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Exhibit 10.1
iGate Capital Corporation
AMENDED AND RESTATED STOCK INCENTIVE PLAN
Section 1. General Purpose of the Plan; Definitions. The name of this
plan is the iGate Capital Corporation Amended and Restated Stock Incentive Plan
(formerly the Mastech Corporation Second Amended and Restated 1996 Stock
Incentive Plan) (the "Plan"). The purpose of the Plan is to encourage and enable
the officers, employees, directors and consultants of iGate Capital Corporation
(the "Company") and its Subsidiaries upon whose judgment, initiative and efforts
the Company largely depends for the successful conduct of its business to
acquire a proprietary interest in the Company. It is anticipated that providing
such persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and strengthening their desire to remain
with the Company. Except as otherwise specifically provided herein, the Plan as
amended and restated generally applies to Awards granted prior to, as well as
Awards granted on or after, the Restated Effective Date.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Awards, Stock Awards, Performance Share Awards and
Stock Appreciation Rights.
"Board" means the Board of Directors of the Company.
"Change of Control" shall have the meaning assigned to that term in Section
15.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Effective Date" means November 4, 1996, the date on which the Plan was
originally approved by the Company's stockholders.
"Fair Market Value" of the Stock on any given date means (i) if the Stock
is admitted to quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the Fair Market Value on any given date
shall be the average of the highest bid and lowest asked prices of the Stock
reported for such date or, if no bid and asked prices were reported for such
date, for the last day preceding such date for which such prices were reported,
or (ii) if the Stock is admitted to trading on a United States securities
exchange or the NASDAQ National Market System, the Fair Market Value on any date
shall be the closing price reported for the Stock on such
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exchange or system for such date or, if no sales were reported for such date,
for the last day preceding such date for which a sale was reported; (iii)
notwithstanding the foregoing, the Fair Market Value of the Stock on the
effective date of the Initial Public Offering shall be the offering price to the
public of the Stock on such date; and (iv) if the Fair Market Value cannot be
determined on the basis previously set forth in this definition on the date that
Fair Market Value is to be determined, the Board shall in good faith determine
the Fair Market Value of the Stock on such date.
"Incentive Stock Option" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.
"Independent Director" means a member of the Board who is not an employee
or officer of the Company or any Subsidiary.
"Initial Public Offering" means the Company's first underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Stock to the public.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option" or "Stock Option" means any Option to purchase shares of Stock
granted pursuant to Section 6.
"Performance Share Award" means any Award granted pursuant to Section 12.
"Restated Effective Date" means April 6, 2000, the effective date of the
Plan as amended and restated herein.
"Restricted Stock Award" means any Award granted pursuant to Section 10.
"Stock" means the Common Stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 14.
"Stock Appreciation Right" or "SAR" means any Award granted pursuant to
Section 7.
"Stock Award" means any Award granted pursuant to Section 11.
"Subsidiary" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities, beginning with the
Company, if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
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Section 2. Administration. The Plan shall be administered by the full
Board of Directors of the Company or a committee of such Board of Directors
comprised of two or more "Non-Employee Directors" within the meaning of Rule
16b-3(a)(3) promulgated under the Act (the "Plan Administrator"). Subject to the
provisions of the Plan, the Plan Administrator is authorized to:
(a) construe the Plan and any Award under the Plan;
(b) select the directors, officers, employees and consultants of the
Company and its Subsidiaries to whom Awards may be granted;
(c) determine the number of shares of Stock to be covered by any
Award;
(d) determine and modify from time to time the terms and
conditions, including restrictions, of any Award and to approve
the form of written instrument evidencing Awards;
(e) accelerate at any time the exercisability or vesting of all or
any portion of any Award and/or to include provisions in awards
providing for such acceleration;
(f) impose limitations on Awards, including limitations on transfer
and repurchase provisions;
(g) extend the exercise period within which Stock Options may be
exercised; and
(h) determine at any time whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an
Award shall be deferred either automatically or at the election
of the participant and whether and to what extent the Company
shall pay or credit amounts constituting interest (at rates
determined by the Plan Administrator) or dividends or deemed
dividends on such deferrals.
The determination of the Plan Administrator on any such matters shall be
conclusive.
Section 3. Delegation of Authority to Grant Awards. The Plan Administrator,
in its discretion, may delegate to the Co-Chairmen of the Company all or part of
the Plan Administrator's authority and duties with respect to granting Awards to
individuals who are not subject, by reason of their position with the Company or
its Subsidiaries, to the reporting provisions of Section 16 of the Act and who
are not expected to be "covered employees" of the Company or its Subsidiaries
within the meaning of Section 162(m) of the Code. The Plan Administrator may
revoke or amend the terms of such a delegation at
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any time, but such revocation shall not invalidate prior actions of the Co-
Chairmen that were consistent with the terms of the Plan.
Section 4. Eligibility. Directors, officers, employees and consultants of
the Company or its Subsidiaries who, in the opinion of the Plan Administrator,
are primarily responsible for the continued growth and development and future
financial success of the business shall be eligible to participate in the Plan.
In addition, Independent Directors are eligible to receive an automatic grant of
Stock Options pursuant to Section 9 hereof.
Section 5. Shares Subject to the Plan. The number of shares of Stock which
may be issued pursuant to the Plan shall be 10,000,000 shares, plus an automatic
annual increase on the first day of each fiscal year of the Company beginning on
or after January 1, 2001 and ending on or before December 31, 2006 equal to the
lesser of (i) 2,000,000 shares, (ii) 3% of the shares outstanding on the last
day of the immediately preceding fiscal year, or (iii) such lesser number of
shares as is determined by the Board. For purposes of the foregoing limitation,
the shares of Stock underlying any Awards which are forfeited, canceled,
reacquired by the Company, satisfied without the issuance of Stock or otherwise
terminated (other than by exercise) shall be added back to the number of shares
of Stock available for issuance under the Plan. Notwithstanding the foregoing,
Stock Options with respect to no more than 500,000 shares of Stock may be
granted to any one individual participant during any one calendar year period.
To the extent that an SAR is granted in conjunction with an Option, the shares
covered by such SAR and Option shall be counted only once. Common Stock to be
issued under the Plan may be either authorized and unissued shares or shares
held in treasury by the Company.
Section 6. Stock Options. Options granted pursuant to the Plan may be either
Incentive Stock Options or Non-Qualified Stock Options. Incentive Stock Options
and Non-Qualified Stock Options shall be granted separately hereunder. The Plan
Administrator shall determine whether and to what extent Options shall be
granted under the Plan and whether such Options granted shall be Incentive Stock
Options or Non-Qualified Stock Options; provided, however, that: (a) Incentive
Stock Options may be granted only to employees of the Company or any Subsidiary
that is a "subsidiary corporation" within the meaning of Section 424(f) of the
Code; and (b) no Incentive Stock Option may be granted following the tenth
anniversary of the Effective Date. The provisions of the Plan and any Option
agreement pursuant to which Incentive Stock Options shall be issued shall be
construed in a manner consistent with Section 422 of the Code (or any successor
provision) and rules and regulations promulgated thereunder.
Section 7. Stock Appreciation Rights. The Plan Administrator may, from time
to time, subject to the provisions of the Plan, grant SARs to eligible
participants. Such SARs may be granted (i) alone, (ii) simultaneously with the
grant of an Option (either an Incentive Stock Option or Non-Qualified Stock
Option) and in conjunction therewith or in the alternative thereto or (iii)
subsequent to the grant of a Non-Qualified Stock Option and in conjunction
therewith or in the alternative thereto.
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(a) An SAR shall entitle the holder upon exercise thereof to receive from
the Company, upon a written request filed with the Secretary of the
Company at its principal offices (the "Request"), (i) a number of
shares of Stock (with or without restrictions as to substantial risk
of forfeiture and transferability, as determined by the Plan
Administrator in its sole discretion), (ii) an amount of cash, or
(iii) any combination of shares of Stock and cash, as specified in the
Request (but subject to the approval of the Plan Administrator in its
sole discretion, at any time up to and including the time of payment,
as to the making of any cash payment), having an aggregate Fair Market
Value equal to the product of (i) the excess of the Fair Market Value,
on the day of such Request, of one share of Stock over the exercise
price per share specified in such SAR or its related Option,
multiplied by (ii) the number of shares of Stock for which such SAR
shall be exercised.
(b) The exercise price of an SAR granted alone shall be determined by the
Plan Administrator, but may not be less than the Fair Market Value of
the underlying Stock on the date of grant. An SAR granted
simultaneously with or subsequent to the grant of an Option and in
conjunction therewith or in the alternative thereto shall have the
same exercise price as the related Option, shall be transferable only
upon the same terms and conditions as the related Option, and shall be
exercisable only to the same extent as the related Option; provided,
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however, that an SAR, by its terms, shall be exercisable only when the
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Fair Market Value of the Stock subject to the SAR and related Option
exceeds the exercise price thereof.
(c) Upon exercise of an SAR granted simultaneously with or subsequent to
an Option and in the alternative thereto, the number of
shares of Stock for which the related Option shall be exercisable
shall be reduced by the number of shares of Stock for which the SAR
shall have been exercised. The number of shares of Stock for which an
SAR shall be exercisable shall be reduced upon any exercise of a
related Option by the number of shares of Stock for which such Option
shall have been exercised.
(d) Any SAR shall be exercisable upon such additional terms and conditions
as may be prescribed by the Plan Administrator.
Section 8. Terms of Options and SARs. Each Option or SAR granted under the
Plan shall be evidenced by an agreement between the Company and the person to
whom such Option or SAR is granted and shall be subject to the following terms
and conditions:
(a) Subject to adjustment as provided in Section 14 of this Plan, the
price at which each share covered by an Option may be purchased shall
be determined in each case by the Plan Administrator; provided,
however, that such price shall not, in the case of an Incentive Stock
Option, be less
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than the Fair Market Value of the underlying Stock at the time the
Option is granted. If an optionee owns (or is deemed to own under
applicable provisions of the Code and rules and regulations
promulgated thereunder) more than ten percent (10%) of the combined
voting power of all classes of the stock of the Company and an Option
granted to such optionee is intended to qualify as an Incentive Stock
Option, the Option price shall be no less than 110% of the Fair Market
Value of the Common Stock covered by the Option on the date the Option
is granted.
(b) The aggregate Fair Market Value of shares of Stock with respect to
which Incentive Stock Options are first exercisable by the
optionee in any calendar year (under all plans of the Company) shall
not exceed the limitations, if any, imposed by Section 422(d) of the
Code (or any successor provision). If any Option designated as an
Incentive Stock Option, either alone or in conjunction with any other
Option or Options, exceeds the foregoing limitation, the portion of
such Option in excess of such limitation shall automatically be
reclassified (in whole share increments and without fractional share
portions) as a Non-Qualified Stock Option, with later granted Options
being so reclassified first.
(c) Neither an Option nor an SAR shall be transferable by the participant
otherwise than by will or by the laws of descent and distribution or
pursuant to a domestic relations order. After the death of the
participant, the Option or SAR may be transferred to the Company upon
such terms and conditions, if any, as the Plan Administrator and the
personal representative or other person entitled to exercise the
Option or SAR may agree within the period specified in subsection
8(d)(iii) hereof.
(d) An Option or SAR may be exercised in whole at any time, or in part
from time to time, within such period or periods (not to exceed ten
years from the granting of the Option in the case of an Incentive
Stock Option) as may be determined by the Plan Administrator and set
forth in the agreement (such period or periods being hereinafter
referred to as the "Option Period"), provided that, unless the
agreement provides otherwise:
(i) If a participant who is an employee of the Company shall cease to
be employed by the Company, all Options and SARs which the
employee is then entitled to exercise may be exercised only
within three months after the termination of employment and
within the Option Period or, if such termination was due to
disability or retirement (as hereinafter defined), within one
year after termination of employment and within the Option
Period. Notwithstanding the foregoing: (a) In the event that any
termination of employment shall be for Cause (as defined herein)
or the participant becomes an officer or director of, a
consultant to or employed by a Competing Business (as defined
herein), during
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the Option Period, then any and all Options and SARs held by such
participant shall forthwith terminate; and (b) the Plan
Administrator may, in its sole discretion, extend the Option
Period of any Option or SAR for up to three years from the date
of termination of employment regardless of the original Option
Period. For purposes of the Plan, retirement shall mean the
termination of employment with the Company, other than for Cause,
at any time after age 65.
For purposes of this Plan, the term "Cause" shall mean (a) with
respect to an individual who is party to a written agreement with
the Company which contains a definition of "cause" or "for cause"
or words of similar import for purposes of termination of
employment thereunder by the Company, "cause" or "for cause" as
defined in such agreement; (b) in all other cases (i) the willful
commission by an employee of a criminal or other act that causes
substantial economic damage to the Company or substantial injury
to the business reputation of the Company; (ii) commission of an
act of fraud in the performance of such person's duties to or on
behalf of the Company; or (iii) the continuing willful failure of
a person to perform the duties of such person to the Company
(other than a failure to perform duties resulting from such
person's incapacity due to illness) after written notice thereof
(specifying the particulars thereof in reasonable detail) and a
reasonable opportunity to cure such failure are given to the
person by the Board of Directors of the Company or the Plan
Administrator. For purposes of the Plan, no act, or failure to
act, on the part of any person shall be considered "willful"
unless done or omitted to be done by the person other than in
good faith and without reasonable belief that the person's action
or omission was in the best interest of the Company.
For purposes of this Plan, the term "Competing Business" shall
mean: any person, corporation or other entity engaged in the
business of (a) providing information technology services or (b)
selling or attempting to sell any product or service which is the
same as or similar to products or services sold by the Company
within the last year prior to termination of such person's
employment, consultant relationship or directorship, as the case
may be, hereunder.
(ii) If a participant who is a director of the Company shall cease to
serve as a director of the Company, any Options or SARs then
exercisable by such director may be exercised only within three
months after the cessation of service and within the Option
Period unless such cessation was due to disability, in which case
such
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optionee may exercise such Option or SAR within one year after
cessation of service and within the Option Period.
Notwithstanding the foregoing: (a) if any cessation of service as
a director was the result of removal for Cause or the participant
becomes an officer or director of, a consultant to or employed by
a Competing Business during the Option Period, any Options and
SARs held by such participant shall forthwith terminate; and (b)
the Plan Administrator may in its sole discretion extend the
Option Period of any Option or SAR for up to three years from the
date of cessation of service regardless of the original Option
Period;
(iii) If the participant shall die during the Option Period, any
Options or SARs then exercisable may be exercised only within one
year after the participant's death and within the Option Period
and only by the participant's personal representative or persons
entitled thereto under the participant's will or the laws of
descent and distribution;
(iv) The Option or SAR may not be exercised for more shares (subject
to adjustment as provided in Section 14) after the termination of
the participant's employment, cessation of service as a director
or the participant's death, as the case may be, than the
participant was entitled to purchase thereunder at the time of
the termination of the participant's employment or the
participant's death; and
(v) If a participant owns (or is deemed to own under applicable
provisions of the Code and regulations promulgated thereunder)
more than 10% of the combined voting power of all classes of
stock of the Company (or any parent or subsidiary corporation of
the Company) and an Option granted to such participant is
intended to qualify as an Incentive Stock Option, the Option by
its terms may not be exercisable after the expiration of five
years from the date such Option is granted.
(e) The Option exercise price of each share purchased pursuant to an
Option shall be paid in full at the time of each exercise (the
"Payment Date") of the Option (i) in cash; (ii) by delivering to the
Company a notice of exercise with an irrevocable direction to a
broker-dealer registered under the Act to sell a sufficient portion of
the shares and deliver the sale proceeds directly to the Company to
pay the exercise price; (iii) in the discretion of the Plan
Administrator, through the delivery to the Company of previously-owned
shares of Common Stock having an aggregate Fair Market Value equal to
the Option exercise price of the shares being purchased pursuant to
the exercise of the Option; provided, however, that shares of Common
Stock delivered in payment of the Option price must have been held by
the participant for at least six (6) months in order to be utilized to
pay the Option price; (iv) in the discretion of the Plan
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Administrator, through an election to have shares of Common Stock
otherwise issuable to the optionee withheld to pay the exercise price
of such Option; or (v) in the discretion of the Plan Administrator,
through any combination of the payment procedures set forth in
subsections (i)-(iv) of this Section 8(e).
(f) The Plan Administrator, in its discretion, may authorize "stock
retention Options" which provide, upon the exercise of an Option
previously granted under this Plan (a "prior Option"), using
previously owned shares, for the automatic issuance of a new Option
under this Plan with an exercise price equal to the current Fair
Market Value and for up to the number of shares equal to the number of
previously-owned shares delivered in payment of the exercise price of
the prior Option. Such stock retention Option shall have the same
Option Period as the prior Option.
(g) Nothing contained in the Plan nor in any Award agreement shall confer
upon any participant any right with respect to the continuance of
employment by the Company nor interfere in any way with the right of
the Company to terminate his employment or change his compensation at
any time.
(h) The Plan Administrator may include such other terms and conditions not
inconsistent with the foregoing as the Plan Administrator shall
approve. Without limiting the generality of the foregoing sentence,
the Plan Administrator shall be authorized to determine that Options
or SARs shall be exercisable in one or more installments during the
term of the Option, subject to the attainment of performance goals and
objectives, and the right to exercise may be cumulative as determined
by the Plan Administrator.
Section 9. Independent Director Options. Anything to the contrary
notwithstanding, each Independent Director who is first elected or appointed to
serve as a director commencing after the effective time of the Initial Public
Offering shall automatically be granted Non-Qualified Stock Options to purchase
30,000 shares of Stock. The Option exercise price for Options granted to
Independent Directors under the Plan will be equal to the Fair Market Value of
the Stock on the date of grant. Options granted to Independent Directors under
the foregoing provisions will be granted on the date that such Independent
Director is first elected or appointed to serve as a director and will vest in
equal annual installments over three years commencing on the anniversary of the
date of grant and will expire ten years after grant, subject to earlier
termination if the optionee ceases to serve as a director.
Section 10. Restricted Stock Awards.
(a) The Plan Administrator may grant Restricted Stock Awards to any
officer, employee or consultant of the Company and its
Subsidiaries. A Restricted
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Stock Award entitles the recipient to acquire shares of Stock subject
to such restrictions and conditions as the Plan Administrator may
determine at the time of grant ("Restricted Stock"). Conditions may be
based on continuing employment (or other business relationship) and/or
achievement of pre-established performance goals and objectives.
(b) Upon execution of a written instrument setting forth the Restricted
Stock Award and paying any applicable purchase price, a
participant shall have the rights of a shareholder with respect to the
Stock subject to the Restricted Stock Award, including, but not
limited to, the right to vote and receive dividends with respect
thereto; provided, however, that shares of Stock subject to Restricted
Stock Awards that have not vested shall be subject to the restrictions
on transferability described in Section 10(d) below. Unless the Plan
Administrator shall otherwise determine, certificates evidencing the
Restricted Stock shall remain in the possession of the Company until
such Restricted Stock is vested as provided in Section 10(c) below.
(c) The Plan Administrator at the time of grant shall specify the date or
dates and/or the attainment of pre-established performance goals,
objectives and other conditions on which Restricted Stock shall become
vested, subject to such further rights of the Company or its assigns
as may be specified in the instrument evidencing the Restricted Stock
Award.
(d) Unvested Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically
provided herein or in the written instrument evidencing the Restricted
Stock Award.
Section 11. Stock Awards. The Plan Administrator may, in its sole
discretion, grant (or sell at a purchase price determined by the Plan
Administrator) a Stock Award to any officer, employee or consultant of the
Company or its Subsidiaries, pursuant to which such individual may receive
shares of Stock free of any vesting restrictions (a "Stock Award") under the
Plan. Stock Awards may be granted or sold as described in the preceding sentence
in respect of past services or other valid consideration, or in lieu of any cash
compensation due to such individual.
Section 12. Performance Share Awards. A Performance Share Award is an Award
entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Plan Administrator may make Performance Share
Awards independent of or in connection with the granting of any other Award
under the Plan. Performance Share Awards may be granted under the Plan to any
officer, employee or consultant of the Company or its Subsidiaries, including
those who qualify for awards under other performance plans of the Company. The
Plan Administrator in its sole discretion shall determine whether and to whom
Performance Share Awards shall be made, the performance goals applicable under
each such Award, the periods during which performance is to be measured, and all
other limitations and conditions applicable
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to the awarded Performance Shares; provided, however, that the Plan
Administrator may rely on the performance goals and other standards applicable
to other performance plans of the Company in setting the standards for
Performance Share Awards under the Plan.
Section 13. Tax Withholding.
(a) Whenever shares are to be issued or cash is to be paid under the Plan,
the Company shall have the right to require the participant
to remit to the Company an amount sufficient to satisfy federal, state
and local tax withholding requirements prior to the delivery of any
certificate for shares or any proceeds; provided, however, that in the
case of a participant who receives an Award of shares under the Plan
which is not fully vested, the participant shall remit such amount on
the first business day following the Tax Date. The "Tax Date" for
purposes of this Section 13 shall be the date on which the amount of
tax to be withheld is determined. If a participant makes a
disposition of shares acquired upon the exercise of an Incentive Stock
Option within either two years after the Option was granted or one
year after its exercise by the participant, the participant shall
promptly notify the Company, and the Company shall have the right to
require the participant to pay to the Company an amount sufficient to
satisfy federal, state and local tax withholding requirements.
(b) A participant who is obligated to pay the Company an amount required
to be withheld under applicable tax withholding requirements may pay
such amount (i) in cash; (ii) in the discretion of the Plan
Administrator, through the delivery to the Company of previously-owned
shares of Common Stock having an aggregate Fair Market Value on the
Tax Date which does not exceed the amount of the tax required to be
withheld (based on the statutory minimum withholding rates for federal
and state tax purposes, including payroll taxes), provided that the
previously owned shares delivered in satisfaction of the withholding
obligations must have been held by the participant for at least six
(6) months; or (iii) in the discretion of the Plan Administrator,
through a combination of the procedures set forth in subsections (i)
and (ii) of this Section 13(b).
(c) A participant who is obligated to pay to the Company an amount
required to be withheld under applicable tax withholding requirements
in connection with either the exercise of a Non-Qualified Stock
Option, or the receipt of a Restricted Stock Award, Stock Award or
Performance Share Award under the Plan may, in the discretion of the
Plan Administrator, elect to satisfy this withholding obligation, in
whole or in part, by requesting that the Company withhold shares of
stock otherwise issuable to the participant having a Fair Market Value
on the Tax Date which does not exceed the amount of the tax required
to be withheld (based on the statutory minimum withholding rates for
federal and state tax purposes, including payroll taxes); provided,
however, that shares may
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be withheld by the Company only if such withheld shares have vested.
Any fractional amount shall be paid to the Company by the participant
in cash or shall be withheld from the participant's next regular
paycheck.
(d) An election by a participant to have shares of stock withheld to
satisfy federal, state and local tax withholding requirements pursuant
to Section 13(c) must be in writing and delivered to the Company prior
to the Tax Date.
Section 14. Adjustment of Number and Price of Shares.
Any other provision of the Plan notwithstanding:
(a) If, through or as a result of any reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or
other similar transaction, the outstanding shares of Stock are
increased or decreased or are exchanged for a different number or kind
of shares or other securities of the Company, or additional shares or
new or different shares or other securities of the Company or other
noncash assets are distributed with respect to such shares of Stock or
other securities, the Plan Administrator shall make an appropriate or
proportionate adjustment in (i) the number of Stock Options that can
be granted to any one individual participant, (ii) the number and kind
of shares or other securities subject to any then outstanding Awards
under the Plan, and (iii) the price for each share subject to any then
outstanding Stock Options under the Plan, without changing the
aggregate exercise price (i.e., the exercise price multiplied by the
number of shares) as to which such Stock Options remain exercisable.
The adjustment by the Plan Administrator shall be final, binding and
conclusive.
(b) In the event that, by reason of a corporate merger, consolidation,
acquisition of property or stock, separation, reorganization or
liquidation, the Board of Directors shall authorize the issuance or
assumption of a stock Option or stock Options in a transaction to
which Section 424(a) of the Code applies, then, notwithstanding any
other provision of the Plan, the Plan Administrator may grant an
Option or Options upon such terms and conditions as it may deem
appropriate for the purpose of assumption of the old Option, or
substitution of a new Option for the old Option, in conformity with
the provisions of Code Section 424(a) and the rules and regulations
thereunder, as they may be amended from time to time.
(c) No adjustment or substitution provided for in this Section 14 shall
require the Company to issue or to sell a fractional share
under any stock Option agreement or share award agreement and the
total adjustment or substitution with respect to each stock Option and
share award agreement shall be limited accordingly.
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Section 15. Definition of Change of Control. For purposes of this Plan, a
"Change of Control" shall mean the occurrence of any of the following events:
(a) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d) (3) or 14(d) (2)
of the Act ) (a "Person") (other than the Company, a Subsidiary or any
of their respective benefit plans or affiliates (within the meaning of
Rule 144 under the Securities Act of 1933, as amended)) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Act)
of 30% or more of either (i) the then outstanding shares of Stock (the
"Outstanding Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Company Voting
Securities"); or
(b) Individuals who, as of the Restated Effective Date, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any individual becoming a
director subsequent to the Restated Effective Date whose election or
nomination for election by the Company's stockholders was approved by
a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election
of the Directors of the Company (as such terms are used in Rule 14a-ll
of Regulation 14A promulgated under the Act); or
(c) Approval by the stockholders of the Company of a reorganization,
merger or consolidation or similar form of corporate transaction,
involving the Company or any of its Subsidiaries (a "Business
Combination"), in each case, with respect to which all or
substantially all of the individuals and entities who were the
respective beneficial owners of the Outstanding Stock and Company
Voting Securities immediately prior to such Business Combination do
not, immediately following such Business Combination, beneficially
own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Business Combination in substantially the same
proportion as their ownership immediately prior to such Business
Combination of the Outstanding Stock and Company Voting Securities, as
the case may be; or
(d) (A) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company or (B) sale or other
disposition of all or substantially all of the assets of the Company
other than to a
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corporation with respect to which, following such sale or disposition,
more than 50% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors is
then owned beneficially, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Stock and Company
Voting Securities immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the
Outstanding Stock and Company Voting Securities, as the case may be,
immediately prior to such sale or disposition.
Section 16. Consequences of a Change of Control.
(a) Upon a Change of Control, (i) each outstanding Option or SAR shall be
assumed by the Acquiring Corporation (as defined below) or parent
thereof or replaced with a comparable option or right to purchase or
to be awarded shares of the capital stock, or equity equivalent
instrument, of the Acquiring Corporation or parent thereof, or other
comparable rights (such assumed and comparable options and rights,
together, the "Replacement Options"), and (ii) each share of
Restricted Stock shall be converted to a comparable restricted grant
of capital stock, or equity equivalent instrument, of the Acquiring
Corporation or parent thereof or other comparable restricted property
(such assumed and comparable restricted grants, together, the
"Replacement Restricted Stock"); provided, however, that if the
Acquiring Corporation or parent thereof does not agree to grant
Replacement Options and Replacement Restricted Stock, then all
outstanding Options or SARs which have been granted under the Plan and
which are not exercisable as of the effective date of the Change of
Control shall automatically accelerate and become exercisable
immediately prior to the effective date of the Change of Control, and
all restrictions and conditions on any Restricted Stock shall lapse
upon the effective date of the Change of Control. The term "Acquiring
Corporation" means the surviving, continuing, successor or purchasing
corporation, as the case may be. The Board may determine in its
discretion (but shall not be obligated to do so) that in lieu of the
issuance of Replacement Options, all holders of outstanding Options
and SARs which are exercisable immediately prior to a Change of
Control (including those that become exercisable under this Section
16(a)) will be required to surrender them in exchange for a payment by
the Company, in cash or Common Stock as determined by the Board, of an
amount equal to the amount (if any) by which the per-share value of
Stock subject to unexercised Options or SARs (determined by the Board
in good faith, based on the applicable price in the transaction giving
rise to the Change of Control, and such other considerations as the
Board deems appropriate) exceeds the exercise price of those Options
or SARs (where Options and SARS are issued in tandem, such payment to
be made only with respect to a single underlying
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share of Stock upon surrender of each tandem pair of Options and
SARs), with such payment to take place as of the date of the Change of
Control or such other date as the Board may prescribe.
(b) Any Options or SARs that are not assumed or replaced by Replacement
Options, exercised or cashed out prior to or concurrent with a Change
of Control will terminate effective upon the Change of Control or at
such other time as the Board deems appropriate.
(c) Notwithstanding anything in the Plan to the contrary, in the event of
a Change of Control, no action described in the Plan shall be taken
(including, without limitation, actions described in subsections (a)
and (b) above) if such actions would make the Change of Control
ineligible for "pooling of interests" accounting treatment or would
make the Change of Control ineligible for desired tax treatment if, in
the absence of such actions, the Change of Control would qualify for
such treatment and the Company intends to use such treatment with
respect to such Change of Control.
Section 17. Amendment and Discontinuance. The Board of Directors may
alter, amend, suspend or discontinue the Plan, provided that no such action
shall deprive any person without such person's consent of any rights theretofore
granted pursuant hereto.
Section 18. Compliance with Governmental Regulations. Notwithstanding any
provision of the Plan or the terms of any agreement entered into pursuant to the
Plan, the Company shall not be required to issue any shares hereunder prior to
registration of the shares subject to the Plan under the Securities Act of 1933
or the Act, if such registration shall be necessary, or before compliance by the
Company or any participant with any other provisions of either of those acts or
of regulations or rulings of the Securities and Exchange Commission thereunder,
or before compliance with other federal and state laws and regulations and
rulings thereunder, including the rules of any applicable exchange or of the
NASDAQ National Market System. The Company shall use its best efforts to effect
such registrations and to comply with such laws, regulations and rulings
forthwith upon advice by its counsel that any such registration or compliance is
necessary.
Section 19. Compliance with Section 16. With respect to persons subject to
Section 16 of the Act by reason of their service with the Company or its
Subsidiaries, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 (or any successor rule) and shall be
construed to the fullest extent possible in a manner consistent with this
intent. To the extent that any Award fails to so comply, it shall be deemed to
be modified to the extent permitted by law and to the extent deemed advisable by
the Plan Administrator in order to comply with Rule 16b-3.
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Section 20. Participation by Foreign Nationals. The Plan Administrator
may, in order to fulfill the purposes of the Plan and without amending the Plan,
determine the terms and conditions applicable to Awards to foreign nationals or
United States citizens employed abroad in a manner otherwise inconsistent with
the Plan if it deems such terms and conditions necessary in order to recognize
differences in local law or regulations, tax policies or customs.
Section 21. Restated Effective Date of Plan; Termination of Plan. The
Plan's Effective Date was November 4, 1996, the date of initial approval and
adoption of the Plan by requisite vote of the holders of the outstanding shares
of Stock. The Plan was thereafter amended and restated on each of June 1, 1998
and February 1, 1999. The Restated Effective Date is April 6, 2000. The Plan
shall terminate on November 3, 2006, unless it is earlier terminated by the
Board. Termination of the Plan shall not affect previous Awards under the Plan.
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