INTERWEST HOME MEDICAL, INC.
2000 STOCK INCENTIVE PLAN
1. Purpose of Plan. The purpose of the Interwest Home Medical, Inc. 2000
Stock Incentive Plan (the "Plan") is to advance the interests of Interwest Home
Medical, Inc (the "Company") and its stockholders by enabling the Company and
its Subsidiaries to attract and retain persons of ability to perform services
for the Company and its Subsidiaries by providing an incentive to such
individuals through equity participation in the Company and by rewarding such
individuals who contribute to the achievement by the Company of its economic
objectives.
Pursuant to the Plan, the Company may grant (i) "incentive stock options,"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") and (ii) stock options that do not qualify as incentive
stock options ("non-qualified stock options"). No option granted under the Plan
shall be treated as an incentive stock option unless the stock option agreement
which evidences the grant refers to such option as an incentive stock option and
such option satisfies the requirements of Section 422 of the Code. Pursuant to
the Plan, the Company may grant Restricted Stock Awards and Stock Bonuses.
As used herein, the term "parent" or "subsidiary" shall mean any
present or future corporation which is or would be a "parent corporation" or
"subsidiary corporation" of the Company as the term is defined in Section 424 of
the Code (determined as if the Company were the employer corporation).
2. Definitions. The following terms will have the meanings set forth
below, unless the context clearly otherwise requires:
2.1. "Board" means the Board of Directors of the Company.
2.2. "Broker Exercise Notice" means a written notice pursuant to which a
Participant, upon exercise of an Option, irrevocably instructs a broker or
dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or any
related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer.
2.3. "Change in Control" means an event described in Section 11.1 of the
Plan.
2.4. "Code" means the Internal Revenue Code of 1986, as amended.
2.5. "Committee" means the group of individuals administering the Plan,
as provided in Section 3 of the Plan.
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2.6. "Common Stock" means the common stock of the Company; par value $.001
per share, or the number and kind of shares of stock or other securities into
which such Common Stock may be changed in accordance with Section 4.3 of the
Plan.
2.7. "Disability" means the disability of the Participant such as would
entitle the Participant to receive disability income benefits pursuant to the
long-term disability plan of the Company or Subsidiary then covering the
participant or, if no such plan exists or is applicable to the Participant, the
permanent and total disability of the Participant within the meaning of Section
22(e)(3) of the Code.
2.8. "Eligible Recipients" means all employees (including, without
limitation, officers and directors who are also employees) of the Company or any
Subsidiary, any non-employee director, consultants and independent contractors
of the Company or any Subsidiary and any joint venture partners (including
without limitation, officers, directors and partners thereof) of the Company or
any Subsidiary.
2.9. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.10. "Fair Market Value" means, with respect to the Common Stock, as of
any date (or, if no shares were traded or quoted on such date, as of the next
preceding date on which there was such a trade or quote), the closing market
price per share of the Common Stock as reported on NASDAQ on that date.
2.11. "Incentive Award" means an Option, Restricted Stock Award or Stock
Bonus granted to an Eligible Recipient pursuant to the Plan.
2.12. "Incentive Stock Option" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422 of
the Code.
2.13. "Non-Employee Director" means any member of the Board of Directors
of the Company who is not an employee of the Company or any Subsidiary.
2.14. "Non-Statutory Stock Option" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that does not
qualify as an Incentive Stock Option.
2.15. "Option" means an Incentive Stock Option or a Non-Statutory Stock
Option.
2.16. "Participant" means an Eligible Recipient who receives one or more
Incentive Awards under the Plan.
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2.17. "Previously Acquired Shares" means shares of Common Stock that are
already owned by the Participant or, with respect to any Incentive Award, that
are to be issued upon the grant, exercise or vesting of such Incentive Award.
2.18. "Restricted Stock Award" means an award of Common Stock granted to
an Eligible Recipient pursuant to Section 8 of the Plan that is subject to the
restrictions on transferability and the risk of forfeiture imposed by the
provisions of such Section 8.
2.19. "Retirement" means termination of employment or service pursuant to
and in accordance with the regular (or, if approved by the Board for purposes of
the Plan, early) retirement/pension plan or practice of the Company or
Subsidiary then covering the Participant, provided that if the Participant is
not covered by any such plan or practice, the Participant will be deemed to be
covered by the Company plan or practice for purposes of this determination.
2.20. "Securities Act" means the Securities Act of 1933, as amended.
2.21. "Stock Bonus" means an award of Common Stock granted to an Eligible
Recipient pursuant to Section 8 of the Plan.
2.22. "Subsidiary" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.
2.23. "Tax Date" means the date any withholding tax obligation arises
under the Code for a Participant with respect to an Incentive Award.
3. Plan Administration.
3.1. The Committee. The Plan shall be administered by the Committee as
appointed from time to time by the Board of Directors of the Company, which may
be the Compensation Committee of the Board of Directors. Except as otherwise
specifically provided herein, no person, other than members of the Committee,
shall have any discretion as to decisions regarding the Plan. The Company may
engage a third party to administer routine matters under the Plan, such as
establishing and maintaining accounts for Plan participants and facilitating
transactions by participants pursuant to the Plan.
In administering the Plan, the Committee may adopt rules and regulations
for carrying out the Plan. The interpretations and decisions made by the
Committee with regard to any question arising under the Plan shall be final and
conclusive on all persons participating or eligible to participate in the Plan.
3.2. Authority of the Committee.
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(a) In accordance with and subject to the provisions of the Plan,
the Committee will have the authority to determine all provisions of
Incentive Awards as the Committee may deem necessary or desirable and as
consistent with the terms of the Plan, including, without limitation, the
following:
(i) the Eligible Recipients to be selected as Participants;
(ii) the nature and extent of the Incentive Awards to be made to
each Participant (including the number of shares of Common Stock to
be subject to each Incentive Award, any exercise price, the manner
in which Incentive Awards will vest or become exercisable and
whether Incentive Awards will be granted in tandem with other
Incentive Awards) and the form of written agreement, if any,
evidencing such Incentive Award;
(iii) the time or times when Incentive Awards will be granted;
(iv) the duration of each Incentive Award; and (v) the restrictions
and other conditions to which the payment or vesting of Incentive
Awards may be subject. In addition, the Committee will have the
authority under the Plan in its sole discretion to pay the economic
value of any Incentive Award in the form of cash, Common Stock or
any combination of both.
(b) The Committee will have the authority under the Plan to amend or
modify the terms of any outstanding Incentive Award in any manner,
including, without limitation, the authority to modify the number of
shares or other terms and conditions of an Incentive Award, extend the
term of an Incentive Award, accelerate the exercisability or vesting or
otherwise terminate any restrictions relating to an Incentive Award,
accept the surrender of any outstanding Incentive Award or, to the extent
not previously exercised or vested, authorize the grant of new Incentive
Awards in substitution for surrendered Incentive Awards; provided, however
that the amended or modified terms are permitted by the Plan as then in
effect and that any Participant adversely affected by such amended or
modified terms has consented to such amendment or modification. No
amendment or modification to an Incentive Award, however, whether pursuant
to this Section 3.2 or any other provisions of the Plan, will be deemed to
be a regrant of such Incentive Award for purposes of this Plan.
(c) In the event of (i) any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock
split, combination of shares, rights offering, extraordinary dividend or
divestiture (including a spin-off) or any other change in corporate
structure or shares, (ii) any purchase, acquisition, sale or disposition
of a significant amount of assets or a significant business, (iii) any
change in accounting principles or practices, or (iv) any other similar
change, in each case with respect the Company or any other entity whose
performance is relevant to the grant or vesting of an Incentive Award, the
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Committee (or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) may,
without the consent of any affected Participant, amend or modify the
vesting criteria of any outstanding Incentive Award that is based in whole
or in part on the financial performance of the Company (or any Subsidiary
or division thereof) or such other entity so as equitably to reflect such
event, with the desired result that the criteria for evaluating such
financial performance of the Company or such other entity will be
substantially the same (in the sole discretion of the Committee or the
board of directors of the surviving corporation) following such event as
prior to such event; provided, however, that the amended or modified terms
are permitted by the Plan as then in effect.
4. Shares Available for Issuance.
4.1. Maximum Number of Shares Available. Subject to adjustment as provided
in Section 4.3 of the Plan, the maximum number of shares of Common Stock that
will be available for issuance under the Plan will be 600,000 shares.
4.2. Accounting for Incentive Awards. Shares of Common Stock that are
issued under the Plan or that are subject to outstanding Incentive Awards will
be applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan. Any shares of Common Stock that are
subject to an Incentive Award that lapses, expires, is forfeited or for any
reason is terminated unexercised or unvested and any shares of Common Stock that
are subject to an Incentive Award that is settled or paid in cash or any form
other than shares of Common Stock will automatically again become available for
issuance under the Plan. Any shares of Common Stock that constitute the
forfeited portion of a Restricted Stock Award, however, will not become
available for further issuance under the Plan.
4.3. Adjustments to Shares and Incentive Awards. In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend (including a spin-off) or any
other change in the corporate structure or shares of the Company, the Committee
(or, if the Company is not the surviving corporation in any such transaction,
the board of directors of the surviving corporation) will make appropriate
adjustment (which determination will be conclusive) as to the number and kind of
securities available for issuance under the Plan and, in order to prevent
dilution or enlargement of the rights of Participants, the number, kind and,
where applicable, exercise price of securities subject to outstanding Incentive
Awards.
5. Participation. Participants in the Plan will be those Eligible
Recipients who, in the judgment of the Committee, have contributed, are
contributing or are expected to contribute to the achievement of economic
objectives of the Company or its Subsidiaries. Eligible Recipients may be
granted from time to time one or more Incentive Awards, singly or in combination
or in tandem with other Incentive Awards, as may be determined by the Committee
in its sole discretion.
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Incentive Awards will be deemed to be granted as of the date specified in the
grant resolution of the Committee, which date will be the date of any related
agreement with the Participant.
6. Options.
6.1. Grant. An Eligible Recipient may be granted one or more Options under
the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion. The Committee may designate whether an Option
is to be considered an Incentive Stock Option or a Non-Statutory Stock Option.
6.2. Exercise Price. The per share price to be paid by a Participant upon
exercise of an Option will be determined by the Committee in its discretion at
the time of the Option grant, provided that (a) such price will not be less than
100% of the Fair Market Value of one share of Common Stock on the date of grant
with respect to an Incentive Stock Option (110% of the Fair Market Value if, at
the time the Incentive Stock Option is granted, the Participant owns, directly
or indirectly, more than 10% of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary corporation of the Company),
and (b) such price will not be less than 85% of the Fair Market Value of one
share of Common Stock on the date of grant with respect to a Non-Statutory Stock
Option.
6.3. Exercisabilitv and Duration. An Option will become exercisable at
such times and in such installments as may be determined by the Committee in its
sole discretion at the time of grant; provided, however, that no Option may be
exercisable after 10 years from its date of grant.
6.4. Payment of Exercise Price. The purchase price of the shares to be
purchased upon exercise of an Option will be payable to the Company in United
States dollars in cash or by check or, such other legal consideration as may be
approved by the Committee in its discretion. The Committee, in its sole
discretion and upon terms and conditions established by the Committee, may allow
such payments to be made, in whole or in part, by tender of a Broker Exercise
Notice, Previously Acquired Shares or by a combination of such methods.
6.5. Manner of Exercise. An Option may be exercised by a Participant in
whole or in part from time to time, subject to the conditions contained in the
Plan and in the agreement evidencing such Option, by delivery in person, by
facsimile or electronic transmission or through the mail of written notice of
exercise to the Company (Attention: Chief Financial Officer) at its principal
executive office in Salt lake City, Utah and by paying in full the total
exercise price for the shares of Common Stock to be purchased in accordance with
Section 6.4 of the Plan.
6.6. Aggregate Limitation of Stock Subject to Incentive Stock Options. To
the extent that the aggregate Fair Market Value (determined as of the date an
Incentive Stock Option is granted) of the shares of Common Stock with respect to
which incentive stock options (within the meaning of Section 422 of the Code)
are exercisable for the first time by a Participant during any calendar year
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(under the Plan and any other incentive stock option plans of the Company or any
subsidiary or parent corporation of the Company (within the meaning of the
Code)) exceeds $100,000 (or such other amount as may be prescribed by the Code
from time to time), such excess Options will be treated as Non-Statutory Stock
Options. The determination will be made by taking incentive stock options into
account in the order in which they were granted. If such excess only applies to
a portion of an incentive stock option, the Committee, in its discretion, will
designate which shares will be treated as shares to be acquired upon exercise of
an incentive stock option.
7. Restricted Stock Awards.
7.1. Grant. An Eligible Recipient may be granted one or more Restricted
Stock Awards under the Plan, and such Restricted Stock Awards will be subject to
such terms and conditions, consistent with the other provisions of the Plan, as
may be determined by the Committee in its sole discretion. The Committee may
impose such restrictions or conditions, not inconsistent with the provisions of
the Plan, to the vesting of such Restricted Stock Awards as it deems
appropriate, including, without limitation, that the Participant remain in the
continuous employ or service of the Company or a Subsidiary for a certain period
or that the Participant or the Company (or any Subsidiary or division thereof)
satisfy certain performance goals or criteria.
7.2. Rights as a Stockholder; Transferability. Except as provided in
Sections 7.1, 7.3 and 12.3 of the Plan, a Participant will have all voting,
dividend, liquidation and other rights with respect to shares of Common Stock
issued to the Participant as a Restricted Stock Award under this Section 7 upon
the Participant becoming the holder of record of such shares as if such
Participant were a holder of record of shares of unrestricted Common Stock.
7.3. Dividends and Distributions. Unless the Committee determines
otherwise in its sole discretion (either in the agreement evidencing the
Restricted Stock Award at the time of grant or at any time after the grant of
the Restricted Stock Award), any dividends or distributions (including regular
quarterly cash dividends) paid with respect to shares of Common Stock subject to
the unvested portion of a Restricted Stock Award will be subject to the same
restrictions as the shares to which such dividends or distributions relate. In
the event the Committee determines not to pay such dividends or distributions
currently, the Committee will determine in its sole discretion whether any
interest will be paid on such dividends or distributions. In addition, the
Committee in its sole discretion may require such dividends and distributions to
be reinvested (and in such case the Participants consent to such reinvestment)
in shares of Common Stock that will be subject to the same restrictions as the
shares to which such dividends or distributions relate.
7.4. Enforcement of Restrictions. To enforce the restrictions referred to
in this Section 7, the Committee may place a legend on the stock certificates
referring to such restrictions and may require the Participant, until the
restrictions have lapsed, to keep the stock certificates, together with duly
endorsed stock powers, in the custody of the Company or its transfer agent or to
maintain evidence of stock ownership, together with duly endorsed stock powers,
in a certificateless book-entry stock account with the Company's transfer agent.
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8. Stock Bonuses. An Eligible Recipient may be granted one or more Stock
Bonuses under the Plan, and such Stock Bonuses will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. The Participant will have
all voting, dividend, liquidation and other rights with respect to the shares of
Common Stock issued to a Participant as a Stock Bonus under this Section 8 upon
the Participant becoming the holder of record of such shares; provided, however,
that the Committee may impose such restrictions on the assignment or transfer of
a Stock Bonus as it deems appropriate.
9. Effect of Termination of Employment or Other Service.
9.1. Termination Due to Death, Disability or Retirement. In the event a
Participant's employment or other service with the Company and all Subsidiaries
is terminated by reason of death, Disability or Retirement:
(a) All outstanding Options then held by the Participant will remain
exercisable to the extent exercisable as of such termination following
such termination until the expiration date of such Option;
(b) All Restricted Stock Awards then held by the Participant that
have not vested will be terminated and forfeited; and
(c) All Stock Bonuses then held by the Participant will vest and/or
continue to vest in the manner determined by the Committee and set forth
in the agreement evidencing such Stock Bonuses.
9.2. Termination for Reasons Other than Death, Disability or Retirement.
(a) In the event a Participant's employment or other service is
terminated with the Company and all Subsidiaries for any reason other than
death, Disability or Retirement, or a Participant is in the employ or
service of a Subsidiary and the Subsidiary ceases to be a Subsidiary of
the Company (unless the Participant continues in the employ or service of
the Company or another Subsidiary), all rights of the Participant under
the Plan and any agreements evidencing an Incentive Award will immediately
terminate without notice of any kind, and no Options then held by the
Participant will thereafter be exercisable, all Restricted Stock Awards
then held by the Participant that have not vested will be terminated and
forfeited, and Stock Bonuses then held by the Participant will vest and/or
continue to vest in the manner determined by the Committee and set forth
in the agreement evidencing such Stock Bonuses; provided, however, that if
such termination is due to any reason other than termination by the
Company or any Subsidiary for "cause," all outstanding Options then held
by such Participant will remain exercisable to the extent exercisable as
of such termination for a period of one month after such termination (but
in no event after the expiration date of any such Option).
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(b) For purposes of this Section 9.2, "cause" (as determined by the
Committee) will be as defined in any employment or other agreement or
policy applicable to the Participant or, if no such agreement or policy
exists, will mean (i) dishonesty, fraud, misrepresentation, embezzlement
or deliberate injury or attempted injury, in each case related to the
Company or any Subsidiary, (ii) any unlawful or criminal activity of a
serious nature, (iii) any intentional and deliberate breach of a duty or
duties that, individually or in the aggregate, are material in relation to
the Participant's overall duties, or (iv) any material breach of any
employment, service, confidentiality or noncompete agreement entered into
with the Company or any Subsidiary.
9.3. Modification of Rights Upon Termination. Notwithstanding the other
provisions of this Section 9, upon a Participant's termination of employment or
other service with the Company and all Subsidiaries, the Committee may, in its
sole discretion (which may be exercised at any time on or after the date of
grant, including following such termination), cause Options (or any part
thereof) then held by such Participant to become or continue to become
exercisable and/or remain exercisable following such termination of employment
or service and Restricted Stock Awards and Stock Bonuses then held by such
Participant to vest and/or continue to vest or become free of transfer
restrictions, as the case may be, following such termination of employment or
service, in each case in the manner determined by the Committee; provided,
however, that no Option may remain exercisable beyond its expiration date.
9.4. Breach of Confidentiality or Noncompete Agreements. Notwithstanding
anything in this Plan to the contrary, in the event that a Participant
materially breaches the terms of any confidentiality or noncompete agreement
entered into with the Company or any Subsidiary or takes any other action that
the Committee, in its sole discretion, deems to be adverse to the interests of
the Company or any Subsidiary (an "Adverse Action"), whether such Adverse Action
occurs before or after termination of such Participant's employment or other
service with the Company or any Subsidiary, the Committee in its sole discretion
may immediately terminate all rights of the Participant under the Plan and any
agreements evidencing an Incentive Award then held by the Participant without
notice of any kind. In addition, to the extent that a Participant takes such
Adverse Action during the period beginning 6 months prior to, and ending 6
months following, the date of such employment or service termination, the
Committee in its sole discretion will have the authority (by so providing in the
agreement evidencing such Incentive Award at the time of grant) to rescind (i)
any grant of an Incentive Award made to such Participant during such period and
(ii) any exercise of an Option of the Participant that was exercised during such
period, and to require the Participant to pay to the Company, within 10 days of
receipt from the Company of notice of such rescission, the amount of any gain
realized from such rescinded grant or exercise. Such payment will be made in
cash (including check, bank draft or money order) or, with the Committee's
consent, shares of Common Stock with a Fair Market Value on the date of payment
equal to the amount of such payment. The Company will be entitled to withhold
and deduct from future wages of the Participant (or from other amounts that may
be due and owing to the Participant from the Company or Subsidiary) or make
other arrangements for the collection of all amounts necessary to satisfy such
payment obligation.
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9.5. Date of Termination of Employment or Other Service. Unless the
Committee otherwise determines in its sole discretion, a Participant's
employment or other service will, for purposes of the Plan, be deemed to have
terminated on the date recorded on the personnel or other records of the Company
or the Subsidiary for which the Participant provides employment or other
service, as determined by the Committee in its sole discretion based upon such
records.
10. Payment of Withholding Taxes.
10.1. General Rules. The Company is entitled to (a) withhold and deduct
from future wages of the Participant (or from other amounts that may be due and
owing to the Participant from the Company or a Subsidiary), or make other
arrangements for the collection of, all legally required amounts necessary to
satisfy any and all federal, state and local withholding and employment-related
tax requirements attributable to an Incentive Award, including, without
limitation, the grant, exercise or vesting of, or payment of dividends with
respect to, an Incentive Award or a disqualifying disposition of stock received
upon exercise of an Incentive Stock Option, or (b) require the Participant
promptly to remit the amount of such withholding to the Company before taking
any action, including issuing any shares of Common Stock, with respect to an
Incentive Award.
10.2. Special Rules. The Committee may, in its sole discretion and upon
terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 12.1 of the Plan by
electing to tender Previously Acquired Shares or a Broker Exercise Notice, or by
a combination of such methods.
11. Change in Control.
11.1. Change in Control. For purposes of this Section 11.1, a "Change in
Control" of the Company will mean (a) the sale, lease, exchange or other
transfer of substantially all of the assets of the Company (in one transaction
or in a series of related transaction) to a person or entity that is not
controlled, directly or indirectly, by the Company, (b) a merger or
consolidation to which the Company is a party if the stockholders of the Company
immediately prior to effective date of such merger or consolidation do not have
"beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act)
immediately following the effective date of such merger or consolidation of more
than 80% of the combined voting power of the surviving corporation's outstanding
securities ordinarily having the right to vote at elections of directors, or (c)
a change in control of the Company of a nature that would be required to be
reported pursuant to Section 13 or 15(d) of the Exchange Act, whether or not the
Company is then subject to such reporting requirements, including, without
limitation, such time as (i) any person becomes, after the effective date of the
Plan, the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 40% or more of the combined voting power of the
Company's outstanding securities ordinarily having the right to vote at
elections of directors, or (ii) individuals who constitute the Board on the
effective date of the Plan cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to the effective date of the Plan whose election, or nomination for
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election by the Company's stockholders, was approved by a vote of at least a
majority of the directors comprising the Board on the effective date of the Plan
will, for purposes of this clause (ii), be considered as though such persons
were a member of the Board on the effective date of the Plan.
11.2. Acceleration of Vesting. Without limiting the authority of the
Committee under Section 3.2 of the Plan, if a Change in Control of the Company
occurs, then, if approved by the Committee in its sole discretion either in an
agreement evidencing an Incentive Award at the time of grant or at any time
after the grant of an Incentive Award, (a) all Options will become immediately
exercisable in full and will remain exercisable for the remainder of their
terms, regardless of whether the Participants to whom such Options have been
granted remain in the employ or service of the Company or any Subsidiary; (b)
all outstanding Restricted Stock Awards will become immediately fully vested;
and (c) and Stock Bonuses then held by the Participant will vest and/or continue
to vest in the manner determined by the Committee and set forth in the agreement
evidencing such or Stock Bonuses.
11.3. Cash Payment for Options. If a Change in Control of the Company
occurs, then the Committee, if approved by the Committee in its sole discretion
either in an agreement evidencing an Incentive Award at the time of grant or at
any time after the grant of an Incentive Award, and without the consent of any
Participant effected thereby, may determine that some or all Participants
holding outstanding Options will receive, with respect to and in lieu of some or
all of the shares of Common Stock subject to such Options, as of the effective
date of any such Change in Control of the Company, cash in an amount equal to
the excess of the Fair Market Value of such shares immediately prior to the
effective date of such Change in Control of the Company over the exercise price
per share of such Options.
11.4. Limitation on Change in Control Payments. Notwithstanding anything
in Section 11.2 or 11.3 of the Plan to the contrary, if, with respect to a
Participant, the acceleration of the vesting of an Incentive Award as provided
in Section 11.2 or the payment of cash in exchange for all or part of an
Incentive Award as provided in Section 11.3 (which acceleration or payment could
be deemed a "payment" within the meaning of Section 280G(b)(2) of the Code),
together with any other payments which such Participant has the right to receive
from the Company or any corporation that is a member of an "affiliated group"
(as defined in Section 1504(a) of the Code without regard to Section 1504(b) of
the Code) of which the Company is a member, would constitute a "parachute
payment" (as defined in Section 280G(b)(2) of the Code), then the payments to
such Participant pursuant to Section 11.2 or 11.3 will be reduced to the largest
amount as will result in no portion of such payments being subject to the excise
tax imposed by Section 4999 of the Code; provided, however, that if such
Participant is subject to a separate agreement with the Company or a Subsidiary
which specifically provides that payments attributable to one or more forms of
employee stock incentives or to payments made in lieu of employee stock
incentives will not reduce any other payments under such agreement, even if it
would constitute an excess parachute payment, then the limitations of this
Section 11.4 will, to that extent, not apply.
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12. Rights of Eligible Recipients and Participants: Transferability.
12.1. Employment or Service. Nothing in the Plan will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Recipient or Participant at any time, nor
confer upon any Eligible Recipient or Participant any right to continue in the
employ or service of the Company or any Subsidiary.
12.2. Rights as a Stockholder. As a holder of Incentive Awards (other than
Restricted Stock Awards), a Participant will have no rights as a stockholder
unless and until such Incentive Awards are exercised for, or paid in the form
of, shares of Common Stock and the Participant becomes the holder of record of
such shares. Except as otherwise provided in the Plan, no adjustment will be
made for dividends or distributions with respect to such Incentive Awards as to
which there is a record date preceding the date the Participant becomes the
holder of record of such shares, except as the Committee may determine in its
discretion.
12.3. Restrictions on Transfer. Except pursuant to testamentary will or
the laws of descent and distribution or as otherwise expressly permitted by the
Committee or the Plan, no right or interest of any Participant in an Incentive
Award prior to the exercise or vesting of such Incentive Award will be
assignable or transferable, or subjected to any lien; during the lifetime of the
Participant, either voluntarily or involuntarily, directly or indirectly by
operation of law or otherwise. A Participant will, however, be entitled to
designate a beneficiary to receive an Incentive Award upon such Participant's
death, and in the event of a Participant's death, payment of any amounts due
under the Plan will be made to, and exercise of any Options may be made by, the
Participant's legal representatives, heirs and legatees.
12.4. Non-Exclusivity of the Plan. Nothing contained in the Plan is
intended to modify or rescind any previously approved compensation plans of
programs of the Company or create any limitations on the power or authority of
the Board to adopt such additional or other compensation arrangements as the
Board may deem necessary or desirable.
12.5. Securities Law and Other Restrictions. Notwithstanding any other
provision of the Plan or any agreements entered into pursuant to the Plan, the
Company will not be required to issue any shares of Common Stock under this
Plan, and a Participant may not sell, assign, transfer or otherwise dispose of
shares of Common Stock issued pursuant to Incentive Awards granted under the
Plan, unless (a) there is in effect with respect to such shares a registration
statement under the Securities Act and any applicable state securities laws or
an exemption from such registration under the Securities Act and applicable
state securities laws, and (b) there has been obtained any other consent,
approval or permit from any other regulatory body which the Committee, in its
sole discretion, deems necessary or advisable. The Company may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing shares of Common Stock, as may be deemed necessary or advisable by
the Company in order to comply with such securities law or other restrictions.
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13. Plan Amendment. Modification and TerminThe Board may suspend or
terminate the Plan or any portion thereof at any time, and may amend the Plan
from time to time in such respects as the Board may deem advisable in order that
Incentive Awards under the Plan will conform to any change in applicable laws or
regulations or in any other respect the Board may deem to be in the best
interests of the Company; provided, however, that (a) the Board will not have
the authority to amend the eligibility requirements for Options granted pursuant
to Section 6.7 of the Plan, or to modify the number of shares, exercise price,
exercisability, duration, manner of payment or other terms with respect to such
Options, more than once every six months, other than to comply with changes in
the Code, the Employee Retirement Income Security Act or the rules promulgated
thereunder; and (b) no amendments to the Plan will be effective without approval
of the stockholders of the Company if stockholder approval of the amendment is
then required pursuant to Rule 16b-3 under the Exchange Act, Section 422 of the
Code or the rules of the National Association of Securities Dealers, Inc. No
termination, suspension or amendment of the Plan may adversely affect any
outstanding Incentive Award without the consent of the affected Participant;
provided, however, that this sentence will not impair the right of the Committee
to take whatever action it deems appropriate under Sections 4.3 and 11 of the
Plan.
14. Effective Date and Duration of the Plan. The Plan is effective as of
February 7, 2000, the date it was adopted by the Board. The Plan will terminate
at midnight on November 18, 2010, and may be terminated prior to such time to by
Board action, and no Incentive Award will be granted after such termination.
Incentive Awards outstanding upon termination of the Plan may continue to be
exercised, or become free of restrictions, in accordance with their terms.
15. Miscellaneous.
15.1. Governing Law. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Utah.
15.2. Successors and Assigns. The Plan will be binding upon and inure to
the benefit of the successors and permitted assigns of the Company and the
Participants.
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