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EXHIBIT 10.1
ANNEX A
GABRIEL/TRIVERGENT CORPORATION
EMPLOYEE INCENTIVE PLAN
1. Purpose. The purpose of the Gabriel/TriVergent Corporation Employee
Incentive Plan is to provide additional incentives to employees and others to
advance the interests of Gabriel Communications, Inc., a Delaware corporation
("Gabriel"), and TriVergent Corporation, a Delaware corporation and wholly owned
subsidiary of Gabriel ("TriVergent"), and to enable Gabriel and TriVergent to
attract and retain the services of other highly competent employees and others.
By action of the Board of Directors of Gabriel and pursuant to the
Agreement and Plan of Merger dated as of June 9, 2000 (the "Merger Agreement")
by and among Gabriel, Triangle Acquisition, Inc., a Delaware corporation and
wholly owned subsidiary of Gabriel, and TriVergent, formerly known as State
Communications, Inc., at the effective time of the merger contemplated by the
Merger Agreement, Gabriel assumed the TriVergent Corporation Amended and
Restated Employee Incentive Plan, which plan was amended and restated to
redesignate such plan as an employee incentive plan of Gabriel (the "Plan"). The
Plan was adopted by the Board of Directors [and approved by the stockholders of
Gabriel.] Under the terms of the Merger Agreement, options to acquire shares of
common stock of Gabriel, par value $0.01 per share ("Common Stock"), under the
Plan were substituted for options to acquire common stock, par value $0.001 per
share, of TriVergent outstanding under the Plan prior to the merger ("TriVergent
Options"). Such substitute options have terms and conditions substantially
identical to the TriVergent Options, as adjusted for the merger exchange ratio
of shares of Common Stock for each outstanding share of TriVergent Common
Stock and except, under certain circumstances, with respect to the vesting
provisions of the TriVergent Options as provided in the Merger Agreement.
2. Eligibility. Qualified Options and Non-qualified Options
(collectively, "Options") and Bonus Stock Awards and Restricted Stock Awards
(collectively, "Awards") hereunder may be
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granted to employees of TriVergent or any subsidiary or affiliate of TriVergent.
Non-qualified Options hereunder may also be granted any others that the Board of
Directors of Gabriel (the "Board of Directors"), in its sole discretion, shall
determine. The Board of Directors, in its sole discretion, shall also determine
the nature of the Options and Restricted Stock Awards to be granted and the
terms and provisions of such Restricted Stock Awards and Options, subject to the
limitations set forth in this Plan.
3. Amount of Stock. Options and/or Awards for no more than 11,080,000
shares of Common Stock may be granted pursuant to this Plan. In the event that
any Options or Awards granted under this Plan shall terminate, expire or be
canceled, new Options or Awards may be granted with respect to the shares
covered by such Options or Awards. However, to the extent that Options or other
Awards granted under this Plan are exercised or become vested, respectively, the
stock available for grant under the Plan shall be reduced. The aggregate number
of shares of Common Stock that may be subject to Qualified Options is
11,080,000, subject to any adjustment as provided in Section 5(g). The maximum
number of shares of Common Stock that may be subject to Options granted to any
individual during a calendar year may not exceed 2,000,000 shares, subject to
adjustment as provided in Section 5(g).
4. Administration of Plan. This Plan shall be administered by the Board
of Directors; provided that in the event that the shares of Common Stock of
Gabriel become listed on a national stock exchange, this Plan shall be
administered by a committee (the "Committee") which shall consist solely of
individuals each of whom qualify as (i) an "outside director" within the meaning
of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), and the regulations issued thereunder or (ii) a
"nonemployee director" within the meaning of Rule 16b-3(b)(3)(i) promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Subject to the express provisions of the Plan, the Board (or the Committee)
shall have plenary authority, in its discretion, to administer the Plan and to
exercise all powers and authority either specifically granted to it under the
Plan or necessary and advisable in the administration of the Plan, including,
without limitation, the authority to interpret the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to
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determine the terms of all Options and Awards granted under the Plan (which need
not be identical), the purchase price of the shares covered by each award, the
individuals to whom and the time or times at which award shall be granted,
whether an award shall be a Qualified Option, a Non-qualified Option, Bonus
Stock Award or Restricted Stock Award and the number of shares covered by each
award; and to make all other necessary or advisable determinations with respect
to the Plan. The determination of the Board (or the Committee) on such matters
shall be conclusive. The Committee shall have the right at any time to delegate
to the person then serving as Gabriel's chief executive officer its authority to
take any permitted action under the Plan provided that (i) such action is not
otherwise required to be taken by a "nonemployee director" or an "outside
director" in order to comply either with Section 162(m) of the Internal Revenue
Code or with Rule 16b-3 of the Exchange Act, respectively, and (ii) such person
shall not have the right under any circumstance to grant Options to himself or
herself.
5. Terms and Conditions of Options intended to Qualify as Incentive
Stock Options Under the Internal Revenue Code. ("Qualified Options"). All
Qualified Options approved for grant by the Board of Directors shall be
evidenced by written stock option agreements in such form as the Board of
Directors may designate. Each such agreement shall incorporate the terms of this
Plan and shall also be subject to the provisions of the Internal Revenue Code
applicable to "incentive stock options", as that term is defined in Section 422
of the Internal Revenue Code. Each Qualified Option shall be subject to the
following terms and conditions, in addition to such other terms and conditions
as the Board of Directors may deem advisable:
(a) Option Price. The option price for each share of Common
Stock under a Qualified Option shall not be less than the fair market value
("Fair Market Value") of such share on the date that the Qualified Option is
granted; provided, however, that a Qualified Option granted to an employee who
is a ten (10%) percent or more stockholder of Gabriel shall not be less than one
hundred and ten (110%) percent of the Fair Market Value of such share on such
date. Prior to the date on which Gabriel becomes listed on a national stock
exchange, unless the Board of Directors determines that an appraisal by an
independent appraiser must be made as of the date the Qualified Option is
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granted, Fair Market Value shall be the most recent valuation of Common Stock
made for general stock transaction purposes. On and after the date Gabriel
becomes listed on a national stock exchange, Fair Market Value shall be the
average of the high and the low sales prices of a share of Common Stock on the
date of grant (or, if not a trading day, on the last preceding trading day) as
reported on the principal stock exchange on which the Common Stock is then
listed or traded. If a Qualified Option is granted after the fiscal year end of
Gabriel, but before the valuation as of such date is received, the option price
shall be determined when such valuation is received by Gabriel. Each option
agreement shall state the number of shares to which it pertains and the option
price of such shares.
(b) Option Period. The option agreement shall set forth the
period for which each Qualified Option is granted. It is anticipated that
Qualified Options shall be exercisable with respect to twenty (20%) percent of
the shares covered by such Qualified Option on each anniversary date of the
grant of such shares, beginning with the first anniversary date of such grant,
and shall be exercisable with respect to one hundred (100%) percent of the
shares covered by such Qualified Option after the expiration of five (5) years
from the date of grant. The Board of Directors shall have the discretion to vary
the schedule pursuant to which such Qualified Options shall be exercisable,
provided, that no Qualified Option shall be exercisable after the expiration of
(i) ten (10) years from the date of grant, with respect to an employee who is
less than a ten (10%) percent stockholder of Gabriel, or (ii) five (5) years
from the date of grant with respect to an employee who is a ten (10%) percent or
more stockholder of Gabriel.
If the employee dies while in the employ of Gabriel, Qualified Options
granted under this Plan may be exercised in whole or in part, but only to the
extent that the employee would have been entitled to exercise them if he had
been living, for a period that does not exceed the lesser of (i) the remaining
term of such Qualified Option, or (ii) nine (9) months after the employee's
death. Any Qualified Options not exercised within such period shall expire. Such
Qualified Options may be exercised by the executor or administrator of the
employee's Gabriel or such other person as the employee may designate in his
will.
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If the employee terminates employment with Gabriel for any reason other
than death, Qualified Options may be exercised in whole or in part, but only to
the extent vested at the employee's termination for a period that does not
exceed the lesser of (i) the remaining term of such Qualified Option or (ii)
ninety (90) days after the employee's termination.
(c) Assignability. A Qualified Option granted pursuant to this
Plan shall be exercisable only by the employee to whom it is granted and shall
not be assignable by him otherwise than by will or by the laws of descent and
distribution.
(d) Manner of Exercise. The Board of Directors may impose such
conditions and restrictions upon the exercise of Qualified Options as it may
deem advisable. Payment shall be made in cash or, unless otherwise prohibited in
the applicable stock option agreement, in shares of Common Stock already owned
by the holder of the option or partly in cash and partly in such shares;
provided, however, that if shares of Common Stock are to be used to satisfy the
exercise price, such shares shall have been acquired (i) at least six months
prior to the exercise date or (ii) in an open market purchase price. No shares
may be issued until full payment of the purchase price therefor has been made.
The options, to the extent vested, shall be exercisable in whole at any time or
in part from the time to time during the term of the option, but not as to less
than 100 shares (or the shares then purchasable under the option if less than
100 shares) remain available for purchase. In addition, it shall be a condition
to the obligation of Gabriel to issue or transfer shares of stock upon exercise
of a Qualified Option or upon the disposition of shares acquired pursuant to a
Qualified Option that the employee pay to Gabriel, upon its demand, such amount
as may be requested by Gabriel in order to satisfy its obligation to withhold
Federal and state income taxes with respect to such disposition. The taxable
value of the Qualified Option at the time of disposition shall be reported to
the Internal Revenue Service for the year in which disposition occurs.
(e) Rights as a Stockholder. The holder of a Qualified Option
granted under this Plan shall not by reason thereof have any right as a
stockholder until shares of Common
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Stock are issued to him or her.
(f) Restrictions Upon Shares Issued Pursuant to Qualified
Options. Prior to an initial public offering by Gabriel shares of Common Stock
("IPO"), all shares issued pursuant to the exercise of Qualified Options granted
hereunder shall be subject to the following restrictions, and certificates
evidencing such shares shall be appropriately legended to give notice of such
restrictions:
(i) If such shares are issued to an employee of
Gabriel and such employee's employment is terminated
for any reason, then, and any time within six (6)
months after the termination of such employee's
employment, Gabriel may, at its option, require such
employee to sell all or any portion of such shares to
Gabriel at their then fair market value, as defined
in Section 5.(a) hereof.
(ii) All shares acquired pursuant to Qualified
Options hereunder shall be subject to a right of
first refusal in favor of Gabriel and may not be
sold, assigned or otherwise transferred unless first
offered to Gabriel on the same terms and conditions.
These restrictions will cease and no longer be effective on and after
the date of an IPO.
(g) Adjustment in the Event of Change in Stock. In the event
of any change in the outstanding stock of Gabriel by reason of stock dividend,
stock split, recapitalization, reorganization, merger, split up or the like, the
number and kind of shares under outstanding option agreements pursuant to this
Plan and the option price as well as the maximum number of shares of Common
Stock that may be granted under the Plan, the maximum number of shares of Common
Stock that may be subject to Qualified Options and the maximum number of shares
of Common Stock that may be subject to options granted to any individual during
a calendar year shall be appropriately adjusted as determined by the Board of
Directors, in its discretion, so as to preserve, but not increase, the benefits
to the holders of such Qualified Options.
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(i) Prohibition of Tandem Options. No grant of tandem stock
options may be made, nor may Qualified Options and Non-qualified Options be
granted under any sort of arrangement where the exercise of one affects the
right to exercise the other.
(j) The aggregate fair market value (determined as of the time
the option is granted) of the stock with respect to which Qualified Options are
exercisable for the first time by a holder during any calendar year (under all
such plans of Gabriel and its subsidiary corporations) shall not exceed One
Hundred Thousand Dollars ($100,000). In the event that this limit is exceeded,
any option that was intended to constitute a Qualified Option that and which is
in excess of this limitation shall automatically be converted into a
Non-qualified Option.
(6) Terms and Conditions of Non-qualified Options. All Non-qualified
Options approved for grant by the Board of Directors shall be evidenced by
written stock option agreements in such form as the Board of Directors may
designate. Each such option agreement shall incorporate the terms of this Plan
and shall be subject to the following terms and conditions, in addition to such
other terms and conditions as the Board of Directors may deem advisable:
(a) Option Price. The option price for each share of Gabriel
Common Stock under a Non-qualified Option shall be the fair market value of such
share, as defined in Section 5(a) hereof, subject to the authority of the Board
of Directors to designate an option price either less than or more than such
Fair Market Value; provided, however, that in no event will the option price be
less than 85% of the Fair Market Value of a share of Common Stock on the date of
grant.
(b) Option Period. The option agreement shall set forth the
period for which each Non-qualified Option is issued. In general, subject to the
discretion of the Board of Directors to set some other period, a Non-qualified
Option may be exercised with respect to twenty (20%) percent of the shares
covered by such Non-qualified Option on each anniversary date of the grant of
such shares, beginning with the first anniversary date of such grant, and shall
be exercisable with respect to one hundred (100%) percent of the shares covered
by such Non-qualified Option
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after the expiration of five (5) years from the date of grant. If the employee
ceases to be employed by Gabriel, all of that employee's Non-Qualified Options
that have become exercisable according to the terms of this Plan shall be
exercisable for a period of sixty (60) days following the date of termination of
the employee's employment after which time they shall expire.
(c) Assignability. Unless the Board (or the Committee) shall
otherwise determine, Non-qualified Options may not be transferred other than by
will or by the laws of descent and distribution. The designation of a
beneficiary by an optionee shall not constitute a transfer. With the approval of
the Board (or the Committee), a nonqualified stock option may be transferred by
gift to any member of the optionee's immediate family or a trust established for
such family members. For the purposes of this Section 6(c), "immediate family"
shall mean the spouse, children and grandchildren, parents, grandparents, form
spouses, siblings, nieces, nephews, parents-in-law, sons-in-law,
daughters-in-law, brothers-in-law, sisters-in-law, including adoptive or step
relationships and any person sharing the employee's household (other than as
tenant or employee).
(d) Manner of Exercise. The Board of Directors may impose such
conditions and restrictions upon the exercise of Non-qualified Options as it may
deem advisable. Payment shall be made as provided in Section 5(d). In addition,
it shall be a condition to the obligation of Gabriel to issue or transfer shares
of stock upon grant of a Non-qualified Option, upon exercise of a Non-qualified
Option or upon the disposition of shares acquired pursuant to a Non-qualified
Option that the individual pay to Gabriel, upon its demand, such amount as may
be requested by Gabriel in order to satisfy its obligation to withhold Federal
and state income taxes with respect to such grant, exercise or disposition. The
taxable value of the Non-qualified Option at the time of grant, exercise or
disposition, as the case may be, shall be reported to the Internal Revenue
Service for the year in which grant, exercise or disposition occurs.
(e) Rights as a Stockholder. The holder of a Non-qualified
Option granted under this Plan shall not by reason thereof have any right as a
stockholder until shares of Common Stock are issued to him or her.
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(f) Restrictions Upon Shares Issued Pursuant to Non-qualified
Options. Prior to an IPO, all shares issued pursuant to the exercise of
Non-qualified Options granted hereunder shall be subject to the following
restriction, and certificates evidencing such shares shall be appropriately
legended to give notice of such restrictions:
(i) If such shares are issued to an employee of
Gabriel and such employee holder's employment is
terminated for any reason, or if such shares are
issued to a holder who is not an employee of Gabriel,
then, at any time within six (6) months after the
termination of such employee holder's employment or
at any time within six (6) months after such issuance
of shares to a non-employee holder, Gabriel may, at
its option, require such holder to sell all or any
portion of such shares to Gabriel at their then Fair
Market Value, as defined in Section 5.(a) hereof.
(ii) All shares acquired pursuant to Non-qualified
Options hereunder shall be subject to a right of
first refusal in favor of Gabriel and may not be
sold, assigned or otherwise transferred unless first
offered to Gabriel on the same terms and conditions.
These restrictions will cease and no longer be effective on and after
the date of an IPO.
(g) Adjustment in the Event of Change in Stock. In the event
of any change in the outstanding stock of Gabriel by reason of stock dividend,
stock split, recapitalization, reorganization, merger, split up or the like, the
number and kind of shares under outstanding option agreements pursuant to this
Plan and the option price shall be appropriately adjusted by the Board of
Directors, in its discretion, so as to preserve, but not increase, the benefits
to the holders of such Non-qualified Options.
7. Terms and Conditions of Restricted Stock Awards. Each share of
Restricted Stock which may be awarded to an employee
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shall be subject to the following terms and conditions, in addition to such
other terms and conditions as the Board of Directors may deem advisable:
(a) Price. Shares of Restricted Stock may be sold to employees
for such price as the Board of Directors may determine or may be awarded for no
consideration other than the employee's past and future services or other
considerations, as the Board of Directors, in its sole discretion, shall deem
appropriate.
(b) Risk of Forfeiture. All shares of Restricted Stock shall
be forfeited and returned to Gabriel for cancelation if the employee ceases to
be employed by Gabriel for any reason prior to the scheduled lapse of such risk
of forfeiture as provided by the Board of Directors. Upon making any grant of
Restricted Stock, the Board of Directors shall determine the schedule for lapse
of such risk of forfeiture, which is anticipated to call for a lapse of the risk
of forfeiture with respect to twenty (20%) percent of such shares on each
anniversary of the grant of such shares, beginning with the first anniversary of
such grant, until none of such shares are subject to such risk of forfeiture.
The Board of Directors, however, shall have complete discretion to determine the
manner in which such risk of forfeiture shall lapse.
(c) Assignability. No shares of Restricted Stock shall be
sold, assigned or transferred by an employee so long as it remains subject to a
risk of forfeiture hereunder.
(d) Rights as a Stockholder. A grantee, as owner of Restricted
Stock, shall have the right to vote such shares and to receive all dividends,
cash or stock, paid or delivered thereon. Such shares, however, may not be sold,
assigned, pledged, hypothecated or otherwise transferred prior to the vesting of
such shares.
(e) Buy Back and Right of First Refusal. If an employee leaves
the employ of Gabriel for any reason, Gabriel may, at its option, purchase any
shares of Restricted Stock which are not forfeited by reason of such termination
of employment. Such option shall lapse unless exercised within six (6) months
after such termination of employment. The purchase price shall be the fair
market value, as defined in Section 5.(a) hereof, of
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such shares at the date of such termination of employment. All shares of stock
awarded to employees hereunder shall permanently be subject to a right of
refusal in favor of Gabriel and may not be sold, assigned or transferred to any
person unless first offered for sale to Gabriel upon the same terms and
conditions. This right of first refusal shall lapse on and after the date of an
IPO.
(f) Legend. All certificates representing shares of Restricted
Stock shall be appropriately legended to reflect the above restrictions.
(g) Withholding. An employee to whom shares of Restricted
Stock are awarded shall be required to remit to Gabriel, upon demand, such
amounts of money as may be required by Gabriel to satisfy Federal and Gabriel
income tax withholding requirements with respect to such Restricted Stock. The
value of the Restricted Stock at the time of vesting shall be reported to the
Internal Revenue Service for the year in which vesting occurs.
8. Terms and Conditions of Bonus Stock Awards. All Bonus Shares which
may be awarded to an employee shall be subject to the following terms and
conditions, in addition to such other terms and conditions as the Board of
Directors may deem advisable:
(a) Price. Bonus Shares shall be awarded at the fair market
value of such shares at date of award, as defined in Section 5(a) hereof, and
shall be issued in the name of the grantee. The Bonus Shares shall be issued
without the payment of any cash consideration by the grantee. However, it shall
be a condition to issuance of the Bonus Shares that the grantee pay to Gabriel,
upon its demand, such amount as may be requested by Gabriel in order to satisfy
its obligation to withhold Federal and Gabriel income taxes with respect to such
grant. The value of the Bonus Shares at the time of award shall be reported on
the grantee's W-2 for the year in which the award is made.
(b) The Bonus Shares shall be issued against execution by the
grantee of an Award Agreement.
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(c) Stockholder of Rights. A grantee, as owner of Bonus
Shares, shall have all of the rights of a stockholder, including the right to
vote such shares and to receive all dividends, cash or stock, paid or delivered
thereon.
(d) Buy Back and Right of First Refusal. All Bonus Shares
awarded are subject to repurchase by Gabriel upon termination of the grantee's
employment, for any reason, as follows:
(i) If termination of employment occurs within three
(3) years from date of award of the Bonus Shares, the
price to be paid upon repurchase shall be the value
of such Bonus Shares at date of award, plus interest
at the annual prime rate less one (1%) percent during
the period from date of award to date of repurchase,
or
(ii) If termination of employment occurs after three
(3) years from date of award of the Bonus Shares, the
price to be paid upon repurchase shall be their then
fair market value as defined in Section 5.(a) hereof.
All shares of stock awarded to employees hereunder shall
permanently be subject to a right of refusal in favor of Gabriel and may not be
sold, assigned or transferred to any person unless first offered for sale to
Gabriel upon the same terms and conditions. This right of first refusal shall
lapse on and after the date of an IPO.
9. Change in Control Acceleration. In the event of a Change in Control
(as defined herein), (i) all outstanding Options shall immediately become
exercisable, (ii) all Bonus Shares shall cease to be subject to a right of first
refusal pursuant to Section 8 and (iii) all outstanding shares of Restricted
Stock shall vest. For purposes hereof, a "Change of Control", shall mean the
occurrence of any of the following events:
(i) any "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than
Gabriel or any subsidiary of Gabriel,
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or any trustee or other fiduciary holding securities
under an employee benefit plan of Gabriel or any
subsidiary) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Gabriel
representing fifty percent (50%) or more of the
combined voting power of Gabriel's then outstanding
securities;
(ii) during any period of two consecutive years
beginning on or after the Second Restatement Date (as
defined in Section 12), individuals who at the
beginning of such period constitute the Board of
Directors, and any new director (other than a
director designated by a person who has entered into
an agreement with the Company to effect a transaction
described in clause (i), (iii) or (iv)) whose
election by the Board or nomination for election by
Gabriel's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of
the period or whose election or nomination for
election was previously so approved (unless the
approval of the election or nomination for election
of such new directors was in connection with an
actual or threatened election or proxy contest),
cease for any reason to constitute at least a
majority thereof;
(iii) the stockholders of Gabriel approve a merger or
consolidation of Gabriel with any other corporation,
other than (x) a merger or consolidation which would
result in the voting securities of Gabriel
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by
being converted into voting securities of the
surviving entity) more than fifty percent (50%) of
the combined voting power of the voting securities of
Gabriel or such surviving entity outstanding
immediately after such merger or consolidation or (y)
a merger or consolidation effected to implement a
recapitalization of Gabriel (or similar
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transaction) in which no "person" (as defined above
in clause (i)) acquires more than fifty percent (50%)
of the combined voting power of Gabriel's then
outstanding securities; or
(iv) the stockholders of Gabriel approve a plan of
complete liquidation of Gabriel or an agreement for
the sale or disposition by Gabriel of all or
substantially all of Gabriel's assets or any
transaction having a similar effect.
Notwithstanding the foregoing, with respect to Options, Bonus
Shares and Restricted Stock granted or awarded on or after June 9, 2000, the
transactions contemplated by and under the Merger Agreement shall not constitute
a "Change in Control". Accordingly, the provisions of this Section 9 shall not
be effective as to any such transaction with respect to any Options, Bonus
Shares and Restricted Stock granted or awarded on or after June 9, 2000.
10. Governmental Regulations. This Plan and the options and rights
granted hereunder shall be subject to all applicable Federal and the laws of the
State of Delaware. Gabriel shall not be required to issue stock prior to
satisfaction of applicable registration requirements or necessary
qualifications.
11. Non-Uniform Determinations. Determinations by the Board of
Directors with respect to Options, Awards, stock values and all other matters
under this Plan need not be uniform or consistent and may be made selectively
among employees, including among employees who are similarly situated, or
others, at the sole discretion of the Board of Directors.
12. Term of the Plan. This Plan originally became effective on January
12, 1998 and shall terminate on January 12, 2008, or such earlier date as may be
determined by the Board of Directors. Termination of the Plan shall not affect
the rights of holders of outstanding Qualified Options, Non-qualified Options or
Restricted Stock Awards. The Plan was amended and restated as of April 19, 2000
(the "First Restatement Date"), and as of June 21, 2000 (the "Second Restatement
Date").
13. Amendment and Termination of the Plan. This Plan may
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be amended or terminated by the Board of Directors without stockholder approval;
provided, that the Board of Directors shall have no power without the approval
of the stockholders of Gabriel to increase the total number of shares that may
be issued pursuant to the Plan, or to amend the provisions of the Plan which
establish the price of Qualified Options as the fair market value at date of
grant or award. No amendment shall adversely affect the terms of an outstanding
grant of an Option Award made hereunder without the consent of the holder of
such Option or Award.
14. Conflicting Terms. In the event that any provision of this Plan
should conflict with any applicable provision of an agreement evidencing the
grant of an Option or Award made hereunder, the terms of the Plan provision
shall govern.
15. Amendment Construction. No provision of this amended and restated
Plan shall apply to (i) any outstanding Qualified Option to the extent that, if
so applied, it would cause such Option to cease to qualify as an incentive stock
option under Section 422 of the Internal Revenue Code or (ii) any outstanding
Option to the extent that, if so applied, it would necessitate, in the opinion
of Gabriel's independent accountants, a charge to Gabriel's earnings. Without
limiting the generality of the foregoing, the last sentences of Sections 5(b)
and 5(f) of the Plan as so amended (relating, respectively, to repurchase rights
and post-employment continued exercisability of Options) shall not be applicable
to any Qualified Option granted prior to the First Restatement Date and the
applicable provisions of Sections 5(b) and 5(f) as in effect prior to the Second
Restatement Date shall continue to apply to all Qualified Options granted prior
to the Second Restatement Date.
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