SONUS CORP.
SECOND AMENDED AND RESTATED
STOCK AWARD PLAN
(AS AMENDED FEBRUARY 11, 2000)
ARTICLE 1
ESTABLISHMENT AND PURPOSE
1.1 ESTABLISHMENT; AMENDMENT AND RESTATEMENT. Sonus Corp.
("Corporation") established the Sonus Corp. Stock Award Plan (the "Plan"),
effective as of December 10, 1996, subject to shareholder approval as provided
in Article 16 of the Plan. The Plan was previously amended and restated
effective February 5, 1997, was further amended and restated effective October
15, 1997, was further amended effective December 18, 1997, and October 26, 1998,
and most recently has been amended to increase the number of Shares issuable
hereunder from 2,300,000 Shares to 2,500,000 Shares, subject to shareholder
approval at Corporation's 2000 annual meeting of shareholders.
1.2 PURPOSE. The purpose of the Plan is to promote and advance the
interests of Corporation and its shareholders by enabling Corporation and its
subsidiaries to attract, retain, and reward key employees, directors, and
outside consultants. It is also intended to strengthen the mutuality of
interests between such employees, directors, and outside consultants and
Corporation's shareholders. The Plan is designed to meet this intent by offering
stock options and other equity-based incentive awards, thereby providing a
proprietary interest in pursuing the long-term growth, profitability, and
financial success of Corporation.
ARTICLE 2
DEFINITIONS
2.1 DEFINED TERMS. For purposes of the Plan, the following terms shall
have the meanings set forth below:
"AWARD" means an award or grant made to a Participant of Options, Stock
Appreciation Rights, Restricted Units, Performance Awards, or Other Stock-Based
Awards pursuant to the Plan.
"AWARD AGREEMENT" means an agreement as described in Section 6.4
evidencing an Award granted under the Plan.
"BOARD" means the Board of Directors of Corporation.
"CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, or any successor thereto, together with rules,
regulations, and interpretations promulgated thereunder. Where the context so
requires, any reference to a particular Code section shall be construed to refer
to the successor provision to such Code section.
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"CONSULTANT" means any consultant or adviser to Corporation or a
Subsidiary who is not an employee of Corporation or a Subsidiary, but does not
include any person involved in a capital-raising or investor relations activity
on behalf of the Corporation.
"CONTINUING RESTRICTION" means a Restriction contained in Sections
15.4, 15.6, and 15.7 of the Plan and any other Restrictions expressly designated
by the Board in an Award Agreement as a Continuing Restriction.
"CORPORATION" means Sonus Corp., an Alberta, Canada, corporation as it
may be continued to the Yukon Territories, or any successor corporation.
"DISABILITY" means the condition of being "disabled" within the meaning
of Section 22(e)(3) of the Code. However, the Board may change the foregoing
definition of "Disability" or may adopt a different definition for purposes of
specific Awards.
"DOLLARS" OR "$" means United States dollars.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
and in effect from time to time, or any successor statute. Where the context so
requires, any reference to a particular section of the Exchange Act, or to any
rule promulgated under the Exchange Act, shall be construed to refer to
successor provisions to such section or rule.
"FAIR MARKET VALUE" of a Share on a particular day means, without
regard to any Restrictions, the mean between the reported high and low sale
prices, or, if there is no sale on such day, the mean between the reported bid
and asked prices, for that day, of Shares on that day or, if that day is not a
trading day, the last prior trading day, on the principal securities exchange or
automated securities interdealer quotation system on which such Shares shall
have been traded.
"INCENTIVE STOCK OPTION" or "ISO" means any Option granted pursuant to
the Plan that is intended to be and is specifically designated in its Award
Agreement as an "incentive stock option" within the meaning of Section 422 of
the Code.
"NONEMPLOYEE DIRECTOR" means a member of the Board who is not an
employee of Corporation or a Subsidiary.
"NONQUALIFIED OPTION" or "NQO" means any Option granted pursuant to the
Plan that is not an Incentive Stock Option.
"OPTION" means an ISO or an NQO.
"OTHER STOCK-BASED AWARD" means an Award as described in Section 11.1.
"PARTICIPANT" means an employee or Consultant of Corporation or a
Subsidiary or a Nonemployee Director who is granted an Award under the Plan.
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"PERFORMANCE AWARD" means an Award granted pursuant to the provisions
of Article 10 of the Plan, the Vesting of which is contingent on attaining one
or more Performance Goals.
"PERFORMANCE CYCLE" means a designated performance period pursuant to
the provisions of Section 10.3 of the Plan.
"PERFORMANCE GOAL" means a designated performance objective pursuant to
the provisions of Section 10.4 of the Plan.
"PLAN" means this Sonus Corp. Stock Award Plan, as amended and restated
as set forth herein and as it may be hereafter amended from time to time.
"REPORTING PERSON" means a Participant who is subject to the reporting
requirements of Section 16(a) of the Exchange Act.
"RESTRICTED UNIT" means an Award of stock units representing Shares
described in Section 9.1 of the Plan.
"RESTRICTION" means a provision in the Plan or in an Award Agreement
which limits the exercisability or transferability, or which governs the
forfeiture, of an Award or the Shares, cash, or other property payable pursuant
to an Award.
"RETIREMENT" means:
(a) For Participants who are employees, retirement from active
employment with Corporation and its Subsidiaries at or after age 65, or
such earlier retirement date as approved by the Board for purposes of
the Plan;
(b) For Participants who are Nonemployee Directors, termination of
membership on the Board after attaining age 65, or such earlier
retirement date as approved by the Board for purposes of the Plan; and
(c) For individual Participants who are Consultants, termination
of service as a Consultant after attaining a retirement age specified
by the Board for purposes of an Award to such Consultant.
However, the Board may change the foregoing definition of "Retirement" or may
adopt a different definition for purposes of specific Awards.
"SHARES" means the Common Shares without nominal or par value of
Corporation or any security of Corporation issued in substitution, exchange, or
in lieu of such securities.
"STOCK APPRECIATION RIGHT" or "SAR" means an Award described in Article
8 of the Plan.
"STOCK OPTION PLAN" means the Corporation's incentive stock option plan
adopted effective November 18, 1993.
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"SUBSIDIARY" means a "subsidiary corporation" of Corporation within the
meaning of Section 425 of the Code, namely any corporation in which Corporation
directly or indirectly controls 50 percent or more of the total combined voting
power of all classes of stock having voting power.
"VEST" or "VESTED" means:
(a) In the case of an Award that requires exercise, to be or to
become immediately and fully exercisable and free of all Restrictions
(other than Continuing Restrictions);
(b) In the case of an Award that is subject to forfeiture, to be
or to become nonforfeitable, freely transferable, and free of all
Restrictions (other than Continuing Restrictions);
(c) In the case of an Award that is required to be earned by
attaining specified Performance Goals, to be or to become earned and
nonforfeitable, freely transferable, and free of all Restrictions
(other than Continuing Restrictions); or
(d) In the case of any other Award as to which payment is not
dependent solely upon the exercise of a right, election, or option, to
be or to become immediately payable and free of all Restrictions
(except Continuing Restrictions).
2.2 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine or feminine terminology used in the Plan shall also include the
opposite gender; and the definition of any term in Section 2.1 in the singular
shall also include the plural, and vice versa.
ARTICLE 3
ADMINISTRATION
3.1 GENERAL. Except as provided in Section 3.2, the Plan shall be
administered by the Board.
3.2 COMMITTEE. The Board may delegate administration of the Plan to a
committee of two or more Nonemployee Directors. In the event the Board delegates
administration to such a committee, the committee will have all the authority of
the Board with respect to administration of the Plan, other than the authority
to grant Awards to Nonemployee Directors, which authority shall reside
exclusively with the Board, and subject to any additional limits on such
delegation imposed by the Board.
3.3 AUTHORITY OF THE BOARD. The Board shall have full power and
authority to administer the Plan in its sole discretion, including the authority
to:
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(a) Construe and interpret the Plan and any Award Agreement;
(b) Promulgate, amend, and rescind rules and procedures relating
to the implementation of the Plan;
(c) With respect to Participants:
(i) Select the employees, Nonemployee Directors, and
Consultants who will be granted Awards;
(ii) Determine the number and types of Awards to be granted
to each Participant;
(iii) Determine the number of Shares, or Share equivalents,
to be subject to each Award;
(iv) Determine the option price, purchase price, base price,
or similar feature for any Award; and
(v) Determine all the terms and conditions of all Award
Agreements, consistent with the requirements of the Plan and
subject to approval, to the extent required, by any regulatory
authority having jurisdiction over Awards granted under the Plan.
Decisions of the Board, or any delegate as permitted by the Plan, will be final,
conclusive, and binding on all Participants.
3.4 LIABILITY OF BOARD MEMBERS. No member of the Board will be liable
for any action or determination made in good faith with respect to the Plan, any
Award, or any Participant.
3.5 COSTS OF PLAN. The costs and expenses of administering the Plan
will be borne by Corporation.
ARTICLE 4
DURATION OF THE PLAN AND SHARES SUBJECT TO THE PLAN
4.1 DURATION OF THE PLAN. The Sonus Corp. Stock Award Plan initially
became effective December 10, 1996, subject to approval by Corporation's
shareholders as provided in Article 16 of the Plan. The Plan will remain in
effect until Awards have been granted covering all the available Shares or the
Plan is otherwise terminated by the Board. Termination of the Plan will not
affect outstanding Awards.
4.2 Shares Subject to the Plan.
4.2.1 GENERAL. The shares which may be made subject to Awards under the
Plan are Shares, which may be either authorized and unissued Shares or
reacquired Shares. No fractional Shares may be issued under the Plan.
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4.2.2 MAXIMUM NUMBER OF SHARES. The maximum number of Shares for which
Awards may be granted under the Plan is 2,500,000 Shares, subject to adjustment
pursuant to Article 13 of the Plan; provided that the maximum number of Shares
issuable under the Plan may not exceed the number permitted by the regulations,
guidelines or policies of any regulatory authority having jurisdiction over the
issuance of Shares pursuant to the Plan.
4.2.3 AVAILABILITY OF SHARES FOR FUTURE AWARDS. If an Award under the
Plan is canceled or expires for any reason prior to having been fully Vested or
exercised by a Participant or is settled in cash in lieu of Shares or is
exchanged for other Awards, all Shares covered by such Awards will be made
available for future Awards under the Plan. Furthermore, any Shares covered by a
Stock Appreciation Right which are not issued upon exercise will become
available for future Awards.
ARTICLE 5
ELIGIBILITY
Officers and other key employees of Corporation and its Subsidiaries
(who may also be directors of Corporation or a Subsidiary), Consultants, and
Nonemployee Directors who, in the Board's judgment, are or will be contributors
to the long-term success of Corporation shall be eligible to receive Awards
under the Plan.
ARTICLE 6
AWARDS
6.1 TYPES OF AWARDS. The types of Awards that may be granted under the
Plan are:
(a) Options governed by Article 7 of the Plan;
(b) Stock Appreciation Rights governed by Article 8 of the Plan;
(c) Restricted Units governed by Article 9 of the Plan;
(d) Performance Awards governed by Article 10 of the Plan; and
(e) Other Stock-Based Awards or combination Awards governed by Article
11 of the Plan.
In the discretion of the Board, any Award may be granted alone, in addition to,
or in tandem with other Awards under the Plan.
6.2 GENERAL. Subject to the limitations of the Plan, the Board may
cause Corporation to grant Awards to such Participants, at such times, of such
types, in such amounts, for such periods, with such option prices, purchase
prices, or base prices, and subject to such terms, conditions, limitations, and
restrictions as the Board, in its discretion, deems appropriate; provided that
all Awards granted under the Plan are subject to approval by any regulatory
authority having jurisdiction over such grants. Awards may be granted as
additional compensation to a Participant or in lieu of other compensation to
such Participant. A Participant
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may receive more than one Award and more than one type of Award under the Plan,
subject to approval, to the extent required, by any regulatory authority having
jurisdiction over Awards granted under the Plan.
6.3 NONUNIFORM DETERMINATIONS. The Board's determinations under the
Plan or under one or more Award Agreements, including, without limitation, the
selection of Participants to receive Awards, the type, form, amount, and timing
of Awards, the terms of specific Award Agreements, and elections and
determinations made by the Board with respect to exercise or payments of Awards,
need not be uniform and may be made by the Board selectively among Participants
and Awards, whether or not Participants are similarly situated.
6.4 AWARD AGREEMENTS. Each Award will be evidenced by a written Award
Agreement between Corporation and the Participant. Award Agreements, or the form
thereof, must be approved by the Board and may, subject to the provisions of the
Plan, contain any provision approved by the Board, subject to approval, to the
extent required, by any regulatory authority having jurisdiction over Awards
granted under the Plan.
6.5 PROVISIONS GOVERNING ALL AWARDS. All Awards will be subject to the
following provisions:
(a) ALTERNATIVE AWARDS. If any Awards are designated in their Award
Agreements as alternative to each other, the exercise of all or part of one
Award automatically will cause an immediate equal (or pro rata)
corresponding termination of the other alternative Award or Awards.
(b) RIGHTS AS SHAREHOLDERS. No Participant will have any rights of a
shareholder with respect to Shares subject to an Award until such Shares are
issued in the name of the Participant.
(c) EMPLOYMENT RIGHTS. Neither the adoption of the Plan nor the
granting of any Award will confer on any person the right to continued
employment with Corporation or any Subsidiary or the right to remain as a
director of or a consultant to Corporation or any Subsidiary, as the case
may be, and will not interfere in any way with the right of Corporation or a
Subsidiary to terminate such person's employment or to remove such person as
a Consultant or as a director at any time for any reason or for no reason,
with or without cause.
(d) TERMINATION OF EMPLOYMENT. The terms and conditions under which an
Award may be exercised, if at all, after a Participant's termination of
employment or service as a Nonemployee Director or Consultant will be
determined by the Board and specified in the applicable Award Agreement,
subject to approval, to the extent required, by any regulatory authority
having jurisdiction over Awards granted under the Plan.
(e) CHANGE IN CONTROL. The Board, in its discretion, may provide in
any Award Agreement that in the event of a change in control of Corporation
(as the Board may define such term in the Award Agreement), as of the date
of such change in control:
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(i) All, or a specified portion of, Awards requiring exercise
will become fully and immediately exercisable, notwithstanding any
other limitations on exercise;
(ii) All, or a specified portion of, Awards subject to
Restrictions will become fully Vested; and
(iii) All, or a specified portion of, Awards subject to
Performance Goals will be deemed to have been fully earned.
The Board, in its discretion, may include change in control provisions in
some Award Agreements and not in others, may include different change in
control provisions in different Award Agreements, and may include change in
control provisions for some Awards or some Participants and not for others.
(f) REPORTING PERSONS. Notwithstanding anything in the Plan to the
contrary, the Board, in its sole discretion, may bifurcate the Plan so as to
restrict, limit, or condition the use of any provision of the Plan to
Participants who are Reporting Persons without so restricting, limiting or
conditioning the Plan with respect to other Participants.
(g) SERVICE PERIODS. At the time of granting Awards, the Board may
specify, by resolution or in the Award Agreement, the period or periods of
service performed or to be performed by the Participant in connection with
the grant of the Award.
(h) NONTRANSFERABILITY. Each Award shall not be transferable or
assignable otherwise than by will or the laws of descent and distribution
and shall be exercisable (if exercise is required) during the lifetime of
the Participant, only by the Participant or, in the event the Participant
becomes legally incompetent, by the Participant's guardian or legal
representative.
ARTICLE 7
OPTIONS
7.1 TYPES OF OPTIONS. Options granted under the Plan may be in the
form of Incentive Stock Options or Nonqualified Options. The grant of each
Option and the Award Agreement governing each Option will identify the Option as
an ISO or an NQO. In the event the Code is amended to provide for tax-favored
forms of stock options other than or in addition to Incentive Stock Options, the
Board may grant Options under the Plan meeting the requirements of such forms of
options.
7.2 GENERAL. Options will be subject to the terms and conditions set
forth in Article 6 of the Plan and this Article 7 and may contain such
additional terms and conditions, not inconsistent with the express provisions of
the Plan, as the Board deems desirable, subject to approval by any regulatory
authority having jurisdiction over Awards granted under the Plan.
7.3 OPTION PRICE. Each Award Agreement for Options will state the
option exercise price per Share of Common Stock purchasable under the Option,
which will not be less than:
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(a) 75 percent of the Fair Market Value of a Share on the date of grant
for all Nonqualified Options; or
(b) 100 percent of the Fair Market Value of a Share on the date of
grant for all Incentive Stock Options;
provided that at no time shall the option exercise price of an Option at the
date of grant be greater or less than that permitted under the regulations,
guidelines or policies of any regulatory authority having jurisdiction over
Awards granted under the Plan.
7.4 OPTION TERM. The Award Agreement for each Option will specify the
term during which the Option may be exercised, as determined by the Board,
subject to approval by any regulatory authority having jurisdiction over Awards
granted under the Plan.
7.5 TIME OF EXERCISE. The Award Agreement for each Option will specify,
as determined by the Board:
(a) The time or times when the Option will become exercisable and
whether the Option will become exercisable in full or in graduated amounts
over a period specified in the Award Agreement;
(b) Such other terms, conditions, and restrictions as to when the
Option may be exercised as are determined by the Board; and
(c) The extent, if any, to which the Option will remain exercisable
after the Participant ceases to be an employee, Consultant or Nonemployee
Director of Corporation or a Subsidiary;
in each case, subject to approval by any regulatory authority having
jurisdiction over Awards granted under the Plan. An Award Agreement for an
Option may, in the discretion of the Board, provide whether, and to what extent,
the Option will become immediately and fully exercisable (i) in the event of the
death, Disability, or Retirement of the Participant, or (ii) upon the occurrence
of a change in control of Corporation.
7.6 METHOD OF EXERCISE. The Award Agreement for each Option will
specify the method or methods of payment acceptable upon exercise of an
Option. An Award Agreement may provide that the option price is payable in
full in cash or, at the discretion of the Board, by delivery (in a form
approved by the Board) of an irrevocable direction to a securities broker
acceptable to the Board (i) to sell Shares subject to the Option and to
deliver all or a part of the sales proceeds to Corporation in payment of all
or a part of the option price and withholding taxes due, or (ii) to pledge
Shares subject to the Option to the broker as security for a loan and to
deliver all or a part of the loan proceeds to Corporation in payment of all
or a part of the option price and withholding taxes due.
7.7 SPECIAL RULES FOR INCENTIVE STOCK OPTIONS. In the case of an Option
designated as an Incentive Stock Option, the terms of the Option and the
Award Agreement shall be in conformance with the statutory and regulatory
requirements specified in Section 422 of the Code, as in effect on the date
such ISO is granted. ISOs may not be granted under the Plan after
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December 9, 2006, unless the ten-year limitation of Section 422(b)(2) of the
Code is removed or extended.
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1 GENERAL. Stock Appreciation Rights will be subject to the terms and
conditions set forth in Article 6 of the Plan and this Article 8 and may contain
such additional terms and conditions, not inconsistent with the express terms of
the Plan, as the Board deems desirable, subject to approval, to the extent
required, by any regulatory authority having jurisdiction over Awards granted
under the Plan.
8.2 NATURE OF STOCK APPRECIATION RIGHT. A Stock Appreciation Right (or
SAR) is an Award entitling a Participant to receive an amount equal to the
excess (or if the Board determines at the time of grant, a portion of the
excess) of the Fair Market Value of a Share on the date of exercise of the SAR
over the base price, as described below, on the date of grant of the SAR,
multiplied by the number of Shares with respect to which the SAR is exercised.
The base price will be designated by the Board in the Award Agreement for the
SAR and may be the Fair Market Value of a Share on the grant date of the SAR or
such other higher or lower price as the Board determines.
8.3 EXERCISE. A Stock Appreciation Right may be exercised by a
Participant in accordance with procedures established by the Board. The Board
may also provide that a SAR will be automatically exercised on one or more
specified dates or upon the satisfaction of one or more specified conditions.
8.4 FORM OF PAYMENT. Payment upon exercise of a Stock Appreciation
Right may be made in cash, in installments, in Shares, or in any other form or
combination of such methods as the Board shall determine.
ARTICLE 9
RESTRICTED UNITS
9.1 NATURE OF RESTRICTED UNITS. A Restricted Unit is an Award of stock
units (with each unit having a value equivalent to one Share) granted to a
Participant subject to such terms and conditions as the Board deems appropriate,
and may include a requirement that the Participant forfeit such Restricted Units
upon termination of Participant's employment (or service as a Consultant or
Nonemployee Director) for specified reasons within a specified period of time or
upon other conditions, as set forth in the Award Agreement for such Restricted
Units.
9.2 GENERAL. Restricted Units will be subject to the terms and
conditions of Article 6 of the Plan and this Article 9 and may contain such
additional terms and conditions, not inconsistent with the express provisions of
the Plan, as the Board deems desirable, subject to approval, to the extent
required, by any regulatory authority having jurisdiction over Awards granted
under the Plan.
9.3 RESTRICTION PERIOD. Restricted Units will provide that such Awards,
and the Shares subject to such Awards, may not be transferred, and may provide
that, in order for a
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Participant to Vest in such Awards, the Participant must remain in the
employment (or remain as a Consultant or Nonemployee Director) of Corporation or
its Subsidiaries, subject to relief for reasons specified in the Award
Agreement, for a period commencing on the date of grant of the Award and ending
on such later date or dates as the Board may designate at the time of the Award
(the "Restriction Period"). During the Restriction Period, a Participant may not
sell, assign, transfer, pledge, encumber, or otherwise dispose of Shares
underlying Restricted Units. The Board, in its sole discretion, may provide for
the lapse of restrictions in installments during the Restriction Period. Upon
expiration of the applicable Restriction Period (or lapse of Restrictions during
the Restriction Period where the Restrictions lapse in installments) the
Participant will be entitled to settlement of the Restricted Units or portion
thereof, as the case may be. Although Restricted Units usually will Vest based
on continued employment (or continued service as a Consultant or Nonemployee
Director) and Performance Awards under Article 10 of the Plan will usually Vest
based on attainment of Performance Goals, the Board, in its discretion, may
condition Vesting of Restricted Units on attainment of Performance Goals as well
as continued employment (or continued service as a Consultant or Nonemployee
Director). In such case, the Restriction Period for such Restricted Units will
include the period prior to satisfaction of the Performance Goals.
9.4 FORFEITURE. If a Participant ceases to be an employee (or
Consultant or Nonemployee Director) of Corporation or a Subsidiary during the
Restriction Period for any reason other than reasons which may be specified in
an Award Agreement (such as death, Disability, or Retirement) the Award
Agreement may require that all non-Vested Restricted Units previously granted to
the Participant be forfeited and returned to Corporation.
9.5 SETTLEMENT OF VESTED RESTRICTED UNITS. Upon Vesting of an Award (or
portion thereof) of Restricted Units, a Participant will be entitled to receive
payment for Restricted Units in an amount equal to the aggregate Fair Market
Value of the number of Shares covered by such Restricted Units at the expiration
of the applicable Restriction Period. Payment in settlement of a Restricted Unit
will be made as soon as practicable following the conclusion of the applicable
Restriction Period in cash, in installments, in Shares equal to the number of
Restricted Units, or in any other form or combination of such methods as the
Board, in its sole discretion, determines.
ARTICLE 10
PERFORMANCE AWARDS
10.1 GENERAL. Performance Awards will be subject to the terms and
conditions set forth in Article 6 of the Plan and this Article 10 and may
contain such other terms and conditions not inconsistent with the express
provisions of the Plan, as the Board deems desirable, subject to approval, to
the extent required, by any regulatory authority having jurisdiction over Awards
granted under the Plan.
10.2 NATURE OF PERFORMANCE AWARDS. A Performance Award is an Award of
stock units (with each unit having a value equivalent to one Share) granted to a
Participant subject to such terms and conditions as the Board deems appropriate,
including, without limitation, the requirement that the Participant forfeit such
Performance Award or a portion of
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such Award in the event specified Performance Goals are not met within a
designated Performance Cycle.
10.3 PERFORMANCE CYCLES. For each Performance Award, the Board will
designate a performance period (the "Performance Cycle") with a duration to be
determined by the Board in its discretion within which specified Performance
Goals are to be attained. There may be several Performance Cycles in existence
at any one time and the duration of Performance Cycles for specific Awards may
differ from each other.
10.4 PERFORMANCE GOALS. For each Performance Award, the Board will
establish Performance Goals on the basis of such criteria and to accomplish such
objectives as the Board may from time to time select. Performance Goals may be
based on performance criteria for Corporation, a Subsidiary, or an operating
group or division, or based on a Participant's individual performance.
Performance Goals may include objective and subjective criteria. During any
Performance Cycle, the Board may adjust the Performance Goals for such
Performance Cycle as it deems equitable in recognition of unusual or
nonrecurring events affecting Corporation, changes in applicable tax laws or
accounting principles, or such other factors as the Board may determine.
10.5 DETERMINATION OF VESTED AWARDS. As soon as practicable after the
end of a Performance Cycle, the Board will determine the extent to which
Performance Awards have been earned on the basis of performance in relation to
the established Performance Goals.
10.6 TIMING AND FORM OF PAYMENT. Settlement of earned Performance
Awards will be made to the Participant as soon as practicable after the
expiration of the Performance Cycle and the Board's determination under Section
10.5, in the form of cash, installments, or Shares, or in any form or
combination of such methods as the Board determines.
ARTICLE 11
OTHER STOCK-BASED AND COMBINATION AWARDS
11.1 OTHER STOCK-BASED AWARDS. The Board may grant other Awards under
the Plan pursuant to which Shares are or may in the future be acquired, or
Awards denominated in or measured by Share equivalent units, including Awards
valued using measures other than the market value of Shares. Such Other
Stock-Based Awards may be granted either alone, in addition to, or in tandem
with, any other type of Award granted under the Plan.
11.2 COMBINATION AWARDS. The Board may also grant Awards under the Plan
in tandem or combination with other Awards or in exchange of Awards, or in
tandem or combination with, or as alternatives to, grants or rights under any
other employee plan of Corporation, including the plan of any acquired entity.
No action authorized by this section will reduce the amount of any existing
benefits or change the terms and conditions thereof without the Participant's
consent.
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ARTICLE 12
DEFERRAL ELECTIONS
The Board may permit a Participant to elect to defer receipt of the
payment of cash or the delivery of Shares that would otherwise be due to such
Participant by virtue of the exercise, earn-out, or Vesting of an Award made
under the Plan. If any such election is permitted, the Board will establish
rules and procedures for such payment deferrals, including, but not limited to,
payment or crediting of a growth factor on such deferred amounts credited in
cash.
ARTICLE 13
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC.
13.1 PLAN DOES NOT RESTRICT CORPORATION. The existence of the Plan and
the Awards granted under the Plan will not affect or restrict in any way the
right or power of the Board or the shareholders of Corporation to make or
authorize any adjustment, recapitalization, reorganization, or other change in
Corporation's capital structure or its business, any merger or consolidation of
the Corporation, any issue of bonds, debentures, preferred or prior preference
stocks ahead of or affecting Corporation's capital stock or the rights thereof,
the dissolution or liquidation of Corporation or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding.
13.2 ADJUSTMENTS BY THE BOARD. In the event of any change in
capitalization affecting the Shares of Corporation, such as a stock dividend,
stock split, recapitalization, merger, consolidation, split-up, combination or
exchange of shares or other form of reorganization, or any other change
affecting the Shares, such proportionate adjustments as the Board, in its sole
discretion, deems appropriate to reflect such change, will be made with respect
to the aggregate number of Shares for which Awards in respect thereof may be
granted under the Plan, the maximum number of Shares which may be sold or
awarded to any Participant, the number of Shares covered by each outstanding
Award, and the price per Share in respect of outstanding Awards. The Board may
also make such adjustments in the number of Shares covered by, and price or
other value of any outstanding Awards in the event of a spin-off or other
distribution (other than normal cash dividends), of Corporation assets to
shareholders.
ARTICLE 14
AMENDMENT AND TERMINATION
Without further approval of Corporation's shareholders, the Board may
at any time terminate the Plan, or may amend it from time to time in such
respects as the Board may deem advisable; provided that the Board may not,
without approval of the shareholders, make any amendment that would materially
increase the aggregate number of Shares that may be issued under the Plan
(except for adjustments pursuant to Article 13 of the Plan); and provided
further that any amendment of the Plan shall be subject to approval, to the
extent required, by any regulatory authority having jurisdiction over the Plan.
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ARTICLE 15
MISCELLANEOUS
15.1 Tax Withholding.
15.1.1 GENERAL. Corporation will have the right to deduct from any
settlement of any Award under the Plan, including the delivery or vesting of
Shares, any taxes of any kind required by the laws of any Canadian or U.S.
jurisdiction to be withheld with respect to such payments or to take such other
action as may be necessary in the opinion of Corporation to satisfy all
obligations for the payment of such taxes. The recipient of any payment or
distribution under the Plan may be required to make arrangements satisfactory to
Corporation for the satisfaction of any such withholding tax obligations,
whether or not such recipient is an employee of Corporation or a Subsidiary on
the date of such settlement. Corporation will not be required to make any such
payment or distribution under the Plan until such obligations are satisfied.
15.1.2 STOCK WITHHOLDING. The Board, in its sole discretion, may
permit a Participant to satisfy all or a part of the withholding tax obligations
incident to the settlement of an Award involving payment or delivery of Shares
to the Participant by having Corporation withhold a portion of the Shares that
would otherwise be issuable to the Participant. Such Shares will be valued based
on their Fair Market Value on the date the tax withholding is required to be
made.
15.2 UNFUNDED PLAN. The Plan will be unfunded and Corporation shall
not be required to segregate any assets that may at any time be represented by
Awards under the Plan. Any liability of Corporation to any person with respect
to any Award under the Plan will be based solely upon any contractual
obligations that may be effected pursuant to the Plan. No such obligation of
Corporation shall be deemed to be secured by any pledge of, or other encumbrance
on, any property of Corporation.
15.3 PAYMENTS TO TRUST. The Board is authorized to cause to be
established a trust agreement or several trust agreements whereunder the Board
may make payments of amounts due or to become due to Participants in the Plan.
However, the Board has no obligation to establish such a trust or fund.
15.4 ANNULMENT OF AWARDS. Any Award Agreement may provide that the
grant of an Award payable in cash is provisional until cash is paid in
settlement of such Award or that the grant of an Award payable in Shares is
provisional until the Participant becomes entitled to the stock certificate in
settlement of such Award. In the event the employment (or service as a
Consultant or Nonemployee Director) of a Participant is terminated for cause (as
defined below), any Award that is provisional will be annulled as of the date of
such termination for cause. For the purpose of this Section 15.4, the term "for
cause" will have the meaning set forth in the Participant's employment
agreement, if any, or otherwise means any discharge (or removal) for material or
flagrant violation of the policies and procedures of Corporation or for other
job performance or conduct that is materially detrimental to the best interests
of Corporation, as determined by the Board.
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15.5 ENGAGING IN COMPETITION WITH CORPORATION. Any Award Agreement
may provide that, if a Participant terminates employment with Corporation or a
Subsidiary for any reason whatsoever, and within 18 months after the date of
such termination accepts employment with any competitor of (or otherwise engages
in competition with) Corporation, the Board, in its sole discretion, may require
such Participant to return to Corporation the economic value of any Award that
is realized or obtained (measured at the date of exercise, Vesting, or payment)
by such Participant at any time during the period beginning on the date that is
six months prior to the date of such Participant's termination of employment
with Corporation.
15.6 OTHER CORPORATION BENEFIT AND COMPENSATION PROGRAMS. Payments
and other benefits received by a Participant under an Award made pursuant to the
Plan will not be deemed a part of a Participant's regular, recurring
compensation for purposes of the termination indemnity or severance pay law of
any state or country and will not be included in, or have any effect on, the
determination of benefits under any other employee benefit plan or similar
arrangement provided by Corporation or a Subsidiary unless expressly so provided
by such other plan or arrangements, or except where the Board expressly
determines that an Award or portion of an Award should be included to accurately
reflect competitive compensation practices or to recognize that an Award has
been made in lieu of a portion of cash compensation. Awards under the Plan may
be made in combination with or in tandem with, or as alternatives to, grants,
awards, or payments under any other Corporation or Subsidiary plans,
arrangements, or programs. The Plan notwithstanding, Corporation or any
Subsidiary may adopt such other compensation programs and additional
compensation arrangements as it deems necessary to attract, retain, and reward
employees and directors for their service with Corporation and its Subsidiaries.
15.7 SECURITIES LAW RESTRICTIONS. No Shares will be issued under the
Plan unless counsel for Corporation is satisfied that such issuance will be in
compliance with the applicable securities laws of any Canadian or U.S.
jurisdiction. Certificates for Shares delivered under the Plan may be subject to
such stop-transfer orders and other restrictions as the Board deems advisable
under the rules, regulations, and other requirements of the Securities and
Exchange Commission, the Alberta or British Columbia Securities Commissions, any
stock exchange upon which the Shares are then listed, and any applicable
securities law. The Board may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
15.8 GOVERNING LAW. Except with respect to references to the Code or
applicable securities laws, the Plan and all actions taken thereunder will be
governed by and construed in accordance with the laws of the State of Oregon.
ARTICLE 16
SHAREHOLDER APPROVAL
The adoption of the Plan, as amended and restated effective October 15,
1997, and any grant of Awards under the Plan are expressly subject to the
approval of the Plan by the shareholders at the 1997 annual meeting of
Corporation's shareholders. In the event that such shareholder approval is
received, no additional stock options will be granted thereafter under the
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Stock Option Plan and such plan will immediately terminate; provided that such
termination will have no effect on any options previously granted thereunder.
