indemnitee, and the
Company will have the burden of proof to overcome a presumption that the Indemnitee is entitled to indemnification.
The Agreements further provide that to the extent the Company maintains a liability insurance policy for directors, officers, employees, agents or fiduciaries, the Indemnitee will be covered by such policy in accordance with its terms to the maximum extent of the coverage available for any such officer, director, employee, agent or fiduciary under the policy. The Agreements will terminate upon the later of: (a) 10 years after the date the Indemnitee ceases to serve; or (b) the final termination of all pending proceedings covered thereunder.
Item 7. Exemption From Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The Exhibit Index immediately preceding the exhibits is incorporated herein by reference.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 ("Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment hereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration Statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) That for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the DGCL, the Amended and Restated Certificate of Incorporation, the By-Laws of the Registrant and the Agreements or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
The Registrant.
Pursuant to the requirements of the Securities Act of 1933 ("Securities Act"), the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration
Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Louisville, Commonwealth of Kentucky, on the 13th day of July, 2000.
HUMANA INC.
RESTRICTED STOCK PLAN FOR EMPLOYEES
RESTRICTED STOCK PLAN FOR OFFICERS & DIRECTORS
By: /s/ Arthur P. Hipwell
Arthur P. Hipwell
Senior Vice President and
General Counsel
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this Registration Statement and Power of Attorney have been signed below by the following persons in the capacities and on the dates indicated.
Each person whose signature appears below constitutes and appoints David A. Jones and Arthur P. Hipwell, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution to execute in his or her name and on his
or her behalf, and to file any amendments (including, without limitation, post-effective amendments) to this Registration Statement necessary or advisable in the opinion of any of them to enable the Company to comply with the Securities Act, and any
rules, regulations and requirements of the Commission thereunder, in connection with the registration of the additional securities which are under the subject of this Registration Statement.
BY:
/s/ David A. Jones
David A. Jones
Chairman of the Board and Director
DATE: July
13, 2000
BY:
/s/ James E. Murray
James E. Murray
Chief Operating Officer-Health Plans
and Chief Operating Officer,
(Principal Financial & Accounting Officer)
DATE: July
13, 2000
BY:
/s/ K. Frank Austen, M.D.
K. Frank Austen, M.D.
Director
DATE: July
13, 2000
BY:
/s/ Charles M. Brewer
Charles M. Brewer
Director
DATE: July
13, 2000
BY:
/s/ Michael E. Gellert
Michael E. Gellert
Director
DATE: July
13, 2000
BY:
/s/ John R. Hall
John R. Hall
Director
DATE: July
13, 2000
BY:
/s/ David A. Jones, Jr.
David A. Jones, Jr.
Director
DATE: July
13, 2000
BY:
/s/ Irwin Lerner
Irwin Lerner
Director
DATE: July
13, 2000
BY:
/s/ Michael B. McCallister
Michael B. McCallister
President, Chief Executive Officer and Director
DATE: July
13, 2000
BY:
/s/ W. Ann Reynolds, Ph.D.
W. Ann Reynolds, Ph.D.
Director
DATE: July
13, 2000
Exhibit Index.
4.1 Restated Certificate of Incorporation filed with the Secretary of State of Delaware on November 9, 1989, as restated to incorporate the amendment of January 9, 1992, and the correction of March 23, 1992.
Exhibit 4(i) to the Company's Post-Effective Amendment No. 1 to the Company's Registration Statement on Form S-8 (Reg. No. 33-49305) filed February 2, 1994 is incorporated by reference herein.
4.2. By-Laws as amended. Exhibit 3(b) to the Company's Annual Report for the year ended December 31, 1997, is incorporated by reference herein.
4.3 Form of Amended and Restated Rights Agreement, dated February 14, 1996, between Humana Inc. and Mid-America Bank of Louisville and Trust Company. Exhibit 1.3 to the Registration Statement (File No. 1-5975)
on Form 8-A/A dated February 14, 1996, is incorporated by reference herein.
4.4 Amendment No. 1 dated May 27, 1998, to Amended and Restated Rights Agreement, dated February 14, 1996 between Humana Inc. and Mid-America Bank of Louisville and Trust Company ("Rights Agreement"). Exhibit
4.2 to the Registration Statement (File No. 1-5975 on Form 8-A/A dated June 15, 1998 is incorporated by reference herein.
4.5 Amendment No. 2 dated as of March 1, 1999 to the Rights Agreement. Exhibit 4.3 to the Registration Statement (File No. 1-5975) on Form 8-A12B/A dated February 26, 1999 is incorporated by reference herein.
5 Opinion of counsel as to the validity of the securities registered herein, filed herewith.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants for the Registrant, filed herewith.
23.2 Consent of counsel, included in 5 above.
24 Powers of Attorney (included on the signature page of this (Registration Statement).
99.1 Humana Inc. Restricted Stock Plan for Employees, filed herewith.
99.2 Humana Inc. Restricted Stock Plan for Officers and Directors, filed herewith.
Exhibit 5 V:\law\atty\jok4925\DOCS\s-8OPINIONLETTER.DOC July 13, 2000 Humana Inc. 500 West Main Street Louisville, KY 40202 Form S-8 Registration Statement Ladies and Gentlemen: I am Vice President and Associate General Counsel for Humana Inc., a Delaware Corporation (the "Company"), and have been involved with the preparation of a Registration Statement on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended, covering an aggregate of 5,000,000 shares of the common stock, par value $0.16 2/3 per share (the "Shares") to be issued in connection with the Company's Restricted Stock Plan for Employees and the Restricted Stock Plan for Officers & Directors ( collectively the "Plans"). I have examined and am familiar with the Restated Certificate of Incorporation and Restated By-Laws of the Company and the various corporate records and proceedings related to the organization of the Company and the proposed issuance of Shares. I have also examined such other documents as I have considered necessary for the purpose of this opinion. Based on the foregoing, it is my opinion that the Shares have been duly authorized and, when issued and paid for in accordance with the terms of the Plan, will be validly issued, fully paid and nonassessable. I hereby consent to the filing of this opinion as an Exhibit to the Registration Statement. Sincerely, /s/ Kathleen Pellegrino Kathleen Pellegrino Vice President and Associate General Counsel
V:\law\atty\jok4925\DOCS\PwCConsentS-8.doc
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated
February 9, 2000 relating to the financial statements, which
appears in the 1999 Annual Report to Shareholders of Humana
Inc., which is incorporated by reference in Humana Inc.'s
Annual Report on Form 10-K for the year ended December 31,
1999. We also consent to the incorporation by reference of
our report dated February 9, 2000 relating to the financial
statement schedules, which appears in such Annual Report on
Form 10-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Louisville, Kentucky
July 13, 2000
- 1 - ffny01\renaubr\338494.4
HUMANA INC.
RESTRICTED STOCK PLAN FOR
EMPLOYEES
(As Adopted July 13, 2000)
HUMANA INC.
RESTRICTED STOCK PLAN FOR EMPLOYEES
1. Purpose.
The purpose of the Humana Inc., Restricted Stock Plan
for Employees ("Plan") is to strengthen Humana Inc., a Delaware
corporation (the "Company"), (a) by providing an incentive to its
non-officer employees and thereby encouraging them to devote
their abilities and industry to the success of the Company's
business enterprise, and (b) by encouraging the attraction and
retention of key employees with exceptional qualifications. It
is intended that this purpose be achieved by extending to non-
officer employees (including such future employees who have
received a formal written offer of employment) of the Company and
its Subsidiaries an added long-term incentive for high levels of
performance and unusual efforts through the grant of Restricted
Stock.
2. Definitions.
Except as otherwise stated herein, defined terms
whenever used in this Plan, shall have the same meaning as
defined in the Humana Inc. 1996 Stock Incentive Plan for
Employees or its successor.
3. Administration.
3.1 The Plan shall be administered by the Committee,
which shall hold meetings at such times as may be necessary for
the proper administration of the Plan. The Committee shall keep
minutes of its meetings. The Committee shall consist of at least
two (2) directors of the Company ("Directors") and may consist of
the entire Board; provided, however, that if the Committee
consists of less than the entire Board, then the Committee shall
consist of at least two (2) Directors each of whom shall be a
nonemployee director, within the meaning of Rule 16b-3
promulgated under the Exchange Act ("Nonemployee Director"). For
purposes of the preceding sentence, if one or more members of the
Committee is not a Nonemployee Director but recuses himself or
herself or abstains from voting with respect to a particular
action taken by the Committee, then the Committee, with respect
to that action, shall be deemed to consist only of the members of
the Committee who have not recused themselves or abstained from
voting. A quorum shall consist of not fewer than two (2) members
of the Committee and a majority of a quorum may authorize any
action. Any decision or determination reduced to writing and
signed by all of the members of the Committee shall be as fully
effective as if made by vote at a meeting duly called and held.
Subject to applicable law, the Committee may delegate its
authority under the Plan to any other person or persons.
3.2 No member of the Committee shall be liable for any
action, failure to act, determination or interpretation made in
good faith with respect to this Plan or any transaction
hereunder. The Company hereby agrees to indemnify each member of
the Committee for all costs and expenses and, to the extent
permitted by applicable law, any liability incurred in connection
with defending against, responding to, negotiating for the
settlement of or otherwise dealing with any claim, cause of
action or dispute of any kind arising in connection with any
actions in administering this Plan or in authorizing or denying
authorization to any transaction hereunder.
3.3 Subject to the express terms and conditions set
forth herein, the Committee shall have the power from time to
time to:
(a) select those Eligible Individuals to whom
Awards shall be granted under the Plan and to determine the
number of Shares in respect of which each Award is granted, the
terms and conditions (which need not be identical) of each such
Award, and make any amendment or modification to any Award
Agreement consistent with the terms of the Plan;
(b) construe and interpret the Plan and Awards
granted hereunder and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, but
not limited to, correcting any defect or supplying any omission,
or reconciling any inconsistency in the Plan or in any Agreement,
in the manner and to the extent it shall deem necessary or
advisable, including so that the Plan and the operation of the
Plan complies with Rule 16b-3 under the Exchange Act, the Code to
the extent applicable and other applicable law, and otherwise to
make the Plan fully effective. The Committee shall have full
authority, in its discretion, to determine when capital awards
will become vested, including the ability to accelerate the
vesting date of Awards previously granted under the Plan. All
decisions and determinations by the Committee in the exercise of
this power shall be final, binding and conclusive upon the
Company, its Subsidiaries, the Grantees, and all other persons
having any interest therein;
(c) determine the duration and purposes for
leaves of absence which may be granted to a Grantee on an
individual basis without constituting a termination of employment
or service for purposes of the Plan;
(d) exercise its discretion with respect to the
powers and rights granted to it as set forth in the Plan; and
(e) exercise such powers and to perform such acts
as are deemed necessary or advisable to promote the best
interests of the Company with respect to the Plan.
4. Stock Subject to the Plan; Grant Limitations.
4.1 The maximum number of Shares that may be made the
subject of Awards granted under the Plan is five million
(5,000,000); provided that the number Shares issuable under the
Plan shall be reduced by the number of Shares issuable pursuant
to any "Awards" granted pursuant to the Humana Inc. Restricted
Stock Plan for Officers & Directors. The Company shall reserve
for the purposes of the Plan, out of its authorized but unissued
Shares or out of Shares held in the Company's treasury, or partly
out of each, such number of Shares as shall be determined by the
Board.
4.2 Upon the granting of an Award, the number of
Shares available under Section 4.1 for the granting of further
Awards shall be reduced by the number of Shares in respect of
which the Award is granted or denominated.
Whenever any outstanding Award or portion thereof
expires, is canceled, is settled in cash (including the
settlement of tax withholding obligations using Shares) or is
otherwise terminated for any reason without having been exercised
or payment having been made in respect of the entire Award, the
Shares allocable to the expired, canceled, settled or otherwise
terminated portion of the Award may again be the subject of
Awards granted hereunder.
5. Eligible Individuals
Any of the following shall be considered eligible to
participate in the Plan ("Eligible Individual")(a) any employee
of the Company or a Subsidiary who is not an officer or director
of the Company or (b) any individual to whom the Company or a
Subsidiary has extended a formal, written offer of employment
for a non-officer position. For purposes of the Plan "Officer"
is defined as Executive Officer is defined pursuant to
Securities and Exchange Commission Rule 3b-7 and any other
Officer elected by the Company's Board of Directors.
6. Restricted Stock.
6.1 Grant. The Committee may grant Awards to Eligible
Individuals of Restricted Stock, which shall be evidenced by an
Agreement between the Company and the Grantee. Each Agreement
shall contain such restrictions, terms and conditions as the
Committee may, in its discretion, determine and (without limiting
the generality of the foregoing) such Agreements may require that
an appropriate legend be placed on Share certificates. Awards of
Restricted Stock shall be subject to the terms and provisions set
forth below in this Section 6.
6.2 Purchase Price. The purchase price, if any, for
Shares of Restricted Stock shall be determined by the Committee,
but shall not be less than the par value per Share, except in the
case of treasury Shares for which no payment need be required.
6.3 Rights of Grantee. Shares of Restricted Stock
granted pursuant to an Award hereunder shall be issued in the
name of the Grantee as soon as reasonably practicable after the
Award is granted provided that the Grantee has executed an
Agreement evidencing the Award, the appropriate blank stock
powers and, in the discretion of the Committee, an escrow
agreement and any other documents which the Committee may require
as a condition to the issuance of such Shares. If a Grantee
shall fail to execute the Agreement evidencing a Restricted Stock
Award, the appropriate blank stock powers, an escrow agreement or
any other or any documents which the Committee may require within
the time period prescribed by the Committee at the time the Award
is granted, the Award shall be null and void. At the discretion
of the Committee, Shares issued in connection with a Restricted
Stock Award shall be deposited together with the stock powers
with an escrow agent (which may be the Company) designated by the
Committee. Unless the Committee determines otherwise and as set
forth in the Agreement, upon delivery of the Shares to the escrow
agent, the Grantee shall have all of the rights of a stockholder
with respect to such Shares, including the right to vote the
Shares and to receive all dividends or other distributions paid
or made with respect to the Shares.
6.4 Non-transferability. Until all restrictions upon
the Shares of Restricted Stock awarded to a Grantee shall have
lapsed in the manner set forth in Section 6.5, such Shares shall
not be sold, transferred or otherwise disposed of and shall not
be pledged or otherwise hypothecated, nor shall they be delivered
to the Grantee.
6.5 Lapse of Restrictions.
(a) Generally. Restrictions upon Shares of
Restricted Stock awarded hereunder shall lapse at such time or
times and on such terms and conditions as the Committee may
determine, which in the sole discretion of the Committee, may
include the lapsing of restrictions based solely on the passage
of time, on the attainment of individual and/or corporate
performance criteria or a combination thereof. The Agreement
evidencing the Award shall set forth any such restrictions and
the basis on which such restrictions shall lapse.
(b) Effect of Change in Control. Unless the
Committee shall determine otherwise at the time of the grant of
an Award of Restricted Stock, the restrictions upon Shares of
Restricted Stock shall lapse upon a Change in Control. The
Agreement evidencing the Award shall set forth any such
provisions.
6.6 Treatment of Dividends. At the time an Award of
Shares of Restricted Stock is granted, the Committee may, in its
discretion, determine that the payment to the Grantee of
dividends, or a specified portion thereof, declared or paid on
such Shares by the Company shall be (a) deferred until the
lapsing of the restrictions imposed upon such Shares and (b) held
by the Company for the account of the Grantee until such time.
In the event that dividends are to be deferred, the Committee
shall determine whether such dividends are to be reinvested in
Shares (which shall be held as additional Shares of Restricted
Stock) or held in cash. If deferred dividends are to be held in
cash, there may be credited at the end of each year (or portion
thereof) interest on the amount of the account at the beginning
of the year at a rate per annum as the Committee, in its
discretion, may determine. Payment of deferred dividends in
respect of Shares of Restricted Stock (whether held in cash or as
additional Shares of Restricted Stock), together with interest
accrued thereon, if any, shall be made upon the lapsing of
restrictions imposed on the Shares in respect of which the
deferred dividends were paid, and any dividends deferred
(together with any interest accrued thereon) in respect of any
Shares of Restricted Stock shall be forfeited upon the forfeiture
of such Shares.
6.7 Effect of a Termination of Employment.
(a) Except as provided in Section 6.7(c), if the
employment of a Grantee is terminated for any reason other than
death, Disability or a Change in Control prior to the expiration
of any restrictions applicable to any Shares of Restricted Stock
then held by the Grantee, such Shares shall thereupon be
forfeited immediately by the Grantee and returned to the Company,
and the grantee shall only receive the amount, if any, paid by
the Grantee for such Restricted Stock.
(b) If the employment of a Grantee is terminated
as a result of death or Disability prior to the expiration of any
restrictions applicable to any Shares of Restricted Stock then
held by the Grantee, any restrictions and other conditions
pertaining to such Shares then held by the Grantee, including,
but not limited to, vesting requirements, shall immediately lapse
and such Shares shall thereafter be immediately transferable and
nonforfeitable.
(c) Notwithstanding anything in the Plan to the
contrary, the Committee may determine, in its sole discretion, in
the case of any termination of Grantee's employment other than
for Cause, that the restrictions on some or all of the Shares of
Restricted stock then held by the Grantee shall immediately lapse
and such Shares shall thereafter be immediately transferable and
nonforfeitable.
6.8 Delivery of Shares. Upon the lapse of the
restrictions on Shares of Restricted Stock, the Committee shall
cause a stock certificate to be delivered to the Grantee with
respect to such Shares, free of all restrictions hereunder.
7. Adjustment Upon Changes in Capitalization.
In the event of a Change in Capitalization, the
Committee shall conclusively determine the appropriate
adjustments, if any, to (i) the maximum number and class of
Shares or other stock or securities with respect to which Awards
may be granted under the Plan, and (ii) the number and class of
Shares or other stock or securities which are subject to
outstanding Awards granted under the Plan and the exercise price
therefor, if applicable.
8. Effect of Certain Transactions.
Subject to Section 6.5(b) or as otherwise provided in
an Agreement, in the event of (a) the liquidation or
dissolution of the Company or (b) a merger or consolidation of
the Company (a "Transaction"), the Plan and Awards issued
hereunder shall continue in effect in accordance with their
respective terms, except that following a Transaction either
(i) each outstanding Award shall be treated as provided for in
the agreement entered into in connection with the Transaction
or (ii) if not so provided in such agreement, each Grantee
shall be entitled to receive in respect of each Share subject
to any outstanding Awards, as the case may be, upon payment or
transfer in respect of any Award, the same number and kind of
stock, securities, cash, property or other consideration that
each holder of a Share was entitled to receive in the
Transaction in respect of a Share; provided, however, that such
stock, securities, cash, property, or other consideration shall
remain subject to all of the conditions, restrictions and
performance criteria which were applicable to the Awards prior
to such Transaction.
9. Interpretation.
The Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act and the Committee shall
interpret and administer the provisions of the Plan or any
Agreement in a manner consistent therewith. Any provisions
inconsistent with such Rule shall be inoperative and shall not
affect the validity of the Plan.
10. Pooling Transactions.
Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event of a Change in Control
which is also intended to constitute a Pooling Transaction, the
Committee shall take such actions, if any, as are specifically
recommended by an independent accounting firm retained by the
Company to the extent reasonably necessary in order to assure
that the Pooling Transaction will qualify as such, including
but not limited to (a) deferring the vesting, exercise,
payment, settlement or lapsing of restrictions with respect to
any Award and (b) providing that the payment or settlement in
respect of any Award be made in the form of cash, Shares or
securities of a successor or acquirer of the Company, or a
combination of the foregoing.
11. Termination and Amendment of the Plan or Modification
of Awards.
11.1 Plan Amendment or Termination. The Plan shall
terminate on the day preceding the tenth anniversary of the
date of its adoption by the Board and no Award may be granted
thereafter. The Board may sooner terminate the Plan and the
Board may at any time and from time to time amend, modify or
suspend the Plan; provided, however, that:
(a) no such amendment, modification, suspension
or termination shall impair or adversely alter any Awards
theretofore granted under the Plan, except with the consent of
the Grantee, nor shall any amendment, modification, suspension or
termination deprive any Grantee of any Shares which he or she may
have acquired through or as a result of the Plan; and
(b) to the extent necessary under any applicable
law, regulation or exchange requirement no amendment shall be
effective unless approved by the stockholders of the Company in
accordance with applicable law, regulation or exchange
requirement.
11.2 Modification of Awards. No modification of an
Award shall adversely alter or impair any rights or obligations
under the Award without the consent of the Grantee, as the case
may be.
12. Non-Exclusivity of the Plan.
The adoption of the Plan by the Board shall not be
construed as amending, modifying or rescinding any previously
approved incentive arrangement or as creating any limitations on
the power of the Board to adopt such other incentive arrangements
as it may deem desirable and such arrangements may be either
applicable generally or only in specific cases.
13. Limitation of Liability.
As illustrative of the limitations of liability of
the Company, but not intended to be exhaustive thereof, nothing
in the Plan shall be construed to:
(a) give any person any right to be granted an Award
other than at the sole discretion of the Committee;
(b) give any person any rights whatsoever with respect
to Shares except as specifically provided in the Plan;
(c) limit in any way the right of the Company or any
Subsidiary to terminate the employment of any person at any time;
or
(d) be evidence of any agreement or understanding,
expressed or implied, that the Company will employ any person at
any particular rate of compensation or for any particular period
of time.
14. Regulations and Other Approvals; Governing Law.
14.1 Except as to matters of federal law, the Plan and
the rights of all persons claiming hereunder shall be construed
and determined in accordance with the laws of the State of
Delaware without giving effect to conflicts of laws principles
thereof.
14.2 The obligation of the Company to sell or deliver
Shares with respect to Awards granted under the Plan shall be
subject to all applicable laws, rules and regulations, including
all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may
be deemed necessary or appropriate by the Committee.
14.3 The Board may make such changes as may be
necessary or appropriate to comply with the rules and regulations
of any government authority.
14.4 Each Award is subject to the requirement that, if
at any time the Committee determines, in its discretion, that the
listing, registration or qualification of Shares issuable
pursuant to the Plan is required by any securities exchange or
under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Award or the
issuance of Shares, no Awards shall be granted or payment made or
Shares issued, in whole or in part, unless listing, registration,
qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.
14.5 Notwithstanding anything contained in the Plan or
any Agreement to the contrary, in the event that the disposition
of Shares acquired pursuant to the Plan is not covered by a then
current registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), and is not otherwise exempt
from such registration, such Shares shall be restricted against
transfer to the extent required by the Securities Act and
Rule 144 or other regulations thereunder. The Committee may
require any individual receiving Shares pursuant to an Award
granted under the Plan, as a condition precedent to receipt of
such Shares, to represent and warrant to the Company in writing
that the Shares acquired by such individual are acquired without
a view to any distribution thereof and will not be sold or
transferred other than pursuant to an effective registration
thereof under said Act or pursuant to an exemption applicable
under the Securities Act or the rules and regulations promulgated
thereunder. The certificates evidencing any of such Shares shall
be appropriately amended or have an appropriate legend placed
thereon to reflect their status as restricted securities as
aforesaid.
15. Miscellaneous.
15.1 Multiple Agreements. The terms of each Award may
differ from other Awards granted under the Plan at the same time,
or at some other time. The Committee may also grant more than
one Award to a given Eligible Individual during the term of the
Plan, either in addition to, or in substitution for, one or more
Awards previously granted to that Eligible Individual.
15.2 Withholding of Taxes.
(a) At such times as a Grantee recognizes taxable
income in connection with the receipt of Shares or cash hereunder
(a "Taxable Event"), the Grantee shall pay to the Company an
amount equal to the federal, state and local income taxes and
other amounts as may be required by law to be withheld by the
Company in connection with the Taxable Event (the "Withholding
Taxes") prior to the issuance, or release from escrow, of such
Shares or the payment of such cash. The Company shall have the
right to deduct from any payment of cash to a Grantee an amount
equal to the Withholding Taxes in satisfaction of the obligation
to pay Withholding Taxes. The Committee may provide in the
Agreement at the time of grant, or at any time thereafter, that
the Grantee, in satisfaction of the obligation to pay Withholding
Taxes to the Company, may elect to have withheld a portion of the
Shares then issuable or transferable to him or her having an
aggregate Fair Market Value equal to the Withholding Taxes.
15.3 Effective Date. The effective date of this Plan
shall be as determined by the Board.
338494 (7/00)
- 1 - ffny01\renaubr\339079.2
HUMANA INC.
RESTRICTED STOCK PLAN FOR
OFFICERS & DIRECTORS
(As Adopted July 13, 2000)
HUMANA INC.
RESTRICTED STOCK PLAN FOR OFFICERS & DIRECTORS
1. Purpose.
The purpose of the Humana Inc., Restricted Stock Plan
for Officers & Directors ("Plan") is to strengthen Humana Inc., a
Delaware corporation (the "Company"), (a) by providing an
incentive to its officer employees and thereby encouraging them
to devote their abilities and industry to the success of the
Company's business enterprise, and (b) by encouraging the
attraction and retention of officers and directors with
exceptional qualifications. It is intended that this purpose be
achieved by extending to Officers and Directors (including such
future employees who have received a formal written offer of
employment) of the Company and its Subsidiaries an added long-
term incentive for high levels of performance and unusual efforts
through the grant of Restricted Stock.
2. Definitions.
Except as otherwise stated herein, defined terms
whenever used in this Plan, shall have the same meaning as
defined in the Humana Inc. 1996 Stock Incentive Plan for
Employees or its successor.
3. Administration.
3.1 The Plan shall be administered by the Committee,
which shall hold meetings at such times as may be necessary for
the proper administration of the Plan. The Committee shall keep
minutes of its meetings. The Committee shall consist of at least
two (2) directors of the Company ("Directors") and may consist of
the entire Board; provided, however, that if the Committee
consists of less than the entire Board, then the Committee shall
consist of at least two (2) Directors each of whom shall be a
nonemployee director, within the meaning of Rule 16b-3
promulgated under the Exchange Act ("Nonemployee Director"). For
purposes of the preceding sentence, if one or more members of the
Committee is not a Nonemployee Director but recuses himself or
herself or abstains from voting with respect to a particular
action taken by the Committee, then the Committee, with respect
to that action, shall be deemed to consist only of the members of
the Committee who have not recused themselves or abstained from
voting. A quorum shall consist of not fewer than two (2) members
of the Committee and a majority of a quorum may authorize any
action. Any decision or determination reduced to writing and
signed by all of the members of the Committee shall be as fully
effective as if made by vote at a meeting duly called and held.
Subject to applicable law, the Committee may delegate its
authority under the Plan to any other person or persons.
3.2 No member of the Committee shall be liable for any
action, failure to act, determination or interpretation made in
good faith with respect to this Plan or any transaction
hereunder. The Company hereby agrees to indemnify each member of
the Committee for all costs and expenses and, to the extent
permitted by applicable law, any liability incurred in connection
with defending against, responding to, negotiating for the
settlement of or otherwise dealing with any claim, cause of
action or dispute of any kind arising in connection with any
actions in administering this Plan or in authorizing or denying
authorization to any transaction hereunder.
3.3 Subject to the express terms and conditions set
forth herein, the Committee shall have the power from time to
time to:
(a) select those Eligible Individuals to whom
Awards shall be granted under the Plan and to determine the
number of Shares in respect of which each Award is granted, the
terms and conditions (which need not be identical) of each such
Award, and make any amendment or modification to any Award
Agreement consistent with the terms of the Plan;
(b) construe and interpret the Plan and Awards
granted hereunder and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, but
not limited to, correcting any defect or supplying any omission,
or reconciling any inconsistency in the Plan or in any Agreement,
in the manner and to the extent it shall deem necessary or
advisable, including so that the Plan and the operation of the
Plan complies with Rule 16b-3 under the Exchange Act, the Code to
the extent applicable and other applicable law, and otherwise to
make the Plan fully effective. The Committee shall have full
authority, in its discretion, to determine when capital awards
will become vested, including the ability to accelerate the
vesting date of Awards previously granted under the Plan. All
decisions and determinations by the Committee in the exercise of
this power shall be final, binding and conclusive upon the
Company, its Subsidiaries, the Grantees, and all other persons
having any interest therein;
(c) determine the duration and purposes for
leaves of absence which may be granted to a Grantee on an
individual basis without constituting a termination of employment
or service for purposes of the Plan;
(d) exercise its discretion with respect to the
powers and rights granted to it as set forth in the Plan; and
(e) exercise such powers and to perform such acts
as are deemed necessary or advisable to promote the best
interests of the Company with respect to the Plan.
4. Stock Subject to the Plan; Grant Limitations.
4.1 The maximum number of Shares that may be made the
subject of Awards granted under the Plan is five million
(5,000,000); provided that the number of Shares issuable under
the Plan shall be reduced by the number of Shares issuable
pursuant to any "Awards" granted pursuant to the Humana Inc.
Restricted Stock Plan for Employees. Only Shares held in the
Company's treasury shall be issuable under this Plan and the
Company shall reserve for the purposes of the Plan, out of Shares
held in the Company's treasury, such number of Shares as shall be
determined by the Board.
4.2 Upon the granting of an Award, the number of
Shares available under Section 4.1 for the granting of further
Awards shall be reduced by the number of Shares in respect of
which the Award is granted or denominated.
Whenever any outstanding Award or portion thereof
expires, is canceled, is settled in cash (including the
settlement of tax withholding obligations using Shares) or is
otherwise terminated for any reason without having been exercised
or payment having been made in respect of the entire Award, the
Shares allocable to the expired, canceled, settled or otherwise
terminated portion of the Award may again be the subject of
Awards granted hereunder.
5. Eligible Individuals
Any of the following shall be considered eligible to
participate in the Plan ("Eligible Individual")(a) any employee
of the Company or a Subsidiary who is an officer of the Company,
(b) any individual to whom the Company or a Subsidiary has
extended a formal, written offer of employment for an officer
position, or (c) any Director. For purposes of the Plan
"Officer" is defined as Executive Officer is defined pursuant to
Securities and Exchange Commission Rule 3b-7 and any other
Officer elected by the Company's Board of Directors.
6. Restricted Stock.
6.1 Grant. The Committee may grant Awards to Eligible
Individuals of Restricted Stock, which shall be evidenced by an
Agreement between the Company and the Grantee. Each Agreement
shall contain such restrictions, terms and conditions as the
Committee may, in its discretion, determine and (without limiting
the generality of the foregoing) such Agreements may require that
an appropriate legend be placed on Share certificates. Awards of
Restricted Stock shall be subject to the terms and provisions set
forth below in this Section 6.
6.2 Purchase Price. The purchase price, if any, for
Shares of Restricted Stock shall be determined by the Committee,
but shall not be less than the par value per Share, except in the
case of treasury Shares for which no payment need be required.
6.3 Rights of Grantee. Shares of Restricted Stock
granted pursuant to an Award hereunder shall be issued in the
name of the Grantee as soon as reasonably practicable after the
Award is granted provided that the Grantee has executed an
Agreement evidencing the Award, the appropriate blank stock
powers and, in the discretion of the Committee, an escrow
agreement and any other documents which the Committee may require
as a condition to the issuance of such Shares. If a Grantee
shall fail to execute the Agreement evidencing a Restricted Stock
Award, the appropriate blank stock powers, an escrow agreement or
any other or any documents which the Committee may require within
the time period prescribed by the Committee at the time the Award
is granted, the Award shall be null and void. At the discretion
of the Committee, Shares issued in connection with a Restricted
Stock Award shall be deposited together with the stock powers
with an escrow agent (which may be the Company) designated by the
Committee. Unless the Committee determines otherwise and as set
forth in the Agreement, upon delivery of the Shares to the escrow
agent, the Grantee shall have all of the rights of a stockholder
with respect to such Shares, including the right to vote the
Shares and to receive all dividends or other distributions paid
or made with respect to the Shares.
6.4 Non-transferability. Until all restrictions upon
the Shares of Restricted Stock awarded to a Grantee shall have
lapsed in the manner set forth in Section 6.5, such Shares shall
not be sold, transferred or otherwise disposed of and shall not
be pledged or otherwise hypothecated, nor shall they be delivered
to the Grantee.
6.5 Lapse of Restrictions.
(a) Generally. Restrictions upon Shares of
Restricted Stock awarded hereunder shall lapse at such time or
times and on such terms and conditions as the Committee may
determine, which in the sole discretion of the Committee, may
include the lapsing of restrictions based solely on the passage
of time, on the attainment of individual and/or corporate
performance criteria or a combination thereof. The Agreement
evidencing the Award shall set forth any such restrictions and
the basis on which such restrictions shall lapse.
(b) Effect of Change in Control. Unless the
Committee shall determine otherwise at the time of the grant of
an Award of Restricted Stock, the restrictions upon Shares of
Restricted Stock shall lapse upon a Change in Control. The
Agreement evidencing the Award shall set forth any such
provisions.
6.6 Treatment of Dividends. At the time an Award of
Shares of Restricted Stock is granted, the Committee may, in its
discretion, determine that the payment to the Grantee of
dividends, or a specified portion thereof, declared or paid on
such Shares by the Company shall be (a) deferred until the
lapsing of the restrictions imposed upon such Shares and (b) held
by the Company for the account of the Grantee until such time.
In the event that dividends are to be deferred, the Committee
shall determine whether such dividends are to be reinvested in
Shares (which shall be held as additional Shares of Restricted
Stock) or held in cash. If deferred dividends are to be held in
cash, there may be credited at the end of each year (or portion
thereof) interest on the amount of the account at the beginning
of the year at a rate per annum as the Committee, in its
discretion, may determine. Payment of deferred dividends in
respect of Shares of Restricted Stock (whether held in cash or as
additional Shares of Restricted Stock), together with interest
accrued thereon, if any, shall be made upon the lapsing of
restrictions imposed on the Shares in respect of which the
deferred dividends were paid, and any dividends deferred
(together with any interest accrued thereon) in respect of any
Shares of Restricted Stock shall be forfeited upon the forfeiture
of such Shares.
6.7 Effect of a Termination of Employment or Service as a
Director.
(a) Except as provided in Section 6.7(c), if the
employment or service as a Director of a Grantee is terminated
for any reason other than death, Disability or a Change in
Control prior to the expiration of any restrictions applicable to
any Shares of Restricted Stock then held by the Grantee, such
Shares shall thereupon be forfeited immediately by the Grantee
and returned to the Company, and the grantee shall only receive
the amount, if any, paid by the Grantee for such Restricted
Stock.
(b) If the employment or service as a Director of
a Grantee is terminated as a result of death or Disability prior
to the expiration of any restrictions applicable to any Shares of
Restricted Stock then held by the Grantee, any restrictions and
other conditions pertaining to such Shares then held by the
Grantee, including, but not limited to, vesting requirements,
shall immediately lapse and such Shares shall thereafter be
immediately transferable and nonforfeitable.
(c) Notwithstanding anything in the Plan to the
contrary, the Committee may determine, in its sole discretion, in
the case of any termination of Grantee's employment or service as
a Director other than for Cause, that the restrictions on some or
all of the Shares of Restricted stock then held by the Grantee
shall immediately lapse and such Shares shall thereafter be
immediately transferable and nonforfeitable.
6.8 Delivery of Shares. Upon the lapse of the
restrictions on Shares of Restricted Stock, the Committee shall
cause a stock certificate to be delivered to the Grantee with
respect to such Shares, free of all restrictions hereunder.
7. Adjustment Upon Changes in Capitalization.
In the event of a Change in Capitalization, the
Committee shall conclusively determine the appropriate
adjustments, if any, to (i) the maximum number and class of
Shares or other stock or securities with respect to which Awards
may be granted under the Plan, and (ii) the number and class of
Shares or other stock or securities which are subject to
outstanding Awards granted under the Plan and the exercise price
therefor, if applicable.
8. Effect of Certain Transactions.
Subject to Section 6.5(b) or as otherwise provided in
an Agreement, in the event of (a) the liquidation or
dissolution of the Company or (b) a merger or consolidation of
the Company (a "Transaction"), the Plan and Awards issued
hereunder shall continue in effect in accordance with their
respective terms, except that following a Transaction either
(i) each outstanding Award shall be treated as provided for in
the agreement entered into in connection with the Transaction
or (ii) if not so provided in such agreement, each Grantee
shall be entitled to receive in respect of each Share subject
to any outstanding Awards, as the case may be, upon payment or
transfer in respect of any Award, the same number and kind of
stock, securities, cash, property or other consideration that
each holder of a Share was entitled to receive in the
Transaction in respect of a Share; provided, however, that such
stock, securities, cash, property, or other consideration shall
remain subject to all of the conditions, restrictions and
performance criteria which were applicable to the Awards prior
to such Transaction.
9. Interpretation.
The Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act and the Committee shall
interpret and administer the provisions of the Plan or any
Agreement in a manner consistent therewith. Any provisions
inconsistent with such Rule shall be inoperative and shall not
affect the validity of the Plan.
10. Pooling Transactions.
Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event of a Change in Control
which is also intended to constitute a Pooling Transaction, the
Committee shall take such actions, if any, as are specifically
recommended by an independent accounting firm retained by the
Company to the extent reasonably necessary in order to assure
that the Pooling Transaction will qualify as such, including
but not limited to (a) deferring the vesting, exercise,
payment, settlement or lapsing of restrictions with respect to
any Award and (b) providing that the payment or settlement in
respect of any Award be made in the form of cash, Shares or
securities of a successor or acquirer of the Company, or a
combination of the foregoing.
11. Termination and Amendment of the Plan or Modification
of Awards.
11.1 Plan Amendment or Termination. The Plan shall
terminate on the day preceding the tenth anniversary of the
date of its adoption by the Board and no Award may be granted
thereafter. The Board may sooner terminate the Plan and the
Board may at any time and from time to time amend, modify or
suspend the Plan; provided, however, that:
(a) no such amendment, modification, suspension
or termination shall impair or adversely alter any Awards
theretofore granted under the Plan, except with the consent of
the Grantee, nor shall any amendment, modification, suspension or
termination deprive any Grantee of any Shares which he or she may
have acquired through or as a result of the Plan; and
(b) to the extent necessary under any applicable
law, regulation or exchange requirement no amendment shall be
effective unless approved by the stockholders of the Company in
accordance with applicable law, regulation or exchange
requirement.
11.2 Modification of Awards. No modification of an
Award shall adversely alter or impair any rights or obligations
under the Award without the consent of the Grantee, as the case
may be.
12. Non-Exclusivity of the Plan.
The adoption of the Plan by the Board shall not be
construed as amending, modifying or rescinding any previously
approved incentive arrangement or as creating any limitations on
the power of the Board to adopt such other incentive arrangements
as it may deem desirable and such arrangements may be either
applicable generally or only in specific cases.
13. Limitation of Liability.
As illustrative of the limitations of liability of
the Company, but not intended to be exhaustive thereof, nothing
in the Plan shall be construed to:
(a) give any person any right to be granted an Award
other than at the sole discretion of the Committee;
(b) give any person any rights whatsoever with respect
to Shares except as specifically provided in the Plan;
(c) limit in any way the right of the Company or any
Subsidiary to terminate the employment of any person at any time;
or
(d) be evidence of any agreement or understanding,
expressed or implied, that the Company will employ any person at
any particular rate of compensation or for any particular period
of time.
14. Regulations and Other Approvals; Governing Law.
14.1 Except as to matters of federal law, the Plan and
the rights of all persons claiming hereunder shall be construed
and determined in accordance with the laws of the State of
Delaware without giving effect to conflicts of laws principles
thereof.
14.2 The obligation of the Company to sell or deliver
Shares with respect to Awards granted under the Plan shall be
subject to all applicable laws, rules and regulations, including
all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may
be deemed necessary or appropriate by the Committee.
14.3 The Board may make such changes as may be
necessary or appropriate to comply with the rules and regulations
of any government authority.
14.4 Each Award is subject to the requirement that, if
at any time the Committee determines, in its discretion, that the
listing, registration or qualification of Shares issuable
pursuant to the Plan is required by any securities exchange or
under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Award or the
issuance of Shares, no Awards shall be granted or payment made or
Shares issued, in whole or in part, unless listing, registration,
qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.
14.5 Notwithstanding anything contained in the Plan or
any Agreement to the contrary, in the event that the disposition
of Shares acquired pursuant to the Plan is not covered by a then
current registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), and is not otherwise exempt
from such registration, such Shares shall be restricted against
transfer to the extent required by the Securities Act and
Rule 144 or other regulations thereunder. The Committee may
require any individual receiving Shares pursuant to an Award
granted under the Plan, as a condition precedent to receipt of
such Shares, to represent and warrant to the Company in writing
that the Shares acquired by such individual are acquired without
a view to any distribution thereof and will not be sold or
transferred other than pursuant to an effective registration
thereof under said Act or pursuant to an exemption applicable
under the Securities Act or the rules and regulations promulgated
thereunder. The certificates evidencing any of such Shares shall
be appropriately amended or have an appropriate legend placed
thereon to reflect their status as restricted securities as
aforesaid.
15. Miscellaneous.
15.1 Multiple Agreements. The terms of each Award may
differ from other Awards granted under the Plan at the same time,
or at some other time. The Committee may also grant more than
one Award to a given Eligible Individual during the term of the
Plan, either in addition to, or in substitution for, one or more
Awards previously granted to that Eligible Individual.
15.2 Withholding of Taxes.
(a) At such times as a Grantee recognizes taxable
income in connection with the receipt of Shares or cash hereunder
(a "Taxable Event"), the Grantee shall pay to the Company an
amount equal to the federal, state and local income taxes and
other amounts as may be required by law to be withheld by the
Company in connection with the Taxable Event (the "Withholding
Taxes") prior to the issuance, or release from escrow, of such
Shares or the payment of such cash. The Company shall have the
right to deduct from any payment of cash to a Grantee an amount
equal to the Withholding Taxes in satisfaction of the obligation
to pay Withholding Taxes. The Committee may provide in the
Agreement at the time of grant, or at any time thereafter, that
the Grantee, in satisfaction of the obligation to pay Withholding
Taxes to the Company, may elect to have withheld a portion of the
Shares then issuable or transferable to him or her having an
aggregate Fair Market Value equal to the Withholding Taxes.
15.3 Effective Date. The effective date of this Plan
shall be as determined by the Board.
339079 (7/00)