EXHIBIT 10.21
ENDO PHARMACEUTICALS HOLDINGS INC.
2000 STOCK INCENTIVE PLAN
1. Establishment and Purpose.
The purpose of the Endo Pharmaceuticals Holdings Inc. 2000 Stock
Incentive Plan (the "Plan") is to promote the interests of the Company and
the stockholders of the Company by providing directors, officers, employees
and consultants of the Company with appropriate incentives and rewards to
encourage them to enter into and continue in the employ or service of the
Company, to acquire a proprietary interest in the long-term success of the
Company and to reward the performance of individuals in fulfilling their
personal responsibilities for long-range achievements.
2. Administration of the Plan.
The Plan shall be administered by a Committee appointed by the Board
of Directors. The Committee shall have the authority, in its sole
discretion, subject to and not inconsistent with the express terms and
provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including,
without limitation, the authority to grant Awards; to determine the persons
to whom and the time or times at which Awards shall be granted; to
determine the type and number of Awards to be granted; to determine the
number of shares of stock to which an Award may relate and the terms,
conditions, restrictions and performance criteria relating to any Award; to
determine whether, to what extent, and under what circumstances an Award
may be settled, cancelled, forfeited, exchanged or surrendered; to make
adjustments in the performance goals in recognition of unusual or
nonrecurring events affecting the Company or the financial statements of
the Company (to the extent not inconsistent with Section 162(m) of the
Code, if applicable), or in response to changes in applicable laws,
regulations, or accounting principles; to construe and interpret the Plan
and any Award; to prescribe, amend and rescind rules and regulations
relating to the Plan; to determine the terms and provisions of Agreements;
and to make all other determinations deemed necessary or advisable for the
administration of the Plan.
The Committee may, in its absolute discretion, without amendment to
the Plan, (a) accelerate the date on which any Option granted under the
Plan becomes exercisable, waive or amend the operation of Plan provisions
respecting exercise after termination of employment or otherwise adjust any
of the terms of such Option, and (b) accelerate the vesting date, or waive
any condition imposed hereunder, with respect to any share of Restricted
Stock, or other Award or otherwise adjust any of the terms applicable to
any such Award.
Subject to Section 162(m) of the Code and except as required by Rule
16b-3 with respect to grants of Options to individuals who are subject to
Section 16 of the Exchange Act, or as otherwise required for compliance
with Rule 16b-3 or other applicable law, the Committee may delegate all or
any part of its authority under the Plan to an employee, employees or
committee of employees.
Subject to Section 162(m) of the Code and Section 16 of the Exchange
Act, to the extent the Committee deems it necessary, appropriate or
desirable to comply with foreign law or practices and to further the
purpose of the Plan, the Committee may, without amending this Plan,
establish special rules applicable to Options granted to Participants who
are foreign nationals, are employed outside the United States, or both,
including rules that differ from those set forth in the Plan, and grant
Options to such Participants in accordance with those rules.
3. Definitions.
(a) "Agreement" shall mean the written agreement between the
Company and a Participant evidencing an Award.
(b) "Award" shall mean any Option, Restricted Stock, Stock
Bonus award, Stock Appreciation Right or Performance Award granted pursuant
to the terms of the Plan.
(c) "Board of Directors" shall mean the Board of Directors of
the Company.
(d) "Cause" shall mean a termination of a Participant's
employment by the Company or any of its Subsidiaries due to (i) the
continued failure, after written notice, by such Participant substantially
to perform his or her duties with the Company or any of its Subsidiaries
(other than any such failure resulting from incapacity due to reasonably
documented physical illness or injury or mental illness), (ii) the
engagement by such Participant in serious misconduct that causes, or in the
good faith judgment of the Board of Directors may cause, harm (financial or
otherwise) to the Company or any of its Subsidiaries including, without
limitation, (A) the disclosure of material secret or confidential
information of the Company or any of its Subsidiaries (B) the potential
debarment of the Company or any of its Subsidiaries by the U.S. Food and
Drug Administration or any successor agency (the "FDA"), or (C) the
possibility that the registration of the Company or any of its Subsidiaries
with the U.S. Drug Enforcement Administration or any successor agency (the
"DEA") could be revoked or an application with the DEA could be denied,
(iii) the potential debarment of such Participant by the FDA, or (iv) the
material breach by the Participant of any agreement between such
Participant, on the one hand, and the Company or Kelso, on the other hand.
(e) A "Change in Control" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have
occurred:
(1) any Person is or becomes the "Beneficial Owner" (as
defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company (not
including in the securities Beneficially Owned by such
Person any securities acquired directly from the Company)
representing 25% or more of the Company's then
outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction
described in clause (A) of paragraph (3) below; or
(2) the following individuals cease for any reason to
constitute a majority of the number of directors then
serving: individuals who, on the Effective Date,
constitute the Board of Directors and any new director
(other than a director whose initial assumption of office
is in connection with an actual or threatened election
contest, including but not limited to a consent
solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board
of Directors or nomination for election by the Company's
stockholders was approved or recommended by a vote of at
least a two-thirds of the directors then still in office
who either were directors on the Effective Date or whose
appointment, election or nomination for election was
previously so approved or recommended; or
(3) there is consummated a merger or consolidation of the
Company with any other corporation other than (A) a
merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior
to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted
into voting securities of the surviving entity or any
parent thereof) at least 50% of the combined voting power
of the voting securities of the Company or such surviving
entity or any parent thereof outstanding immediately
after such merger or consolidation, or (B) a merger or
consolidation effected to implement a re-capitalization
of the Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including
in the securities Beneficially Owned by such Person any
securities acquired directly from the Company)
representing 25% or more of the combined voting power of
the Company's then outstanding securities; or
(4) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or
there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of
the Company's assets, other than a sale or disposition by
the Company of all or substantially all of the Company's
assets to an entity at least 75% of the combined voting
power of the voting securities of which are owned by
Persons in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
Notwithstanding the foregoing, a Change in Control shall not
result from the transfer of the Company's then outstanding securities to
current members or future direct or indirect members of Endo Pharma LLC.
(f) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any regulations promulgated thereunder.
(g) "Committee" shall mean, at the discretion of the Board of
Directors, a Committee of the Board of Directors, which shall consist of
two or more persons, each of whom, unless otherwise determined by the Board
of Directors, is an "outside director" within the meaning of Section 162(m)
of the Code and a "nonemployee director" within the meaning of Rule 16b-3.
(h) "Company" shall mean Endo Pharmaceuticals Holdings Inc., a
Delaware corporation, and, where appropriate, each of its Subsidiaries.
(i) "Company Stock" shall mean the common stock of the Company,
par value $.01 per share.
(j) "Disability" shall mean permanent disability as determined
pursuant to the Company's long-term disability plan or policy, in effect at
the time of such Disability.
(k) "Effective Date" shall mean the date as of which this Plan
is adopted by the Board of Directors.
(l) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(m) The "Fair Market Value" of a share of Company Stock, as of
a date of determination, shall mean (1) the closing sales price per share
of Company Stock on the national securities exchange on which such stock is
principally traded on the date of the grant of such Award, or (2) if the
shares of Company Stock are not listed or admitted to trading on any such
exchange, the closing price as reported by the Nasdaq Stock Market for the
last preceding date on which there was a sale of such stock on such
exchange, or (3) if the shares of Company Stock are not then listed on a
national securities exchange or traded in an over-the-counter market or the
value of such shares is not otherwise determinable, such value as
determined by the Committee in good faith upon the advice of a qualified
valuation expert. In no event shall the fair market value of any share of
Company Stock, the Option exercise price of any Option, the appreciation
base per share of Company Stock under any Stock Appreciation Right, or the
amount payable per share of Company Stock under any other Award, be less
than the par value per share of Company Stock.
(n) "Kelso" shall mean Kelso Investment Associates V, L.P., a
Delaware limited partnership together with Kelso Equity Partners V, L.P., a
Delaware limited partnership.
(o) "Incentive Stock Option" shall mean an Option that is an
"incentive stock option" within the meaning of Section 422 of the Code, or
any successor provision, and that is designated by the Committee as an
Incentive Stock Option.
(p) "Nonemployee Director" shall mean a member of the Board of
Directors who is not an employee of the Company.
(q) "Nonqualified Stock Option" shall mean an Option other than
an Incentive Stock Option.
(r) "Option" shall mean an option to purchase shares of Company
Stock granted pursuant to Section 6(b).
(s) "Participant" shall mean an employee, consultant or
director of the Company to whom an Award is granted pursuant to the Plan,
and, upon the death of the employee, consultant or director, his or her
successors, heirs, executors and administrators, as the case may be.
(t) "Performance Award" shall mean an Award granted to a
Participant pursuant to Section 6(e) hereof.
(u) "Person" shall have the meaning set forth in Section
3(a)(9) of the Exchange Act, except that such term shall not include (1)
the Company, (2) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, (3) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (4) a
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock
of the Company.
(v) "Restricted Stock" shall mean a share of Company Stock
which is granted pursuant to the terms of Section 6(d) hereof.
(w) "Rule 16b-3" shall mean the Rule 16b-3 promulgated under
the Exchange Act, as amended from time to time.
(x) "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
(y) "Stock Appreciation Right" shall mean the right, granted to
a Participant under Section 6(c), to be paid an amount measured by the
appreciation in the Fair Market Value of a share of Company Stock from the
date of grant to the date of exercise of the right, with payment to be made
in cash and/or a share of Company Stock, as specified in the Award or
determined by the Committee.
(z) "Stock Bonus" shall mean a bonus payable in shares of
Company Stock granted pursuant to Section 6(d) hereof.
(aa) "Subsidiary" shall mean a "subsidiary corporation" within
the meaning of Section 424(f) of the Code.
4. Stock Subject to the Plan.
(a) Shares Available for Awards.
The maximum number of shares of Company Stock reserved for issuance
under the Plan shall be four million (4,000,000) shares (subject to
adjustment as provided herein). Such shares may be authorized but unissued
Company Stock or authorized and issued Company Stock held in the Company's
treasury. The Committee may direct that any stock certificate evidencing
shares issued pursuant to the Plan shall bear a legend setting forth such
restrictions on transferability as may apply to such shares pursuant to the
Plan.
(b) Individual Limitation.
To the extent required by Section 162(m) of the Code, the total
number of shares of Company Stock subject to Awards awarded to any
Participant during any tax year of the Company, shall not exceed four
million (4,000,000) shares (subject to adjustment as provided herein).
(c) Adjustment for Change in Capitalization.
In the event that the Committee shall determine that any dividend or
other distribution (whether in the form of cash, Company Stock, or other
property), re-capitalization, Company Stock split, reverse Company Stock
split, reorganization, merger, consolidation, spin-off, combination,
repurchase, or share exchange, or other similar corporate transaction or
event, makes an adjustment appropriate in order to prevent dilution or
enlargement of the rights of Participants under the Plan, then the
Committee shall make such equitable changes or adjustments as it deems
necessary or appropriate to any or all of (1) the number and kind of shares
of Company Stock which may thereafter be issued in connection with Awards,
(2) the number and kind of shares of Company Stock issued or issuable in
respect of outstanding Awards, (3) the exercise price, grant price or
purchase price relating to any Award, and (4) the maximum number of shares
subject to Awards which may be awarded to any employee during any tax year
of the Company; provided that, with respect to Incentive Stock Options, any
such adjustment shall be made in accordance with Section 424 of the Code.
(d) Adjustment for Change or Exchange of Shares for Other
Consideration.
In the event the outstanding shares of Company Stock shall be changed
into or exchanged for any other class or series of capital stock or cash,
securities or other property pursuant to a re-capitalization,
reclassification, merger, consolidation, combination or similar transaction
("Transaction"), then, unless otherwise determined by the Committee, (1)
each Option shall thereafter become exercisable for the number and/or kind
of capital stock, and/or the amount of cash, securities or other property
so distributed, into which the shares of Company Stock subject to the
Option would have been changed or exchanged had the Option been exercised
in full prior to such transaction, provided that, if the kind or amount of
capital stock or cash, securities or other property received in such
transaction is not the same for each outstanding share, then the kind or
amount of capital stock or cash, securities or other property for which the
Option shall thereafter become exercisable shall be the kind and amount so
receivable per share by a plurality of the shares of Company Stock, and
provided further that, if necessary, the provisions of the Option shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably
be, to any shares of capital stock, cash, securities or other property
thereafter issuable or deliverable upon exercise of the Option, and (2)
each Award that is not an Option and that is not automatically changed in
connection with the Transaction shall represent the number and/or kind of
shares of capital stock, and/or the amount of cash, securities or other
property so distributed, into which the number of shares of Company Stock
covered by the Award would have been changed or exchanged had they been
held by a stockholder.
(e) Reuse of Shares.
The following shares of Company Stock shall again become available
for Awards: except as provided below, any shares subject to an Award that
remain unissued upon the cancellation, surrender, exchange or termination
of such Award for any reason whatsoever; and any shares of Restricted Stock
forfeited. Notwithstanding the foregoing, upon the exercise of any Award
granted in tandem with any other Awards, such related Awards shall be
cancelled to the extent of the number of shares of Company Stock as to
which the Award is exercised and such number of shares shall no longer be
available for Awards under the Plan.
5. Eligibility.
The persons who shall be eligible to receive Awards pursuant to the
Plan shall be such employees of the Company (including officers of the
Company, whether or not they are directors of the Company), Nonemployee
Directors, and consultants as the Committee shall select from time to time.
6. Awards Under the Plan.
(a) Agreement.
The Committee may grant Awards in such amounts and with such terms
and conditions as the Committee shall determine, subject to the terms and
provisions of the Plan. Each Award granted under the Plan (except an
unconditional Stock Bonus) shall be evidenced by an Agreement as the
Committee may in its sole discretion deem necessary or desirable and unless
the Committee determines otherwise, such Agreement must be signed,
acknowledged and returned by the Participant to the Company. Unless the
Committee determines otherwise, any failure by the Participant to sign and
return the Agreement shall cause such Award to the Participant to be null
and void. By accepting an Award or other benefits under the Plan (including
participation in the Plan), each Participant, shall be conclusively deemed
to have indicated acceptance and ratification of, and consent to, all
provisions of the Plan and the Agreement.
(b) Stock Options.
(i) Grant of Stock Options. The Committee may grant Options
under the Plan to purchase shares of Company Stock in such amounts and
subject to such terms and conditions as the Committee shall from time to
time determine in its sole discretion, subject to the terms and provisions
of the Plan. Unless otherwise determined by the Committee, the exercise
price of the share purchasable under an Option shall be the Fair Market
Value per share on the grant date of such Option.
(ii) Each Option shall be clearly identified in the applicable
Agreement as either an Incentive Stock Option or a Nonqualified Stock
Option.
(iii) Special Requirements for Incentive Stock Options.
(A) To the extent that the aggregate Fair Market Value of
shares of Company Stock with respect to which Incentive Stock Options
are exercisable for the first time by a Participant during any
calendar year under the Plan and any other stock option plan of the
Company shall exceed $100,000, such Options shall be treated as
Nonqualified Stock Options. Such Fair Market Value shall be
determined as of the date on which each such Incentive Stock Option
is granted.
(B) No Incentive Stock Option may be granted to an
individual if, at the time of the proposed grant, such individual
owns (or is deemed to own under the Code) stock possessing more than
ten percent of the total combined voting power of all classes of
stock of the Company unless (A) the exercise price of such Incentive
Stock Option is at least 110 percent of the Fair Market Value of a
share of Company Stock at the time such Incentive Stock Option is
granted and (B) such Incentive Stock Option is not exercisable after
the expiration of five years from the date such Incentive Stock
Option is granted.
(c) Stock Appreciation Rights.
(i) The Committee may grant a related Stock Appreciation Right
in connection with all or any part of an Option granted under the Plan,
either at the time such Option is granted or at any time thereafter prior
to the exercise, termination or cancellation of such Option, and subject to
such terms and conditions as the Committee shall from time to time
determine in its sole discretion, consistent with the terms and provisions
of the Plan. The holder of a related Stock Appreciation Right shall,
subject to the terms and conditions of the Plan and the applicable
Agreement, have the right by exercise thereof to surrender to the Company
for cancellation all or a portion of such related Stock Appreciation Right,
but only to the extent that the related Option is then exercisable, and to
be paid therefor an amount equal to the excess (if any) of (i) the
aggregate Fair Market Value of the shares of Company Stock subject to the
related Stock Appreciation Right or portion thereof surrendered (determined
as of the exercise date), over (ii) the aggregate appreciation base of the
shares of Company Stock subject to the Stock Appreciation Right or portion
thereof surrendered. Upon any exercise of a related Stock Appreciation
Right or any portion thereof, the number of shares of Company Stock subject
to the related Option shall be reduced by the number of shares of Company
Stock in respect of which such Stock Appreciation Right shall have been
exercised.
(ii) The Committee may grant unrelated Stock Appreciation
Rights in such amount and subject to such terms and conditions, as the
Committee shall from time to time determine in its sole discretion, subject
to the terms and provisions of the Plan. The holder of an unrelated Stock
Appreciation Right shall, subject to the terms and conditions of the Plan
and the applicable Agreement, have the right to surrender to the Company
for cancellation all or a portion of such Stock Appreciation Right, but
only to the extent that such Stock Appreciation Right is then exercisable,
and to be paid therefor an amount equal to the excess (if any) of (i) the
aggregate Fair Market Value of the shares of Company Stock subject to the
Stock Appreciation Right or portion thereof surrendered (determined as of
the exercise date), over (ii) the aggregate appreciation base of the shares
of Company Stock subject to the Stock Appreciation Right or portion thereof
surrendered.
(iii) The grant or exercisability of any Stock Appreciation
Right shall be subject to such conditions as the Committee, in its sole
discretion, shall determine.
(d) Restricted Stock and Stock Bonus.
(i) The Committee may grant Restricted Stock awards, alone or
in tandem with other Awards under the Plan, subject to such restrictions,
terms and conditions, as the Committee shall determine in its sole
discretion and as shall be evidenced by the applicable Agreements. The
vesting of a Restricted Stock award granted under the Plan may be
conditioned upon the completion of a specified period of employment or
service with the Company or any Subsidiary, upon the attainment of
specified performance goals, and/or upon such other criteria as the
Committee may determine in its sole discretion.
(ii) Each Agreement with respect to a Restricted Stock award
shall set forth the amount (if any) to be paid by the Participant with
respect to such Award and when and under what in circumstances such payment
is required to be made.
(iii) The Committee may, upon such terms and conditions as the
Committee determines, provide that a certificate or certificates
representing the shares underlying a Restricted Stock award shall be
registered in the Participant's name and bear an appropriate legend
specifying that such shares are not transferable and are subject to the
provisions of the Plan and the restrictions, terms and conditions set forth
in the applicable Agreement, or that such certificate or certificates shall
be held in escrow by the Company on behalf of the Participant until such
shares become vested or are forfeited. Except as provided in the applicable
Agreement, no shares underlying a Restricted Stock award may be assigned,
transferred, or otherwise encumbered or disposed of by the Participant
until such shares have vested in accordance with the terms of such Award.
(iv) If and to the extent that the applicable Agreement may so
provide, a Participant shall have the right to vote and receive dividends
on the shares underlying a Restricted Stock award granted under the Plan.
Unless otherwise provided in the applicable Agreement, any stock received
as a dividend on or in connection with a stock split of the shares
underlying a Restricted Stock award shall be subject to the same
restrictions as the shares underlying such Restricted Stock award.
(v) The Committee may grant Stock Bonus awards, alone or in
tandem with other Awards under the Plan, subject to such terms and
conditions as the Committee shall determine in its sole discretion and as
may be evidenced by the applicable Agreement.
(e) Performance Awards.
(i) The Committee may grant Performance Awards, alone or in
tandem with other Awards under the Plan, to acquire shares of Company Stock
in such amounts and subject to such terms and conditions as the Committee
shall from time to time in its sole discretion determine, subject to the
terms of the Plan.
(ii) In the event that the Committee grants a Performance Award
(other than Nonqualified Stock Option or Incentive Stock Option), that is
intended to constitute qualified performance-based compensation within the
meaning Section 162(m) of the Code, the following rules shall apply (as
such rules may be modified by the Committee to conform with Code section
162(m) and the Treasury Regulations thereunder as may be in effect from
time to time, and any amendments, revisions or successor provisions
thereto): (a) payments under the Performance Award shall be made solely on
account of the attainment of one or more objective performance goals
established in writing by the Committee not later than 90 days after the
commencement of the period of service to which the Performance Award
relates (or if less, one-third of such period of service); (b) the
performance goal(s) to which the Performance Award relates shall be based
on one or more of the following business criteria applied to the
Participant and/or a business unit or the Company and/or a Subsidiary: (1)
return on total stockholder equity; (2) earnings per share of Company
Stock; (3) net income (before or after taxes); (4) earnings before all or
any interest, taxes, depreciation and/or amortization ("EBIT", "EBITA" or
"EBITDA"); (5) inventory goals; (6) return on assets; (7) market share; (8)
cost reduction goals; (9) earnings from continuing operations; levels of
expense, cost or liability; (10) any combination of, or a specified
increase or decrease of one or more of the foregoing over a specified
period; and (11) such other criteria as the stockholders of the Company may
approve; in each case, as determined in accordance with generally accepted
accounting principles; and (c) once granted, the Committee may not have
discretion to increase the amount payable under such stock award, provided,
however, that whether or not a Performance Award is intended to constitute
qualified performance-based compensation within the meaning of Section
162(m) of the Code, the Committee shall have the authority to make
appropriate adjustments in performance goals under an Award to reflect the
impact of extraordinary items not reflected in such goals. For purposes of
the Plan, extraordinary items shall be defined as (1) any profit or loss
attributable to acquisitions or dispositions of stock or assets, (2) any
changes in accounting standards that may be required or permitted by the
Financial Accounting Standards Board or adopted by the Company after the
goal is established, (3) all items of gain, loss or expense for the year
related to restructuring charges for the Company, (4) all items of gain,
loss or expense for the year determined to be extraordinary or unusual in
nature or infrequent in occurrence or related to the disposal of a segment
of a business, (5) all items of gain, loss or expense for the year related
to discontinued operations that do not qualify as a segment of a business
as defined in APB Opinion No. 30, and (6) such other items as may be
prescribed by Section 162(m) of the Code and the Treasury Regulations
thereunder as may be in effect from time to time, and any amendments,
revisions or successor provisions and any changes thereto. The Committee
shall, prior to making payment under any award under this Section 6(e),
certify in writing that all applicable performance goals have been
attained.
(f) Exercisability of Awards; Cancellation of Awards in
Certain Cases.
(i) Each Agreement with respect to an Option or Stock
Appreciation Right shall set forth the period during which and the
conditions subject to which the Option or Stock Appreciation Right
evidenced thereby shall be exercisable, and each Agreement with respect to
a Restricted Stock award or Performance Award shall set forth the period
after which and the conditions subject to which the shares underlying such
Award shall vest or be deliverable, all such periods and conditions to be
determined by the Committee in its sole discretion.
(ii) Except as provided in Section 7(d), no Option or Stock
Appreciation Right may be exercised and no shares of Company Stock
underlying any other Award under the Plan may vest or become deliverable
more than ten (10) years after the date of grant.
(iii) An Option or Stock Appreciation Right shall be
exercisable by the filing of a written notice of exercise or a notice of
exercise in such other manner with the Company, on such form and in such
manner as the Committee shall in its sole discretion prescribe, and by
payment in accordance with Section 6(g) hereof.
(iv) Unless the applicable Agreement provides otherwise, in the
case of an Option or Stock Appreciation Right, at any time after the
Company's receipt of written notice of exercise of an Option or Stock
Appreciation Right and prior to the Option or Stock Appreciation Right
exercise date (as defined in subsection v), and in the case of a stock
award or Performance Award, at any time within the six (6) business days
immediately preceding the otherwise applicable date on which the previously
Restricted Stock, stock award or Performance Award would otherwise have
become unconditionally vested or the shares subject thereto unconditionally
deliverable, the Committee, in its sole discretion, shall have the right,
by written notice to the Participant, to cancel such Award or any part
thereof if the Committee, in its sole judgment, determines that legal or
contractual restrictions and/or blockage and/or other market considerations
would make the Company's acquisition of Company Stock from, and/or the
Participant's sale of Company Stock to, the public markets illegal,
impracticable or inadvisable. If the Committee determines to cancel all or
any part of an Award, the Company shall pay to the Participant an amount
equal to the excess of (i) the aggregate Fair Market Value of the shares of
Company Stock subject to the Award or part thereof canceled (determined as
of the Option or Stock Appreciation Right exercise date, or the date that
shares would have been unconditionally vested or delivered in the case of
Restricted Stock, Stock Bonus or Performance Award), over (ii) the
aggregate Option exercise price or appreciation base of the Stock
Appreciation Right or part thereof canceled (in the case of an Option or
Stock Appreciation Right) or any amount payable as a condition of delivery
of shares (in the case of Restricted Stock, Stock Bonus or Performance
Award). Such amount shall be delivered to the Participant as soon as
practicable after such Award or part thereof is canceled.
(v) Unless the applicable Agreement provides otherwise, the
"Option exercise date" and the "Stock Appreciation Right exercise date"
shall be the date that the written notice of exercise, together with
payment, are received by the Company.
(g) Payment of Award Price.
(i) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion otherwise determines, any written notice
of exercise of an Option or Stock Appreciation Right must be accompanied by
payment of the full Option or Stock Appreciation Right exercise price. If
Section 6(f)(iv) applies, and the six (6) business day delay for the Option
exercise date or Stock Appreciation Right exercise date is applied, the
Participant shall have no right to pay the Option or Stock Appreciation
Right exercise price or to receive Company Stock with respect to the Option
or Stock Appreciation Right exercise prior to the lapse of such six
business days.
(ii) Payment of the Option exercise price and of any other
payment required by the Agreement to be made pursuant to any other Award
shall be made in any combination of the following: (a) by certified or
official bank check payable to the Company (or the equivalent thereof
acceptable to the Committee) and/or (b) with the consent of the Committee
in its sole discretion, by personal check (subject to collection) which may
in the Committee's discretion be deemed conditional; Payment in accordance
with clause (a) of this Section 6(g)(ii) may be deemed to be satisfied, if
and to the extent that the applicable Agreement so provides or the
Committee permits, by delivery to the Company of an assignment of a
sufficient amount of the proceeds from the sale of Company Stock to be
acquired pursuant to the Award to pay for all of the Company Stock to be
acquired pursuant to the Award and an authorization to the broker or
selling agent to pay that amount to the Company and to effect such sale at
the time of exercise or other delivery of shares of Company Stock; provided
that any such sale of Company Stock shall not occur prior to the six-month
anniversary of the acquisition thereof.
7. Termination of Employment.
(a) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion determines otherwise, upon termination of
a Participant's employment or service with the Company and its Subsidiaries
by the Company or its Subsidiary for Cause (or in the case of a Nonemployee
Director upon such Nonemployee Director's failure to be renominated as
Nonemployee Director of the Company), the portions of outstanding Options
and Stock Appreciation Rights granted to such Participant that are
exercisable as of the date of such termination of employment or service
shall remain exercisable, and any payment or notice provided for under the
terms of any other outstanding Award as respects the portion thereof that
is vested as of the date of such termination of employment or service, may
be given, for a period of thirty (30) days from and including the date of
termination of employment or service (and shall thereafter terminate). All
portions of outstanding Options or Stock Appreciation Rights granted to
such Participant which are not exercisable as of the date of such
termination of employment or service, and any other outstanding Award which
is not vested as of the date of such termination of employment or service
shall terminate upon the date of such termination of employment or service.
(b) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion determines otherwise, upon termination of
the Participant's employment or service with the Company and its
Subsidiaries for any reason other than as described in subsection (a), (c),
(d) or (e) hereof, the portions of outstanding Options and Stock
Appreciation Rights granted to such Participant that are exercisable as of
the date of such termination of employment or service shall remain
exercisable for a period of 90 days (and shall terminate thereafter), and
any payment or notice provided for under the terms of any other outstanding
Award as respects the portion thereof vested as of the date of termination
of employment or service may be given, for a period of ninety (90) days
from and including the date of termination of employment or service (and
shall terminate thereafter). All additional portions of outstanding Options
or Stock Appreciation Rights granted to such Participant which are not
exercisable as of the date of such termination of employment or service,
and any other outstanding Award which is not vested as of the date of such
termination of employment or service shall terminate upon the date of such
termination of employment or service.
(c) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion determines otherwise, if the Participant
voluntarily retires with the consent of the Company or the Participant's
employment or service terminates due to Disability, all outstanding
Options, Stock Appreciation Rights and all other outstanding Awards granted
to such Participant shall continue to vest in accordance with the terms of
the applicable Agreements. The Participant shall be entitled to exercise
each such Option or Stock Appreciation Right and to make any payment, give
any notice or to satisfy other condition under each such other Award, in
each case, for a period of one (1) year from and including the later of (i)
date such entire Award becomes vested or exercisable in accordance with the
terms of such Award and (ii) the date of termination of employment or
retirement, and thereafter such Awards or parts thereof shall be canceled.
Notwithstanding the foregoing, the Committee may in its sole discretion
provide for a longer or shorter period for exercise of an Option or Stock
Appreciation Right or may permit a Participant to continue vesting under an
Option, Stock Appreciation Right or Restricted Stock award or to make any
payment, give any notice or to satisfy other condition under any other
Award. The Committee may in its sole discretion determine (i) whether any
termination of employment or service is a voluntary retirement with the
Company's consent or is due to Disability for purposes of the Plan, (ii)
whether any leave of absence (including any short-term or long-term
Disability or medical leave) constitutes a termination of employment or
service within the meaning of the Plan, (iii) the applicable date of any
such termination of employment or service, and (iv) the impact, if any, of
any of the foregoing on Awards under the Plan.
(d) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion determines otherwise, if the Participant's
employment or service terminates by reason of death, or if the
Participant's employment or service terminates under circumstances
providing for continued rights under subsection (b) or (c) of this Section
7 and during the period of continued rights described in subsection (b) or
(c) the Participant dies, all outstanding Options Restricted Stock and
Stock Appreciation Rights granted to such Participant shall become fully
exercisable, and any payment or notice provided for under the terms of any
other outstanding Award may be immediately paid or given and any condition
may be satisfied, by the person to whom such rights have passed under the
Participant's will (or if applicable, pursuant to the laws of descent and
distribution) for a period of one (1) year from and including the date of
the Participant's death (notwithstanding that such period may extend more
than 10 years after the grant of the Award) and thereafter all such Awards
or parts thereof shall be canceled.
(e) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion determines otherwise, upon termination of
a Participant employment or service with the Company and its Subsidiaries
(i) by the Company or its Subsidiaries without cause (including, in case of
a Nonemployee Director, the failure to be elected as a Nonemployee
Director) or (ii) by the Participant for "good reason" or any like term as
defined under any employment agreement with the Company or a Subsidiary to
which a Participant may be a party to, the portions of outstanding Options
and Stock Appreciation Rights granted to such Participant which are
exercisable as of the date of termination of employment or service of such
Participant shall remain exercisable, and any payment or notice provided
for under the terms of any other outstanding Award as respects the portion
thereof vested as of the date of termination of employment or service may
be given, for a period of one (1) year from and including the date of
termination of employment or service and shall terminate thereafter. Any
other outstanding Award shall terminate as of the date of such termination
of employment or service.
8. Effect of Change in Control.
Unless the applicable Agreement provides otherwise or the Committee
in its sole discretion determines otherwise, in the event of a Change of
Control:
(1) any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable and
vested; and
(2) the restrictions, deferral limitations, payment
conditions, and forfeiture conditions applicable to any other Award granted
under the Plan shall lapse and such Awards shall be deemed fully vested,
and any performance goals imposed with respect to Awards shall be deemed to
be fully achieved.
9. Miscellaneous.
(a) Notwithstanding any other provision hereof, the Committee
shall have the right at any time to deny or delay a Participant's exercise
of Options if such Participant is reasonably believed by the Committee (i)
to be engaged in material conduct adversely affecting the Company or (ii)
to be contemplating such conduct, unless and until the Committee shall have
received reasonable assurance that the Participant is not engaged in, and
is not contemplating, such material conduct adverse to the interests of the
Company.
(b) Participants are and at all times shall remain subject to
the trading window policies adopted by the Company from time to time
throughout the period of time during which they may exercise Options, Stock
Appreciation Rights or sell shares of Company Stock acquired pursuant to
the Plan.
10. No Special Employment Rights; No Right to Award.
(a) Nothing contained in the Plan or any Agreement shall confer
upon any Participant any right with respect to the continuation of
employment or service by the Company or interfere in any way with the right
of the Company, subject to the terms of any separate employment agreement
to the contrary, at any time to terminate such employment or service or to
increase or decrease the compensation of the Participant.
(b) No person shall have any claim or right to receive an Award
hereunder. The Committee's granting of an Award to a Participant at any
time shall neither require the Committee to grant any other Award to such
Participant or other person at any time or preclude the Committee from
making subsequent grants to such Participant or any other person.
11. Securities Matters.
(a) The Company shall be under no obligation to effect the
registration pursuant to the Securities Act of any interests in the Plan or
any shares of Company Stock to be issued hereunder or to effect similar
compliance under any state laws. Notwithstanding anything herein to the
contrary, the Company shall not be obligated to cause to be issued or
delivered any certificates evidencing shares of Company Stock pursuant to
the Plan unless and until the Company is advised by its counsel that the
issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authority and the requirements
of any securities exchange on which shares of Company Stock are traded. The
Committee may require, as a condition of the issuance and delivery of
certificates evidencing shares of Company Stock pursuant to the terms
hereof, that the recipient of such shares make such agreements and
representations, and that such certificates bear such legends, as the
Committee, in its sole discretion, deems necessary or desirable.
(b) The transfer of any shares of Company Stock hereunder shall
be effective only at such time as counsel to the Company shall have
determined that the issuance and delivery of such shares is in compliance
with all applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which shares of Company Stock
are traded. The Committee may, in its sole discretion, defer the
effectiveness of any transfer of shares of Company Stock hereunder in order
to allow the issuance of such shares to be made pursuant to registration or
an exemption from registration or other methods for compliance available
under federal or state securities laws. The Committee shall inform the
Participant in writing of its decision to defer the effectiveness of a
transfer. During the period of such deferral in connection with the
exercise of an Award, the Participant may, by written notice, withdraw such
exercise and obtain the refund of any amount paid with respect thereto.
12. Withholding Taxes.
(a) Whenever cash is to be paid pursuant to an Award, the
Company shall have the right to deduct therefrom an amount sufficient to
satisfy any federal, state and local withholding tax requirements related
thereto.
(b) Whenever shares of Company Stock are to be delivered
pursuant to an Award, the Company shall have the right to require the
Participant to remit to the Company in cash an amount sufficient to satisfy
any federal, state and local withholding tax requirements related thereto.
With the approval of the Committee, a Participant may satisfy the foregoing
requirement by electing to have the Company withhold from delivery shares
of Company Stock having a value equal to the minimum amount of tax required
to be withheld. Such shares shall be valued at their Fair Market Value on
the date of which the amount of tax to be withheld is determined.
Fractional share amounts shall be settled in cash. Such a withholding
election may be made with respect to all or any portion of the shares to be
delivered pursuant to an Award.
13. Notification of Election Under Section 83(b) of the Code.
If any Participant shall, in connection with the acquisition of
shares of Company Stock under the Plan, make the election permitted under
Section 83(b) of the Code, such Participant shall notify the Company of
such election within 10 days of filing notice of the election with the
Internal Revenue Service.
14. Non-Competition and Confidentiality.
By accepting Awards and as a condition to the exercise of Awards and
the enjoyment of any benefits of the Plan, including participation therein,
each Participant agrees to be bound by and subject to non-competition,
confidentiality and invention ownership agreements acceptable to the
Committee or any officer or director to whom the Committee elects to
delegate such authority.
15. Notification Upon Disqualifying Disposition Under Section 421(b) of
the Code.
Each Agreement with respect to an Incentive Stock Option shall
require the Participant to notify the Company of any disposition of shares
of Company Stock issued pursuant to the exercise of such Option under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), within 10 days of such disposition.
16. Amendment or Termination of the Plan.
The Board of Directors or the Committee may, at any time, suspend or
terminate the Plan or revise or amend it in any respect whatsoever;
provided, however, that the requisite stockholder approval shall be
required if and to the extent the Board of Directors or Committee
determines that such approval is appropriate or necessary for purposes of
satisfying Sections 162(m) or 422 of the Code or Rule 16b-3 or other
applicable law. Awards may be granted under the Plan prior to the receipt
of such stockholder approval of the Plan but each such grant shall be
subject in its entirety to such approval and no Award may be exercised,
vested or otherwise satisfied prior to the receipt of such approval. No
amendment or termination of the Plan may, without the consent of a
Participant, adversely affect the Participant's rights under any
outstanding Award.
17. Transfers Upon Death; Nonassignability.
(a) Upon the death of a Participant, outstanding Awards granted
to such Participant may be exercised only by the executor or administrator
of the Participant's estate or by a person who shall have acquired the
right to such exercise by will or by the laws of descent and distribution.
No transfer of an Award by will or the laws of descent and distribution
shall be effective to bind the Company unless the Committee shall have been
furnished with written notice thereof and with a copy of the will and/or
such evidence as the Committee may deem necessary to establish the validity
of the transfer and an agreement by the transferee to comply with all the
terms and conditions of the Award that are or would have been applicable to
the Participant and to be bound by the acknowledgments made by the
Participant in connection with the grant of the Award.
(b) During a Participant's lifetime, the Committee may, in its
discretion, pursuant to the provisions set forth in this clause (b), permit
the transfer, assignment or other encumbrance of an outstanding Option
unless such Option is an Incentive Stock Option and the Committee and the
Participant intends that it shall retain such status. Subject to the
approval of the Committee and to any conditions that the Committee may
prescribe, a Participant may, upon providing written notice to the General
Counsel of the Company, elect to transfer any or all Options granted to
such Participant pursuant to the Plan to members of his or her immediate
family, including, but not limited to, children, grandchildren and spouse
or to trusts for the benefit of such immediate family members or to
partnerships in which such family members are the only partners; provided,
however, that no such transfer by any Participant may be made in exchange
for consideration. Any such transferee must agree, in writing, to be bound
by all provisions of the Plan.
18. Effective Date and Term of Plan.
The Plan shall become effective on the Effective Date, but the Plan
(and any grants of Awards made prior to stockholder approval of the Plan)
shall be subject to the requisite approval of the stockholders of the
Company. In the absence of such approval, such Awards shall be null and
void. Unless earlier terminated by the Board of Directors, the right to
grant Awards under the Plan shall terminate on the tenth anniversary of the
Effective Date. Awards outstanding at Plan termination shall remain in
effect according to their terms and the provisions of the Plan.
19. Applicable Law.
Except to the extent preempted by any applicable federal law, the
Plan shall be construed and administered in accordance with the laws of the
State of Delaware, without reference to its principles of conflicts of law.
20. Participant Rights.
(a) No Participant shall have any claim to be granted any award
under the Plan, and there is no obligation for uniformity of treatment for
Participants. Except as provided specifically herein, a Participant or a
transferee of an Award shall have no rights as a stockholder with respect
to any shares covered by any award until the date of the issuance of a
Company Stock certificate to him or her for such shares.
(b) Determinations by the Committee under the Plan relating to
the form, amount and terms and conditions of grants and Awards need not be
uniform, and may be made selectively among persons who receive or are
eligible to receive grants and awards under the Plan, whether or not such
persons are similarly situated.
21. Unfunded Status of Awards.
The Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any
Agreement shall give any such Participant any rights that are greater than
those of a general creditor of the Company.
22. No Fractional Shares.
No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan. The Committee shall determine whether cash, other
Awards, or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.
23. Interpretation.
The Plan is designed and intended to the extent applicable, to comply
with Section 162(m) of the Code, and to provide for grants and other
transactions which are exempt under Rule 16b-3, and all provisions hereof
shall be construed in a manner to so comply.
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Approved and adopted by the Board of Directors this 11th day of August,
2000.
