EXHIBIT 10.1
SECOND AMENDED AND RESTATED
AMERIPATH, INC.
1997 LONG-TERM INCENTIVE PLAN
ARTICLE 1
PURPOSE
1.1 GENERAL. The purpose of the AMERIPATH, INC. 1997 LONG-TERM
INCENTIVE PLAN, as amended and restated (the "Plan") is to promote the success,
and enhance the value, of AMERIPATH, INC., a Delaware corporation (the
"Corporation"), and its subsidiaries, by linking the personal interests of their
employees, officers, consultants, advisors and directors to those of the
Corporation's stockholders and by providing such persons with an incentive for
outstanding performance. The term "advisors" includes personnel of medical
practices that have entered into and remain subject to management agreements
with the Corporation or any subsidiary, and the provision of services by such
personnel to those practices shall be considered performance of services with
respect to the Corporation for purposes of the Plan. The Plan is further
intended to provide flexibility to the Corporation in its ability to motivate,
attract, and retain the services of employees, officers, advisors and directors
upon whose judgment, interest, and special effort the successful conduct of the
Corporation's operation is largely dependent. Accordingly, the Plan permits the
grant of incentive awards from time to time to selected employees, officers,
advisors and directors; provided, however, that non-employee directors,
consultants and advisors of the Corporation will not be eligible to receive
Awards under the Plan until such time, if any, upon which the Corporation's
common stock shall be traded on a national securities exchange or on the NASDAQ
National Market, unless such Awards are permitted without jeopardizing the
"employee benefit plan exemption" under applicable state "blue sky" securities
laws.
ARTICLE 2
EFFECTIVE DATE
2.1 EFFECTIVE DATE. The Plan first became effective upon approval of
the same by the Board of Directors of Pathology Consultants of America, Inc.
d/b/a Inform DX, a Tennessee corporation ("Inform DX") on September 16, 1997
(the "Effective Date"), and was also approved by the stockholders of Inform DX
on September 16, 1997. The Plan was subsequently amended on December 19, 1997
and on February 16, 1998, and then amended and restated on September 18, 1998.
Pursuant to that certain Agreement and Plan of Merger, dated as of November 7,
2000 (the "Merger Agreement"), by and among the Corporation, AMP Merger Corp., a
wholly owned subsidiary of the Corporation, and Inform DX, the Corporation
assumed the Plan, together with all of the stock options outstanding under the
Plan. In accordance with this assumption, the Board of the Corporation adopted
this amended and restated Plan effective as of November 30, 2000 (the "Amended
Plan"). No Incentive Stock Options granted under the Amended Plan may be
exercised prior to the approval of the Amended Plan by the stockholders and if
the stockholders fail to approve the Amended Plan within 12 months of the
Board's approval of the Amended Plan, any Incentive Stock Options previously
granted hereunder shall be automatically converted to Non-Qualified Stock
Options without any further act. In the discretion of the Committee, Awards may
be made to Covered Employees which are intended to constitute qualified
performance-based compensation under Code Section 162(m). Any such Awards shall
be contingent upon the stockholders having approved the Amended Plan.
ARTICLE 3
DEFINITIONS
3.1 DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed
<PAGE>
to it in this Section or in Section 1.1 unless a clearly different meaning is
required by the context. The following words and phrases shall have the
following meanings:
"Award" means any Option, Stock Appreciation Right, Restricted Stock
Award, Performance Share Award, Dividend Equivalent Award, or Other Stock-Based
Award, or any other right or interest relating to Stock or cash, granted to a
Participant under the Plan.
"Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
"Board" means the Board of Directors of the Corporation.
"Change in Control" means and includes each of the following:
(1) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 40% or more of the combined voting
power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of
this subsection (1), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition by a Person who is on the
Effective Date the beneficial owner of 25% or more of the Outstanding
Company Voting Securities, (ii) any acquisition directly from the
Company, (iii) any acquisition by the Company, (iv) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, or (v) any
acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (3) of this definition;
or
(2) Individuals who, as of the Effective Date, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the Effective Date whose election, or
nomination for election by the Company's shareholders, 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 occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(3) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets
of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of
the individuals and entities who were the beneficial owners of the
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of
the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership of Outstanding Company Voting
Securities immediately prior to such Business Combination, and (ii) no
Person (excluding any corporation resulting from such Business
Combination on any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 25% or more of the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination, arid (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination.
<PAGE>
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the committee of the Board described in Article 4 or
the Board if the Board is administering the Plan.
"Corporation" means AMERIPATH, INC., a Delaware corporation, and its
successors or assigns.
"Covered Employee" means a covered employee as defined in Code Section
l62(m)(3), provided that no employee shall be a Covered Employee until the
deduction limitation of Code Section 162(m) are applicable to the Corporation
and any reliance period under Code Section 162(m) has expired, as described in
Section 16.14 hereof.
"Disability" shall mean any illness or other physical or mental
condition of a Participant that renders the Participant incapable of performing
his customary and usual duties for the Corporation, or any medically
determinable illness or other physical or mental condition resulting from a
bodily injury, disease or mental disorder which, in the judgment of the
Committee, is permanent and continuous in nature. The Committee may require such
medical or other evidence as it deems necessary to judge the nature and
permanency of the Participant's condition.
"Dividend Equivalent" means a right granted to a Participant under
Article 11.
"Effective Date" has the meaning assigned such term in Section 2.1.
"Fair Market Value", on any date, means (i) if the Stock is listed on a
securities exchange or is traded over the NASDAQ National Market, the closing
sales price on such exchange or over such system on such date or, in the absence
of reported sales on such date, the closing sales price on the immediately
preceding date on which sales were reported, or (ii) if the Stock is not listed
on a securities exchange or traded over the NASDAQ National Market, the mean
between the bid and offered prices as quoted by NASDAQ for such date, provided
that if it is determined that the fair market value is not properly reflected by
such NASDAQ quotations or if the Stock is not traded in a manner that results in
such quotations, Fair Market Value will be determined by such other method as
the Committee determines in good faith to be reasonable.
"Incentive Stock Option" means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor provision thereto.
"Non-Qualified Stock Option" means an Option that is not an Incentive
Stock Option.
"Option" means a right granted to a Participant under Article 7 of the
Plan to purchase Stock at a specified price during specified time periods. An
Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.
"Other Stock-Based Award" means a right, granted to a Participant under
Article 12, that relates to or is valued by reference to Stock or other Awards
relating to Stock.
"Parent" means a corporation which owns or beneficially owns a majority
of the outstanding voting stock or voting power of the Corporation. For
incentive Stock Options, the term shall have the same meaning as set forth in
Code Section 424(e).
"Participant" means a person who, as an employee, officer or director
of the Corporation or any Parent or Subsidiary, has been granted an Award under
the Plan.
"Performance Share" means a right granted to a Participant under
Article 9, to receive cash, Stock, or other Awards, the payment of which is
contingent upon achieving certain performance goals established by the
Committee.
"Plan" means the AMERIPATH, INC. 1997 Long-Term Incentive Plan, as
amended from time to time.
<PAGE>
"Restricted Stock Award" means Stock granted to a Participant under
Article 10 that is subject to certain restrictions and to risk of forfeiture.
"Retirement" means a Participant's termination of employment with the
Corporation, Parent or Subsidiary after attaining any normal or early retirement
age specified in any pension, profit sharing or other retirement program
sponsored by the Corporation, or, in the event of the inapplicability thereof
with respect to the person in question, as determined by the Committee in its
reasonable judgment.
"Stock" means the $.01 par value common stock of the Corporation and
such other securities of the Corporation as may be substituted for Stock
pursuant to Article 14.
"Stock Appreciation Right" or "SAR" means a right granted to a
Participant under Article 8 to receive a payment equal to the difference between
the Fair Market Value of a share of Stock as of the date of exercise of the SAR
over the grant price of the SAR, all as determined pursuant to Article 8.
"Subsidiary" means any corporation, limited liability company,
partnership or other entity of which a majority of the outstanding voting stock
or voting power is beneficially owned directly or indirectly by the Corporation.
For Incentive Stock Options, the term shall have the meaning set forth in Code
Section 424(f).
"1934 Act" means the Securities Exchange Act of 1934, as amended from
time to time.
ARTICLE 4
ADMINISTRATION
4.1 COMMITTEE. The Plan shall be administered by the Board or a duly
authorized committee thereof appointed by the Board; provided, however, that
from and after such time, if any, as any class of the Corporation's common
equity securities is registered under Section 12 of the 1934 Act or the
Corporation otherwise meets the definition of a "publicly held corporation"
under Treasury Regulation 1.162-27(c) or any successor provision, the Plan shall
be administered by a committee of the Board consisting of two or more members of
the Board who are (i) "outside directors" as that term is used in Section 162(m)
of the Code and the regulations promulgated thereunder, to the extent that
Section 162(m) is applicable to the Corporation as described in Section I 6.14
hereof and (ii) "non-employee directors" as such term is defined in Rule 16b-3
promulgated under Section 16 of the 1934 Act or any successor provision. During
any time that the Board is acting as administrator of the Plan, it shall have
all the powers of the Committee hereunder, and any reference herein to the
Committee (other than in this Section 4.1) shall include the Board.
4.2 ACTION BY THE COMMITTEE. For purposes of administering the Plan,
the following rules of procedure shall govern the Committee. A majority of the
Committee shall constitute a quorum. The acts of a majority of the members
present at any meeting at which a quorum is present, and acts approved
unanimously in writing by the members of the Committee in lieu of a meeting,
shall be deemed the acts of the Committee. Each member of the Committee is
entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the Corporation or
any Parent or Subsidiary, the Corporation's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Corporation to assist in the administration of the Plan.
4.3 AUTHORITY OF COMMITTEE. The Committee has the exclusive power,
authority and discretion to:
(a) Designate Participants;
(b) Determine the type or types of Awards to be
granted to each Participant;
(c) Determine the number of Awards to be granted and
the number of shares of Stock to which an Award will relate;
<PAGE>
(d) Determine the terms and conditions of any Award
granted under the Plan, including but not limited to, the
exercise price, grant price, or purchase price, any
restrictions or limitations on the Award, any schedule for
lapse of forfeiture restrictions or restrictions on the
exercisability of an Award, and accelerations or waivers
thereof, based in each case on such considerations as the
Committee in its sole discretion determines;
(e) Accelerate the vesting or lapse of restrictions
of any outstanding Award, based in each case on such
considerations as the Committee in its sole discretion
determines;
(f) Determine whether, to what extent, and under what
circumstances an Award may be settled in, or the exercise
price of an Award may be paid in, cash, Stock, other Awards,
or other property, or an Award may be canceled, forfeited, or
surrendered;
(g) Prescribe the form of each Award Agreement, which
need not be identical for each Participant;
(h) Decide all other matters that must be determined
in connection with an Award;
(i) Establish, adopt or revise any rules and
regulations as it may deem necessary or advisable to
administer the Plan;
(j) Make all other decisions and determinations that
may be required under the Plan or as the Committee deems
necessary or advisable to administer the Plan; and
(k) Amend the Plan or any Award Agreement as provided
herein.
4.4 DECISIONS BINDING. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.
ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 14.
1, the aggregate number of shares of Stock reserved and available for Awards or
which may be used to provide a basis of measurement for or to determine the
value of an Award (such as with a Stock Appreciation Right or Performance Share
Award) shall be 90,000.
5.2 LAPSED AWARDS. To the extent that an Award is canceled, terminates,
expires or lapses for any reason, any shares of Stock subject to the Award will
again be available for the grant of an Award under the Plan and shares subject
to SARs or other Awards settled in cash will be available for the grant of an
Award under the Plan.
5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
5.4 LIMITATION ON AWARDS. Notwithstanding any provision in the Plan to
the contrary, the maximum number of shares of Stock with respect to one or more
Options and/or SARs that may be granted during any one calendar year under the
Plan to any one Covered Employee shall be 18,075. The maximum fair market value
of any Awards (other than Options and SARs) that may be received by a Covered
Employee (less any consideration paid by the Participant for such Award) during
any one calendar year under the Plan shall be $225,000.
<PAGE>
ARTICLE 6
ELIGIBILITY
6.1 GENERAL. Awards may be granted only to individuals who are
employees, officers, consultants, advisors or directors of the Corporation or a
Parent or Subsidiary; provided, however, that non-employee directors,
consultants and advisors will not be eligible to receive Awards under the Plan
until such time, if any, upon which the Corporation's common stock shall be
traded on a national securities exchange or on the NASDAQ National Market,
unless such Awards are permitted without jeopardizing the "employee benefit plan
exemption" under applicable state "blue sky" securities laws.
ARTICLE 7
STOCK OPTIONS
7.1 GENERAL. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(a) EXERCISE PRICE. The exercise price per share of Stock
under an Option shall be determined by the Committee.
(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part. The Committee also shall determine the performance or
other conditions, if any, that must be satisfied before all or part of
an Option may be exercised. The Committee may waive any exercise
provisions at any time in whole or in part based upon factors as the
Committee may determine in its sole discretion so that the Option
becomes exercisable at an earlier date.
(c) PAYMENT. The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, shares of Stock, or other property
(including "cashless exercise" arrangements), and the methods by which
shares of Stock shall be delivered or deemed to be delivered to
Partcipants; provided, however, that if shares of Stock are used to pay
the exercise price of an Option, such shares must have been held by the
Participant for at least six months. Without limiting the power and
discretion conferred on the Committee pursuant to the preceding
sentence, the Committee may, in the exercise of its discretion, but
need not, allow a Participant to pay the Option price by directing the
Corporation to withhold from the shares of Stock that would otherwise
be issued upon exercise of the Option that number of shares having a
Fair Market Value on the exercise date equal to the Option price, all
as determined pursuant to rules and procedures established by the
Committee.
(d) EVIDENCE OF GRANT. All Options shall be evidenced by a
written Award Agreement between the Corporation and the Participant.
The Award Agreement shall include such provisions as may be specified
by the Committee.
7.2 INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options
granted under the Plan must comply with the following additional rules:
(a) EXERCISE PRICE. The exercise price per share of Stock
shall be set by the Committee, provided that the exercise price for any
Incentive Stock Option shall not be less than the Fair Market Value as
of the date of the grant.
(b) EXERCISE. In no event may any Incentive Stock Option be
exercisable for more than ten years from the date of its grant.
(c) LAPSE OF OPTION. An Incentive Stock Option shall lapse
under the earliest of the following circumstances; provided, however,
that the Committee may, prior to the lapse of the
Incentive Stock Option under the circumstances described in paragraphs
(3), (4) and (5) below, provide in
<PAGE>
writing that the Option will extend until a later date, but if Option
is exercised after the dates specified in paragraphs (3), (4) and (5)
below, it will automatically become a Non-Qualified Stock Option:
(1) The Incentive Stock Option shall lapse as of the
option expiration date set forth in the Award Agreement.
(2) The Incentive Stock Option shall lapse ten years
after it is granted, unless an earlier time is set in the
Award Agreement.
(3) If the Participant terminates employment for any
reason other than as provided in paragraph (4) or (5) below,
the Incentive Stock Option shall lapse, unless it is
previously exercised, three months after the Participant's
termination of employment.
(4) If the Participant terminates employment by
reason of his Disability, the Incentive Stock Option shall
lapse, unless it is previously exercised, one year after the
Participant's termination of employment.
(5) If the Participant dies while employed, or during
the three-month period described in paragraph (3) or during
the one-year period described in paragraph (4) and before the
Option otherwise lapses, the Option shall lapse one year after
the Participant's death. Upon the Participant's death, any
exercisable Incentive Stock Options may be exercised by the
Participant's beneficiary.
Unless the exercisability of the Incentive Stock Option is accelerated
as provided in Article 13 or in the Award Agreement, if a Participant exercises
an Option after termination of employment, the Option may be exercised only with
respect to the shares that were otherwise vested on the Participant's
termination of employment.
(d) INDIVIDUAL DOLLAR LIMITAT1ON. The aggregate Fair Market
Value (determined as of the time an Award is made) of all shares of
Stock with respect to which Incentive Stock Options are first
exercisable by a Participant in any calendar year may not exceed
$100,000.00.
(e) TEN PERCENT OWNERS. No Incentive Stock Option shall be
granted to any individual who, at the date of grant, owns stock
possessing more than ten percent of the total combined voting power of
all classes of stock of the Corporation or any Parent or Subsidiary
unless the exercise price per share of such Option is at least 110% of
the Fair Market Value per share of Stock at the date of grant and the
Option expires no later than five years after the date of grant.
(f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an
Incentive Stock Option may be made pursuant to the Plan after the day
immediately prior to the tenth anniversary of the Effective Date.
(g) RIGHT TO EXERCISE. During a Participant's lifetime, an
Incentive Stock Option may be exercised only by the Participant or, in
the case of the Participant's Disability, by the Participant's guardian
or legal representative.
(h) DIRECTORS. The Committee may not grant an Incentive Stock
Option to a non-employee director. The Committee may grant an Incentive
Stock Option to a director who is also an employee of the Corporation
or Parent or Subsidiary but only in that individual's position as an
employee and not as a director.
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1 GRANT OF SARs. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
<PAGE>
(a) RIGHT TO PAYMENT. Upon the exercise of a Stock
Appreciation Right, the Participant to whom it is granted has the right
to receive the excess, if any, of:
(1) The Fair Market Value of one share of Stock on
the date of exercise; over
(2) The grant price of the Stock Appreciation Right
as determined by the Committee, which shall not be less than
the Fair Market Value of one share of Stock on the date of
grant in the case of any SAR related to an Incentive Stock
Option.
(b) OTHER TERMS. All awards of Stock Appreciation
Rights shall be evidenced by an Award Agreement. The terms, methods of
exercise, methods of settlement, form of consideration payable in
settlement, and any other terms and conditions of any Stock
Appreciation Right shall be determined by the Committee at the time of
the grant of the Award and shall be reflected in the Award Agreement.
ARTICLE 9
PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE SHARES. The Committee is authorized to grant
Performance Shares to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion to
determine the number of Performance Shares granted to each Participant. All
Awards of Performance Shares shall be evidenced by an Award Agreement.
9.2 RIGHT TO PAYMENT. A grant of Performance Shares gives the
Participant rights, valued as determined by the Committee, and payable to, or
exercisable by, the Participant to whom the Performance Shares are granted, in
whole or in part, as the Committee shall establish at grant or thereafter. The
Committee shall set performance goals and other terms or conditions to payment
of the Performance Shares in its discretion which, depending on the extent to
which they are met, will determine the number and value of Performance Shares
that will be paid to the Participant.
9.3 OTHER TERMS. Performance Shares may be payable in cash, Stock, or
oilier property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.
ARTICLE 10
RESTRICTED STOCK AWARDS
10.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make
Awards of Restricted Stock to Participants in such amounts and subject to such
terms and conditions as may be selected by the Committee All Awards of
Restricted Stock shall be evidenced by a Restricted Stock Award Agreement.
10.2 ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, upon the satisfaction of performance
goals or otherwise, as the Committee determines at the time of the grant of the
Award or thereafter.
10.3 FORFEITURE. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment
during the applicable restriction period or upon failure to satisfy a
performance goal during the applicable restriction period, Restricted Stock that
is at that time subject to restrictions shall be forfeited and reacquired by the
Corporation; provided, however, that the Committee may provide in any Award
Agreement that restrictions or forfeiture conditions relating to Restricted
Stock will be waived in whole or in part in the event of terminations resulting
from specified causes, and the Committee may in other cases waive in whole or in
part restrictions or forfeiture conditions relating to Restricted Stock.
<PAGE>
10.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock.
ARTICLE 11
DIVIDEND EQUIVALENTS
11.1 GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to
grant Dividend Equivalents to Participants subject to such terms and conditions
as may he selected by the Committee. Dividend Equivalents shall entitle the
Participant to receive payments equal to dividends with respect to all or a
portion of the number of shares of' Stock subject to an Option Award or SAR
Award, as determined by the Committee. The Committee may provide that Dividend
Equivalents be paid or distributed when accrued or be deemed to have been
reinvested in additional shares of Stock, or otherwise reinvested.
ARTICLE 12
OTHER STOCK-BASED AWARDS
12.1 GRANT OF OTHER STOCK-BASED AWARDS. The Committee is authorized,
subject to limitations under applicable law, to grant to Participants such other
Awards that are payable in, valued in whole or in part by reference to, or
otherwise based on or related to shares of Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including without limitation shares
of Stock awarded purely as a "bonus" and not subject to any restrictions or
conditions, convertible or exchangeable debt securities, other rights
convertible or exchangeable into shares of Stock, and Awards valued by reference
to book value of shares of Stock or the value of securities of or the
performance of specified Parents or Subsidiaries. The Committee shall determine
the terms and conditions of such Awards.
ARTICLE 13
PROVISIONS APPLICABLE TO AWARDS
13.1 STAND-ALONE. TANDEM. AND SUBSTITUTE AWARDS. Awards granted under
the Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for, any other Award granted
under the Plan. If an Award is granted in substitution for another Award, the
Committee may require the surrender of such other Award in consideration of the
grant of the new Award. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other Awards.
13.2 EXCHANGE PROVISIONS. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Stock,
or another Award (subject to Section 14.1), based on the terms and conditions
the Committee determines and communicates to the Participant at the time the
offer is made.
13.3 TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant
(or, if Section 7.2(e) applies, five years from the date of its grant).
13.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and
any applicable law or Award Agreement, payments or transfers to be made by the
Corporation or a Parent or Subsidiary on the grant or exercise of an Award may
be made in such form as the Committee determines at or after the time of grant,
including without limitation, cash, Stock, other Awards, or other property, or
any combination, and may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case determined in accordance with
rules adopted by, and at the discretion of, the Committee.
<PAGE>
13.5 LIMITS ON TRANSFER. No right or interest of a Participant in any
unexercised or restricted Award may be pledged, encumbered, or hypothecated to
or in favor of any party other than the Corporation or a Parent or Subsidiary,
or shall be subject to any lien, obligation, or liability of such Participant to
any other party other than the Corporation or a Parent or Subsidiary. No
unexercised or restricted Award shall be assignable or transferable by a
Participant other than by will or the laws of descent and distribution or,
except in the case of an Incentive Stock Option, pursuant to a domestic
relations order that would satisfy Section 414(p)(1)(A) of the Code if such
Section applied to an Award under the Plan; provided, however, that the
Committee may (but need not) permit other transfers where the Committee
concludes that such transferability (i) does not result in accelerated taxation,
(ii) does not cause any Option intended to be an incentive stock option to fail
to be described in Code Section 422(b), and (iii) is otherwise appropriate and
desirable, taking into account any state or federal tax or securities laws
applicable to transferable Awards.
13.6 BENEFICIARIES. Notwithstanding Section 13.5, a Participant may, in
the manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If no beneficiary has been designated or survives the
Participant, payment shall be made to the Participant's estate. Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.
13.7 STOCK CERTIFICATES. All Stock certificates delivered under the
Plan are subject to any stop-transfer orders and other restrictions as the
Committee deems necessary or advisable to comply with federal or state
securities laws, rules and regulations and the rules of any national securities
exchange or automated quotation system on which the Stock is listed, quoted, or
traded. The Committee may place legends on any Stock certificate to reference
restrictions applicable to the Stock.
13.8 ACCELERATION UPON CHANGE IN CONTROL. In the event of a Change in
Control, the Committee may in its sole discretion declare all outstanding
Options, Stock Appreciation Rights, and other Awards in the nature of rights
that may be exercised to be fully exercisable, and/or all restrictions on all
outstanding Awards to have lapsed, in each case as of such date as the Committee
may, in its sole discretion, declare, which may be on or before the consummation
of the transaction or event giving rise to the Change in Control, provided,
however, that (i) the Committee may not make such declaration with respect to
any such transaction approved by the Board and which is contingent on qualifying
as a "pooling of interest" for accounting purposes and, in the opinion of the
Company's accountants, is otherwise eligible for such treatment, and (ii)
nothing in this Section 13.8 shall have any impact on any automatic acceleration
of vesting provided in any Award Agreement. To the extent that this provision
causes Incentive Stock Options to exceed the dollar limitation set forth in
Section 7.2(d), the excess Options shall be deemed to be Non-Qualified Stock
Options.
13.9 ACCELERATION FOR ANY OTHER REASON. Regardless of whether an event
has occurred as described in Section 13.8 above, the Committee may in its sole
discretion at any time determine that all or a portion of a Participant's
Options, Stock Appreciation Rights, and other Awards in the nature of rights
that may be exercised shall become fully or partially exercisable, and/or that
all or a part of the restrictions on all or a portion of the outstanding Awards
shall lapse, in each case as of such date as the Committee may, in its sole
discretion, declare, provided, however, that the Committee may not take such
action in contemplation of a transaction approved by the Board and which is
contingent on qualifying as a "pooling of interest" for accounting purposes and,
in the opinion of the Company's accountants, is otherwise eligible for such
treatment, and (ii) nothing in this Section 13.9 shall have any impact on any
automatic acceleration of vesting provided in any Award Agreement. The Committee
may discriminate among Participants and among Awards granted to a Participant in
exercising its discretion pursuant to this Section 13.9.
13.10 EFFECT OF ACCELERATION. If an Award is accelerated under Section
13.8, Section 13.9 or otherwise as may be provided in the terms of an Award
Agreement, the Committee may, in its sole discretion, provide (i) that the Award
will expire after a designated period of time after such acceleration to the
extent not then exercised, (ii) that the Award will be settled in cash rather
than Stock, (iii) that the Award will be assumed by
<PAGE>
another party to the transaction giving rise to the acceleration or otherwise be
equitably converted in connection with such transaction, or (iv) any combination
of the foregoing. The Committee's determination need not be uniform and may be
different for different Participants whether or not such Participants are
similarly situated.
13.11 PERFORMANCE GOALS. The Committee may determine that any Award
granted pursuant to this Plan to a Participant (including, but not limited to,
Participants who are Covered Employees) shall be determined solely on the basis
of (a) the achievement by the Corporation or a Parent or Subsidiary of a
specified target return, or target growth in return, on equity or assets, (b)
the Corporation's, Parent's or Subsidiary's stock price, (c) the achievement by
a business unit of the Corporation, Parent or Subsidiary of a specified target,
or target growth in, net income or earnings per share, or (d) any combination of
the goals set forth in (a) through (c) above. Furthermore, the Committee
reserves the right for any reason to reduce (but not increase) any Award,
notwithstanding the achievement of a specified goal. If an Award is made on such
basis, the Committee shall establish goals prior to the beginning of the period
for which such performance goal relates (or such later date as may be permitted
under Code Section 162(m) or the regulations thereunder). Any payment of an
Award granted with performance goals shall be conditioned on the written
certification of the Committee in each case that the performance goals and any
other material conditions were satisfied.
13.12 TERMINATION OF EMPLOYMENT. Whether military, government or other
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A termination of
employment shall not occur in a circumstance in which a Participant transfers
from the Corporation to one of its Parents or Subsidiaries, transfers from a
Parent or Subsidiary to the Corporation, or transfers from one Parent or
Subsidiary to another Parent or Subsidiary.
13.13 LOAN PROVISIONS. With the consent of the Committee, the
Corporation may make, guarantee or arrange for a loan or loans to a Participant
with respect to the exercise of any Option granted under this Plan and/or with
respect to the payment of the purchase price, if any, of any Award granted
hereunder and/or with respect to the payment by the Participant of any or all
federal and/or state income taxes due on account of the granting or exercise of
any Award hereunder. The Committee shall have full authority to decide whether
to make a loan or loans hereunder and to determine the amount, terms and
provisions of any such loan or loans, including the interest rate to be charged
in respect of any such loan or loans, whether the loan or loans are to be made
with or without recourse against the borrower, the terms on which the loan is to
be repaid and the conditions, if any, under which the loan or loans may be
forgiven.
ARTICLE 14
CHANGES IN CAPITAL STRUCTURE
14.1 GENERAL. In the event a stock dividend is declared upon the Stock,
the shares of Stock then subject to each Award shall be increased
proportionately without any change in the aggregate purchase price thereof. In
the event; the Stock shall be changed into or exchanged for a different number
or class of shares of stock or securities of the Corporation or of another
corporation, whether through reorganization, recapitalization, stock split-up,
combination of shares, merger or consolidation, there shall be substituted for
each such share of Stock then subject to each Award the number and class of
shares into which each outstanding share of Stock shall be so exchanged, all
without any change in the aggregate purchase price for the shares then subject
to each Award.
ARTICLE 15
AMENDMENT, MODIFICATION AND TERMINATION
15.1 AMENDMENT, MODIFICATION AND TERMINATION. The Board or the
Committee may, at any time and from time to time, amend, modify or terminate the
Plan without stockholder approval; provided, however, that the Board or
Committee may condition any amendment or modification on the approval of
stockholders of the Company if such approval is necessary or deemed advisable
with respect to tax, securities or other applicable laws, policies or
regulations.
<PAGE>
15.2 AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Award without approval
of the Participant; provided, however, that such amendment, modification or
termination shall not, without the Participant's consent, reduce or diminish the
value of such Award determined as if the Award had been exercised, vested,
cashed in or otherwise settled on the date of such amendment or termination. No
termination amendment, or modification of the Plan shall adversely affect any
Award previously granted under the Plan, without the written consent of the
Participant.
ARTICLE 16
GENERAL PROVISIONS
16.1 NO RIGHTS TO AWARDS. No Participant or employee, officer or
director shall have any claim to be granted any Award under the Plan, and
neither the Corporation nor the Committee is obligated to treat Participants and
employees, officers or directors uniformly.
16.2 NO STOCKHOLDER RIGHTS. No Award gives the Participant any of the
rights of a stockholder of the Corporation unless and until shares of Stock are
in fact issued to such person in connection with such Award.
16.3 WITHHOLDING. The Corporation or any Parent or Subsidiary shall
have the authority and the right to deduct or withhold, or require a Participant
to remit to the Corporation, an amount sufficient to satisfy federal, state, and
local taxes (including the Participant's FICA obligation) required by law to be
withheld with respect to any taxable event arising as a result of the Plan. With
respect to withholding required upon any taxable event under the Plan, the
Committee may, at the time the Award is granted or thereafter, require that any
such withholding requirement be satisfied, in whole or in part, by withholding
shares of Stock having a Fair Market Value on the date of withholding equal to
the amount to be withheld for tax purposes, all in accordance with such
procedures as the Committee establishes.
16.4 NO IMPLIED RIGHTS. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Corporation or any
Parent or Subsidiary to terminate any Participant's employment or status as a
director or advisor at any time, nor confer upon any Participant any right to
continue as an employee, director or advisor of the Corporation or any Parent or
Subsidiary.
16.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award Agreement shall give the Participant any rights that
are greater than those of a general creditor of the Corporation or any Parent or
Subsidiary.
16.6 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall he
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the
Corporation or any Parent or Subsidiary unless provided otherwise in such other
plan.
16.7 EXPENSES. The expenses of administering the Plan shall be borne by
the Corporation and its Parents or Subsidiaries.
16.8 TITLES AND HEADINGS. The titles and headings of the Sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.
16.9 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
<PAGE>
16.10 FRACTIONAL SHARES. No fractional shares of Stock shall be issued
and the Committee shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up.
16.11 GOVERNMENT AND OTHER REGULATIONS. The obligation of the
Corporation to make payment of awards in Stock or otherwise shall be subject to
all applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Corporation shall be under no obligation to
register under the 1933 Act, any of the shares of Stock paid under the Plan. If
the shares paid under the Plan may in certain circumstances be exempt from
registration under the 1933 Act, the Corporation may restrict the transfer of
such shares in such manner as it deems advisable to ensure the availability of
any such exemption.
16.12 GOVERNING LAW. To the extent not governed by federal law, the
Plan and all Award Agreements shall be construed in accordance with and governed
by the laws of the State of Delaware.
16.13 ADDITIONAL PROVISIONS. Each Award Agreement may contain such
other terms and conditions as the Committee may determine; provided that such
other terms and conditions are not inconsistent with the provisions of this
Plan.
16.14 CODE SECTION 162(m). The deduction limits of Code Section 162(m)
and the regulation thereunder do not apply to the Corporation until such time,
if any, as any class of the Corporation's common equity securities is registered
under Section 12 of the 1934 Act or the Corporation otherwise meets the
definition of a "publicly held corporation" under Treasury Regulation
1.162-27(c) or any successor provision. Upon becoming a publicly held
corporation, the deduction limits of Code Section 162(m) and time regulations
thereunder shall not apply to compensation payable under this Plan until the
expiration of the reliance period described in Treasury Regulation 1.162-27(f)
or any successor regulation.
