<PAGE> 1
EXHIBIT 4(d)
MEDIA METRIX, INC.
2000 EQUITY INCENTIVE PLAN
1. Purpose. The purpose of the Media Metrix Inc. 2000 Equity
Incentive Plan is to establish a flexible vehicle through which Media Metrix
Inc. can offer equity-based compensation incentives to eligible recipients with
a view toward promoting the long-term financial success of Media Metrix Inc. and
enhancing stockholder value. Awards under the Plan may be in the form of one or
more of the following: (a) Options to purchase shares of Common Stock, including
Incentive Stock Options and Non-Qualified Stock Options, (b) Stock Appreciation
Rights, (c) Restricted Stock, (d) Performance-Based Awards, and (e) Other
Stock-Based Awards. In addition, Non-Employee Directors shall receive automatic
grants of Non-Qualified Stock Options under the Plan.
2. Definitions. For purposes of the Plan, the following terms shall
have the following meanings:
(a) "Affiliate" shall mean an affiliate within the meaning of
Rule 12b-2 under the Exchange Act.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Cause" shall mean, except as otherwise provided by the
Committee at the time of grant: (i) in a case where there is no employment or
consulting agreement between the recipient and the Company or its Affiliates or
where such an agreement exists but does not define "cause" (or words of like
import), a termination classified by the Company or its Affiliates as a
termination due to an individual's dishonesty, fraud, insubordination, willful
misconduct or refusal to perform services, or (ii) in a case where there is an
employment or consulting agreement between the recipient and the Company or its
Affiliates, a termination that is or would be deemed for "cause" (or words of
like import) under such agreement. Notwithstanding the foregoing, in the case of
a director of the Company, Cause shall mean an act or failure to act that
constitutes "cause" for removal of a director under applicable Delaware law.
(d) "Change in Control" shall mean, except as otherwise
determined by the Committee at the time of grant: (i) a merger in which the
Company is not the surviving corporation or which results in the acquisition of
all or substantially all of the Company's outstanding shares of Common Stock by
a single person or entity or by a group of persons and/or entities acting in
concert, or (ii) the sale or other disposition of all or substantially all of
the Company's assets.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) "Committee" shall mean the administrative committee under
the Plan as duly constituted from time to time in accordance with Section 3 of
the Plan.
<PAGE> 2
(g) "Common Stock" shall mean the Company's common stock, par
value $0.01.
(h) "Company" shall mean Media Metrix Inc., a Delaware
corporation, and its successors.
(i) "Disability" shall mean, except as otherwise provided by
the Committee at the time of grant, the inability of a participant to perform
the customary duties of his or her employment or other service for the Company
or its Affiliates by reason of a physical or mental incapacity which is expected
to result in death or be of indefinite duration.
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(k) "Fair Market Value" shall mean, as of any date, the closing
price per share of Common Stock as published by the principal national
securities exchange on which the Common Stock is traded on such date or, if
there is no sale of Common Stock on such date, the average of the bid and asked
prices on such exchange at the close of trading on such date, or if shares of
the Common Stock are not listed on a national securities exchange on such date,
the closing price or, if none, the average of the bid and asked prices in the
over the counter market at the close of trading on such date, of if the Common
Stock is not traded on a national securities exchange or the over the counter
market value of a share of the Common Stock on such date as determined in good
faith by the Committee.
(l) "Incentive Stock Option" or "ISO" shall mean any Option
that is intended to be an "incentive stock option" within the meaning of Section
422 of the Code.
(m) "Non-Employee Director" shall mean any member of the Board
who is not employed by or a consultant to the Company of any of its Affiliates.
(n) "Non-Qualified Stock Option" or "NQSO" shall mean any
Option that is not an Incentive Stock Option.
(o) "Option" shall mean an option to purchase shares of Common
Stock awarded under the Plan.
(p) "Other Stock-Based Award" shall mean any stock-based award
awarded under the Plan.
(q) "Parent" shall mean any "parent corporation" of the Company
within the meaning of Section 424(e) of the Code.
(r) "Performance-Based Award" shall mean any performance-based
award awarded under the Plan.
- 2 -
<PAGE> 3
(s) "Plan" shall mean this Media Metrix Inc. 2000 Equity
Incentive Plan, as amended from time to time.
(t) "Restricted Stock" shall mean any restricted share of
Common Stock awarded under the Plan.
(u) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(v) "Stock Appreciation Right" or "SAR" shall mean any stock
appreciation right awarded under the Plan.
(w) "Subsidiary" shall mean any "subsidiary corporation" of the
Company within the meaning of Section 424(f) of the Code.
(x) "Ten Percent Stockholder" shall mean a person owning stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or its Subsidiaries or Parents.
3. Administration.
(a) Committee. The Plan will be administered by Committee of
two (2) or more members by the Board. The members of the Committee will be
appointed by, and serve at the pleasure of, the Board. Unless the Board
determines otherwise, each member of the Committee will be a "non-employee
director" within the meaning of Rule 16b-3 under the Exchange and an "outside
director" within the meaning of Section 162(m) of the Code. If for any reason
the appointed Committee does not comply with the requirements of Rule 16b-3 or
Section 162(m) of the Code, such non-compliance will not affect the validity of
any awards, grants, interpretations or other actions of the Committee. The Plan
will be administered by the Board with respect to discretionary grants made to
Non-Employee Directors. Notwithstanding anything herein to the contrary, the
Board may, in its sole discretion, at any time and from time to time, grant
awards under the Plan or administer the Plan. In such event, the Board shall
have all of the authority and responsibility granted to the Committee herein.
(b) Authority of Committee. Subject to the limitations of the
Plan, the Committee, acting in its sole and absolute discretion, will have full
power and authority to: (i) select the persons to whom awards will be granted
under the Plan, (ii) grant awards to such persons and prescribe the terms and
conditions of such awards (including, but not limited to, the exercise or
purchase price (if any), and any vesting or forfeiture conditions applicable to
such awards), (iii) interpret and apply the provisions of the Plan and of any
agreement or other document evidencing an award made under the Plan, (iv) carry
out any responsibility or duty specifically reserved to the Committee under the
Plan, and (v) make any and all determinations and interpretations and take such
other actions as may be necessary or desirable in order to carry out the
provisions, intent and purposes of the Plan. A majority of the members of the
Committee will constitute a quorum. The
- 3 -
<PAGE> 4
Committee may act by the vote of a majority of its members present at a meeting
at which there is a quorum or by unanimous written consent. The decisions of the
Committee, including with regard to questions of construction, interpretation
and administration, will be final, binding and conclusive on all persons.
(c) Indemnification. The Company will indemnify and hold
harmless each member of the Committee and the Board and any employee of the
Company or its Affiliates who provides assistance with the administration of the
Plan from and against any loss, cost, liability (including any sum paid in
settlement of a claim with the approval of the Board), damage and expense
(including legal and other expenses incident thereto) arising out of or incurred
in connection with the Plan, unless and except to the extent attributable to
such person's fraud or wilful misconduct.
4. Eligibility. Awards may be granted under the Plan to any member of
the Board (whether or not an employee of the Company or its Affiliates), to any
officer or other employee of the Company or its Affiliates and to any consultant
or other independent contractor who performs or will perform services for the
Company or its Affiliates. In addition, Non-Employee Directors shall receive
automatic grants of Non-Qualified Options under the Plan.
5. Available Shares.
(a) Aggregate Number of Shares. Subject to adjustment as
provided in Section 14, the maximum number of shares of Common Stock that may be
issued, or used for reference purposes, under the Plan shall not exceed
2,000,000 shares. Notwithstanding the foregoing, the maximum number of shares
that may be issued, or used for reference purposes, under the Plan will
automatically increase on the first trading day of each calendar year, beginning
with the 2001 calendar year, by an amount equal to the lesser of (i) four
percent (4%) of the total number of shares of Common Stock outstanding on the
last trading day of the immediately preceding calendar year or (ii) 1,000,000
shares (as adjusted pursuant to Section 14), provided that in no event shall
such maximum number of shares exceed 6,000,000 shares (as adjusted pursuant to
Section 14) during the term of the Plan. In determining the number of shares
that remain available for issuance or reference purposes under the Plan at any
time, the following shares will be deemed not to have been issued, or used for
reference purposes, under the Plan: (i) shares underlying an Option or Stock
Appreciation Right that terminates, expires or is canceled without having been
exercised in full, (ii) shares of Restricted Stock and shares covered by a
Performance-Based Award or Other Stock-Based Award that are forfeited in
accordance with the terms of the applicable award, and (iii) shares that are
withheld in order to pay the exercise price of Options or to satisfy the minimum
tax withholding obligations associated with Options or other awards. The number
of shares of Common Stock issued in connection with the exercise of an Option
will be determined net of any previously-owned shares tendered by the holder of
the Option in payment of the exercise price or of any applicable withholding
taxes. Any shares of Common Stock that are issued by the Company, and any awards
that are granted through the assumption of, or in substitution for, outstanding
awards previously granted by an acquired entity shall not be counted against the
shares of Common Stock available for issuance or reference purposes under the
Plan. Shares of Common Stock
- 4 -
<PAGE> 5
available for issuance under the Plan may be either authorized and unissued or
held by the Company in its treasury. No fractional shares of Common Stock may be
issued under the Plan.
(b) Employee Award Limitations. The maximum number of shares of
Common Stock with respect to which Options or SARs may be granted under the Plan
to any employee in any calendar year shall be 1,000,000. The aggregate maximum
number of shares of Common Stock subject to awards, other than Options or SARs,
that may be granted under the Plan to any employee in any calendar year shall be
1,000,000. Subject to these limitations, each person eligible to participate in
the Plan will be eligible in any year to receive awards covering up to the full
number of shares of Common Stock then available for awards under the Plan. No
more than $1,000,000 may be paid to any employee with respect to any cash
Performance-Based Award covered by Section 9. In applying this limitation,
multiple Performance-Based Awards to the same employee will be subject to a
single $1,000,000 limit if they are either (i) determined by reference to
performance periods of one year or less ending with or within the same fiscal
year of the Company, or (ii) determined by reference to one or more multi-year
performance periods ending in the same fiscal year of the Company.
6. Stock Options.
(a) ISOs and NQSOs. Subject to the provisions hereof, the
Committee may grant ISOs and NQSOs to eligible personnel to purchase shares of
Common Stock upon such terms and conditions as the Committee deems appropriate,
provided that the Committee may only grant ISOs to employees of the Company or
its Subsidiaries or Parents.
(b) Option Term. Unless sooner terminated, all Options granted
pursuant to this Section 6 will expire ten (10) years after the date the Option
is granted (or, in the case of an ISO granted to a Ten Percent Stockholder, five
(5) years).
(c) Exercise Price. The exercise price per share of Common
Stock covered by an Option granted pursuant to this Section 6 will be determined
by the Committee when the Option is granted. The exercise price per share of
Common Stock covered by a NQSO must be at least equal to 85% of the Fair Market
Value of the Common Stock on the date the Option is granted, provided that the
exercise price per share of Common Stock covered by a NQSO which is intended to
qualify for the "performance-based compensation" exception under Section
162(m)(4)(C) of the Code may not be less than the Fair Market Value of the
Common Stock on the date the Option is granted. The exercise price per share of
Common Stock covered by an ISO may not be less than 100% of the Fair Market
Value of the Common Stock on the date the ISO is granted (or, in the case of Ten
Percent Stockholder, 110% of the Fair Market Value of the Common Stock on the
date the ISO is granted).
(d) Vesting Conditions. The Committee may establish such
vesting and other restrictions on the exercise of an Option and/or upon the
disposition of the shares of Common Stock acquired upon the exercise of an
Option as it deems appropriate. If the Committee provides, in its discretion,
that any Option is exercisable upon the attainment of certain vesting conditions
(including, without limitation, that it is exercisable only in installments
based upon the attainment
- 5 -
<PAGE> 6
of specified time and/or performance criteria), the Committee may waive or
accelerate such conditions on the exercisability at any time after grant in
whole or in part.
(e) Exercise of Options. An Option may be exercised by
transmitting to the Company: (i) a notice specifying the number of shares to be
purchased, and (ii) payment of the exercise price, together with the amount, if
any, deemed necessary by the Committee to enable the Company to satisfy its
minimum federal, foreign or other tax withholding obligations with respect to
such exercise (unless other arrangements acceptable to the Committee are made
with respect to the satisfaction of such withholding obligations). The Committee
may establish such rules and procedures as it deems appropriate for the exercise
of Options. The exercise price of shares of Common Stock acquired pursuant to
the exercise of an Option may be paid in cash and/or such other form of payment
as may be permitted by the Committee from time to time, including, without
limitation, shares of Common Stock which have been owned by the holder for at
least six (6) months (free and clear of any liens and encumbrances), installment
payments pursuant to promissory note or in accordance with a "cashless exercise"
procedure established by the Committee.
(f) Rights as a Stockholder. No shares of Common Stock will be
issued in respect of the exercise of an Option until full payment therefor has
been made (and/or provided for where all or a portion of the exercise price is
being paid in installments), and the applicable income tax withholding
obligation has been satisfied or provided for. The holder of an Option will have
no rights as a stockholder with respect to any shares covered by an Option until
the date a stock certificate for such shares is issued to him or her. Except as
otherwise provided herein, no adjustments shall be made for dividend
distributions or other rights for which the record date is prior to the date
such stock certificate is issued.
(g) Other Provisions. The Committee may impose such other
conditions with respect to the exercise of Options, including, without
limitation, any conditions relating to the application of federal or state
securities laws or exchange requirements, as it may deem necessary or advisable.
7. Stock Appreciation Rights.
(a) General. Subject to the provisions hereof, the Committee
may award SARs to eligible personnel upon such terms and conditions as it deems
appropriate. A SAR is an award entitling the holder, upon exercise, to receive
an amount, in cash or shares of Common Stock or a combination thereof, as
determined by the Committee in its sole discretion, determined with reference to
the appreciation, if any, in the Fair Market Value of Common Stock during the
period beginning on the date the SAR is granted and ending on the date the SAR
is exercised.
(b) Types of SARs. SARs may be awarded under the Plan in
conjunction with an Option ("Tandem SARs") or independent of Options. Tandem
SARs awarded in conjunction with a NQSO may be awarded either at or after the
time the NQSO is granted. Tandem SARs awarded in conjunction with an ISO may
only be awarded at the time the ISO is granted.
- 6 -
<PAGE> 7
(c) Exercisability of SARs. Except as otherwise provided
herein, a Tandem SAR will be exercisable only at the same time and to the same
extent and subject to the same conditions as the related Option is exercisable.
The exercise of a Tandem SAR will cancel the related Option to the extent of the
shares of Common Stock with respect to which the SAR is exercised, and vice
versa. Tandem SARs may be exercised only when the Fair Market Value of the
Common Stock to which it relates exceeds the exercise price. The Committee may
impose such additional service or performance-based vesting conditions upon the
exercise of a SAR as it deems appropriate.
(d) Exercise of SARs. A SAR may be exercised by giving written
notice to the Company identifying the SAR that is being exercised, specifying
the number of shares covered by the exercise and containing such other
information or statements as the Committee may require. The Committee may
establish such rules and procedures as it deems appropriate for the exercise of
SARs under the Plan. Upon the exercise of a SAR, the holder will be entitled to
receive an amount (in cash and/or shares of Common Stock as determined by the
Committee) equal to the product of (i) the number of shares with respect to
which the SAR is being exercised and (ii) the difference between the Fair Market
Value of a share of Common Stock on the date the SAR is exercised and the
exercise price per share of the SAR. As a condition of exercise, the holder must
pay to the Company or make arrangements satisfactory to the Company for the
payment of applicable withholding taxes.
(e) Deferral of Payment. The Committee may at any time and from
time to time provide for the deferral of delivery of any shares and/or cash for
which an SAR may be exercisable until such date or dates and upon such other
terms and conditions as the Committee may determine.
8. Restricted Stock.
(a) General. Subject to the provisions of the Plan, the
Committee may award shares of Restricted Stock to eligible personnel upon such
terms and subject to such forfeiture and other conditions as the Committee deems
appropriate. The terms and conditions of any Restricted Stock award will be
evidenced by a written agreement or other instrument approved for this purpose
by the Committee.
(b) Stock Certificates for Restricted Stock. Unless the
Committee elects to use a different method (such as, for example, the issuance
and delivery of stock certificates) shares of Restricted Stock will be evidenced
by book entries on the Company's stock transfer records pending the expiration
of restrictions thereon. If a stock certificate for Restricted Stock is issued
in the name of the grantee, it will bear an appropriate legend to reflect the
nature of the restrictions applicable to the shares represented by the
certificate, and the Committee may require that such stock certificates be held
in custody by the Company until the restrictions on such shares have lapsed. The
Committee may establish such other conditions as it deems appropriate in
connection with the issuance of stock certificates for shares of Restricted
Stock, including, without limitation, a requirement that the grantee deliver a
duly signed stock power, endorsed in blank, for the shares covered by the award.
- 7 -
<PAGE> 8
(c) Purchase Price. The purchase price payable for shares of
Restricted Stock will be determined by the Committee. To the extent permitted by
applicable law, the purchase price may be as low as zero and, to the extent
required by the applicable law, the purchase price will be no less than the par
value of the shares covered by the award.
(d) Restrictions and Vesting. The Committee will establish such
conditions as it deems appropriate on the grant or vesting of Restricted Stock.
Such conditions may be based upon continued service, the attainment of
performance goals (which, in the case of grants of Restricted Stock intended to
qualify for the performance-based compensation exception under Section
162(m)(4)(C) of the Code, satisfy the requirements of Section 9 below) and/or
such other relevant factors or criteria designated by the Committee. The holder
of Restricted Stock will not be permitted to transfer shares before the time the
applicable vesting conditions are satisfied.
(e) Rights as a Stockholder. Except as provided herein and as
otherwise determined by the Committee, the recipient of Restricted Stock shall
have, with respect to his or her Restricted Stock, all of the rights of a holder
of shares of Common Stock, including, without limitation, the right to receive
any dividends, the right to vote such shares and, subject to satisfaction of the
applicable vesting conditions, the right to tender such shares. The Committee
may, in its sole discretion, determine at the time of grant that the payment of
dividends will be deferred until, and conditioned upon, the satisfaction of the
applicable vesting conditions.
(f) Lapse of Restrictions. If and when the vesting conditions
are satisfied with respect to a Restricted Stock award, a certificate for the
shares covered by the award, to the extent vested, will be delivered to the
grantee. All legends shall be removed from said certificates at the time of
delivery except as otherwise required by applicable law.
9. Performance-Based Awards.
(a) General. Subject to the provisions of the Plan, the
Committee may award Performance-Based Awards to eligible personnel upon, or
subject to, the attainment of such performance goals and such terms and
conditions as the Committee deems appropriate. The Committee may condition the
exercise, vesting or settlement of a Performance-Based Award on the achievement
of specified performance goals. The provisions of this Section 9 will apply in
the case of a Performance-Based Award.
(b) Objective Performance Goals. A performance goal established
in connection with a Performance-Based Award that is intended to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code must be (1) objective, so that a third party having knowledge of the
relevant facts could determine whether the goal is attained, (2) prescribed in
writing by the Committee before the beginning of the applicable performance
period or at such later date (when fulfillment is substantially uncertain) as
may be permitted under Section 162(m) of the Code, and (3) based on one or more
of the following business criteria:
- 8 -
<PAGE> 9
(i) the attainment of certain target levels of, or a
specified percentage increase in, revenues, income before income taxes
and extraordinary items, net income, earnings before income tax, earnings
before interest, taxes, depreciation and amortization or a combination of
any or all of the foregoing;
(ii) the attainment of certain target levels of, or a
percentage increase in, after-tax or pre-tax profits;
(iii) the attainment of certain target levels of, or a
specified increase in, operational cash flow;
(iv) the attainment of a certain level of, reduction of,
or other specified objectives with regard to limiting the level of
increase in, all or a portion of, the Company's bank debt or other
long-term or short-term public or private debt or other similar financial
obligations of the Company, which may be calculated net of such cash
balances and/or other offsets and adjustments as may be established by
the Committee;
(v) the attainment of a specified percentage increase in
earnings per share or earnings per share from continuing operations;
(vi) the attainment of certain target levels of, or a
specified increase in return on capital employed or return on invested
capital;
(vii) the attainment of certain target levels of, or a
percentage increase in, after-tax return on stockholders' equity;
(viii) the attainment of certain target levels of, or a
specified increase in, economic value added targets based on a cash flow
return on investment formula;
(ix) the attainment of certain target levels in the Fair
Market Value of the Common Stock; and/or
(x) growth in the value of an investment in Common Stock
assuming the reinvestment of dividends.
If and to the extent permitted under Section 162(m) of the Code, such
performance goals may be determined without regard to (or adjusted for) changes
in accounting methods, corporate transactions (including, without limitation,
dispositions and acquisitions), extraordinary items, non-recurring items and
other similar events or circumstances occurring during the applicable
performance period.
- 9 -
<PAGE> 10
(c) Calculation. At the expiration of the applicable
performance period, the Committee will determine the extent to which the
performance goals established pursuant to this Section 9 are attained and the
percentage of each Performance-Based Award that has been earned. The Committee
may reduce the amount that would otherwise be payable pursuant to a
Performance-Based Award, but may not exercise its discretion to increase such
amount.
(d) Payment. Following the Committee's determination in
accordance with Section 9(c), the Committee, in its sole discretion, may pay
earned Performance-Based Awards in the form of cash or in shares of Common Stock
(or in a combination thereof) which have an aggregate Fair Market Value equal to
the value of the earned Performance-Based Awards at the close of the applicable
performance period. Unless otherwise determined by the Committee, payment of
earned Performance-Based Awards shall be made in a single lump sum following the
close of the applicable performance period. Any such shares may be granted
subject to any restrictions deemed appropriate by the Committee. At the
discretion of the Committee, participants may be entitled to receive any
dividends declared with respect to shares which have been earned in connection
with grants of Performance-Based Awards which have been earned, but not yet
distributed to participants.
10. Other Stock-Based Awards.
(a) General. Other awards of Common Stock and awards that are
valued in whole or in part by reference to, or are payable in or otherwise based
on, Common Stock ("Other Stock-Based Awards") may be granted either alone or in
addition to or in tandem with Options, Stock Appreciation Rights, Restricted
Stock and Performance Based-Awards. Subject to the provisions of the Plan, the
Committee shall, in its sole discretion, determine the eligible personnel to
whom and the time or times at which such awards shall be made, the number of
shares of Common Stock to be awarded pursuant to such awards, the ability of
participants to defer the receipt of Common Stock pursuant to such awards and
all other conditions of the awards. The Committee may also provide for the grant
of Common Stock under such awards upon the completion of a specified performance
period.
(b) Terms and Conditions. Other Stock-Based Awards made
pursuant to this Section 10 shall be subject to the following terms and
conditions:
(i) Unless otherwise determined by the Committee at the
time of grant, subject to the provisions of the award agreement and the
Plan, the recipient of an award under this Section 10 shall be entitled
to receive, currently or on a deferred basis, dividends or dividend
equivalents with respect to the number of shares of Common Stock covered
by the award.
(ii) Any award under this Section 10 and any Common Stock
covered by any such award shall vest or be forfeited to the extent so
provided in the award agreement, as determined by the Committee, in its
sole discretion. The Committee may, in its sole discretion, waive in
whole or in part any or all of the
- 10 -
<PAGE> 11
limitations imposed hereunder (if any) with respect to any or all of an
award under this Section 10.
(iii) Common Stock issued on a bonus basis under this
Section 10 may be issued for no cash consideration. Common Stock
purchased pursuant to a purchase right awarded under this Section 10
shall be priced as determined by the Committee. The purchase price of
shares of Common Stock may be zero to the extent permitted by applicable
law, and, to the extent not so permitted, such purchase price may not be
less than par value.
11. Non-Employee Director Stock Options.
(1) Automatic Grants. Without further action by the Board or
the stockholders of the Company, (i) each director who is a Non-Employee
Director on January 1, 2000 shall be granted an Option to purchase 20,000 shares
of Common Stock on the first trading day following the 2000 Annual Meeting of
Stockholders, (ii) each director who first becomes a Non-Employee Director on or
after the date of the 2000 Annual Meeting of Stockholders shall be granted an
Option to purchase 15,000 shares of Common Stock on the first trading day
following the date he or she commences service as a Non-Employee Director and
(iii) each Non-Employee Director shall be granted an Option to purchase 15,000
shares of Common Stock on the first trading day following each Annual Meeting of
Stockholders at which such director is re-elected to the Board, provided that
such Non-Employee Director did not receive an Option pursuant to Section
11(a)(ii) during the one hundred eighty (180) day period ending on such Annual
Meeting of Stockholders.
(2) Exercise Price. The exercise price per share covered by an
Option granted pursuant to this Section 11 shall be equal to the Fair Market
Value of the Common Stock on the date of grant.
(3) Vesting Conditions. Each Option granted pursuant to this
Section 11 will be immediately exercisable with respect to twenty-five percent
(25%) of the shares covered thereby and will become exercisable with respect to
an additional 2.083% of the shares covered thereby on the last day of each month
for the first thirty-six (36) months commencing on or after the date of grant,
provided that the optionee remains in continuous service as a director of the
Company through each applicable vesting date.
(4) Effect of Termination of Service. If a director's service
on the Board is terminated due to his or her death or Disability, then: (i) any
Option granted pursuant to this Section 11 that is not exercisable on the date
of termination shall immediately terminate, and (ii) any Option granted pursuant
to this Section 11 that is exercisable on the date of termination shall remain
exercisable, to the extent exercisable on the date of termination, by the
director (or his or her beneficiary) during the one year period following the
date of termination or, if sooner, until the expiration of the stated term
thereof, and, to the extent not exercised during such period, shall thereupon
terminate. If a director's service on the Board is terminated by the Company for
Cause or if, at the time of his or her termination, grounds for a termination
for Cause exist, then any
- 11 -
<PAGE> 12
Option granted pursuant to this Section 11 (whether or not then exercisable)
shall immediately terminate and cease to be exercisable. If a director's service
on the Board for any reason, other than death, Disability or Cause or at a time
when Cause exists) or no reason, then: (1) any Option granted pursuant to this
Section 11 that is not exercisable on the date of termination shall immediately
terminate, and (2) any Option granted pursuant to this Section 11 that is
exercisable on the date of termination shall remain exercisable, to the extent
exercisable on the date of termination, during the one hundred eighty (180) day
period following the date of termination or, if sooner, until the expiration of
its stated term and, to the extent not exercised during such period, shall
thereupon terminate.
(5) Capital Transactions; Change in Control. The provisions of
Section 14 shall apply to Options granted pursuant to this Section 11.
(6) Expiration. Except as otherwise provided herein, if not
previously exercised, each Option granted pursuant to this Section 11 will
expire on the tenth anniversary of the date of grant.
12. Non-Transferability of Awards. No Options, SARs, Performance-Based
Awards or Other Stock-Based Awards shall be transferable by the recipient other
than upon the recipient's death to a beneficiary designated by the recipient,
or, if no designated beneficiary shall survive the recipient, pursuant to the
recipient's will or by the laws of descent and distribution. All Options and
SARs shall be exercisable during the recipient's lifetime only by the recipient.
Tandem SARs shall be transferable, to the extent permitted above, only with the
underlying Option. Shares of Restricted Stock may not be transferred prior to
the date on which shares are issued, or, if later, the date on which such shares
have vested and are free of any applicable restriction imposed thereon. Except
as otherwise specifically provided by law or the provisions hereof, no award
received under the Plan may be transferred in any manner, and any attempt to
transfer any such award shall be void, and no such award shall in any manner be
liable for or subject to the debts, contracts, liabilities, engagements or torts
of any person who shall be entitled to such award, nor shall it be subject to
attachment or legal process for or against such person. Notwithstanding the
foregoing, the Committee may determine at the time of grant or thereafter that a
NQSO is transferable in whole or part to such persons, under such circumstances,
and subject to such conditions as the Committee may prescribe.
13. Effect of Termination of Employment or Service. Except as
otherwise provided herein or determined by the Committee at grant or, if no
rights of the participant are thereby reduced, thereafter, and subject to
earlier termination in accordance with the provisions hereof, the following
rules shall apply with regard to awards (other than Options granted pursuant to
Section 11) held by a participant at the time of his or her termination of
employment or other service with the Company and its Affiliates:
(a) Rules Applicable to Stock Options and SARs.
- 12 -
<PAGE> 13
(i) Termination due to Death. If a participant's
employment or service terminates due to his or her death, then:
(A) any Option or SAR held by the participant that is not
exercisable on the date of termination shall immediately
terminate, and (B) any Option or SAR that is exercisable on the
date of termination shall remain exercisable, to the extent
exercisable on the date of termination, by the deceased
participant's beneficiary during the one year period following the
date of termination or, if sooner, until the expiration of the
stated term thereof, and, to the extent not exercised during such
period, shall thereupon terminate.
(ii) Termination due to Disability. If a participant's
employment or service terminates due to his or her Disability,
then: (A) any Option or SAR held by the participant that is not
exercisable on the date of termination shall immediately
terminate, and (B) any Option or SAR held by the participant that
is exercisable on the date of termination shall remain
exercisable, to the extent exercisable on the date of termination,
during the one hundred eighty (180) day period following the date
of termination or, if sooner, until the expiration of its stated
term and, to the extent not exercised during such period, shall
thereupon terminate.
(iii) Termination for Cause. If a participant's employment
or service is terminated by the Company or an affiliate for Cause
or if, at the time of his or her termination, grounds for a
termination for Cause exist, then any Option or SAR held by the
participant (whether or not then exercisable) shall immediately
terminate and cease to be exercisable.
(iv) Other Termination. If a participant's employment or
service terminates for any reason(other than death, Disability or
Cause or at a time when Cause exists) or no reason, then: (A) any
Option or SAR held by the participant that is not exercisable on
the date of termination shall immediately terminate, and (B) any
Option or SAR held by the participant that is exercisable on the
date of termination shall remain exercisable, to the extent
exercisable on the date of termination, during the ninety (90) day
period following the date of termination or, if sooner, until the
expiration of its stated term and, to the extent not exercised
during such period, shall thereupon terminate.
(b) Rules Applicable to Restricted Stock. Upon the termination
of a participant's employment or service for any reason (including death or
Disability) or no reason, Restricted Stock which has not yet become fully vested
will, unless otherwise determined by the Committee, automatically be forfeited
by the participant (or the participant's successors) and any certificate
therefor or book entry with respect thereto or other evidence thereof will be
canceled.
(c) Rules Applicable to Performance-Based Awards. Upon
termination of a participant's employment or service for any reason (including
death or Disability) or no reason, then the participant's outstanding
Performance-Based Awards will, unless otherwise determined by the Committee,
thereupon expire and the participant (or his or her beneficiary, as the case may
be) will
- 13 -
<PAGE> 14
not be entitled to receive any amount in respect of the performance
period within which the participant's employment or service is terminated.
(d) Rules Applicable to Other Stock-Based Awards. Upon the
termination of a participant's employment or service for any reason (including
death or Disability) or no reason, Other Stock-Based Awards which have not yet
become fully vested will, unless otherwise determined by the Committee,
automatically be forfeited by the participant (or the participant's successors)
and any certificate therefor or book entry with respect thereto or other
evidence thereof will be canceled.
14. Capital Changes; Change in Control.
(a) Adjustments upon Changes in Capitalization. If any change
is made to the Common Stock by reason of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the
Company's receipt of consideration, appropriate adjustments shall be made to:
(i) the maximum number and/or class of securities issuable and available for
reference purposes under the Plan, (ii) the number and/or class of securities
with respect to which any one employee may be granted awards under the Plan per
calendar year, (iii) the number and/or class of securities for which automatic
grants are made to Non-Employee Directors pursuant to Section 11 of the Plan,
and (iv) the number and/or class of securities and, if applicable, the exercise
price per share in effect under each outstanding award under the Plan. Such
adjustments to the outstanding awards are to be effected in a manner which shall
preclude the enlargement or dilution of rights and benefits under such awards.
(b) Change in Control. Unless the Committee determines
otherwise at the time of grant, each Option and SAR outstanding at the time of a
Change in Control that is not otherwise fully exercisable shall automatically
accelerate so that each such Option and SAR shall, immediately prior to the
effective date of the Change in Control, become fully exercisable, provided that
no acceleration of exercisability shall occur with respect to an outstanding
Option or SAR if and to the extent such Option or SAR is, in connection with the
Change in Control, to be assumed or otherwise continued in full force or effect
by the successor corporation (or parent thereof) pursuant to the terms of the
Change in Control transaction. Unless the Committee determines otherwise at the
time of grant, upon the consummation of the Change in Control, all outstanding
Options and SARs shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation (or parent thereof) or otherwise
expressly continued in full force and effect pursuant to the terms of the Change
in Control transaction. Each Option and SAR which is assumed (or is otherwise to
continue in effect) in connection with a Change in Control shall be
appropriately adjusted, immediately after such Change in Control, to apply to
the number and class of securities which would have been issuable or, in the
case of a SAR, payable (if settled in shares) to the participant upon
consummation of such Change in Control had the Option or SAR been exercised
immediately prior to such Change in Control, provided the aggregate exercise
price of an Option payable for such securities shall remain the same. Unless the
Committee determines otherwise at the time of grant, the restrictions to which
any shares of Restricted Stock, Performance-
- 14 -
<PAGE> 15
Based Awards and Other Stock-Based Awards granted prior to a Change in Control
are subject shall lapse as if the applicable restriction period had ended upon
the Change in Control. If, in connection with a Change in Control, new,
additional or different shares or securities ("New Securities") are issued in
exchange for Restricted Stock, non-cash Performance-Based Awards or Other
Stock-Based Awards, such New Securities shall, unless the Committee determines
otherwise at the time of grant, be subject to all of the conditions and
restrictions applicable to the awards with respect to which such New Securities
were exchanged.
(c) Fractional Shares. In the event of any adjustment in the
number of shares covered by any award pursuant to the provisions hereof, any
fractional shares resulting from such adjustment will be settled in cash, and
each such award will cover only the number of full shares resulting from the
adjustment.
(d) Determination of Board to be Final. All adjustments under
this Section 14 shall be made by the Board, and its determination as to what
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive.
15. Tax Withholding. As a condition to the exercise of any award or
the delivery of any shares of Common Stock pursuant to any award or the lapse of
restrictions on any award, or in connection with any other event that gives rise
to a federal or other governmental tax withholding obligation on the part of the
Company or its subsidiaries relating to an award: (a) the Company may deduct or
withhold (or cause to be deducted or withheld) from any payment or distribution
to a grantee whether or not pursuant to the Plan, and (b) the Company shall be
entitled to require that the grantee remit cash to the Company (through payroll
deduction or otherwise), in each case in an amount sufficient in the opinion of
the Company to satisfy such withholding obligation. If the event giving rise to
the withholding obligation involves a transfer of shares of Common Stock, then,
unless the applicable award agreement provides otherwise, at the discretion of
the Committee, the grantee may satisfy the withholding obligation described
under this Section 15 by electing to have the Company withhold shares of Common
Stock (which withholding will be at a rate not in excess of the statutory
minimum rate) or by tendering previously-owned shares of Common Stock, in each
case having a Fair Market Value equal to the amount of tax to be withheld (or by
any other mechanism as may be required or appropriate to conform with local tax
and other rules).
16. Amendment and Termination. The Board may amend or terminate the
Plan at any time, provided that no such action may adversely affect the rights
of the holder of any outstanding award without his or her consent. Except as
otherwise provided in Section 14, any amendment which would increase the
aggregate number of shares of Common Stock which may be issued or used for
reference purposes under the Plan or with respect to which awards may be granted
to any employee during any calendar year or modify the class of employees
eligible to receive Options under the Plan shall, to the extent required by
applicable law, be subject to the approval of the Company's stockholders. The
Committee may amend the terms of any agreement or certificate made or issued
hereunder at any time and from time to time provided that any amendment which
would adversely affect the rights of the holder may not be made without his or
her consent.
- 15 -
<PAGE> 16
17. Term of the Plan. The Plan shall be effective on the date of its
adoption by the Board, subject to the approval of the stockholders of the
Company within one year from the date of adoption by the Board. The Plan will
terminate on the tenth anniversary of the date of its adoption by the Board,
unless sooner terminated by the Board. The rights of any person with respect to
an award made under the Plan that is outstanding at the time of the termination
of the Plan shall not be affected solely by reason of the termination of the
Plan and shall continue in accordance with the terms of the award (as then in
effect or thereafter amended) and the Plan.
18. Miscellaneous.
(a) Documentation of Awards. Each award made under the Plan
will be evidenced by a written agreement or other written instrument the terms
of which will be established by the Committee. To the extent not inconsistent
with the provisions of the Plan, the written agreement or other instrument
evidencing an award will govern the rights and obligations of the participant
(and any person claiming through the participant) with respect to the award.
(b) No Rights Conferred. Nothing contained herein will be
deemed to give any individual any right to receive an award under the Plan or to
be retained in the employ or service of the Company or its Affiliates.
(c) Governing Law. The Plan shall be governed by the laws of
the State of Delaware, without regard to its principles of conflicts of law.
(d) Decisions and Determinations. All decisions or
determinations made by the Board pursuant to the provisions hereof and, except
to the extent rights or powers under the Plan are reserved specifically to the
discretion of the Board, all decisions and determinations of the Committee are
final, binding and conclusive.
(e) Severability. In the event any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
(f) Requirements of Law. The grant of awards and issuance of
shares under the Plan shall be subject to compliance with all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as the Committee deems necessary or desirable.
(g) Listing and Other Conditions. As long as the Common Stock
is listed on a national securities exchange or system sponsored by a national
securities association, the issue of any shares of Common Stock pursuant to an
award shall be conditioned upon such shares being listed on such exchange or
system. If at any time counsel to the Company shall be of the opinion that any
sale or delivery of shares of Common Stock pursuant to an award is or may in the
circumstances be unlawful or result in the imposition of excise taxes on the
Company under the statutes, rules or regulations of any applicable jurisdiction,
the Company shall have no obligation
- 16 -
<PAGE> 17
to make such sale or delivery, or to make any application or to effect or to
maintain any qualification or registration under the Securities Act or otherwise
with respect to shares of Common Stock or awards, and the right to exercise any
Option shall be suspended until, in the opinion of said counsel, such sale or
delivery shall be lawful or will not result in the imposition of excise taxes on
the Company.
(h) Beneficiary Designation. Each Participant under the Plan
may, from time to time, designate any beneficiary or beneficiaries (who may be
named contingently or successively) to whom any benefit under the Plan is to be
paid in case of his or her death before he or she receives any or all of such
benefit. Each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be effective
only when filed by the Participant in writing with the Company during the
Participant's lifetime. In the absence of any such designation, benefits
remaining unpaid at the Participant's death shall be paid to the Participant's
estate.
- 17 -
