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EXHIBIT 10.4
THE GOOD GUYS, INC.
AMENDED AND RESTATED
1994 STOCK INCENTIVE PLAN
(AS AMENDED THROUGH December 20, 2000)
1. PURPOSE.
The purposes of the 1994 Stock Incentive Plan (the "Plan") are to
enable The Good Guys, Inc. (the "Corporation") and its Subsidiaries, if any, to
attract and retain directors, employees and consultants and to provide them with
additional incentive to advance the interests of the Corporation. For the
purposes of the Plan, the term "Subsidiary" means any corporation or other
entity in which the Corporation has, directly or indirectly, an equity interest
representing 50% or more of the capital stock thereof or equity interests
therein.
2. ADMINISTRATION.
(a) The Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Corporation (the "Board") and
consisting of not less than two non-employee directors (as defined under Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "1934 Act"), or
any successor rule.
(b) The Committee shall interpret the Plan and prescribe such rules,
regulations and procedures in connection with the Plan as it shall deem to be
necessary and advisable for the administration of the Plan.
3. ELIGIBILITY.
Officers, other key employees, non-employee directors and
consultants of the Corporation or any Subsidiary shall be eligible to be granted
stock options and to receive restricted share, restricted share unit,
performance unit or bonus share awards as described herein, with the exception
that non-employee directors and consultants shall not be eligible to receive
incentive stock options.
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4. SHARES AVAILABLE.
The aggregate number of shares of the Corporation's Common Stock,
$.001 par value ("Common Stock"), which may be issued and as to which grants or
awards of stock options, restricted shares, restricted share units, performance
units or bonus shares may be made under the Plan is 2,500,000 shares subject to
adjustment and substitution as set forth in Section 8. If any stock option
granted under the Plan is cancelled by mutual consent or terminates or expires
for any reason without having been exercised in full, the number of shares
subject thereto shall again be available for purposes of the Plan. If shares of
Common Stock or the right to receive shares of Common Stock are forfeited to the
Corporation pursuant to the restrictions applicable to restricted shares or
restricted share units awarded under the Plan, the shares so forfeited or
covered by such right shall not again be available for the purposes of the Plan.
To the extent any award of performance units is not earned or is paid in cash
rather than shares, the number of shares covered thereby shall again be
available for purposes of the Plan. The shares which may be issued under the
Plan may be either authorized but unissued shares or treasury shares or partly
each, as shall be determined from time to time by the Board.
5. GRANTS AND AWARDS.
(a) The Committee shall have authority, in its discretion, to grant
incentive stock options pursuant to Section 422 of the Code to officers and
other key employees and to grant non-qualified stock options and award
restricted shares, restricted share units, performance units and bonus shares to
officers, other key employees, non-employee directors and consultants.
Notwithstanding any other provision contained in the Plan or in any
stock option agreement, the aggregate fair market value, determined on the date
of grant, of the shares with respect to which incentive stock options are
exercisable for the first time by an employee during any calendar year under all
plans of the corporation employing such employee, any parent or subsidiary
corporation of such corporation and any predecessor corporation of any such
corporation shall not exceed $100,000; provided, however, that all or any
portion of a stock option which cannot be exercised because of such limitation
shall be treated as a non-qualified option.
The maximum number of shares covered by all grants or awards in any
fiscal year of the Corporation to any participant shall not exceed 250,000
(subject to adjustment and substitution as set forth in Section 8).
(b) On the date on which the Board appoints, or the shareholders of
the Corporation elect, a person who is not an employee of the Corporation as a
member of the Board for the first time, such director shall be awarded a
non-qualified option under this Plan to purchase 20,000 shares of Common Stock.
Each such option shall have an exercise price per share equal to the fair market
value of the shares of the Corporation on the date of such award and shall vest
as to the total number of shares covered thereby on the first anniversary date
of the grant of the option
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1 Subject to approval of the increase by 700,000 in the number of shares
covered by the Plan at the Annual Meeting of Shareholders to be held in
January 2001.
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(or, as to options awarded by reason of election at an annual meeting of
shareholders, on the day immediately preceding the next annual meeting, if
earlier). Except as otherwise specifically provided in this Section 5(b), the
terms of this Plan, shall apply to all options granted pursuant to this Section
5(b).
(c) If a grantee of a stock option, restricted share or performance
unit engages in the operation or management of a business (whether as owner,
partner, officer, director, employee or otherwise and whether during or after
termination of employment) which is in competition with the Corporation or any
of its Subsidiaries, the Committee may immediately terminate all outstanding
stock options held by the grantee, declare forfeited all restricted shares or
restricted share units held by the grantee as to which the restrictions have not
yet lapsed and terminate all outstanding performance unit awards held by the
grantee for which the applicable Performance Period has not been completed;
provided, however, that this sentence shall not apply if the lapse of the
restrictions applicable to restricted shares or restricted share units has been
accelerated as provided in Section 9A (c), or if a performance unit has been
deemed to have been earned as provided in Section 9A (d). Whether a grantee has
engaged in the operation or management of a business which is in competition
with the Corporation or any of its Subsidiaries shall be determined by the
Committee in its discretion, and any such determination shall be final and
binding.
6. TERMS AND CONDITIONS OF STOCK OPTIONS.
Stock options granted under the Plan shall be subject to the
following terms and conditions:
(a) The purchase price at which each stock option may be
exercised (the "option price") shall not be less than one hundred
percent (100%) of the fair market value per share of the Common
Stock covered by the stock option on the date of grant; provided,
however, that in the case of an incentive stock option granted to
an employee, who, immediately prior to such grant, owns stock
possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation or a
Subsidiary (a "Ten Percent Employee"), the option price shall not
be less than one hundred ten percent (110%) of such fair market
value on the date of grant. For purposes of this Section 6(a), an
individual (i) shall be considered as owning not only shares of
stock owned individually but also all shares of stock that are at
the time owned, directly or indirectly, by or for the spouse,
ancestors, lineal descendants and brothers and sisters (whether
by the whole or half blood) of such individual and (ii) shall be
considered as owning proportionately any shares owned, directly
or indirectly, by or for any corporation, partnership, estate or
trust in which such individual is a shareholder, partner or
beneficiary.
(b) The option price for each stock option shall be paid in full
upon exercise and shall be payable in cash in United States
dollars
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(including check, bank draft or money order), which may include
cash forwarded through a broker or other agent-sponsored exercise
or financing program; provided, however, that in lieu of such
cash the person exercising the stock option may pay the option
price in whole or in part by delivering to the Corporation shares
of Common Stock having a fair market value on the date of
exercise of the stock option equal to the option price for the
shares being purchased; except that (i) any portion of the option
price representing a fraction of a share shall in any event be
paid in cash and (ii) no shares of Common Stock which have been
held for less than six months may be delivered in payment of the
option price of a stock option. Notwithstanding any procedure of
a broker or other agent-sponsored exercise or financing program,
if the option price is paid in cash, the exercise of the stock
option shall not be deemed to occur and no shares of the Common
Stock will be issued until the Corporation has received full
payment in cash (including check, bank draft or money order) for
the option price from the broker or other agent. The date of
exercise of a stock option shall be determined under procedures
established by the Committee, and as of the date of exercise the
person exercising the stock option shall be considered for all
purposes to be the owner of the shares with respect to which the
stock option has been exercised. Payment of the option price with
shares shall not increase the number of shares of Common Stock
available for issuance under the Plan.
(c) No stock option shall be exercisable during the first six
months of its term, subject to the provision of Section 9 hereof.
No stock option shall be exercisable after the expiration of ten
years (five years in the case of an incentive stock option
granted to a Ten Percent Employee) from the date of grant. To the
extent it is exercisable, a stock option may be exercised at any
time in whole or in part.
(d) The Committee shall have the power to set the time or times
within which each option shall be exercisable, and to accelerate
the time or times of exercise. Unless the stock option agreement
otherwise provides, the option shall become exercisable on a
cumulative basis as to one-third of the total number of shares
covered thereby on each of the first, second and third
anniversary dates of the date of grant of the option.
(e) No stock option shall be transferable by the grantee
otherwise than by will, or if the grantee dies intestate, by the
laws of descent and distribution of the state of domicile of the
grantee at the time of death, provided that a non-qualified stock
option may be transferred by a grantee to a trust or other entity
established by the
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grantee for estate planning purposes. Except for exercises of
non-qualified stock options by trusts or entities established by
the grantee for estate tax purposes, all stock options shall be
exercisable during the lifetime of the grantee only by the
grantee.
(f) Unless the Committee, in its discretion, shall otherwise
determine:
(i) If the employment, directorship or consultantship of a
grantee terminates, other than by reason of the death of the
grantee or the grantee becoming disabled within the meaning of
Section 422(c)(6) of the Code ("Disabled Grantee") any then
outstanding stock option held by such grantee shall be
exercisable by the grantee (but only to the extent exercisable by
the grantee immediately prior to such termination) at any time
prior to the expiration date of such stock option or within three
months after the date of such termination, whichever is the
shorter period;
(ii) If the employment, directorship or consultantship of a
grantee who is a Disabled Grantee is terminated, any then
outstanding stock option held by such grantee shall be
exercisable by the grantee in full (whether or not so exercisable
by the grantee immediately prior to such termination) by the
grantee at any time prior to the expiration date of such stock
option or within one year after the date of such termination,
whichever is the shorter period;
(iii) Following the death of a grantee during employment or while
serving as a director or a consultant, any outstanding stock
option held by the grantee at the time of death shall be
exercisable in full (whether or not so exercisable by the grantee
immediately prior to the death of the grantee) by the person
entitled to do so under the will of the grantee, or, if the
grantee shall fail to make testamentary disposition of the stock
option or shall die intestate, by the legal representative of the
grantee at any time prior to the expiration date of such stock
option or within one year after the date of death, whichever is
the shorter period; and
(iv) Following the death of a grantee after termination of
employment or his or her directorship or his or her
consultantship during a period within which a stock option is
exercisable, any outstanding stock option held by the grantee at
the time of death shall be exercisable by such person entitled to
do so under the will of the grantee or by such legal
representative (but only to the extent the stock option was
exercisable by the grantee immediately prior to the death of the
grantee) at any time prior to the expiration date of such stock
option or within one year after the date of death, whichever is
the shorter period.
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Whether a grantee is a Disabled Grantee shall be determined in each
case by the Committee in its discretion and any such determination by the
Committee shall be final and binding.
(g) All stock options shall be confirmed by an agreement, which
shall be executed on behalf of the Corporation by the Chief
Executive Officer (if other than the President), the President or
any Vice President of the Corporation and by the grantee.
(h) The term "fair market value" for all purposes of the Plan
shall mean the market price of the Common Stock, determined by
the Committee as follows:
(i) If the Common Stock is traded on a stock exchange, then the
Fair Market Value shall be equal to the closing price reported by
the applicable composite-transactions report for such date;
(ii) If the Common Stock is traded in the Nasdaq Stock Market and
is classified as a national market issue, then the Fair Market
Value shall be equal to the last-transaction price quoted by the
Nasdaq National Market system for such date;
(iii) If the Common Stock is traded in the Nasdaq Stock Market,
but is not classified as a national market issue, then the Fair
Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted by the Nasdaq system
for such date; and
(iv) If none of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good
faith on such basis as it deems appropriate.
(v) The obligation of the Corporation to issue shares of Common
Stock under the Plan shall be subject to (i) the effectiveness of
a registration statement under the Securities Act of 1933, as
amended, with respect to such shares, if deemed necessary or
appropriate by counsel for the Corporation, (ii) the condition
that the shares shall have been listed (or authorized for listing
upon official notice of issuance) upon each stock exchange, if
any, on which the Common Stock may then be listed and (iii) all
other applicable laws, regulations, rules and orders which may
then be in effect.
Subject to the foregoing provisions of this Section and the other
provisions of the Plan, any stock option granted under the Plan may be exercised
at such times and in such amounts and be subject to such restrictions and other
terms and conditions, if any, as shall be determined, in its discretion, by the
Committee and set forth in the agreement referred to in Section 6(i), or an
amendment thereto.
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7. TERMS AND CONDITIONS OF RESTRICTED SHARE, RESTRICTED SHARE UNIT,
PERFORMANCE UNIT AND BONUS SHARE AWARDS.
(a) Restricted Shares and Units. Restricted share or restricted
share unit awards shall be evidenced by a written agreement in the form
prescribed by the Committee in its discretion, which shall set forth the number
of restricted shares of Common Stock or restricted share units entitling the
holder to receive shares of Common Stock awarded, the restrictions imposed
thereon (including, without limitation, restrictions on the right of the grantee
to sell, assign, transfer or encumber such shares or units while such shares or
units are subject to other restrictions imposed under this Section 7), the
duration of such restrictions, events (which may, in the discretion of the
Committee, include performance-based events) the occurrence of which would cause
a forfeiture of restricted shares or restricted share units and such other terms
and conditions as the Committee in its discretion deems appropriate. Restricted
share or restricted share unit awards shall be effective only upon execution of
the applicable restricted share or restricted share unit agreement on behalf of
the Corporation by the Chief Executive Officer (if other than the President),
the President or any Vice President, and by the grantee.
Restricted shares or restricted share units may be issued for no
consideration other than for services to be rendered or for such consideration
as shall be determined at the time of award by the Committee.
Except as the Committee may otherwise in its sole discretion
determine, if the employment, directorship or consultantship of the holder of
restricted shares or restricted share units terminates for any reason, all
unvested restricted shares or restricted share units shall be forfeited.
Following a restricted share award and prior to the lapse or
termination of the applicable restrictions, the Committee shall deposit share
certificates for such restricted shares in escrow (which may be an escrow in the
custody of an officer of the Corporation). Upon the lapse or termination of the
applicable restrictions (and not before such time), the grantee shall be issued
or transferred share certificates for such restricted shares. From the date a
restricted share award is effective, the grantee shall be a shareholder with
respect to all the shares represented by such certificates and shall have all
the rights of a shareholder with respect to all such shares, including the right
to vote such shares and to receive all dividends and other distributions paid
with respect to such shares, subject only to the restrictions imposed by the
Committee. The grantee of restricted share units shall not have any rights as a
shareholder until the delivery to the grantee of shares on lapse of the
restrictions imposed.
(b) Performance Units. The Committee may award performance units
which shall be earned by an awardee based on the level of performance over a
specified period of time by the Corporation, a Subsidiary or Subsidiaries, any
branch, department or other portion thereof or the awardee individually, as
determined by the Committee. For the purposes of the grant of performance units,
the following definitions shall apply:
(i) "Performance unit" shall mean an award, expressed in dollars
or shares of Common Stock, granted to an awardee with respect to a
Performance Period. Awards expressed in dollars may be established as
fixed dollar amounts, as a percentage of salary,
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as a percentage of a pool based on earnings of the Corporation, a
Subsidiary or Subsidiaries or any branch, department or other portion
thereof or in any other manner determined by the Committee in its
discretion, provided that the amount thereof shall be capable of being
determined as a fixed dollar amount as of the close of the Performance
Period.
(ii) "Performance Period" shall mean an accounting period of the
Corporation or a Subsidiary of not less than one year, as determined by
the Committee in its discretion.
(iii) "Performance Target" shall mean that level of performance
established by the Committee which must be met in order for the
performance unit to be fully earned. The Performance Target may be
expressed in terms of earnings per share, return on assets, asset
growth, ratio of capital to assets or such other level or levels of
accomplishment by the Corporation, a Subsidiary or Subsidiaries, any
branch, department or other portion thereof or the awardee individually
as may be established or revised from time to time by the Committee.
(iv) "Minimum Target" shall mean a minimal level of performance
established by the Committee which must be met before any part of the
performance unit is earned. The Minimum Target may be the same as or
less than the Performance Target in the discretion of the Committee.
An awardee shall earn the performance unit in full by meeting the
Performance Target for the Performance Period. If the Minimum Target has not
been attained at the end of the Performance Period, no part of the performance
unit shall have been earned by the awardee. If the Minimum Target is attained
but the Performance Target is not attained, the portion of the performance unit
earned by the awardee shall be determined on the basis of a formula established
by the Committee.
Payment of earned performance units shall be made to awardees
following the close of the Performance Period as soon as practicable after the
time the amount payable is determined by the Committee. Payment in respect of
earned performance units, whether expressed in dollars or shares, may be made in
cash, in shares of Common Stock, or partly in cash and partly in shares of
Common Stock, as determined by the Committee at the time of payment. For this
purpose, performance units expressed in dollars shall be converted to shares,
and performance units expressed in shares shall be converted to dollars, based
on the fair market value of the Common Stock, as of the date the amount payable
is determined by the Committee.
Except as the Committee may otherwise in its sole discretion
determine, if the employment, directorship or consultantship of an awardee of
performance units terminates prior to the close of a Performance Period for any
reason, the performance units of the awardee shall be deemed not to have been
earned, and no portion of such performance units may be paid. Performance unit
awards shall be evidenced by a written agreement in the form prescribed by the
Committee which shall set forth the amount or manner of determining the amount
of the performance unit, the Performance Period, the Performance Target and any
Minimum Target and such other terms and conditions as the Committee in its
discretion deems appropriate. Performance unit awards shall be effective only
upon execution of the applicable performance
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unit agreement on behalf of the Corporation by the Chief Executive Officer (if
other than the President), the President or any Vice President, and by the
awardee.
(c) Bonus Shares. The Committee shall have the authority in its
discretion to award bonus shares of Common Stock to officers, other key
employees, non-employee directors or consultants from time to time in
recognition of the contribution of the awardee to the performance of the
Corporation, a Subsidiary or Subsidiaries, or any branch, department or other
portion thereof, in recognition of the awardee's individual performance or on
the basis of such other factors as the Committee may deem relevant.
8. ADJUSTMENT AND SUBSTITUTION OF SHARES.
If a dividend or other distribution shall be declared upon the
Common Stock payable in shares of the Common Stock, the number of shares of the
Common Stock then subject to any outstanding stock options, restricted share
units or performance unit awards and the number of shares of the Common Stock
which may be issued under the Plan but are not then subject to outstanding stock
options or awards shall be adjusted by adding thereto the number of shares of
the Common Stock which would have been distributable thereon if such shares had
been outstanding on the date fixed for determining the shareholders entitled to
receive such stock dividend or distribution. Shares of Common Stock so
distributed with respect to any restricted shares held in escrow shall be held
by the Corporation in escrow and shall be subject to the same restrictions as
are applicable to the restricted shares on which they were distributed.
If the outstanding shares of the Common Stock shall be changed into
or exchangeable for a different number or kind of shares of stock or other
securities of the Corporation or another corporation, whether through
reorganization, reclassification, recapitalization, stock split-up, combination
of shares, merger or consolidation, then there shall be substituted for each
share of the Common Stock subject to any then outstanding stock option,
restricted share unit or performance unit award, and for each share of the
Common Stock which may be issued under the Plan but which is not then subject to
any outstanding stock option or award, the number and kind of shares of stock or
other securities into which each outstanding share of the Common Stock shall be
so changed or for which each such share shall be exchangeable. Unless otherwise
determined by the Committee in its discretion, any such stock or securities, as
well as any cash or other property, into or for which any restricted shares held
in escrow shall be changed or exchangeable in any such transaction shall also be
held by the Corporation in escrow and shall be subject to the same restrictions
as are applicable to the restricted shares in respect of which such stock,
securities, cash or other property was issued or distributed.
In case of any adjustment or substitution as provided for in this
Section 8, the aggregate option price for all shares subject to each then
outstanding stock option prior to such adjustment or substitution shall be the
aggregate option price for all shares of stock or other securities (including
any fraction) to which such shares shall have been adjusted or which shall have
been substituted for such shares. Any new option price per share shall be
carried to at least three decimal places with the last decimal place rounded
upwards to the nearest whole number.
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No adjustment or substitution provided for in this Section 8 shall
require the Corporation to issue or sell a fraction of a share or other
security. Accordingly, all fractional shares or other securities which result
from any such adjustment or substitution shall be eliminated and not carried
forward to any subsequent adjustment or substitution. Owners of restricted
shares held in escrow shall be treated in the same manner as owners of Common
Stock not held in escrow with respect to fractional shares created by an
adjustment or substitution of shares, except that, unless otherwise determined
by the Committee in its discretion, any cash or other property paid in lieu of a
fractional share shall be subject to restrictions similar to those applicable to
the restricted shares exchanged therefor.
If any such adjustment or substitution provided for in this Section
8 requires the approval of shareholders in order to enable the Corporation to
grant incentive stock options, then no such adjustment or substitution shall be
made without the required shareholder approval. Notwithstanding the foregoing,
in the case of incentive stock options, if the effect of any such adjustment or
substitution would be to cause the stock option to fail to continue to qualify
as an incentive stock option or to cause a modification, extension or renewal of
such stock option within the meaning of Section 424 of the Code, the Committee
may elect that such adjustment or substitution not be made but rather shall use
reasonable efforts to effect such other adjustment of each then outstanding
stock option as the Committee, in its discretion, shall deem equitable and which
will not result in any disqualification, modification, extension or renewal
(within the meaning of Section 424 of the Code) of such incentive stock option.
9. CERTAIN EVENTS.
A. The following provisions of this subsection 9A shall apply
only with respect to options granted under the Plan prior to November 8, 2000;
(a) Definitions. For purposes of this Section 9A, the following
terms shall have the following meanings:
(i) The term "Person" shall be used as that term is used in
Sections 13(d) and 14(d) of the 1934 Act.
(ii) Beneficial ownership shall be determined as provided in Rule
13d-3 under the 1934 Act as in effect on the effective date of the Plan.
(iii) "Voting Shares" shall mean all securities of a company
entitling the holders thereof to vote in an annual election of Directors
(without consideration of the rights of any class of stock other than the Common
Stock to elect Directors by a separate class vote); and a specified percentage
of "Voting Power" of a company shall mean such number of the Voting Shares as
shall enable the holders thereof to cast such percentage of all the votes which
could be cast in an annual election of directors (without consideration of the
rights of any class of stock other than the Common Stock to elect Directors by a
separate class vote).
(iv) "Tender Offer" shall mean a tender offer or exchange offer
to acquire securities of the Corporation (other than such an offer made by the
Corporation or any Subsidiary), whether or not such offer is approved or opposed
by the Board.
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(v) "Section 9A Event" shall mean the date upon which any of the
following events occurs::
(1) The Corporation acquires actual knowledge that any Person has
acquired the Beneficial Ownership, directly or indirectly, of securities
of the Corporation entitling such Person to 20% or more of the Voting
Power of the Corporation, other than the Corporation, a Subsidiary or
any employee benefit plan(s) sponsored by the Corporation, or a Person
approved by the Board that has acquired 20% or more but less than 50% of
the Voting Power of the Corporation;
(2) Tender Offer is made to acquire securities of the Corporation
entitling the holders thereof to 20% or more of the Voting Power of the
Corporation; or
(3) A solicitation subject to Rule 14a-11 under the 1934 Act (or any
successor Rule) relating to the election or removal of 50% or more of
the members of any class of the Board shall be made by any person other
than the Corporation; or
(4) The shareholders of the Corporation shall approve a merger,
consolidation, share exchange, division or sale or other disposition of
assets of the Corporation as a result of which the shareholders of the
Corporation immediately prior to such transaction shall not hold,
directly or indirectly, immediately following such transaction a
majority of the Voting Power of (i) in the case of a merger or
consolidation, the surviving or resulting corporation, (ii) in the case
of a share exchange, the acquiring corporation or (iii) in the case of a
division or a sale or other disposition of assets, each surviving,
resulting or acquiring corporation which, immediately following the
transaction, holds more than 20% of the consolidated assets of the
Corporation immediately prior to the transaction; provided, however,
that (i) if securities beneficially owned by a grantee are included in
determining the Beneficial Ownership of a Person referred to in Section
9A(a)(v)(1), (ii) a grantee is required to be named pursuant to Item 2
of the Schedule 14D-1 (or any similar successor filing requirement)
required to be filed by the bidder making a Tender Offer referred to in
Section 9A(a)(v)(2), or (iii) if a grantee is a "participant" as defined
in 14a-11 under the 1934 Act (or any successor Rule) in a solicitation
(other than a solicitation by the Corporation) referred to in Section
9A(a)(v)(3), then no Section 9A Event with respect to such grantee shall
be deemed to have occurred by reason of such event.
(b) Acceleration of the Exercise Date of Stock Options. Unless the
agreement referred to in Section 6(g), or an amendment thereto, shall otherwise
provide, notwithstanding any other provision contained in the Plan, in case any
"Section 9A Event" occurs all outstanding stock options (other than those held
by a person referred to in the proviso to Section 9A(a)(v)) shall become
immediately and fully exercisable whether or not otherwise exercisable by their
terms.
(c) Lapse of Restrictions on Restricted Share or Restricted Share
Unit Awards. If any "Section 9A Event" occurs prior to the scheduled lapse of
all restrictions applicable to restricted share or restricted share unit awards
under the Plan (other than those held by a person
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referred to in the proviso to Section 9A(a)(v)), all such restrictions shall
lapse upon the occurrence of any such "Section 9A Event" regardless of the
scheduled lapse of such restrictions.
(d) Payment of Performance Units. If any "Section 9A Event" occurs
prior to the end of any Performance Period, all performance units awarded with
respect to such Performance Period (other than those held by a person referred
to in the proviso to Section 9(a)(v)) shall be deemed to have been fully earned
as of the date of such Section 9A Event, regardless of the attainment or
nonattainment of the Performance Target or any Minimum Target, and shall be paid
to the awardees thereof as promptly as practicable thereafter. If the
performance unit is not expressed as a fixed amount in dollars or shares, the
Committee may provide in the performance unit agreement for the amount to be
paid in the case of a Section 9A Event.
B. The following provisions of this subsection B shall be applicable
with respect to options granted under the Plan on and after November 8, 2000:
Except as otherwise provided in the option agreement, or any
contract of employment or engagement between the grantee and the Corporation, in
the event of a Change of Control Transaction, the Corporation shall endeavor to
cause the successor entity in such transaction either to assume all of the
options which have been granted hereunder and which are outstanding as of the
consummation of such transaction (the "Closing"), or to issue (or cause to be
issued in substitution therefor comparable options of such successor entity or
of its parent or its subsidiary. If the successor entity is unwilling to either
assume such options or grant comparable options in substitution for such options
on terms that are acceptable to the Corporation as determined by the Board in
the exercise of its discretion, then with respect to each outstanding option,
that portion of the option which remains unvested will become vested immediately
prior to the Closing; and the Board may cancel all outstanding options, and
terminate this Plan, effective as of the Closing, provided that it will notify
the grantee of the proposed Change of Control Transaction a reasonable amount of
time prior to the Closing so that each grantee will be given the opportunity to
exercise his or her option (after giving effect to the acceleration of such
vesting discussed above) prior to Closing. In the event of a Change of Control
Transaction, the Board will also have the discretion to waive restricted share
or restricted share unit restrictions and determine that performance units have
been fully earned. For purposes of this Section 9B , the term "Change of Control
Transaction" means (a) the sale of all or substantially all of the assets of the
Corporation to any person or entity that, prior to such sale, did not control,
was not under common control with, or was not controlled by, the Corporation, or
(b) a merger or consolidation or other reorganization in which the Corporation
is not the successor entity or becomes owned entirely by another entity, unless
at least fifty percent (50%) of the outstanding voting securities of the
surviving or parent corporation, as the case maybe, immediately following such
transaction are beneficially held by such persons and entities in the same
proportions as such persons and entities beneficially held the outstanding
voting securities of the Corporation immediately prior to such transaction, or
(c) the sale or other change of beneficial ownership of the outstanding voting
securities of the Corporation such that any person or "group" as that term is
defined under the Securities Exchange Act of 1934 becomes the beneficial owner
of more than 50% of the outstanding voting securities of the Corporation.
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10. EFFECT OF THE PLAN ON THE RIGHTS OF EMPLOYEES AND EMPLOYER.
Neither the adoption of the Plan nor any action of the Board or the
Committee pursuant to the Plan shall be deemed to give any person any right to
be granted a stock option or to be awarded restricted shares, restricted share
units, performance units or bonus shares under the Plan. Nothing in the Plan, in
any stock option, in any restricted share, restricted share unit, performance
unit or bonus share award under the Plan or in any agreement providing for any
of the foregoing shall confer any right to any employee to continue in the
employ of the Corporation or any Subsidiary or interfere in any way with the
rights of the Corporation or any Subsidiary to terminate the employment of any
employee at any time.
11. AMENDMENT.
The right to alter and amend the Plan at any time and from time to
time and the right to revoke or terminate the Plan are hereby specifically
reserved to the Board; provided that shareholder approval shall be required (a)
to increase the total number of shares which may be issued under the Plan, or
(b) if such approval is required to maintain the favorable tax treatment of
incentive stock options granted under the Plan. No alteration, amendment,
revocation or termination of the Plan shall, without the written consent of the
holder of a stock option, restricted shares, restricted share units, performance
units or bonus shares theretofore awarded under the Plan, adversely affect the
rights of such holder with respect thereto.
12. EFFECTIVE DATE AND DURATION OF PLAN.
The effective date and date of adoption of the Plan shall be
November 14, 1994, the date of adoption of the Plan by the Board. No stock
option may be granted, and no restricted shares, restricted share units, bonus
shares or performance units payable in performance shares may be awarded under
the Plan subsequent to November 13, 2004.
13. INDEMNIFICATION.
In addition to such other rights of indemnification as they may have
as directors, the members of the Committee administering the Plan shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any rights granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding that such member is liable for negligence or misconduct in
the performance of such member's duties; provided that within 60 days after
institution of any such action, suit or proceeding, the member shall in writing
offer the Corporation the opportunity, at its own expense, to handle and defend
the same.
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