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Exhibit 4.0
SYNTELLECT INC.
LONG-TERM INCENTIVE PLAN
(AS AMENDED THROUGH JUNE 1, 2000)
ARTICLE 1 PURPOSE
1.1. GENERAL. The purpose of the Syntellect Inc. Long-Term
Incentive Plan (the "Plan") is to promote the success, and enhance the
value, of Syntellect Inc. (the "Company") by linking the personal
interests of its employees, consultants and advisors to those of Company
shareholders and by providing its employees, consultants and advisors with
an incentive for outstanding performance. The Plan is further intended to
provide flexibility to the Company in its ability to motivate, attract,
and retain the services of employees, consultants and advisors upon whose
judgment, interest, and special effort the successful conduct of the
Company's operation is largely dependent. Accordingly, the Plan permits
the grant of incentive awards from time to time to selected employees,
consultants and advisors of the Company and any Subsidiary.
ARTICLE 2 EFFECTIVE DATE
2.1. EFFECTIVE DATE. The Plan became effective on February 1,
1995 (the "Effective Date"), the date the Plan was approved by the Board.
The Plan was approved by the shareholders of the Company on May 23, 1995.
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 shall 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 shall have the following meanings:
(a) "Award" means any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Share Award, Dividend Equivalent
Award, or Other Stock-Based Award, or any other right or interest
relating to Stock or cash, granted to a Participant under the Plan.
(b) "Award Agreement" means any written agreement,
contract, or other instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Company
or a Committee thereof formed under Section 4, as the case may be.
(d) "Cause" means (except as otherwise provided in an
Option Agreement) if the Board, in its reasonable and good faith
discretion, determines that the employee, consultant or advisor (i)
has developed or pursued interests substantially adverse to the
Company, (ii) materially breached any employment, engagement or
confidentiality agreement or otherwise failed to satisfactorily
discharge his or her duties, (iii) has not devoted all or
substantially all of his or her business time, effort and attention
to the affairs of the Company (or such lesser amount as has been
agreed to in writing by the Company), (iv) is convicted of a felony
involving moral turpitude, or (v) has engaged in activities or
omissions that are detrimental to the well-being of the Company.
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(e) "Change of Control" means and includes each of the
following (except as otherwise provided in an Option Agreement):
(1) there shall be consummated any consolidation
or 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) there shall be consummated any sale, lease,
exchange or other transfer (in one transaction or
a series of related transactions) of assets or
earning power aggregating more than 40% of the
assets or earning power of the Company and its
subsidiaries (taken as a whole);
(3) the shareholders of the Company shall 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 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 20% or more of the Company's
outstanding Stock; or
(5) during any period of two consecutive years,
individuals who at the beginning of such period
shall fail to constitute a majority thereof,
unless the election, or the nomination for
election by the Company's shareholders, of each
new director was approved by a vote of at least
two-thirds of the directors then still in office
who were directors at the beginning of the period.
(f) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(g) "Committee" means the committee of the Board
described in Article 4.
(h) "Disability" shall mean any illness or other
physical or mental condition of a Participant which renders the
Participant incapable of performing his customary and usual duties
for the Company, or any medically determinable illness or other
physical or mental condition resulting from a bodily injury, disease
or mental disorder which in the judgment of the Committee is
permanent and continuous in nature.
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The Committee may require such medical or other evidence as it deems
necessary to judge the nature and permanency of the Participant's
condition.
(i) "Dividend Equivalent" means a right granted to a
Participant under Article 11.
(j) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(k) "Fair Market Value" means with respect to Stock or
any other property, the fair market value of such Stock or other
property as determined by the Board in its discretion, under one of
the following methods: (i) the average of the closing bid and asked
prices for the Stock as reported on any national securities exchange
on which the Stock is then listed (which shall include the NASDAQ
National Market System) for that date or, if no prices are so
reported for that date, such prices on the next preceding date for
which closing bid and asked prices were reported; or (ii) the price
as determined by such methods or procedures as may be established
from time to time by the Board.
(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-Qualified Stock Option" means an Option that is
not intended to be an Incentive Stock Option.
(n) "Option" means a right granted to a Participant
under Article 7 of the Plan to purchase Stock at a specified price
during specified time periods.
An Option may be either an Incentive Stock Option or a Non-Qualified
Stock Option.
(o) "Other Stock-Based Award" means a right, granted to
a Participant under Article 12, that relates to or is valued by
reference to Stock or other Awards relating to Stock.
(p) "Participant" means a person who, as an employee of
or consultant or advisor to the Company or any Subsidiary, has been
granted an Award under the Plan. A "Participant" shall not include
any Director of the Company or any Subsidiary who is not also an
employee of or consultant to the Company or any Subsidiary.
(q) "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
performance goals established by the Committee.
(r) "Plan" means the Syntellect Inc. Long-Term Incentive
Plan, as amended from time to time.
(s) "Restricted Stock Award" means Stock granted to a
Participant under Article 10 that is subject to certain restrictions
and to risk of forfeiture.
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(t) "Stock" means the common stock of the Company and
such other securities of the Company that may be substituted for
Stock pursuant to Article 13.
(u) "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.
(v) "Subsidiary" means any corporation, domestic or
foreign, of which a majority of the outstanding voting stock or
voting power is beneficially owned directly or indirectly by the
Company.
ARTICLE 4 ADMINISTRATION
4.1. BOARD/COMMITTEE. The Plan shall be administered by the
Board of Directors or, to the extent required to comply with Rule 16b-3
promulgated under the Exchange Act, a Committee that is appointed by, and
serves at the discretion of, the Board. Any Committee shall consist of at
least two individuals who are members of the Board and are "disinterested
persons," as such term is defined in Rule 16b-3 promulgated under Section
16 of the Exchange Act or any successor provision, except as may be
otherwise permitted under Section 16 of the Exchange Act and the
regulations and rules promulgated thereunder. For purposes of this Plan,
the "Board" shall mean the Board of Directors or the Committee, as the
case may be.
4.2. ACTION BY THE BOARD. A majority of the Board shall
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 Board in lieu of a meeting shall be deemed the acts of the
Board. Each member of the Board 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 BOARD. The Board has the exclusive power,
authority and discretion to:
(a) Designate Participants;
(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 Board in its sole discretion determines;
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(e) 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;
(f) Prescribe the form of each Award Agreement, which
need not be identical for each Participant;
(g) Decide all other matters that must be determined in
connection with an Award;
(h) Establish, adopt or revise any rules and regulations
as it may deem necessary or advisable to administer the Plan; and
(i) Make all other decisions and determinations that may
be required under the Plan or as the Board deems necessary or
advisable to administer the Plan.
4.4. DECISIONS BINDING. The Board's interpretation of the
Plan, any Awards granted under the Plan, any Award Agreement and all
decisions and determinations by the Board 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 15.1, the aggregate number of shares of Stock reserved and
available for Awards or which may be used to provide a basis of
measurement for or to determine the value of an Award (such as with a
Stock Appreciation Right or Performance Share Award) shall be 2,100,000.
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, in each case to the full extent
available pursuant to the rules and interpretations of the Securities and
Exchange Commission under Section 16 of the Exchange Act, if applicable.
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. LIMITATIONS ON AWARDS TO ANY SINGLE PARTICIPANT. There is
no limitation that restricts the number of shares of stock which are
subject to Awards issued to any single Participant.
ARTICLE 6 ELIGIBILITY
6.1. GENERAL. Awards may be granted only to individuals who
are employees (including employees who also are directors or officers) of
the Company or a Subsidiary or to consultants or advisors thereto, as
determined by the Board.
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ARTICLE 7 STOCK OPTIONS
7.1. GENERAL. The Board is authorized to grant Options to
Participants on the following terms and conditions:
(a) EXERCISE PRICE. The exercise price per share of
Stock under an Option shall be determined by the Board.
(b) TIME AND CONDITIONS OF EXERCISE. The Board shall
determine the time or times at which an Option may be exercised in
whole or in part. The Board also shall determine the performance or
other conditions, if any, that must be satisfied before all or part
of an Option may be exercised.
(c) PAYMENT. The Board shall 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, or
other property (including net issuance or other "cashless exercise"
arrangements), and the methods by which shares of Stock shall be
delivered or deemed to be delivered to Participants. Without
limiting the power and discretion conferred on the Board pursuant to
the preceding sentence, the Board may, in the exercise of its
discretion, but need not, allow a Participant to pay the Option
price by directing the Company to withhold from the shares of Stock
that would otherwise be issued upon exercise of the Option that
number of shares having a Fair Market Value on the exercise date
equal to the Option price, all as determined pursuant to rules and
procedures established by the Board.
(d) EVIDENCE OF GRANT. All Options shall be evidenced by
a written Award Agreement between the Company and the Participant.
The Award Agreement shall include such provisions as may be
specified by the Board.
7.2. INCENTIVE STOCK OPTIONS. 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 shall be set by the Board, 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) LAPSE OF OPTION. An Incentive Stock Option shall
lapse under the following circumstances:
(1) The Incentive Stock Option shall lapse ten
(10) years after it is granted, unless an earlier time is set
in the Award Agreement.
(2) The Incentive Stock Option shall lapse upon
termination of employment for Cause or for any other reason,
other than the Participant's death or Disability, unless the
Committee determines in its discretion to extend the
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exercise period for no more than ninety (90) days after the
Participant's termination of employment.
(3) In the case of the Participant's termination
of employment due to Disability or death, the Incentive Stock
Option shall lapse upon termination of employment, unless the
Committee determines in its discretion to extend the exercise
period of the Incentive Stock Option for no more than twelve
(12) months after the date the Participant terminates
employment. Upon the Participant's death, any vested and
otherwise exercisable Incentive Stock Options 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
shall fail to make testamentary disposition of such Incentive
Stock Option or shall die intestate, by the person or persons
entitled to receive said Incentive Stock Option under the
applicable laws of descent and distribution.
(d) 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 One Hundred Thousand Dollars ($100,000.00).
(e) TEN PERCENT OWNERS. An Incentive Stock Option shall
be granted to any individual who, at the date of grant, owns stock
possessing more than ten percent (10%) of the total combined voting
power of all classes of Stock of the Company only if, at time such
Option is granted, the Option price is at least one hundred ten
percent (110%) of the Fair Market Value of the Stock and such Option
by its terms is not exercisable after the expiration of five (5)
years from the date the Option is granted.
(f) 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.
(g) RIGHT TO EXERCISE. During a Participant's lifetime,
an Incentive Stock Option may be exercised only by the Participant.
(h) EMPLOYEES ONLY. Incentive Stock Options may be
granted only to Participants who are employees of the Company or any
Subsidiary.
ARTICLE 8 STOCK APPRECIATION RIGHTS
8.1. GRANT OF SARs. The Board is authorized to grant SARs to
Participants on the following terms and conditions:
(a) 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:
(1) The Fair Market Value of one share of Stock on
the date of exercise; over
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(2) The grant price of the Stock Appreciation
Right as determined by the Board, which shall not be less than
the Fair Market Value of one share of Stock on the date of
grant in the case of any SAR related to any Incentive Stock
Option.
(b) OTHER TERMS. All awards of Stock Appreciation Rights
shall be evidenced by an Award Agreement. 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 shall be determined by the Board at the time of
the grant of the Award and shall be reflected in the Award
Agreement.
ARTICLE 9 PERFORMANCE SHARES
9.1. GRANT OF PERFORMANCE SHARES. The Board is authorized to
grant Performance Shares to Participants on such terms and conditions as
may be selected by the Board. The Board shall have the complete discretion
to determine the number of Performance Shares granted to each Participant.
All Awards of Performance Shares shall 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 Board, and payable to, or
exercisable by, the Participant to whom the Performance Shares are
granted, in whole or in part, as the Board shall establish at grant or
thereafter. The Board shall set performance 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,
provided that the time period during which the performance goals must be
met shall, in all cases, exceed six months.
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 Board and reflected in the Award Agreement.
ARTICLE 10 RESTRICTED STOCK AWARDS
10.1. GRANT OF RESTRICTED STOCK. The Board 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 Board. All
Awards of Restricted Stock shall be evidenced by a Restricted Stock Award
Agreement.
10.2. ISSUANCE AND RESTRICTIONS. Restricted Stock shall be
subject to such restrictions on transferability and other restrictions as
the Board 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 Board determines at the time of the grant of the
Award or thereafter.
10.3. FORFEITURE. Except as otherwise determined by the Board
at the time of the grant of the Award or thereafter, upon termination of
employment during the applicable restriction period, Restricted Stock that
is at that time subject to restrictions shall be forfeited and reacquired
by the Company, provided, however, that the Board may provide in any Award
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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 Board may in other
cases waive in whole or in part restrictions or forfeiture conditions
relating to Restricted Stock.
10.4. CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock
granted under the Plan may be evidenced in such manner as the Board shall
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 shall retain physical
possession of the certificate until such time as all applicable
restrictions lapse.
ARTICLE 11 DIVIDEND EQUIVALENTS
11.1. GRANT OF DIVIDEND EQUIVALENTS. The Board is authorized
to grant Dividend Equivalents to Participants subject to such terms and
conditions as may be selected by the Board. Dividend Equivalents shall
entitle the Participant to receive payments equal to dividends with
respect to all or a portion of the number of shares of Stock subject to an
Option Award or SAR Award, as determined by the Board. The Board may
provide that Dividend Equivalents be paid or distributed when accrued or
be deemed to have been reinvested in additional shares of Stock, or
otherwise reinvested.
ARTICLE 12 OTHER STOCK-BASED AWARDS
12.1. GRANT OF OTHER STOCK-BASED AWARDS. The Board is
authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that are payable in, valued in whole or in
part by reference to, or otherwise based on or related to shares of Stock,
as deemed by the Board to be consistent with the purposes of the Plan,
including without limitation shares of Stock awarded purely as a "bonus"
and not subject to any restrictions or conditions, convertible or
exchangeable debt securities, other rights convertible or exchangeable
into shares of Stock, and Awards valued by reference to book value of
shares of Stock or the value of securities of or the performance of
specified Subsidiaries. The Board shall determine the terms and conditions
of such Awards.
ARTICLE 13 PROVISIONS APPLICABLE TO AWARDS
13.1. STAND-ALONE, TANDEM, AND SUBSTITUTE AWARDS. Awards
granted under the Plan may, in the discretion of the Board, be granted
either alone or in addition to, in tandem with, or in substitution for,
any other Award granted under the Plan. If an Award is granted in
substitution for another Award, the Board may require the surrender of
such other Award in consideration of the grant of the new Award. 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 Board 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 Board determines and communicates to the Participant at the
time the offer is made.
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13.3. TERM OF AWARD. The term of each Award shall be for the
period as determined by the Board, provided that in no event shall 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 Board determines at or after the
time of grant, including without limitation, cash, Stock, 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 Board.
The Board may also authorize payment in the exercise of an Option by net
issuance or other cashless exercise methods.
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 Subsidiary, or shall 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 below, no Award shall be assignable or transferable by a
Participant other than by will or the laws of descent and distribution or,
with the consent of the Board in its sole discretion and except in the
case of an Incentive Stock Option, pursuant to a court order that would
otherwise satisfy the requirements to be a domestic relations order as
defined in Section 414(p)(1)(B) of the Code, if the order satisfies
Section 414(p)(1)(A) of the Code notwithstanding that such an order
relates to the transfer of a stock option rather than an interest in an
employee benefit plan. In the Award Agreement for any Award other than an
Award that includes an Incentive Stock Option, the Board may allow a
Participant to assign or otherwise transfer all or a portion of the rights
represented by the Award to specified individuals or classes of
individuals, or to a trust benefiting such individuals or classes of
individuals, subject to such restrictions, limitations, or conditions as
the Board deems to be appropriate.
13.6. BENEFICIARIES. Notwithstanding Section 13.5, a
Participant may, in the manner determined by the Board, 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 Board. If
the Participant is married and resides in a jurisdiction in which
community property laws apply, 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 shall not be effective
without the written consent of the Participant's spouse. If no beneficiary
has been designated or survives the Participant, payment shall 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 Board.
13.7. STOCK CERTIFICATES. All Stock certificates delivered
under the Plan are subject to any stop-transfer orders and, other
restrictions as the Board 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 which
the Stock is listed,
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quoted, or traded. The Board may place legends on any Stock certificate to
reference restrictions applicable to the Stock.
13.8 TENDER OFFERS. In the event of a public tender for all or
any portion of the Stock, or in the event that a proposal to merge,
consolidate, or otherwise combine with another company is submitted for
shareholder approval, the Board may in its sole discretion declare
previously granted Options to be immediately exercisable. 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.
13.9. CHANGE OF CONTROL. A Change of Control shall cause every
Option outstanding hereunder to become fully exercisable and allow each
Participant the right to exercise an Option prior to the occurrence of the
event otherwise terminating the Option; provided, however, that in the
event (i) the Company's Board of Directors approves a transaction to be
accounted for as a "pooling-of-interests" and (ii) the Company's
independent accountants have advised the Company in writing that the
amendment to this Section 13.9 approved by the Board of Directors on
February 17, 1998, precludes such accounting, then, without any further
action, such amendment to Section 13.9 shall be null and void, and Section
13.9 shall remain in effect as existing prior to such amendment.
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) shall be increased proportionately without any
change in the aggregate purchase price therefor. In the event the Stock
shall be 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, there shall be
substituted for each such share of Stock then subject to each Award (and
for each share of Stock then subject thereto) the number and class of
shares of Stock into which each outstanding share of Stock shall be so
exchanged, all without any change in the aggregate purchase price for the
shares then subject to each Award.
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 Board may
terminate, amend or modify the Plan. However, without approval of the
shareholders of the Company or other conditions (as may be required by the
Code, by the insider trading rules of Section 16 of the Exchange Act, by
any national securities exchange or system on which the Stock is listed or
reported, or by a regulatory body having jurisdiction), no such
termination, amendment, or modification may:
(a) Materially increase the total number of shares of
Stock that may be issued under the Plan, except as provided in
Section 14.1;
(b) Materially modify the eligibility requirements for
participation in the Plan; or
(c) Materially increase the benefits accruing to
Participants under the Plan.
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15.2. AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall 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 or employee or
consultant shall have any claim to be granted any Award under the Plan,
and neither the Company nor the Board is obligated to treat Participants
and employees or consultants 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 shall have
the authority and the right to deduct or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy
United States Federal, state, and local taxes (including the Participant's
FICA obligation and any withholding obligation imposed by any country
other than the United States in which the Participant resides) required by
law to be withheld with respect to any taxable event arising as a result
of this Plan. With respect to withholding required upon any taxable event
under the Plan, Participants may elect, subject to the Board's approval,
to satisfy the withholding requirement, in whole or in part, by having the
Company or any Subsidiary withhold shares of Stock having a Fair Market
Value on the date of withholding equal to the amount to be withheld for
tax purposes in accordance with such procedures as the Board establishes.
The Board may, at the time any Award is granted, require that any and all
applicable tax withholding requirements be satisfied by the withholding of
shares of Stock as set forth above.
16.4. NO RIGHT TO EMPLOYMENT. Nothing in the Plan or any Award
Agreement shall 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 and deferred 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 shall 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 shall 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 shall not be
exclusive of any other rights of indemnification to which such
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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 shall 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 shall
be borne 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, shall control.
16.10. FRACTIONAL SHARES. No fractional shares of stock shall
be issued and the Board shall determine, in its discretion, whether cash
shall be given in lieu of fractional shares or whether such fractional
shares shall be eliminated by rounding up.
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
Board fails to so comply, it shall be void to the extent permitted by law
and voidable as deemed advisable by the Board, and such provision or
action shall be deemed to be modified so as to comply with Rule 16b-3.
16.12. GOVERNMENT AND OTHER REGULATIONS. The obligation of the
Company to make payment of awards in Stock or otherwise shall be subject
to all applicable laws, rules, and regulations, and to such approvals by
government agencies as may be required. The Company shall be under no
obligation to register under the Securities Act of 1933, as amended, 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 such
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 shall
be construed in accordance with and governed by the laws of the State of
Arizona.
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