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EXHIBIT 10.18
METHODE ELECTRONICS, INC. 2000 STOCK PLAN
1. PREAMBLE.
Methode Electronics, Inc., a Delaware corporation (the "Company"), hereby
establishes the Methode Electronics, Inc. 2000 Stock Plan (the "Plan") as a
means whereby the Company may, through awards of (i) incentive stock options
("ISOs") within the meaning of section 422 of the Code, (ii) non-qualified stock
options ("NSOs"), (iii) stock appreciation rights ("SARs"), and (iv) restricted
stock ("Restricted Stock"):
(a) provide selected officers, directors and employees with additional
incentive to promote the success of the Company's business;
(b) encourage such persons to remain in the service of the Company; and
(c) enable such persons to acquire proprietary interests in the Company.
The provisions of this Plan do not apply to or affect any option, stock
appreciation right or restricted stock hereafter granted under any other stock
plan of the Company, and all such options, stock appreciation rights or
restricted stock shall be governed by and subject to the applicable provisions
of the plan under which they will be granted.
2. DEFINITIONS AND RULES OF CONSTRUCTION.
2.01 "Affiliate" means any entity during any period that, in the
opinion of the Committee, the Company has a significant economic interest in
the entity.
2.02 "Award" means the grant of Options, SARs and/or Restricted Stock
to a Participant.
2.03 "Award Date" means the date upon which an Option, SAR or
Restricted Stock is awarded to a Participant under the Plan.
2.04 "Board" or "Board of Directors" means the board of directors of
the Company.
2.05 "Cause" shall mean any willful misconduct by the Participant
which affects the business reputation of the Company or willful failure by the
Participant to perform his or her material responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of
any employment, consulting, advisory, nondisclosure, non-competition or other
similar agreement between the Participant and the Company or any Affiliate or
Subsidiary). The Participant shall be considered to have been discharged for
"Cause" if the Company determines, within 30 days after the Participant's
resignation, that discharge for Cause was warranted.
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2.06 "Change of Control" shall be deemed to have occurred on the first
to occur of any of the following:
(i) any "person" (as such term is used in Section 13(d) and 14(d)(2)
of the Exchange Act, other than any Subsidiary, any employee
benefit plan of the Company or a Subsidiary or William J.
McGinley or any one or more of his Family Members, is or becomes
a beneficial owner, directly or indirectly, of stock of the
Company representing 25% or more of the total voting power of the
Company's then outstanding stock;
(ii) a tender offer (for which a filing has been made with the SEC
which purports to comply with the requirements of Section 14(d)
of the Exchange Act and the corresponding SEC rules) is made for
the stock of the Company. In case of a tender offer described in
this paragraph (ii), the "Change of Control" will be deemed to
have occurred upon the first to occur of (A) any time during the
offer when the person (using the definition in (i) above) making
the offer owns or has accepted for payment stock of the Company
with 25% or more of the total voting power of the Company's
outstanding stock or (B) three business days before the offer is
to terminate unless the offer is withdrawn first, if the person
making the offer could own, by the terms of the offer plus any
shares owned by this person, stock with 50% or more of the total
voting power of the Company's outstanding stock when the offer
terminates; or
(iii) individuals who were the Board's nominees for election as
directors of the Company immediately prior to a meeting of the
shareholders of the Company involving a contest for the election
of directors shall not constitute a majority of the Board
following the election.
2.07 "Code" means the Internal Revenue Code of 1986, as amended from
time to time or any successor thereto.
2.08 "Committee" means two or more directors elected by the Board of
Directors from time to time; provided, however, that in the absence of an
election by the Board, the Committee shall mean the Compensation Committee of
the Board of Directors.
2.09 "Common Stock" means Class A Common Stock of the Company, par
value $.50 per share.
2.10 "Company" means Methode Electronics, Inc., a Delaware
corporation, and any successor thereto.
2.11 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
it exists now or from time to time may hereafter be amended.
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2.12 "Fair Market Value" means as of any date, the closing price for
the Common Stock on that date, or if no sales occurred on that date, the next
trading day on which actual sales occurred (as reported by the NASDAQ Stock
Market System or any securities exchange or automated quotation system of a
registered securities association on which the Common Stock is then traded or
quoted).
2.13 "Family Members" mean with respect to an individual, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the individual's household (other than a
tenant or employee), a trust in which these persons have more than 50% of the
beneficial interest, a foundation in which these persons (or the individual)
control the management of assets, and any other entity in which these persons
(or the individual) own more than 50% of the voting interests.
2.14 "Good Reason" shall mean any of the following:
(i) any significant diminution in the Participant's title, authority,
or responsibilities from and after a Change of Control;
(ii) any reduction in the base compensation payable to the Participant
from and after a Change of Control; or
(iii) the relocation after a Change of Control of the Company's place
of business at which the Participant is principally located to a
location that is greater than 50 miles from the site immediately
prior to the Change of Control.
2.15 "ISO" means an incentive stock option within the meaning of
section 422 of the Code.
2.16 "NSO" means a non-qualified stock option which is not intended to
qualify as an incentive stock option under section 422 of the Code.
2.17 "Option" means the right of a Participant, whether granted as an
ISO or an NSO, to purchase a specified number of shares of Common Stock, subject
to the terms and conditions of the Plan.
2.18 "Option Price" means the price per share of Common Stock at which
an Option may be exercised.
2.19 "Participant" means an individual to whom an Award has been
granted under the Plan.
2.20 "Plan" means the Methode Electronics, Inc. 2000 Stock Plan, as
set forth herein and from time to time amended.
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2.21 "Restricted Stock" means the Common Stock awarded to a
Participant pursuant to Section 8 of this Plan.
2.22 "SAR" means a stock appreciation right issued to a Participant
pursuant to Section 9 of this Plan.
2.23 "SEC" means the Securities and Exchange Commission.
2.24 "Subsidiary" means any entity during any period which the Company
owns or controls more than 50% of (i) the outstanding capital stock, or (ii) the
combined voting power of all classes of stock.
2.25 Rules of Construction:
2.25.1 GOVERNING LAW AND VENUE. The construction and operation of
this Plan are governed by the laws of the State of Illinois without regard
to any conflicts or choice of law rules or principles that might otherwise
refer construction or interpretation of this Agreement to the substantive
law of another jurisdiction, and any litigation arising out of this Plan
shall be brought in the Circuit Court of the State of Illinois or the
United States District Court for the Eastern Division of the Northern
District of Illinois.
2.25.2 UNDEFINED TERMS. Unless the context requires another
meaning, any term not specifically defined in this Plan is used in the
sense given to it by the Code.
2.25.3 HEADINGS. All headings in this Plan are for reference only
and are not to be utilized in construing the Plan.
2.25.4 CONFORMITY WITH SECTION 422. Any ISOs issued under this
Plan are intended to qualify as incentive stock options described in
section 422 of the Code, and all provisions of the Plan relating to ISOs
shall be construed in conformity with this intention. Any NSOs issued under
this Plan are not intended to qualify as incentive stock options described
in section 422 of the Code, and all provisions of the Plan relating to NSOs
shall be construed in conformity with this intention.
2.25.5 GENDER. Unless clearly inappropriate, all nouns of
whatever gender refer indifferently to persons or objects of any
gender.
2.25.6 SINGULAR AND PLURAL. Unless clearly inappropriate,
singular terms refer also to the plural and vice versa.
2.25.7 SEVERABILITY. If any provision of this Plan is determined
to be illegal or invalid for any reason, the remaining provisions are to
continue in full force and effect and to be construed and enforced as if
the illegal or invalid provision did not exist, unless the continuance of
the Plan in such circumstances is not consistent with its purposes.
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3. STOCK SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 12 hereof, the aggregate
number of shares of Common Stock for which Awards may be issued under this Plan
may not exceed 2,000,000 shares, and the aggregate number of shares of Common
Stock for which Restricted Stock Awards may be issued under this Plan may not
exceed 500,000 shares. Reserved shares may be either authorized but unissued
shares or treasury shares, in the Board's discretion. If any Award shall
terminate or expire, as to any number of shares of Common Stock, new Awards may
thereafter be awarded with respect to such shares. Notwithstanding the
foregoing, the total number of shares of Common Stock with respect to which
Awards may be granted to any Participant in any calendar year shall not exceed
100,000 shares (subject to adjustment as provided in Section 12 hereof).
4. ADMINISTRATION.
The Committee shall administer the Plan. All determinations of the
Committee are made by a majority vote of its members. The Committee's
determinations are final and binding on all Participants. In addition to any
other powers set forth in this Plan, the Committee has the following powers:
(a) to construe and interpret the Plan;
(b) to establish, amend and rescind appropriate rules and regulations
relating to the Plan;
(c) subject to the terms of the Plan, to select the individuals who
will receive Awards, the times when they will receive them, the
number of Options, Restricted Stock and/or SARs to be subject to
each Award, the Option Price, the vesting schedule (including any
performance targets to be achieved in connection with the vesting
of any Award), the expiration date applicable to each Award and
other terms, provisions and restrictions of the Awards (which
need not be identical) and subject to Section 17 hereof, to amend
or modify any of the terms of outstanding Awards;
(d) to contest on behalf of the Company or Participants, at the
expense of the Company, any ruling or decision on any matter
relating to the Plan or to any Awards;
(e) generally, to administer the Plan, and to take all such steps and
make all such determinations in connection with the Plan and the
Awards granted thereunder as it may deem necessary or advisable;
and
(f) to determine the form in which tax withholding under Section 15
of this Plan will be made (I.E., cash, Common Stock or a
combination thereof).
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Except to the extent prohibited by applicable law or the applicable rules of a
stock exchange, the Committee may allocate all or any portion of its
responsibilities and powers to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked by the
Committee at any time.
5. ELIGIBLE PARTICIPANTS.
Present and future directors, officers and employees of the Company or any
Subsidiary or Affiliate shall be eligible to participate in the Plan. The
Committee from time to time shall select those officers, directors and employees
of the Company and any Subsidiary or Affiliate of the Company who shall be
designated as Participants and shall designate in accordance with the terms of
the Plan the number, if any, of ISOs, NSOs, SARs and shares of Restricted Stock
or any combination thereof, to be awarded to each Participant.
6. TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTIONS.
Subject to the terms of the Plan, the Committee, in its discretion, may
award an NSO to any Participant. Each NSO shall be evidenced by an agreement, in
such form as is approved by the Committee, and except as otherwise provided by
the Committee in such agreement, each NSO shall be subject to the following
express terms and conditions, and to such other terms and conditions, not
inconsistent with the Plan, as the Committee may deem appropriate:
6.01 OPTION PERIOD. Each NSO will expire as of the earliest of:
(i) the date on which it is forfeited under the provisions of
Section 11.1;
(ii) 10 years from the Award Date;
(iii) in the case of a Participant who is an employee of the
Company, a Subsidiary or an Affiliate, three months after
the Participant's termination of employment with the Company
and its Subsidiaries and Affiliates for any reason other
than for Cause or death or total and permanent disability;
(iv) in the case of a Participant who is a member of the board of
directors of the Company or a Subsidiary or Affiliate, but
not an employee of the Company, a Subsidiary or an
Affiliate, three months after the Participant's retirement
from the board for any reason other than for Cause or death
or total and permanent disability or the sale, merger or
consolidation, or similar extraordinary transaction
involving the Company, Subsidiary or Affiliate, as the case
may be;
(v) immediately upon the Participant's termination of employment
with the Company and its Subsidiaries and Affiliates or
service on a board of directors of the Company or a
Subsidiary or Affiliate for Cause;
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(vi) 12 months after the Participant's death or total and
permanent disability; or
(vii) any other date specified by the Committee when the NSO is
granted.
6.02 OPTION PRICE. At the time granted, the Committee shall determine
the Option Price of any NSO, and in the absence of such determination, the
Option Price shall be 100 % of the Fair Market Value of the Common Stock subject
to the NSO on the Award Date.
6.03 VESTING. Unless otherwise determined by the Committee and
set forth in the agreement evidencing an Award, NSO Awards shall vest in
accordance with Section 11.1.
6.04 OTHER OPTION PROVISIONS. The form of NSO authorized by the Plan
may contain such other provisions as the Committee may from time to time
determine.
7. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS
Subject to the terms of the Plan, the Committee, in its discretion, may
award an ISO to any employee of the Company or a Subsidiary. Each ISO shall be
evidenced by an agreement, in such form as is approved by the Committee, and
except as otherwise provided by the Committee, each ISO shall be subject to the
following express terms and conditions and to such other terms and conditions,
not inconsistent with the Plan, as the Committee may deem appropriate:
7.01 OPTION PERIOD. Each ISO will expire as of the earliest of:
(i) the date on which it is forfeited under the provisions of
Section 11.1;
(ii) 10 years from the Award Date, except as set forth in Section
7.02 below;
(iii) immediately upon the Participant's termination of
employment with the Company and its Subsidiaries for Cause;
(iv) three months after the Participant's termination of
employment with the Company and its Subsidiaries for any
reason other than for Cause or death or total and permanent
disability;
(v) 12 months after the Participant's death or total and
permanent disability; or
(vi) any other date (within the limits of the Code) specified by
the Committee when the ISO is granted.
Notwithstanding the foregoing provisions granting discretion to the Committee to
determine the terms and conditions of ISOs, such terms and conditions shall meet
the requirements set forth in section 422 of the Code or any successor thereto.
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7.02 OPTION PRICE AND EXPIRATION. The Option Price of any ISO shall be
determined by the Committee at the time an ISO is granted, and shall be no less
than 100% of the Fair Market Value of the Common Stock subject to the ISO on the
Award Date; provided, however, that if an ISO is granted to a Participant who,
immediately before the grant of the ISO, beneficially owns stock representing
more than 10% of the total combined voting power of all classes of stock of the
Company or its parent or subsidiary corporations, the Option Price shall be at
least 110% of the Fair Market Value of the Common Stock subject to the ISO on
the Award Date and in such cases, the exercise period specified in the Option
agreement shall not exceed five years from the Award Date.
7.03 VESTING. Unless otherwise determined by the Committee and set
forth in the agreement evidencing an Award, ISO Awards shall vest in accordance
with Section 11.1.
7.04 OTHER OPTION PROVISIONS. The form of ISO authorized by the Plan
may contain such other provisions as the Committee may, from time to time,
determine; provided, however, that such other provisions may not be inconsistent
with any requirements imposed on incentive stock options under Code section 422
and the regulations thereunder.
8. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.
Subject to the terms of the Plan, the Committee, in its discretion, may
award Restricted Stock to any Participant at no additional cost to the
Participant. Each Restricted Stock Award shall be evidenced by an agreement, in
such form as is approved by the Committee, and all shares of Common Stock
awarded to Participants under the Plan as Restricted Stock shall be subject to
the following express terms and conditions and to such other terms and
conditions, not inconsistent with the Plan, as the Committee shall deem
appropriate:
(a) RESTRICTED PERIOD. Shares of Restricted Stock awarded under this
Section 8 may not be sold, assigned, transferred, pledged or
otherwise encumbered before they vest.
(b) VESTING. Unless otherwise determined by the Committee and set
forth in the agreement evidencing an Award, Restricted Stock
Awards under this Section 8 shall vest in accordance with Section
11.2. Until a Participant's shares of Restricted Stock vest, he
may receive cash dividends declared thereon, but all noncash
dividends and distributions with respect to shares of Restricted
Stock shall be subject to the same vesting and other restrictions
applicable to the underlying shares of Restricted Stock.
(c) CERTIFICATE LEGEND. Each certificate issued in respect of shares
of Restricted Stock awarded under this Section 8 shall be
registered in the name of the Participant and shall bear the
following (or a similar) legend until such shares have vested:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions
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(including forfeiture) relating to Restricted Stock
contained in Section 8 of the Methode Electronics, Inc. 2000
Stock Plan and an Agreement entered into between the
registered owner and Methode Electronics, Inc. Copies of
such Plan and Agreement are on file at the principal office
of Methode Electronics, Inc."
9. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.
The Committee may, in its discretion, grant an SAR to any Participant under
the Plan. Each SAR shall be evidenced by an agreement between the Company and
the Participant, and may relate to and be associated with all or any part of a
specific ISO or NSO. An SAR shall entitle the Participant to whom it is granted
the right, so long as such SAR is exercisable and subject to such limitations as
the Committee shall have imposed, to surrender any then exercisable portion of
his SAR and, if applicable, the related ISO or NSO, in whole or in part, and
receive from the Company in exchange, without any payment of cash (except for
applicable employee withholding taxes), that number of shares of Common Stock
having an aggregate Fair Market Value on the date of surrender equal to the
product of (i) the excess of the Fair Market Value of a share of Common Stock on
the date of surrender over the Fair Market Value of the Common Stock on the date
the SARs were issued, or, if the SARs are related to an ISO or an NSO, the per
share Option Price under such ISO or NSO on the Award Date, and (ii) the number
of shares of Common Stock subject to such SAR, and, if applicable, the related
ISO or NSO or portion thereof which is surrendered.
An SAR granted in conjunction with an ISO or NSO shall terminate on the
same date as the related ISO or NSO and shall be exercisable only if the Fair
Market Value of a share of Common Stock exceeds the Option Price for the related
ISO or NSO, and then shall be exercisable to the extent, and only to the extent,
that the related ISO or NSO is exercisable. The Committee may at the time of
granting any SAR add such additional conditions and limitations to the SAR as it
shall deem advisable, including, but not limited to, limitations on the period
or periods within which the SAR shall be exercisable and the maximum amount of
appreciation to be recognized with regard to such SAR. Any ISO or NSO or portion
thereof which is surrendered with an SAR shall no longer be exercisable. An SAR
that is not granted in conjunction with an ISO or NSO shall terminate on such
date as is specified by the Committee in the SAR agreement and shall vest in
accordance with Section 11.2. The Committee, in its sole discretion, may allow
the Company to settle all or part of the Company's obligation arising out of the
exercise of an SAR by the payment of cash equal to the aggregate Fair Market
Value of the shares of Common Stock which the Company would otherwise be
obligated to deliver.
10. MANNER OF EXERCISE OF OPTIONS.
To exercise an Option in whole or in part, a Participant (or, after his
death, his executor or administrator) must give written notice to the Committee
on a form acceptable to the Committee, stating the number of shares with respect
to which he intends to exercise the Option. The Company will issue the shares
with respect to which the Option is exercised upon payment in full of the Option
Price. The Committee may permit the Option Price to be paid in cash or shares of
Common Stock held by the Participant having an aggregate Fair Market Value, as
determined on the date of delivery,
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equal to the Option Price. The Committee may also permit the Option Price to be
paid by any other method permitted by law, including by delivery to the
Committee from the Participant of an election directing the Company to withhold
the number of shares of Common Stock from the Common Stock otherwise due upon
exercise of the Option having an aggregate Fair Market Value on that date equal
to the Option Price. If a Participant pays the Option Price with shares of
Common Stock which were received by the Participant upon exercise of one or more
ISOs, and such Common Stock has not been held by the Participant for at least
the greater of:
(a) two years from the date the ISOs were granted; or
(b) one year after the transfer of the shares of Common Stock to the
Participant;
the use of the shares shall constitute a disqualifying disposition and the ISO
underlying the shares used to pay the Option Price shall no longer satisfy all
of the requirements of Code section 422.
11. VESTING.
11.1 OPTIONS. A Participant may not exercise an Option until it has
become vested. The portion of an Award of Options that is vested depends upon
the period that has elapsed since the Award Date. The following schedule applies
to any Award of Options under this Plan unless the Committee establishes a
different vesting schedule on the Award Date:
<TABLE>
<CAPTION>
NUMBER OF MONTHS SINCE
AWARD DATE VESTED PERCENTAGE
---------------------- -----------------
<S> <C>
Fewer than 12 months 0%
12 months 50%
24 months or more 100%
</TABLE>
Not withstanding the above schedule, unless otherwise determined by the
Committee and set forth in the agreement evidencing an Award, a Participant's
Awards shall become fully vested if a Participant's employment with the Company
and its Subsidiaries and Affiliates or service on the board of directors of the
Company, a Subsidiary or an Affiliate is terminated due to: (i) retirement on or
after his sixty-fifth birthday; (ii) retirement on or after his fifty-fifth
birthday with consent of the Company; (iii) retirement at any age on account of
total and permanent disability as determined by the Company; or (iv) death.
Unless the Committee otherwise provides in the applicable agreement evidencing
an Award or the preceding sentence of this Section or Section 11.3 applies, if a
Participant's employment with or service to the Company, a Subsidiary or an
Affiliate terminates for any other reason, any Awards that are not yet vested
are immediately and automatically forfeited; provided, however, in such special
circumstances as the Committee deems appropriate, the Committee may take such
action as it deems equitable in the circumstances or in the best interests of
the Company, including, without limitation, fully vesting an Award or waiving or
modifying any other limitation or requirement under the Award.
A Participant's employment shall not be considered to be terminated
hereunder by reason of a transfer of his employment from the Company to a
Subsidiary or Affiliate, or vice versa, or a
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leave of absence approved by the Participant's employer. A Participant's
employment shall be considered to be terminated hereunder if, as a result of a
sale or other transaction, the Participant's employer ceases to be a Subsidiary
or Affiliate (and the Participant's employer is or becomes an entity that is
separate from the Company and its Subsidiaries and Affiliates).
11.2 RESTRICTED STOCK AND SARs. The Committee shall establish the
vesting schedule to apply to any Award of Restricted Stock or SAR that is not
associated with an ISO or NSO granted under the Plan to a Participant, and in
the absence of such a vesting schedule, such Award shall vest in accordance with
Section 11.1.
11.3 EFFECT OF "CHANGE OF CONTROL". Notwithstanding Sections 11.1 and
11.2 above, if within 12 months following a "Change of Control" the employment
of a Participant with the Company and its Subsidiaries and Affiliates is
terminated without Cause or the Participant resigns for Good Reason, any Award
issued to the Participant shall be fully vested, and in the case of an Award
other than a Restricted Stock Award, fully exercisable for 90 days following the
date on which the Participant's service with the Company and its Subsidiaries
and Affiliates is terminated, but not beyond the date the Award would otherwise
expire but for the Participant's termination of employment.
12. ADJUSTMENTS TO REFLECT CHANGES IN CAPITAL STRUCTURE.
12.01 ADJUSTMENTS. If there is any change in the corporate structure
or shares of the Company, the Committee may make any appropriate adjustments,
including, but limited to, such adjustments deemed necessary to prevent
accretion, or to protect against dilution, in the number and kind of shares of
Common Stock with respect to which Awards may be granted under this Plan
(including the maximum number of shares of Common Stock with respect to which
Awards may be granted under this Plan in the aggregate and individually to any
Participant during any calendar year as specified in Section 3) and, with
respect to outstanding Awards, in the number and kind of shares covered thereby
and in the applicable Option Price. For the purpose of this Section 12, a change
in the corporate structure or shares of the Company includes, without
limitation, any change resulting from a recapitalization, stock split, stock
dividend, consolidation, rights offering, separation, reorganization, or
liquidation (including a partial liquidation) and any transaction in which
shares of Common Stock are changed into or exchanged for a different number or
kind of shares of stock or other securities of the Company or another
corporation, but does not include the spinoff of Stratos Lightwave, Inc. from
the Company.
12.02 CASHOUTS. In the event of an extraordinary dividend or other
distribution, merger, reorganization, consolidation, combination, sale of
assets, split up, exchange, or spin off, or other extraordinary corporate
transaction, the Committee may, in such manner and to such extent (if any) as it
deems appropriate and equitable, make provision for a cash payment or for the
substitution or exchange of any or all outstanding Awards or the cash,
securities or property deliverable to the holder of any or all outstanding
Awards based upon the distribution or consideration payable to holders of Common
Stock upon or in respect of such event; provided, however, in each case, that
with respect to any ISO no such adjustment may be made that would cause the Plan
to violate section 422 of the Code (or any successor provision).
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13. NONTRANSFERABILITY OF AWARDS.
ISOs are not transferable, voluntarily or involuntarily, other than by will
or by the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code. During a Participant's lifetime, his
ISOs may be exercised only by him. All other Awards granted pursuant to this
Plan are transferable by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code, or in
the Committee's discretion after vesting.
14. RIGHTS AS STOCKHOLDER.
No Common Stock may be delivered upon the exercise of any Option until full
payment has been made. A Participant has no rights whatsoever as a stockholder
with respect to any shares covered by an Option until the date of the issuance
of a stock certificate for the shares.
15. WITHHOLDING TAX.
The Committee may, in its discretion and subject to such rules as it may
adopt, permit or require a Participant to pay all or a portion of the federal,
state and local taxes, including FICA and Medicare withholding tax, arising in
connection with any Awards by (i) having the Company withhold shares of Common
Stock at the minium rate legally required, (ii) tendering back shares of Common
Stock received in connection with such Award or (iii) delivering other
previously acquired shares of Common Stock having a Fair Market Value
approximately equal to the amount to be withheld.
16. NO RIGHT TO EMPLOYMENT.
Participation in the Plan will not give any Participant a right to be
retained as an employee or director of the Company or its parent or
Subsidiaries, or any right or claim to any benefit under the Plan, unless the
right or claim has specifically accrued under the Plan.
17. AMENDMENT OF THE PLAN.
The Board of Directors may from time to time amend or revise the terms of
this Plan in whole or in part and may, without limitation, adopt any amendment
deemed necessary; provided, however, that no change in any Award previously
granted to a Participant may be made that would impair the rights of the
Participant without the Participant's consent.
18. CONDITIONS UPON ISSUANCE OF SHARES.
An Option shall not be exercisable and a share of Common Stock shall not be
issued pursuant to the exercise of an Option, and Restricted Stock shall not be
awarded until and unless the award of Restricted Stock, exercise of such Option
and the issuance and delivery of such share pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange or national securities
association upon which the shares of
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Common Stock may then be listed or quoted, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the shares of Common Stock are being purchased only for investment
and without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
19. SUBSTITUTION OR ASSUMPTION OF AWARDS BY THE COMPANY.
The Company, from time to time, also may substitute or assume outstanding
awards granted by another company, whether in connection with an acquisition of
such other company or otherwise, by either (a) granting an Award under the Plan
in substitution of such other company's award, or (b) assuming such award as if
it had been granted under the Plan if the terms of such assumed award could be
applied to an Award granted under the Plan. Such substitution or assumption
shall be permissible if the holder of the substituted or assumed award would
have been eligible to be granted an Award under the Plan if the other company
had applied the rules of the Plan to such grant. In the event the Company
assumes an award granted by another company, the terms and conditions of such
award shall remain unchanged (except that the exercise price and the number and
nature of Shares issuable upon exercise of any such option will be adjusted
appropriately pursuant to section 424(a) of the Code). In the event the Company
elects to grant a new Award rather than assuming an existing option, such new
Award may be granted with a similarly adjusted exercise price.
20. EFFECTIVE DATE AND TERMINATION OF PLAN.
20.01 EFFECTIVE DATE. This Plan is effective as of the date of its
adoption by the Board of Directors; provided, however, that no Award granted
hereunder shall be effective until the Plan has been approved by the
shareholders of the Company and the spinoff of Stratos Lightwave, Inc. from the
Company has occured.
20.02 TERMINATION OF THE PLAN. The Plan will terminate 10 years after
the date it is approved by the Board of Directors; provided, however, that the
Board of Directors may terminate the Plan at any time prior thereto with respect
to any shares that are not then subject to Awards. Termination of the Plan will
not affect the rights and obligations of any Participant with respect to Awards
granted before termination.
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