<PAGE> 1
EXHIBIT 4
RADYNE COMSTREAM INC.
2000 LONG-TERM INCENTIVE PLAN
ARTICLE 1. PURPOSE
1.1 GENERAL. The purpose of the Radyne Comstream Inc. 2000
Long-Term Incentive Plan (the "Plan") is to promote the success, and enhance the
value, of Radyne Comstream Inc. (the "Company") by linking the personal
interests of its employees, officers, and non-employee directors of and
consultants and advisors to, the Company to those of Company stockholders and by
providing such individuals with an incentive for outstanding performance in
order to generate superior returns to shareholders of the Company. The Company
also intends that the Plan will provide it with the flexibility to motivate,
attract, and retain the services of employees, officers, and non-employee
directors of and consultants and advisors to, the Company upon whose judgment,
interest, and special effort the successful conduct of the Company's operation
is largely dependent.
ARTICLE 2. EFFECTIVE AND EXPIRATION DATES
2.1 EFFECTIVE DATE. The Plan is effective as of May 1, 2000 (the
"Effective Date"). Within one year of the Effective Date, the Plan will be
submitted to the shareholders of the Company for their approval. The Plan will
be deemed to be approved by the shareholders if it receives the affirmative vote
of the holders of a majority of the shares of stock of the Company present, or
represented, and entitled to vote at a meeting duly held in accordance with
applicable laws and the Company's By-Laws and Articles of Incorporation. Any
Award granted under the Plan before shareholder approval is effective when made
(unless the Committee specifies otherwise at the time of grant), but no Award
may be exercised or settled and no restrictions relating to any Award may lapse
before shareholder approval. If the shareholders do not approve the Plan, any
Award previously made will be automatically canceled without any further act.
2.2 EXPIRATION DATE. The Plan will expire on, and no Award may be
granted under the Plan after, April 30, 2010.
ARTICLE 3. DEFINITIONS AND CONSTRUCTION.
3.1 DEFINITIONS. When a word or phrase appears in this Plan with
the initial letter capitalized, and the word or phrase does not commence a
sentence, the word or phrase will generally be given the meaning ascribed to it
in this Section or in Sections 1.1 or 2.1 unless a clearly different meaning is
required by the context. The following words and phrases will have the following
meanings:
(a) "Award" means any Option, Director Option, Stock
Appreciation Right, Restricted Stock Award, Performance Share Award, or
Performance-Based Award granted to a Participant under the Plan.
(b) "Award Agreement" means any written agreement,
contract, or other instrument or document evidencing an Award.
<PAGE> 2
(c) "Board" means the Board of Directors of the Company.
(d) "Change of Control" means any of the following:
(1) any merger of the Company in which the
Company is not the continuing or surviving entity, or pursuant to which
Stock would be converted into cash, securities, or other property other
than a merger of the Company in which the holders of the Company's
Stock immediately prior to the merger have the same proportionate
ownership of beneficial interest of common stock or other voting
securities of the surviving entity immediately after the merger;
(2) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of assets or
earning power aggregating more than 50% of the assets or earning power
of the Company and its subsidiaries (taken as a whole), other than
pursuant to a sale-leaseback, structured finance or other form of
financing transaction;
(3) the shareholders of the Company approve any
plan or proposal for liquidation or dissolution of the Company;
(4) any person (as such term is used in Section
13(d) and 14(d)(2) of the Exchange Act), other than any current
shareholder of the Company or affiliate thereof or any employee benefit
plan of the Company or any subsidiary of the Company or any entity
holding shares of capital stock of the Company for or pursuant to the
terms of any such employee benefit plan in its role as an agent or
trustee for such plan, shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of 50% or more of the
Company's outstanding Stock; or
(5) during any two-year period, individuals who
at the beginning of such period do not constitute a majority of the
Board at the end of that period, excluding any new director approved by
a vote of at least two-thirds of the directors who were directors at
the beginning of the period.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
(f) "Committee" means the committee of the Board
described in Article 4.
(g) "Covered Employee" means an Employee who is a
"covered employee" within the meaning of Section 162(m) of the Code.
(h) "Director Option" means an Option granted to a
Non-Employee Director under Section 12.
(i) "Disability" means a period of disability during
which a Participant qualifies for permanent disability benefits under the
Participant's employer's long-term disability plan, or if a Participant does not
participate in such a plan, a period of disability during which the Participant
would have qualified for permanent disability benefits under such a plan had the
Participant been a participant in such a plan, as determined in the sole
discretion of the
-2-
<PAGE> 3
Committee. If the Participant's employer does not sponsor such a plan, or
discontinues to sponsor such a plan, Disability shall mean permanent and total
disability for purposes of Social Security.
(j) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(k) "Fair Market Value" means, as of any given date, the
fair market value of Stock on a particular date determined by such methods or
procedures as may be established from time to time by the Committee. Unless
otherwise determined by the Committee, the Fair Market Value of Stock as of any
date will be the closing price for the Stock as reported on the NASDAQ (or on
any national securities exchange on which the Stock is then listed) for that
date or, if no price is reported for that date, the closing price on the next
preceding date for which such price was reported.
(l) "Incentive Stock Option" means an Option that is
intended to meet the requirements of Section 422 of the Code or any successor
provision thereto.
(m) "Non-Employee Director" means a member of the
Company's Board who is not a common-law employee of the Company. For purposes of
Section 4.1, a Non-Employee Director means a member of the Board who qualifies
as a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the Exchange Act,
or any successor definition adopted by the Board.
(n) "Non-Qualified Stock Option" means an Option that is
not intended to be an Incentive Stock Option.
(o) "Option" means a right granted to a Participant under
Article 7 or Article 12 of the Plan to purchase Stock at a specified price
during specified time periods. An Option granted under Article 7 of the Plan may
be either an Incentive Stock Option or a Non-Qualified Stock Option. An Option
granted under Article 12 of the Plan may only be a Non-Qualified Stock Option.
(p) "Participant" means a person who, as an employee,
officer, or Non-Employee Director of, or consultant or advisor to, the Company
or any Subsidiary, has been granted an Award under the Plan.
(q) "Performance-Based Awards" means the Performance
Share Awards and Restricted Stock Awards granted to selected Covered Employees
pursuant to Articles 9 and 10, but which are subject to the terms and conditions
set forth in Article 11. All Performance-Based Awards are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code.
(r) "Performance Criteria" means the criteria that the
Committee selects for purposes of establishing the Performance Goal or
Performance Goals for a Participant for a Performance Period. The Performance
Criteria that will be used to establish Performance Goals are limited to the
following: net operating income before taxes and extraordinary charges against
income; earnings before interest, and taxes, earnings before interest, taxes,
depreciation, and amortization, pre- or after-tax net earnings, sales growth,
operating earnings, operating cash
-3-
<PAGE> 4
flow, return on net assets, return on stockholders' equity, return on assets,
return on capital, Stock price growth, stockholder returns, gross or net profit
margin, earnings per share, price per share of Stock, and market share, any of
which may be measured either in absolute terms or as compared to any incremental
increase or as compared to results of a peer group. The Committee will, within
the time prescribed by Section 162(m) of the Code, define in an objective
fashion the manner of calculating the Performance Criteria it selects to use for
such Performance Period for such Participant.
(s) "Performance Goals" means, for a Performance Period,
the goals established in writing by the Committee for the Performance Period
based upon the Performance Criteria. Depending on the Performance Criteria used
to establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit or an individual. The Committee, in its discretion, may, within the time
prescribed by Section 162(m) of the Code, adjust or modify the calculation of
Performance Goals for such Performance Period in order to prevent the dilution
or enlargement of the rights of Participants (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development, or (ii) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or in response to, or in anticipation of, changes in
applicable laws, regulations, accounting principles, or business conditions.
(t) "Performance Period" means the one or more periods of
time, which may be of varying and overlapping durations, as the Committee may
select, over which the attainment of one or more Performance Goals will be
measured for the purpose of determining a Participant's right to, and the
payment of, a Performance-Based Award.
(u) "Performance Share" means a right granted to a
Participant under Article 9, to receive cash, Stock, or other Awards, the
payment of which is contingent upon achieving certain objectives or goals
established by the Committee.
(v) "Plan" means the Radyne Comstream Inc. 2000 Long-Term
Incentive Plan, as amended from time to time.
(w) "Restricted Stock Award" means Stock granted to a
Participant under Article 10 that is subject to certain restrictions and to risk
of forfeiture.
(x) "Stock" means the common stock of the Company and
such other securities of the Company that may be substituted for Stock pursuant
to Article 14.
(y) "Stock Appreciation Right" or "SAR" means a right
granted to a Participant under Article 8 to receive a payment equal to the
difference between the Fair Market Value of a share of Stock as of the date of
exercise of the SAR over the grant price of the SAR, all as determined pursuant
to Article 8 and the applicable Award Agreement.
(z) "Subsidiary" means any corporation of which the
Company beneficially owns (directly or indirectly) a majority of the outstanding
voting stock or voting power.
-4-
<PAGE> 5
ARTICLE 4. ADMINISTRATION
4.1 COMMITTEE. The Plan will be administered by the Board or a
Committee appointed by, and which serves at the discretion of, the Board. If the
Board appoints a Committee, the Committee will consist of at least two
individuals, each of whom qualifies as (i) a Non-Employee Director, and (ii) an
"outside director" under Code Section 162(m) and the regulations issued
thereunder. Reference to the Committee will refer to the Board if the Board does
not appoint a Committee.
4.2 ACTION BY THE COMMITTEE. A majority of the Committee will
constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present and acts approved in writing by a majority
of the Committee in lieu of a meeting will be deemed the acts of the Committee.
Each member of the Committee is entitled to, in good faith, rely or act upon any
report or other information furnished to that member by any officer or other
employee of the Company or any Subsidiary, the Company's independent certified
public accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.
4.3 AUTHORITY OF COMMITTEE. The Committee has the exclusive power,
authority, and discretion to:
(a) Designate Participants to receive Awards;
(b) Determine the type or types of Awards to be granted
to each Participant;
(c) Determine the number of Awards to be granted and the
number of shares of Stock to which an Award will relate;
(d) Determine the terms and conditions of any Award
granted under the Plan including but not limited to, the exercise price, grant
price, or purchase price, any restrictions or limitations on the Award, any
schedule for lapse of forfeiture restrictions or restrictions on the
exercisability of an Award, and accelerations or waivers thereof, based in each
case on such considerations as the Committee in its sole discretion determines;
provided, however, that the Committee will not have the authority to accelerate
the vesting, or waive the forfeiture, of any Performance-Based Awards;
(e) Amend, modify, or terminate any outstanding Award,
with the Participant's consent unless the Committee has the authority to amend,
modify or terminate an Award without the Participant's consent under any other
provision of the Plan.
(f) Determine whether, to what extent, and under what
circumstances an Award may be settled in, or the exercise price of an Award may
be paid in, cash, Stock, other Awards, or other property, or an Award may be
canceled, forfeited, or surrendered;
(g) Prescribe the form of each Award Agreement, which
need not be identical for each Participant;
-5-
<PAGE> 6
(h) Decide all other matters that must be determined in
connection with an Award;
(i) Establish, adopt or revise any rules and regulations
as it may deem necessary or advisable to administer the Plan; and
(j) Make all other decisions and determinations that may
be required under the Plan or as the Committee deems necessary or advisable to
administer the Plan.
4.4 DECISIONS BINDING. The Committee's interpretation of the Plan,
any Awards granted under the Plan, any Award Agreement, and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.
ARTICLE 5. SHARES SUBJECT TO THE PLAN
5.1 NUMBER OF SHARES. Subject to adjustment provided in Section
14.1, the aggregate number of shares of Stock reserved and available for grant
under the Plan will be 2,500,000.
5.2 LAPSED AWARDS. To the extent that an Award terminates,
expires, or lapses for any reason, any shares of Stock subject to the Award will
again be available for the grant of an Award under the Plan and shares subject
to SARs or other Awards settled in cash will be available for the grant of an
Award under the Plan.
5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award
may consist, in whole or in part, of authorized and unissued Stock, treasury
Stock or Stock purchased on the open market.
5.4 LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS.
Notwithstanding any provision in the Plan to the contrary, and subject to the
adjustment in Section 14.1, the maximum number of shares of Stock with respect
to one or more Awards that may be granted to any one Participant who is a
Covered Employee during the Company's fiscal year is 500,000.
ARTICLE 6. ELIGIBILITY AND PARTICIPATION
6.1 ELIGIBILITY.
(a) GENERAL. Persons eligible to participate in this Plan
(other than Article 12) include all employees and officers of, and consultants
and advisors to, the Company or a Subsidiary, as determined by the Committee.
Persons eligible to receive Director Option grants under Article 12 of the Plan
include all Non-Employee Directors of the Company.
(b) FOREIGN PARTICIPANTS. In order to assure the
viability of Awards granted to Participants employed in foreign countries, the
Committee may provide for such special terms as it may consider necessary or
appropriate to accommodate differences in local law, tax policy, or custom.
Moreover, the Committee may approve such supplements to, or amendments,
restatements, or alternative versions of the Plan as it may consider necessary
or
-6-
<PAGE> 7
appropriate for such purposes without affecting the terms of the Plan as in
effect for any other purpose; provided, however, that no such supplements,
amendments, restatements, or alternative versions will increase the number of
shares of Stock available under Section 5.1 of the Plan.
6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan,
the Committee may, from time to time, select from among all eligible
individuals, those to whom Awards will be granted and will determine the nature
and amount of each Award; provided that the Committee does not have the
authority to determine those Participants eligible to receive Director Options
under Article 12. No individual will have any right to be granted an Award under
this Plan.
ARTICLE 7. STOCK OPTIONS
7.1 GENERAL. The Committee is authorized to grant Options to
Participants (other than to Non-Employee Directors) on the following terms and
conditions:
(a) EXERCISE PRICE. The exercise price per share of Stock
under an Option will be determined by the Committee and set forth in the Award
Agreement. It is the intention under the Plan that the exercise price for any
Option be not less than the Fair Market Value as of the date of grant; provided,
however that the Committee may, in its discretion, grant Options (other than
Options that are intended to be Incentive Stock Options or Options that are
intended to qualify as performance-based compensation under Code Section 162(m))
with an exercise price of less than the Fair Market Value on the date of grant.
(b) TIME AND CONDITIONS OF EXERCISE. The Committee will
determine the time or times at which an Option may be exercised in whole or in
part. The Committee may also determine the performance or other conditions, if
any, that must be satisfied before all or part of an Option may be exercised.
(c) LAPSE OF OPTION. An Option will lapse under the
following circumstances:
(1) The Option will lapse ten years from the
date it is granted, unless an earlier time is set in the Award
Agreement;
(2) Unless otherwise provided in the Award
Agreement, the vested portion of the Option will lapse upon the earlier
of (i) the Option's expiration date or (ii) 90 days after a
Participant's termination of employment or service for any reason other
than the Participant's death or Disability. Upon a Participant's
termination of employment or service with the Company or any
Subsidiary, the non-vested portion of the Option will lapse upon the
date of such termination. To the extent that any portion of an
Incentive Stock Option is exercised more than 90 days after the date
the Participant ceases to be an employee of the Company for any reason
(other than death or Disability), the exercise of such portion will be
considered the exercise of a Non-Qualified Stock Option; and
(3) Unless otherwise provided in the Award
Agreement, if the Participant terminates employment or service on
account of Disability or death before the
-7-
<PAGE> 8
Option lapses pursuant to paragraph (1) or (2) above, the vested
portion of the Option will lapse on the earlier of (i) the Option's
expiration date, or (ii) one year after the date the Participant
terminates employment on account of Retirement, Disability or death.
Upon a Participant's termination of employment or service with the
Company or any Subsidiary, the non-vested portion of the Option will
lapse upon the date of such termination. Upon the Participant's
Disability or death, any Options exercisable at the Participant's
Disability or death may be exercised by the Participant's legal
representative or representatives, by the person or persons entitled to
do so under the Participant's last will and testament, or, if the
Participant fails to make testamentary disposition or dies intestate,
by the person or persons entitled to receive the Option under the
applicable laws of descent and distribution. To the extent that any
portion of an Incentive Stock Option is exercised more than 12 months
after the date the Participant ceases to be an employee of the Company
on account of Disability, the exercise of such portion will be
considered the exercise of a Non-Qualified Stock Option.
(d) PAYMENT. The Committee will determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, shares of Stock that has been held by the
Participant for at least six months (through actual tender or by attestation),
promissory note, or other property (including broker-assisted arrangements), and
the methods by which shares of Stock will be delivered or deemed to be delivered
to a Participant.
(e) EVIDENCE OF GRANT. All Options will be evidenced by
an Award Agreement between the Company and the Participant. The Award Agreement
will include such additional provisions as may be specified by the Committee.
7.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options will be
granted only to employees of the Company and any Subsidiary and the terms of any
Incentive Stock Options granted under the Plan must comply with the following
additional rules.
(a) EXERCISE PRICE. The exercise price per share of Stock
will be set by the Committee, provided that the exercise price for any Incentive
Stock Option may not be less than the Fair Market Value as of the date of the
grant.
(b) EXERCISE. In no event, may any Incentive Stock Option
be exercisable for more than ten years from the date of its grant.
(c) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair
Market Value (determined as of the time an Award is made) of all shares of Stock
with respect to which Incentive Stock Options are first exercisable by a
Participant in any calendar year may not exceed $100,000.00 or such other
limitation as imposed by Section 422(d) of the Code, or any successor provision.
If for any reason Incentive Stock Options are first exercisable by a Participant
in excess of such limitation, the excess will be considered Non-Qualified Stock
Options.
(d) TEN PERCENT OWNERS. An Incentive Stock Option will be
granted to any individual who, at the date of grant, owns Stock possessing more
than ten percent of the total
-8-
<PAGE> 9
combined voting power of all classes of Stock of the Company only if such Option
is granted at a price that is not less than 110% of Fair Market Value on the
date of grant and the Option is exercisable for no more than five years from the
date of grant.
(e) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an
Incentive Stock Option may be made pursuant to this Plan after the tenth
anniversary of the Effective Date.
(f) RIGHT TO EXERCISE. During a Participant's lifetime,
an Incentive Stock Option may be exercised only by the Participant.
ARTICLE 8. STOCK APPRECIATION RIGHTS
8.1 GRANT OF SARs. The Committee is authorized to grant SARs to
Participants on such terms and conditions as may be selected by the Committee.
The Committee has the complete discretion to determine the number of SARs
granted to each Participant. All Awards of SARs will be evidenced by an Award
Agreement.
8.2 RIGHT TO PAYMENT. Upon the exercise of a Stock Appreciation
Right, the Participant to whom it is granted has the right to receive the
excess, if any, of the Fair Market Value of a share of Stock on the date of
exercise, over the grant price of the Stock Appreciation Right as determined by
the Committee, which will not be less than the Fair Market Value of a share of
Stock on the date of grant in the case of any SAR related to any Incentive Stock
Option.
8.3 OTHER TERMS. The terms, methods of exercise, methods of
settlement, form of consideration payable in settlement, and any other terms and
conditions of any Stock Appreciation Right will be determined by the Committee
at the time of the grant of the Award and will be reflected in the Award
Agreement.
8.4 DEATH OR DISABILITY. Unless provided otherwise in a
Participant's Award Agreement, a Stock Appreciation Right will be vested and
exercisable if a Participant terminates employment on account of death or
Disability.
ARTICLE 9. PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE SHARES. The Committee is authorized to
grant Performance Shares to Participants on such terms and conditions as may be
selected by the Committee. The Committee has the complete discretion to
determine the number of Performance Shares granted to each Participant. All
Awards of Performance Shares will be evidenced by an Award Agreement.
9.2 RIGHT TO PAYMENT. A grant of Performance Shares gives the
Participant rights, valued as determined by the Committee, and payable to, or
exercisable by, the Participant to whom the Performance Shares are granted, in
whole or in part, as the Committee will establish at grant or thereafter. The
Committee may set objectives or goals and other terms or conditions to payment
of the Performance Shares in its discretion which, depending on the extent to
which they are met, will determine the number and value of Performance Shares
that will be paid to the Participant.
-9-
<PAGE> 10
9.3 OTHER TERMS. Performance Shares may be payable in cash, Stock,
or other property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.
9.4 DEATH OR DISABILITY. Unless provided otherwise in a
Participant's Award Agreement, Performance Shares will be vested and exercisable
if a Participant terminates employment on account of death or Disability.
ARTICLE 10. RESTRICTED STOCK AWARDS
10.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make
Awards of Restricted Stock to Participants in such amounts and subject to such
terms and conditions as may be selected by the Committee. All Awards of
Restricted Stock will be evidenced by a Restricted Stock Award Agreement.
10.2 ISSUANCE AND RESTRICTIONS. Restricted Stock will be subject to
such restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter.
10.3 FORFEITURE. Except as otherwise determined by the Committee at
the time of the grant of the Award or thereafter, upon termination of employment
during the applicable restriction period for any reason (other than death or
Disability), Restricted Stock that is at that time subject to restrictions will
be forfeited, provided, however, that the Committee may provide in any
Restricted Stock Award Agreement that restrictions or forfeiture conditions
relating to Restricted Stock will be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part restrictions or forfeiture conditions relating
to Restricted Stock.
10.4 DEATH OR DISABILITY. Unless provided otherwise in a
Participant's Award Agreement, restrictions on Restricted Stock will lapse if a
Participant terminates employment on account of death or Disability.
10.5 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted
under the Plan may be evidenced in such manner as the Committee will determine.
If certificates representing shares of Restricted Stock are registered in the
name of the Participant, certificates must bear an appropriate legend referring
to the terms, conditions, and restrictions applicable to such Restricted Stock,
and the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.
ARTICLE 11. PERFORMANCE-BASED AWARDS
11.1 PURPOSE. The purpose of this Article 11 is to provide the
Committee the ability to qualify the Performance Share Awards under Article 9
and the Restricted Stock Awards under Article 10 as "performance-based
compensation" under Section 162(m) of the Code. If the Committee, in its
discretion, decides to grant a Performance-Based Award to a Covered
-10-
<PAGE> 11
Employee, the provisions of this Article 11 will control over any contrary
provision contained in Articles 9 or 10.
11.2 APPLICABILITY. This Article 11 will apply only to those
Covered Employees selected by the Committee to receive Performance-Based Awards.
The Committee may, in its discretion, grant Restricted Stock Awards or
Performance Share Awards to Covered Employees that do not satisfy the
requirements of this Article 11. The designation of a Covered Employee as a
Participant for a Performance Period will not in any manner entitle the
Participant to receive an Award for the period. Moreover, designation of a
Covered Employee as a Participant for a particular Performance Period will not
require designation of such Covered Employee as a Participant in any subsequent
Performance Period and designation of one Covered Employee as a Participant will
not require designation of any other Covered Employees as a Participant in such
period or in any other period.
11.3 DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE AWARDS.
With regard to a particular Performance Period, the Committee will have full
discretion to select the length of such Performance Period, the type of
Performance-Based Awards to be issued, the kind and/or level of the Performance
Goal, and whether the Performance Goal is to apply to the Company, a Subsidiary
or any division or business unit thereof.
11.4 PAYMENT OF PERFORMANCE AWARDS. Unless otherwise provided in
the relevant Award Agreement, a Participant must be employed by the Company or a
Subsidiary on the last day of the Performance Period to be eligible for a
Performance Award for such Performance Period. Furthermore, a Participant will
be eligible to receive payment under a Performance-Based Award for a Performance
Period only if the Performance Goals for such period are achieved. In
determining the actual size of an individual Performance-Based Award, the
Committee may reduce or eliminate the amount of the Performance-Based Award
earned for the Performance Period, if in its sole and absolute discretion, such
reduction or elimination is appropriate.
11.5 MAXIMUM AWARD PAYABLE. The maximum Performance-Based Award
payable to any one Participant under the Plan for a Performance Period is
500,000 shares of Stock, or in the event the Performance-Based Award is paid in
cash, such maximum Performance-Based Award will be determined by multiplying
500,000 by the Fair Market Value of one share of Stock as of the date of grant
of the Performance-Based Award.
ARTICLE 12. NON-EMPLOYEE DIRECTOR OPTION GRANTS
12.1 PERIODIC DIRECTOR OPTION GRANTS. The Board shall have the
authority to grant Options to Non-Employee Directors. Options granted to
Non-Employee Directors under this Section 12.1 will have terms and conditions
consistent with the provisions of this Article 12 and such other terms and
conditions consistent with the provisions in this Plan.
12.2 OPTION EXERCISE PRICE. The exercise price for Director Options
will be the Fair Market Value as of the relevant date of grant.
-11-
<PAGE> 12
12.3 PERIOD FOR EXERCISE. A Director Option granted under Section
12.1 will be exercisable in accordance with the Award Agreement and will be
subject to such terms and conditions as set forth by the Committee.
12.4 TERMINATION OF DIRECTOR STATUS. If a Non-Employee Director
ceases to be a director of the Company for any reason, any vested Director
Option will expire on the earlier of (i) its expiration date, or (ii) 90 days
after the date on which his or her status as a director terminated. Leave of
absence approved by the Committee will not constitute termination of status as
director. If a Non-Employee Director terminates service because of death, any
Director Option may be exercised in whole or in part by the executor or
administrator of the Non-Employee Director's estate or by the person or persons
entitled to the Director Option by will or by applicable laws of descent and
distribution. If a Non-Employee Director ceases to be a director of the Company
for any reason, any nonvested Director Option will expire on the date the
Non-Employee Director ceases to be a director of the Company.
12.5 PAYMENT OF EXERCISE PRICE. The exercise price of a Director
Option may be paid in cash, shares of Stock that have been held for at least six
month (through actual tender or by attestation), or other property (including
broker-assisted arrangements).
ARTICLE 13. PROVISIONS APPLICABLE TO AWARDS
13.1 STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan
may, in the discretion of the Committee, be granted either alone or in addition
to, or in tandem with any other Award granted under the Plan. Awards granted in
addition to or in tandem with other Awards may be granted either at the same
time as or at a different time from the grant of such other Awards.
13.2 EXCHANGE PROVISIONS. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Stock,
or another Award (subject to Section 13.1), based on the terms and conditions
the Committee determines and communicates to the Participant at the time the
offer is made.
13.3 TERM OF AWARD. The term of each Award will be for the period
as determined by the Committee, provided that in no event will the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant.
13.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan
and any applicable law or Award Agreement, payments or transfers to be made by
the Company or a Subsidiary on the grant or exercise of an Award may be made in
such forms as the Committee determines at or after the time of grant, including
without limitation, cash, Stock that has been held by the Participant for at
least six months, promissory note, other Awards, or other property, or any
combination, and may be made in a single payment or transfer, in installments,
or on a deferred basis, in each case determined in accordance with rules adopted
by, and at the discretion of, the Committee.
13.5 LIMITS ON TRANSFER. No right or interest of a Participant in
any Award may be pledged, encumbered, or hypothecated to or in favor of any
party other than the Company or a
-12-
<PAGE> 13
Subsidiary, or will be subject to any lien, obligation, or liability of such
Participant to any other party other than the Company or a Subsidiary. Except as
otherwise provided by the Committee, no Award will be assignable or transferable
by a Participant other than by will or the laws of descent and distribution.
13.6 BENEFICIARIES. Notwithstanding Section 13.5, a Participant
may, in the manner determined by the Committee, designate a beneficiary to
exercise the rights of the Participant and to receive any distribution with
respect to any Award upon the Participant's death. A beneficiary, legal
guardian, legal representative, or other person claiming any rights under the
Plan is subject to all terms and conditions of the Plan and any Award Agreement
applicable to the Participant, except to the extent the Plan and Award Agreement
otherwise provide, and to any additional restrictions deemed necessary or
appropriate by the Committee. If the Participant is married and resides in a
community property state, a designation of a person other than the Participant's
spouse as his beneficiary with respect to more than 50 percent of the
Participant's interest in the Award will not be effective without the written
consent of the Participant's spouse. If no beneficiary has been designated or
survives the Participant, payment will be made to the person entitled thereto
under the Participant's will or the laws of descent and distribution. Subject to
the foregoing, a beneficiary designation may be changed or revoked by a
Participant at any time provided the change or revocation is filed with the
Committee.
13.7 STOCK CERTIFICATES. All Stock certificates delivered under the
Plan are subject to any stop-transfer orders and other restrictions as the
Committee deems necessary or advisable to comply with Federal or state
securities laws, rules and regulations and the rules of any national securities
exchange or automated quotation system on with the Stock is listed, quoted, or
traded. The Committee may place legends on any Stock certificate to reference
restrictions applicable to the Stock..
13.8 ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control
occurs, all outstanding Awards shall become fully exercisable and all
restrictions on outstanding Awards shall lapse. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set
forth in Section 7.2(d), the excess Options shall be deemed to be Non-Qualified
Stock Options. Upon, or in anticipation of, such an event, the Committee may
cause every Award outstanding hereunder to terminate at a specific time in the
future and shall give each Participant the right to exercise Awards during a
period of time as the Committee, in its sole and absolute discretion, shall
determine.
ARTICLE 14. CHANGES IN CAPITAL STRUCTURE
14.1 GENERAL. In the event a stock dividend is declared upon the
Stock, the shares of Stock then subject to each Award (and the number of shares
subject thereto) will be increased proportionately without any change in the
aggregate purchase price therefor. If the Stock is changed into or exchanged for
a different number or class of shares of Stock or of another corporation,
whether through reorganization, recapitalization, stock split-up, combination of
shares, merger or consolidation, there will be substituted for each such share
of Stock then subject to each Award the number and class of shares of Stock into
which each outstanding share of Stock is exchanged, all without any change in
the aggregate purchase price for the shares then subject to each Award.
-13-
<PAGE> 14
ARTICLE 15. AMENDMENT, MODIFICATION AND TERMINATION
15.1 AMENDMENT, MODIFICATION AND TERMINATION. With the approval of
the Board, at any time and from time to time, the Committee may terminate, amend
or modify the Plan; provided, however, that to the extent necessary and
desirable to comply with any applicable law, regulation, or stock exchange rule,
the Company will obtain shareholder approval of any Plan amendment in such a
manner and to such a degree as required.
15.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan will adversely affect in any material way any Award
previously granted under the Plan without the written consent of the
Participant.
ARTICLE 16. GENERAL PROVISIONS
16.1 NO RIGHTS TO AWARDS. No Participant , employee, or other
person will have any claim to be granted any Award under the Plan, and neither
the Company nor the Committee is obligated to treat Participants, employees, and
other persons uniformly.
16.2 NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of
the rights of a stockholder of the Company unless and until shares of Stock are
in fact issued to such person in connection with such Award.
16.3 WITHHOLDING. The Company or any Subsidiary will have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of this Plan.
16.4 NO RIGHT TO EMPLOYMENT. Nothing in the Plan or any Award
Agreement will interfere with or limit in any way the right of the Company or
any Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary.
16.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an
"unfunded" plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award, nothing contained in the Plan or any
Award Agreement will give the Participant any rights that are greater than those
of a general creditor of the Company or any Subsidiary.
16.6 INDEMNIFICATION. To the extent allowable under applicable law,
each member of the Committee or of the Board will be indemnified and held
harmless by the Company from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by such member in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure
to act under the Plan and against and from any and all amounts paid by him or
her in satisfaction of judgment in such action, suit, or proceeding against him
or her provided he or she gives the Company an opportunity, at its own expense,
to handle and defend the same before he or she undertakes to handle and defend
it on his or her own behalf. The foregoing right of indemnification will not be
exclusive of any other rights of indemnification to which such
-14-
<PAGE> 15
persons may be entitled under the Company's Articles of Incorporation or
By-Laws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
16.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan will
be taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary.
16.8 EXPENSES. The expenses of administering the Plan will be paid
by the Company and its Subsidiaries.
16.9 TITLES AND HEADINGS. The titles and headings of the Sections
in the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, will
control.
16.10 FRACTIONAL SHARES. No fractional shares of stock will be
issued and the Committee will determine, in its discretion, whether cash will be
given in lieu of fractional shares or whether such fractional shares will be
eliminated by rounding up or down as appropriate.
16.11 SECURITIES LAW COMPLIANCE. With respect to any person who is,
on the relevant date, obligated to file reports under Section 16 of the Exchange
Act, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it will
be void to the extent permitted by law and voidable as deemed advisable by the
Committee.
16.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the
Company to make payment of awards in Stock or otherwise will be subject to all
applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Company will be under no obligation to register
under the Securities Act of 1933, as amended (the "1933 Act"), any of the shares
of Stock paid under the Plan. If the shares paid under the Plan may in certain
circumstances be exempt from registration under the 1933 Act, the Company may
restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.
16.13 GOVERNING LAW. The Plan and all Award Agreements will be
construed in accordance with and governed by the laws of the State of Delaware.
-15-
