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Exhibit 4(b)
HARRIS CORPORATION
2000 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of the Harris Corporation 2000 Stock Incentive Plan is to
promote the long-term growth and performance of Harris Corporation and its
Affiliates and to increase shareholder value by providing long-term incentive
awards to officers, directors, employees, and consultants. The Plan is designed
to: (i) encourage stock ownership by Participants to further align their
interest with other shareholders in increasing the value of the Corporation; and
(ii) assist in the attraction and retention of outstanding individuals by
awarding performance-based stock awards, restricted stock, stock options, stock
appreciation rights and/or other stock-based awards.
2. DEFINITIONS.
The following definitions are applicable to the Plan:
"AFFILIATE" means any entity that is directly or indirectly controlled
by the Corporation or any entity in which the Corporation has a significant
ownership interest, as determined by the Board Committee.
"AWARD" means the grant of Options, Performance Shares, Restricted
Stock, Stock Appreciation Rights or other Share-based awards under the Plan.
"AWARD AGREEMENT" means any written or electronic agreement between the
Corporation and a Participant or other instrument or document evidencing the
terms and conditions of an Award and includes any Performance Share Award
Agreement, Restricted Stock Award Agreement, Stock Option Agreement and Stock
Appreciation Rights Agreement. An Award Agreement may, but need not be required
to be signed by a Participant.
"BOARD" means the Board of Directors of the Corporation.
"BOARD COMMITTEE" means a committee of the Board designated by the
Board to administer the Plan which shall be comprised solely of Outside
Directors and which shall satisfy any applicable legal requirements, including
the requirements of Rule 16b-3 promulgated by the Commission under the
Securities Exchange Act of 1934, as amended from time to time, or under any
successor rule adopted by the Commission and Section 162(m) of the Code, and to
the extent the Board Committee delegates authority to one or more individuals in
accordance with the Plan, such individual(s).
"CHANGE OF CONTROL" shall have the meaning set forth in Section 11 of
the Plan.
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"CODE" means the United States Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder. A
reference to any provision of the Code shall include references to any successor
provision of the Code.
"COMMISSION" means the Securities and Exchange Commission or any
successor thereto.
"COMMON STOCK" means the common stock of the Corporation, $1.00 par
value per share, or such other class of shares or securities as to which the
Plan may be applicable pursuant to Section 3.2 of the Plan.
"CONSULTANT" means any person, including an advisor, engaged by the
Corporation or a Subsidiary to render services to such entity, or any person who
is an advisor, director, or consultant of an Affiliate.
"CORPORATION" means Harris Corporation, a Delaware corporation.
"DIRECTOR" means a member of the Board.
"EMPLOYEE" means a regular, full-time or part-time employee of the
Corporation, any Subsidiary or any Affiliate, including any Executive Officers
(whether or not a Director), who is treated as an employee in the personnel
records of the Corporation or its Subsidiaries or Affiliates for the relevant
period, but shall exclude individuals who are classified by the Corporation, its
Subsidiaries, or Affiliates as (i) leased or otherwise employed by a third
party; (ii) independent contractors; or (iii) intermittent or temporary, even if
any such classification is changed retroactively as a result of an audit,
litigation, or otherwise.
"EXECUTIVE OFFICER" means any Participant the Board has designated as
an executive officer of the Corporation for purposes of reporting under Section
16 of the Securities Exchange Act of 1934, as amended from time to time, or any
successor thereto.
"FAIR MARKET VALUE" means the closing price of the Common Stock as
reported on the New York Stock Exchange consolidated transactions reporting
system on the applicable date or, if no such closing price is available on such
date, on the preceding day upon which such closing price is available, or if the
Common Stock is not traded on the New York Stock Exchange, the closing price of
the Common Stock as quoted on the NASDAQ or national stock exchange on which the
Common Stock is traded, as reported by such source as the Board Committee shall
determine.
"GRANT DATE" means the date on which the grant of an Award hereunder
becomes effective pursuant to the terms of the related Award or such other date
selected by the Board or Board Committee, from time to time, upon which Awards
are granted to Participants pursuant to the Plan.
"INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
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"NON-EMPLOYEE DIRECTOR" means a member of the Board who is not an
Employee.
"NON-QUALIFIED STOCK OPTION" means an Option not intended to qualify as
an Incentive Stock Option.
"OPTION" means an option to purchase shares of Common Stock granted
under Sections 7.1 or 10.1 hereof. Options granted under the Plan may be
Incentive Stock Options or Non-qualified Stock Options.
"OPTION PRICE" means the purchase price of each share of Common Stock
under an Option.
"OUTSIDE DIRECTOR" means a Director who is not an Employee and who
qualifies as (i) a "non-employee director" under Rule 16b-3(b)(3) under the
Securities Exchange Act of 1934, as amended from time to time, and (ii) an
"outside director" under Section 162(m) of the Code.
"PARTICIPANT" means any Employee or Consultant designated to receive an
Award under the Plan or any Director receiving an Award under Section 10 of the
Plan.
"PERFORMANCE GOAL" means a written pre-established goal based upon any
of the following criteria: the Corporation's revenue, earnings per share of
Common Stock, net income, return on equity, return on capital, return on assets,
total shareholder return or cash flow, or any combination thereof.
"PERFORMANCE PERIOD" means the period of time established by the Board
Committee for achievement of certain objectives under Section 5.1 hereof.
"PERFORMANCE SHARE" means any Award granted under Section 5.1 of the
Plan.
"PERMITTED TRANSFEREE" shall have the meaning set forth in Section 7.4
of the Plan.
"PLAN" means this Harris Corporation 2000 Stock Incentive Plan, as
hereinafter amended from time to time.
"PRIOR PLAN" shall mean the Harris Corporation Stock Incentive Plan, as
in effect on the effective date of the Plan.
"RESTRICTION PERIOD" means the period of time established by the Board
or Board Committee during which certain restrictions as to vesting and as to the
sale or other disposition of Shares awarded under the Plan remain in effect
under Section 6.1 hereof.
"RESTRICTED STOCK" means any Award granted under Section 6.1 of the
Plan.
"SHARE AWARD" means any Award granted under Section 9 of the Plan.
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"SHARES" means shares of Common Stock, subject to adjustments made
under Section 3.2 or by operation of law.
"STOCK APPRECIATION RIGHTS" or "SARs" means the right to receive a cash
payment or Shares from the Corporation equal to the excess of the Fair Market
Value of a stated number of Shares of Common Stock at the exercise date over a
fixed price for such Shares which is granted under Section 8.1 of the Plan.
"SUBSIDIARY" means a "subsidiary corporation," whether now or hereafter
existing as defined in Section 424(f) of the Code.
"SUBSTITUTE AWARDS" means Awards granted in assumption of, or in
substitution for outstanding awards previously granted by a company acquired by
the Corporation or with which the Corporation combines.
"UNITS" means units under share-based Awards that are payable solely in
cash, determined by reference to the number of Shares by which the share-based
award is measured.
3. SHARES AND UNITS SUBJECT TO PLAN.
3.1 SHARES AVAILABLE FOR AWARDS.
(a) SHARES AVAILABLE. Subject to adjustment as provided in
Section 3.2 of the Plan, the maximum aggregate number of Shares with respect to
which Awards may be granted under the Plan is Ten Million (10,000,000) Shares;
provided that no more than Three Million (3,000,000) of these Shares shall be
available for issuance pursuant to Incentive Stock Options under the Plan.
Shares to be issued pursuant to the Plan may be authorized and unissued Shares,
treasury Shares, or any combination thereof.
(b) LIMITS ON PERFORMANCE SHARE AWARDS, RESTRICTED STOCK
AWARDS AND OTHER SHARE AWARDS. Subject to adjustment as set forth in Section 3.2
of the Plan, the maximum aggregate number of Shares that may be granted under
the Plan in the form of Performance Share Awards, Restricted Stock Awards, or
other Share Awards, shall not exceed Two Million Five Hundred Thousand
(2,500,000) Shares.
(c) REISSUE OF SHARES AND UNITS. Subject to Section 8.2 of the
Plan, if any Shares or Units subject to an Award hereunder are forfeited or any
such Award otherwise terminates without the issuance of such Shares or Units to
a Participant, or becomes unexercisable without having been exercised in full,
such Shares or Units, to the extent of any such forfeiture, or termination,
shall be available for future grant under the Plan. In addition to the Shares
authorized in Section 3.1(a) above, Shares of Common Stock that are forfeited
under the Prior Plan or Awards underlying options that are forfeited or not
exercised or for any other reason not issued or paid under the Prior Plan, shall
be available for issuance under the Plan. Shares that are tendered, whether by
physical delivery or by attestation, to the Corporation by a Participant as full
or partial payment of the exercise price of any Award or in payment of any
applicable withholding
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for federal, state, city, local, or foreign taxes incurred in connection with
the exercise or earning of any Award under the Plan or under the Prior Plan
shall become available for future grant under the Plan.
(d) SUBSTITUTE AWARDS. Any Common Stock or Award issued by the
Corporation through the assumption or substitution of outstanding grants from a
corporation or entity acquired by or combined with the Corporation shall not
reduce the Shares available for Awards under the Plan.
3.2 ADJUSTMENTS. Subject to Section 12 hereof, the maximum aggregate
number of Shares which may be awarded under the Plan, the number of Shares
subject to outstanding Awards and the grant, exercise price, fixed price or
Option Price may be adjusted by the Board Committee to reflect a change in the
capitalization of the Corporation, including but not limited to, a stock
dividend or split, reverse stock split, repurchase, rights offering,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, spin-off, spin-out or other distribution of assets to shareholders or
other similar corporate transaction or event; provided that the number and price
of shares subject to outstanding Options granted to Non-employee Directors
pursuant to Section 10 hereof and the number of shares subject to future Options
to be granted pursuant to Section 10 shall be subject to adjustment only as
determined by the Board. To the extent deemed equitable and appropriate by the
Board, subject to any required action by shareholders, in any merger,
consolidation or reorganization, liquidation, or dissolution, any Award shall
pertain to the securities or other property which a holder of the number of
Shares covered by the Award would have been entitled to receive in connection
with such event.
4. ADMINISTRATION OF PLAN; ELIGIBILITY.
4.1 ADMINISTRATION BY THE BOARD AND BOARD COMMITTEE.
(a) POWERS OF BOARD COMMITTEE; DISCRETION. The Plan shall be
administered by the Board Committee; provided, however, that the Board shall
administer the Plan as it relates to the terms, conditions and grants of Awards
to Directors and the Chief Executive Officer and President. The Board Committee
shall be responsible for the administration of the Plan including, without
limitation, determining (i) which individuals shall receive Awards, (ii) the
types of Awards to be made under the Plan, (iii) the number of Shares underlying
Awards, and (iv) the other terms and conditions of such Awards. Determinations
by the Board Committee under the Plan, including, without limitation,
determinations of the Participants, the form, amount, and timing of Awards, the
terms and provisions of Awards and the Award Agreements evidencing Awards, need
not be uniform and may be made selectively among Participants who receive or are
eligible to receive Awards.
The Board Committee shall have the full power,
discretion and authority to interpret the Plan, to establish, amend, and rescind
any rules and regulations relating to the Plan, to prescribe the form of any
Award Agreement or instrument executed in connection herewith, and to make all
other determinations that it deems necessary or advisable for the administration
of the
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Plan. All such interpretations, rules, regulations and determinations shall be
conclusive and binding on all persons (including the Corporation and
Participants) and for all purposes.
(b) BOARD AUTHORITY. If the Board Committee does not exist, or
for any other reason determined by the Board, the Board may take any action
under the Plan that would otherwise be the responsibility of the Board
Committee.
(c) DELEGATION. Notwithstanding any provision of the Plan to
the contrary, the Board Committee may delegate some or all of its power and
authority hereunder to the Chief Executive Officer or other senior members of
management as the Board Committee deems appropriate; provided, however, that the
Board Committee may not delegate its authority with regard to any Executive
Officer or "covered employee" within the meaning of Section 162(m) of the Code.
4.2 ELIGIBILITY. Participants shall be selected, from time to time, by
the Board or Board Committee from those Employees or Consultants who, in the
opinion of the Board, Board Committee or senior management, have the capacity to
contribute to the growth and performance of the Corporation. Incentive Stock
Options may be granted only to Employees of the Corporation or any of its
Subsidiaries.
5. PERFORMANCE SHARE AWARDS.
5.1 AWARDS. Awards of Shares may be made, from time to time, to such
Employees or Consultants as may be selected by the Board Committee. The release
of such Shares to the Participant subject to such Awards shall be contingent
upon (i) the degree of attainment of the applicable Performance Goals during the
Performance Period relative to such objectives as shall be established by the
Board Committee and (ii) the expiration of the Performance Period. The Board
Committee may determine that Performance Goals for any Participant shall be
based upon the attainment of performance goals similar to the Performance Goals,
but in whole or in part applied to the results of a business unit of the
Corporation. Except as provided in Section 11 hereof and the Performance Share
Award Agreement between the Participant and the Corporation, or as otherwise
provided or determined by the Board Committee, Shares subject to such Awards
under this Section 5.1 shall be released to the Participant only after the
expiration of the relevant Performance Period. Each Award under this Section 5.1
shall be evidenced by a Performance Share Award Agreement between the
Participant and the Corporation which shall specify the applicable Performance
Goals, the Performance Period, any forfeiture conditions and such other terms
and conditions as the Board Committee shall determine. The Board Committee shall
determine a performance level under which the number of Shares earned may be
less than, equal to, or greater than, the number of Shares awarded based upon
the Corporation's performance. The Board Committee may adjust the Performance
Goals to reflect significant unforeseen events; provided, however, that the
Board Committee may not make any such adjustment with respect to any Award of
Shares to an individual who is then a "covered employee" as defined pursuant to
Section 162(m) of the Code if such adjustment would cause compensation pursuant
to such Award of Shares to cease to be performance-based compensation under
Section 162(m). Subject to adjustment pursuant to
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Section 3.2 of the Plan, in no event shall the number of Shares to be issued or
credited to the Participant at the expiration of the Performance Period exceed
200% of the initial Award.
5.2 PAYOUTS. Upon expiration of the Performance Period, the Corporation
shall at its option, cause such Shares as to which a Participant is entitled
either (i) to be issued by a certificate registered in the name of the
Participant or his designee evidencing the Shares to which the Participant is
entitled and release such Shares to the custody of the Participant or (ii) to be
credited to an account for the benefit of the Participant maintained by the
Corporation's stock transfer agent or its designee.
5.3 RIGHTS AS SHAREHOLDERS. Subject to the provisions of the
Performance Share Award Agreement between the Participant and the Corporation
and unless otherwise provided or determined by the Board Committee, during the
Performance Period Participants may exercise full voting rights with respect to
all Shares awarded under Section 5.1 hereof and shall be entitled to receive
dividends and other distributions paid with respect to those Shares.
5.4 TRANSFERABILITY OF SHARES. Shares awarded under Section 5.1 of the
Plan shall not be sold, exchanged, assigned, transferred, pledged, hypothecated
or otherwise disposed of until such Shares have been issued or credited to the
Participant.
5.5 TERMINATION OF EMPLOYMENT. If a Participant ceases to be an
Employee or Consultant, the number of Shares subject of the Award, if any, to
which the Participant shall be entitled shall be determined in accordance with
the Performance Share Award Agreement between the Participant and the
Corporation. All remaining Shares as to which the Participant may not be
entitled shall be forfeited subject to such exceptions, if any, authorized by
the Board Committee.
5.6 TRANSFER OF EMPLOYMENT. If a Participant transfers employment from
one business unit of the Corporation or any of its Subsidiaries or Affiliates to
another business unit during a Performance Period, such Participant shall be
eligible to receive such number of Shares as the Board Committee may determine
based upon such factors as the Board Committee in its sole discretion may deem
appropriate.
5.7 INDIVIDUAL SHARE LIMITATION. Subject to adjustment pursuant to
Section 3.2 of the Plan, the number of Shares for which a Performance Share
Award may be granted to any Participant who is an Executive Officer shall not
exceed 100,000 Shares in any fiscal year.
6. RESTRICTED STOCK AWARDS.
6.1 AWARDS. Awards of Shares subject to such restrictions as to vesting
and otherwise as the Board Committee shall determine, may be made, from time to
time, to such Employees or Consultants as may be selected by the Board
Committee. The Board Committee may in its sole discretion at the time of the
Award or at any time thereafter provide for the early vesting of such Award
prior to the expiration of the Restriction Period. Each Award under this Section
6.1 shall be evidenced by a Restricted Stock Award Agreement between the
Participant and the Corporation
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which shall specify the vesting schedule, any rights of acceleration, any
forfeiture conditions, and such other terms and conditions as the Board
Committee shall determine.
6.2 PAYOUTS. Upon expiration of the Restriction Period, the Corporation
shall at its option, cause such Shares as to which a Participant is entitled
either (i) to be issued by a stock certificate registered in the name of the
Participant or his designee and release such Shares to the custody of the
Participant or (ii) to be credited to an account for the benefit of the
Participant maintained by the Corporation's stock transfer agent or its
designee.
6.3 RIGHTS AS SHAREHOLDERS. Subject to the provisions of the Restricted
Stock Award Agreement between the Participant and the Corporation and unless
otherwise provided or determined by the Board Committee, during the Restriction
Period Participants may exercise full voting rights with respect to all Shares
awarded under Section 6.1 hereof and shall be entitled to receive dividends and
other distributions paid with respect to those Shares.
6.4 TRANSFERABILITY OF SHARES. Shares awarded under Section 6.1 of the
Plan shall not be sold, exchanged, assigned, transferred, pledged, hypothecated
or otherwise disposed of until such Shares have been issued or credited to the
Participant.
6.5 TERMINATION OF EMPLOYMENT. If a Participant ceases to be an
Employee or Consultant, the number of Shares subject of the Award, if any, to
which the Participant shall be entitled shall be determined in accordance with
the Restricted Stock Award Agreement between the Participant and the
Corporation. All remaining Shares as to which restrictions apply at the date of
termination of employment or consultancy shall be forfeited subject to such
exceptions, if any, authorized by the Board Committee.
7. STOCK OPTIONS.
7.1 OPTION GRANTS. Options may be granted, from time to time, to such
Employees or Consultants as may be selected by the Board Committee. The Option
Price shall be determined by the Board Committee effective on the Grant Date;
PROVIDED, HOWEVER, that except in the case of Substitute Awards, such price
shall not be less than one hundred percent (100%) of the Fair Market Value of a
Share on the Grant Date. The number of Shares subject to each Option granted to
each Participant, the terms of each Option, and any other terms and conditions
of an Option granted hereunder shall be determined by the Board Committee, in
its sole discretion, effective on the Grant Date; PROVIDED, HOWEVER, that no
Option shall be exercisable any later than ten (10) years from the Grant Date.
Each Option shall be evidenced by a Stock Option Agreement between the
Participant and the Corporation which shall specify the type of Option granted,
the Option Price, the term of the Option, the number of Shares to which the
Option pertains, the conditions upon which the Option becomes exercisable and
such other terms and conditions as the Board Committee shall determine.
7.2 PAYMENT OF OPTION PRICE. No Shares shall be issued upon exercise of
an Option until full payment of the Option Price by the Participant. Upon
exercise, the Option Price may be paid by (i) delivery of cash and/or in Shares
having a Fair Market Value equal to the Option Price
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or (ii) if permitted by the Board Committee, by directing the Corporation to
retain Shares otherwise issuable to the Participant under the Plan.
7.3 RIGHTS AS SHAREHOLDERS. Participants shall not have any of the
rights of a shareholder with respect to any Shares subject to an Option, unless
and until such Shares have been issued upon the proper exercise of such Option.
7.4 TRANSFERABILITY OF OPTIONS. Except as permitted by this Section
7.4, Options granted under the Plan may not be sold, transferred, pledged,
assigned, hypothecated or otherwise disposed of other than by will or by the
laws of descent and distribution. The Board Committee may, in its discretion,
authorize all or a portion of the Options to be granted to a Participant (other
than Incentive Stock Options) to be on terms which permit transfer by such
Participant to (i) immediate family members of the Participant or to a trust,
partnership or limited liability company for the benefit of such immediate
family members, (ii) pursuant to domestic relations orders referred to in Rule
16a-12 under the Securities Exchange Act of 1934, as amended from time to time,
and (iii) to other transferees permitted by the Board Committee in its
discretion (such transferees of a Participant are referred to as "PERMITTED
TRANSFEREES") provided that (A) there may be no payment of consideration (other
than release of marital rights) for any such transfer, (B) the Stock Option
Agreement shall specifically provide for transferability in a manner consistent
with this Section, and (C) subsequent transfers of transferred Options shall be
prohibited except without consideration for such transfer to the Participant or
a Permitted Transferee of the Participant. Following transfer, Options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer; the Participant shall remain subject to
applicable tax withholding; the events of termination of employment of a
Participant shall continue to be applied with respect to the Permitted
Transferee; and all other terms of the Option shall remain unchanged. All
Options granted to a Participant under the Plan shall be exercisable during the
lifetime of such Participant only by such Participant, his agent, guardian or
attorney-in-fact or by a Permitted Transferee.
7.5 TERMINATION OF EMPLOYMENT. If a Participant ceases to be an
Employee or Consultant, whether the Options granted hereunder shall be
exercisable or not and the other applicable terms and conditions shall be
determined in accordance with the Stock Option Agreement between the Participant
and the Corporation.
7.6 INDIVIDUAL SHARE LIMITATION. Subject to adjustment pursuant to
Section 3.2 of the Plan, the number of Shares for which Options may be granted
to any Participant who is an Executive Officer shall not exceed 750,000 Shares
over any continuous five-year period, including issuances under the Prior Plan.
7.7 LIMITS ON INCENTIVE STOCK OPTIONS. Notwithstanding the designation
of an Option as an Incentive Stock Option, to the extent the aggregate Option
Price of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar year exceeds
$100,000 (or such other amount as determined under the Code), such Options shall
be treated as Non-qualified Stock Options.
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7.8 LIMITS ON OPTION REPRICING. Other than in connection with a change
in the Corporation's capitalization (as set forth in Section 3.2), Options may
not be repriced, replaced, regranted through cancellation or modified without
shareholder approval if the effect of such repricing, replacement or regrant or
modification would be to reduce the Option Price of such Options.
8. STOCK APPRECIATION RIGHTS.
8.1 SAR GRANTS. Stock Appreciation Rights may be granted, from time to
time, to such Employees or Consultants as may be selected by the Board
Committee. SARs may be granted at the discretion of the Board Committee either
(i) in connection with an Option or (ii) independent of an Option. The price
from which appreciation shall be computed shall be established by the Board
Committee at the Grant Date; PROVIDED, HOWEVER, that such price shall not be
less than one hundred percent (100%) of the Fair Market Value of the number of
Shares subject of the grant on the Grant Date. In the event the SAR is granted
in connection with an Option, the fixed price from which appreciation shall be
computed shall be the Option Price. Each grant of a SAR shall be evidenced by a
Stock Appreciation Rights Agreement between the Participant and the Corporation
which shall specify the type of SAR granted, the number of SARs, the conditions
upon which the SARs vest and such other terms and conditions as the Board
Committee shall determine. In no event shall a SAR be exercisable any later than
ten (10) years from the Grant Date.
8.2 EXERCISE OF SARS. SARs may be exercised upon such terms and
conditions as the Board Committee shall determine; PROVIDED, HOWEVER, that SARs
granted in connection with Options may be exercised only to the extent the
related Options are then exercisable. Notwithstanding Section 3.1 hereof, upon
exercise of a SAR granted in connection with an Option as to all or some of the
Shares subject of such Award, the related Option shall be automatically canceled
to the extent of the number of Shares subject of the exercise, and such Shares
shall no longer be available for grant hereunder. Conversely, if the related
Option is exercised as to some or all of the Shares subject of such Award, the
related SAR shall automatically be canceled to the extent of the number of
Shares of the exercise, and such Shares shall no longer be available for grant
hereunder.
8.3 PAYMENT UPON EXERCISE. Upon exercise of a SAR, the holder shall be
paid in cash and/or Shares as set forth in the Stock Appreciation Rights
Agreement, the excess of the Fair Market Value of the number of Shares subject
of the exercise over the fixed price, which in the case of a SAR granted in
connection with an Option shall be the Option Price for such Shares.
8.4 RIGHTS OF SHAREHOLDERS. Participants shall not have any of the
rights of a shareholder with respect to any Options granted in connection with a
SAR until Shares have been issued upon the proper exercise of an Option.
8.5 TRANSFERABILITY OF SARS. Except as permitted by this Section 8.5,
SARs granted under the Plan may not be sold, transferred, pledged, assigned,
hypothecated or otherwise disposed of other than by will or by the laws of
descent and distribution. The Board Committee may, in its discretion, authorize
all or a portion of the SARs to be granted to a Participant to be on terms
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which permit transfer by such Participant to Permitted Transferees provided that
(A) there may be no payment of consideration (other than release of marital
rights) for any such transfer, (B) the Stock Appreciation Rights Agreement shall
specifically provide for transferability in a manner consistent with this
Section, and (C) subsequent transfers of transferred SARs shall be prohibited
except without consideration for such transfer to the Participant or a Permitted
Transferee of the Participant. Following transfer, SARs shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer; the Participant shall remain subject to applicable tax withholding;
the events of termination of employment of a Participant shall continue to be
applied with respect to the Permitted Transferee; and all other terms of the
SARs shall remain unchanged. All SARs granted to a Participant under the Plan
shall be exercisable during the lifetime of such Participant only by such
Participant, his agent, guardian, or attorney-in-fact or by a Permitted
Transferee.
8.6 TERMINATION OF EMPLOYMENT. If a Participant ceases to be an
Employee or Consultant, whether SARs granted hereunder shall be exercisable or
not and the other applicable terms and conditions shall be determined in
accordance with the Stock Appreciation Rights Agreement between the Participant
and the Corporation.
8.7 INDIVIDUAL SHARE LIMITATION. Subject to adjustment pursuant to
Section 3.2 of the Plan, the number of Shares for which SARs may be granted to
any Participant who is an Executive Officer shall not exceed 750,000 Shares over
any continuous five-year period.
9. OTHER SHARE-BASED AWARDS.
Awards of Shares and other awards that are valued in whole or in part
by reference to, or are otherwise based on, Shares (including, but not limited
to, phantom stock or Units, performance units, bonus stock or similar securities
or rights), may be made, from time to time, to such Employees or Consultants as
may be selected by the Board Committee. Such Awards may be made alone or in
addition to or in connection with any other Award hereunder. The Board Committee
may in its sole discretion determine the terms and conditions of any such Award.
Each such Award shall be evidenced by an agreement between the Participant and
the Corporation which shall specify the number of Shares subject of the Award,
any consideration therefor, any vesting or performance requirements and such
other terms and conditions as the Board Committee shall determine. The number of
shares or Units subject of any Awards under this Section 9 which may be granted
to a Participant who is an Executive Officer shall not exceed 100,000 Shares or
Units, as the case may be, in any fiscal year, subject to adjustment as set
forth in Section 3.2.
10. NON-EMPLOYEE DIRECTORS' OPTIONS.
10.1 GRANTS. (a) INITIAL GRANTS. Each Non-employee Director who is
first elected or appointed to the Board shall automatically, subject to
adjustment pursuant to Section 3.2 of the Plan, be granted on the date of such
election or appointment an Option to purchase 2,000 Shares. All such Options
shall be Non-qualified Stock Options. The Option Price shall be one hundred
percent (100%) of the Fair Market Value of the Shares on the Grant Date.
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(b) ANNUAL OPTIONS GRANTS. On the date of the 2000 Annual
Meeting of Shareholders and on the date of each Annual Meeting of Shareholders
of the Corporation thereafter, each Non-employee Director shall, subject to
adjustment pursuant to Section 3.2 of the Plan, automatically be granted an
Option to purchase 2,000 Shares. All such Options shall be Non-qualified Stock
Options. The Option Price shall be one hundred percent (100%) of the Fair Market
Value of the Shares on the Grant Date.
10.2 EXERCISE OF OPTIONS. (a) VESTING. Except as set forth in this
Section 10, fifty percent (50%) of the total number of Shares subject of an
Option granted to a Non-employee Director shall become exercisable on the first
anniversary of the date of grant of the year in which the option is granted and
twenty-five percent (25%) on the anniversary date of each of the next two
succeeding years. The right to purchase Shares which have become exercisable
shall be cumulative during the term of the Option. Any Option granted to
Non-employee Directors that has been outstanding for more than one (1) year
shall immediately become exercisable in full in the event of a Change of
Control.
(b) TERMINATION OF SERVICE. In the event a Non-employee
Director to whom an Option under this Section 10 has been granted shall cease to
be a Director (other than by reason of death) each such Option granted under
this Section 10 may be exercised during the period following such cessation of
service in accordance with its terms provided that in no event shall the Option
be exercisable more than ten (10) years after the date of grant.
(c) DEATH. In the event of the death of a Non-employee
Director, all Options held by such Non-employee Director shall immediately
become fully vested and exercisable and shall be exercisable only within the
twelve (12) month period following the date of death. Such Options shall be
exercisable only by the executor or administrator of the Non-employee Director's
estate or by the person or persons to whom the Non-employee Director's rights
under the Option shall pass by the Non-employee Director's will or the laws of
descent and distribution, provided that in no event shall the Option be
exercisable more than ten (10) years after the date of grant.
10.3 PAYMENT OF OPTION PRICE. No Shares shall be issued upon exercise
of an Option until full payment of the Option Price therefor by the Non-employee
Director. Payment for the Shares may be paid in whole or in part by (i) delivery
of cash and/or in Shares having a Fair Market Value equal to the Option Price or
(ii) directing the Corporation to retain Shares otherwise issuable to the
Participant under the Plan.
10.4 RIGHTS AS SHAREHOLDER. Participants shall not have any of the
rights of a Shareholder with respect to any Shares subject to an Option until
such Shares have been issued upon the proper exercise of such Option.
11. CHANGE OF CONTROL.
11.1 DEFINITION OF CHANGE OF CONTROL. For purposes hereof, a "change of
control" shall be deemed to have occurred if:
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(i) any "person" (as such term is defined in Section 3(a)(9)
of the Securities Exchange Act of 1934 (the "Exchange Act") and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities eligible
to vote for the election of the Board (the "Corporation Voting Securities");
PROVIDED, HOWEVER, that the event described in this paragraph (i) shall not be
deemed to be a Change of Control by virtue of any of the following acquisitions:
(a) by the Corporation or any Subsidiary, (b) by any employee benefit plan
sponsored or maintained by the Corporation or any Subsidiary, (c) by any
underwriter temporarily holding securities pursuant to an offering of such
securities, or (d) pursuant to a Non-Control Transaction (as defined in
paragraph (iii));
(ii) individuals who, on July 1, 2000, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to July 1, 2000, whose election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors who remain on the Board
(either by a specific vote or by approval of the proxy statement of the
Corporation in which such person is named as a nominee for director, without
objection to such nomination) shall also be deemed to be an Incumbent Director;
PROVIDED, HOWEVER, that no individual initially elected or nominated as a
director of the Corporation as a result of an actual or threatened election
contest with respect to directors or any other actual or threatened solicitation
of proxies or consents by or on behalf of any person other than the Board of
Directors shall be deemed to be an Incumbent Director;
(iii) the consummation of a merger, consolidation, share
exchange or similar form of corporate reorganization of the Corporation or any
such type of transaction involving the Corporation or any of its Subsidiaries
that requires the approval of the Corporation's stockholders (whether for such
transaction or the issuance of securities in the transaction or otherwise) (a
"Business Combination"), unless immediately following such Business Combination:
(a) more than 80% of the total voting power of the corporation resulting from
such Business Combination (including, without limitation, any corporation which
directly or indirectly has beneficial ownership of 100% of the Corporation
Voting Securities) eligible to elect directors of such corporation is
represented by shares that were Corporation Voting Securities immediately prior
to such Business Combination (either by remaining outstanding or being
converted), and such voting power is in substantially the same proportion as the
voting power of such Corporation Voting Securities immediately prior to the
Business Combination, (b) no person (other than any publicly traded holding
Corporation resulting from such Business Combination, any employee benefit plan
sponsored or maintained by the Corporation (or the corporation resulting from
such Business Combination)) becomes the beneficial owner, directly or
indirectly, of 20% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the corporation resulting from such
Business Combination, and (c) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
Incumbent Directors at the time of the Board's approval of the execution of the
initial agreement providing for such Business Combination (any Business
Combination which satisfies the conditions specified in (a), (b) and (c) shall
be deemed to be a "Non-Control Transaction"); or
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(iv) the shareholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation or the direct or indirect
sale or other disposition of all or substantially all of the assets of the
Corporation and its subsidiaries.
Notwithstanding the foregoing, a "change of control" of the
Corporation shall not be deemed to occur solely because any person acquires
beneficial ownership of more than 20% of the Corporation Voting Securities as a
result of the acquisition of Corporation Voting Securities by the Corporation
which reduces the number of Corporation Voting Securities outstanding; PROVIDED,
THAT if after such acquisition by the Corporation such person becomes the
beneficial owner of additional Corporation Voting Securities that increases the
percentage of outstanding Corporation Voting Securities beneficially owned by
such person, a "change of control" of the Corporation shall then occur.
11.2 ACCELERATION OF BENEFITS. In the event of a "change of control" of
the Corporation, all outstanding Awards shall be paid in such manner and in such
amounts as determined by the Board Committee in its sole discretion at the time
such Awards are made.
12. AMENDMENT OR TERMINATION OF PLAN.
(a) AMENDMENT OR TERMINATION OF PLAN. Until such time as a "change of
control" shall have occurred, the Board may amend, suspend or terminate the Plan
or any part thereof from time to time, provided that no change may be made which
would adversely impair the rights of a Participant whom has received an Award
without the consent of said Participant. The Board may not increase the
aggregate number of Shares which may be issued under the Plan (other than an
increase reflecting a change in capitalization of the Corporation), without the
approval of the shareholders of the Corporation, nor may the Board amend the
Plan without approval of the shareholders where the absence of such approval
would cause the Plan to fail to comply with Rule 16b-3 under the Securities
Exchange Act of 1934 and Section 162(m) of the Code. After a "change of
control," the Board shall no longer have the power to amend, suspend or
terminate the Plan or any part thereof.
(b) FOREIGN JURISDICTIONS. The Board or the Board Committee may also
amend the Plan in such manner as may be necessary so as to have the Plan conform
with local rules and regulations in any jurisdiction outside the United States.
13. MISCELLANEOUS.
13.1 RIGHTS OF EMPLOYEES. Nothing in the Plan shall interfere with or
limit in any way the right of the Corporation or any of its Subsidiaries or
Affiliates to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continued employment with the Corporation or
any of its Subsidiaries or Affiliates.
13.2 WITHHOLDING FOR TAXES. The Corporation shall have the authority to
withhold, or to require a Participant to remit to the Corporation, prior to
issuance or delivery of any Shares or cash
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hereunder, an amount sufficient to satisfy federal, state and local tax or
withholding requirements associated with any Award. In addition, the Corporation
may, in its sole discretion, permit a Participant to satisfy any tax withholding
requirements, in whole or in part, by (i) delivering to the Corporation Shares
held by such Participant having a Fair Market Value equal to the amount of the
tax or (ii) directing the Corporation to retain Shares otherwise issuable to the
Participant under the Plan.
13.3 STATUS OF AWARDS. Awards hereunder shall not be deemed
compensation for purposes of computing benefits under any retirement plan of the
Corporation or any of its Subsidiaries or Affiliates and shall not affect any
benefits under any other benefit plan now or hereafter in effect under which the
availability or amount of benefits is related to the level of compensation.
13.4 WAIVER OF RESTRICTIONS. The Board Committee may, in its sole
discretion, based on such factors as the Board Committee may deem appropriate,
waive in whole or in part, any remaining restrictions or vesting requirements in
connection with any Award hereunder.
13.5 DELEGATION TO MANAGEMENT. The Board Committee may delegate to one
or more officers of the Corporation or a committee of officers the right to
grant Awards hereunder to employees who are not Executive Officers or Directors
of the Corporation and to cancel or suspend Awards to Employees or Consultants
who are not Executive Officers or Directors of the Corporation.
13.6 ADJUSTMENT OF AWARDS. Subject to Section 7.8 and Section 12, the
Board Committee shall be authorized to make adjustments in the method of
calculating attainment of Performance Goals or in the terms and conditions of
other Awards in recognition of unusual or nonrecurring events affecting the
Corporation or its financial statements or changes in applicable laws,
regulations or accounting principles; provided, however, that no such adjustment
shall adversely impair the rights of any Participant without his or her consent
and that any such adjustments shall be made in a manner consistent with Section
162(m) of the Code. The Board Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem desirable to carry it into effect. In the event
the Corporation shall assume outstanding employee benefit awards or the right or
obligation to make future such awards in connection with the acquisition of
another corporation or business entity, the Board Committee may, in its
discretion, make such adjustments in the terms of Awards under the Plan as it
shall deem appropriate.
13.7 CONSIDERATION FOR AWARDS. Except as otherwise required in any
applicable agreement or by the terms of the Plan, Participants under the Plan
shall not be required to make any payment or provide consideration for an Award
other than the rendering of services.
13.8 DEFERRAL. Notwithstanding anything contained herein to the
contrary, in the event that any Award shall be ineligible for treatment as
"other performance based compensation" under Section 162(m) of the Code, the
Board Committee, in its sole discretion, shall have the right with respect to
any Executive Officer who is in the year any Award hereunder becomes deductible
by the
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Corporation, a "covered employee" under Section 162(m) of the Code, to defer, in
whole or in part, such Executive Officer's receipt or exercise of such Award
until the Executive Officer is no longer a "covered employee" or until such time
as shall be determined by the Board Committee, provided that the Board Committee
may effect such a deferral only in a situation where the Corporation would be
prohibited a deduction under Section 162(m) of the Code and such deferral shall
be limited to the portion of the Award that is not deductible.
13.9 GOVERNING LAW. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan and any agreement governing
an Award shall be determined in accordance with the laws of the State of
Delaware, without regard to the conflict of law principles thereof.
13.10 SEVERABILITY. Notwithstanding any other provision or Section of
the Plan, if any provision of the Plan or any Award is or becomes or is deemed
to be invalid, illegal or unenforceable in any jurisdiction or as to any person
or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Board or the Board Committee, such provision shall be
construed or deemed amended to conform to the applicable laws (but only to such
extent necessary to comply with such laws), or if it cannot be construed or
deemed amended without, in the determination of the Board or the Board
Committee, materially altering the intent of the Plan or Award, such provision
shall be stricken as to such jurisdiction, person or Award and the remainder of
the Plan and any such Award shall remain in full force and effect.
13.11 NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Corporation or any Affiliate and a
Participant or any other person. To the extent that any person acquires a right
to receive payments from the Corporation or any Affiliate pursuant to an Award,
such right shall be no greater than the right of any unsecured general creditor
of the Corporation or any Affiliate.
13.12 EFFECTIVE DATE AND TERM.
(a) EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become
effective upon approval by the shareholders at the Annual Meeting of
Shareholders on October 27, 2000. All Awards granted under the Plan must be
granted within ten (10) years from its effective date. Any Awards outstanding
ten (10) years after the adoption of the Plan may be exercised within the
periods prescribed under or pursuant to the Plan.
(b) PRIOR PLAN. Upon the effective date of this Plan, no
further grants or awards are permitted under the Prior Plan. All grants and
awards under the Prior Plan that remain outstanding shall be administered and
paid in accordance with the provisions of the Prior Plan. Subject to approval by
the shareholders at the Annual Meeting of Shareholders on October 27, 2000, the
Options to be granted to Non-employee Directors under Section 10 of the Prior
Plan shall instead be granted under Section 10 of the Plan.
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Approved by the Board of Directors the 26th day of August 2000.
Attested:
/s/ Richard L. Ballantyne
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Corporate Secretary
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