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C-COR.NET CORP.
INCENTIVE PLAN
(as amended and restated effective August 15, 2000)
ARTICLE I
Purpose
The purpose of the C-COR.net Corp. Incentive Plan (the "Plan") is to
enable C-COR.net Corp. (the "Company") to offer certain officers, key employees
and directors of the Company equity interests in the Company and other incentive
awards, including performance-based stock incentives, thereby attracting,
retaining and rewarding such persons, and strengthening the mutuality of
interests between such persons and the Company's shareholders.
ARTICLE II
Definitions
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Award" shall mean an award under this Plan of Stock Options,
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Restricted Stock, Performance Shares or Performance Units.
2.2 "Board" shall mean the Board of Directors of the Company.
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2.3 "Change of Control" shall mean the occurrence of any one
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of the following:
(a) Any person or group of persons acting in concert shall have
acquired ownership of or the right to vote or to direct the voting of shares of
capital stock of the Company representing 30% or more of the total voting power
of the Company, or
(b) The Company shall have merged into or consolidated with
another corporation, or merged another corporation into the Company, on a basis
whereby less than 50% of the total voting power of the surviving corporation is
represented by shares held by former shareholders of the Company prior to such
merger or consolidation, or
(c) The Company shall have sold more than 50% of its assets to
another corporation or other entity or person, or
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(d) As the result of, or in connection with, any cash tender or
exchange offer, merger or other business combination, sale of assets or
contested election, the persons who were Directors of the Company before such
transaction cease to constitute a majority of Directors of the Company.
2.4 "Code" shall mean the Internal Revenue Code of 1986, as amended.
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2.5 "Common Stock" shall mean the Common Stock, par value $.05 per
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share, of the Company.
2.6 "Director" shall mean a member of the Board.
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2.7 "Disability" shall mean Total Disability as defined in the
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Company's long-term disability plan.
2.8 "Fair Market Value" for purposes of this Plan, unless otherwise
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required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, as of any date, the closing sale price of a share of
Common Stock for the preceding business day as reported on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or, if not listed or traded on any such exchange, the Nasdaq Stock
Market ("Nasdaq") , or, if such sale price is not available, the average of the
bid and asked prices per share reported on Nasdaq for such day, or, if such
quotations are not available, the fair market value as determined by the Board,
which determination shall be conclusive.
2.9 "Incentive Stock Option" shall mean any Stock Option awarded
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under this Plan intended to be and designated as an "Incentive Stock Option"
within the meaning of Section 422 of the Code.
2.10 "Non-Qualified Stock Option" shall mean any Stock Option
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awarded under this Plan that is not an Incentive Stock Option.
2.11 "Participant" shall mean an individual to whom an Award has
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been made pursuant to this Plan.
2.12 "Performance Cycle" shall have the meaning set forth in Section
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9.1.
2.13 "Performance Period" shall have the meaning set forth in
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Section 8.1.
2.14 "Performance Share" shall mean an Award made pursuant to
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Article VIII of this Plan of the right to receive Common Stock at the end of a
specified Performance Period if specified performance goals are met.
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2.15 "Performance Unit" shall mean an Award made pursuant to Article
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IX of this Plan of the right to receive a fixed dollar amount, payable in cash
or Common Stock or a combination of both, at the end of a specified Performance
Cycle if specified performance goals are met.
2.16 "Restricted Stock" shall mean an Award of shares of Common
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Stock under this Plan that is subject to forfeiture under Article VII.
2.17 "Restriction Period" shall have the meaning set forth in
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Section 7.2 (c) .
2.18 "Retirement" shall mean retirement from employment with the
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Company or one of its subsidiaries, provided that the employee at such time has
been employed by the Company or a subsidiary of the Company for at least five
years and is at least 55 years old.
2.19 "Stock Option" or "Option" shall mean any option to purchase
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shares of Common Stock granted pursuant to Article VI.
2.20 "Termination of Employment" shall mean (a) termination of an
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employee's employment with the Company and all of its subsidiaries for reasons
other than a military or personal leave of absence granted by the Company or (b)
the date on which a Director ceases to be a member of the Board for any reason.
ARTICLE III
Administration
3.1 Administration. The Plan shall be administered and interpreted
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by the Board; provided, however, that the Board may delegate this responsibility
to a committee comprised of two or more members of the Board.
3.2 Awards. The Board shall have full authority to grant, pursuant
to the terms of this Plan, to persons eligible under Article V: (i) Stock
Options, (ii) Restricted Stock, (iii) Performance Shares and (iv) Performance
Units. In particular, the Board shall have the authority:
(a) to select the persons eligible under Article V to whom Stock
Options, Restricted Stock, Performance Shares and Performance Units may from
time to time be granted hereunder;
(b) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options, Restricted Stock, Performance Shares and
Performance Units, or any combination thereof, are to be granted hereunder to
one or more persons eligible under Article V;
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(c) to determine whether Stock Options are to be Incentive Stock
Options or Non-Qualified Stock Options;
(d) to determine the number of shares of Common Stock to be
covered by each Award granted hereunder; and
(e) to determine the terms and conditions, not inconsistent with
the terms of this Plan, of any Award granted hereunder (including, but not
limited to, the term, the option or purchase price, any restriction or
limitation, any vesting schedule or acceleration thereof, or any forfeiture
restrictions or waiver thereof, regarding any Award and the shares of Common
Stock relating thereto, based on such factors as the Board shall determine, in
its sole discretion).
3.3 Guidelines. Subject to Article X hereof, the Board shall have
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the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan as it shall, from time to time, deem
advisable; to interpret the terms and provisions of this Plan and any Award
granted under this Plan (and any agreements relating thereto); and to otherwise
supervise the administration of this Plan. The Board may correct any defect,
supply any omission or reconcile any inconsistency in this Plan or in any Award
granted in the manner and to the extent it shall deem necessary to carry this
Plan into effect. Notwithstanding the foregoing, no action of the Board under
this Section 3.3 shall impair the rights of any Participant without the
Participant's consent.
3.4 Decisions Final. Any decision, interpretation or other action
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made or taken in good faith by the Board arising out of or in connection with
the Plan shall be final, binding and conclusive on the Company, all Participants
and their respective heirs, executors, administrators, successors and assigns.
ARTICLE IV
Share Limitation
4.1 Shares. The maximum aggregate number of shares of Common Stock
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that may be issued under this Plan shall be 5,000,000 shares (subject to any
increase or decrease pursuant to Section 4.2), plus an additional number of
shares remaining available for grant under the 1988 Stock Option Plan and the
1989 Non-Employee Directors' Non-Qualified Stock Option Plan as of the date
hereof. The shares of Common Stock issued under this Plan may be either
authorized and unissued Common Stock or issued Common Stock reacquired by the
Company. If any Option granted under this Plan shall expire, terminate or be
cancelled for any reason without having been exercised in full, the number of
unpurchased shares shall again be available
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for the purposes of the Plan. Further, if any shares of Restricted Stock granted
hereunder are forfeited or any Award of Performance Shares terminates without
the delivery of such shares, the shares subject to such Award, to the extent of
such forfeiture or termination, shall again be available under this Plan.
4.2 Changes. In the event of any merger, reorganization,
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consolidation, recapitalization, dividend (other than a regular cash dividend),
stock split, or other change in corporate structure affecting the Common Stock,
such substitution or adjustment shall be made in the maximum aggregate number of
shares that may be issued under this Plan, in the maximum aggregate number of
shares with respect to which Options or Performance Shares may be granted under
this Plan to any individual during any calendar year, in the number and option
price of shares subject to outstanding Options granted under this Plan, and in
the number of shares subject to other outstanding Awards granted under this
Plan, as may be determined to be appropriate by the Board, in its sole
discretion, provided that the number of shares subject to any Award shall always
be a whole number.
ARTICLE V
Eligibility
5.1 Employees. Officers and other employees of the Company and its
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subsidiaries are eligible to be granted Awards under this Plan.
5.2 Directors. Directors of the Company who are not employees of the
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Company or any of its subsidiaries are eligible to be granted Awards other than
Incentive Stock Options under this Plan.
ARTICLE VI
Stock Options
6.1 Options. Each Stock Option granted under this Plan shall either
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be an Incentive Stock Option or a Non-Qualified Stock Option.
6.2 Grants. The Board shall have the authority to grant to any
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person, to the extent eligible under Article V, one or more Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options; provided,
however, (a) that no individual may be granted Stock Options for more than
750,000 shares of Common Stock (subject to any increase or decrease pursuant to
Section 4.2) during any calendar year, and (b) that no Incentive Stock Options
shall be granted to any individual owning shares of Company stock representing
10% or more of the total combined voting power of all classes of stock of the
Company and its subsidiaries (a "10 Percent Owner"), unless, at the time the
Incentive Stock Option is granted, the option price is at least 110% of the Fair
Market Value of the Common Stock subject to the
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Option on the date of grant and the Option states that it is not exercisable
after the expiration of five (5) years from the date of its grant. To the extent
that any Stock Option does not qualify as an Incentive Stock Option (whether
because of its provisions or the time or manner of its exercise or otherwise),
such Stock Option or the portion thereof which does not qualify as an Incentive
Stock Option shall constitute a separate Non-Qualified Stock Option.
6.3 Incentive Stock Options. Anything in the Plan to the contrary
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notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify the Plan under Section
422 of the Code, or, without the consent of the Participants affected, to
disqualify any Incentive Stock Option under such Section 422.
6.4 Terms of Options. Options granted under this Plan shall be
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subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of this Plan, as the Board
shall deem desirable:
(a) Stock Option Certificate. Each Stock Option shall be
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evidenced by, and subject to the terms of, a Stock Option Certificate executed
by the Company. The Stock Option Certificate shall specify the number of shares
of Common Stock subject to the Stock Option, the option price, the option term,
whether the Option is an Incentive Stock Option or a Non-Qualified Stock Option,
and the other terms and conditions applicable to the Stock Option.
(b) Option Price. The option price per share of Common Stock
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purchasable upon exercise of a Stock Option shall be determined by the Board at
the time of grant but (subject to Section 6.2(b) with respect to a 10 Percent
Owner) shall not be less than 100% of the Fair Market Value of a share of Common
Stock on the date of grant.
(c) Option Term. Subject to Section 6.2(b), the term of each
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Stock option shall be fixed by the Board, but no Stock Option shall be
exercisable more than eight (8) years after the date it is granted.
(d) Exercisability. Stock Options shall be exercisable at such
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time or times and subject to such terms and conditions as shall be determined by
the Board at the time of grant. The Board may waive any installment exercise or
waiting period provisions, in whole or in part, at any time after the date of
grant, based on such factors as the Board shall, in its sole discretion, deem
appropriate.
(e) Method of Exercise. Subject to such installment exercise
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and waiting period provisions as may be imposed by the Board, Stock Options may
be exercised in whole or in part at any time during the option term, by giving
written notice of exercise to the Company specifying the number of shares of
Common Stock to be purchased and the option price therefor. Such notice shall be
accompanied by payment in full of the option price in such form as the Board may
accept and, if requested, by the representation described in Section 12.4.
Unless otherwise determined by the Board in its sole discretion at or after
grant, payment in full
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or in part may be made in the form of Common Stock duly owned by the Participant
(and for which the Participant has good title free and clear of any liens and
encumbrances), based on the Fair Market Value of the Common Stock on the date of
exercise, or through a broker-assisted cashless exercise. Upon payment in full
of the option price, as provided herein, a stock certificate or stock
certificates representing the number of shares of Common Stock to which the
Participant is entitled shall be issued and registered in the name of, and
delivered to, the Participant.
(f) Death. Upon a Participant's death, unless otherwise
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determined by the Board at the time of grant, all Stock options held by such
Participant shall become fully exercisable and may thereafter be exercised by
the legal representative of the Participant's estate for a period of one year
from the date of the Participant's death or until the expiration of the stated
term of such Stock Option, whichever period is shorter.
(g) Disability. Unless otherwise determined by the Board at
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the time of grant, upon a Participant's Termination of Employment as a result of
a Disability (as determined by the Board, in its sole discretion), any Stock
Option held by such Participant that was exercisable on the date of such
Termination of Employment may thereafter be exercised by the Participant for a
period of one year from the date of such Termination of Employment or until the
expiration of the stated term of such Stock Option, whichever period is shorter;
provided, however, that, if the Participant dies within such one-year period,
any unexercised Stock option held by such Participant shall thereafter be
exercisable by the legal representative of the Participant's estate to the
extent to which it was exercisable at the time of death, for a period of one
year from the date of the Participant's death or until the expiration of the
stated term of such Stock Option, whichever period is shorter. In the event of
Termination of Employment as a result of a Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
(h) Retirement. Upon a Participant's Retirement, unless
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otherwise determined by the Board at the time of grant, all Stock Options held
by such Participant shall become fully exercisable and may thereafter be
exercised for a period of one year from the date of the Participant's Retirement
or until the expiration of the stated term of such Stock Option, whichever
period is shorter. In the event of Retirement, if an Incentive Stock Option is
exercised after the expiration periods that apply for purposes of Section 422 of
the Code, such Stock Option will thereafter be treated as a Non-Qualified Stock
Option.
(i) Termination of Employment. Unless otherwise determined by
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the Board at the time of grant, upon a Participant's Termination of Employment
for any reason other than death, Disability or Retirement, any Stock Option held
by such Participant that was exercisable on the date of such Termination of
Employment may thereafter be exercised by the Participant for a period of 30
days or until the expiration of the stated term of such Stock Option,
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whichever period is shorter. Any Stock Option that was not exercisable on the
date of such Termination of Employment shall terminate as of such date.
(j) Incentive Stock Option Limitations. To the extent that the
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aggregate Fair Market Value (determined as of the date of grant) of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by the Participant during any calendar year under the Plan and/or any
other stock option plan of the Company or any subsidiary or parent corporation
(within the meaning of Section 424 of the Code) exceeds $100,000, such Options
shall be treated as Options which are not Incentive Stock Options.
Should any of the foregoing provisions not be necessary in order
for the Stock Options to qualify as Incentive Stock Options, or should any
additional provisions be required, the Board may amend the Plan accordingly,
without the necessity of obtaining the approval of the shareholders of the
Company.
(k) Special Terms Reflecting Foreign Tax Law. An Option issued
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with respect to a Participant which, because of the Participant=s residence,
place of work or citizenship, will be subject to taxation by a country other
than the United States may contain such special terms and/or conditions, which
are not inconsistent with paragraphs (a), (b) and (c) of this Section 6.4, as
may be considered desirable by the Board to improve the tax efficiency of the
Stock Option under the tax laws of such country. Such special terms or
conditions may include, without limitation, provisions to render the Stock
Option vested for foreign tax purposes at grant but imposing penalties or
restrictions in the event the Participant were to exercise the Option and leave
the Company or an affiliate prior to satisfying a designated waiting period (an
"early exercise restriction"). Such early exercise restriction may include,
without limitation, a financial penalty, the holding of exercised shares by the
Company in escrow pending satisfaction of the waiting period, or the granting of
a Company right to re-purchase the shares at the exercise price from a
Participant who terminates employment with the Company prior to the end of the
waiting period.
(l) Board Discretion. Notwithstanding any other provision of
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this Plan, upon a Participant's Termination of Employment for any reason
(including death, Disability or Retirement), the Board may, in its sole
discretion, accelerate the exercisability of any outstanding Stock option held
by such Participant and/or extend the post-termination exercise periods set
forth in subsections (f), (g), (h) and (i) of this Section 6.4, provided that
such post-termination exercise period may not extend beyond the expiration of
the stated term of such Stock Option.
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ARTICLE VII
Restricted Stock
7.1 Awards of Restricted Stock. The Board shall have the authority
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to grant Restricted Stock to any person eligible under Article V. The Board
shall determine to whom, and the time or times at which, grants of Restricted
Stock will be made, the number of shares to be included in each Award, the time
or times within which such Awards may be subject to forfeiture, the vesting
schedule and rights to acceleration thereof, and the other terms and conditions
of the Awards, in addition to those set forth in Section 7.2.
The provisions of Restricted Stock Awards need not be the same with
respect to each Participant, and such Awards to individual Participants need not
be the same in subsequent years.
7.2 Terms and Conditions. Restricted Stock awarded pursuant to
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this Article VII shall be subject to the following terms and conditions and such
other terms and conditions, not inconsistent with the terms of this Plan, as the
Board shall deem desirable:
(a) Award Certificate. Each Restricted Stock Award shall be
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evidenced by, and subject to the terms of, a Restricted Stock Award Certificate
executed by the Company. The Restricted Stock Award Certificate shall specify
the number of shares of Common Stock subject to the Award, the time or times
within which such Restricted Stock is subject to forfeiture and the other terms,
conditions and restrictions applicable to such Award.
(b) Stock Certificates. When a Participant receives a
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Restricted Stock Award, a stock certificate or stock certificates representing
the number of shares of Common Stock covered by such Restricted Stock Award
shall be issued and registered in the name of the Participant. Such stock
certificates shall be held in custody by the Company as long as the Restricted
Stock is subject to forfeiture. When a Restricted Stock Award, or any portion
thereof, ceases to be subject to forfeiture, the stock certificate or stock
certificates representing such shares shall be released from custody and
delivered to the Participant. The Participant shall have all of the rights of a
holder of Common Stock with respect to shares subject to a Restricted Stock
Award, including the right to vote such shares and to receive dividends thereon,
except that the Participant shall not be permitted to sell, transfer, pledge or
assign shares of Restricted Stock as long as such shares are held in custody by
the Company.
(c) Restriction Period. Subject to the provisions of this Plan
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and the Restricted Stock Award Certificate, shares of Restricted Stock will be
forfeited to the Company upon a Participant's Termination of Employment during a
period set by the Board commencing with the date of such Award (the "Restriction
Period"). Subject to the provisions of this Plan, the Board, in its sole
discretion, may provide for the lapse of such restrictions in installments. The
Board may waive such restrictions, in whole or in part, at any time after the
date of grant, based on such factors as the Board shall, in its sole discretion,
deem appropriate.
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(d) Termination of Employment. Subject to the provisions of
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this Plan and the Restricted Stock Award Certificate, upon a Participant's
Termination of Employment during the Restriction Period due to death or
Disability or Retirement, restrictions will lapse with respect to a percentage
of the Restricted Stock Award granted to the Participant that is equal to the
percentage of the Restriction Period that has elapsed as of the date of the
Participant's Termination of Employment, and stock certificates representing
such shares of Common Stock shall be released from custody and delivered to the
Participant or the Participant's estate, as the case may be. Upon a
Participant's Termination of Employment for any reason other than death,
Disability or Retirement, all outstanding Restricted Stock Awards shall be
forfeited to the Company.
(e) Distributions. In the event of a dividend or distribution
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payable in stock or a reclassification, stock split or split-up, the shares
issued or declared in respect of Restricted Stock shall be subject to the same
terms and conditions relating to forfeiture as the Restricted Stock to which
they relate.
(f) Special Terms Reflecting Foreign Tax Law. Restricted Stock
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granted with respect to a Participant which, because of the Participant's
residence, place of work or citizenship, will be subject to taxation by a
country other than the United States may contain such special terms and/or
conditions as may be considered desirable by the Board to improve the tax
efficiency of the grant, vesting and/or award of Restricted Stock under the tax
laws of such country.
ARTICLE VIII
Performance Shares
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8.1 Award of Performance Shares. The Board shall have the
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authority to grant Performance Shares to any person eligible under Article V.
The Board shall determine the persons to whom, and the time or times at which,
Performance Shares shall be awarded, the number of Performance Shares to be
included in each Award, the duration of the period (the "Performance Period")
during which, and the conditions under which, receipt of the shares of Common
Stock will be deferred, and the other terms and conditions of the Award in
addition to those set forth in Section 8.2.
The provisions of Performance Share Awards need not be the same with
respect to each Participant, and such Awards to individual Participants need not
be the same in subsequent years.
8.2 Terms and Conditions. Performance Shares awarded pursuant to
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this Article VIII shall be subject to the following terms and conditions and
such other terms and conditions, not inconsistent with the terms of this Plan,
as the Board shall deem desirable:
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(a) Conditions. The Board, in its sole discretion, shall
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specify the Performance Period during which, and the conditions under which, the
receipt of shares of Common Stock covered by the Performance Share Award will be
deferred. The receipt of shares of Common Stock pursuant to a Performance Share
Award shall be conditioned upon the attainment of one or more pre-established
objective performance goals, which if applicable shall be established in
accordance with the requirements of Section 162(m) of the Code and the
regulations promulgated thereunder. Such goals must be established by the Board
in writing not later than 90 days after the commencement of the Performance
Period, provided that the outcome is substantially uncertain at the time the
goal is established. The performance goals may be based on the Company's stock
price, return on assets, return on capital employed, return on shareholders'
equity, earnings, earnings per share, total shareholder return, sales, costs, or
such other performance goals as may be established by the Board from time to
time.
(b) Award Certificate. Each Performance Share Award shall be
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evidenced by, and subject to the terms of, a Performance Share Certificate
executed by the Company. The Performance Share Certificate shall specify the
number of shares of Common Stock subject to the Award, the applicable
Performance Period, the applicable performance goals, and the other terms and
conditions applicable to such Award.
(c) Stock Certificates. If the Board determines, after the
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expiration of the Performance Period, that the performance goals specified in
the Performance Share Certificate and all other material terms of the Award have
been satisfied, stock certificates representing the number of shares of Common
Stock covered by the Performance Share Award shall be issued and registered in
the name of, and delivered to, the Participant.
(d) Termination of Employment. Unless otherwise determined by
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the Board at the time of grant, the Performance Shares will be forfeited upon a
Participant's Termination of Employment during the Performance Period for any
reason (including death, Disability or Retirement).
(e) Special Terms Reflecting Foreign Tax Law. Performance Share
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Awards with respect to a Participant which, because of the Participant's
residence, place of work or citizenship, will be subject to taxation by a
country other than the United States may contain such special terms and/or
conditions as may be considered desirable by the Board to improve the tax
efficiency of the grant, deferred and/or award of Performance Shares under the
tax laws of such country.
8.3 Individual Limit. The maximum number of shares of Common Stock
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that may be subject to Performance Share Awards granted to any individual during
any calendar year shall be 100,000 shares (subject to any increase or decrease
pursuant to Section 4.2).
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ARTICLE IX
Performance Units
9.1 Award of Performance Units. The Board shall have the authority
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to grant Performance Units to any person eligible under Article V. The Board
shall determine the persons to whom, and the time or times at which, Performance
Units shall be awarded, the number of Performance Units to be included in each
Award, the duration of the period (the "Performance Cycle") during which, and
the conditions under which, a Participant's right to Performance Units will be
vested, the ability of Participants to defer the receipt of payment of such
Units, and the other terms and conditions of the Award in addition to those set
forth in Section 9.2.
A Performance Unit shall have a fixed dollar value.
The provisions of Performance Unit Awards need not be the same with respect
to each Participant, and such Awards to individual Participants need not be the
same in subsequent years.
9.2 Terms and Conditions. The Performance Units awarded pursuant to
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this Article IX shall be subject to the following terms and conditions and such
other terms and conditions, not inconsistent with the terms of this Plan, as the
Board shall deem desirable:
(a) Conditions. The Board, in its sole discretion, shall
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specify the Performance Cycle during which, and the conditions under which, the
Participant's right to Performance Units will be vested. The vesting of
Performance Units shall be conditioned upon the attainment of one or more pre-
established objective performance goals, which if applicable shall be
established in accordance with the requirements of Section 162(m) of the Code
and the regulations promulgated thereunder. Such goals must be established by
the Board in writing not later than 90 days after the commencement of the
Performance Cycle, provided that the outcome is substantially uncertain at the
time the goal is established. The performance goals may be based on the
Company's stock price, return on assets, return on capital employed, return on
shareholders' equity, earnings, earnings per share, total shareholder return,
sales, costs, or such other objective performance goals as may be established by
the Board from time to time.
(b) Award Certificate. Each Performance Unit Award shall be
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evidenced by, and subject to the terms of, a Performance Unit Certificate
executed by the Company. The Performance Unit Certificate shall specify the
dollar value of the Award, the applicable Performance Cycle, the applicable
performance goals, and the other terms and conditions applicable to such Award.
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(c) Vesting; Payment. If the Board determines, after the
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expiration of the Performance Cycle, that the performance goals specified in the
Performance Unit Certificate and all other material terms of the Award have been
satisfied, the Performance Units will be vested and the Participant will receive
payment of the amount specified in the Performance Unit Certificate as soon as
practicable thereafter. Payment may be made in cash, shares of Common Stock or
a combination of both, as determined by the Board, in its sole discretion.
(d) Termination of Employment. Unless otherwise determined by
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the Board at the time of grant, the Performance Units will be forfeited upon a
Participant's Termination of Employment during the Performance Cycle for any
reason (including death, Disability or Retirement).
(e) Special Terms Reflecting Foreign Tax Law. Performance Unit
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Awards with respect to a Participant which, because of the Participant's
residence, place of work or citizenship, will be subject to taxation by a
country other than the United States may contain such special terms and/or
conditions as may be considered desirable by the Board to improve the tax
efficiency of the grant, vesting and/or payment of Performance Unit under the
tax laws of such country.
9.3 Individual Limit. The maximum dollar amount of Performance Unit
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Awards that may be granted to any individual during any calendar year shall be
$4,000,000.
ARTICLE X
Termination or Amendment
10.1 Termination or Amendment of Plan. The Board may at any time
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amend, discontinue or terminate this Plan or any part hereof (including any
amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement referred to in Article XII); provided, however, that,
unless otherwise required by law, the rights of a Participant with respect to
Awards granted prior to such amendment, discontinuance or termination may not be
impaired without the consent of such Participant and, provided further, that the
Company will seek the approval of the Company's shareholders for any amendment
if such approval is necessary to comply with the Code, Federal or state
securities law or any other applicable rules or regulations.
10.2 Amendment of Awards. The Board may amend the terms of any Award
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previously granted, prospectively or retroactively, but, subject to Article IV,
no such amendment or other action by the Board shall impair the rights of any
holder without the holder's consent. The Board may also substitute new Stock
Options for previously granted Stock Options having higher option prices.
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ARTICLE XI
Unfunded Plan
11.1 Unfunded Status of Plan. This Plan is intended to constitute an
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"unfunded" plan for incentive and deferred compensation. With respect to any
payment not yet made to a Participant by the Company, nothing contained herein
shall give any such Participant any rights that are greater than those of a
general creditor of the Company.
ARTICLE XII
General Provisions
12.1 Nonassignment. Except as otherwise provided in this Plan,
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Awards made hereunder and the rights and privileges conferred thereby shall not
be sold, transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise), and shall not be subject to execution,
attachment or similar process. Upon any attempt to sell, transfer, assign,
pledge, hypothecate or otherwise dispose of such Award, right or privilege
contrary to the provisions hereof, or upon the levy of any attachment or similar
process thereon, such Award and the rights and privileges conferred hereby shall
immediately terminate and the Award shall immediately be forfeited to the
Company.
12.2 Change of Control. In the event of a Change of Control, all
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outstanding Stock Options shall immediately become fully exercisable and
restrictions will lapse with respect to a percentage of each outstanding
Restricted Stock Award equal to the percentage of the Restriction Period that
has elapsed as of the date of the Change of Control. Stock certificates
representing the Common Stock covered by any outstanding Restricted Stock Award
as to which restrictions have lapsed shall be released from custody and
delivered to the Participants as soon as practicable following the Change of
Control. Stock certificates representing the Common Stock covered by any
outstanding Stock Option shall be issued and registered in the name of, and
delivered to, the Participants as soon as practicable following exercise of such
option and payment by the Participant of the option price and, if requested,
delivery of the representation described in Section 12.4. In the event of a
Change in Control, outstanding Performance Share Awards and Performance Unit
Awards shall be considered vested and all conditions therefore satisfied and, as
the case may be, stock certificates representing the number of shares of Common
Stock covered by the Performance Share Awards shall be issued and registered in
the name of, and delivered to, the Participants, and the cash (and stock
certificates, if applicable) representing the Performance Unit Awards shall be
paid to the Participants (or in the case of stock certificates, shall be issued
and registered in the name of, and delivered to, the Participants) in each case
as soon as practicable following the Change in Control.
12.3 Rights as Shareholder. A Participant shall not be deemed to be
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the holder of Common Stock, or to have the rights of a holder of Common Stock,
with respect to shares subject to an Award unless and until stock certificates
representing such shares of
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Common Stock have been issued and registered in the name of such Participant.
12.4 Legend. The Board may require each person acquiring shares
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pursuant to an Award under the Plan to represent to the Company in writing that
the Participant is acquiring the shares without a view to distribution thereof.
The stock certificates representing such shares may include any legend that the
Board deems appropriate to reflect any restrictions on transfer.
All certificates representing shares of Common Stock delivered under
the Plan shall be subject to such stock transfer orders and other restrictions
as the Board may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange or
stock market on which the Common Stock is then listed or traded, any applicable
Federal or state securities law, and any applicable corporate law, and the Board
may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
12.5 Other Plans. Nothing contained in this Plan shall prevent the
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Board from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
12.6 No Right to Employment. Neither this Plan nor the grant of any
----------------------
Award hereunder shall give any Participant or other person any right with
respect to continuance of employment by the Company or any subsidiary, nor shall
there be a limitation in any way on the right of the Company or a subsidiary to
terminate a Participant's employment at any time. Neither this Plan nor the
grant of any Award hereunder shall give any Director any right to continue as a
member of the Board or obligate the Company to nominate any Director for re-
election by the Company's shareholders.
12.7 Withholding of Taxes. The Company shall have the right to
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reduce the number of shares of Common Stock otherwise deliverable pursuant to
this Plan by an amount that would have a Fair Market Value equal to the amount
of all Federal, state and local taxes required to be withheld, based upon the
tax rates then in effect, or to deduct the amount of such taxes from any cash
payment to be made to a Participant, pursuant to this Plan or otherwise. In
connection with such withholding, the Board may make such arrangements as are
consistent with the Plan as it may deem appropriate.
12.8 Listing and Other Conditions.
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(a) If the Common Stock is listed on a national securities
exchange or the Nasdaq Stock Market, the issuance of any shares of Common Stock
pursuant to an Award shall be conditioned upon such shares being listed on such
exchange or stock market. The Company shall have no obligation to issue such
shares unless and until such shares are so listed, and the right to exercise any
Option or to receive shares pursuant to any other Award shall be suspended until
such listing has been effected.
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(b) If at any time counsel to the Company shall be of the
opinion that any sale or delivery of shares of Common Stock pursuant to an Award
is or may in the circumstances be unlawful or result in the imposition of excise
taxes under the statutes, rules or regulations of any applicable jurisdiction,
the Company shall have no obligation to make such sale or delivery, or to make
any application or to effect or to maintain any qualification or registration
under the Securities Act of 1933, as amended, or otherwise with respect to
shares of Common Stock or Awards, and the right to exercise any Option or to
receive shares pursuant to any other Award shall be suspended until, in the
opinion of such counsel, such sale or delivery shall be lawful or shall not
result in the imposition of excise taxes.
(c) Upon termination of any period of suspension under this
Section 12.8, any Award affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available before such
suspension and as to shares which would otherwise have become available during
the period of such suspension, but no such suspension shall extend the term of
any Option.
12.9 Governing Law. This Plan and actions taken in connection
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herewith shall be governed and construed in accordance with the laws of the
Commonwealth of Pennsylvania.
12.10 Construction. Wherever any words are used in this Plan in the
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masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.
12.11 Liability. No member of the Board nor any employee of the
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Company or any of its subsidiaries shall be liable for any act or action
hereunder, whether of omission or commission, by any other member or employee or
by any agent to whom duties in connection with the administration of this Plan
have been delegated or, except in circumstances involving bad faith, gross
negligence or fraud, for anything done or omitted to be done by himself.
12.12 Other Benefits. No payment pursuant to an Award under this
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Plan shall be deemed compensation for purposes of computing benefits under any
retirement plan of the Company nor 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.
12.13 Costs. The Company shall bear all expenses incurred in
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administering this Plan, including expenses of issuing Common Stock pursuant to
Awards hereunder.
14.14 Severability. If any part of this Plan shall be determined to
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be invalid or void in any respect, such determination shall not affect, impair,
invalidate or nullify the remaining provisions of this Plan which shall continue
in full force and effect.
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12.15 Successors. This Plan shall be binding upon and inure to the
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benefit of any successor or successors of the Company.
12.16 Headings. Article and section headings contained in this Plan
--------
are included for convenience only and are not to be used in construing or
interpreting this Plan.
ARTICLE XIII
Term of Plan
13.1 Effective Date. This Plan, as amended and restated effective
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August 15, 2000, shall be effective as of such date upon its approval by the
Board; provided however, that all provisions relating to the grant of Incentive
Stock Options will not become effective unless this Plan is approved by the
Company's shareholders by December 31, 2000.
13.2 Termination. No Award shall be granted pursuant to this Plan
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on or after the tenth anniversary of its approval by the Board, but Awards
granted prior to such tenth anniversary may extend beyond that date.
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