As filed with the Securities and Exchange Commission on February 25, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERICAN TOWER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 65-0723837
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
116 Huntington Avenue, Boston, Massachusetts 02116
(Address, including zip code, of principal executive offices)
Specialty Teleconstructors, Inc. 1997 Stock Incentive Plan
Specialty Teleconstructors, Inc. 1998 Stock Option Plan
(Full title of the Plan)
STEVEN B. DODGE
American Tower Corporation
116 Huntington Avenue
Boston, Massachusetts 02116 I
(617) 375-7500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
NORMAN A. BIKALES, ESQ.
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
(617) 338-2800
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Amount Maximum Maximum
Title of Each Class of to be Offering Price Aggregate Amount of
Securities to be Registered Registered Per Share Offering Price Registration Fee
<S> <C> <C> <C> <C>
Class A Common Stock, $.01 par value....... 971,850 $10.909 to $15.909(2) $13,441,750(2) $3,737
Issuable upon exercise of outstanding
options under the Specialty
Teleconstructors, Inc. 1997 Stock Incentive
Plan and the Specialty Teleconstructors,
Inc. 1998 Stock Option Plan(1)
<PAGE>
<FN>
(1) Options to purchase Common Stock of OmniAmerica, Inc. ("Omni") under the
Specialty Teleconstructors, Inc. 1997 Stock Incentive Plan and the Specialty
Teleconstructors 1998 Stock Option Plan were assumed by American Tower
Corporation ( the "Company"), pursuant to a certain Agreement and Plan of
Merger (the "Merger Agreement") by and among the Company, American Towers,
Inc. and Omni, dated as of November 16, 1998.
(2) Pursuant to Rule 457(h) the offering price is calculated based upon the
exercise price with respect to shares subject to options currently
outstanding.
</FN>
</TABLE>
<PAGE>
AMERICAN TOWER CORPORATION
REGISTRATION STATEMENT ON FORM S-8
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information; Item 2. Registrant Information and Employee Plan
Annual Information.
The documents containing the information required by these items will be
given to employees participating in the Specialty Teleconstructors, Inc. 1997
Stock Incentive Plan (the "1997 Plan") and the Specialty Teleconstructors, Inc.
1998 Stock Option Plan (the "1998 Plan") and are not required to be filed with
the Securities and Exchange Commission (the "Commission") as part of the
Registration Statement or as an exhibit thereto.
Employees participating in the 1997 Plan and 1998 Plan may obtain additional
information regarding the Company by requesting from the Company a copy, without
charge, of the Company's recent Registration Statement on Form S-1 (File No.
333-70881).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed by the Company with the
Commission are incorporated by reference in and made a part of this Registration
Statement, as of their respective dates:
(a) The Company's Annual Report on Form 10-K for the year ended December 31,
1997, as filed with the Commission on April 9, 1998.
(b) The Company's Form 8-A filed on June 4, 1998; and
(c) The Company's (i) Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998, filed on May 15, 1998, (ii) Quarterly Report on Form 10-Q for
the quarter ended June 30, 1998, filed on August 14, 1998, (iii) Quarterly
Report on Form 10-Q for the quarter ended September 30, 1998, filed on November
16, 1998, (iv) Currents Reports on Form 8-K filed on March 20, 1998, May 1,
1998, June 4, 1998, July 16, 1998, November 30, 1998, January 8, 1999, January
21, 1999, February 12, 1999 and February 24, 1999, and (iii) Current Report on
Form 8-K/A filed on January 27, 1999.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
herein, or in any subsequently filed document which also is or is deemed to be
incorporated by reference, modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
None.
II-1
<PAGE>
Item 5. Interests of Named Experts and Counsel.
The validity of the shares offered hereby will be passed upon for the
Company by Sullivan & Worcester LLP, Boston, Massachusetts. Norman A. Bikales, a
member of the firm of Sullivan & Worcester LLP owns 9,000 shares of Class A
Common Stock and 41,490 shares of Class B Common Stock and currently has an
option to purchase 20,000 shares of Class A Common Stock at $10.00 per share. An
associate of Sullivan & Worcester LLP has an option to purchase 8,000 shares of
Class A Common Stock at $18.75 per share. Mr. Bikales and/or associates of that
firm serve as secretary or assistant secretaries of the Company and certain of
its subsidiaries.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL") provides,
in effect, that any person made a party to any action by reason of the fact that
he is or was a director, officer, employee or agent of the Company may and, in
certain cases, must be indemnified by the Company against, in the case of a
non-derivative action, judgments, fines, amounts paid in settlement and
reasonable expenses (including attorney's fees), if in either type of action he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, in a non-derivative action,
which involves a criminal proceeding, in which such person had no reasonable
cause to believe his conduct was unlawful. This indemnification does not apply,
in a derivative action, to matters as to which it is adjudged that the director,
officer, employee or agent is liable to the Company, unless upon court order it
is determined that, despite such adjudication of liability, but in view of all
the circumstances of the case, he is fairly and reasonably entitled to indemnity
for expenses.
Article XII of the Company's By-Laws provides that the Company shall
indemnify each person who is or was an officer or director of the Company to the
fullest extent permitted by Section 145 of the DGCL.
Article Sixth of the Company's Restated Certificate of Incorporation states
that no director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for (i) breach of the director's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, (iii) liability under
Section 174 of the DGCL relating to certain unlawful dividends and stock
repurchases, or (iv) any transaction from which the director derived an improper
personal benefit.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Listed below are the exhibits which are filed as part of this registration
statement (according to the number assigned to them in Item 601 of Regulation
S-K).
<TABLE>
<CAPTION>
Exhibit No. Description of Document Exhibit File No.
<S> <C> <C>
5 Opinion of Sullivan & Worcester LLP.............................Filed herewith as Exhibit 5
10.1 Specialty Teleconstructors, Inc. 1997 Stock Incentive Plan......Filed herewith as Exhibit 10.1
10.2 Specialty Teleconstructors, Inc. 1998 Stock Option Plan.........Filed herewith as Exhibit 10.2
23.0 Consent of Sullivan & Worcester LLP.............................Contained in the opinion of
Sullivan & Worcester LLP filed
herewith as part of Exhibit 5
23.1 Consent of Deloitte & Touche LLP................................Filed herewith as Exhibit 23.1
24 Power of Attorney...............................................Filed herewith as page II-4 of the
Registration Statement
</TABLE>
II-2
<PAGE>
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement:
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering;
(b) For purposes of determining any liability under the Securities Act of
1933, each filing of the Company's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in that Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, Commonwealth of Massachusetts, on the 25th
day of February, 1999.
AMERICAN TOWER CORPORATION
By: /s/ Steven B. Dodge
Steven B. Dodge
Chairman of the Board, President
and Chief Executive Officer
The undersigned Officers and Directors of American Tower Corporation (the
"Company") hereby severally constitute Joseph L. Winn, Justin D. Benincasa,
Michael B. Milsom and Norman A. Bikales, and each of them, acting singly, our
true and lawful attorneys to sign for us and in our names in the capacities
indicated below the Company's Registration Statement on Form S-8 relating to the
registration of an aggregate of 971,850 shares of the Company's Class A Common
Stock, $.01 par value issued or issuable upon the exercise of options granted
under the Specialty Teleconstructors, Inc. 1997 Stock Incentive Plan and the
Specialty Teleconstructors, Inc. 1998 Stock Option Plan, and any and all
amendments and supplements thereto, filed with the Securities and Exchange
Commission, for the purpose of registering such shares, under the Securities Act
of 1933, as amended, granting unto each of said attorneys, acting singly, full
power and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming our
signatures to said registration statement signed by our said attorneys and all
else that said attorneys may lawfully do and cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Company and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Steven B. Dodge Chairman, President and February 25, 1999
Steven B. Dodge Chief Executive Officer
/s/ Joseph L. Winn Chief Financial Officer and February 25, 1999
Joseph L. Winn Treasurer
/s/ Justin D. Benincasa Vice President and February 25, 1999
Justin D. Benincasa Corporate Controller
/s/ Alan L. Box Executive Vice President and February 25, 1999
Alan L. Box Director
/s/ Arnold L. Chavkin Director February 25, 1999
Arnold L. Chavkin
/s/ J. Michael Gearon, Jr. Executive Vice President and February 25, 1999
J. Michael Gearon, Jr. Director
II-4
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Thomas H. Stoner Director February 25, 1999
Thomas H. Stoner
/s/ Fred R. Lummis Director February 25, 1999
Fred R. Lummis
/s/ Randall Mays Director February 25, 1999
Randall Mays
/s/ Maggie Wilderotter Director February 25, 1999
Maggie Wilderotter
II-5
<PAGE>
EXHIBIT INDEX
Listed below are the exhibits which are filed as part of this registration
statement (according to the number assigned to them in Item 601 of Regulation
S-K).
<TABLE>
<CAPTION>
Exhibit No. Description of Document Exhibit File No. Page
<S> <C> <C>
5 Opinion of Sullivan & Worcester LLP.............................Filed herewith as Exhibit 5
10.1 Specialty Teleconstructors, Inc. 1997 Stock Incentive Plan......Filed herewith as Exhibit 10.1
10.2 Specialty Teleconstructors, Inc. 1998 Stock Option Plan.........Filed herewith as Exhibit 10.2
23.0 Consent of Sullivan & Worcester LLP Contained in the opinion of
Sullivan & Worcester LLP filed
herewith as part of Exhibit 5
23.1 Consent of Deloitte & Touche LLP................................Filed herewith as Exhibit 23.1
24 Power of Attorney...............................................Filed herewith as page II-4 of
the Registration Statement
</TABLE>
EXHIBIT 5
SULLIVAN & WORCESTER LLP
ONE POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109
(617) 338-2800
FAX NO. 617-338-2880
IN WASHINGTON, D.C. IN NEW YORK CITY
1025 CONNECTICUT AVENUE, N.W. 767 THIRD AVENUE
WASHINGTON, D.C. 20036 NEW YORK, NEW YORK 10017
(202) 775-8190 (212) 486-8200
FAX NO. 202-293-2275 FAX NO. 212-758-2151
February 25, 1999
American Tower Corporation
116 Huntington Avenue
Boston, MA 02116
Re: Registration Statement on Form S-8 of an Aggregate of 971,850
Shares of Class A Common Stock
Dear Sir or Madam:
In connection with the registration under the Securities Act of 1933,
as amended (the "Securities Act"), by American Tower Corporation, a Delaware
corporation (the "Company"), of an aggregate of 971,850 shares (the "Registered
Shares") of its Class A Common Stock, par value $.01 per share (the "Class A
Common Stock") which underlie options that were issued to purchase shares of
Common Stock of OmniAmerica, Inc. ("Omni") under the Specialty Telecontructors,
Inc. 1997 Stock Incentive Plan and the Specialty Teleconstructors, Inc. 1998
Stock Option Plan (collectively, the "Omni Stock Option Plans"), the following
opinion is furnished to you to be filed with the Securities and Exchange
Commission (the "Commission") as Exhibit 5 to the Company's registration
statement on Form S-8 (the "Registration Statement").
We have acted as counsel to the Company in connection with the
preparation of the Registration Statement, and we have examined originals or
copies, certified or otherwise identified to our satisfaction, of the
Registration Statement, the Restated Certificate of Incorporation of the
Company, as amended (the "Restated Certificates"), Agreement and Plan of Merger
by and among the Company, American Towers, Inc. and Omni, as amended, and
certain related documents, the Omni Stock Option Plans, corporate records,
certificates and statements of officers and accountants of the Company and of
public officials, and such other documents as we have considered necessary in
order to furnish the opinion hereinafter set forth. We express no opinion herein
as to any laws other than the General Corporation Law of the State of Delaware.
We assume that the number and issuance of options to be offered from time to
time pursuant to the Omni Stock Option Plans have been determined and authorized
by proper action of the Board of Directors, or a committee thereof, of the
Company and that the number, issuance and sale of the Registered Shares to be
offered from time to time pursuant to the exercise of such options have been and
will be determined in accordance with the Restated Certificate and applicable
Delaware Law. We further assume that prior to the
<PAGE>
American Tower Corporation
February 25, 1999
Page 2
issuance of any Registered Shares, there will exist, under the Company's
Restated Certificate, the requisite number of authorized shares of common stock
for such issuance which are unissued and are not otherwise reserved for
issuance.
Based on and subject to the foregoing, we are of the opinion that, when
the Registration Statement has become effective under the Securities Act, upon
due authorization by the Board of Directors, or a committee thereof, of the
Company of an issuance of an option pursuant to the Omni Stock Option Plans, and
upon an issuance by the Company of Registered Shares pursuant to the exercise of
such option and upon delivery of certificates representing the Registered Shares
against payment therefor in the manner contemplated by the Omni Stock Option
Plans, the Registration Statement and any applicable amendment of either
thereof, the Registered Shares represented by such certificates will be duly
authorized, validly issued, fully paid and nonasseassable by the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act or the Rules and Regulations of the Commission promulgated
thereunder.
Very truly yours,
/s/ Sullivan & Worcester LLP
SULLIVAN & WORCESTER LLP
EXHIBIT 10.1
SPECIALTY TELECONSTRUCTORS, INC.
1997 STOCK INCENTIVE PLAN
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 1997 Stock Incentive Plan is intended to promote the interests of Specialty
Teleconstructors, Inc., a Nevada corporation, by providing eligible persons with
the opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation.
Capitalized terms shall have the meanings assigned to such terms in the attached
Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into three separate equity programs:
- the Discretionary Option Grant Program under which eligible
persons may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock,
- the Stock Issuance Program under which eligible persons may,
at the discretion of the Plan Administrator, be issued shares of Common Stock
directly, either through the immediate purchase of such shares or as a bonus for
services rendered the Corporation (or any Parent or Subsidiary), and
- the Automatic Option Grant Program under which eligible
nonemployee Board members shall automatically receive option grants at periodic
intervals to purchase shares of Common Stock.
B. The provisions of Articles One and Five shall apply to all
equity programs under the Plan and shall govern the interests
of all persons under the Plan.
III. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and exclusive authority
to administer the Discretionary Option Grant and Stock
Issuance Programs with respect to Section 16 Insiders.
Administration of the Discretionary Option Grant and Stock
Issuance Programs with respect to all other persons eligible
to participate in those programs
<PAGE>
may, at the Board's discretion, be vested in the Primary
Committee or a Secondary Committee, or the Board may retain
the power to administer those programs with respect to all
such persons.
B. Members of the Primary Committee or any Secondary Committee
shall serve for such period of time as the Board may determine
and may be removed by the Board at any time. The Board may
also at any time terminate the functions of any Secondary
Committee and reassume all powers and authority previously
delegated to such committee.
C. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and
authority (subject to the provisions of the Plan) to establish
such rules and regulations as it may deem appropriate for
proper administration of the Discretionary Option Grant and
Stock Issuance Programs and to make such determinations under,
and issue such interpretations of, the provisions of such
programs and any outstanding options or stock issuances
thereunder as it may deem necessary or advisable. Decisions of
the Plan Administrator within the scope of its administrative
functions under the Plan shall be final and binding on all
parties who have an interest in the Discretionary Option Grant
and Stock Issuance Programs under its jurisdiction or any
option or stock issuance thereunder.
D. Service on the Primary Committee or the Secondary Committee
shall constitute service as a Board member, and members of
each such committee shall accordingly be entitled to full
indemnification and reimbursement as Board members for their
service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or
omission made in good faith with respect to the Plan or any
option grants or stock issuances under the Plan.
E. Administration of the Automatic Option Grant Program shall be
self executing in accordance with the terms of that program,
and no Plan Administrator shall exercise any discretionary
functions with respect to any option grants or stock issuances
made under such program.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary
Option Grant and Stock Issuance Programs are as follows;
(i) employees,
(ii) nonemployee members of the Board or the board of
directors of any Parent or Subsidiary, and
-2-
<PAGE>
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full
authority to determine, (i) with respect to the option grants
under the Discretionary Option Grant Program, which eligible
persons are to receive option grants, the time or times when
such option grants are to be made, the number of shares to be
covered by each such grant, the status of the granted option
as either an Incentive Option or a Nonstatutory Option, the
time or times when each option is to become exercisable, the
vesting schedule (if any) applicable to the option shares and
the maximum term for which the option is to remain outstanding
and (ii) with respect to stock issuances under the Stock
Issuance Program, which eligible persons are to receive stock
issuances, the time or times when such issuances are to be
made, the number of shares to be issued to each Participant,
the vesting schedule (if any) applicable to the issued shares
and the consideration to be paid for such shares.
C. The Plan Administrator shall have the absolute discretion
either to grant options in accordance with the Discretionary
Option Grant Program or to effect stock issuances in
accordance with the Stock Issuance Program.
D. The individuals who shall be eligible to participate in the
Automatic Option Grant Program shall be limited to (i) those
individuals serving as nonemployee Board members on the Plan
Effective Date, (ii) those individuals who first become
nonemployee Board members on or after the Plan Effective Date,
whether through appointment by the Board or election by the
Corporation's stockholders, and (iii) those individuals who
continue to serve as nonemployee Board members at one or more
Annual Stockholders Meetings held after the Plan Effective
Date.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including
shares repurchased by the Corporation on the open market. The
maximum number of shares of Common Stock reserved for issuance
over the term of the Plan shall not exceed 500,000 shares,
subject to certain changes in the Corporation's capital
structure.
B. No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct
stock issuances for more than 200,000 shares of Common Stock
in the aggregate per calendar year, beginning with the 1997
calendar year.
C. Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent
those options expire or terminate for any reason prior to
exercise in full. Unvested shares issued under the Plan and
-3-
<PAGE>
subsequently cancelled or repurchased by the Corporation, at
the original exercise or direct issue price paid per share,
pursuant to the Corporation's repurchase rights under the Plan
shall be added back to the number of shares of Common Stock
reserved for issuance under the Plan and shall accordingly be
available for reissuance through one or more subsequent option
grants or direct stock issuances under the Plan. However,
shares subject to any options surrendered in connection with
the stock appreciation right provisions of the Plan shall not
be available for reissuance. Should the exercise price of an
option under the Plan be paid with shares of Common Stock or
should shares of Common Stock otherwise issuable under the
Plan be withheld by the Corporation in satisfaction of the
withholding taxes incurred in connection with the exercise of
an option or the vesting of a stock issuance under the Plan,
then the number of shares of Common Stock available for
issuance under the Plan shall be reduced by the gross number
of shares for which the option is exercised or which vest
under the stock issuance, and not by the net number of shares
of Common Stock issued to the holder of such option or stock
issuance.
D. If any change is made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's
receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and/or class of securities
issuable under the Plan, (ii) the number and/or class of
securities for which any one person may be granted stock
options, separately exercisable stock appreciation rights and
direct stock issuances under the Plan per calendar year, (iii)
the number and/or class of securities for which grants are
subsequently to be made under the Automatic Option Grant
Program to new and continuing nonemployee Board members, and
(iv) the number and/or class of securities and the exercise
price per share in effect under each outstanding option under
the Plan. Such adjustments to the outstanding options are to
be effected in a manner which shall preclude the enlargement
or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be
final, binding and conclusive.
E. In the event of a restructuring of the Corporation in which
the Corporation is divested of one or more Subsidiaries, the
Plan Administrator may, in its sole discretion, make
appropriate adjustments to the vesting schedule, number and/or
class of securities and the exercise price per share in effect
under each outstanding option under the Plan (i) held by an
individual who is to remain in the Corporation's Service
following such divestiture or (ii) held by an individual who
is to provide services to the divested Subsidiary immediately
following the divestiture, which the Plan Administrator
deems advisable in order to reflect the effect of the
divestiture on the Corporation's capital structure and
the-fair market value of the Common Stock.
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<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Five and the documents evidencing the option, be payable in one or more
of the forms specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date, or
(iii) to the extent the option is exercised for vested shares,
through a special sale and remittance procedure pursuant to which the Optionee
shall concurrently provide irrevocable instructions to (a) a Corporation
designated brokerage firm to effect the immediate sale of the purchased shares
and remit to the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Corporation by reason of such
exercise and (b) the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable
at such time or times, during such period and for such number
of shares as shall be determined by the Plan Administrator and
set forth in the documents evidencing the option. However, no
option shall have a term in excess of ten (10) years measured
from the option grant date.
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C. EFFECT OF TERMINATION OF SERVICE.
1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such period of
time thereafter as shall be determined by the Plan Administrator and set forth
in the documents evidencing the option, but no such option shall be exercisable
after the expiration of the option term.
(ii) Any option exercisable in whole or in part by the
Optionee at the time of death may be subsequently exercised by the personal
representative of the Optionee's estate or by the person or persons to whom the
option is transferred pursuant to the Optionee's will or in accordance with the
laws of descent and distribution.
(iii) During the applicable exercise period following
termination of Service, the option may not be exercised in the aggregate for
more than the number of vested shares for which the option is exercisable on the
date of the Optionee's cessation of Service. Upon the expiration of the
applicable exercise period or (if earlier) upon the expiration of the option
term, the option shall terminate and cease to be outstanding for any vested
shares for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease to be
outstanding to the extent the option is not otherwise at that time exercisable
for vested shares.
(iv) Should the Optionee's Service be terminated for
Misconduct, then all outstanding options held by the Optionee shall terminate
immediately and cease to be outstanding.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
(i) extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service from the
limited exercise period otherwise in effect for that option to such greater
period of time as the Plan Administrator shall deem appropriate, but in no event
beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable
Service exercise period following termination of service, not only with respect
to the number of vested shares of Common Stock for which such option is
exercisable at the time of the Optionee's cessation of Service but also with
respect to one or more additional installments in which the Optionee would have
vested had the Optionee continued in Service.
D. STOCKHOLDER RIGHTS. The holder of an option shall have no
stockholder rights with respect to the shares subject to the
option until such person shall have
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exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. REPURCHASE RIGHTS. The Plan Administrator shall have the
discretion to grant options which are exercisable for unvested
shares of Common Stock. Should the Optionee cease Service
while holding such unvested shares, the Corporation shall have
the right to repurchase, at the exercise price paid per share,
any or all of those unvested shares. The terms upon which such
repurchase right shall be exercisable (including the period
and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the
Plan Administrator and set forth in the document evidencing
such repurchase right.
F. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the
Optionee, Incentive Options shall be exercisable only by the
Optionee and shall not be assignable or transferable other
than by will or by the laws of descent and distribution
following the Optionee's death. However, a Nonstatutory Option
may, in connection with the Optionee's estate plan, be
assigned in whole or in part during the Optionee's lifetime to
one or more members of the Optionee's immediate family or to a
trust established exclusively for one or more such family
members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the
option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set
forth in such documents issued to the assignee as the Plan
Administrator may deem appropriate.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive Options.
Except as modified by the provisions of this Section II, all the provisions of
Articles One, Two and Five shall be applicable to Incentive Options. Options
which are specifically designated as Nonstatutory Options when issued under the
Plan shall not be subject to the terms of this Section II.
A. ELIGIBILITY. Incentive Options may only be granted to
Employees.
B. DOLLAR LIMITATION. The aggregate Fair Market Value of the
shares of Common Stock (determined as of the respective date
or dates of grant) for which one or more options granted to
any Employee under the Plan (or any other option plan of the
Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one
calendar year shall not exceed the sum of One Hundred Thousand
Dollars ($100,000). To the extent the Employee holds two (2)
or more such options which become exercisable for the first
time in the same calendar year, the foregoing limitation on
the exercisability of such
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options as Incentive Options shall be applied on the basis of
the order in which such options are granted.
C. 10% STOCKHOLDER. If any Employee to whom an Incentive Option
is granted is a 10% Stockholder, then the exercise price per
share shall not be less than one hundred ten percent (110%) of
the Fair Market Value per share of Common Stock on the option
grant date, and the option term shall not exceed five (5)
years measured from the option grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each outstanding
option shall automatically accelerate so that each such option
shall, immediately prior to the effective date of the
Corporate Transaction, become fully exercisable with respect
to the total number of shares of Common Stock at the time
subject to such option and may be exercised for any or all of
those shares as fully vested shares of Common Stock. However,
an outstanding option shall not so accelerate if and to the
extent: (i) such option is, in connection with the Corporate
Transaction, to be assumed by the successor corporation (or
parent thereof), (ii) such option is to be replaced with a
cash incentive program of the successor corporation which
preserves the spread existing at the time of the Corporate
Transaction on any shares for which the option is not
otherwise at that time exercisable and provides for subsequent
payout in accordance with the same exercise/vesting schedule
applicable to those option shares or (iii) the acceleration of
such option is subject to other limitations imposed by the
Plan Administrator at the time of the option grant.
B. All outstanding repurchase rights shall automatically
terminate, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event
of any Corporate Transaction, except to the extent: (i) those
repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such
Corporate Transaction or (ii) such accelerated vesting is
precluded by other limitations imposed by the Plan
Administrator at the time the repurchase right is issued.
C. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease
to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof).
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to the Optionee
in consummation of such Corporate Transaction had the option
been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments to reflect such Corporate
Transaction shall also be made to (i) the
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exercise price payable per share under each outstanding
option, provided the aggregate exercise price payable for such
securities shall remain the same, (ii) the maximum number
and/or class of securities available for issuance over the
remaining term of the Plan and (iii) the maximum number and/or
class of securities for which any one person may be granted
stock options, separately exercisable stock appreciation
rights and direct stock issuances under the Plan per calendar
year.
E. The Plan Administrator shall have the discretionary authority
to provide for the automatic acceleration of one or more
outstanding options under the Discretionary Option Grant
Program upon the occurrence of a Corporate Transaction,
whether or not those options are to be assumed in the
Corporate Transaction, so that each such option shall,
immediately prior to the effect date of such Corporate
Transaction, become fully exercisable with respect to the
total number of shares of Common Stock at the time subject to
that option and may be exercised for any or all of those
shares as fully vested shares of Common Stock. In addition,
the Plan Administrator shall have the discretionary authority
to structure one or more of the Corporation's repurchase
rights under the Discretionary Option Grant Program so that
those rights shall not be assignable in connection with such
Corporate Transaction and shall accordingly terminate upon the
consummation of such Corporate Transaction, and the shares
subject to those terminated rights shall thereupon vest in
full.
F. The Plan Administrator shall have full power and authority,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to provide for the
automatic acceleration of one or more outstanding options
under the Discretionary Option Grant Program in the event the
Optionee's Service is subsequently terminated by reason of an
Involuntary Termination within a designated period (not to
exceed eighteen (18) months) following the effective date of
any Corporate Transaction in which those options are assumed
and do not otherwise accelerate. Any options so accelerated
shall remain exercisable for fully vested shares until the
earlier of (i) the expiration of the option term or (ii) the
expiration of the one (1) year period measured from the
effective date of the Involuntary Termination. In addition,
the Plan Administrator may provide that one or more of the
Corporation's outstanding repurchase rights with respect to
shares held by the Optionee at the time of such Involuntary
Termination shall immediately terminate, and the shares
subject to those terminated repurchase rights shall
accordingly vest in full.
G. The Plan Administrator shall have full power and authority,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to provide for the
automatic acceleration of one or more outstanding options
under the Discretionary Option Grant Program upon (i) a Change
in Control or (ii) the subsequent termination of the
Optionee's Service by reason of an Involuntary Termination
within a designated period (not to exceed eighteen (18)
months)
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following the effective date of such Change in Control. Each
option so accelerated shall remain exercisable for fully
vested shares until the earlier of (i) the expiration of the
option term or (ii) the expiration of the one (1) year period
measured from the effective date of Optionee's cessation of
Service. In addition, the Plan Administrator shall have
discretionary authority to structure one or more of the
Corporation's outstanding repurchase rights so that those
repurchase rights shall immediately terminate with respect to
any shares held by the Optionee at the time of such Change in
Control or Involuntary Termination, and the shares subject to
those terminated rights shall accordingly vest in full.
H. The portion of any Incentive Option accelerated in connection
with a Corporate Transaction or Change in Control shall remain
exercisable as an Incentive Option only to the extent the
applicable One Hundred Thousand Dollar ($100,000) limitation
is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be
exercisable as a Nonstatutory Option under the Federal tax
laws.
I. The outstanding options shall in no way affect the right of
the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or
any part of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Discretionary Option
Grant Program and to grant in substitution new options covering the same or
different number of shares of Common Stock but with an exercise price per share
equal to the Fair Market Value per share of Common Stock on the new grant date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have the authority to grant to
selected Optionees tandem stock appreciation rights and/or
limited stock appreciation rights.
B. The following terms shall govern the grant and exercise of
tandem stock appreciation rights:
(i) One or more Optionees may be granted the right,
exercisable upon such terms as the Plan Administrator may establish, to elect
between the exercise of the underlying option for shares Common Stock and the
surrender of that option in exchange for a distribution from the Corporation in
an amount equal to the excess of (a) the Fair Market Value (on the option
surrender date) of the number of shares in which the Optionee is at the time
vested under the surrendered option (or surrendered portion) over (b) the
aggregate exercise price payable for those shares.
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(ii) No such option surrender shall be effective unless it is
approved by the Plan Administrator, either at the time of the actual option
surrender or at any earlier time. If the surrender is so approved, then the
distribution to which the Optionee shall be entitled may be made in shares of
Common Stock valued at Fair Market Value on the option surrender date, in cash,
or partly in shares and partly in cash, as the Plan Administrator shall in its
sole discretion deem appropriate.
(iii) If the surrender of an option is not approved by the
Plan Administrator, then the Optionee shall retain whatever rights the Optionee
had under the surrendered option (or surrendered portion) on the option
surrender date and may exercise such rights at any time prior to the later of
(a) five (5) business days after the receipt of the rejection notice or (b) the
last day on which the option is otherwise exercisable in accordance with the
terms of the documents evidencing such option, but in no event may such rights
be exercised more than ten (10) years after the option grant date.
C. The following terms shall govern the grant and exercise of
limited stock appreciation rights:
(i) One or more Section 16 Insiders may be granted limited
stock appreciation rights with respect to their outstanding options.
(ii) Upon the occurrence of a Hostile Takeover, each
individual holding one or more options with such a limited stock appreciation
right shall have the unconditional right (exercisable for a thirty (30) day
period following such Hostile Takeover) to surrender each such option to the
Corporation, to the extent the option is at the time exercisable for vested
shares of Common Stock. In return for the surrendered option, the Optionee shall
receive a cash distribution from the Corporation in an amount equal to the
excess of (A) the Takeover Price of the shares of Common Stock which are at the
time vested under each surrendered option (or surrendered portion) over (B) the
aggregate exercise price payable for those shares. Such cash distribution shall
be paid within five (5) days following the option surrender date.
(iii) The Plan Administrator shall preapprove, at the time the
limited right is granted, the subsequent exercise of that right in accordance
with the terms of the grant and the provisions of this Section V. No additional
approval of the Plan Administrator or the Board shall be required at the time of
the actual option surrender and cash distribution.
(iv) The balance of the option (if any) shall remain
outstanding and exercisable in accordance with the documents evidencing such
option.
ARTICLE THREE
STOCK ISSUANCE PROGRAM
I. STOCK ISSUANCE TERMS
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Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants.
Each such stock issuance shall be evidenced by a Stock Issuance Agreement which
complies with the terms specified below.
A. PURCHASE PRICE.
1. The purchase price per share shall be fixed by the Plan
Administrator, but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the issuance date.
2. Subject to the provisions of Section I of Article Five,
shares of Common Stock may be issued under the Stock Issuance Program for any
combination of the following items of consideration which the Plan Administrator
may deem appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any Parent
or Subsidiary).
B. VESTING PROVISIONS.
1. Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant's period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program shall be
determined by the Plan Administrator and incorporated into the Stock Issuance
Agreement.
2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii)such escrow arrangements as the Plan Administrator shall deem appropriate.
3. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or not the Participant's interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the
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performance objectives not be attained with respect to one or more such unvested
shares of Common Stock, then those shares shall be immediately surrendered to
the Corporation for cancellation, and the Participant shall have no further
stockholder rights with respect to those shares. To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash
or cash equivalent (including the Participant's purchase money indebtedness),
the Corporation shall repay to the Participant the cash consideration paid for
the surrendered shares and shall cancel the unpaid principal balance of any
outstanding purchase money note of the Participant attributable to the
surrendered shares.
5. The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested shares of Common Stock which
would otherwise occur upon the cessation of the Participant's Service or the non
attainment of the performance objectives applicable to those shares. Such waiver
shall result in the immediate vesting of the Participant's interest in the
shares as to which the waiver applies. Such waiver may be effected at any time,
whether before or after the Participant's cessation of Service or the attainment
or non attainment of the applicable performance objectives.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. All of the Corporation's outstanding repurchase rights under
the Stock Issuance Program shall terminate automatically, and
all the shares of Common Stock subject to those terminated
rights shall immediately vest in full, in the event of any
Corporate Transaction, except to the extent (i) those
repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such
Corporate Transaction or (ii) such accelerated vesting is
precluded by other limitations imposed in the Stock Issuance
Agreement.
B. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares are issued
under the Stock Issuance Program or any time while the
Corporation's repurchase rights with respect to those shares
remain outstanding, to structure one or more of those
repurchase rights so that such rights shall not be assignable
in connection with a Corporate Transaction and shall
accordingly terminate upon the consummation of such Corporate
Transaction, and the shares subject to those terminated
repurchase rights shall thereupon vest in full.
C. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares are issued
or any time while the Corporation's repurchase rights remain
outstanding under the Stock Issuance Program, to provide that
those rights shall automatically terminate in whole or in
part, and the shares of Common Stock subject to those
terminated rights shall immediately vest, in the event the
Participant's Service should subsequently terminate by reason
of an Involuntary Termination within a designated period (not
to exceed eighteen (18) months) following the effective date
of any Corporate Transaction
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in which those repurchase rights are assigned to the successor
corporation (or parent thereof).
D. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares are issued
or any time while the Corporation's repurchase rights with
respect to those shares remain outstanding under the Stock
Issuance Program, to structure one or more of those repurchase
rights so that such rights shall automatically terminate in
whole or in part, and the shares of Common Stock subject to
those terminated rights shall immediately vest, upon (i) a
Change in Control or (ii) the subsequent termination of the
Participant's Service by reason of an involuntary Termination
within a designated period (not to exceed eighteen (18)
months) following the effective date of such Change in Control
or Involuntary Termination.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held in
escrow by the Corporation until the Participant's interest in such shares vests
or may be issued directly to the Participant with restrictive legends on the
certificates evidencing those unvested shares.
ARTICLE FOUR
AUTOMATIC OPTION PROGRAM
I. OPTION TERMS
A. GRANT DATES. Option grants shall be made on the dates
specified below:
1. Each individual serving as a nonemployee Board member on
the Plan Effective Date shall automatically be granted at that time a
Nonstatutory Option to purchase 6,000 shares of Common Stock, provided that
individual has not previously been in the employ of the Corporation or any
Parent or Subsidiary.
2. Each individual who is first elected or appointed as a
nonemployee Board member on or after the Plan Effective Date shall automatically
be granted, on the date of such initial election or appointment, a Nonstatutory
Option to purchase 6,000 shares of Common Stock, provided that individual has
not previously been in the employ of the Corporation or any Parent or
Subsidiary.
3. On the date of each Annual Stockholders Meeting, beginning
with the 1998 Annual Stockholders Meeting, each individual who is to continue to
serve as an Eligible Director, whether or not that individual is standing for
reelection to the Board at that particular Annual Meeting, shall automatically
be granted a Nonstatutory Option to purchase 3,000 shares of Common Stock,
provided such individual has served as a nonemployee Board member for at least
six (6) months. There shall be no limit on the number of such 3,000 share option
grants any
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one Eligible Director may receive over his or her period of Board service, and
nonemployee Board members who have previously been in the employ of the
Corporation (or any Parent or Subsidiary) shall be eligible to receive one or
more such annual option grants over their period of continued Board service.
Stockholder approval of the Plan on the Plan Effective Date will
constitute preapproval of each option granted pursuant to the express terms of
this Automatic Option Grant Program and the subsequent exercise of that option
in accordance with its terms.
B. EXERCISE PRICE.
1. The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
C. OPTION TERM. Each option shall have a term of ten (10) years
measured from the option grant date.
D. EXERCISE AND VESTING OF OPTIONS. Each initial 6,000 share
option grant shall be immediately exercisable for any or all
of the option shares, 3,000 of which shall be fully vested
shares of Common Stock, and all of which shall remain so
exercisable until the expiration or sooner termination of the
option term. The remaining 3,000 of the shares of Common Stock
purchased under such initial 6,000 share grant shall be
subject to repurchase by the Corporation, at the exercise
price paid per share, upon the Optionee's cessation of Board
service prior to vesting in those shares. The unvested portion
of the initial 6,000 share grant shall vest, and the
Corporation's repurchase right shall lapse, in two (2)
successive equal annual installments (the first of which shall
be for 2,000 of the 3,000 unvested shares and the second of
which shall be for the remaining 1,000 of the 3,000 unvested
shares), upon the Optionee's completion of each year of Board
service over the two (2) year period measured from the date of
the initial grant. Each annual 3,000 share grant shall also be
immediately exercisable for any or all of the option shares.
However, 2,000 of the shares of Common Stock purchased under
each annual 3,00,0 share grant shall be subject to repurchase
by the Corporation, at the exercise price paid per share, upon
the Optionee's cessation of Board service prior to vesting in
those shares. The unvested portion of each annual 3,000 share
grant shall vest, and the Corporation's repurchase right shall
lapse, in a series of two (2) successive equal annual
installments upon the Optionee's completion of each year of
Board service over the two (2) year period measured from the
automatic grant date.
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E. TERMINATION OF BOARD SERVICE. The following provisions shall
govern the exercise of any options held by the Optionee at the
time the Optionee ceases to serve as a Board member:
(i) The Optionee (or, in the event of Optionee's death, the
personal representative of the Optionee's estate or the person or persons to
whom the option is transferred pursuant to the Optionee's will or in accordance
with the laws of descent and distribution) shall have a twelve (12) month period
following the date of such cessation of Board service in which to exercise each
such option.
(ii) During the twelve (12) month exercise period, the option
may not be exercised in the aggregate for more than the number of vested shares
of Common Stock for which the option is exercisable at the time of the
Optionee's cessation of Board service.
(iii) Should the Optionee cease to serve as a Board member by
reason of death or Permanent Disability, then all shares at the time subject to
the option shall immediately vest so that such option may, during the twelve
(12) month exercise period following such cessation of Board service, be
exercised for all or any portion of those shares as fully vested shares of
Common Stock.
(iv) In no event shall the option remain exercisable after the
expiration of the option term. Upon the expiration of the twelve (12) month
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares for
which the option has not been exercised. However, the option shall, immediately
upon the Optionee's cessation of Board service for any reason other than death
or Permanent Disability, terminate and cease to be outstanding to the extent the
option is not otherwise at that time exercisable for vested shares.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKEOVER
A. The shares of Common Stock subject to each option outstanding
under this Article Four at the time of a Corporate Transaction
but not otherwise vested shall automatically vest in full so
that each such option shall, immediately prior to the
effective date of the Corporate Transaction, become fully
exercisable for all of the shares of Common Stock at the time
subject to such option and may be exercised for all or any
portion of those shares as fully vested shares of Common
Stock. Immediately following the consummation of the Corporate
Transaction, each automatic option grant shall terminate and
cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof).
B. The shares of Common Stock subject to each option outstanding
under this Article Four at the time of a Change in Control but
not otherwise vested shall automatically vest in full so that
each such option shall, immediately prior to the effective
date of the Change in Control, become fully exercisable for
all of the shares of Common Stock at the time subject to such
option and may be exercised
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for all or any portion of those shares as fully vested shares
of Common Stock. Each such option shall remain exercisable for
such fully vested option shares until the expiration or sooner
termination of the option term or the surrender of the option
in connection with a Hostile Takeover.
C. All outstanding repurchase rights under the Automatic Option
Grant Program shall automatically terminate, and the unvested
shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Corporate
Transaction or Change in Control.
D. Upon the occurrence of a Hostile Takeover, the Optionee shall
have a thirty (30) day period in which to surrender to the
Corporation each of his or her outstanding automatic option
grants. The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the
excess of (i) the Takeover Price of the shares of Common Stock
at the time subject to each surrendered option (whether or not
the optionee is otherwise at the time vested in those shares)
over (ii) the aggregate exercise price payable for such
shares. Such cash distribution shall be paid within five (5)
days following the surrender of the option to the Corporation.
Stockholder approval of the Plan on the Plan Effective Date
shall constitute preapproval of the grant of each such option
surrender right under this Automatic Option Grant Program and
the subsequent exercise of such right in accordance with the
terms and provisions of this Section II.D. No additional
approval or consent of the Plan Administrator or the Board
shall be required at the time of the actual option surrender
and cash distribution.
E. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to the Optionee
in consummation of such Corporate Transaction had the option
been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the
exercise price payable per share under each outstanding
option, provided the aggregate exercise price payable for such
securities shall remain the same.
F. The grant of options under the Automatic Option Grant Program
shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business
or assets.
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic option
Grant Program shall be the same as the terms in effect for option grants made
under the Discretionary Option Grant Program.
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ARTICLE FIVE
MISCELLANEOUS
I. FINANCING
The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Discretionary Option Grant Program or the
purchase price of shares issued under the Stock Issuance Program by delivering a
full recourse, interest bearing promissory note payable in one or more
installments. The terms of any such promissory note (including the interest rate
and the terms of repayment) shall be established by the Plan Administrator in
its sole discretion. In no event may the maximum credit available to the
Optionee or Participant exceed the sum of (i) the aggregate option exercise
price or purchase price payable for the purchased shares (less the par value of
those shares) plus (ii) any Federal, state and local income and employment tax
liability incurred by the Optionee or the Participant in connection with the
option exercise or share purchase.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options or the issuance or vesting of
such shares under the Plan shall be subject to the
satisfaction of all applicable Federal, state and local income
and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or
all holders of Nonstatutory Options or unvested shares of
Common Stock under the Plan (other than the options granted or
the shares issued under the Automatic Option Grant Program)
with the right to use shares of Common Stock in satisfaction
of all or part of the Taxes incurred by such holders in
connection with the exercise of their options or the vesting
of their shares. Such right may be provided to any such holder
in either or both of the following formats:
Stock Withholding: The election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such Nonstatutory Option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the Taxes
(not to exceed one hundred percent (100%)) designated by the holder.
Stock Delivery: The election to deliver to the Corporation, at
the time the Nonstatutory Option is exercised or t-he shares vest, one or more
shares of Common Stock previously acquired by such holder (other than in
connection with the option exercise or share vesting triggering the Taxes) with
an aggregate Fair Market Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the holder.
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<PAGE>
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board as of June 30, 1997 and
shall become effective upon approval by the Corporation's
stockholders at the 1997 Annual Meeting Held on the Plan
Effective Date.
B. The Plan shall terminate upon the earliest to occur of (i) 12,
2007, (ii) the date on which all shares available for issuance
under the Plan shall have been issued as fully vested shares
or (iii) the termination of all outstanding options in
connection with a Corporate Transaction. Upon such plan
termination, all outstanding option grants and unvested stock
issuances shall thereafter continue to have force and effect
in accordance with the provisions of the documents evidencing
those grants or issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects.
However, no such amendment or modification shall adversely
affect the rights and obligations with respect to stock
options or unvested stock issuances at the time outstanding
under the Plan unless the Optionee or the Participant consents
to such amendment or modification. In addition, certain
amendments may require stockholder approval pursuant to
applicable laws or regulations.
B. Options to purchase shares of Common Stock may be granted
under the Discretionary Option Grant Program and shares of
Common Stock may be issued under the Stock Issuance Program
that are in each instance in excess of the number of shares
then available for issuance under the Plan, provided any
excess shares actually issued under those programs shall be
held in escrow until there is obtained stockholder approval of
an amendment sufficiently increasing the number of shares of
Common Stock available for issuance under the Plan. If such
stockholder approval is not obtained within twelve (12) months
after the date the first such excess issuances are made, then
(i) any unexercised options granted on the basis of such
excess shares shall terminate and cease to be outstanding and
(ii) the Corporation shall promptly refund to the Optionees
and the Participants the exercise or purchase price paid for
any excess shares issued under the Plan and held in escrow,
together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held in escrow, and such
shares shall thereupon be automatically cancelled and cease to
be outstanding.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.
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<PAGE>
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock
option under the Plan and the issuance of any shares of Common
Stock (i) upon the exercise of any granted option or (ii)
under the Stock Issuance Program shall be subject to the
Corporation's procurement of all approvals and permits
required by regulatory authorities having jurisdiction over
the Plan, the stock options granted under it and the shares of
Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have
been compliance with all applicable requirements of Federal
and state securities laws, including the filing and
effectiveness of the Form S-8 registration statement for the
shares of Common Stock issuable under the Plan, and all
applicable listing requirements of the Nasdaq National Market
or any stock exchange on which Common Stock is then listed for
trading, if applicable.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.
APPENDIX
The following definitions shall be in effect under the Plan:
A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option
grant program in effect under the Plan.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership or control
of the Corporation effected through either of the following
transactions:
(i) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders, or
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(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the Board
members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time the Board approved such election or nomination.
D. COMMON STOCK shall mean the Corporation's Common Stock, which
shall be registered under Section 12(g) of the 1934 Act and
shall be entitled to one (1) vote per share on all matters
subject to stockholder approval.
E. CODE shall mean the Internal Revenue Code of 1986, as amended.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder approved transactions to which the Corporation is
a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
G. CORPORATION shall mean Specialty Teleconstructors, Inc., a
Nevada corporation, and its successors.
H. DISCRETIONARY OPTION GRANT PROGRAM shall mean the
discretionary option grant program in effect under the Plan.
I. ELIGIBLE DIRECTOR shall mean a nonemployee Board member
eligible to participate in the Automatic Option Grant Program
in accordance with the eligibility provisions of Article One.
J. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or, any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.
K. EXERCISE DATE shall mean the date on which the Corporation
shall have received written notice of the option exercise.
L. FAIR MARKET VALUE per share of Common Stock on any relevant
date shall be determined in accordance with the following
provisions:
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<PAGE>
(i) if the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be deemed equal to the closing
selling price per share of Common Stock on the date in question, as such price
is reported on the Nasdaq National Market or any successor system. If there is
no closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.
(ii) If the Common Stock is at the time listed on the Nasdaq
National Market or any Stock Exchange, then the Fair Market Value shall be
deemed equal to the closing selling price per share of Common stock on the date
in question on the Nasdaq National Market or the Stock Exchange determined by
the Plan Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on the Nasdaq
National Market or such exchange. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.
M. HOSTILE TAKEOVER shall mean the acquisition, directly or
indirectly, by any person or related group of persons (other
than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with,
the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's
stockholders which the Board does not recommend such
stockholders to accept.
N. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
O. INVOLUNTARY TERMINATION shall mean the termination of the
Service of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by
the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a
change in his or her position with the Corporation which materially reduces his
or her duties and responsibilities or the level of management to which he or she
reports, (B) a reduction in his or her level of compensation (including base
salary, fringe benefits and participation in any corporate performance based
bonus or incentive programs) by more than fifteen percent (15%) or (C) a
relocation of such individual's place of employment by more than fifty (50)
miles, provided and only if such change, reduction or relocation is effected by
the Corporation without the individual's consent.
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<PAGE>
P. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any
unauthorized use or disclosure by such person of confidential
information or trade secrets of the Corporation (or any Parent
or Subsidiary), or any other intentional misconduct by such
person adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material
manner. The foregoing definition shall not be deemed to be
inclusive of all the acts or omissions which the Corporation
(or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other
person in the Service of the Corporation (or any Parent or
Subsidiary).
Q. 1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.
R. NONSTATUTORY OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.
S. OPTIONEE shall mean any person to whom an option is granted
under the Discretionary Option Grant or Automatic Option Grant
Program.
T. PARENT shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain
(other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one
of the other corporations in such chain.
U. PARTICIPANT shall mean any person who is issued shares of
Common Stock under the Stock Issuance Program.
V. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
inability of the Optionee or the Participant to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment expected to result
in death or to be of continuous duration of twelve (12) months
or more. However, solely for purposes of the Automatic Option
Grant Program, Permanent Disability or Permanently Disabled
shall mean the inability of the nonemployee Board member to
perform his or her usual duties as a Board member by reason of
any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of
twelve (12) months or more.
W. PLAN shall mean the Corporation's 1997 Stock Incentive Plan,
as set forth in this document.
X. PLAN ADMINISTRATOR shall mean the particular entity, whether
the Primary Committee, the Board or the Secondary Committee,
which is authorized to administer the Discretionary Option
Grant and Stock Issuance Programs with
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<PAGE>
respect to one or more classes of eligible persons, to the
extent such entity is carrying out its administrative
functions under those programs with respect to the persons
under its jurisdiction.
Y. PLAN EFFECTIVE DATE shall mean the date of the 1997 Annual
Stockholders Meeting at which the Plan is approved by the
Corporation's stockholders.
Z. PRIMARY COMMITTEE shall mean the committee of two (2) or more
nonemployee Board members appointed by the Board to administer
the Discretionary Option Grant and Stock Issuance Programs
with respect to Section 16 Insiders.
AA. SECONDARY COMMITTEE shall mean a committee of one (1) or more Board
members appointed by the Board to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to eligible persons other than Section 16
insiders.
AB. SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short swing profit liabilities of Section 16 of the
1934 Act.
AC. SERVICE shall mean the performance of services for the Corporation
(or any Parent or Subsidiary) by a person in the capacity of an employee, a
nonemployee member of the board of directors or a consultant or independent
advisor, except to the extent otherwise specifically provided in the documents
evidencing the option grant or stock issuance.
AD. STOCK EXCHANGE shall mean the Pacific Stock Exchange or such
national if any, on which the Common Stock is then listed for trading.
AE. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by
the Corporation and the Participant at the time of issuance of shares of Common
Stock under the stock Issuance Program.
AF. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
effect under the Plan.
AG. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
AH. TAKEOVER PRICE shall mean the greater of (i) the Fair Market Value
per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Takeover or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Takeover. However, if the surrendered option is an Incentive option, the
Takeover Price shall not exceed the clause (i) price per share.
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<PAGE>
AI. TAXES shall mean the Federal, state and local income and employment
tax liabilities incurred by the holder of Nonstatutory Options or unvested
shares of Common Stock in connection with the exercise of those options or the
vesting of those shares.
AJ. 10% STOCKHOLDER shall mean the owner of stock (as determined under
Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
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EXHIBIT 10.2
SPECIALTY TELECONSTRUCTORS, INC.
1998 STOCK OPTION PLAN
1. Purpose.
Specialty Teleconstructors, Inc., a Nevada corporation (herein,
together with its successors, referred to as the "Company"), by means of this
1998 Stock Option Plan (the "Plan"), desires to afford certain key employees
employed by, and certain persons performing services for the Company and any
direct or indirect subsidiary or parent corporation thereof now existing or
hereafter formed or acquired (such corporations sometimes referred to herein as
"Related Entities") who are responsible for the continued growth of the Company
an opportunity to acquire a proprietary interest in the Company, and thus to
create in such persons an increased interest in and a greater concern for the
welfare of the Company and any Related Entities. Certain definitions used herein
are defined in Section 18 of this Plan.
The stock options described in Sections 6 and 7 (the "Options"), and
the shares of Common Stock (as hereinafter defined) acquired pursuant to the
exercise of such Options are a matter of separate inducement and are not in lieu
of any salary or other compensation for services. As used in the Plan, the terms
"parent corporation" and "subsidiary corporation" shall have the meanings
contained in Sections 424(e) and 424(f), respectively, of the Internal Revenue
Code of 1986, as amended (the "Code").
2. Administration.
The Plan ! shall be administered by the Compensation Committee of the
Board of Directors of the Company or by any other committee appointed by the
Board of Directors of the Company to administer this Plan (the "Committee");
provided, that the entire Board of Directors of the Company (the "Board of
Directors") may act as the Committee if it chooses to do so; and provided,
further, that (i) for purposes of determining any Performance-Based Options (as
hereinafter defined) applicable to Key Employees (as hereinafter defined) who
constitute "covered employees" within the meaning of Section 162 (m) of the
Code, "Committee" shall mean the members of the Compensation Committee of the
Board of Directors who qualify as "outside directors" within the meaning of
Section 162(m) of the Code, and such Performance-Based Options shall be subject
to ratification by unanimous approval of the members of the Board of Directors,
and (ii) for so long as the Company is subject to the reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Committee shall be composed solely of two or more "Non Employee Directors" as
defined in Rule 16b-3, as amended ("Rule 16b-3"), promulgated thereunder;
provided, that, alternatively, for purposes of granting Options other than
Performance-Based Options hereunder, the Board of Directors may authorize such
grants and may take any other action permitted pursuant to Section 162(m) of the
Code, Rule 16b-3 and applicable law and regulations.
The number of individuals that shall constitute the Committee shall be
determined from time to time by a majority of all the members of the Board of
Directors, and, unless that majority of the Board of Directors determines
otherwise, shall be no less than two individuals. A majority of the Committee
shall constitute a quorum (or if the Committee consists of only two members,
then both
<PAGE>
members shall constitute a quorum), and subject to the provisions of Section 5,
the acts of a majority of the members present at any meeting at which a quorum
is present, or acts approved in writing by all members of the Committee, shall
be the acts of the Committee. The Committee shall administer the Plan so as (i)
to comply at all times with the Exchange Act, and (ii) to ensure that
compensation attributable to Options granted under the Plan to Key Employees who
constitute "covered employees" within the meaning of Section 162(m) of the Code
shall (A) meet the deduction limitation imposed by Section 162(m) of the Code,
or (B) qualify as "performance-based compensation" as such term is used in
Section 162(m) of the Code and the regulations promulgated thereunder and thus
be exempt from the deduction limitation imposed by Section 162(m) of the Code.
The members of the Committee shall serve at the pleasure of the Board
of Directors, which shall have the power, at any time and from time to time, to
remove members from or add members to the Committee. Removal from the Committee
may be with or without cause. Any individual serving as a member of the
Committee shall have the right to resign from membership in the Committee by
written notice to the Board of Directors. The Board of Directors, and not the
remaining members of the Committee, shall have the power and authority to fill
vacancies on the Committee, however caused. The Board of Directors shall
promptly fill any vacancy that causes the number of members of the Committee to
be below two or any other number that Rule 16b- 3 or other applicable rules
under Section 16 (b) of the Exchange Act, Section 162 (in) of the Code, or any
successor or analogous rules or laws may require from time to time.
3. Shares Available and Maximum Individual Grants.
Subject to the adjustments provided in Section 10, the maximum
aggregate number of shares of common stock, par value $0.01 per share, of the
Company ("Common Stock") in respect of which Options may be granted for all
purposes under the Plan shall be 675,000 shares. If, for any reason, any shares
as to which Options have been granted cease to be subject to purchase
thereunder, including the expiration of such Option, the termination of such
Option prior to exercise, or the forfeiture of such Option, such shares shall
thereafter be available for grants under the Plan. Options granted under the
Plan may be fulfilled in accordance with the terms of the Plan with (i)
authorized and unissued shares of the Common Stock, or (ii) issued shares of
such Common Stock held in the Company's treasury.
The maximum aggregate number of shares of Common Stock underlying all
Options that may be granted to any single Key Employee (as hereinafter defined),
including any Options that may have been granted to such Key Employee as an
Eligible Non-Employee (as hereinafter defined), during the Term (as hereinafter
defined) of the Plan shall be 250,000 shares, subject to the adjustments
provided in Section 10. For purposes of the preceding sentence, such Options
that are canceled or repriced shall continue to be counted in determining such
maximum aggregate number of shares of Common Stock that may be granted to any
single Key Employee, including any Options that may have been granted to such
Key Employee as an Eligible NonEmployee, during the Term of the Plan.
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<PAGE>
4. Eligibility and Bases of Participation.
Grants of Incentive Options (as hereinafter defined) and Non-Qualified
Options (as hereinafter defined) may be made under the Plan, subject to and in
accordance with Section 6, to Key Employees. As used herein, the term "Key
Employee" shall mean any employee of the Company or any Related Entity,
including officers and directors of the Company or any Related Entity who are
also employees of the Company or any Related Entity, who are regularly employed
on a salaried basis and who are so employed on the date of such grant, whom the
Committee identifies as having a direct and significant effect on the
performance of the Company or any Related Entity.
Grants of Non-Qualified Options may be made, subject to and in
accordance with Section 7, to any Eligible Non-Employee. As used herein, the
term "Eligible Non-Employee" shall mean any person or entity of any nature
whatsoever, specifically including an individual, a firm, a company, a
corporation, a partnership, a trust, or other entity (collectively, a "Person"),
that the Committee designates as eligible for a grant of Options pursuant to
this Plan because such Person performs bona fide consulting, advisory, or other
services for the Company or any Related Entity (other than services in
connection with the offer or sale of securities in a capital-raising
transaction) and the Board of Directors or the Committee determines that the
Person has a direct and significant effect on the performance of the Company or
any Related Entity.
The adoption of this Plan shall not be deemed to give any Person a
right to be granted any Options.
5. Authority of Committee.
Subject to and not inconsistent with the express provisions of the
Plan, the Code and, if applicable, Rule 16b-3 and Section 162(m) of the Code,
the Committee shall have plenary authority to:
a. determine the Key Employees and Eligible Non-Employees to
whom Options shall be granted, the time when such Options shall be
granted, the number of Options, the purchase price or exercise price of
each Option, the period(s) during which such Options shall be
exercisable (whether in whole or in part, including whether such
Options shall become immediately exercisable upon the consummation of a
change of Control), the restrictions to be applicable to Options and
all other terms and provisions thereof (which need not be identical);
b. require, as a condition to the granting of any Option, that
the Person receiving such Option agree not to sell or otherwise dispose
of such Option, any Common Stock acquired pursuant to such Option, or
any other "derivative security" (as defined by Rule 16a- I (c) under
the Exchange Act) of the Company for a peri@d of six months following
the later of (i) the date of the grant of such Option or (ii) the date
when the exercise price of such Option is fixed if such exercise price
is not fixed at the date of grant of such Option, or for such other
period as the Committee may determine;
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<PAGE>
c. provide an arrangement through registered broker-dealers
whereby temporary financing may be made available to an optionee by the
broker-dealer, under the rules and regulations of the Board of
Governors of the Federal Reserve, for the purpose of assisting the
optionee in the exercise of an Option, such authority to include the
payment by the Company of the commissions of the broker-dealer;
d. provide the establishment of procedures for an optionee (i)
to have withheld from the total number of shares of Common Stock to be
acquired upon the exercise of an Option that number of shares having a
Fair Market Value which, together with such cash as shall be paid in
respect of fractional shares, shall equal the aggregate exercise price
under such Option for the number of shares then being acquired
(including the shares to be so withheld), and (ii) to exercise a
portion of an Option by delivering that number of shares of Common
Stock already owned by such optionee having an aggregate Fair Market
Value which shall equal the partial Option exercise price, and to
deliver the shares thus acquired by such optionee, in payment of shares
to be received pursuant to the exercise of additional portions of such
Option, the effect of which shall be that such optionee can in sequence
utilize such newly acquired shares in payment of the exercise price of
the entire Option, together with such cash as shall be paid in respect
of fractional shares; provided, however, that (i) in the case of an
Incentive Option, no shares shall be used to pay the exercise price
under this paragraph unless (A) such shares were not acquired through
the exercise of an Incentive Option, or (B) if so acquired, (x) such
shares have been held for more than two years since the grant of such
Incentive Option and for more than one year since the exercise of such
Incentive Option (the "Holding Period"), or (y) if such shares do not
meet the Holding Period, the optionee elects in writing to use such
shares to, pay the exercise price under this paragraph, and (ii) no
such procedure shall be available if there is an opinion of the
Company's independent accounting firm that the use of such a procedure
could negatively affect the financial statements of the Company or a
Related Entity;
e. provide (in accordance with Section 13 or otherwise) the
establishment of a procedure whereby a number of shares of Common Stock
or other securities may be withheld from the total number of shares of
Common Stock or other securities to be issued upon exercise of an
Option to meet the obligation of withholding for income, social
security and other taxes incurred by an optionee upon such exercise or
required to be withheld by the Company or a Related Entity in
connection with such exercise unless, as determined by the Committee in
the exercise of its discretion, such procedure is not permitted by
applicable law or would result in a charge to earnings that otherwise
would not have occurred;
f. prescribe, amend, modify and rescind rules and regulations
relating to the Plan; and
g. make all determinations permitted or deemed necessary,
appropriate or advisable for the administration of the Plan, interpret
any Plan or Option provision, perform all other acts, exercise all
other powers, and establish any other procedures determined by the
Committee to be necessary, appropriate, or advisable in administering
the Plan or for the conduct of the Committee's business. Any act of the
Committee, including interpretations
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<PAGE>
of the provisions of the Plan or any Option and determinations under
the Plan or any Option shall be final, conclusive and binding on all
parties.
The Committee may delegate to one or more of its members, or to one or
more agents, such administrative duties as it may deem advisable, and the
Committee or any Person to whom it has delegated duties as aforesaid may employ
one or more Persons to render advice with respect to any responsibility the
Committee or such Person may have under the Plan; provided, however, that any
such delegation shall be in writing; and provided, however, that, any
determination of Performance-Based Options (as hereinafter defined) applicable
to Key Employees who constitute "covered employees" within the meaning of
Section 162 (m) of the Code may not be delegated to a member of the Board of
Directors who, if elected to serve on the Committee, would not qualify as an
"outside director" within the meaning of Section 162(m) of the Code. The
Committee may employ attorneys, consultants, accountants, or other Persons and
the Committee, the Company, and its officers and directors shall be entitled to
rely upon the advice, opinions, or valuations of any such Persons. No member or
agent of the Committee shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan and all members
and agents of the Committee shall be fully protected by the Company in respect
of any such action, determination or interpretation.
6. Stock Option Grants to Key Employees.
Subject to the express provisions of this Plan, the Committee shall
have the authority to grant incentive stock options pursuant to Section 422 of
the Code ("Incentive Options"), to grant non-qualified stock options (options
which do not qualify under Section 422 of the Code) ("NonQualified Options"),
and to grant both types of Options to Key Employees. No Incentive Option shall
be granted pursuant to this Plan after the earlier of ten years from the date of
adoption of the Plan or ten years from the date of approval of the Plan by the
stockholders of the Company. Incentive Options may be granted only to Key
Employees. The terms and conditions of the Options granted under this Section 6
shall be determined from time to time by the Committee; provided, however, that
the Options granted under this Section 6 shall be subject to all terms and
provisions of the Plan (other than Section 7), including the following:
a. Option Exercise Price. Subject to Section 4, the Committee
shall establish the Option exercise price at the time any Option is
granted to a Key Employee at such amount as the Committee shall
determine; provided, that, in the case of an Incentive Option, such
price shall not be less than the Fair Market Value per share of Common
Stock at the date the Option is granted; and provided, further, that in
the case of an Incentive Option granted to a person who, at the time
such Incentive Option is granted, owns shares of the Company or any
Related Entity which possess more than 10% of the total combined voting
power of all classes of shares of the Company or of any Related Entity,
the option exercise price shall not be less than I 10% of the Fair
Market Value per share of Common Stock at the date the Option is
granted. The Option exercise price shall be subject to adjustment in
accordance with the provisions of Section 10 of the Plan.
B5
<PAGE>
b. Payment. The price per share of Common Stock with respect
to each Option exercise by a Key Employee shall be payable at the time
of such exercise. Such price shall be payable in cash or by any other
means acceptable to the Committee, including delivery to the Company of
shares of Common Stock owned by the optionee or by the delivery or
withholding of shares pursuant to a procedure created pursuant to
subsection 5 (d) of the Plan (but, with respect to Incentive Options,
subject to the limitations described in such subsection 5(d)). Shares
delivered to or withheld by the Company in payment of the Option
exercise price shall be valued at the Fair Market Value of the Common
Stock on the day preceding the date of the exercise of the Option.
c. Exercisability of Stock Option. Unless otherwise determined
by the Committee at the time of grant, and subject to the provisions of
subsections 6(d), (e), (f), (g) and (i) below, stock options granted to
Key Employees hereunder shall vest and become exercisable according to
the vesting schedule set forth below:
o one-third of the shares of Common Stock underlying the stock
option grant shall vest and become exercisable on the first
anniversary of the date of grant and remain exercisable
until the stock option expires; and
o an additional one-third of the shares of Common Stock
underlying the stock option grant shall vest and become
exercisable on the second anniversary of the date of grant
and remain exercisable until the stock option expires; and
o the final one-third of the shares of Common Stock underlying
the stock option grant shall vest and become exercisable on
the third anniversary of the date of grant and remain
exercisable until the stock option expires.
No Option by its terms shall be exercisable after the expiration of ten years
from the date of grant of the Option, unless, as to any Non-Qualified Option,
otherwise expressly provided in such Option; provided, however, that no
Incentive Option granted to a person who, at the time such Option is granted,
owns stock of the Company, or any Related Entity, possessing more than 10% of
the total combined voting power of all classes of stock of the Company, or any
Related Entity, shall be exercisable after the expiration of five years from the
date such Option is granted.
d. Death. If any optionee's employment with the Company or a
Related Entity terminates due to the death of such optionee, the estate
of such optionee, or a Person who acquired the right to exercise such
Option by bequest or inheritance or by reason of the death of the
optionee, shall have the right to exercise the vested portion of such
Option in accordance with its terms at any time and from time to time
within 180 days after the date of death unless a longer or shorter
period is expressly provided in such Option or established by the
Committee pursuant to Section 9 (but in no event after the expiration
date of such Option), and thereafter such Option shall lapse and no
longer be exercisable.
c. Disability. If the employment of any optionee terminates
because of his or her Disability (as defined in Section 18), such
optionee or his or her legal representative shall
B6
<PAGE>
have the right to exercise the vested portion of such Option in
accordance with its terms at any time and from time to time within 180
days after the date of such termination unless a longer or shorter
period is expressly provided in such Option or established by the
Committee pursuant to Section 9 (but in no event after the expiration
date of the Option), and thereafter such Option shall lapse and no
longer be exercisable; provided, however, that in the case of an
Incentive Option, the optionee or his or her legal representative shall
in any event be required to exercise the vested portion of such
Incentive Option within one year after termination of the optionee's
employment due to his or her Disability.
f. Termination for Cause. Unless an optionee's Option
expressly provides otherwise, such optionee shall immediately forfeit
all rights under his or her Option, except as to the shares of stock
already purchased thereunder, if the employment of such optionee with
the Company or a Related Entity is terminated by the Company or any
Related Entity for Good Cause (as defined below). The determination
that there exists Good Cause for termination shall be made by the
Committee (unless otherwise agreed to in writing by the Company and the
optionee) and any decision in respect thereof by the Committee shall be
final and binding on all parties in interest.
g. Other Termination of Employment. If the employment of an
optionee with the Company or a Related Entity terminates for any reason
(including if such optionee voluntarily terminates employment with or
without the consent of the Company or any Related Entity) other than
those specified in subsections 6(d), (e) or (f) above, then with the
approval of the Board of Directors, such optionee shall have the right
to exercise the vested portion of his or her Option in accordance with
its terms, within 30 days after the date of such termination, unless a
longer or shorter period is expressly provided in such Option or
established by the Committee pursuant to Section 9 (but in no event
after the expiration date of the Option), and thereafter such Option
shall lapse and no longer be exercisable; provided, that (i) no
Incentive Option shall be exercisable more than three months after such
termination, and (ii) the Committee may, in the exercise of its
discretion, extend the exercise date of any Option upon termination of
employment for a period not to exceed six months plus one day (but in
no event after the expiration date of the Option) if the Committee
determines that the stated exercise date will have an inequitable
result under Section 16(b) of the Exchange Act.
h. Maximum Exercise. To the extent that the aggregate Fair
Market Value of Common Stock (determined at the time of the grant of
the Option) with respect to which Incentive Options are exercisable for
the first time by an optionee during any calendar year under all plans
of the Company and any Related Entity exceeds $100,000, such Incentive
Options shall be treated as Non-Qualified Options.
i. Continuation of Employment. Each Incentive Option shall
require the optionee to remain in the continuous employ of the Company
or any Related Entity from the date of grant of the Incentive Option
until at least three months prior to the date of exercise of the
Incentive Option.
B7
<PAGE>
j. Interpretation of Plan. Any termination of employment of
an Optionee with the Company or any Related Entity shall in no way
change or amend the Company's at-will termination policy.
7. Stock Option Grants to Eligible Non-Employees.
Subject to the express provisions of this Plan, the Committee shall
have the authority to grant NonQualified Options (and not Incentive Options) to
Eligible Non-Employees; provided, however, that no Eligible Non-Employee then
serving on the Committee (or such other committee then administering the Plan)
shall be granted Options hereunder if the grant of such Options would cause such
Eligible NonEmployee to no longer be a "Non-Employee Director" as set forth in
Section 2 hereof. The terms and conditions of the Options granted under this
Section 7 shall be determined from time to time by the Committee; provided,
however, that the Options granted under this Section 7 shall be subject to all
terms and provisions of the Plan (other than Section 6), including the
following:
a. Option Exercise Price. Subject to Section 4, the Committee
shall establish the Option exercise price at the time any Non-Qualified
Option is granted to an Eligible Non-Employee at such amount as the
Committee shall determine. The Option exercise price shall be subject
to adjustment in accordance with the provisions of Section 10 of the
Plan.
b. Payment. The price per share of Common Stock with respect to
each Option exercise by an Eligible Non-Employee shall be payable at
the time of such exercise. Such price shall be payable in cash or by
any other means acceptable to the Committee, including delivery to the
Company of shares of Common Stock owned by the optionee or by the
delivery or withholding of shares pursuant to a procedure created
pursuant to subsection 5 (d) of the Plan. Shares delivered to or
withheld by the Company in payment of the Option exercise price shall
be valued at the Fair Market Value of the Common Stock on the day
preceding the date of the exercise of the Option.
c. Exercisability of Stock Option. Unless otherwise determined by
the Committee at the time of grant and subject to the provisions of
subsections 7 (d), (e), (f), (g) and (i) below, stock options granted
to Eligible Non-Employees hereunder shall vest and become exercisable
according to the vesting schedule set forth below:
o One-third of the shares of Common Stock underlying the stock
option grant shall vest and become exercisable on the first
anniversary of the date of grant and remain exercisable
until the stock option expires; and
o an additional one-third of the shares of Common Stock
underlying the stock option grant shall vest and become
exercisable on the second anniversary of the date of grant
and remain exercisable until the stock option expires; and
o the final one-third of the shares of Common Stock underlying
the stock option grant shall vest and become exercisable on
the third anniversary of the date of grant
B8
<PAGE>
and remain exercisable until the stock option expires.
No Option shall be exercisable after the expiration of ten years from the date
of grant of the Option, unless otherwise expressly provided in such Option.
d. Death. If the retention by the Company or any Related Entity of
the services of any Eligible Non-Employee that is a natural person
terminates because of his or her death, the estate of such optionee, or
a Person who acquired the right to exercise such Option by bequest or
inheritance or by reason of the death of the optionee, shall have the
right to exercise the vested portion of such Option in accordance with
its terms, at any time and from time to time within 180 days after the
date of death unless a longer or shorter period is expressly provided
in such Option or established by the Committee pursuant to Section 9
(but in no event after the expiration date of such Option), and
thereafter such Option shall lapse and no longer be exercisable.
e. Disability. If the retention by the Company or any Related
Entity of the services of any Eligible Non-Employee that is a natural
person terminates because of his or her Disability (as defined in
Section 18), such optionee or his or her legal representative shall
have the right to exercise the vested portion of such Option in
accordance with its terms at any time and from time to time within 180
days after the date of the optionee's termination unless a longer or
shorter period is expressly provided in such Option or established by
the Committee pursuant to Section 9 (but in no event after the
expiration of the Option), and thereafter such Option shall lapse and
no longer be exercisable.
f. Termination for Cause; Voluntary Termination. If the retention
by the Company or any Related Entity of the services of any Eligible
Non-Employee is terminated (i) for Good Cause, (ii) as a result of
removal of the optionee from office as a director of the Company or of
any Related Entity for cause by action of the stockholders of the
Company or such Related Entity in accordance with the certificate of
incorporation or, the by-laws of the Company or such Related Entity, as
applicable, and the corporate law of the jurisdiction of incorporation
of the Company or such Related Entity, or (iii) as a result of the
voluntary termination by such optionee of the optionee's service, then
such optionee shall immediately forfeit his, her or its rights under
such Option except as to the shares of stock already purchased. The
determination that there exists Good Cause for termination shall be
made by the Committee (unless otherwise agreed to in writing by the
Company and the optionee) and any decision in respect thereof by the
Committee shall be final and binding on all parties in interest.
g. Other Termination of Relationship. If the retention by the
Company or any Related Entity of the services of any Eligible
Non-Employee terminates for any reason other than those specified in
subsections 7 (d), (e) or (f) above, then with the approval of the
Board of Directors, such optionee shall have the right to exercise the
vested portion of his, her or its Option in accordance with its terms
within 30 days after the date of such termination, unless a longer or
shorter period is expressly provided in such Option or established by
the Committee pursuant to Section 9 (but in no event after the
expiration date of the Option), and
B9
<PAGE>
thereafter such Option shall lapse and no longer be exercisable;
provided, that the Committee may, in the exercise of its discretion,
extend the exercise date of any Option upon termination of retention of
an Eligible Non-Employee's services for a period not to exceed six
months plus one day (but in no event after the expiration date of the
Option) if the Committee determines that the stated exercise date will
have an inequitable result under Section 16(b) of the Exchange Act.
8. Performance-Based Options.
The Committee, in its sole discretion, may designate and design Options
granted under the Plan as Performance-Based Options (as hereinafter defined) if
it determines that compensation attributable to such Options might not otherwise
be tax deductible by the Company due to the deduction limitation imposed by
Section 162(m) of the Code. Accordingly, Options granted under the Plan may be
granted in such a manner that the compensation attributable to such Options is
intended by the Committee to qualify as "performance based compensation" as such
term is used in Section 162(m) of the Code and the regulations promulgated
thereunder and thus be exempt from the deduction limitation imposed by Section
162(m) of the Code ("Performance-Based Options").
Options granted under the Plan to Key Employees who constitute "covered
employees" within the meaning of Section 162(m) of the Code shall be deemed to
qualify as Performance-Based Options only if:
a. The Option exercise price is not less than the Fair Market
Value per share of Common Stock at the date the Option is granted;
provided, that in the case of an Incentive Option, such price is
subject to the limitations described in subsection 6(a); provided,
further, that the Option exercise price shall be subject to adjustment
in accordance with the provisions of Section 10 of the Plan; or
b. With respect a Non-Qualified Option granted at an exercise
price that is below the Fair Value per share of the Common Stock on the
date of grant, such Option satisfies the following requirements:
(i) the granting or vesting of such Non-Qualified
Option is subject to the achievement of a performance goal or
goals based on one or more of the following performance
measures (either individually or- in any combination): net
sales; pre-tax income before allocation of corporate overhead
and bonus; budget; cash flow; earnings per share; net income;
division, group or corporate financial goals; return on
stockholders' equity; return on assets; attainment of,
strategic and operational initiatives; appreciation in and/or
maintenance of the price of the Common Stock or any other
publicly-traded securities of the Company; market share; gross
profits; earnings before interest and taxes; earnings before
interest, taxes, depreciation and amortization; economic
value-added models; comparisons with various stock market
indices; increase in number of customers; and/or reductions in
costs;
(ii) the Committee establishes in writing (A) the
objective performance-based
B10
<PAGE>
goals applicable to a given performance period, and (B) the
individual employees or class of employees to which such
performance-based goals apply no later than ninety days after
the commencement of such performance period (but in no event
after twenty-five percent of such performance period has
elapsed);
(iii) no compensation attributable to
Performance-Based Options will be paid to or otherwise
received by a Key Employee who constitutes a "covered
employee" within the meaning of Section 162(m) of the Code
until the Committee certifies in writing that the performance
goal or goals (and any other material terms) applicable to
such performance period have been satisfied;
(iv) after the establishment of a performance goal,
the Committee shall not revise such performance goal (unless
such revision will not disqualify compensation attributable to
the based compensation attributable to the Performance-Based
Options as "performance-based compensation" under Section
162(m) of the Code) or increase the amount of compensation
payable with respect to such Performance-Based Options upon
the attainment of such performance goal; and
(v) as required by the regulations promulgated under
Section 162(m) of the Code, the material terms of performance
goals as described in subsection 8 (b) (i) shall be disclosed
to and reapproved by the Company's stockholders no later than
the first stockholder meeting that occurs in the fifth year
following the year in which the Company stockholders
previously approved such performance goals.
9. Change of Control.
If (i) a Change of Control shall occur, or (ii) the Company shall enter
into an agreement providing for a Change of Control, then the Committee may
declare any or all Options outstanding under the Plan to be exercisable in full
at such time or times as the Committee shall determine, notwithstanding the
express provisions of such Options. Each Option accelerated by the Committee
pursuant to the preceding sentence shall terminate, notwithstanding any express
provision thereof or any other provision of the Plan, on such date (not later
than the stated exercise date) as the Committee shall determine.
10. Adjustment of Shares.
Except as otherwise contemplated in Section 9, and unless otherwise
expressly provided in a particular Option, in the event that, by reason of any
merger, consolidation, combination, liquidation, recapitalization, stock
dividend, stock split, split-up, split-off, spin-off, combination of shares,
exchange of shares or other like change in capital structure of the Company
(collectively, an "Adjustment Event"), the Common Stock is substituted,
combined, or changed into any cash, property, or other securities, or the shares
of Common Stock are changed into a greater or lesser number of shares of Common
Stock, the number and/or kind of shares and/or interests subject to an Option
and the per share price or value thereof shall be appropriately adjusted by the
Committee to give appropriate effect to such Adjustment Event. Any fractional
shares or interests resulting from
B11
<PAGE>
such adjustment shall be eliminated. Notwithstanding the foregoing, (i) each
such adjustment with respect to an Incentive Option shall comply with the
rulesof Section 424 (a) of the Code to an Incentive Option, and (ii) in no
event shall any adjustment be made which would render any Incentive Option
granted hereunder other than an "incentive stock option" for purposes of Section
422 of the Code.
In the event the Company is not the surviving entity of an Adjustment
Event and, following such Adjustment Event, any optionee will hold Options
issued pursuant to this Plan which have not been exercised, canceled, or
terminated in connection therewith, the Company shall cause such Options to be
assumed (or canceled and replacement Options issued) by the surviving entity or
a Related Entity. In the event of any perceived conflict between the provisions
of Section 9 and this Section 10, the Committee's determinations under Section 9
shall control.
11. Assignment or Transfer.
Except as otherwise expressly provided in any Non-Qualified Option, no
Option granted under the Plan or any rights or interests therein shall be
assignable or transferable by an optionee except by will or the laws of descent
and distribution, and during the lifetime of an optionee, Options granted to him
or her hereunder shall be exercisable only by the optionee or, in the event that
a legal representative has been appointed in connection with the Disability of
an optionee, such legal representative.
12. Compliance with Securities Laws.
The Company shall not in any event be obligated to file any
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") or any applicable state securities law to permit exercise of
any Option or to issue any Common Stock in violation of the Securities Act or
any applicable state securities law. Each optionee (or, in the event of his or
her death or, in the event a legal representative has been appointed in
connection with his or her Disability,-the Person exercising the Option) shall,
as a condition to his or her right to exercise any Option, deliver to the'
Company an agreement or certificate containing such representations, warranties
and covenants as the Company may deem necessary or appropriate to ensure that
the issuance of shares of Common Stock pursuant to such exercise- is not
required to be registered under the Securities Act or any applicable state
securities law.
Certificates for shares of Common Stock, when issued, may have substantially the
following legend, or statements of other applicable restrictions, endorsed
thereon, and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE
SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED OR OTHERWISE
DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO THE ISSUER
(WHICH, IN THE DISCRETION OF THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER)
B12
<PAGE>
THAT SUCH OFFER, SALE, PLEDGE, TRANSFER OR OTHER DISPOSITION WILL NOT VIOLATE
APPLICABLE FEDERAL OR STATE LAWS.
This legend shall not be required for shares of Common Stock issued
pursuant to an effective registration statement under the Securities Act and in
accordance with applicable state securities laws.
13. Withholding Taxes.
By acceptance of the Option, the optionee will be deemed to (i) agree
to reimburse the Company or Related Entity by which the optionee is employed for
any federal, state, or local taxes required by any government to be withheld or
otherwise deducted by such corporation in respect of the optionee's exercise of
all or a portion of the Option; (ii) authorize the Company or any Related Entity
by which the optionee is employed to withhold from any cash compensation paid to
the optionee or in the optionee's behalf, an amount sufficient to discharge any
federal, state, and local taxes imposed on the Company, or the Related Entity by
which the optionee is employed, and which otherwise has not been reimbursed by
the optionee, in respect of the optionee's exercise of all or a portion of the
Option; and (iii), agree that the Company may, in its discretion, hold the stock
certificate to which the optionee is entitled upon exercise of the Option as
security for the payment of the aforementioned withholding tax liability, until
cash sufficient to pay that liability has been accumulated, and may, in its
discretion, effect such withholding by retaining shares issuable upon the
exercise of the Option having a Fair Market Value on the date of exercise which
is equal to the amount to be withheld.
14. Costs and Expenses.
The costs and expenses of administering the Plan shall become by the
Company and shall not be charged against any Option nor to any employee
receiving an Option.
15. Funding of Plan.
The Plan shall be unfunded. The Company shall not be required to make
any segregation of assets to assure the payment of any Option under the Plan.
16. Other Incentive Plans.
The adoption of the Plan does not preclude the adoption by appropriate
means of any other incentive p an for employees.
17. Effect on Employment.
Nothing contained in the Plan or any agreement related hereto or
referred to herein shall affect, or be construed as affecting, the terms of
employment of any Key Employee except to the extent specifically provided herein
or therein. Nothing contained in the Plan or any agreement related hereto or
referred to herein shall impose, or be construed as imposing, an obligation on
(i)
B13
<PAGE>
the Company or any Related Entity to continue the employment of any Key
Employee, and (ii) any Key Employee to remain in the employ of the Company or
any Related Entity.
18. Definitions.
In addition to the terms specifically defined elsewhere in the Plan, as
used in the Plan, the following terms shall have the respective meanings
indicated:
"Adjustment Event" shall have the meaning set forth in Section 10
hereof.
"Affiliate" shall mean, as to any Person, a Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person.
"Board of Directors" shall have the meaning set forth in Section 2
hereof.
"Change of Control" shall mean the first to occur of the following
events: (i) any sale, lease, exchange, or other transfer (in one transaction or
series of related transactions) of all or substantially all of the assets of the
Company to any Person or group of related Persons as determined pursuant to
Section 13 (d) of the Exchange Act and the regulations and interpretations
thereunder (a "Group") other than one or more members of the HMC Group, (ii) a
majority of the Board of Directors of the Company shall consist of Persons who
are not Continuing Directors; or (iii) the acquisition by any Person or Group
other than one or more members of the HMC Group of the power, directly or
indirectly, to vote or direct the voting of securities having more than 50% of
the ordinary voting power for the election of directors of the Company.
"Code" shall have the meaning set forth in Section I hereof.
"Committee" shall have the meaning set forth in Section 2 hereof.
"Common Stock" shall have the meaning set forth in Section 3 hereof.
"Company" shall have the meaning set forth in Section I hereof.
"Continuing Director" shall mean, as of the date of determination, any
Person who (i) was a member of the Board of Directors of the Company on the date
of adoption of this Plan, or (ii) was nominated for election or elected to the
Board of Directors of the Company with the affirmative vote of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.
"Disability" shall mean permanent disability as defined under the
appropriate provisions of the applicable long-term disability plan maintained
for the benefit of employees of the Company or any Related Entity who are
regularly employed on a salaried basis unless another meaning shall be agreed to
in writing by the Committee and the optionee; provided, however, that, in the
case of an Incentive Option, "disability" shall have the meaning specified in
Section 22(e) (3) of the Code.
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<PAGE>
"Eligible Non-Employee" shall have the meaning set forth in Section 4
hereof.
"Exchange Act" shall have the meaning set forth in Section 2 hereof.
"Fair Market Value" shall, as it relates to the Common Stock, mean the
average of the high and low prices of such Common Stock as reported on the
principal national securities exchange on which the shares of Common Stock are
then listed or the NASDAQ National Market, as applicable, on the date specified
herein for such a determination; or, if there were no sales on such date, on the
next preceding day on which there were sales; or, if such Common Stock is not
listed on a national securities exchange, the last reported bid price in the
over-the-counter market; or, if such shares are not traded in the over
the-counter market, the per share cash price for which all of the outstanding
Common Stock could be sold to a willing purchaser in an arms length transaction
(without regard to minority discount, absence of liquidity, or transfer
restrictions imposed by any applicable law or agreement) at the date of the
event giving rise to a need for a determination. Except as may be otherwise
expressly provided in a particular Option, Fair Market Value shall be determined
in good faith by the Committee.
"Good Cause", with respect to any Key Employee, shall mean (unless
another definition is agreed to in writing by the Company and the optionee)
termination by action of the Board of Directors because of: (A) the optionee's
conviction of, or plea of nolo contenders to, a felony or a crime involving
moral turpitude; (B) the optionee's personal dishonesty, willful misconduct,
willful violation of any law, rule, or regulation (other than minor traffic
violations or similar offenses) or breach of fiduciary duty which involves
personal profit; (C) the optionee's willful commission of material mismanagement
in the, conduct of his or her duties as assigned to him by the Board of
Directors or the optionee's supervising officer or officers of the Company; (D)
the optionee's willful failure to execute or comply with the policies of the
Company or his or her stated duties as established by the Board of Directors or
the optionee's supervising officer or officers of the Company, or the optionee's
intentional failure to perform the optionee's stated duties; or (E) substance
abuse or addiction on the part of the optionee. "Good Cause", with respect to
any Eligible Non-Employee, shall mean (unless another definition is agreed to in
writing by the Company and the optionee) termination by action of the Board of
Directors because of: (A) the optionee's conviction of, or plea of nolo
contenders to, a felony or a crime involving moral turpitude; (B) the optionee's
personal dishonesty, willful misconduct, willful violation of any law, rule, or
regulation (other than minor traffic violations or similar offenses) or breach
of fiduciary duty which involves personal profit; (C) the optionee's willful
commission of material mismanagement in providing services to the Company or any
Related Entity; (D) the optionee's willful failure to comply with the policies
of the Company in providing' services to the Company or any Related Entity, or
the optionee's intentional failure to perform the services for which the
optionee has been engaged; (E) substance abuse or addiction on the part of the
optionee; or (F) the optionee's willfully making any material misrepresentation
or willfully omitting to disclose any material fact to the board of directors of
the Company or any Related Entity with respect to the business of the Company or
any Related Entity.
"HMC Group" shall mean Hicks, Muse, Tate & Furst Incorporated, its
Affiliates, and their respective employees, officers, partners and directors
(and members of their respective families and
B15
<PAGE>
trusts for the primary benefit of such family members).
"Holding Period" shall have the meaning set forth in subsection 5 (d)
hereof.
"Incentive Options" shall have the meaning set forth in Section 6
hereof.
The term "including" when used herein shall mean "including, but not
limited to".
"Key Employee" shall have the meaning set forth in Section 4 hereof.
"Non-Qualified Options" shall have the meaning set forth in Section 6
hereof.
"Options" shall have the meaning set forth in Section I hereof.
"Performance-Based Options" shall have the meaning set forth in Section
8 hereof.
"Person" shall have the meaning set forth in Section 4 hereof
"Plan" shall have the meaning set forth in Section I hereof.
"Related Entities." shall have the meaning set forth in Section I
hereof.
"Rule ]6b-3" shall have the meaning set forth in Section 2 hereof.
"Securities Act" shall have the meaning set forth in Section I 1
hereof.
"Term" shall have the meaning set forth in Section 26 hereof.
19. Amendment of Plan.
The Board of Directors shall have the right to amend, modify, suspend
or terminate the Plan at any time; provided, that no amendment shall be made
which shall increase the total number of shares of the Common Stock which may be
issued and sold pursuant to Options granted under the Plan or decrease the
minimum Option exercise price in the case of an Incentive Option, or modify the
provisions of the Plan relating to eligibility with respect to Incentive Options
unless such amendment is made by or with the approval of the stockholders. The
Board of Directors shall be authorized to amend the Plan and the Options granted
thereunder, without the consent or joinder of any optionee or other Person, in
such manner as may be deemed necessary or appropriate by the Board of Directors
in order to cause the Plan and the Options granted thereunder (i) to qualify as
"incentive stock options" within the meaning of Section 422 of the Code or (ii)
to comply with Rule 16b-3 (or any successor rule) under the Exchange Act (or any
successor law) and the regulations (including any temporary regulations)
promulgated thereunder or (iii) to comply with Section 162(m) of the Code (or
any successor section) and any regulations (including any temporary regulations)
promulgated thereunder. Except as provided above, no amendment, modification,
suspension or termination of the Plan shall materially impair the value of any
Options previously
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<PAGE>
granted under the Plan, without the consent of the holder thereof.
20. Effective Date and Term.
The Plan shall be effective as of September 14, 1998, and shall be void
retroactively as to any Incentive Option if not approved by the stockholders of
the Company within twelve months thereafter. The Plan shall terminate on the
tenth anniversary of the date of adoption of the Plan or the date of approval of
the Plan by the stockholders of the Company, whichever is earlier, unless sooner
terminated by the Board of Directors (the "Term").
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
American Tower Corporation on Form S-8 of:
i. Our report dated March 6, 1998 (March 27, 1998 as to the sixth paragraph of
Note 1 and the second paragraph of Note 4) included in the Annual Report on
Form 10-K of American Tower Corporation for that year ended December 31, 1997;
and
ii. Our report dated March 2, 1998 related to the December 31, 1997 and 1996
financial statements of OPM-USA-INC., included in a Current Report on Form 8-K
filed by American Tower Corporation on March 20, 1998.
/s/ DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 25, 1999
