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EXHIBIT 10.1
AMERICAN SPECTRUM REALTY, INC.
2000 OMNIBUS STOCK INCENTIVE PLAN
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TABLE OF CONTENTS
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1. PURPOSE..................................................................................................1
2. DEFINITIONS..............................................................................................1
3. ADMINISTRATION...........................................................................................6
4. STOCK SUBJECT TO THE PLAN................................................................................8
5. OPTION GRANTS FOR NON-EMPLOYEE DIRECTORS.................................................................9
5.1 GRANT...........................................................................................9
5.2 PURCHASE PRICE.................................................................................10
5.3 VESTING........................................................................................10
5.4 DURATION.......................................................................................10
6. DISCRETIONARY OPTION GRANTS FOR ELIGIBLE INDIVIDUALS....................................................11
6.1 AUTHORITY OF PLAN ADMINISTRATOR................................................................11
6.2 PURCHASE PRICE.................................................................................11
6.3 MAXIMUM DURATION...............................................................................12
6.4 VESTING........................................................................................12
6.5 MODIFICATION OR SUBSTITUTION...................................................................12
7. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS..........................................................12
7.1 NON-TRANSFERABILITY............................................................................12
7.2 METHOD OF EXERCISE.............................................................................12
7.3 RIGHTS OF OPTIONEES............................................................................13
7.4 EFFECT OF CHANGE IN CONTROL....................................................................13
7.5 DIVIDEND EQUIVALENT RIGHTS.....................................................................14
8. STOCK APPRECIATION RIGHTS...............................................................................14
8.1 TIME OF GRANT..................................................................................14
8.2 STOCK APPRECIATION RIGHT RELATED TO AN OPTION..................................................14
(a) EXERCISE...............................................................................14
(b) AMOUNT PAYABLE.........................................................................14
(c) TREATMENT OF RELATED OPTIONS AND STOCK APPRECIATION RIGHTS UPON
EXERCISE...............................................................................15
8.3 STOCK APPRECIATION RIGHT UNRELATED TO AN OPTION................................................15
8.4 METHOD OF EXERCISE.............................................................................15
8.5 FORM OF PAYMENT................................................................................15
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8.6 MODIFICATION OR SUBSTITUTION...................................................................16
8.7 EFFECT OF CHANGE IN CONTROL....................................................................16
9. RESTRICTED STOCK........................................................................................16
9.1 GRANT..........................................................................................16
9.2 RIGHTS OF GRANTEE..............................................................................16
9.3 NON-TRANSFERABILITY............................................................................17
9.4 LAPSE OF RESTRICTIONS..........................................................................17
(a) GENERALLY..............................................................................17
(b) EFFECT OF CHANGE IN CONTROL............................................................17
9.5 MODIFICATION OR SUBSTITUTION...................................................................17
9.6 TREATMENT OF DIVIDENDS.........................................................................17
9.7 DELIVERY OF SHARES.............................................................................18
10. PERFORMANCE AWARDS......................................................................................18
10.1 PERFORMANCE OBJECTIVES.........................................................................18
10.2 PERFORMANCE UNITS..............................................................................19
(a) VESTING AND FORFEITURE.................................................................19
(b) PAYMENT OF AWARDS......................................................................19
10.3 PERFORMANCE SHARES.............................................................................19
(a) RIGHTS OF GRANTEE......................................................................20
(b) NON-TRANSFERABILITY....................................................................20
(c) LAPSE OF RESTRICTIONS..................................................................20
(d) TREATMENT OF DIVIDENDS.................................................................20
(e) DELIVERY OF SHARES.....................................................................20
10.4 EFFECT OF CHANGE IN CONTROL....................................................................20
10.5 NON-TRANSFERABILITY............................................................................21
10.6 MODIFICATION OR SUBSTITUTION...................................................................21
11. EFFECT OF A TERMINATION OF EMPLOYMENT OR SERVICE........................................................21
12. ADJUSTMENT UPON CHANGES IN CAPITALIZATION...............................................................22
13. EFFECT OF CERTAIN TRANSACTIONS..........................................................................22
14. INTERPRETATION..........................................................................................22
15. TERMINATION AND AMENDMENT OF THE PLAN...................................................................23
16. NON-EXCLUSIVITY OF THE PLAN.............................................................................23
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17. LIMITATION OF LIABILITY.................................................................................24
18. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW..........................................................24
19. MISCELLANEOUS...........................................................................................25
19.1 MULTIPLE AGREEMENTS............................................................................25
19.2 WITHHOLDING OF TAXES...........................................................................25
20. EFFECTIVE DATE..........................................................................................26
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AMERICAN SPECTRUM REALTY, INC.
2000 OMNIBUS STOCK INCENTIVE PLAN
1. PURPOSE.
The purpose of this Plan is to strengthen American Spectrum
Realty, Inc. (the "Company") by providing an incentive to its officers,
employees, consultants and directors and thereby encouraging them to devote
their abilities and industry to the success of the Company's business
enterprise. It is intended that this purpose be achieved by extending to
officers, employees, consultants and directors of the Company and its
subsidiaries an added long-term incentive for high levels of performance and
unusual efforts through the grant of Incentive Stock Options, Nonqualified Stock
Options, Stock Appreciation Rights, Restricted Stock, Performance Units and
Performance Shares (as each term is hereinafter defined).
2. DEFINITIONS.
For purposes of the Plan:
2.1 "Adjusted Fair Market Value" means, in the event of a
Change in Control, the greater of (i) the highest price per Share paid to
holders of the Shares in any transaction (or series of transactions)
constituting or resulting in a Change in Control or (ii) the highest Fair Market
Value of a Share during the ninety (90) day period ending on the date of a
Change in Control.
2.2 "Agreement" means the written agreement between the
Company and an Optionee or Grantee evidencing the grant of an Option or Award
and setting forth the terms and conditions thereof.
2.3 "Award" means a grant of Restricted Stock, a Stock
Appreciation Right, a Performance Award or any or all of them.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means, unless otherwise defined in the Agreement
evidencing a particular Award or an employment agreement between the Company and
the individual, an individual's (i) intentional failure to perform reasonably
assigned duties, (ii) dishonesty or willful misconduct in the performance of
duties, (iii) involvement in a transaction in connection with the performance of
duties to the Company or any of its Subsidiaries thereof which transaction is
adverse to the interests of the Company or any of its Subsidiaries and which is
engaged in for personal profit, (iv) willful violation of any law, rule or
regulation in connection with the performance of duties (other than traffic
violations or
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similar offenses), (v) the commission of an act of fraud or intentional
misappropriation or conversion of assets or opportunities of the Company or any
Subsidiary, or (vi) any termination of an employment agreement with the
individual by the individual except in accordance with the terms of the
employment agreement.
2.6 "Change in Capitalization" means any increase or reduction
in the number of Shares, or any change (including, but not limited to, a change
in par value) in the Shares or exchange of Shares for a different number or kind
of shares or other securities of the Company, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, spin-off, split-up,
issuance of warrants or rights or debentures, stock dividend, stock split or
reverse stock split, cash dividend, property dividend, combination or exchange
of shares, repurchase of shares, change in corporate structure or otherwise.
2.7 A "Change in Control" shall mean the occurrence during the
term of the Plan of:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for purposes
of Section 13(d) or 14(d) of the Exchange Act) immediately after which
such Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of thirty percent (30%) or
more of the combined voting power of the Company's then outstanding
Voting Securities; PROVIDED, HOWEVER, in determining whether a Change
in Control has occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute
an acquisition which would cause a Change in Control. A "Non- Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan
(or a trust forming a part thereof) maintained by (A) the Company or
(B) any corporation or other Person of which a majority of its voting
power or its voting equity securities or equity interest is owned,
directly or indirectly, by the Company (for purposes of this
definition, a "Subsidiary"), (ii) the Company or its Subsidiaries,
(iii) any corporation or other Person the majority of its voting power
or its voting equity securities is owned, directly or indirectly, by
William J. Carden or John Galardi unless it results in them
individually or together having Beneficial Ownership of more than fifty
percent (50%) of the combined voting power of the Company's then
outstanding voting securities, or (iv) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined).
(b) The individuals who, as of the Plan Effective
Date, are members of the Board (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the members of the Board;
PROVIDED, HOWEVER, that if the election, or nomination for election by
the Company's common stockholders, of any new director was approved by
a vote of at least two-thirds of the Incumbent Board, such new director
shall, for purposes of this Plan, be considered as a member of the
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Incumbent Board; PROVIDED FURTHER, HOWEVER, that no individual shall be
considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board (a "Proxy Contest")
including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
(i) A merger, consolidation or
reorganization involving the Company, unless such merger,
consolidation or reorganization is a "Non- Control
Transaction" a "Non-Control Transaction" shall mean a merger,
consolidation or reorganization of the Company where:
(A) the stockholders of the Company,
immediately before such merger, consolidation or
reorganization, own, directly or indirectly
immediately following such merger, consolidation or
reorganization, at least fifty percent (50%) of the
combined voting power of the outstanding voting
securities of the corporation resulting from such
merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the same
proportion as their ownership of the Voting
Securities immediately before such merger,
consolidation or reorganization,
(B) the individuals who were members
of the Incumbent Board immediately prior to the
execution of the agreement providing for such merger,
consolidation or reorganization constitute at least
two-thirds of the members of the board of directors
of the Surviving Corporation, or a corporation
beneficially directly or indirectly owning a majority
of the Voting Securities of the Surviving
Corporation, and
(C) no Person other than (i) the
Company, (ii) any Subsidiary, (iii) any employee
benefit plan (or any trust forming a part thereof)
maintained by the Company, the Surviving Corporation,
or any Subsidiary, or (iv) any Person who,
immediately prior to such merger, consolidation or
reorganization had Beneficial Ownership of thirty
percent (30%) or more of the then outstanding Voting
Securities has Beneficial Ownership of thirty percent
(30%) or more of the combined voting power of the
Surviving Corporation's then outstanding voting
securities.
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(ii) A complete liquidation or dissolution
of the Company; or
(iii) The sale or other disposition of all
or substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then outstanding
Voting Securities as a result of the acquisition of Voting Securities by the
Company which, by reducing the number of Voting Securities outstanding,
increases the proportional number of shares Beneficially Owned by the Subject
Persons, provided that if a Change in Control would occur (but for the operation
of this sentence) as a result of the acquisition of Voting Securities by the
Company, and after such share acquisition by the Company, the Subject Person
becomes the Beneficial Owner of any additional Voting Securities which increases
the percentage of the then outstanding Voting Securities Beneficially Owned by
the Subject Person, then a Change in Control shall occur.
2.8 "Code" means the Internal Revenue Code of 1986, as
amended.
2.9 "Company" means American Spectrum Realty, Inc.
2.10 "Director Option" means an Option granted pursuant to
Section 5 hereof.
2.11 "Disability" means a physical or mental infirmity which
impairs the Optionee's ability to perform substantially his or her duties for a
period of one hundred eighty (180) consecutive days.
2.12 "Discretionary Option" means an Option granted pursuant
to Section 6 hereof.
2.13 "Dividend Equivalent Right" means a right to receive all
or some portion of the cash dividends that are or would be payable with respect
to Shares.
2.14 "Division" means any of the operating units or divisions
of the Company designated as a Division by the Plan Administrator.
2.15 "Eligible Individual" means any officer, employee,
consultant or director of the Company or a Subsidiary designated by the Plan
Administrator as eligible to receive Options or Awards subject to the conditions
set forth herein.
2.16 "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
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2.17 "Fair Market Value" on any date means the average of the
high and low sales prices of the Shares on such date on the principal national
securities exchange on which such Shares are listed or admitted to trading, or,
if such Shares are not so listed or admitted to trading, the arithmetic mean of
the per Share closing bid price and per Share closing asked price on such date
as quoted on the National Association of Securities Dealers Automated Quotation
System or such other market in which such prices are regularly quoted, or, if
there have been no published bid or asked quotations with respect to Shares on
such date, the Fair Market Value shall be the value established by the Board in
good faith and, in the case of an Incentive Stock Option, in accordance with
Section 422 of the Code.
2.18 "Grantee" means a person to whom an Award has been
granted under the Plan.
2.19 "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Plan Administrator
as an Incentive Stock Option.
2.20 "Non-Employee Director" means a director of the Company
who is not an employee of the Company or any Subsidiary.
2.21 "Nonqualified Stock Option" means an Option which is not
an Incentive Stock Option.
2.22 "Option" means an Discretionary Option, a Director
Option, or either or both of them.
2.23 "Optionee" means a person to whom an Option has been
granted under the Plan.
2.24 "Parent" means any corporation which is a parent
corporation (within the meaning of Section 424(e) of the Code) with respect to
the Company.
2.25 "Performance Awards" means Performance Units, Performance
Shares or either or both of them.
2.26 "Performance Cycle" means the time period specified by
the Plan Administrator at the time a Performance Award is granted during which
the performance of the Company, a Subsidiary or a Division will be measured.
2.27 "Performance Shares" means Shares issued or transferred
to an Eligible Individual under Section 10.3 hereof.
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2.28 "Performance Unit" means Performance Units granted to an
Eligible Individual under Section 10.2 hereof.
2.29 "Plan" means the American Spectrum Realty, Inc. Omnibus
Stock Incentive Plan.
2.30 "Plan Administrator" means the Board or, if the Board
determines, a committee of the Board which shall consist of not fewer than two
non- employee directors within the meaning of Rule 16b-3 under the Exchange Act
or such greater number as shall be required for compliance with Rule 16b-3 under
the Exchange Act.
2.31 "Plan Effective Date" means the date of the approval of
the Plan by the Company's Board of Directors.
2.32 "Restricted Stock" means Shares issued or transferred to
an Eligible Individual pursuant to Section 9 hereof.
2.33 "Shares" means the common stock, par value $.01 per
share, of the Company.
2.34 "Stock Appreciation Right" (SAR) means a right to receive
all or some portion of the increase in the value of the Shares as provided in
Section 8 hereof.
2.35 "Subsidiary" means any corporation which is a subsidiary
corporation (within the meaning of Section 424(f) of the Code) with respect to
the Company.
2.36 "Successor Corporation" means a corporation, or a parent
or subsidiary thereof within the meaning of Section 424(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 424(a) of the
Code applies.
2.37 "Ten-Percent Stockholder" means an Eligible Individual,
who, at the time an Incentive Stock Option is to be granted to him or her, owns
(within the meaning of Section 422(b)(6) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, or of a Parent or a Subsidiary.
3. ADMINISTRATION.
3.1 The Plan shall be administered by the Plan Administrator,
which shall hold meetings at such times as may be necessary for the proper
administration of the Plan. The Plan Administrator shall keep minutes of its
meetings. If the Plan Administrator is a committee of the Board, a quorum shall
consist of not less than two members of the Plan Administrator and a majority of
a quorum may authorize any action. Any decision or determination reduced to
writing and signed by a majority of all of the members shall be as
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fully effective as if made by a majority vote at a meeting duly called and held.
To the extent compliance with Section 162(m) of the Code is desired, each member
of any committee which is the Plan Administrator shall also be "outside
directors" within the meaning of Section 162(m)(4)(C) and the regulations
thereunder. No member of the Plan Administrator shall be liable for any action,
failure to act, determination or interpretation made in good faith with respect
to this Plan or any transaction hereunder, except for liability arising from his
or her own willful misfeasance, gross negligence or reckless disregard of his or
her duties. The Company hereby agrees to indemnify each member of the Plan
Administrator for all costs and expenses and, to the extent permitted by
applicable law, any liability incurred in connection with defending against,
responding to, negotiating for the settlement of or otherwise dealing with any
claim, cause of action or dispute of any kind arising in connection with any
actions in administering this Plan or in authorizing or denying authorization to
any transaction hereunder.
3.2 Subject to the express terms and conditions set forth
herein, the Plan Administrator shall have the power from time to time to:
(a) determine those Eligible Individuals to whom
Discretionary Options shall be granted under the Plan and the number of
Incentive Stock Options and/or Nonqualified Stock Options to be granted to each
Eligible Individual and to prescribe the terms and conditions (which need not be
identical) of each Discretionary Option, including the purchase price per Share
subject to each Discretionary Option, and make any amendment or modification to
any Agreement consistent with the terms of the Plan; and
(b) select those Eligible Individuals to whom Awards
shall be granted under the Plan and to determine the number of Stock
Appreciation Rights, Performance Units, Performance Shares, and/or Shares of
Restricted Stock to be granted pursuant to each Award, the terms and conditions
of each Award, including the restrictions or performance criteria relating to
such Units or Shares, the maximum value of each Performance Unit and Performance
Share and make any amendment or modification to any Agreement consistent with
the terms of the Plan.
3.3 Subject to the express terms and conditions set forth
herein, the Plan Administrator shall have the power from time to time:
(a) to construe and interpret the Plan and the
Options and Awards granted hereunder and to establish, amend and revoke rules
and regulations for the administration of the Plan, including, but not limited
to, correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable to make the Plan fully effective and comply
with applicable law including Rule 16b-3 under the Exchange Act and the Code to
the extent applicable. All decisions and determinations by the Plan
Administrator in the
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exercise of this power shall be final, binding and conclusive upon the Company,
its Subsidiaries, the Optionees and Grantees, and all other persons having any
interest therein;
(b) to determine the duration and purposes for leaves
of absence which may be granted to an Optionee or Grantee on an individual basis
without constituting a termination of employment or service for purposes of the
Plan;
(c) to exercise its discretion with respect to the
powers and rights granted to it as set forth in the Plan;
(d) generally, to exercise such powers and to perform
such acts as are deemed necessary or advisable to promote the best interests of
the Company with respect to the Plan; and
(e) to provide for the limited transferability of
Options to certain family members, family trusts or family partnerships of
Optionees.
4. STOCK SUBJECT TO THE PLAN.
4.1 The maximum number of Shares that may be made the subject
of Options and Awards granted under the Plan is 720,000. Upon a Change in
Capitalization the maximum number of Shares which may be made the subject of
Options or Awards granted under the Plan and which may be granted to any shall
be adjusted in number and kind pursuant to Section 12 hereof. The Company shall
reserve for the purposes of the Plan, out of its authorized but unissued Shares
or out of Shares held in the Company's treasury, or partly out of each, such
number of Shares as shall be determined by the Board.
4.2 (a) The maximum number of shares of Common Stock
subject to any Option which may be granted under this Plan during any fiscal
year of the Company to each Optionee shall be 100,000 shares (subject to any
increase or decrease pursuant to Section 4.1).
(b) The maximum number of shares of Common Stock that
may be subject to an Award granted under the Plan during any Fiscal Year to any
person shall be 100,000 shares (subject to any increase or decrease pursuant to
Section 4.1).
(c) The maximum number of shares of Common Stock
subject to any Stock Appreciation Right which may be granted under this Plan
during any fiscal year of the Company to any person shall be 100,000 shares
(subject to any increase or decrease pursuant to Section 4.1). If a Stock
Appreciation Right is granted in connection with an Option it shall apply
against the individual's share limitations for both Stock Appreciation Rights
and Options.
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(d) The maximum value at grant of Performance Units
which may be granted under this Plan during any fiscal year of the Company to
each person shall be $50,000.
(e) The maximum number of Performance Shares which
may be granted under this Plan during any fiscal year of the Company to each
person shall be 100,000 shares (subject to any increase or decrease pursuant to
Section 4.1).
4.3 Upon the granting of an Option or an Award, the number of
Shares available under Section 4.1 hereof for the granting of further Options
and Awards shall be reduced as follows:
(a) In connection with the granting of an Option or
an Award (other than the granting of a Performance Unit denominated in dollars),
the number of Shares shall be reduced by the number of Shares in respect of
which the Option or Award is granted or denominated.
(b) In connection with the granting of a Performance
Unit denominated in dollars, the number of Shares shall be reduced by an amount
equal to the quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.
4.4 Whenever any outstanding Option or Award or portion
thereof expires, is canceled or is otherwise terminated for any reason without
having been exercised or payment having been made in respect of the entire
Option or Award, the Shares allocable to the expired, canceled or otherwise
terminated portion of the Option or Award may again be the subject of Options or
Awards granted hereunder.
5. OPTION GRANTS FOR NON-EMPLOYEE DIRECTORS.
5.1 GRANT.
(a) Each individual who is serving as a Non-Employee
Board member on the date of the consummation of the Consolidation pursuant to
the Company's Registration Statement on Form S-4, shall be granted a Director
Option to purchase 5,000 shares of Common Stock on such consummation date at a
price per share equal to the Exchange Value (as defined in the Registration
Statement on Form S-4 relating to the Consolidation) and a Director Option to
purchase 5,000 shares of Common Stock on the six- month anniversary of such
consummation date, provided he continues to serve as a Non- Employee Director on
such six-month anniversary.
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(b) Each individual who is first elected or appointed
as a Non- Employee Board member at any time after the consummation of the
Consolidation pursuant to the Company's Registration Statement on Form S-4,
shall automatically be granted, on the date of such initial election or
appointment, or, if later, a Director Option to purchase 10,000 shares of Common
Stock, provided that the individual has not previously been a director of or in
the employ of the Company or any Parent or Subsidiary.
(c) Director Options to purchase 5,000 shares shall
be granted to each Non-Employee Director on the date of the 2002 annual meeting
of Stockholders and on the date of each annual meeting thereafter, provided the
Non-Employee Director will continue to serve as a Non-Employee Director after
the date of such meeting. The purchase price of each Director Option shall be as
provided in Section 5.2 hereof and such Options shall be evidenced by an
Agreement containing such other terms and conditions not inconsistent with the
provisions of this Plan as determined by the Board; PROVIDED, HOWEVER, that such
terms shall not vary the price, amount or timing of awards of Director Options
provided under this Section 5, including provisions dealing with forfeiture or
termination of such Director Options.
5.2 PURCHASE PRICE. The purchase price for Shares under each
Director Option shall be equal to 100% of the Fair Market Value of such Shares
on the date immediately preceding the date of grant (except as provided in
Section 5.1(a)).
5.3 VESTING. Subject to Sections 5.4 and 7.4 hereof, each
Director Option shall become exercisable with respect to 25% of the Shares
subject thereto effective immediately as of the grant date and shall become
exercisable with respect to an additional 25% of the Shares subject thereto
effective as of each of the first, second and third anniversaries of the grant
date; PROVIDED, HOWEVER, that the Optionee continues to serve as a Director as
of such dates. If an Optionee ceases to serve as a Director for any reason, the
Optionee shall have no rights with respect to that portion of a Director Option
which has not then vested pursuant to the preceding sentence and the Optionee
shall automatically forfeit that portion of the Director Option which remains
unvested.
5.4 DURATION. Each Director Option shall terminate on the date
which is the tenth anniversary of the grant date, unless terminated earlier as
follows:
(a) If an Optionee's service as a Director terminates
for any reason other than Disability, death or Cause, the Optionee may for a
period of three (3) months after such termination exercise his or her Option to
the extent, and only to the extent, that such Option or portion thereof was
vested and exercisable as of the date the Optionee's service as a Director
terminated, after which time the Option shall automatically terminate in full.
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(b) If an Optionee's service as a Director terminates
by reason of the Optionee's resignation or removal from the Board due to
Disability, the Optionee may, for a period of one (1) year after such
termination, exercise his or her Option to the extent, and only to the extent,
that such Option or portion thereof was vested and exercisable, as of the date
the Optionee's service as Director terminated, after which time the Option shall
automatically terminate in full.
(c) If an Optionee's service as a Director terminates
for Cause, the Option granted to the Optionee hereunder shall immediately
terminate in full and no rights thereunder may be exercised.
(d) If an Optionee dies while a Director or within
three (3) months after termination of service as a Director as described in
clause (a) of this Section 5.4 or within twelve (12) months after termination of
service as a Director as described in clause (b) of this Section 5.4, the Option
granted to the Optionee may be exercised at any time within twelve (12) months
after the Optionee's death by the person or persons to whom such rights under
the Option shall pass by will, or by the laws of descent or distribution, after
which time the Option shall terminate in full; PROVIDED, HOWEVER, that an Option
may be exercised to the extent, and only to the extent, that the Option or
portion thereof was exercisable on the date of death or earlier termination of
the Optionee's services as a Director.
6. DISCRETIONARY OPTION GRANTS FOR ELIGIBLE INDIVIDUALS.
6.1 AUTHORITY OF PLAN ADMINISTRATOR. Subject to the provisions
of the Plan and to Section 4.1 above, the Plan Administrator shall have full and
final authority to select those Eligible Individuals who will receive
Discretionary Options, the terms and conditions of which shall be set forth in
an Agreement; PROVIDED, HOWEVER, that no person shall receive any Incentive
Stock Options unless he or she is an employee of the Company, a Parent or a
Subsidiary at the time the Incentive Stock Option is granted. The aggregate Fair
Market Value (determined as of the date of grant of an Incentive Stock Option)
of the Shares with respect to which Incentive Stock Options granted under this
Plan and all other option plans of the Company, any Parent and any Subsidiary
become exercisable for the first time by an Optionee during any calendar year
shall not exceed $100,000. Any such Options granted in excess of the $100,000
limitation shall be deemed to be Nonqualified Stock Options.
6.2 PURCHASE PRICE. The purchase price or the manner in which
the purchase price is to be determined for Shares under each Discretionary
Option shall be determined by the Plan Administrator and set forth in the
Agreement; PROVIDED, HOWEVER, that the purchase price per Share under each
Incentive Stock Option shall not be less than 100% of the Fair Market Value of a
Share on the date the Incentive Stock Option is granted (110% in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder).
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6.3 MAXIMUM DURATION. Discretionary Options granted hereunder
shall be for such term as the Plan Administrator shall determine, provided that
an Option shall not be exercisable after the expiration of ten (10) years from
the date it is granted (five (5) years in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder). The Plan Administrator may, subsequent to
the granting of any Discretionary Option, extend the term thereof but in no
event shall the term as so extended exceed the maximum term provided for in the
preceding sentence.
6.4 VESTING. Subject to Section 7.4 hereof, each Discretionary
Option shall vest and become exercisable in such installments (which need not be
equal) and at such times as may be designated by the Plan Administrator and set
forth in the Agreement. To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, at any time after becoming
exercisable, but not later than the date the Discretionary Option expires. The
Plan Administrator may accelerate the exercisability of any Option or portion
thereof at any time.
6.5 MODIFICATION OR SUBSTITUTION. The Plan Administrator may,
in its discretion, modify outstanding Discretionary Options or accept the
surrender of outstanding Discretionary Options (to the extent not exercised) and
grant new Discretionary Options in substitution for them. Notwithstanding the
foregoing, no modification of a Discretionary Option shall adversely alter or
impair any rights or obligations under the Discretionary Option without the
Optionee's consent.
7. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS.
7.1 NON-TRANSFERABILITY. No Option granted hereunder shall be
transferable by the Optionee to whom granted otherwise than by will or the laws
of descent and distribution unless specifically authorized by the Plan
Administrator, and unless transferred in a manner permitted by the Plan
Administrator an Option may be exercised during the lifetime of such Optionee
only by the Optionee or his or her guardian or legal representative. The terms
of such Option shall be final, binding and conclusive upon the beneficiaries,
executors, administrators, heirs and successors of the Optionee.
7.2 METHOD OF EXERCISE. The exercise of an Option shall be
made only by a written notice delivered in person or by mail to the Secretary of
the Company at the Company's principal executive office, specifying the number
of Shares to be purchased and accompanied by payment therefor and otherwise in
accordance with the Agreement pursuant to which the Option was granted. The
purchase price for any Shares purchased pursuant to the exercise of an Option
shall be paid in full upon such exercise by any one or a combination of the
following: (i) cash or (ii) transferring Shares to the Company upon such terms
and conditions as determined by the Plan Administrator (such as, for example, a
requirement that such Shares have been held for six months if necessary to avoid
adverse accounting consequences). Notwithstanding the foregoing, the Plan
Administrator shall have discretion to
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determine at the time of grant of each Option or at any later date (up to and
including the date of exercise) the form of payment acceptable in respect of the
exercise of such Option. The written notice pursuant to this Section 7.2 may
also provide instructions from the Optionee to the Company that upon receipt of
the purchase price in cash from the Optionee's broker or dealer, designated as
such on the written notice, in payment for any Shares purchased pursuant to the
exercise of an Option, the Company shall issue such Shares directly to the
designated broker or dealer. Any Shares transferred to the Company as payment of
the purchase price under an Option shall be valued at their Fair Market Value on
the day preceding the date of exercise of such Option. If requested by the Plan
Administrator, the Optionee shall deliver the Agreement evidencing the Option to
the Secretary of the Company who shall endorse thereon a notation of such
exercise and return such Agreement to the Optionee. No fractional Shares (or
cash in lieu thereof) shall be issued upon exercise of an Option and the number
of Shares that may be purchased upon exercise shall be rounded to the nearest
number of whole Shares.
7.3 RIGHTS OF OPTIONEES. No Optionee shall be deemed for any
purpose to be the owner of any Shares subject to any Option unless and until (i)
the Option shall have been exercised pursuant to the terms thereof, (ii) the
Company shall have issued and delivered the Shares to the Optionee and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares, subject to such terms and
conditions as may be set forth in the applicable Agreement.
7.4 EFFECT OF CHANGE IN CONTROL. Notwithstanding anything
contained in the Plan or an Agreement to the contrary, in the event of a Change
in Control, all Options outstanding on the date of such Change in Control shall
become immediately and fully exercisable. In addition, to the extent set forth
in an Agreement evidencing the grant of an Option, an Optionee will be permitted
to surrender for cancellation within sixty (60) days after such Change in
Control, any Option or portion of an Discretionary Option to the extent not yet
exercised and the Optionee will be entitled to receive a cash payment in an
amount equal to the excess, if any, of (x) (A) in the case of a Nonqualified
Stock Option, the greater of (1) the Fair Market Value, on the date preceding
the date of surrender, of the Shares subject to the Option or portion thereof
surrendered or (2) the Adjusted Fair Market Value of the Shares subject to the
Option or portion thereof surrendered or (B) in the case of an Incentive Stock
Option, the Fair Market Value, on the date preceding the date of surrender, of
the Shares subject to the Option or portion thereof surrendered, over (y) the
aggregate purchase price for such Shares under the Option or portion thereof
surrendered. In the event an Optionee's employment with or service as Director
of the Company is terminated by the Company following a Change in Control each
Option held by the Optionee that was exercisable as of the date of termination
of the Optionee's employment or service shall remain exercisable for a period
ending not before the earlier of the first anniversary of the termination of the
Optionee's employment or service or the expiration of the stated term of the
Option.
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7.5 DIVIDEND EQUIVALENT RIGHTS. Dividend Equivalent Rights may
be granted to Eligible Individuals in tandem with an Option. The terms and
conditions applicable to each Dividends Equivalent Right shall be specified in
the Agreement under which the Dividend Equivalent Rights may be payable
currently or deferred until the lapsing of restrictions on such Dividend
Equivalent Rights or until the vesting, exercise, payment, settlement or other
lapse of restrictions on the Option to which the Dividend Equivalent Rights
relate. In the event that the amount payable in respect of Dividend Equivalent
Rights are to be deferred, the Plan Administrator shall determine whether such
amounts are to be held in cash or reinvested in Shares or deemed (notionally) to
be reinvested in Shares. If amounts payable in respect to Dividend Equivalent
Rights are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Plan Administrator, in its discretion, may
determine. Dividend Equivalent Rights may be settled in cash or Shares or a
combination thereof, in a single installment or multiple installments.
8. STOCK APPRECIATION RIGHTS. The Plan Administrator may, in
its discretion, either alone or in connection with the grant of an Option, grant
Stock Appreciation Rights in accordance with the Plan, the terms and conditions
of which shall be set forth in an Agreement. If granted in connection with an
Option, a Stock Appreciation Right shall cover the same Shares covered by the
Option (or such lesser number of Shares as the Plan Administrator may determine)
and shall, except as provided in this Section 8, be subject to the same terms
and conditions as the related Option.
8.1 TIME OF GRANT. A Stock Appreciation Right may be granted
(i) at any time if unrelated to an Option, or (ii) if related to an Option,
either at the time of grant, or at any time thereafter during the term of the
Option.
8.2 STOCK APPRECIATION RIGHT RELATED TO AN OPTION.
(a) EXERCISE. Subject to Section 8.7 hereof, a Stock
Appreciation Right granted in connection with an Option shall be exercisable at
such time or times and only to the extent that the related Option is
exercisable, and will not be transferable even if the Option to which it relates
may be transferable. A Stock Appreciation Right granted in connection with an
Incentive Stock Option shall be exercisable only if the Fair Market Value of a
Share on the date of exercise exceeds the purchase price specified in the
related Incentive Stock Option Agreement.
(b) AMOUNT PAYABLE. Upon the exercise of a Stock
Appreciation Right related to an Option, the Grantee shall be entitled to
receive an amount determined by multiplying (A) the excess of the Fair Market
Value of a Share on the date preceding the date of exercise of such Stock
Appreciation Right over the per Share purchase price under the related Option,
by (B) the number of Shares as to which such Stock Appreciation Right is being
exercised. Notwithstanding the foregoing, the Plan Administrator
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<PAGE> 19
may limit in any manner the amount payable with respect to any Stock
Appreciation Right by including such a limit in the Agreement evidencing the
Stock Appreciation Right at the time it is granted.
(c) TREATMENT OF RELATED OPTIONS AND STOCK
APPRECIATION RIGHTS UPON EXERCISE. Upon the exercise of a Stock Appreciation
Right granted in connection with an Option, the Option shall be canceled to the
extent of the number of Shares as to which the Stock Appreciation Right is
exercised, and upon the exercise of an Option granted in connection with a Stock
Appreciation Right or the surrender of such Option pursuant to Section 7.4
hereof, the Stock Appreciation Right shall be canceled to the extent of the
number of Shares as to which the Option is exercised or surrendered.
8.3 STOCK APPRECIATION RIGHT UNRELATED TO AN OPTION. The Plan
Administrator may grant to Eligible Individuals Stock Appreciation Rights
unrelated to Options. Stock Appreciation Rights unrelated to Options shall
contain such terms and conditions as to exercisability (subject to Section 8.7
hereof), vesting and duration as the Plan Administrator shall determine, but in
no event shall they have a term of greater than ten (10) years. Upon exercise of
a Stock Appreciation Right unrelated to an Option, the Grantee shall be entitled
to receive an amount determined by multiplying (A) the excess of the Fair Market
Value of a Share on the date preceding the date of exercise of such Stock
Appreciation Right over the Fair Market Value of a Share on the date the Stock
Appreciation Right was granted, by (B) the number of Shares as to which the
Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the
Plan Administrator may limit in any manner the amount payable with respect to
any Stock Appreciation Right by including such a limit in the Agreement
evidencing the Stock Appreciation Right at the time it is granted.
8.4 METHOD OF EXERCISE. Stock Appreciation Rights shall be
exercised by a Grantee only by a written notice delivered in person or by mail
to the Secretary of the Company at the Company's principal executive office,
specifying the number of Shares with respect to which the Stock Appreciation
Right is being exercised. If requested by the Plan Administrator, the Grantee
shall deliver the Agreement evidencing the Stock Appreciation Right being
exercised and the Agreement evidencing any related Option to the Secretary of
the Company who shall endorse thereon a notation of such exercise and return
such Agreement to the Grantee.
8.5 FORM OF PAYMENT. Payment of the amount determined under
Sections 8.2(b) or 8.3 hereof may be made in the discretion of the Plan
Administrator, solely in whole Shares in a number determined at their Fair
Market Value on the date preceding the date of exercise of the Stock
Appreciation Right, or solely in cash, or in a combination of cash and Shares.
If the Plan Administrator decides to make full payment in Shares and the amount
payable results in a fractional Share, payment for the fractional Share will be
made in cash.
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8.6 MODIFICATION OR SUBSTITUTION. Subject to the terms of the
Plan, the Plan Administrator may modify outstanding Awards of Stock Appreciation
Rights or accept the surrender of outstanding Awards of Stock Appreciation
Rights (to the extent not exercised) and grant new Awards in substitution for
them. Notwithstanding the foregoing, no modification of an Award shall adversely
alter or impair any rights or obligations under the Agreement without the
Grantee's consent.
8.7 EFFECT OF CHANGE IN CONTROL. Notwithstanding anything
contained in this Plan to the contrary, in the event of a Change in Control, all
Stock Appreciation Rights shall become immediately and fully exercisable. In
addition, to the extent set forth in an Agreement evidencing the grant of a
Stock Appreciation Right, a Grantee will be entitled to receive a payment in
cash or stock, in either case, with a value equal to the excess, if any, of (A)
the greater of (x) the Fair Market Value, on the date preceding the date of
exercise, of the Shares subject to the Stock Appreciation Right or portion
thereof exercised and (y) the Adjusted Fair Market Value, on the date preceding
the date of exercise, of the Shares over (B) the aggregate Fair Market Value, on
the date the Stock Appreciation Right was granted, of the Shares subject to the
Stock Appreciation Right or portion thereof exercised. In the event a Grantee's
employment or service with the Company is terminated by the Company following a
Change in Control, each Stock Appreciation Right held by the Grantee that was
exercisable as of the date of termination of the Grantee's employment or service
shall remain exercisable for a period ending not before the earlier of the first
anniversary of the termination of the Grantee's employment or service or the
expiration of the stated term of the Stock Appreciation Right.
9. RESTRICTED STOCK.
9.1 GRANT. The Plan Administrator may grant to Eligible
Individuals Awards of Restricted Stock, and may issue Shares of Restricted Stock
in payment in respect of vested Performance Units (as hereinafter provided in
Section 10.2), which shall be evidenced by an Agreement between the Company and
the Grantee. Each Agreement shall contain such restrictions, terms and
conditions as the Plan Administrator may, in its discretion, determine and
(without limiting the generality of the foregoing) such Agreements may require
that an appropriate legend be placed on Share certificates. Awards of Restricted
Stock shall be subject to the terms and provisions set forth below in this
Section 9.
9.2 RIGHTS OF GRANTEE. Shares of Restricted Stock granted
pursuant to an Award hereunder shall be issued in the name of the Grantee as
soon as reasonably practicable after the Award is granted provided that the
Grantee has executed an Agreement evidencing the Award, the appropriate blank
stock powers and, in the discretion of the Plan Administrator, an escrow
agreement and any other documents which the Plan Administrator may require as a
condition to the issuance of such Shares. If a Grantee shall fail to execute the
Agreement evidencing a Restricted Stock Award, the appropriate blank stock
powers and, in the discretion of the Plan Administrator, an escrow agreement and
any other documents which
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the Plan Administrator may require within the time period prescribed by the Plan
Administrator at the time the Award is granted, the Award shall be null and
void. At the discretion of the Plan Administrator, Shares issued in connection
with a Restricted Stock Award shall be deposited together with the stock powers
with an escrow agent (which may be the Company) designated by the Plan
Administrator. Unless the Plan Administrator determines otherwise and as set
forth in the Agreement, upon delivery of the Shares to the escrow agent, the
Grantee shall have all of the rights of a stockholder with respect to such
Shares, including the right to vote the Shares and to receive all dividends or
other distributions paid or made with respect to the Shares.
9.3 NON-TRANSFERABILITY. Until any restrictions upon the
Shares of Restricted Stock awarded to a Grantee shall have lapsed in the manner
set forth in Section 9.4 hereof, such Shares shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated, nor
shall they be delivered to the Grantee.
9.4 LAPSE OF RESTRICTIONS.
(a) GENERALLY. Restrictions upon Shares of Restricted
Stock awarded hereunder shall lapse at such time or times and on such terms and
conditions as the Plan Administrator may determine, which restrictions shall be
set forth in the Agreement evidencing the Award.
(b) EFFECT OF CHANGE IN CONTROL. Notwithstanding
anything contained in the Plan, unless the Agreement evidencing the Award
provides to the contrary, in the event of a Change in Control, all restrictions
upon any Shares of Restricted Stock shall lapse immediately and all such Shares
shall become fully vested in the Grantee.
9.5 MODIFICATION OR SUBSTITUTION. Subject to the terms of the
Plan, the Plan Administrator may modify outstanding Awards of Restricted Stock
or accept the surrender of outstanding Shares of Restricted Stock (to the extent
the restrictions on such Shares have not yet lapsed) and grant new Awards in
substitution for them. Notwithstanding the foregoing, no modification of an
Award shall adversely alter or impair any rights or obligations under the
Agreement without the Grantee's consent.
9.6 TREATMENT OF DIVIDENDS. At the time the Award of Shares of
Restricted Stock is granted, the Plan Administrator may, in its discretion,
determine that the payment to the Grantee of dividends, or a specified portion
thereof, declared or paid on such Shares by the Company shall be (i) deferred
until the lapsing of the restrictions imposed upon such Shares and (ii) held by
the Company for the account of the Grantee until such time. In the event that
dividends are to be deferred, the Plan Administrator shall determine whether
such dividends are to be reinvested in shares of Stock (which shall be held as
additional Shares of Restricted Stock) or held in cash. If deferred dividends
are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at
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the beginning of the year at a rate per annum as the Plan Administrator, in its
discretion, may determine. Payment of deferred dividends in respect of Shares of
Restricted Stock (whether held in cash or as additional Shares of Restricted
Stock), together with interest accrued thereon, if any, shall be made upon the
lapsing of restrictions imposed on the Shares in respect of which the deferred
dividends were paid, and any dividends deferred (together with any interest
accrued thereon) in respect of any Shares of Restricted Stock shall be forfeited
upon the forfeiture of such Shares.
9.7 DELIVERY OF SHARES. Upon the lapse of the restrictions on
Shares of Restricted Stock, the Plan Administrator shall cause a stock
certificate to be delivered to the Grantee with respect to such Shares, free of
all restrictions hereunder.
10. PERFORMANCE AWARDS.
10.1 PERFORMANCE OBJECTIVES. Performance objectives for
Performance Awards may be expressed in terms of (i) earnings per Share, (ii)
pre-tax profits, (iii) net earnings or net worth, (iv) return on equity or
assets, (v) any combination of the foregoing, or (vi) any other standard or
standards deemed appropriate by the Plan Administrator at the time the Award is
granted. Performance objectives may be in respect of the performance of the
Company and its Subsidiaries (which may be on a consolidated basis), a
Subsidiary or a Division. Performance objectives may be absolute or relative and
may be expressed in terms of a progression within a specified range. Prior to
the end of a Performance Cycle, the Plan Administrator, in its discretion, may
adjust the performance objectives to reflect a Change in the Capitalization, a
change in the tax rate or book tax rate of the Company or any Subsidiary, or any
other event which may materially affect the performance of the Company, a
Subsidiary or a Division, including, but not limited to, market conditions or a
significant acquisition or disposition of assets or other property by the
Company, a Subsidiary or a Division.
10.2 PERFORMANCE UNITS. The Plan Administrator, in its
discretion, may grant Awards of Performance Units to Eligible Individuals, the
terms and conditions of which shall be set forth in an Agreement between the
Company and the Grantee. Performance Units may be denominated in Shares or a
specified dollar amount and, contingent upon the attainment of specified
performance objectives within the Performance Cycle, represent the right to
receive payment as provided in Section 10.2(b) hereof of (i) in the case of
Share- denominated Performance Units, the Fair Market Value of a Share on the
date the Performance Unit was granted, the date the Performance Unit became
vested or any other date specified by the Plan Administrator, (ii) in the case
of dollar-denominated Performance Units, the specified dollar amount or (iii) a
percentage (which may be more than 100%) of the amount described in clause (i)
or (ii) depending on the level of performance objective attainment; PROVIDED,
HOWEVER, that the Plan Administrator may at the time a Performance Unit is
granted, specify a maximum amount payable in respect of a vested Performance
Unit. Each Agreement shall specify the number of the Performance Units to which
it relates, the
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performance objectives which must be satisfied in order for the Performance
Units to vest and the Performance Cycle within which such objectives must be
satisfied.
(a) VESTING AND FORFEITURE. A Grantee shall become
vested with respect to the Performance Units to the extent that the performance
objectives set forth in the Agreement are satisfied for the Performance Cycle.
(b) PAYMENT OF AWARDS. Payment to Grantees in respect
of vested Performance Units shall be made within sixty (60) days after the last
day of the Performance Cycle to which such Award relates unless the Agreement
evidencing the Award provides for the deferral of payment, in which event the
terms and conditions of the deferral shall be set forth in the Agreement.
Subject to Section 10.4 hereof, such payments may be made entirely in Shares
valued at their Fair Market Value as of the last day of the applicable
Performance Cycle or such other date specified by the Plan Administrator,
entirely in cash, or in such combination of Shares and cash as the Plan
Administrator in its discretion, shall determine at any time prior to such
payment; PROVIDED, HOWEVER, that if the Plan Administrator in its discretion
determines to make such payment entirely or partially in Shares of Restricted
Stock, the Plan Administrator must determine the extent to which such payment
will be in Shares of Restricted Stock and the terms of such Restricted Stock at
the time the Award is granted.
10.3 PERFORMANCE SHARES. The Plan Administrator, in its
discretion, may grant Awards of Performance Shares to Eligible Individuals, the
terms and conditions of which shall be set forth in an Agreement between the
Company and the Grantee. Each Agreement may require that an appropriate legend
be placed on Share certificates. Awards of Performance Shares shall be subject
to the following terms and provisions:
(a) RIGHTS OF GRANTEE. The Plan Administrator shall
provide at the time an Award of Performance Shares is made, the time or times at
which the actual Shares represented by such Award shall be issued in the name of
the Grantee; PROVIDED, HOWEVER, that no Performance Shares shall be issued until
the Grantee has executed an Agreement evidencing the Award, the appropriate
blank stock powers and, in the discretion of the Plan Administrator, an escrow
agreement and any other documents which the Plan Administrator may require as a
condition to the issuance of such Performance Shares. If a Grantee shall fail to
execute the Agreement evidencing an Award of Performance Shares, the appropriate
blank stock powers and, in the discretion of the Plan Administrator, an escrow
agreement and any other documents which the Plan Administrator may require
within the time period prescribed by the Plan Administrator at the time the
Award is granted, the Award shall be null and void. At the discretion of the
Plan Administrator, Shares issued in connection with an Award of Performance
Shares shall be deposited together with the stock powers with an escrow agent
(which may be the Company) designated by the Plan Administrator. Except as
restricted by the terms of the Agreement, upon delivery of the Shares to the
escrow agent, the Grantee shall have, in the discretion of the Plan
Administrator, all of the rights of a
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stockholder with respect to such Shares, including the right to vote the Shares
and to receive all dividends or other distributions paid or made with respect to
the Shares.
(b) NON-TRANSFERABILITY. Until any restrictions upon
the Performance Shares awarded to a Grantee shall have lapsed in the manner set
forth in Sections 10.3(c) or 10.4 hereof, such Performance Shares shall not be
sold, transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated, nor shall they be delivered to the Grantee. The Plan Administrator
may also impose such other restrictions and conditions on the Performance
Shares, if any, as it deems appropriate.
(c) LAPSE OF RESTRICTIONS. Subject to Section 10.4
hereof, restrictions upon Performance Shares awarded hereunder shall lapse and
such Performance Shares shall become vested at such time or times and on such
terms, conditions and satisfaction of performance objectives as the Plan
Administrator may, in its discretion, determine at the time an Award is granted.
(d) TREATMENT OF DIVIDENDS. At the time the Award of
Performance Shares is granted, the Plan Administrator may, in its discretion,
determine that the payment to the Grantee of dividends, or a specified portion
thereof, declared or paid on actual Shares represented by such Award which have
been issued by the Company to the Grantee shall be (i) deferred until the
lapsing of the restrictions imposed upon such Performance Shares and (ii) held
by the Company for the account of the Grantee until such time. In the event that
dividends are to be deferred, the Plan Administrator shall determine whether
such dividends are to be reinvested in shares of Stock (which shall be held as
additional Performance Shares) or held in cash. If deferred dividends are to be
held in cash, there may be credited at the end of each year (or portion thereof)
interest on the amount of the account at the beginning of the year at a rate per
annum as the Plan Administrator, in its discretion, may determine. Payment of
deferred dividends in respect of Performance Shares (whether held in cash or in
additional Performance Shares), together with interest accrued thereon, if any,
shall be made upon the lapsing of restrictions imposed on the Performance Shares
in respect of which the deferred dividends were paid, and any dividends deferred
(together with any interest accrued thereon) in respect of any Performance
Shares shall be forfeited upon the forfeiture of such Performance Shares.
(e) DELIVERY OF SHARES. Upon the lapse of the
restrictions on Performance Shares awarded hereunder, the Plan Administrator
shall cause a stock certificate to be delivered to the Grantee with respect to
such Shares, free of all restrictions hereunder.
10.4 EFFECT OF CHANGE IN CONTROL. Notwithstanding anything
contained in the Plan or any Agreement to the contrary, in the event of a Change
in Control:
(a) With respect to the Performance Units, the
Grantee shall (i) become vested in a percentage of Performance Units as
determined by the Plan
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Administrator at the time of the Award of such Performance Units and as set
forth in the Agreement and (ii) be entitled to receive in respect of all
Performance Units which become vested as a result of a Change in Control, a cash
payment within ten (10) days after such Change in Control in an amount as
determined by the Plan Administrator at the time of the Award of such
Performance Units and as set forth in the Agreement.
(b) With respect to the Performance Shares,
restrictions shall lapse immediately on all or a portion of the Performance
Shares as determined by the Plan Administrator at the time of the Award of such
Performance Shares and as set forth in the Agreement.
(c) The Agreements evidencing Performance Shares and
Performance Units shall provide for the treatment of such Awards (or portions
thereof) which do not become vested as the result of a Change in Control,
including, but not limited to, provisions for the adjustment of applicable
performance objectives.
10.5 NON-TRANSFERABILITY. No Performance Awards shall be
transferable by the Grantee otherwise than by will or the laws of descent and
distribution.
10.6 MODIFICATION OR SUBSTITUTION. Subject to the terms of the
Plan, the Plan Administrator may modify outstanding Performance Awards or accept
the surrender of outstanding Performance Awards and grant new Performance Awards
in substitution for them. Notwithstanding the foregoing, no modification of a
Performance Award shall adversely alter or impair any rights or obligations
under the Agreement without the Grantee's consent.
11. EFFECT OF A TERMINATION OF EMPLOYMENT OR SERVICE.
The Agreement evidencing the grant of each Discretionary
Option and each Award shall set forth the terms and conditions applicable to
such Discretionary Option or Award upon a termination or change in the status of
the employment or service of the Optionee or Grantee by the Company, a
Subsidiary or a Division (including a termination or change by reason of the
sale of a Subsidiary or a Division or a change in status from employee or
director to consultant), as the Plan Administrator may, in its discretion,
determine at the time the Discretionary Option or Award is granted or
thereafter. Notwithstanding the foregoing and unless specifically set forth in
an Agreement to the contrary, in the event an Optionee's or Grantee's employment
or service with the Company is terminated for Cause, the Option or Award granted
to the Optionee or Grantee hereunder shall immediately terminate in full and in
the case of Options, no rights thereunder may be exercised, and in all other
cases, no payment will be made with respect thereto.
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12. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) In the event of a Change in Capitalization, the Plan
Administrator shall conclusively determine the appropriate adjustments, if any,
to the (i) maximum number and class of Shares or other stock or securities with
respect to which Options or Awards may be granted under the Plan, (ii) maximum
number of class of Shares or other stock or securities with respect to which
Options may be granted to any Eligible Individual during the term of the Plan
and (iii) the number and class of Shares or other stock or securities which are
subject to outstanding Options or Awards granted under the Plan, and the
purchase price therefor, if applicable and (iv) the number and class of Shares
or other securities in respect of which Director Options are to be granted under
Section 5 hereof.
(b) Any such adjustment in the Shares or other stock or
securities subject to outstanding Incentive Stock Options (including any
adjustments in the purchase price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent otherwise permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in Capitalization, a Grantee of
an Award shall be entitled to, or an Optionee shall be entitled to exercise an
Option with respect to, new, additional or different shares of stock or
securities, such new, additional or different shares shall thereupon be subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Shares subject to the Award or Option, as the case may be,
prior to such Change in Capitalization.
13. EFFECT OF CERTAIN TRANSACTIONS. Subject to Sections 7.4,
8.7, 9.4(b) and 10.4 hereof, or as otherwise provided in an Agreement, in the
event of (i) the liquidation or dissolution of the Company or (ii) a merger or
consolidation of the Company (a "Transaction"), the Plan and the Options and
Awards issued hereunder shall continue in effect in accordance with their
respective terms except that following a Transaction each Optionee and Grantee
shall be entitled to receive in respect of each Share subject to any outstanding
Options or Awards, as the case may be, upon exercise of any Option or SAR or
payment or transfer in respect of any Award, the same number and kind of stock,
securities, cash, property, or other consideration that each holder of a Share
was entitled to receive in the Transaction in respect of a Share; PROVIDED,
HOWEVER, that such stock, securities, cash, property, or other consideration
shall remain subject to all of the conditions, restrictions and performance
criteria which were applicable to the Options or Awards prior to such
Transaction.
14. INTERPRETATION
Following the required registration of any equity security of
the Company pursuant to Section 12 of the Exchange Act:
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(a) The Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act and the Plan Administrator shall interpret
and administer the provisions of the Plan or any Agreement in a manner
consistent therewith. Any provisions inconsistent with such Rule shall be
inoperative and shall not affect the validity of the Plan.
(b) Unless otherwise expressly stated in the relevant
Agreement, each Award (other than Shares of Restricted Stock) granted under the
Plan is intended to be performance-based compensation within the meaning of
Section 162(m)(4)(C) of the Code. Except in the case of death, disability,
retirement or a Change in Control, the Plan Administrator shall not be entitled
to exercise any discretion otherwise authorized hereunder with respect to such
Awards if the ability to exercise such discretion or the exercise of such
discretion itself would cause the compensation attributable to such Awards to
fail to qualify as performance-based compensation.
15. TERMINATION AND AMENDMENT OF THE PLAN.
The Plan shall terminate on the day preceding the tenth
anniversary of the date of its adoption by the Board and no Option or Award may
be granted thereafter. The Board may sooner terminate the Plan and the Board may
at any time and from time to time amend, modify or suspend the Plan; PROVIDED,
HOWEVER, that:
(a) No such amendment, modification, suspension or
termination shall impair or adversely alter any Options, SARs or Awards
theretofore granted under the Plan, except with the consent of the Optionee or
Grantee, nor shall any amendment, modification, suspension or termination
deprive any Optionee or Grantee of any Shares which he or she may have acquired
through or as a result of the Plan; and
(b) To the extent necessary under Section 16(b) of
the Exchange Act and the rules and regulations promulgated thereunder or
applicable law or securities exchange rule, no amendment shall be effective
unless approved by the stockholders of the Company in accordance with applicable
law and regulations.
16. NON-EXCLUSIVITY OF THE PLAN.
The adoption of the Plan by the Board shall not be construed
as amending, modifying or rescinding any previously approved incentive
arrangement or as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific cases.
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17. LIMITATION OF LIABILITY.
As illustrative of the limitations of liability of the
Company, but not intended to be exhaustive thereof, nothing in the Plan shall be
construed to:
(i) give any person any right to be granted an Option
or Award other than at the sole discretion of the Plan Administrator;
(ii) give any person any rights whatsoever with
respect to Shares except as specifically provided in the Plan;
(iii) limit in any way the right of the Company to
terminate the employment of any person at any time; or
(iv) be evidence of any agreement or understanding,
expressed or implied, that the Company will employ any person at any
particular rate of compensation or for any particular period of time.
18. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.
18.1 Except as to matters of federal law, this Plan and the
rights of all persons claiming hereunder shall be construed and determined in
accordance with the laws of the State of Maryland without giving effect to
conflicts of law principles thereof.
18.2 The obligation of the Company to sell or deliver Shares
with respect to Options and Awards granted under the Plan shall be subject to
all applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Plan Administrator.
18.3 The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Individuals granted Incentive Stock Options
the tax benefits under the applicable provisions of the Code and regulations
promulgated thereunder.
18.4 Each Option and Award is subject to the requirement that,
if at any time the Plan Administrator determines, in its discretion, that the
listing, registration or qualification of Shares issuable pursuant to the Plan
is required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or
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approval has been effected or obtained free of any conditions as acceptable to
the Plan Administrator.
18.5 Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current registration statement
under the Securities Act of 1933, as amended, (the "Securities Act") and is not
otherwise exempt from such registration, such Shares shall be restricted against
transfer to the extent required by the Securities Act and Rule 144 or other
regulations thereunder. The Plan Administrator may require any individual
receiving Shares pursuant to an Option or Award granted under the Plan, as a
condition precedent to receipt of such Shares or Awards, to represent and
warrant to the Company in writing that the Shares acquired by such individual
are acquired without a view to any distribution thereof and will not be sold or
transferred other than pursuant to an effective registration thereof under said
Act or pursuant to an exemption applicable under the Securities Act or the rules
and regulations promulgated thereunder. The certificates evidencing any of such
Shares or Awards shall be appropriately amended to reflect their status as
restricted securities as aforesaid.
19. MISCELLANEOUS.
19.1 MULTIPLE AGREEMENTS. The terms of each Option or Award
may differ from other Options or Awards granted under the Plan at the same time,
or at some other time. The Plan Administrator may also grant more than one
Option or Award to a given Eligible Individual during the term of the Plan,
either in addition to, or in substitution for, one or more Options or Awards
previously granted to that Eligible Individual.
19.2 WITHHOLDING OF TAXES. (a) The Company may make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of any taxes which the Company is required by any law or regulation
of any governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with any Option or the exercise thereof, any
Stock Appreciation Right or the exercise thereof, or the grant of any other
Award, including, but not limited to, the withholding of cash or Shares which
would be paid or delivered pursuant to such exercise or Award or another
exercise of Award under this Plan until the Grantee reimburses the Company for
the amount the Company is required to withhold with respect to such taxes, or
canceling any portion of such Award or another Award under this Plan in an
amount sufficient to reimburse itself for the amount it is required to so
withhold. The Plan Administrator may permit a Grantee (or any beneficiary or
other person authorized to act) to elect to pay a portion or all of any amounts
required or permitted to be withheld to satisfy federal, state, local or foreign
tax obligations by directing the Company to withhold a number of whole Shares
which would otherwise be distributed and which have a Fair Market Value
sufficient to cover the amount of such required or permitted withholding taxes.
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(b) If an Optionee makes a disposition, within the
meaning of Section 424(c) of the Code and regulations promulgated thereunder, of
any Share or Shares issued to such Optionee pursuant to the exercise of an
Incentive Stock Option within the two- year period commencing on the day after
the date of the grant or within the one-year period commencing on the day after
the date of transfer of such Share or Shares to the Optionee pursuant to such
exercise, the Optionee shall, within ten (10) days of such disposition, notify
the Company thereof, by delivery of written notice to the Company at its
principal executive office.
(c) The Plan Administrator shall have the authority,
at the time of grant of an Option or Award under the Plan or at any time
thereafter, to award tax bonuses to designated Optionees or Grantees, to be paid
upon their exercise of Discretionary Options or payment in respect of Awards
granted hereunder. The amount of any such payments shall be determined by the
Plan Administrator. The Plan Administrator shall have full authority in its
absolute discretion to determine the amount of any such tax bonus and the terms
and conditions affecting the vesting and payment thereof.
20. EFFECTIVE DATE. The effective date of the Plan shall be the
date of the consummation of the consolidation pursuant to the Registration
Statement on Form S-4.
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