ENRON CORP. 1999 STOCK PLAN
SECTION 1. PURPOSE
The purpose of this Enron Corp. 1999 Stock Plan (the "Plan") is to
provide a funding source for the issuance of common stock of Enron Corp. (the
"Company") in connection with special situations, including, but not limited to
divestitures, outsourcing, remuneration payable under compensatory programs
sponsored by the Company and its Affiliates, and any other circumstance deemed
by the Compensation Committee of the Board of Directors as such a special
situation.
SECTION 2. ADMINISTRATION
2.1 The Plan shall be administered by the Committee. A majority of the Committee
shall constitute a quorum, and the acts of a majority of the members present at
any meeting at which a quorum is present, or acts approved in writing by all
members of the Committee, shall be deemed the acts of the Committee.
2.2 Subject to the terms of the Plan and applicable law, the Committee shall
have sole power, authority and discretion to: (i) designate Participants; (ii)
determine the types of Awards to be granted to a Participant under the Plan;
(iii) determine the number of Shares to be covered by or with respect to which
payments, rights, or other matters are to be calculated in connection with
Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, under what circumstances and how Awards may be settled
or exercised in cash, Shares, other securities, other Awards, or other property,
or may be canceled, forfeited, or suspended; (vi) determine whether, to what
extent, and under what circumstances cash, Shares, other securities, other
Awards, other property, and other amounts payable with respect to an Award under
the Plan shall be deferred either automatically or at the election of the holder
thereof or of the Committee; (vii) interpret, construe and administer the Plan
and any instrument or agreement relating to an Award made under the Plan; (viii)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
(ix) make a determination as to the right of any person to receive payment of an
Award or other benefit; and (x) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration of
the Plan.
2.3 Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions with respect to the Plan or
any Award shall be within the sole discretion of the Committee, may be made at
any time, and shall be final, conclusive, and binding upon all Persons,
including the Company, any Affiliate, any Participant, any holder or beneficiary
of any Award, any stockholder, and any employee of the Company or of any
Affiliate.
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SECTION 3. SHARES AVAILABLE FOR AWARDS
3.1 SHARES AVAILABLE.
(i) Calculation of Number of Shares Available. The number of Shares
available for granting Awards under the Plan shall be 3,000,000 Shares,
subject to adjustment as provided in Section 3.2.
Further, if after the effective date of the Plan, any Shares covered by
an Award granted under the Plan, or to which an Award relates, are
forfeited, or if an Award otherwise terminates without the delivery of
Shares or of other consideration, then the Shares covered by such Award
(or to which such Award relates, or the number of Shares otherwise
counted against the aggregate number of Shares available under the Plan
with respect to such Award, to the extent of any such forfeiture or
termination) shall again be available for granting Awards under the
Plan.
(ii) Accounting for Awards. For purposes of this Section 3, if an Award
is denominated in Shares, the number of Shares covered by such Award,
or to which such Award relates, shall be counted on the date of grant
of such Award against the aggregate number of Shares available for
granting Awards under the Plan; provided, however, that Awards that
operate in tandem with (whether granted simultaneously with or at a
different time from) other Awards may be counted or not counted under
procedures adopted by the Committee in order to avoid double counting.
(iii) Sources of Shares Deliverable Under Awards. Any shares delivered
pursuant to an Award may consist, in whole or in part, of authorized
and unissued Shares or of treasury Shares.
3.2 ADJUSTMENTS.
(i) In the event that the Committee shall determine that any dividend
or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of
the Company, issuance of warrants or other rights to purchase Shares or
other securities of the Company (or other similar corporate transaction
or event) affects the Shares such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan, then the Committee may, subject to Section
3.2 (ii), in such manner as it may deem equitable, adjust any or all of
(a) the number and type of Shares (or other securities or property)
which thereafter may be made the subject of Awards, (b) the number and
type of Shares (or other securities or property) subject to outstanding
Awards, and (c) the grant, purchase, or exercise price with respect to
any Award, or, if deemed appropriate, make provision for a cash payment
to the holder of an outstanding Award; provided, however, that the
number of Shares subject to any Award denominated in Shares shall
always be a whole number.
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(ii) If, and whenever, prior to the expiration of a grant theretofore
made, the Company shall effect a subdivision or consolidation of Shares
or the payment of a stock dividend on Shares without receipt of
consideration by the Company, the number of Shares with respect to
which such grant may thereafter be vested or exercised (a) in the event
of an increase in the number of outstanding Shares shall be
proportionately increased, and if the grant is an Option the purchase
price per Share shall be proportionately reduced, and (b) in the event
of a reduction in the number of outstanding Shares shall be
proportionately reduced, and if the grant is an Option the purchase
price per Share shall be proportionately increased.
SECTION 4. ELIGIBILITY
4.1 Any Employee of the Company or of an Affiliate, any individual who is a
member of the board of directors of an Affiliate, who is not an Employee at the
time the grant is made, or any individual performing services for the Company or
any Affiliate as a Non-employee Contractor, and any individual who has accepted
an offer of employment with the Company or an Affiliate shall be eligible to be
designated a Participant. Further, no grants of Incentive Stock Options shall be
made under the Plan. Grants may be made to the same individual on more than one
occasion.
4.2 No individual who is subject to any written agreement with the company that
generally restricts the acquisition of Shares shall be eligible for any grant of
an Award while such agreement is in effect.
SECTION 5. AWARDS
5.1 Options. The Committee is hereby authorized to grant Options to Participants
with the following terms and conditions and with such additional terms and
conditions, which are not inconsistent with the provisions of the Plan, as the
Committee shall determine:
(i) Exercise Price. The per Share purchase price of an Option shall be
the exercise price designated by the Committee as of the date of grant.
(ii) Time and Method of Exercise. Subject to the provisions contained in
the Plan and in a Participant's Award Agreement, unexercised vested
Shares under an Option may be exercised in whole or in part from time to
time by request to the Company. Payment of the exercise price and any
applicable tax withholding amounts must be made at the time of exercise,
in whole or in part, by delivery of a cashier's check, Shares of Stock,
other awards, other property or any combination thereof having a fair
market value equal to such amount or part thereof provided that the fair
market value of Stock so delivered shall be equal to the closing price
of the Stock as reported in the "NYSE -- Composite Transactions" section
of the Midwest Edition of the Wall Street Journal on the date of actual
receipt by the Company of the notice exercising the Option or, if no
prices are so reported on such day, on the last preceding day on which
such prices of Stock are so reported. An Option may be exercised through
a broker financed exercise pursuant to the provisions of Regulation T of
the Federal Reserve Board. If the Company receives payment of
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the purchase price for the exercise of the Option through a broker
financed exercise before the end of the fifth business day following
the broker's execution of the sale of Stock for the financed exercise,
the exercise shall be effective at the time of such sale. Otherwise,
the exercise shall be effective when the Company receives payment of
the purchase price.
(iii) Option Agreement. Each Option shall be evidenced by an Award
Agreement which shall specify the term of the Option as well as vesting
and termination provisions.
(iv) Status as Stockholder. Unless and until a certificate or
certificates representing such Shares shall have been issued by the
Company to the Participant, the Participant (or the person permitted to
exercise an Option in the event of the Participant's death or
incapacity) shall not be or have any of the rights or privileges of a
Stockholder of the Company with respect to the Shares acquirable upon
an exercise of an Option.
(v) Grants to Residents and Citizens of Foreign Countries.
Notwithstanding anything to the contrary in this Section 5.2, the
Committee may, in its discretion, grant Options to residents and to
citizens of countries other than the United States of America with the
requirement that the exercise thereof be required to be made through a
broker financed exercise pursuant to the provisions of Regulation T of
the Federal Reserve Board on the same terms and conditions as
referenced in paragraph (ii) above.
5.2 STOCK
(i) Issuance. The Committee is hereby authorized to grant Awards of
Stock to Participants, which Awards shall be evidenced by Award
Agreements, which shall specify vesting provisions.
(ii) Restrictions. Shares of Stock shall be subject to such
restrictions, if any, as the Committee may impose (including without
limitation, any limitation on the right to vote a Share of Stock),
which restrictions may lapse separately or in combination at such time
or times, in such installments or otherwise as the Committee may deem
appropriate.
(iii) Certificates and Dividends. All dividends and distributions, or
cash equivalent thereof (whether cash, stock or otherwise), on
non-vested Shares of Stock shall be withheld from the respective
Participant and credited by the Company for the Participant's account.
At such time as a Participant becomes vested in a portion of the Award
of Stock Shares, any restrictions thereon imposed by this Section 5.2
(iii) shall lapse and certificates representing such vested shares
shall be delivered to the Participant along with all accumulated
credits for dividends and distributions, or cash equivalent thereof
attributable to such vested shares. Interest shall not be paid on any
dividends or distributions or cash equivalent thereof, credited by the
Company for the account of a Participant. The Company shall have the
option of paying such credits for accumulated dividends or
distributions or cash equivalent thereof, in Shares of the Company
rather than in cash or other medium. (If payment is made in Shares, the
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conversion to Shares shall be at the average Fair Market Value for the
five trading days preceding the date of payment.) Dividends and
distributions, or cash equivalent thereof credited on non-vested Stock
shall be forfeited in the same manner and at the same time as the
respective shares of Stock to which they are attributable are
forfeited, except that such forfeited credits for dividends and
distributions or cash equivalent thereof shall be canceled and shall
not be available for future distribution under this Plan.
(iv) Vesting. Unless the Committee determines otherwise, shares of
non-vested Stock awarded to a Participant will be forfeited if the
Participant terminates employment or service for any reason other than
death, Disability, Retirement or Involuntary Termination. At the time
and on the date of a Participant's death, Disability, Retirement or
Involuntary Termination during the Participant's employment or service,
prior to the date the Participant otherwise becomes fully vested in all
the Stock awarded to the Participant, all restrictions placed on each
share of Stock awarded to the Participant shall lapse and the
non-vested Stock will become fully vested Released Securities. From and
after such date the Participant or the Participant's estate, personal
representative or beneficiary, as the case may be, shall have full
rights of transfer or resale with respect to such Stock subject to
applicable state and federal regulations.
(v) Exchange of Stock for Options. In advance of accepting delivery of
a stock certificate for vested Shares of Stock, subject to approval of
the Committee which need not be given, a Participant may request that
such Shares of Stock be traded for a grant of Stock Options under the
Plan, for an amount of Shares of Enron Corp. common stock ("Stock") and
subject to such terms and conditions as the Committee may elect.
(vi) Phantom Stock Units. The Committee is authorized to grant Awards
of Phantom Stock Units to Participants, which Awards shall be evidenced
by Award Agreements. Paragraphs (ii), (iii) and (iv) of this Section
5.2 shall apply to Awards of Phantom Stock Units in similar manner as
they apply to Shares of Stock, as interpreted by the Committee,
provided, however, the limitation in paragraph (i) above on the number
of Shares of Stock which may be granted shall apply to total aggregate
Awards of Shares of Stock and Phantom Stock Units. A Phantom Stock Unit
is a contractual obligation of the Company equal in value to one Share
of the Company, which until paid is an unfunded bookkeeping credit on
the records of the Company. Such credit shall be increased by the
dividends per Share of the Company after the date of the Award. The
portion of such credit attributable to Phantom Stock Units shall be
paid under paragraph (iii) above in Shares of the Company.
5.3 GENERAL
(i) No Cash Consideration for Awards. Except as otherwise provided in
the Plan, awards shall be granted for no cash consideration or for such
minimal cash consideration as may be required by applicable law.
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(ii) Awards May Be Granted Separately or Together. Awards, in the
discretion of the Committee, may be granted either alone or in addition
to, or in tandem with any other Award or any award granted under any
other plan of the Company or an Affiliate. Awards granted in addition
to or in tandem with other Awards, or in addition to or in tandem with
awards granted under any other plan of the Company or any Affiliate,
may be granted either at the same time as or at a different time from
the grant of such other Awards or awards.
(iii) Limits on Transfer of Awards. Except pursuant to a "domestic
relations order" as defined in Section 414 of the Code or Section 206
of the Employee Retirement Income Security Act of 19974, as amended, no
Award (other than Released Securities) and no right under any such
Award, shall be assignable, alienable, saleable or transferable by a
Participant otherwise than by will or by the laws of descent and
distribution or, in the case of an Award of Stock by assignment to the
Company; provided however, if so determined by the Committee, a
Participant may, in the manner established by the Committee, designate
a beneficiary or beneficiaries to exercise the rights of the
Participant and to receive any property distributable with respect to
any Award upon the death of the Participant. Each Award and each right
under any Award shall be exercisable during the Participant's lifetime
only by the Participant or, if permissible under applicable law, by the
Participant's guardian or legal representative. No Award (other than
Released Securities) and no right under any such Award may be pledged,
alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance thereof shall be void and
unenforceable against the Company or any Affiliate.
(iv) Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee; provided however, that in no event
shall the term of any Option exceed a period of ten (10) years from the
date of its grant.
(v) Status of Stock. The Company intends to register for issue under
the Securities Act of 1933, as amended ("The Act"), the Shares of Stock
acquirable pursuant to Awards under the Plan, and to keep such
registration effective throughout the period any Awards are in effect.
In the absence of such effective registration or an available exemption
from registration under the Act, delivery of Shares of Stock acquirable
pursuant to Awards under the Plan shall be delayed until registration
of such Shares is effective or an exemption from registration under the
Act is available. The Company intends to use its best efforts to ensure
that no such delay will occur. In the event exemption from registration
under the Act is available, Participant (or Participant's estate or
personal representative in the event of the Participant's death or
incapacity), if requested by the Company to do so, will execute and
deliver to the Company in writing an agreement containing such
provisions as the Company may require to assure compliance with
applicable securities laws. No sale or disposition of Shares of Stock
acquired pursuant to an Award under the Plan by a Participant shall be
made in the absence of an effective registration statement with respect
to such shares under the Act unless an opinion of counsel satisfactory
to the Company that such sale or disposition will not constitute a
violation of the Act or any other applicable securities laws is first
obtained. In the event that a Participant proposes to sell or otherwise
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dispose of Shares of Stock in such a manner that an exception from the
registration requirements of the Act is unavailable for such sale or
disposition, and upon request to the Company by the Participant, the
Company, at its sole cost and expense, shall cause a registration
statement to be prepared and filed with respect to such sale or
disposition by the Participant and shall use its best efforts to have
such registration statement declared effective, and, in connection
therewith, shall execute and deliver such documents as shall be
necessary, including without limitation, agreements providing for the
indemnification of underwriters for any loss or damage incurred in
connection with such sale or disposition.
(vi) Share Certificates. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the Plan
or the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which such Shares or other
securities are then listed and any applicable Federal or state
securities laws, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such
restrictions, including, but not limited to, the provisions of
Subsection 5.3(v).
(vii) Permitted Grants. Awards may be granted under the Plan to an
individual eligible to participate in the Plan as consideration for any
contractual obligation of the Company and its Affiliates, or in payment
of any benefit or remuneration payable under any compensatory plan or
program of the Company and its Affiliates, as the Committee in its sole
discretion may approve.
SECTION 6. AMENDMENT AND TERMINATION
Except to the extent prohibited by applicable law and unless otherwise expressly
provided in an Award Agreement or in the Plan:
6.1 AMENDMENTS TO THE PLAN. The Board of Directors in its discretion may
terminate the Plan at any time with respect to any Shares for which a grant has
not theretofore been made. The Board of Directors shall have the right to alter
or amend the Plan or any part thereof from time to time, including amending the
Plan for the purpose of making additional Shares available for Awards under the
Plan, provided, that no change in any grant theretofore made may be made which
would impair the rights of the recipient of a grant without the consent of such
recipient.
6.2 ADJUSTMENTS OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR NONRECURRING
EVENTS
A. Subject to the provisions of Section 6.2B and 6.2C below, if a transaction
occurs which is not approved or recommended by a majority of the Board of
Directors of the Company in Actions taken prior to, and with respect to, such
transaction in which either (i) the Company merges or consolidates with any
other corporation (other than one of the Company's wholly-owned subsidiaries)
and is not the surviving corporation (or survives only as the
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subsidiary of another corporation), (ii) the Company sells all or substantially
all of its assets to any other person or entity, or (iii) the Company is
dissolved, or if (iv) any third person or entity (other than the trustee or
committee of any qualified employee benefit plan of the Company), together with
its Affiliates and Associates shall be, directly or indirectly, the Beneficial
Owner of at least thirty percent (30%) of the Voting Stock of the Company, or
(v) the individuals who constitute the members of Company's Board of Directors
on the date hereof (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a Director
subsequent to the date hereof whose election or nomination for election by the
Company's stockholders was approved by a vote of at least eighty percent (80%)
of the Directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for Director, without objection to such nomination) shall be, for
purposes of this clause (v), considered as though such person were a member of
the Incumbent Board, then within (a) ten days of the approval by the
stockholders of the Company of such merger, consolidation, sale of assets or
dissolution as described in clause (i), (ii) or (iii) of this Section 6.2A, or
(b) thirty (30) days of the occurrence of such change of Beneficial Ownership or
Directors as described in clause (iv) or (v) of this Section 6.2A, then with
respect to outstanding grants of Stock made under Section 5.2, each recipient
thereof shall have a fully vested right in all Stock granted to the recipient
and then outstanding, and with respect to outstanding grants of Options made
under Section 5.1, all such outstanding Options irrespective of whether they are
then exercisable, shall be surrendered to the Company by each grantee thereof
and such Options shall thereupon be cancelled by the Company, and the grantee
shall receive a cash payment by the Company in an amount equal to the number of
Shares subject to the Options held by such grantee multiplied by the difference
between (x) and (y) where (y) equals, for Options, the purchase price per Share
covered by the Option and (x) equals (1) the per share price offered to
stockholders of the Company in any such merger, consolidation, sale of assets or
dissolution transaction, (2) the per share price offered to stockholders of the
Company in any tender offer or exchange offer whereby any such change of
Beneficial Ownership or Directors takes place, or (3) the Fair Market Value of a
Share on the date determined by the Committee (as constituted prior to any
change described in clause (iv) or (v)) to be the date of cancellation and
surrender of such Options if any such change of Beneficial Ownership or
Directors occurs other than pursuant to a tender or exchange offer, whichever is
appropriate. In the event that the consideration offered to stockholders of the
Company in any transaction described in this Section 6.2A consists of anything
other than cash, the Committee (as constituted prior to such transaction) shall
determine the fair cash equivalent of the portion of the consideration offered
which is other than cash.
B. Except as otherwise expressly provided herein, the issuance by the Company of
shares of stock of any class or securities convertible into shares of stock of
any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
Shares subject to Stock or Options theretofore granted or the purchase price or
grant price per share, if applicable.
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C. Any adjustment provided for in Section 3.2 or Section 6.2 shall be subject to
any required stockholder action.
6.3 CORRECTION OF DEFECTS, OMISSIONS AND INCONSISTENCIES. The Committee may
correct any defect, supply any omission, or reconcile any inconsistency in the
Plan or any Award in the manner and to the extent it shall deem desirable in the
establishment or administration of the Plan.
SECTION 7. GENERAL PROVISIONS
7.1 NO RIGHTS TO AWARDS. No Employee, Participant or other Person shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Awards under the Plan. The terms and conditions of Awards need not be the
same with respect to each Participant.
7.2 WITHHOLDING. The Company or any Affiliate is authorized (i) to withhold from
any Award granted or any payment due or any transfer made under any Award or
under the Plan the amount (in cash, Shares, other securities, other Awards, or
other property) of withholding taxes due in respect of an Award, its exercise,
or any payment or transfer under such Award or under the Plan, and (ii) to take
such other action, including but not limited to, acceptance of already owned
Shares (including Shares acquired from the exercise of an Option or vesting of
Shares of Stock), as may be necessary in the opinion of the Company or Affiliate
to satisfy all obligations for the payment of such taxes. In the case of Stock,
the Participant is required to pay to the Company or any Affiliate an amount (in
cash, Shares, other securities, other Awards, or other property) necessary to
satisfy applicable taxes required to be withhold by the Company or any
Affiliate, before stock certificates representing the number of Shares of vested
Stock shall be delivered..
7.3 NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in the Plan
shall prevent the Company or any Affiliate from adopting or continuing in effect
other or additional compensation arrangements and such arrangements may be
either generally applicable or applicable only in specific cases.
7.4 NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the Plan
unless otherwise expressly provided in the Plan or in any Award Agreement.
7.5 GOVERNING LAW. The validity, construction and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with applicable Federal law, and to the extent not preempted thereby, with the
laws of the State of Texas.
7.6 SEVERABILITY. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any
person or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the
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Committee, such provision shall be construed or deemed amended to conform to
applicable laws. If it cannot be so construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
the Award, such provision shall be stricken as to such jurisdiction, Person or
Award and the remainder of the Plan and any such Award shall remain in full
force and effect.
7.7 NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Affiliate.
7.8 NO FRACTIONAL SHARES. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Shares, or whether such fractional Shares or any rights
thereto shall be canceled, terminated or otherwise eliminated. In addition, no
fractional Shares shall be accepted by the Company in payment of the exercise
price of an Option.
7.9 HEADINGS. Headings are given to the Sections and Subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
7.10 NO LIMITATION. The existence of the Plan and the grants of Awards made
hereunder shall not affect in any way the right or power of the Board of
Directors or the stockholders of the Company (or stockholders of any Affiliate,
as applicable) to make or authorize any adjustment, recapitalization,
reorganization or other change in the capital structure or business of the
Company or any Affiliate, any merger or consolidation of the Company or any
Affiliate, any issue of debt or equity securities ahead of or affecting Shares
or the rights thereof or pertaining thereto, the dissolution or liquidation of
the Company or any Affiliate or any sale or transfer of all or any part of
Company or any Affiliate's assets or business, or any other corporate act or
proceeding.
7.11 NO RIGHT TO RETENTION. Neither the Plan, nor any Award granted pursuant to
the Plan, is a contract or agreement that the Company will retain the services
of a Non-employee Contractor for any period of time, or at any particular rate
of compensation.
7.12 SECURITIES LAWS. Each Award granted under the Plan shall be subject to the
requirement that if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to such grant upon any securities exchange or under any state or federal
law, or that the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, such grant or
the issue or purchase of shares thereunder, such grant shall be subject to the
condition that such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Board of Directors.
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7.13 DELEGATION. Subject to the terms of the Plan, the Committee may delegate to
other Persons the authority and responsibility of designating the recipients of
Awards under the Plan (which recipients may not be any Person to whom the
Committee has so delegated such authority and responsibility).
SECTION 8. TERM OF THE PLAN
The Plan is effective as of the date of its approval by the Board of Directors
of the Company. No Award shall be granted under the Plan after the earlier of
(i) ten (10) years from the date of approval of the Plan or (ii) termination of
the Plan pursuant to Section 6.1. However, unless otherwise expressly provided
in the Plan or in an applicable Award Agreement, any Award theretofore granted
may extend beyond such date, and any authority of the Committee to amend, after,
suspend, discontinue or terminate any such Award, or to waive any conditions or
rights under any such Award, and the authority of the Board of Directors of the
Company to amend the Plan, shall extend beyond such date.
SECTION 9. DEFINITIONS
As used in the Plan, the following terms shall have the meanings set forth
below:
(a) "Affiliate" shall mean (i) any entity that directly or through one
or more intermediaries is controlled by the Company, (ii) any entity in
which the Company has a significant equity interest as determined by
the Committee, and (iii) as used in Section 6.2 and in the term
"Associate", as the term "affiliate" is defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended, or any successor rule or
regulation.
(b) "Associate" is used to indicate a relationship with a specified
person and shall mean (i) any corporation, partnership or other
organization to which such specified person is an officer or partner or
is, directly or indirectly, the Beneficial Owner of ten percent (10%)
or more of any class of equity securities, (ii) any trust or other
estate in which such specified person has a substantial beneficial
interest or as to which such specified person serves as trustee or in a
similar fiduciary capacity, (iii) any relative or spouse of such
specified person, or any relative of such spouse, who has the same home
as such specified person or who is a Director or officer of the Company
or any of its parents or Affiliates, and (iv) any person who is a
director or officer of such specified person or any of its parents or
Affiliates (other than the Company or any wholly-owned subsidiary of
the Company).
(c) "Award" shall mean any Option or Stock granted under the Plan.
(d) "Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award granted under the
Plan.
(e) "Beneficial Owner" shall be defined by reference to Rule 13d-3
under the Securities Exchange Act of 1934, as amended, or any successor
rule or regulation;
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provided, however, and without limitation, any individual, corporation,
partnership, group, association or other person or entity which has the
right to acquire any Voting Stock at any time in the future, whether
such right is contingent or absolute, pursuant to any agreement,
arrangement or understanding or upon exercise of conversion rights,
warrants or options, or otherwise, shall be the Beneficial Owner of
such Voting Stock.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(g) "Committee" shall mean a committee of the Board of Directors of the
Company designated by such Board to administer the Plan and composed of
not less than two outside directors.
(h) "Disability" shall mean, with respect to an Employee of the Company
or one of its Affiliates, such total and permanent disability as
qualifies the Employee for benefits under the long-term or extended
disability plan of the Company or Affiliate covering the Employee at
the time. With respect to a Non-employee Contractor, Disability shall
mean inability to perform duties and services for the Company or an
Affiliate by reason of a medically determinable physical or mental
impairment supported by medical evidence which in the opinion of the
Committee can be expected to result in death or which can be expected
to last for a continuous period of not less than twelve (12) months.
(i) "Employee" shall mean any person employed by the Company or any
Affiliate.
(j) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the
value of such property determined by such methods or procedures as
shall be established from time to time by the Committee; provided, that
so long as the closing price of Shares as reported in the
"NYSE-Composite Transactions" section of the Midwest edition of The
Wall Street Journal is reported, Fair Market Value with respect to
Shares on a particular date shall mean such closing price of Shares as
so reported for such date (or, if no prices are quoted for that date,
as so quoted for the last preceding date for which such prices were so
quoted).
(k) "Incentive Stock Option" shall mean an option that is intended to
meet the requirements of Section 422 of the Code, or any successor
provision thereto.
(l) "Involuntary Termination" shall mean termination of a Participant's
employment as an Employee or service as a Non-employee Contractor with
the Company or an Affiliate at the election of the Company or
Affiliate, provided that such termination is not Termination for Cause,
and provided further, that in the case of a Non-employee Contractor,
such termination is not due to the election of the Company or an
Affiliate not to renew the Non-employee Contractor's contract upon its
expiration. Involuntary Termination shall not include a transfer of
assignment or location of a Participant where the Participant is
employed by or in the service of the Company or an Affiliate
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both before and after the transfer.
(m) "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
(n) "Non-employee Contractor" shall mean a person who is not an
Employee as defined in this Section 9, who is performing services for
the Company or an Affiliate under a contractual arrangement either
directly or through a third party agency.
(o) "Non-Qualified Stock Option" shall mean an option granted under
Section 5.1 or the Plan that is not intended to be an Incentive Stock
Option.
(p) "Option" shall mean a Non-Qualified Stock Option.
(q) "Participant" shall mean an Employee or other individual described
in Sections 4.1 designated to be granted an Award under the Plan.
(r) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization or
government or political subdivision thereof.
(s) "Released Securities" shall mean securities that were Stock with
respect to which all applicable restrictions have expired, lapsed or
been waived.
(t) "Retirement" shall mean (i) with the consent of the Committee,
after age 55 with at least five years of service, an Employee's
termination of employment, and (ii) upon or after age 71 employee's
termination of employment and commencement of receipt of benefits
accrued under a tax qualified pension plan sponsored by the Company.
(u) "Shares" shall mean the shares of Common Stock of the Company, $.10
par value, and such other securities or property as may become the
subject of Awards pursuant to an adjustment made under Section 3.2 of
the Plan.
(v) "Stock" shall mean any Shares granted under Section 5.2 of the
Plan.
(w) "Termination for Cause: shall mean termination of employment or
service at the election of the Company or an Affiliate because of the
Participant's (i) conviction of a felony relating to or in connection
with Enron or Enron's business (which, through lapse of time or
otherwise, is not subject to appeal); or (ii) willful refusal without
proper legal cause to perform the Participant's duties and
responsibilities; or (iii) willfully engaging in conduct which the
Participant has, or in the opinion of the Committee should have, reason
to know is materially injurious to the Company or an Affiliate. Such
termination of employment or service shall be effected by notice
thereof delivered by the Company or an Affiliate to the Participant and
shall be effective as of the date stated in such notice; provided,
however, that if (a) such termination of employment or service is
because of the Participant's willful refusal without proper cause to
perform any one or more duties and responsibilities and (b)
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within seven (7) days following the date of such notice the Participant
shall cease such refusal and shall use all reasonable efforts to
perform such obligations, the termination of employment or service, if
made, shall not be for cause.
(x) "Voting Stock" shall mean all outstanding shares of capital stock
of the Company entitled to vote generally in elections for directors,
considered as one class; provided, however, that if the Company has
shares of Voting Stock entitled to more or less than one vote for any
such share, each reference to a proportion of shares of Voting Stock
shall be deemed to refer to such proportion of the votes entitled to be
cast by such shares.
(y) Any terms or provisions used herein which are defined in Sections
83, 421, 422 or 424 of the Code or the regulations thereunder shall
have the meanings as therein defined.
Adopted pursuant to resolution of the Board of Directors this _____ day of
______________, 1999.
By: Date:
---------------------------------- ---------------------
Chairman of the Board and
Chief Executive Officer
By: Date:
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Secretary
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1999 Stock Plan - Enron Corp.
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