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EXHIBIT 10.1
ROBERT HALF INTERNATIONAL INC.
EQUITY INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE AUGUST 2, 2000)
1. PURPOSES. The principal purposes of the Robert Half International Inc.
Equity Incentive Plan (the "Plan") are: (a) to improve individual employee
performance by providing long-term incentives and rewards to key employees of
the Company, (b) to assist the Company in attracting, retaining and motivating
key employees with experience and ability, and (c) to align the interests of
such employees with those of the Company's stockholders.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms, when used in this Plan, shall have the meanings set forth
below:
(a) "Administrator" means either the Board of Directors or a committee of
the Board of Directors of the Company, the composition and the size of which
shall cause such committee to satisfy the requirements of Rule 16b-3 of the
Exchange Act with respect to officers and directors.
(b) "Board" means the Board of Directors of the Company.
(c) "Change in Control" means the occurrence of any of the following:
(i) Any person or group (as such terms are defined in Section 13(d)(3) of
the Exchange Act), other than an employee benefit plan sponsored by the Company
or a subsidiary thereof or a corporation owned (directly or indirectly), by the
stockholders of the Company in substantially the same proportions of the
ownership of stock of the Company, shall become the beneficial owner of
securities of the Company representing 20% or more, or commences a tender or
exchange offer following the successful consummation of which the offerer and
its affiliates would beneficially own securities representing 20% or more, of
the combined voting power of then outstanding securities ordinarily (and apart
from rights accruing in special circumstances) having the right to vote in the
election of directors, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise; PROVIDED, HOWEVER, that
a Change in Control shall not be deemed to include the acquisition by any such
person or group of securities representing 20% or more of the Company if such
party has acquired such securities not with the purpose nor with the effect of
changing or influencing the control of the Company, nor in connection with or as
a participant in any transaction having such purposes or effect, including,
without limitation, not in connection with such party (A) making any public
announcement with respect to the voting of such shares at any meeting to
consider a merger, consolidation, sale of substantial assets or other business
combination or extraordinary transaction involving the Company, (B) making, or
in any way participating in, any "solicitation" of "proxies" (as such terms are
defined or used in Regulation 14A under the Exchange Act) to vote any voting
securities of the Company (including, without limitation, any such solicitation
subject to Rule 14a-11 under the Exchange Act) or seeking to advise or influence
any party with respect to the voting of any voting securities of the Company,
directly or indirectly, relating to a merger or other business combination
involving the Company or the sale or transfer of substantial assets of the
Company, (C) forming, joining or in any way participating in any "group" within
the meaning of Section 13(d)(3) of the Exchange Act with respect to any voting
securities of the Company, directly or indirectly, relating to a merger or other
business combination involving the Company or the sale or transfer of any
substantial assets of the Company, or (D) otherwise acting, alone or in concert
with others, to seek control of the Company or to seek to control or influence
the management or policies of the Company.
(ii) The stockholders of the Company shall approve any plan or proposal for
the liquidation or dissolution of the Company.
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(iii) A change in the composition of the Board of Directors of the Company
occurring within a two-year period, as a result of which fewer than a majority
of the directors are Incumbent Directors. "Incumbent Directors" shall mean
directors who either (A) are directors of the Company as of the date hereof, or
(B) are elected, or nominated for election, to the Board of Directors of the
Company with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors to the Company).
As a result of or in connection with any cash tender offer, merger, or other
business combination, sale of assets or contested election, or combination of
the foregoing, the persons who were directors of the Company just prior to such
event shall cease within one year to constitute a majority of the Board.
(iv) The Company's stockholders approve a definitive agreement providing for
a transaction in which the Company will cease to be an independent publicly
owned corporation.
(v) The stockholders of the Company approve a definitive agreement (A) to
merge or consolidate the Company with or into another corporation in which the
holders of the Stock immediately before such merger or reorganization will not,
immediately following such merger or reorganization, hold as a group on a
fully-diluted basis both the ability to elect at least a majority of the
directors of the surviving corporation and at least a majority in value of the
surviving corporation's outstanding equity securities, or (B) to sell or
otherwise dispose of all or substantially all of the assets of the Company.
(d) "Common Stock" or "Stock" means Robert Half International Inc. Common
Stock, par value $.001 per share.
(e) "Company" means Robert Half International Inc., its divisions and direct
and indirect subsidiaries.
(f) "Continuous Employment" means employment with the Company or any
Subsidiary, or serving as a director or consultant to the Company or any
Subsidiary, without any termination or leave of absence, except for a leave of
absence approved by the Company or any Subsidiary which is less than six
consecutive months in duration.
(g) "Disability" or "Disabled" shall mean (i) a physical or mental condition
which, in the judgment of the Administrator based on competent medical evidence
satisfactory to the Administrator (including, if required by the Administrator,
medical evidence obtained by an examination conducted by a physician selected by
the Administrator), renders Holder unable to engage in any substantial gainful
activity for the Company and which condition is likely to result in death or to
be of long, continued and indefinite duration, or (ii) a judicial declaration of
incompetence.
(h) "Eligible Employee" means an employee of the Company or any Subsidiary
(including an employee who is a director and/or officer) who, as determined by
the Administrator in its sole discretion, has and exercises management functions
and responsibilities.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(j) "Fair Market Value" means the closing sales price on the New York Stock
Exchange or the NASDAQ National Market System, as the case may be, on the date
the value is to be determined as reported in THE WALL STREET JOURNAL (Western
Edition). If there are no trades on such date, the closing price on the latest
preceding business day upon which trades occurred shall be the Fair Market
Value. If the Stock is not listed in the New York Stock Exchange or quoted on
the NASDAQ National Market System, the Fair Market Value shall be determined in
good faith by the Administrator.
(k) "Grant" shall mean an Option or a Restricted Stock Award.
(l) "Grant Date" means the date a Grant is made under the Plan.
(m) "Holder" means the recipient of a Grant pursuant to this Plan.
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(n) "Issue Date" means the date on which shares of Stock subject to a
Restricted Stock Award are issued or transferred by the Company to the account
of an Eligible Employee who has received such grant.
(o) "Minimum Withholding Taxes" means any applicable federal, state and
local income and other employment taxes which the Company is required to
withhold in connection with (i) the lapse of restrictions on Stock subject to a
Restricted Stock Award, (ii) the exercise of an Option, or (iii) the making of
an election under Section 83(b) of the Internal Revenue Code with respect to a
Restricted Stock Award.
(p) "Offer" means a tender offer or an exchange offer for the Company's
Stock.
(q) "Option" or "Stock Option" means a right granted under the Plan to a
Holder to purchase shares of Common Stock at a fixed price for a specified
period of time.
(r) "Option Price" means the price at which a share of Common Stock covered
by an Option granted hereunder may be purchased.
(s) "Optionee" means an Eligible Employee who has received a Stock Option
granted under the Plan.
(t) "Restricted Stock Award" means a grant described in Section 6 of the
Plan.
(u) "Securities Act" means the Securities Act of 1933, as amended.
(v) "Subsidiary" means a "subsidiary" corporation as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended.
(w) "Vested" means that portion of a Grant with respect to which the Vesting
Date has arrived or passed.
(x) "Vesting Date" means the date specified in Section 5 or 6 hereof, as the
case may be, or such other date as shall be established by the Administrator or
otherwise on the Grant Date or thereafter.
(y) "Voting Shares" means the outstanding shares of the Company entitled to
vote for the election of Directors.
3. STOCK AVAILABLE. The number of shares of Stock for which Grants may be
made during each calendar year shall, commencing with the year 2000, be that
number which is equal to 2% of the number of issued and outstanding shares of
Common Stock of the Company (excluding treasury shares) as of January 1 of such
year. Any shares of Common Stock covered by Options which have terminated or
expired prior to exercise or have been cancelled without value shall not be
counted against the annual limit and shall be available for further grants
hereunder and shares constituting the portion of a Restricted Stock Award that
is forfeited before any dividends are paid upon such forfeited shares shall not
be counted against the annual limit and shall be available for further grants
hereunder. The foregoing number of shares available for Grants shall be subject
to any adjustments which may be made pursuant to Section 12 hereof. Shares of
Stock used for Options may be either shares of authorized but unissued Common
Stock or treasury shares or both. Shares of Stock used for Restricted Stock
Awards shall be treasury shares to the extent that treasury shares are
available, and, if no treasury shares are available, Restricted Stock Awards
shall be authorized but unissued Common Stock.
4. PARTICIPANTS. From time to time the Administrator shall, in its sole
discretion, but subject to all of the provisions of the Plan, determine which
Eligible Employees will be given Grants under the Plan, the number of Options or
shares of Restricted Stock to be granted to each such Eligible Employee and the
terms, conditions and restrictions of each such Grant. In making such
determinations, the Administrator shall take into account the nature of services
rendered and to be rendered by the respective recipients, their present and
potential contribution to the Company's success and such other factors as the
Administrator in its discretion deems relevant to the accomplishment of the
purposes of the Plan. In any year, the Administrator may approve Options to
Eligible Employees subject to differing terms and conditions and
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Restricted Stock Awards to Eligible Employees subject to differing terms and
conditions. During any calendar year, the number of shares of Stock with respect
to which Options or Restricted Stock are granted to any one individual may not
exceed 1.5% of the number of issued and outstanding shares of Common Stock as of
January 1, 2000, subject to adjustment pursuant to Section 12 hereof.
5. OPTIONS. Each Option granted hereunder shall be in writing and shall
contain such terms and conditions as the Administrator may determine, subject to
the following:
(a) PRICE. The Option Price shall be not less than 100% of the Fair Market
Value of Common Stock on the Grant Date.
(b) TERM AND EXERCISE. Options granted hereunder shall have a term of no
longer than ten years from the Grant Date. An Option may be exercised only as to
those portions of the Option that have Vested. Stock Options must be exercised
for full shares of Common Stock.
(c) INCENTIVE STOCK OPTIONS. No Option granted hereunder shall be deemed
an Incentive Stock Option (as such term is defined in the Internal Revenue Code)
unless (a) such Option is designated as an Incentive Stock Option at the time of
grant by the Administrator and (b) such Option otherwise meets the requirements
for Incentive Stock Options specified in the Internal Revenue Code. However, no
Option designated as an Incentive Stock Option shall contain any restrictions
upon the ability of the Holder to dispose of Stock acquired upon the exercise
thereof other than as provided elsewhere in this Plan. During the life of the
Plan, the total number of shares for which Incentive Stock Options may be
granted may not exceed ten times the number of shares available for Grants under
the Plan during the first calendar year in which the Plan is in effect.
(d) VESTING. Unless otherwise determined by the Administrator, each Option
shall Vest as to twenty-five percent (25%) of the Stock covered by such Option
on each of the first through fourth anniversaries of the Grant Date.
Notwithstanding the foregoing, the Administrator may accelerate Vesting, in
whole or in part, under such terms and conditions as the Administrator deems
appropriate.
(e) EXERCISE OF OPTION. To exercise an Option, the Holder shall give
written notice of exercise to the Company, specifying the number of shares of
Common Stock to be purchased and identifying the specific Options that are being
exercised. From time to time the Administrator may establish procedures relating
to such exercises. An Option is exercisable during a Holder's lifetime only by
the Holder or, with respect to options that are not designated as Incentive
Stock Options, under such other circumstances as may be permitted by
Rule 16b-3, or any successor rule, under the Exchange Act and all
interpretations of the staff of the Securities and Exchange Commission
thereunder.
(f) PAYMENT OF OPTION PRICE. The purchase price for Options being
exercised must be paid in full at time of exercise. Payment shall be, at the
option of the holder at the time of exercise, by any combination of cash, check
or delivery of shares of Common Stock that have been owned by Holder for at
least six months. If all or a portion of the purchase price is paid by delivery
of shares, the shares shall be valued at the Fair Market Value of such shares on
the date of exercise. In addition, unless the Administrator determines otherwise
at the time of grant, payment of the Option Price and of Minimum Withholding
Taxes may be made by (i) full recourse promissory note (secured or unsecured),
payable on such terms and bearing such interest as the Administrator may
determine or (ii) delivery (on a form acceptable to the Administrator) of an
irrevocable direction to a securities broker to sell shares of Common Stock and
to deliver part of the sales proceeds to the Company in payment of the full
exercise price and Minimum Withholding Taxes and receipt of written confirmation
from the securities broker of receipt of such irrevocable direction, the number
of shares sold, the price at which sold and the date of sale.
(g) NONTRANSFERABILITY OF OPTIONS. Options are not transferable except by
will, by the laws of descent and distribution, or, with respect to options that
are not designated as Incentive Stock Options, pursuant to a domestic relations
order or under such other circumstances as the Administrator may determine.
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6. RESTRICTED STOCK AWARDS. Each Restricted Stock Award made under the
Plan shall contain the following terms, conditions and restrictions and such
additional terms, conditions and restrictions as may be determined by the
Administrator at the time of grant.
(a) RIGHTS WITH RESPECT TO SHARES OF STOCK. Upon written acceptance by the
Eligible Employee of restrictions and other terms and conditions described in
the Plan and in the instrument evidencing such Restricted Stock Award, the
Eligible Employee shall be a Holder, and the Company shall cause to be issued or
transferred to the name of the Holder a certificate or certificates for the
number of shares of Stock granted. From and after the Issue Date, the Holder
shall have absolute ownership of such shares of Stock, including the right to
vote and to receive dividends thereon, subject to the terms, conditions and
restrictions described in the Plan and in the instrument evidencing the grant of
such Restricted Stock Award.
(b) RESTRICTIONS ON TRANSFER. Shares covered by a Restricted Stock Award
may not be sold, assigned, pledged, transferred or otherwise conveyed in any
manner until the Vesting Date for such shares.
(c) VESTING. Unless otherwise determined by the Administrator, each
Restricted Stock Award shall Vest as to twenty-five percent (25%) of the Stock
covered by such grant on each of the first through fourth Vesting Dates which
occur following the related Grant Date of such Restricted Stock Award.
Notwithstanding the foregoing, the Administrator may accelerate the lapsing of
restrictions on a Restricted Stock Award, in whole or in part under such terms
and conditions as the Administrator deems appropriate.
(d) AUTOMATIC VESTING IN SPECIAL CIRCUMSTANCES. Any provisions herein to
the contrary notwithstanding, a Restricted Stock Award shall automatically
become Vested upon (a) the Death or Disability of the Holder or (b) the
occurrence of a Change in Control.
(e) AGREEMENT BY HOLDER REGARDING WITHHOLDING TAXES. Each Holder granted a
Restricted Stock Award shall represent in writing that such Holder acknowledges
that, with respect to each Restricted Stock Award held by such Holder,
(i) Minimum Withholding Taxes shall be due with respect to shares of Stock
covered by such award, (ii) payment of Minimum Withholding Taxes to the Company
is the responsibility of Holder and (iii) payment of such Minimum Withholding
Taxes may require a significant cash outlay by Holder.
(f) ELECTION TO RECOGNIZE GROSS INCOME IN THE YEAR OF GRANT. If any Holder
properly elects within thirty (30) days of the Grant Date to include in gross
income for federal income tax purposes an amount equal to the fair market value
of the shares of Stock on the Grant Date, such Holder shall pay in cash to the
Company in the calendar month of such Grant Date, or make arrangements
satisfactory to the Administrator to pay to the Company, any Minimum Withholding
Taxes required to be withheld with respect to such shares.
(g) CONSIDERATION. Recipients of Restricted Stock Awards made in treasury
shares shall not be required to pay any consideration to the Company. Recipients
of Restricted Stock Awards made in the form of previously unissued shares shall
be required to pay such minimum consideration, if any, as may be required by
applicable law. The Administrator shall determine the form of consideration at
the time of the award, which may include services rendered prior to the award.
(h) PERFORMANCE CONDITIONS. Any grant of Restricted Shares shall be
made subject to the Performance Condition described in this subsection 6(h)
or the Alternative Performance Condition described in subsection 6(i) in
addition to any vesting requirements imposed upon such grant. Such
Performance Condition shall operate as specified in this paragraph (h).
(1) As used in this paragraph (h), the following terms shall have the
indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes its written
certification of a Final Restricted Stock Award.
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EPS means fully diluted earnings per share, determined in accordance with
generally accepted accounting principles. For purposes of the foregoing
sentence, earnings shall mean income before extraordinary items, discontinued
operations and cumulative effect of changes in accounting principles and after
full accrual for the bonuses paid under this Plan.
EPS RATIO means the result obtained by dividing Preliminary EPS by Target
EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier and the
Original Restricted Stock Award.
MEASUREMENT YEAR means (a) in the case of a grant made in the first fiscal
quarter of a fiscal year, that fiscal year or (b) in the case of a grant made in
the second, third or fourth quarters of a fiscal year, the subsequent fiscal
year.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS Ratio is
greater than or equal to 0 and less than 0.9, (b) 1, if the EPS Ratio is greater
than or equal to 0.9, or (c) 0, if the EPS Ratio is less than 0.
NINE-MONTH PERIOD means the first three fiscal quarters of the Bonus Year.
ORIGINAL RESTRICTED STOCK AWARD means the number of shares initially granted
pursuant to a Restricted Stock Award made subject to a Performance Condition.
PRELIMINARY EPS means 1.334 multiplied by EPS for a Nine-Month Period.
TARGET EPS means the EPS goal for the Performance Period set with respect to
a Restricted Stock Award made subject to a Performance Condition.
(2) A Restricted Stock Award shall be subject to a Performance Condition
only if the Administrator makes such a determination on the Grant Date or if the
Holder consents thereto.
(3) If a Restricted Stock Award is made subject to a Performance
Condition, the Administrator shall, within the time permitted by section
162(m) of the Internal Revenue Code, determine the Target EPS for such award.
(4) After the public release by the Company of its unaudited results for the
third fiscal quarter of the Measurement Year, the Chief Financial Officer shall,
with respect to each Restricted Stock Award made subject to a Performance
Condition, (a) calculate the Preliminary EPS, (b) determine the Multiplier,
(c) calculate the Final Restricted Stock Award, and (d) deliver such calculation
to the Administrator.
(5) The Administrator shall, prior to the end of the Measurement Year,
review the information submitted by the Chief Financial Officer and certify, in
writing, each Final Restricted Stock Award.
(6) To the extent that a Final Restricted Stock Award is less than the
Original Restricted Stock Award, the number of shares of the Original Restricted
Stock Award representing the difference shall be forfeited by the Holder. The
Final Restricted Stock Award shall bear the same vesting schedule as the
Original Restricted Stock Award, and on each Vesting Date the percentage of the
Final Restricted Stock Award that vests shall be the same as the percentage of
the Original Restricted Stock Award that would have vested had no shares been
forfeited as a result of the performance condition.
(7) If all or a portion of a Restricted Stock Award made subject to a
Performance Condition shall vest prior to the Certification Date by reason of
death, Disability or a Change in Control, then the Performance Condition shall
be cancelled and none of such shares shall be subject to reduction or forfeiture
as provided by the Performance Condition. Such shares shall be released to
Holder in accordance with the terms of this plan relating to vested shares.
(8) If all or a portion of a Restricted Stock Award made subject to a
Performance Condition shall vest prior to the Certification Date for any reason
other than death, Disability or a Change in Control, no
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shares shall be released to the Holder until after the Certification Date. No
such vesting prior to the Certification Date shall in any way be deemed a
satisfaction, waiver or cancellation of the Performance Condition, and such
Restricted Stock Award shall remain subject to reduction and forfeiture as
provided by the Performance Condition.
(9) Once established, a Performance Condition may not be waived or
cancelled by the Administrator.
(i) ALTERNATIVE PERFORMANCE CONDITIONS. In lieu of the Performance
Condition described in subsection 6(h), any grant of Restricted Shares may be
made subject to an Alternative Performance Condition in addition to any
vesting requirements imposed upon such grant. Such Alternative Performance
Condition shall operate as specified in this paragraph (i).
(1) As used in this paragraph (i), the following terms shall have the
indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes its written
certification of a Final Restricted Stock Award.
ACTUAL EPS means fully diluted earnings per share for the Performance
Period, determined in accordance with generally accepted accounting principles.
For purposes of the foregoing sentence, earnings shall mean income before
extraordinary items, discontinued operations and cumulative effect of changes in
accounting principles and after full accrual for the bonuses paid under this
Plan.
EPS RATIO means the result obtained by dividing Actual EPS by Target EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier and the
Original Restricted Stock Award.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS Ratio is
greater than or equal to 0 and less than 0.9, (b) 1, if the EPS Ratio is greater
than or equal to 0.9, or (c) 0, if the EPS Ratio is less than 0.
ORIGINAL RESTRICTED STOCK AWARD means the number of shares initially granted
pursuant to a Restricted Stock Award made subject to an Alternative Performance
Condition.
PERFORMANCE PERIOD means the period of service to which the Alternative
Performance Condition relates.
TARGET EPS means the EPS goal set with respect to a Restricted Stock Award
made subject to an Alternative Performance Condition.
(2) A Restricted Stock Award shall be subject to an Alternative Performance
Condition only if the Administrator makes such a determination on the Grant Date
or if the Holder consents thereto.
(3) If a Restricted Stock Award is made subject to an Alternative
Performance Condition, the Administrator shall establish the Performance Period
and Target EPS for such award no later than the time permitted by
section 162(m) of the Internal Revenue Code.
(4) After the public release by the Company of its unaudited results for the
last fiscal quarter of the Performance Period, the Chief Financial Officer
shall, with respect to each Restricted Stock Award made subject to an
Alternative Performance Condition, (a) calculate the Actual EPS, (b) determine
the Multiplier, (c) calculate the Final Restricted Stock Award, and (d) deliver
such calculation to the Administrator.
(5) The Administrator shall review the information submitted by the Chief
Financial Officer and certify, in writing, each Final Restricted Stock Award.
(6) To the extent that a Final Restricted Stock Award is less than the
Original Restricted Stock Award, the number of shares of the Original Restricted
Stock Award representing the difference shall be forfeited by the Holder. The
Final Restricted Stock Award shall bear the same vesting schedule as the
Original Restricted Stock Award, and on each Vesting Date the percentage of the
Final Restricted Stock
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Award that vests shall be the same as the percentage of the Original Restricted
Stock Award that would have vested had no shares been forfeited as a result of
the Alternative Performance Condition.
(7) If all or a portion of a Restricted Stock Award made subject to an
Alternative Performance Condition shall vest prior to the Certification Date by
reason of death, Disability or a Change in Control, then the Alternative
Performance Condition shall be cancelled and none of such shares shall be
subject to reduction or forfeiture as provided by the Alternative Performance
Condition. Such shares shall be released to Holder in accordance with the terms
of this plan relating to vested shares.
(8) If all or a portion of a Restricted Stock Award made subject to an
Alternative Performance Condition shall vest prior to the Certification Date for
any reason other than death, Disability or a Change in Control, no shares shall
be released to the Holder until after the Certification Date. No such vesting
prior to the Certification Date shall in any way be deemed a satisfaction,
waiver or cancellation of the Alternative Performance Condition, and such
Restricted Stock Award shall remain subject to reduction and forfeiture as
provided by the Alternative Performance Condition.
(9) Once established, an Alternative Performance Condition may not be
waived or cancelled by the Administrator.
7. WITHHOLDING TAXES. In order to enable the Company to meet any
applicable foreign, federal (including FICA), state and local withholding tax
requirements, a Holder shall be required to pay the Minimum Withholding Taxes.
No share of stock will be delivered to any Holder until Minimum Withholding
Taxes have been paid. At the option of the Holder, withholding taxes may be paid
by any combination of (a) cash, (b) reduction in the number of shares
deliverable to Holder (in the case of an Option) or by surrendering a portion of
the Restricted Stock Award to the Company (in either case "Share Reduction"),
(c) delivery to the Company of other shares of Common Stock owned by Holder
("Share Delivery") or (d) any other means approved or ratified by the
Administrator. If withholding taxes are paid by Share Reduction or Share
Delivery, such shares shall be valued at the Fair Market Value as of the date of
exercise or vesting. A Holder may elect to have additional shares delivered
pursuant to Share Delivery above the amount required to satisfy Minimum
Withholding Taxes. However, total combined Share Reduction and Share Delivery
may not exceed the total taxes that Holder will have to pay (assuming Federal
and state taxes are imposed at his marginal rate) by reason of the exercise or
vesting. In addition, any use of Share Delivery in excess of Minimum Withholding
Taxes must by effected with shares that have been held at least six months. In
the event that Minimum Withholding Taxes are not paid by Holder, to the extent
permitted by law the Company shall have the right, but not the obligation, to
cause such withholding taxes to be satisfied by Share Reduction or by offsetting
such withholding taxes against amounts otherwise due from the Company to the
Holder. Notwithstanding the foregoing, in the event a Restricted Stock Award
vests by reason of the death of the Holder, Minimum Withholding Taxes shall
be paid by Share Reduction unless Holder's estate elects otherwise no later
than the day after vesting.
8. RESTRICTIVE LEGENDS; TRANSFER RESTRICTIONS; CUSTODY. So long as any
restrictions or obligations imposed pursuant hereto shall apply to a share of
Stock (including, but not limited to, the restrictions or obligations imposed
pursuant to Sections 5(f), 5(h), 6(b), 6(e), 6(f) and 7 hereof), each
certificate evidencing such share shall bear an appropriate legend referring to
the terms, conditions and restrictions. In addition, the Company may instruct
its transfer agent that shares of Stock evidenced by such certificates may not
be transferred without the written consent of the Company. Any attempt to
dispose of such shares of Stock in contravention of such terms, conditions and
restrictions shall be invalid. Certificates representing shares that have not
Vested or with respect to which Minimum Withholding Taxes have not been paid
will be held in custody by the Company or such bank or other institution
designated by the Administrator.
9. TERMINATION OF CONTINUOUS EMPLOYMENT. If the Holder's Continuous
Employment with the Company or any Subsidiary shall terminate for any reason,
then, with respect to any portion of a Grant that has not Vested prior to or
concurrently with such termination (a) in the case of an Option, all rights to
such portion that has not Vested shall terminate and (b) in the case of a
Restricted Stock Award, all rights to the shares covered by any portion thereof
that has not Vested shall be forfeited; provided, however, that the
Administrator, in its sole discretion within ninety (90) days of such
termination of Continuous Employment, may notify the Holder in writing that the
Holder's rights in such portion that has not Vested will not terminate or be
forfeited and that the Holder shall continue to be the owner thereof, subject to
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such continuing restrictions as the Administrator may prescribe in such notice.
Options then held by the Holder which are Vested at the date of termination
shall continue to be exercisable by the Holder, or, if applicable, Holder's
estate, until the earlier of 90 days after such date or the expiration of such
Options in accordance with their terms. Notwithstanding the foregoing, (i) the
Administrator may in its sole discretion extend the period during which an
Option may be exercised following termination of employment at any time,
provided that any such extension does not exceed the Option's normal termination
date, and (ii) if exercise of an Option during the 90-day period described in
the previous sentence would subject the Holder to liability under Section 16 of
the Exchange Act, such Option shall be exercisable until the earliest of
(a) its normal termination date and (b) seven months after the last transaction
in Common Stock by the Holder prior to termination.
10. ADMINISTRATION. The Plan shall be administered by the Administrator,
which shall have full power and authority to administer and interpret the Plan
and to adopt such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan as the Administrator deems necessary or
advisable. The Administrator's powers include, but are not limited to (subject
to the specific limitations described herein), authority to determine the
employees who shall receive Grants under the Plan, determine the size and
applicable terms and conditions of Grants to be made to such employees,
determine the time when Grants will be made and authorize Grants to Eligible
Employees.
The Administrator's interpretations of the Plan, and all actions taken and
determinations made by the Administrator concerning any matter arising under or
with respect to the Plan or any Grants hereunder, shall be final, binding and
conclusive on all interested parties. The Administrator may delegate ministerial
functions hereunder, such delegation to be subject to such terms and conditions
as the Administrator in its discretion shall determine. The Administrator may as
to all questions of accounting rely conclusively upon any determinations made by
the independent public accountants of the Company.
11. COMPLIANCE WITH SECURITIES LAWS. No Option may be exercised and no
Stock may be issued pursuant to an Option or transferred pursuant to a
Restricted Stock Award unless the Administrator shall determine that such
exercise, issuance or transfer complies with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act, applicable
state securities laws, and rules and regulations promulgated under each of the
foregoing, and the requirements of any stock exchange upon which the Stock may
then be listed or quotation system upon which the Stock may be quoted, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance. If the Stock subject to this Plan is not registered under the
Securities Act and under applicable state securities laws, the Administrator may
require that the Holder deliver to the Company such documents as counsel for the
Company may determine are necessary or advisable in order to substantiate
compliance with applicable securities laws and the rules and regulations
promulgated thereunder.
12. ADJUSTMENT FOR CHANGE IN STOCK SUBJECT TO PLAN. In the event of any
change in the outstanding shares of Common Stock by reason of any stock split,
stock dividend, recapitalization, merger, consolidation, combination, spin-off
or exchange of shares or other similar corporate change, appropriate adjustments
shall be made by the Administrator in the number of shares of Stock subject to
this Plan, the number of shares of Stock covered by each Grant and, in the case
of Options, the Option Price of such Option. Any such adjustment shall be
determined by the Administrator in its sole discretion, which determination
shall be conclusive and binding for all purposes of the Plan. Any new or
additional Stock to which a Holder of a Restricted Stock Award may be entitled
shall be subject to all the terms and conditions set forth in Section 6 of this
Plan. If fractional shares become due to any Holder as a result of any
adjustment, the Company may, at its option, pay cash in lieu thereof.
13. NO RIGHTS TO GRANTS OR EMPLOYMENT. No employee or other person shall
have any claim or right to a Grant under the Plan. Receipt of a Grant under the
Plan shall not give an employee any rights to receive any other Grant under the
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any employee any right to be retained in the employ of the Company or any
Subsidiary.
<PAGE>
14. RIGHTS AS SHAREHOLDER. A Holder under the Plan shall have no rights as
a holder of Common Stock with respect to Options granted hereunder, unless and
until certificates for shares of Common Stock are issued to such Holder.
15. PLAN UNFUNDED. The Plan shall be unfunded. Except for reserving a
sufficient number of authorized shares to the extent required by law to meet the
requirements of the Plan, the Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any grant under the Plan.
16. NO ASSIGNMENT. Except as specifically provided by law (including the
laws of descent and distribution) and elsewhere herein, no right or benefit
under, or interest in, the Plan shall be subject to assignment, and no such
right, benefit or interest shall be subject to attachment or legal process for
or against Holder or his or her beneficiaries, as the case may be.
17. GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
18. INDEMNIFICATION OF ADMINISTRATOR. Members of the group constituting
the Administrator shall be indemnified for actions with respect to the Plan to
the fullest extent permitted by the Certificate of Incorporation, as amended,
and the By-laws of the Company and by the terms of any indemnification agreement
that has been or shall be entered into from time to time between the Company and
any such persons.
19. HEADINGS. The headings used in this Plan are for convenience only, and
shall not be used to construe the terms and conditions of the Plan.
20. AMENDMENT. The Administrator may, at any time, amend, suspend or
terminate the Plan, in whole or in part, provided that no such action shall
adversely affect any rights or obligations with respect to any Grants
theretofore made hereunder, provided however, that stockholder consent is
required for any amendment, other than an amendment pursuant to Section 12
hereof, that would (i) increase the number of shares available annually under
the Plan (as specified in Section 3), (ii) increase the maximum number of
shares that may be granted in any calendar year to any individual (as
specified in Section 4), (iii) reduce the percentage expressed in Section
5(a), or (iv) increase the time period specified in Section 5(b). The
Administrator may amend or cancel the terms and conditions of any outstanding
Grant, determine whether cash will be paid or Grants will be made in
replacement of, or as alternatives to, outstanding Grants or grants under any
other incentive compensation plan; provided, however, that no such change
shall be adverse to the Holder thereof without such Holder's consent, and,
except pursuant to Section 12 hereof, no such change shall reduce the
exercise price of any Option.
21. EFFECTIVE DATE, TERMINATION. This Plan shall become effective upon
approval by the stockholders of the Company, and shall remain in effect until
terminated by the Board of Directors or Administrator. No Grants may be made
hereunder subsequent to December 31, 2005. Notwithstanding anything to the
contrary herein, the preceding sentence may not be amended without the
consent of the stockholders of the Company.
